SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 1996
----------------
MILLENNIA, INC.
(Exact name of registrant as specified in its charter)
Commission file number 1-12572
Delaware 59-2158586
(State of Incorporation) (IRS Employer Identification No.)
16910 Dallas Parkway, Suite 100, Dallas, Texas 75248
(Address of principal executive offices) (Zip Code)
(972) 248-1922
(Registrant's telephone number, including area code)
S.O.I. INDUSTRIES, INC.
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
-----------------------------------------
Index to financial statements of business acquired:
F-1 Independent Auditors' Report
F-2 Historical Summary of Revenue and Direct Operating Expenses for the
Nine Months Ended September 30, 1996 and the Year Ended December 31,
1995
F-3 Notes to Historical Summary of Revenues and Direct Operating Expenses
for the Nine Months Ended September 30,1996 and the Year Ended
December 31, 1995
(b) Pro forma financial information.
--------------------------------
Index to pro forma financial information:
F-6 Introduction to Pro Forma Financial Information
F-7 Pro Forma Consolidated Condensed Balance Sheets as of September 30,
1996 (unaudited)
F-8 Pro Forma Consolidated Statements of Operations for the Fiscal Year
Ended June 30, 1996 (unaudited)
F-9 Pro Forma Consolidated Statements of Operations for the Three Months
Ended September 30, 1996 (unaudited)
F-10 Notes to Unaudited Pro Forma Consolidated Financial Statements
(c) Exhibits.
--------
2.1 Asset purchase and sale agreement between Doblique Energy Corporation,
S.O.I. Industries, Inc. and Magnum Hunter Production, Inc., dated
November 4, 1996.
10.1 Term promissory note between Doblique Energy Corporation and Magnum
Hunter Production, Inc., dated November 4, 1996.
These exhibits were previously filed by the Company with the
Commission as Exhibits to its Form 8-K, dated November 19, 1996 and is
incorporated herein by specific reference thereto.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 30, 1996 MILLENNIA, INC.
/s/ Kevin B. Halter
By: _________________________________
Kevin B. Halter, President
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Millennia, Inc.
Dallas, Texas
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses of Properties Acquired November 4, 1996, for the nine months
ended September 30, 1996 and the year ended December 31, 1995. The Historical
Summaries are the responsibility of the Company's management. Our responsibility
is to express an opinion on the Historical Summaries based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the Historical Summaries are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall Historical Summary presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summaries were prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in the Form 8-K/A of Millennia, Inc., formerly known as S.O.I.
Industries, Inc.) as described in Note 2 and are not intended to be a complete
presentation of the properties' revenues and expenses.
In our opinion, the Historical Summaries referred to above present fairly, in
all material respects, the revenue and direct operating expenses of the
Properties Acquired November 4, 1996, for the nine months ended September 30,
1996 and the year ended December 31, 1995, in conformity with generally accepted
accounting principles.
/s/ HEIN + ASSOCIATES LLP
HEIN + ASSOCIATES LLP
December 3, 1996
Dallas, Texas
F-1
<PAGE>
MILLENNIA, INC.
(formerly known as S.O.I. Industries, Inc.)
PROPERTIES ACQUIRED NOVEMBER 4, 1996
Historical Summary of Revenues and Direct Operating Expenses for the
Nine Months Ended September 30, 1996 and the Year Ended December 31, 1995
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
OIL AND GAS SALES $ 514,764 $ 500,253
DIRECT OPERATING EXPENSES 415,194 366,013
------------ -----------
NET REVENUES $ 99,570 $ 134,240
============ ==========
See Notes to Historical Summary
F-2
<PAGE>
MILLENNIA, INC.
(formerly known as S.O.I. Industries, Inc.)
PROPERTIES ACQUIRED NOVEMBER 4, 1996
NOTES TO HISTORICAL SUMMARY
1. BASIS OF PRESENTATION
The accompanying Historical Summary of Revenues and Direct Operating
Expenses relates to the operations of the oil and gas properties
acquired by Millennia, Inc. (formerly known as S.O.I. Industries, Inc.)
(Company) on November 4, 1996. The properties were acquired in exchange
for $100,000 in cash; approximately $150,000 in restricted securities
of the Company; and a promissory note for the balance of approximately
$1,600,000 collateralized by the acquired properties and 750,000 shares
of Digital Communications Technology Corporation common stock. Revenues
are recorded when oil and gas is produced and direct operating expenses
are recorded when the related liability is incurred. Direct operating
expenses include lease operating expenses and production taxes.
Depreciation and amortization of oil and gas properties and general and
administrative expenses have been excluded from operating expenses in
the accompanying historical summary because the amounts would not be
comparable to those resulting from proposed future operations.
The Historical Summary was prepared for the purposes of complying with
the financial statement requirements of a business acquisition to be
filed on Form 8-K/A as promulgated by Regulation S-B Item 3-10 of the
Securities Exchange Act of 1934.
2. OIL AND GAS RESERVE DATA (UNAUDITED)
The following estimates of proved oil and gas reserves for the acquired
properties were prepared by the Company in accordance and with
guidelines established by the Securities and Exchange Commission and
the Financial Accounting Standards Board, which require that reserve
reports be prepared under existing economic and operating conditions
with no provision for price and cost escalation, except by contractual
agreement. Proved reserves are based upon subjective engineering
judgments and may be affected by the limitations inherent in such
estimation. The process of estimating reserves is subject to continual
revision as additional information becomes available as a result of
drilling, testing, reservoir studies and production history. There can
be no assurance that such estimates will not be materially revised in
subsequent periods. All of the reserves are located onshore in the
continental United States.
The following table sets forth the proved oil and gas reserves for the
acquired properties at September 30, 1996 and December 31, 1995 ,
together with the changes therein:
F-3
<PAGE>
MILLENNIA, INC.
(formerly known as S.O.I. Industries, Inc.)
PROPERTIES ACQUIRED NOVEMBER 4, 1996
NOTES TO HISTORICAL SUMMARY
Oil and Natural
Condensate Gas
(BBLS) (MCF)
------ -----
Proved reserves:
Balance at January 1, 1995 161,000 1,398,000
Revisions of previous estimates 35,000 (22,000)
Production (18,000) (126,000)
------- ---------
Balance at December 31, 1995 178,000 1,250,000
Revisions of previous estimates 53,000 137,000
Production (17,000) (81,000)
------- ---------
Balance at September 30, 1996 214,000 1,306,000
======= =========
Proved developed reserves at:
December 31, 1995 178,000 1,079,000
======= =========
September 30, 1996 199,000 1,134,000
======= =========
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved
Reserves (Unaudited):
The standardized measure of discounted future net cash flows at September 30,
1996 and December 31, 1995 relating to proved oil and gas reserves is set forth
below. The assumptions used to compute the standardized measure are those
prescribed by the Financial Accounting Standards Board, and as such, do not
necessarily reflect the Company's expectations of actual revenues to be derived
from those reserves nor their present worth. The limitations inherent in the
reserve quantity estimation process are equally applicable to the standardized
measure computations since these estimates are the basis for the valuation
process.
<TABLE>
<CAPTION>
<S> <C>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
Future cash flows $ 6,900,000 $ 5,503,000
Future production costs (3,869,000) (3,031,000)
Future development costs (65,000) (25,000)
------------- ------------
Future net cash flows, before income tax 2,966,000 2,447,000
Future income tax expenses - -
------------- ------------
Future net cash flows 2,966,000 2,447,000
10% discount to reflect timing of net cash flows (1,121,000) (945,000)
------------- ------------
Standardized measure of discounted future net
cash flows $ 1,845,000 $ 1,502,000
============= ============
</TABLE>
F-4
<PAGE>
MILLENNIA, INC.
(formerly known as S.O.I. Industries, Inc.)
PROPERTIES ACQUIRED NOVEMBER 4, 1996
NOTES TO HISTORICAL SUMMARY
Changes in Standardized Measure of Discounted Future Net Cash Flows
Relating to Proved Reserves:
<TABLE>
<CAPTION>
<S> <C>
Nine Months
Ended Year Ended
September 30, December 31,
1996 1995
------------- ------------
Standardized measure, beginning of period $ 1,502,000 $ 1,378,000
Revisions:
Net change in sales price, net of production costs 64,000 159,000
Revisions of quantity estimates 324,000 121,000
Accretion of discount 150,000 138,000
Changes in timing, future development and other (95,000) (160,000)
Sales, net of production costs (100,000) (134,000)
-------------- --------------
Standardized measure, end of period $ 1,845,000 $ 1,502,000
============== ==============
</TABLE>
F-5
<PAGE>
MILLENNIA, INC. AND SUBSIDIARIES
(formerly known as S.O.I. Industries, Inc.)
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(unaudited)
The following unaudited pro forma consolidated condensed balance sheet of
the Company is derived from the consolidated balance sheet as of September 30,
1996, adjusted to give effect for the acquisition of certain oil and gas
properties pursuant to an asset purchase and sale agreement dated November 4,
1996, as if the acquisition had been consummated at the balance sheet date. The
historical consolidated statements of operations of the Company for the year
ended June 30, 1996 and for the three months ended September 30, 1996 have been
adjusted to give effect for the acquisition as if the acquisition had been
consummated on July 1, 1995.
The pro forma consolidated condensed balance sheet and statements of
operations have been prepared based on estimates and assumptions deemed by
management of the Company to be appropriate and do not purport to be indicative
of the results of operations which would have been obtained if the acquisition
had occurred as presented in such statements, or which may be obtained in the
future. The pro forma consolidated balance sheet and statements of operations
should be read in conjunction with the historical consolidated financial
statements and notes thereto included in the Company's Annual Report of Form
10-KSB for the year ended June 30, 1996 and the Company's Quarterly Report on
Form 10-QSB for the three months ended September 30, 1996, which have been filed
with the Securities and Exchange Commission.
F-6
<PAGE>
MILLENNIA, INC. AND SUBSIDIARIES
(formerly known as S.O.I. Industries, Inc.)
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS
AS OF SEPTEMBER 30, 1996
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Millennia Pro Forma Combined Pro
Historical Adjustments Forma
---------- ----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 53,232 $ $ 53,232
Marketable securities 198,188 198,188
Accounts receivable, net 77,849 15,689 (5) 93,538
Inventories 99,188 99,188
Prepaid expenses and other 224,779 224,779
------------ ------------ ------------
Total current assets 653,236 15,689 668,925
Property, plant and equipment, net 14,744 14,744
Oil and gas properties 1,850,000 (1) 1,850,000
Investment in Digital Communications
Technology Corporation 1,374,439 1,374,439
Other assets 76,805 76,805
------------ ------------ ------------
Total assets $ 2,119,224 $ 1,865,689 $ 3,984,913
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 96,218 $ 100,000 (2) $ 196,218
Current portion of note payable - - -
------------ ------------ ------------
Total current liabilities 96,218 100,000 196,218
------------ ------------ ------------
Note payable - 1,615,689 (3) 1,615,689
------------ ------------ ------------
Stockholders' equity:
Preferred stock, par value $0.00001 par
value; 10,000,000 shares authorized,
120,000 Series A shares outstanding 1 (4) 1
Common stock, par value $0.0002;
50,000,000 shares authorized, 2,152,949
shares outstanding 417 417
Additional paid-in capital and other 6,674,873 149,999 (4) 6,824,872
Accumulated deficit (4,652,284) (4,652,284)
------------ ------------ ------------
Total stockholders' equity 2,023,006 150,000 2,173,006
------------ ------------ ------------
Total liabilities and stockholders' equity $ 2,119,224 $ 1,865,689 $ 3,984,913
============ ============ ============
</TABLE>
See notes to pro forma consolidated financial statements
F-7
<PAGE>
MILLENNIA, INC. AND SUBSIDIARIES
(formerly known as S.O.I. Industries, Inc.)
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
for the year ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Historical
Year Ended
Millennia December 31, Pro Forma Combined
Historical 1995 Adjustments Pro Forma
---------- ------------ ----------- ---------
Net revenues $ 623,978 $ 500,253 $ 74,974 $ 1,199,205
------------ ------------ ------------ ------------
Operating expenses:
Cost of goods sold 374,740 374,740
Oil and gas direct operating expenses 366,013 91,831 (6a) 457,844
Selling 49,667 49,667
General and administrative 1,372,254 55,200 (7) 1,427,454
Depreciation and depletion 5,211 165,447 (8) 170,658
------------- ------------ ------------ ------------
Total operating expenses 1,801,872 366,013 312,478 2,480,363
------------- ------------ ------------ ------------
(Loss) income from operations (1,177,894) 134,240 (237,504) (1,281,158)
Other (expense) income:
Interest expense (12,414) (185,000) (9) (197,414)
(Loss) gain from sale of marketable
securities (143,524) (143,524)
(Loss) gain from sales of securities of
affiliated compan;y (511,426) (511,426)
Equity in earnings of affiliated company 160,255 160,255
------------- ------------ ------------ ------------
Loss from continuing operations before
income taxes (1,685,003) 134,240 (422,504) (1,973,267)
Income tax Benefit 756,608 756,608
------------- ------------ ------------ ------------
Loss from continuing operations $ (928,395) $ 134,240 $ (422,504) $ (1,216,659)
============= ============ ============ ============
Net loss per share from continuing
operations $ (0.54) $ 0.08 $ (0.25) $ (0.71)
============= ============ ============ ============
</TABLE>
See notes to pro forma consolidated financial statements
F-8
<PAGE>
MILLENNIA, INC. AND SUBSIDIARIES
(formerly known as S.O.I. Industries, Inc.)
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Historical
Nine Months
Millennia Ended Pro Forma Combined
Historical September 30, 1996 Adjustments Pro Forma
---------- ------------------ ----------- ---------
Net revenues $ 130,165 $ 514,764 $ (369,935) (6b) $ 274,994
------------ ------------ ------------ ------------
Operating expenses:
Cost of goods sold 96,832 96,832
Oil and gas direct operating expenses 415,194 (304,666) (6b) 110,528
Selling 11,669 11,669
General and administrative 251,468 13,800 (7) 265,268
Depreciation and depletion 1,212 34,038 (8) 35,250
------------ ------------ ------------ ------------
Total operating expenses 361,181 415,194 (256,828) 519,547
------------ ------------ ------------ ------------
(Loss) income from operations (231,016) 99,570 (113,107) (244,553)
Other (expense) income:
Interest and other income 29,759 ( 44,000) (9) (14,241)
Gains on sales of securities 11,129 11,129
------------ ------------ ------------ ------------
Loss from continuing operations before
income taxes (190,128) 99,570 (157,107) (247,665)
Income tax benefit 1,429 1,429
------------ ------------ ------------ ------------
Loss from continuing operations $ (188,699) $ 99,570 $ (157,107) $ (246,236)
============ ============ ============ ============
Net loss per share from continuing
operations $ (0.09) $ 0.05 $ (0.08) $ (0.12)
============ ============ ============ ============
</TABLE>
See notes to pro forma consolidated financial statements
F-9
<PAGE>
MILLENNIA, INC. AND SUBSIDIARIES
(formerly known as S.O.I. Industries, Inc.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Adjustment to reflect total purchase price paid for working interests in
several oil and gas properties acquired by the Company's 100% owned
subsidiary, Doblique Energy Corporation, from Magnum Hunter Production,
Inc. ("Magnum"). The purchase price consisted of $100,000, paid on November
20, 1996, a $1,615,689 promissory note and 120,000 shares of the Company's
newly-issued Series A preferred stock (convertible into 120,000 shares of
the Company's common stock).
(2) This adjustment reflects the portion of the purchase price paid on November
20, 1996.
(3) This adjustment reflects the promissory note payable to Magnum Hunter
Production, Inc. The note bears annual interest at 12% with payments due
monthly beginning December 1, 1996. The monthly payments are to be paid out
of 100% of the net oil and gas income, after lease operating expenses and
monthly management fees due to a third party management company. Any
remaining unpaid principal balance is due on November 1, 1999.
(4) This adjustment reflects the issuance of 120,000 shares of the Company's
Series A preferred stock as a part of the purchase price for the acquired
oil and gas properties. The preferred stock is convertible into 120,000
shares of the Company's common stock. The value of the preferred stock
issued was based on the thirty day average closing price of the Company's
common stock, as traded on the American Stock Exchange, discounted by 25%.
These preferred shares were subsequently converted into 120,000 shares of
restricted (Rule 144) common stock on December 13, 1996.
(5) The base purchase price of $1,850,000 was increased by $15,689 which
represents the net underproduced and overproduced gas imbalances as of the
acquisition date. This balance is essentially a timing difference in
payments from the properties, and will be repaid out of the cash flow from
the oil and gas properties. The promissory note balance was increased by
the gas imbalances amount, and a corresponding receivable was established.
(6) Adjustment to reflect the historical revenues and direct operating expenses
of the acquired properties for the year ended June 30, 1996 and for the
three months ended September 30, 1996 as if the working interests in the
properties had been acquired on July 1, 1995.
(a) The pro forma adjustments for the year ended June 30, 1996 add
the revenues and direct operating expenses for the six months
ended June 30, 1996 and deduct the corresponding amounts for the
six months ended June 30, 1995, which were included in the
Historical Summary of Revenues and Direct Operating Expenses.
(b) The pro forma adjustments for the three months ended September
30, 1996 deduct the revenues and direct operating expenses for
the six months ended June 30, 1996, which were included in the
Historical Summary of Revenues and Direct Operating Expenses.
The information necessary for the pro forma adjustments has been obtained
from historical financial information provided by Magnum.
F-10
<PAGE>
MILLENNIA, INC. AND SUBSIDIARIES
(formerly known as S.O.I. Industries, Inc.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS, Continued
(unaudited)
(7) This adjustment reflects additional general and administrative costs
associated with production and maintenance services performed by outside
service companies contracted by the Company. The Company expects to pay
approximately $4,600 per month for these services.
(8) This adjustment reflects the depletion expense on the oil and gas
properties, calculated using the full cost method.
(9) This adjustment reflects interest expense associated with the financed
portion of the acquired properties. See note (3) for information on the
terms of the related promissory note.
F-11
<PAGE>
