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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended June 30, 1997
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to ____________
Commission file number 33-22097-NY
BOOTS & COOTS
INTERNATIONAL WELL CONTROL, INC.
(Name of Small Business Issuer in Its Charter)
DELAWARE 11-2908692
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
5151 SAN FELIPE, SUITE 450 77056
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)
713-621-7911
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) has 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
---- -----.
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB X .
---
State issuer's revenues for its most recent fiscal year: $ 0
-----------------
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
The aggregate market value of such stock on September 26, 1997, based on
the average of the bid and asked prices on that date was $86,007,497.
The number of shares of the issuer's common stock outstanding on
September 26, 1997 was 24,150,074.
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FORM 10-KSB
ANNUAL REPORT
FOR THE YEAR ENDED JUNE 30, 1997
TABLE OF CONTENTS
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Page
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P A R T I................................................................................... 1
Item 1. Description of Business...................................................... 1
Item 2. Description of Property...................................................... 6
Item 3. Legal Proceedings............................................................ 6
Item 4. Submission of Matters to a Vote of Security-Holders.......................... 6
PART II..................................................................................... 7
Item 5. Market for Common Equity and Related Stockholder Matters..................... 7
Item 6. Management's Discussion and Analysis or Plan of Operation.................... 7
Item 7. Financial Statements......................................................... 7
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure................................................................... 7
PART III.................................................................................... 8
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act............................................ 8
Item 10. Executive Compensation....................................................... 11
Item 11. Security Ownership of Certain Beneficial Owners and Management............... 11
Item 12 Certain Relationships and Related Transactions............................... 12
Item 13. Exhibits List and Reports on Form 8-K........................................ 12
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P A R T I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL. Boots & Coots International Well Control, Inc. ("BCI"), was
incorporated in Delaware in April 1988 as Havenwood Ventures, Inc. BCI was
originally formed to serve as a blind pool investment fund, and in July 1988 BCI
raised $499,500 in an initial public offering of its common stock. After
completing its initial public offering, BCI elected to use its available
resources to develop a theme attraction in Sedona, Arizona. During the fiscal
year ended June 30, 1992, BCI elected to discontinue development of the
attraction as a result of its inability to attract financing for further
development of the project. BCI thereafter divested itself of the project and
was left with no material assets or liabilities and no ongoing business
activities. BCI remained inactive until it acquired IWC Services, Inc., a Texas
corporation ("IWC Services"), on July 29, 1997. BCI acquired IWC Services in a
transaction structured as a "reverse triangular merger" (the "Merger") between
Havenwood Acquisition Corporation, a Texas corporation ("Newco"), which was a
wholly owned subsidiary of the Company formed for the sole purpose of
consummating the Merger, and IWC Services. In furtherance of the Merger, the
Company effected a "reverse split" of its common stock in the ratio of one new
share for every 135 shares held by a stockholder of the Company; provided,
however, that no single stockholder's ownership was reduced to fewer than 100
shares. Immediately prior to the Merger, the principal stockholders of the
Company surrendered a total of 740,740 shares of common stock to the Company for
cancellation. As a result of the Merger, the Company issued to the former
stockholders, warrantholders and optionholders of IWC Services 15,502,000 shares
of common stock of the Company (approximately 93% of the then issued and
outstanding common stock); (ii) warrants to up to $3,000,000 of the Company's
common stock; and (iii) options to purchase 1,955,000 shares of the Company's
Common Stock at a price of $0.43 per share and IWC Services became a wholly-
owned subsidiary of the Company. BCI serves as a holding company for IWC
Services, its wholly owned subsidiary. On July 31, 1997, IWC Services acquired
all the operating assets of Boots & Coots, L.P., a Colorado limited partnership,
and all the issued and outstanding stock of Boots & Coots de Venezuela, S.A.,
and Boots & Coots Overseas, Ltd. and changed its name to "Boots & Coots
International Well Control". For more information regarding the acquisition of
IWC Services by BCI and IWC Services acquisition of the assets of Boots & Coots,
L.P., see the Form 8-K of the Company filed with the Securities and Exchange
Commission (the "SEC") on August 13, 1997.
This report discusses the business of the Company as constituted subsequent
to the fiscal year end and must be read in conjunction with the financial
statements contained in the Form 8-K of the Company filed with the SEC on August
13, 1997. Financial statements included herein as of June 30, 1997 and for the
two years then ended are based on the historical operations of Havenwood
Ventures, Inc.
IWC Services is a global-response well control service company that
specializes in oil field emergencies, including blowouts and well fires. In
addition, IWC Services provides snubbing and other non-critical well control
services. IWC Services was organized in June 1995 by six former key employees
of the Red Adair Company who resigned their positions after Mr. Adair retired
and sold the company. IWC Services conducts its current operations through five
subsidiaries and one strategic alliance. IWC Services' wholly-owned
subsidiaries are Hell Fighters, Inc., a Texas Corporation, Boots & Coots
Overseas, Ltd., a British Virgin Islands Corporation, International Well Control
Services, Ltd., a Cayman Islands Corporation, and Boots & Coots de Venezuela,
S.A., a Venezuela Corporation. IWC de Venezuela, C.A., a Venezuelan corporation
is a majority-owned (90%) subsidiary of International Well Control Services,
Ltd. For convenience of reference, BCI and its subsidiaries are collectively
referred to herein as the "Company."
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SERVICES PROVIDED BY THE COMPANY
The Company is a global-response oil field services company that
specializes in responding to and controlling oil field emergencies, including
blowouts and well fires. In addition, the Company provides snubbing and other
non-critical services for the oil service sector. The Company's staff of well
control specialists has a combined total of over 220 years' experience in oil
well firefighting and an excellent safety record. Throughout their careers,
these professionals have worked in virtually every major oil producing region in
the world and controlled more than 4,000 oil well fires, including the 1963
Devil's Cigarette Lighter fire, the 1988 Piper-Alpha Platform disaster and the
1991 Burgan Field fires that were started by Iraqi troops during their retreat
from Kuwait during the Gulf War. The Company's principal services lines
include:
Well Control. This service line is divided into two distinct service
levels: (1) "Critical Event" response is ordinarily reserved for well control
projects where hydrocarbons are escaping from a well bore, regardless of whether
a fire has occurred. (2) "Non-critical Event" response, on the other hand, is
intended for the more common operating problems that do not involve escaping
hydrocarbons.
Critical Events. Critical Events frequently result in explosive fires, the
loss of life, the destruction of drilling and production facilities,
substantial environmental damage and the loss of hundreds of thousands of
dollars per day in production revenue. Since Critical Events ordinarily
arise from equipment failures or human error, it is impossible to
accurately predict the timing or scope of the Company's Critical Event
work. Notwithstanding the foregoing, a Critical Event of catastrophic
proportions could result in revenues to the Company well in excess of $5
million in the year of the incident.
Non-critical Events. Non-critical Events frequently occur in connection
with the drilling of new wells into high pressure reservoirs. In most Non-
critical Events, the blowout preventers and other safety systems on the
drilling rig function according to design and the Company is then called
upon to supervise and assist in the well control effort so that drilling
operations can resume as promptly as safety permits. While Non-critical
Events do not ordinarily have the revenue impact of a Critical Event, they
are much more common and predictable.
Equipment Rentals. This service line includes the rental of specialty well
control and firefighting equipment by the Company primarily for use in
conjunction with Critical Events. Such equipment includes, but is not limited
to, firefighting pumps, pipe-racks, Athey Wagons, pipe cutters, crimping tools,
and deluge safety systems. The Company charges this equipment out on a per diem
basis. Past experience indicates that rentals can be expected to average
approximately 40% of revenues associated with a Critical Event.
Equipment Sales and Service. This service line involves the sale of
complete firefighting equipment packages, together with maintenance, monitoring,
updating of equipment and ongoing consulting services. A typical example of
this service line is the industry supported Fire Station (as defined below) that
the Company recently established in the North Slope of Alaska. In connection
with the establishment of this Fire Station, the original sale included
approximately $485,000 in equipment. In addition, the Company has entered into
a long-term agreement to provide ongoing consulting services including
education, contingency planning, safety inspections and emergency response
drills.
Consulting; Drilling Engineering. The Company has the ability to provide
through its highly-specialized in-house engineering staff, supplemented if
necessary by outside engineering consultants and the Halliburton Energy Services
division (se the "Halliburton Alliance" below), engineering services for such
areas as: (1) planning and design of relief well drilling (trajectory planning,
directional control and
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equipment specifications, and on-site supervision of the drilling operations),
(2) planning and design of production facilities which are susceptible to well
capping or other control procedures; and, (3) mechanical and computer aided
designs for well control equipment.
Consulting; Inspections. A cornerstone of the Company's strategy of
providing preventive well control services involves on-site inspection services
for drilling and workover rigs, drilling and production platforms, and field
production facilities. Since these inspection services will be offered as a
standard option in Halliburton's field service programs, the Company
anticipates that inspection services will become an important source of revenue.
Consulting; Training. The Company provides specialized training in well
control procedures for drilling, exploration and production personnel. To date
such training programs have been provided for both U.S. and international
operators. Since the Company's training services will be offered in conjunction
with ongoing educational programs sponsored by Halliburton, the Company believes
the training segment of its business offers considerable potential for growth.
Strategic Event Planning (S.T.E.P.). A key element of the services offered
by the Halliburton Alliance is a strategic and tactical planning process
addressing action steps, resources and equipment necessary for an operator to
control a blowout. This planning process incorporates organizational
structures, action plans, specifications, people and equipment mobilization
plans with engineering details for well firefighting, capping, relief well and
kill operations. It also addresses optimal recovery of well production status,
insurance recovery, public information and relations and safety/environmental
issues. While the S.T.E.P. program includes a standardized package of services,
it is easily modified to suit the particular needs of a specific client.
Regional Fire Stations. The Company, in conjunction with Halliburton,
plans to pre-position in selected geographic locations throughout the world
complete complements of specialty firefighting equipment and ancillary tools
and equipment ("Fire Stations"). The equipment for these proposed Fire Stations
will either be purchased by the Company for its own account, using cash flow, if
any, from operations, or purchased by a consortium of local producers who will
then contract with the Company for maintenance and consulting services. The
Company plans to deploy at least one Fire Station per year over the next five
years. It is believed these Fire Stations, once established, will place the
Halliburton Alliance in an unique competitive position within the industry and
allow the alliance to gain market share by reducing the mobilization time and
costs traditionally involved in controlling major blowout events.
HALLIBURTON ALLIANCE
In response to ongoing changes in the emergency response segment of the oil
field service industry, the Company entered into a global strategic alliance
with Halliburton in October 1995. Halliburton is widely recognized as an
industry leader in the pumping, cementing, snubbing, production enhancement,
coiled tubing and related services segment of the oil field services industry.
This alliance, "WELLCALL"/SM/, draws on the expertise and abilities of both
companies and offers a total well control solution for oil and gas producers
worldwide. WELLCALL/SM/ provides a complete range of well control services
including blowout control, snubbing services, pumping services, debris removal,
firefighting, relief well planning, pre-event troubleshooting, contingency
planning, and other specialized services. The specific benefits that
WELLCALL/SM/ provides to an operator include:
. Quick response with a global logistics system supported by an
international communications network that operates around the clock,
seven days a week.
. A full-time team of experienced well control specialists that are
dedicated to safety.
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. Specialized equipment design, rental, and sales.
. Contingency planning consultation where WELLCALL/SM/ specialists meet with
customers, identify potential problems, and help develop a comprehensive
contingency plan.
. A single-point contact to activate a coordinated total response to well
control needs.
Operators contracting with WELLCALL/SM/ receive a Strategic Event Plan, or
S.T.E.P., a comprehensive contingency plan for well control that is region-
specific, reservoir-specific, site-specific and well-specific. The S.T.E.P.
plan provides the operator with a written, comprehensive and coordinated action
plan that incorporates historical data, pre-planned call outs of Company and
Halliburton personnel, pre-planned call outs of necessary equipment and
logistical support to minimize response time and coordinate the entire well
control effort. Thereafter, in the event of a blowout, WELLCALL/SM/ provides
the worldwide engineering and well control equipment capabilities of Halliburton
and the firefighting expertise of the Company through an integrated contract
with the operator.
As a result of the Halliburton Alliance, the Company is directly involved in
Halliburton's well control projects that require firefighting expertise,
Halliburton is a primary service vendor to the Company and the Company has
exclusive rights to use to certain firefighting technologies developed by
Halliburton. It is presently expected that most of the Company's Fire Stations
will be established at existing Halliburton facilities and that maintenance of
the Fire Station equipment will be performed by Halliburton employees. The
Halliburton Alliance also gives the Company access to Halliburton's global
communications and currency management systems, capabilities that could prove
invaluable in connection with the Company's international operations.
Consistent with the Halliburton Alliance, the Company's focus has evolved to
meet its clients' needs in a global theater of operations. With the increased
emphasis by operators on operating efficiencies and outsourcing many engineering
services, the Company has developed a proactive menu of services to meet today's
needs. These services emphasize pre-event planning and training to minimize the
likelihood of a blowout and minimize damages in the event of an actual blowout.
The Company provides comprehensive advance training, readiness, preparation,
inspections and mobilization drills which allow client companies to pursue every
possible preventive measure and to react in the most cohesive manner possible
when an event occurs. The Halliburton Alliance stresses the importance of
safety, environmental protection and cost control, along with asset protection
and liability minimization.
BUSINESS STRATEGY
Over the next few years, the Company intends to expand its operations and
build upon its demonstrated strengths while increasing revenues from consulting
services and Non-critical Event activities. Recognizing that the well control
services business is a finite market whose upside potential is dependent upon
the occurrence of blowouts which cannot be reasonably predicted, the Company's
business strategy is to market its pre-event services on a global basis to
establish a stable revenue base. The Company intends to accomplish its
objectives by promoting the Halliburton Alliance, integrating the business of
Boots & Coots with the business of IWC Services, increasing the geographical
scope of its education programs, capitalizing on the industry reputation of the
Company's key firefighting personnel and establishing additional Company-owned
Fire Stations at locations outside the United States. Like the Company owned
Fire Stations in Houston, Texas, and Duncan, Oklahoma, the industry supported
Fire Stations on the North Slope of Alaska and the Fire Station in Anaco,
Venezuela, the proposed Company-owned Fire Stations would include the equipment
required to respond to a blowout or fire. Using its education programs, its
Fire Stations and the Halliburton Alliance as a foundation, the Company then
plans
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to offer a broader range of services to oil and gas producers worldwide, thereby
increasing both its market share and the absolute size of the market.
Due to the fragmented nature of the oil field services industry, the Company
believes a number of attractive acquisition opportunities exist in the pressure
control, emergency response and environmental services segments of the business.
The oil field services business in general, and the emergency response and
environmental remediation segments in particular, are characterized by a small
number of dominant global competitors and a significant number of locally
oriented businesses, many of which tend to be viable acquisition targets. The
Company believes that the owners of locally oriented companies may be willing to
consider becoming part of a larger organization.
The Company hopes to expand its existing well control operations and enter
the training, specialty tools and environmental services businesses through
internal growth, acquisitions, joint-ventures and strategic alliances.
EMPLOYEES
As of the date hereof, the Company has 25 full-time employees, including two
executive officers, ten well control and firefighting specialists, three sales
and marketing representatives and five administrative staff members. In
addition, the Company has several part-time employees and consultants. The
Company is not subject to any collective bargaining agreements and it considers
its relations with its employees to be good.
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ITEM 2. DESCRIPTION OF PROPERTY.
The Company owns a facility in Northwest Houston, Texas, that includes
approximately two acres of land, a 4,000 square foot office building and a
12,000 square foot manufacturing and warehouse building. The Company leases a
7,000 square foot office in the Halliburton Center, Houston, Texas. This space
is rented from an unaffiliated landlord through May 2002 for an average monthly
rental of $7,000. In addition, the Company leases an 11,000 square foot Fire
Station facility in Houston, Texas, which space is rented through January 2000
for a monthly rental of $4,476.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceeding, nor is its
property the subject of a pending legal proceeding, which is not routine
litigation incidental to its business or which the amount involved, exclusive of
interest and costs, exceeds ten percent of the current assets of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
No matters were submitted to a vote of the security holders of the Company
during the fourth quarter of the fiscal year covered by this report.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded in the over-the-counter market. For the
year ended June 30, 1997, the Company had no business or assets and bid prices
for its stock were not published. Subsequent to June 30, 1997, limited trading
in the Company's stock has occurred, but as of the date hereof, trading has not
occurred for a complete calendar quarter and, therefore, such information has
not been included herein.
As of September 26, 1997 the Company's Common Stock was held by approximately
109 holders of record. The Company estimates that it has a significantly larger
number of shareholders because a substantial number of the Company's shares are
held of record by broker-dealers for their customers in street name. The
Company has not paid any cash dividends on its Common Stock to date. There are
no restrictions which limit the Company's ability to pay cash dividends on its
Common Stock; however, the Company's current policy is to retain earnings to
provide funds for the operation and expansion of its business.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the fiscal year covered by this report, the Company had no business or
assets. Subsequent to the end of such fiscal year, on July 29, 1997, the
Company acquired IWC Services and on July 31, 1997, IWC Services acquired all
the operating assets of Boots & Coots, L.P. For more information regarding
these recent acquisitions, see the Form 8-K filed by the Company with the SEC on
August 13, 1997.
ITEM 7. FINANCIAL STATEMENTS.
Attached following the Signature Pages and Exhibits. As a consequence of the
acquisition by the Company of IWC Services and the purchase of all the operating
assets of Boots & Coots, L.P., by IWC Services subsequent to the end of the
fiscal year reported herein, the financial statements attached hereto, which are
based on the historical operations of Havenwood Ventures, Inc., as of June 30,
1997 and for the two years then ended, should be read in conjunction with the
financial statements, including pro forma unaudited consolidated financial
statements, set forth in the Company's Form 8-K filed with the SEC on August 13,
1997.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not had any disagreements with its independent accountants
and auditors, however, in connection with the acquisition of IWC Services, the
Company changed accounting firms, as disclosed in the Company's Form 8-K filed
with the SEC on August 13, 1997.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
In connection with the acquisition by the Company of IWC Services, the
officers and directors of the Company resigned and were replaced by the officers
and directors of IWC Services. This report sets forth information regarding the
officers and directors of the Company as of September 26, 1997.
The following table lists the name and age of each director and executive
officer of the Company, as well as those persons expected to make a significant
contribution to the Company.
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Name Age Position
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Larry H. Ramming 50 Chief Executive Officer, Chairman
Brian Krause 41 President, Director
Thomas L. Easley 52 Chief Financial Officer
Raymond Henry 53 Director of Well Control Operations
K. Kirk Krist 38 Director
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Other key officers, technical and operating personnel of the Company and its
principal subsidiaries and their ages are as follows:
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Name Age Position
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Richard Hatteberg 58 Senior Vice President, Well Control
Danny Clayton 49 Senior Vice President, President of IWC de
Venezuela
Mike Foreman 35 Senior Well Control Specialist
Juan Moran 38 Senior Well Control Specialist
Rolando A. Gomez 41 Manager, Engineering and Training
James Tuppen 41 Senior Vice President, Well Control
W. D. Cochran 63 Service Manager, Industrial and Marine
Division
Larry Flak 41 Vice President, Engineering Services
</TABLE>
Larry H. Ramming has served as the Chairman of the Board and Chief Executive
Officer of IWC Services since May 1995 and as the Chairman of the Board and
Chief Executive Officer of the Company since the acquisition of IWC Services by
the Company on July 29, 1997. In addition to his positions with the Company,
Mr. Ramming has been actively involved in mortgage banking and the packaging and
resale of mortgage notes, consumer loans and other debt instruments for over 15
years. In addition to his involvement in financial instrument trading, Mr.
Ramming is an active venture capital investor and entrepreneur with substantial
holdings in a number of public and private corporations.
Brian Krause has served as the President and as a Director of IWC Services
since May 1995 and as the President and as a Director of the Company since the
acquisition of IWC Services by the Company on July 29, 1997. Mr. Krause brings
over 19 years of well control and firefighting experience to the Company.
Before joining the group that founded IWC Services, Mr. Krause was employed for
18 years by the Red Adair Company, Houston, Texas. Mr. Krause joined the Red
Adair Company as a Well Control Specialist in August 1978, was promoted to Vice
President in June 1989 and was again promoted to Vice President & Senior Well
Control Specialist in February 1994. During his tenure with the Red
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Adair Company, Mr. Krause participated in hundreds of well control events
worldwide. Mr. Krause, along with Messrs. Henry, Hatteberg and Clayton,
resigned from the Red Adair Company in August 1994 and began the independent
business activities that led to the formation of IWC Services in May 1995.
Thomas L. Easley has served as IWC Services' Chief Financial Officer since
September 1996 and as the Chief Financial Officer of the Company since the
acquisition of IWC Services by the Company on July 29, 1997. From May 1995
through July 1996, Mr. Easley served as Vice President and Chief Financial
Officer of DI Industries, Inc. a publicly-held oil and gas drilling contractor
with operations in the U.S., Mexico, Central America and South America.
Previously, from June 1992 through May 1995, he served as Vice President-Finance
of Huthnance International, Inc., a closely-held offshore oil and gas drilling
contractor. From April 1984 through June 1992, Mr. Easley was Vice President
and Chief Financial Officer for the Granada group of companies. Mr. Easley is a
graduate of Tarleton State University (BS 1967) and Texas A&M University (MBA
1968). Mr. Easley is also a Certified Public Accountant.
Raymond Henry has served as IWC Services' Director of Well Control Operations
since May 1995 and as the Director of Well Control Operations of the Company
since the acquisition of IWC Services by the Company on July 29, 1997. Mr.
Henry brings over 34 years of well control and firefighting experience to the
Company. Before joining the group that founded IWC Services, Mr. Henry was
employed for 32 years by the Red Adair Company, Houston, Texas. Mr. Henry
joined the Red Adair Company as a Well Control Specialist in June 1962 and was
promoted to Senior Vice President in June 1979. During his tenure with the Red
Adair Company, Mr. Henry participated in hundreds of well control events
worldwide. Mr. Henry, along with Messrs. Krause, Hatteberg and Clayton,
resigned from the Red Adair Company in August 1994 and began the independent
business activities that led to the formation of IWC Services in May 1995.
K. Kirk Krist has served as a member of IWC Services' Board of Directors
since May 1995 and of the Company's Board of Directors since the acquisition of
IWC Services by the Company on July 29, 1997. Mr. Krist has been a self
employed oil and gas investor and venture capitalist since 1982. Mr. Krist is a
graduate of the University of Texas (BBA 1982).
Richard Hatteberg has served as a Senior Vice President of IWC Services since
May 1995 and as a Senior Vice President of the Company since the acquisition of
IWC Services by the Company on July 29, 1997. Mr. Hatteberg brings over 31
years of well control and firefighting experience to the Company. Before
joining the group that founded the Company, Mr. Hatteberg was employed for 29
years by the Red Adair Company, Houston, Texas. Mr. Hatteberg joined the Red
Adair Company as a Senior Well Control Specialist in June 1965 and was promoted
to Senior Vice President & Senior Well Control Specialist in February 1994.
During his tenure with the Red Adair Company, Mr. Hatteberg participated in
hundreds of well control events worldwide. Mr. Hatteberg, along with Messrs.
Krause, Henry and Clayton, resigned from the Red Adair Company in August 1994
and began the independent business activities that led to the formation of IWC
Services in May 1995.
Danny Clayton has served as a Senior Vice President of IWC Services since May
1995 and as a Senior Vice President of the Company since the acquisition of IWC
Services by the Company on July 29, 1997 and as President of IWC de Venezuela
since January 1996. Mr. Clayton brings over 18 years of well control and
firefighting experience to IWC Services. Before joining the group that founded
the Company, Mr. Clayton was employed for 18 years by the Red Adair Company,
Houston, Texas. Mr. Clayton joined the Red Adair Company as a Well Control
Specialist in June 1979, was promoted to Vice President in January 1989 and was
again promoted to Vice President & Senior Well Control Specialist in February
1994. During his tenure with the Red Adair Company, Mr. Clayton participated in
hundreds of well control events worldwide. Mr. Clayton, along with Messrs.
Henry, Krause and Hatteberg, resigned
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from the Red Adair Company in August 1994 and began the independent business
activities that led to the formation of IWC Services in May 1995.
Mike Foreman has served as a Senior Well Control Specialist for IWC Services
since May 1995 and as a Senior Well Control Specialist of the Company since the
acquisition of IWC Services by the Company on July 29, 1997. Mr. Foreman brings
over 11 years of well control and firefighting experience to IWC Services.
Before joining the Company, Mr. Foreman was employed for 9 years by the Red
Adair Company, Houston, Texas, as a Well Control Specialist. During his tenure
with the Red Adair Company, Mr. Foreman participated in a large number of well
control events worldwide, including offshore blowouts in Nigeria, and Venezuela,
onshore blowouts in North and South America, and the Piper Alpha platform
disaster. Mr. Foreman resigned from the Red Adair Company in August 1994 in
order to work with Messrs. Henry, Krause, Hatteberg and Clayton in their new
venture.
Juan Moran has served as a Senior Well Control Specialist for IWC Services
since May 1995 and as a Senior Well Control Specialist of the Company since the
acquisition of IWC Services by the Company on July 29, 1997. Mr. Moran brings
over 8 years of well control and firefighting experience to the Company. Before
joining IWC Services, Mr. Moran was employed for 6 years by the Red Adair
Company, Houston, Texas, as a Well Control Specialist. During his tenure with
the Red Adair Company, Mr. Moran participated in a large number of well control
events worldwide, including offshore blowouts in Nigeria, and Venezuela, onshore
blowouts in North and South America, and the Piper Alpha platform disaster. Mr.
Moran resigned from the Red Adair Company in August 1994 in order to work with
Messrs. Henry, Krause, Hatteberg and Clayton in their new venture.
Rolando A. Gomez has served as Manager, Engineering and Training for IWC
Services since April 1996 and as Manager, Engineering and Training of the
Company since the acquisition of IWC Services by the Company on July 29, 1997.
Before joining the Company, Mr. Gomez spent approximately 18 years in various
technical positions in the energy sector including drilling engineering
consultant, energy claims adjustor, licensed property and marine surveying,
sales manager in the Latin American region of a drilling and completion
equipment manufacturer and as a senior well control instructor and drilling
fluids instructor. Mr. Gomez has a BS in Civil Engineering Technology from
Texas A&M University (1977).
James Tuppen was a partner of Boots & Coots prior to joining the Company, and
is a 20 year well control veteran serving as a lead fire control specialist on
both offshore and onshore blowouts. Mr. Tuppen has controlled blowouts and
fires in North America, South America, Northern Africa, Australia and the Middle
East and recently served as co-manager of the Pedernales Old Well Abandonment
Project in the jungles of Venezuela's lower Orinoco River Delta.
W.D. "Dave" Cochran has 40 years' experience in industrial firefighting and
managed Boots & Coots worldwide industrial firefighting operations prior to
joining the Company. In this position, Mr. Cochran led the Boots & Coots
flammable liquid production, transportation and storage facilities fire control
team. In addition, he managed the Boots & Coots marketing team for the sale and
rental of firefighting equipment, supplies and safety equipment.
Larry Flak is a registered professional engineer who trained under W.C.
Goins, the father of modern well control, and has devoted more than 20 years to
drilling engineering and well control supervision. During his career, Mr. Flak
has participated in the control of numerous blowouts and has formulated and
implemented kill procedures and relief well plans in field locations worldwide.
Before joining the Company, Mr. Flak served as a consultant to Boots & Coots and
others, including as a special technical consultant to the U.S. Armed Forces
during his service with the Kuwait Oil Company, and he managed the daily
firefighting operations in Kuwait following the Gulf War. In this capacity, Mr.
Flak was
10
<PAGE>
personally responsible for the development, implementation and logistical
support for the control of nearly 700 burning wells that were set ablaze by
retreating Iraqi troops.
ITEM 10. EXECUTIVE COMPENSATION.
For the fiscal year ended June 30, 1997, none of the former officers or
directors of the Company received compensation in excess of $100,000.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of August 7, 1997, information regarding
the ownership of Common Stock of the Company owned by (i) each person (or
"group" within the meaning of Section 13(d)(3) of the Security Exchange Act of
1934) known by the Company to own beneficially more than 5% of the Common Stock;
(ii) each director of the Company, (iii) each of the named executive officers
and (iv) all officers and directors of the Company as a group.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF
BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------------------- --------------------- -----------------
<S> <C> <C>
*Larry H. Ramming (2) 9,395,500 (3) 33.35%
*Raymond Henry (2) 4,795,500 (4) 17.02%
Mark S. Howells 1,765,988 6.27%
Jeffrey J. Puglisi 1,566,615 5.56%
*Brian Krause (2) 1,345,000 4.77%
Richard Hatteberg (2) 1,150,000 4.08%
Danny Clayton (2) 1,150,000 4.08%
*K. Kirk Krist 575,000 2.04%
*Thomas L. Easley (5) 126,500 0.45%
*All officers and directors
as a group (five persons) 10,097,000 35.84%
</TABLE>
- --------------
(1) Beneficial owners have sole voting and investment power with respect to the
shares unless otherwise noted.
(2) In May 1995, Messrs. Krause, Henry, Hatteberg and Clayton entered into the
Voting Trust Agreement which gives Messrs. Ramming and Henry, as co-
trustees, the absolute right to vote all the shares of the Company's Common
Stock now owned or hereafter acquired by Messrs. Krause, Henry, Hatteberg
and Clayton during the five-year period ending December 31, 2000. In the
event that Messrs. Ramming and Henry are unable to reach an agreement
respecting the voting of such shares, the Voting Trust Agreement designates
Charles T. Phillips, attorney at law, as the tiebreaker.
(3) Includes 4,255,000 shares owned by Mr. Ramming and members of his immediate
family, including certain family-owned entities, 345,000 shares issuable
upon the exercise of presently exercisable options held by Mr. Ramming.
Also includes 4,738,000 shares and 57,500 options owned by Messrs. Krause,
Henry, Hatteberg and Clayton, all of which are subject to the Voting Trust
Agreement under which Messrs. Ramming and Henry serve as co-trustees.
(4) Includes 1,150,000 shares owned by Mr. Henry and 3,588,000 shares and 57,500
options owned by Messrs. Krause, Hatteberg and Clayton, all of which are
subject to the Voting Trust Agreement under which Messrs. Ramming and Henry
serve as co-trustees.
(5) Mr. Easley owns an option to purchase 126,500 shares of Common Stock at
$0.43 per share.
11
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION.
No relationships or transactions between the registrant and the persons
specified in Items 404 of Registration S-B occurred during the past two fiscal
years or are proposed which require disclosure pursuant to Item 404 of
Registration S-B.
ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Exhibit No. Description Location
- ----------- --------------------------------- ------------------------------
<C> <S> <C>
3.01 Amended and Restated Exhibit 3.2 of Form 8-K filed
Certificate of Incorporation August 13, 1997
3.02 Amendment to Certificate of Exhibit 3.3 of Form 8-K filed
Incorporation August 13, 1997.
3.03 Amended Bylaws Exhibit 3.4 of Form 8-K filed
August 13, 1997
4.01 Specimen Certificate for the Exhibit 4.1 of Form 8-K filed
Registrant's Common Stock August 13, 1997
4.02 Form of 12% Senior Exhibit 4.2 of Form 8-K filed
Subordinated Notes due August 13, 1997
December 31, 2000
4.03 Form of Noteholders' Warrants Exhibit 4.3 of Form 8-K filed
to Purchase $3,000,000 of August 13, 1997
Common Stock
4.04 Form of Employees Options to Exhibit 4.4 of Form 8-K filed
Purchase 690,000 Shares of August 13, 1997
Common Stock
4.05 Form of Contractual Options to Exhibit 4.5 of Form 8-K filed
Purchase 1,265,000 Shares of August 13, 1997
Common Stock
9.01 Voting Trust Agreement Exhibit 9.1 of Form 8-K filed
between Larry H. Ramming, August 13, 1997
Raymond Henry, Richard
Hatteberg, Danny Clayton and
Brian Krause
10.01 Alliance Agreement between Exhibit 10.1 of Form 8-K
IWC Services, Inc. and filed August 13, 1997
Halliburton Energy Services, a
division of Halliburton
Company
10.02 Executive Employment Exhibit 10.2 of Form 8-K
Agreement of Larry H. filed August 13, 1997
Ramming
10.03 Executive Employment Exhibit 10.3 of Form 8-K
Agreement of Raymond Henry filed August 13, 1997
10.04 Executive Employment Exhibit 10.4 of Form 8-K
Agreement of Brain Krause filed August 13, 1997
10.05 Executive Employment Exhibit 10.5 of Form 8-K
Agreement of Richard Hatteberg filed August 13, 1997
10.06 Executive Employment Exhibit 10.6 of Form 8-K
Agreement of Danny Clayton filed August 13, 1997
21.01 List of subsidiaries Filed herewith
27.01 Financial Data Schedule Filed herewith
</TABLE>
12
<PAGE>
SIGNATURES
IN ACCORDANCE WITH SECTION 13 OR 15(D) OF THE EXCHANGE ACT, THE REGISTRANT
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED.
CHARTER COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ Larry H. Ramming Date: September 29, 1997
----------------------------------------
LARRY H. RAMMING, CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
IN ACCORDANCE WITH THE EXCHANGE ACT, THIS REPORT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
----------- ------- ------
<S> <C> <C>
By: /s/ Larry H. Ramming Chairman and Chief September 29, 1997
------------------------------------------ Executive Officer and
LARRY H. RAMMING Director
By: /s/ Thomas L. Easley Chief Financial Officer September 29, 1997
-----------------------------------------
THOMAS L. EASLEY
By: /s/ Brian Krause President and Director September 29, 1997
-----------------------------------------
BRIAN KRAUSE
Director September 29, 1997
By: /s/ Kirk Krist
-----------------------------------------
KIRK KRIST
</TABLE>
<PAGE>
ITEM 7. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INDEPENDENT AUDITORS' REPORTS.......................................................... F-2
CONSOLIDATED BALANCE SHEET - June 30, 1997............................................. F-4
CONSOLIDATED STATEMENTS OF OPERATIONS - Years Ended June 30, 1996 and 1997............. F-5
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - Years Ended June 30, 1996
and 1997........................................................................... F-6
CONSOLIDATED STATEMENTS OF CASH FLOWS - Years Ended June 30, 1996 and 1997............. F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................................. F-8
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Boots & Coots International Well Control, Inc.
We have audited the accompanying consolidated balance sheet of Boots & Coots
International Well Control, Inc. (formerly Havenwood Ventures, Inc.) as of June
30, 1997, and the related consolidated statements of operations, shareholders'
deficit, and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Boots & Coots
International Well Control, Inc. as of June 30, 1997, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Hein + Associates llp
Houston, Texas
September 25, 1997
F-2
<PAGE>
[LETTERHEAD OF CORDOVANO AND COMPANY, P.C. APPEARS HERE]
Board of Directors
Havenwood Ventures, Inc.
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated statements of operations,
shareholders' equity, and cash flows for the year ended June 30, 1996 of
Havenwood Ventures, Inc. (a development stage company). These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Havenwood Ventures, Inc. for the year ended June 30, 1996, in conformity with
generally accepted accounting principles.
/s/ Cordovano and Company, P.C.
- --------------------------------
Cordovano and Company, P.C.
Denver, Colorado
July 31, 1996
F-3
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
ASSETS
------
CASH $ 1,339
---------
$ 1,339
=========
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
LIABILITIES:
Accounts payable and accrued expenses $ 4,641
SHAREHOLDERS' DEFICIT
Preferred stock, 5,000,000 shares authorized,
$.0001 par value; no shares issued or outstanding. --
Common stock, 50,000,000 shares authorized, $.00001 par
value; 1,913,814 shares issued and outstanding 19
Additional paid-in capital 725,734
Accumulated deficit (729,055)
---------
Total shareholders' deficit (3,302)
---------
Total liabilities and shareholders' deficit $ 1,339
=========
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30,
------------------------
1996 1997
----------- -----------
COSTS AND EXPENSES - General and administrative $ 8,672 $ 7,683
---------- ----------
Operating loss (8,672) (7,683)
NON-OPERATING INCOME - 2,168
NON-OPERATING EXPENSE- Failed merger costs - (6,863)
---------- ----------
Loss before income taxes (8,672) (12,378)
INCOME TAX BENEFIT (EXPENSE):
Current 1,121 2,037
Deferred (1,121) (2,037)
---------- ----------
Net loss $ (8,672) $ (12,378)
========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING 1,913,814 1,913,814
========== ==========
NET LOSS PER SHARE * *
========== ==========
* Less than $.01 per share
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS.
F-5
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
YEARS ENDED JUNE 30, 1996 AND 1997
<TABLE>
<CAPTION>
Common Stock Additional
-------------------- Paid-in
Shares Par Value Capital Deficit Total
--------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
BALANCES, June 30, 1995 1,913,814 $ 19 $710,371 $(708,005) $ 5,385
Net loss - - - (8,672) (8,672)
--------- --------- -------- --------- --------
BALANCES, June 30, 1996 1,913,814 19 710,371 (716,677) (3,287)
Capital contribution by - - 5,500 - 5,500
an officer
Capital contribution - - 6,863 - 6,863
Net loss - - - (12,378) (12,378)
--------- --------- -------- --------- --------
BALANCES, June 30, 1997 1,913,814 $ 19 $725,734 $(729,055) $ (3,302)
========= ========= ======== ========= ========
</TABLE>
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS.
F-6
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended
June 30,
---------------------
1996 1997
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: $(8,672) $(12,378)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 68 -
Changes in current assets and current liabilities:
Accounts payable and accrued expenses 1,980 (1,172)
------- --------
Net cash used in operating activities (6,624) (13,550)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions - 6,863
Capital contributions by officers/shareholders - 5,500
------- --------
Net cash provided by financing activities - 12,363
------- --------
NET DECREASE IN CASH (6,624) (1,187)
------- --------
CASH, beginning of year 9,150 2,526
------- --------
CASH, end of year $ 2,526 $ 1,339
======= ========
</TABLE>
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS.
F-7
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:
Organization - Boots & Coots International Well Control, Inc. (the Company)
was incorporated under the laws of Delaware on April 28, 1988 as Havenwood
Ventures, Inc. The principal activities from inception have been
organizational matters and the sale and issuance of shares of its $.00001
par value common stock and preliminary development of a theme park, which
was disposed of during fiscal 1991. The Company had no operations from
fiscal 1992 through July 1997 and during such time continued to pursue
acquisition opportunities. On July 29, 1997, the Company completed a merger
transaction with IWC Services, Inc. (see Note 6).
Principles of Consolidation - The accompanying consolidated financial
statements include the amounts of Boots & Coots International Well Control,
Inc. and its wholly-owned subsidiary, SST Productions, Inc. Intercompany
balances and transactions have been eliminated in consolidation.
Net loss Per Share - Net loss per share is based on the weighted average
number of common shares outstanding for the periods presented according to
the rules of the Securities and Exchange Commission.
Income Taxes - The Company reports income taxes in accordance with the
liability method, whereby deferred tax assets and liabilities arise from the
difference between the tax basis of an asset or liability and its reported
amount in the financial statements.
Deferred tax amounts are determined by using the tax rates expected to be in
effect when the taxes will actually be paid or refunds received, as provided
under currently enacted law. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be
realized. Income tax expense or benefit is the tax payable or receivable,
respectively, for the period plus or minus the change during the period in
deferred tax assets and liabilities.
Reclassifications - Certain reclassifications have been made in the June 30,
1996 financial statements to conform with the classifications used in the
current year.
2. RELATED PARTY TRANSACTIONS:
The Company utilized office space on a rent-free basis from the president
during all periods presented.
During the year ended June 30, 1997, an officer contributed $5,500 to the
Company for use as working capital. This amount is reflected a contributed
capital in the accompanying consolidated financial statements.
F-8
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INCOME TAXES:
At June 30, 1997, deferred taxes consisted of the following:
Deferred tax asset, net operating loss
carryforward $ 201,162
Valuation allowance (201,162)
---------
Net deferred taxes $ -
=========
The Company has available, as of June 30, 1997, unused federal operating
loss carryforwards of approximately $599,240 and state operating loss
carryforwards, where the Company is still registered, of approximately
$536,088 which expire through the year 2012. The loss carryforwards, subject
to significant limitations, will be available to the Company should its line
of business or its ownership change substantially.
The valuation allowance will be evaluated at the end of each year,
considering positive and negative evidence about whether the asset will be
realized. At the time, the allowance will either be increased or reduced;
reduction could result in the complete elimination of the allowance if
positive evidence indicates that the value of the deferred tax asset is no
longer impaired and the allowance is no longer required. There was a nominal
change in the valuation allowance on the years ended June 30, 1996 and 1997.
4. FAILED MERGER:
The Company entered into a letter of intent, dated February 18, 1997, with
US Liquids, Inc., a privately held Delaware corporation. Under the terms of
the letter of intent, the Company would have acquired, in a reverse merger,
US Liquids, Inc., subject to certain terms and conditions. In April 1997,
negotiations on the merger were terminated. Costs of the failed merger were
expensed in the year ended June 30, 1997. US Liquids, Inc. made payments
for legal and accounting expenses on behalf of the Company of $6,863, which
amount is included in the accompanying consolidated financial statements as
contributed capital.
5. GOING CONCERN:
In the course of its development activities, the Company had a net capital
deficiency and had sustained continuing operating losses. Through July 31,
1997, various shareholders injected cash into the Company as needed to
finance its operations. As of July 29, 1997, the Company had acquired, in
a reverse acquisition, a privately held, operating company (see Note 6).
The Company's ability to continue as a going concern is ultimately dependent
upon achieving profitable operations.
F-9
<PAGE>
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. SUBSEQUENT EVENTS: On July 28,1997, the shareholders of the Company
approved the following matters: (1) the dissolution of SST Productions,
Inc., a wholly-owned subsidiary of the company; and (2) the agreement and
plan of merger by and among the Company and IWC Services, Inc. (IWC).
The merger was completed on July 29, 1997, and under the plan of merger (i)
the outstanding voting securities of the Company were reverse split in the
ratio of one post-split share for every 135 pre-split shares held by a
shareholder, provided, however, that no single shareholder's share ownership
was reduced to fewer than 100 post-split shares; (ii) certain principal
shareholders of the Company surrendered a total of 740,740 post-split shares
to the Company for cancellation, leaving a total of 1,173,074 shares of
common stock issued and outstanding on the closing date; (iii) each issued
and outstanding share of common stock of IWC was converted into 2.30 post-
merger shares of the Company's common stock, amounting to approximately
15,502,000 post-merger shares in the aggregate; (iv) outstanding options and
warrant to purchase shares of the authorized and unissued common stock of
IWC were converted into substantially similar options and warrants to
purchase shares of the Company's authorized and unissued common stock, and
(v) IWC became a wholly-owned subsidiary of the Company with the former IWC
shareholders, as a group, acquiring shares representing approximately 92% of
the resulting capitalization of the Company. Following the completion of
the transactions, there were approximately 18,630,000 shares of the
Company's common stick issued and outstanding, on a fully diluted basis.
Immediately after the merger, all the officers and directors of the Company
resigned and were replaced by representatives of IWC.
F-10
<PAGE>
Exhibit 21.01 - Subsidiaries
<TABLE>
<CAPTION>
Name Jurisdiction of Incorporation Business Name(s)
- ---- ----------------------------- ----------------
<S> <C> <C>
IWC Services, Inc. Texas, USA International Well Control
Hell Fighters, Inc. Texas, USA
International Well
Control Services, Ltd. Cayman Islands
IWC de Venezuela, C.A. Venezuela
Boots & Coots
Overseas, Ltd. British Virgin Islands
Boots & Coots
Venezuela, S.A. Venezuela
Abasco, Inc. Texas Abasco
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 1,339
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,339
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,339
<CURRENT-LIABILITIES> 4,641
<BONDS> 0
0
0
<COMMON> 19
<OTHER-SE> (3,321)
<TOTAL-LIABILITY-AND-EQUITY> 1,339
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,546
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,378)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,378)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,378)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
