U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1998
Commission File No. 0-17269
Viking Resources International, Inc.
------------------------------------
(Exact name of small business issuer in its charter)
Delaware 59-3314928
-------- ----------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3301 W. Gandy Blvd., Tampa, Florida 33611
-----------------------------------------
(Address of principal executive office) (Zip Code)
Issuer's telephone number - (813) 837-2295
-------------
Securities registered under Section 12 (b) of the Exchange Act:
Common Stock, $0.0001 Par Value
-------------------------------
(Title of each class)
OTC:BB
------
(Name of each exchange on which registered)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 month (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 _ No X .
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not 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-
As of June 30, 1998 the registrant had outstanding 34,687,796 shares of its
Common Stock, par value of $0.0001, its only class of voting securities. This
figure does not reflect significant adjustments made subsequent to this Report
(See Part I Recent Developments and Subsequent Events). The aggregate market
value of the shares of Common Stock of the registrant held by non-affiliates on
June 30, 1998, was approximately $3,880,228 based on the average sales prices on
the OTC:BB on such date (See Item 5).
DOCUMENTS INCORPORATED BY REFERENCE
No documents are incorporated by reference into this Report except those
Exhibits so incorporated as set forth in the Exhibit index.
Transitional Small Business Disclosure Format (Check one): Yes [X] No ___.
<PAGE>
Viking Resources International, Inc.
Index to Form 10-KSB
Year Ended June 30, 1998
<TABLE>
<CAPTION>
PART I
<S> <C> <C>
Item 1. Business Description 3 -4
Item 2. Description of Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to Security Holders 5
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters 6
Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations 7
Item 7. Financial Statements and Supplementary Data F-1-F-8
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 7
PART III
Item 9. Directors and Executive Officers of the Registrant 8
Item 10. Executive Compensation 9
Item 11. Security Ownership of Certain Beneficial Owners and Management 9
Item 12. Certain Relationships and Related Transactions 9
PART IV
Item 13. Exhibits, Financial Statements, Schedules and Reports on Form 8-K 10
</TABLE>
2
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Recent Developments
- -------------------
Viking Resources International, Inc., (formerly Viking Management
Group, Inc.) (the "Company"), a Delaware corporation organized June 10, 1987,
has been a development stage corporation which, after several failed
acquisitions (see "History") in the recycling industry during the period of
1995-98, has been in the process of restructuring and re-capitalizing. The
planned Juleon subsidiary fiberglass operation start-up continues to be delayed
due to the Company's inability to fund the operation. Juleon, in the meantime,
operates as a single unit long-haul trucking operation with minimal operating
profits. Subsequent to this reporting period, on July 1, 1998, the Company
communicated via press release to its shareholders the status of its funding and
pending acquisitions, which information was provided by Chairman Kuhr. Following
this release, the Company, through various business contacts, investigation, and
requests to Chairman Kuhr for substantive documentation and information relevant
to the 7/1/98 release, as well as prior releases and other communication,
determined that Mr. Kuhr was unable to secure financing or to conclude
acquisition negotiations. Subsequent to that, Gerald L. Kuhr, Chairman/CEO was
removed in August of 1998 for non-performance and Dan O. Erickson, President/CFO
(and Chairman/CEO after Mr. Kuhr's removal) began again to restructure the
corporation. The Company determined that it would be necessary to investigate
and re-evaluate all projects, including those in the environmental industry.
During this process, Mr. Erickson established four "groups" or divisions within
the framework of the Company - Aviation, Environmental, Manufacturing and Real
Estate. Negotiations were initiated or continued by Mr. Erickson with
acquisition candidates in each of these groups.
On April 2, 1998, the Company announced a pending $2.0M loan signed
with 6.0M shares of restricted Viking common stock as collateral. The loan
proceeds were never paid to Viking and through the insistence of Chairman Gerald
Kuhr, the shares were converted to a free trading status. By the terms of the
agreement, Mr. Kuhr was required to pledge to Viking 6.0M of the shares
previously issued to him. Subsequent to this period, Viking's stock was
substantially shorted by broker/dealers in the market, which caused a major
reduction in the market value of its stock price over the ensuing months. Viking
subsequently obtained the return of 3.0M shares of this issue. The Company may
initiate legal proceedings against all parties involved in this transaction and
subsequent shorting
On April 2, 1998, the Company authorized a buy-back of up to 1,000,000
shares of its common stock in open market or private transactions, subject to
market conditions. On May 1, 1998, the Company opened brokerage accounts with
Comprehensive Capital Corporation of Boca Raton, FL and with J.E. Liss &
Company, Inc. of Milwaukee, WI. Subsequently, the Company purchased 57,700
shares of its common shock. It should be noted that the current outstanding
total of 34,687,796 does not reflect the purchase by the Company of these 57,700
shares.
On April 27, 1998, Chairman Kuhr announced an increase in the ownership of
Broad Cove Colony, Inc. to 80%.
Subsequent Events
On July 24, 1998, the Company announced a $2.0 Million funding
agreement with Hampton Group, LLC. Despite Hampton Group's efforts, they were
unable to secure the funding due to the Company's current price per share as
well as certain internal management conflict, which later resulted in the
Chairman's removal. Hampton Group did assist the Company in facilitating the
return of 3.0M shares of common stock from the Bodden & Co. In a private
transaction, the Company sold 500,000 of these returned shares due to the
critical nature of its cash flow situation.
On July 29, 1998, a Memorandum of Understanding was signed with
Executive JetPort of New Jersey, Inc. (EJP). Located at New Jersey's
Trenton-Mercer Airport, EJP holds a 30-year lease for 27 acres of land and
buildings providing Fixed Base Operation (FBO) services to the aviation
industry.
On August 25, 1998, the Company announced the removal of its Chairman,
Gerald Kuhr for non-performance. The Company canceled the transaction with
Bodden & Co. (which included an issue of 6.0M shares of non-restricted common
stock). Further, the Company canceled all of the restricted stock issued to Mr.
Kuhr - a total of 18.0M shares of restricted common stock. It should be noted
that the current issued and outstanding total of 34,687,796 does not reflect the
cancellation of the Kuhr shares.
3
<PAGE>
History
- -------
The Company was incorporated as Opticorp, Inc. ("OPTI") on June 10,
1987 in the State of Florida. The Corporation entered a state of dormancy in
1992. In March 1995, OPTI merged with Opticorp, Inc. - Delaware ("OPTI")
therefore, redomiciling the Company to Delaware.
On May 17, 1995, OPTI changed its name to Viking Management Group, Inc.
and began a strategy of acquiring and developing businesses related to the
recycling and waste management industries. Viking Management Group, Inc. changed
its name to Viking Resources International, Inc. (the "Company") on October 5,
1995.
During the period of May 1995 to January 1996, the Company, having
raised funding through a Reg. D 504 exempt offering, made several acquisitions,
including some in the recycling industry. These acquisitions and attempted
acquisitions were unsuccessful due to a lack of additional funding and internal
management conflicts. In January 1996, the initial Chairman/CEO/President, Mark
A. Taylor, and the Sr. VP-Acquisitions & Mergers, Rene Bouchard resigned. Mr.
Erickson remained as the sole officer and director. During this period from
January 1996 through March, 1996 and from October 1996 through May 1997, Mr.
Erickson, with the help of an outside consultant, worked to restructure and
bring capital into the Company. In May 1997, Mr. Erickson gained full control of
the Company and with the appointment of Gerald L. Kuhr as Chairman/CEO in June
of 1997, anticipated that the Company would move forward.
From June, 1997 to June, 1998, Chairman Kuhr initiated a number of
transactions to secure funding for the Company, none of which came to fruition,
although Kuhr did personally provide $128,000 to the Company in May of 1998.
Chairman Kuhr attempted through prolonged negotiations to acquire a number of
companies both within and outside of the environmental market. The Company was
unable to substantiate these transactions and negotiations. (See Recent
Developments and Subsequent Events in this report.)
Employees
- ---------
As of June 30, 1968, the Company had a total of three employees on its
corporate staff, two employees in its Juleon subsidiary as well as contracted
public relations and consulting organizations.
4
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY
-----------------------
The Company maintains its current offices in Tampa, Florida.
ITEM 3. LEGAL PROCEEDINGS
-----------------
As set forth in the Company's March 31, 1998 Report 10-QSB, there
remains an unsatisfied claim for $130,000 associating to a court order issued in
favor of Mr. Irving A. Backman of Boston, MA, which action had originated in a
claim against Gerald L. Kuhr and EPi Systems. As the successor-in-interest to
EPi (based on its announced acquisition of EPi), Viking became a party to this
legal action. Mr. Backman and Mr. Erickson have maintained constant
communication and will address this claim when the Company's financial position
improves.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Presently there are no matters to be submitted to a vote of security
holders.
5
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
------------------------------------------------------------------
MATTERS
-------
Market Information
------------------
The Company's Common Stock has been listed on the OTC:BB market since
May 19, 1995 under the symbol "VIKG". The following chart shows the quarterly
high and low bid and ask prices for the Company's Common Stock for the last two
fiscal years, as reported on the OTC:BB. The prices represent quotations by
dealers without adjustments for retail mark-ups, markdowns or commissions and
may not represent actual transactions.
COMMON STOCK
------------
Fiscal Bid Ask
Quarters High Low High Low
- -------- ---- --- ---- ---
1996-97 First Quarter .14 .12 .15 .13
1996-97
Second Quarter .12 .08 .17 .10
1996-97 Third Quarter .14 .12 .13 .10
1996-97 Fourth Quarter .20 .16 .22 .15
1997-98 First Quarter .62 .61 .66 .64
1997-98 Second Quarter 1.875 1.4375 2.0625 1.50
1997-98 Third Quarter 1.30 1.25 1.35 1.28
.
1997-98 Fourth Quarter .81 .80 .88 .82
Holders
-------
As of June 30, 1998, there were approximately 552 holders of record of
the Company's common stock, an undetermined number of which represent more than
one individual participant in the securities positions with the Company.
Dividends
---------
The Company has never paid cash dividends on its common stock, and
intends to utilize current resources to expand its operations. Therefore, it is
not anticipated that cash dividends will be paid on the Company's common stock
in the foreseeable future.
6
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS AND PLAN OF OPERATION
-------------------------------------------
The following is management's discussion and analysis of significant
factors, which have affected the Company's financial position and operations.
Year Ended June 30, 1998
- ------------------------
The fiscal year ended June 30, 1998 was a disappointing one for the
Company. Management had anticipated, with the addition of Gerald L. Kuhr as
Chairman/CEO, that certain funding and acquisitions would be consummated during
this year. Since the Company received no significant funding, the Company was
unable to fund operations during the year ended June 30, 1998 and should
continue to be considered a development stage company, as defined in FASB No. 7.
The continued lack of capital affected the Company in all areas. Its planned
fiberglass subsidiary was unable to proceed. It was unable to move to larger
office space or to hire additional personnel, except for one employee hired in
March, 1998. A funding transaction which involved the issuance of the Company's
stock may have precipitated the shorting of the stock. This sharp drop in market
value in turn affected all areas of the Company by impacting acquisition
negotiations and funding transactions. Subsequent to this report, the Chairman
was removed and the Company has had to restructure.
Liquidity and Capital Resources
- -------------------------------
During the period ending June 30, 1998, with only minor infusions of
capital ($208,000) the Company's liquidity and capital resources continued to be
severely restricted in its operation, development and acquisitions. Capital
infusion will be necessary for the Company to move forward on its acquisition
and operations goals. During this period, the Company announced a $2.0M loan
signed with 6.0M shares of restricted Viking common stock as collateral. The
loan proceeds were never paid to Viking and through the insistence of Chairman,
Gerald Kuhr, the shares were converted to a free trading status. Viking
subsequently obtained the return of 3.0M shares of this issue, but has not yet
received the balance. Possibly as a result of this transaction, Viking's stock
was substantially shorted by broker/dealers in the market which caused a major
reduction in the market value of its stock price over the ensuing months.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The Consolidated Financial Statements of Viking Resources
International, Inc., together with the report thereon of Want & Ender, C.P.A.,
P.C. dated June 30, 1999, and the supplementary data are set forth on pages F-1
through F-8 hereof.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
There are neither documented changes in nor disagreements with
accountants on accounting and financial disclosure.
7
<PAGE>
PART III
--------
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
Gerald L. Kuhr, age 56, has been the Chairman and Chief Executive
Officer since June 9, 1997. Mr. Kuhr has been appointed Treasurer of the Company
as well. Mr. Kuhr has served since 1992 as Chairman/CEO of EPi Systems
International, Inc. (EPi) of Huntington, New York, (now a subsidiary of the
Company) a developmental stage recycling and waste-to-energy company. From 1982
to 1992, Mr. Kuhr was the founder and Chairman/CEO of Kuhr Technologies, Inc.,
(KTIE-NASDAQ) a major waste-to-energy company. From 1980 to 1982, Mr. Kuhr was
Chairman/CEO and founder of Kuhr Technologies, Ltd., an international producer
"skid mounted" conversion plant, which produced sugar from fructose crops for
local consumption in underdeveloped nations. From 1970 to 1980, Mr. Kuhr was one
of three "profit sharing" Executive Chiefs of the Alexander Proudfoot Company, a
national management consulting firm serving the Fortune 500 companies from top
executive level to full operations. From 1968-1970, Mr. Kuhr served as Vice
President of Manufacturing for Litton Industries (LIT-NASDAQ). Mr. Kuhr served
in the Special Forces unit of the US Coast Guard in international intelligence
functions. Mr. Kuhr is a graduate Chemical Engineer and received his degree from
the University of Minnesota.
Dan O. Erickson, age 55, is President and Chief Financial Officer. He
served as Executive Vice President and Chief Financial Officer from May 17, 1995
to October 15, 1996 when he became President. Mr. Erickson also serves as a
Director and Secretary for the Company. Mr. Erickson was VP/CFO of Viking
Recycling, Inc., a developmental stage tire recycling company in Tampa, Florida,
from July 1993 to May 1995. Since July 1991, Mr. Erickson has served as the
President and majority shareholder of Viking Capital Services, Inc. (a business
planning and consulting firm with no relation to Viking Resources International,
Inc.). He was an accounting and tax advisor for E.K. Williams & Company (an
accounting firm in Tampa, Florida) from 1990 to 1991. From 1989 to 1990, Mr.
Erickson held the positions of comptroller and Vice President of Finance for
Lindeen, Inc. (a nationwide retail/wholesale distribution company). From 1983 to
1989, Mr. Erickson was a mortgage broker for Professional Mortgage Co., Inc., (a
mortgage company). From 1972 to 1983 Mr. Erickson was active in Estate and
Business Insurance Planning with Northwestern Mutual Life Insurance Company and
National Life of Vermont. Mr. Erickson also served as a manager of Freedom
Federal S&L, Savings and Loan branch from 1970 to 1972. Mr. Erickson was the
Atlantic Coast regional accounting manager for Cargill's Feed Division from 1967
to 1970 and was a national internal auditor for Cargill, Inc., from 1965 to
1967. Mr. Erickson received his B.A. degree in Accounting/Business from the
University of Minnesota at Duluth.
Linda Specht, age 51, is Vice President, Corporate Communications. She
joined Viking Management Group in August of 1995 as the Office Manager and
Director of Marketing. From October, 1995 through May, 1996, Ms. Specht served
as General Manager for a subsidiary of Viking's located in Sarasota, FL. Prior
to joining Viking, Ms. Specht served in a variety of marketing and management
positions in Tampa, FL with an emphasis on writing, editing and the creation of
collateral materials. Before moving to Florida, she was employed as a General
Manager for Playdrome Recreation, Inc. in Toms River, NJ with complete
responsibility for one of the company's locations. Prior to that, she was a
Managing Editor for Infocus, Inc. in Philadelphia, PA, a computer trade journal.
Ms. Specht was a founder of The Watchung Software Group, Inc., a software
consulting firm in Plainfield, NJ with a client base of colleges and
universities located throughout the United States. From 1979 to 1983, Ms. Specht
served in management positions with Axxess Information Systems, Inc., a Prime
computer OEM, where she assisted the owners in all startup operations creating
each of the company's business departments and ultimately serving as Director of
Marketing Services.
8
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
----------------------
The following table shows the cash compensation of each executive
officer and as to all executive officers as a group, during the fiscal year
ended June 30, 1998:
<TABLE>
<CAPTION>
Name and Fiscal Other All
Principal Year Annual Other
Position Ended Salary($) Bonus($) Compensation Compensation
- -------- ----- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Gerald L. Kuhr
COB/CEO 6/30/98 (a) -0- -0- 20,761(d) -0-
Dan O. Erickson
Pres./CFO 6/30/98 (b) -0- -0- 3,143(d) -0-
Linda Specht
VP 6/30/98 (c) -0- -0- 6,200(d) -0-
</TABLE>
Notes:
(a) The Company has signed a five year employment agreement, effective 6/09/97,
with Mr. Kuhr which includes salary of $156,000 per year, $600 per month auto
allowance and health insurance benefits.
(b) Mr. Erickson's five year employment agreement, effective as of June, 1995,
was amended, effective 6/9/97, to increase his salary to $104,000 per year.
(c) The Company signed a three year employment agreement with Ms. Specht,
effective 3/15/98 which provides for salary of $60,000 per year, $500 per month
auto allowance and other benefits as they become available to the Company's
employees. Ms. Specht's agreement also provides for two (2) three-year renewals.
(d) Minimal compensation has been paid; however, salary and benefits have
accrued since 6/09/97 for Mr. kuhr and Mr. Erickson and since 3/15/98 for Ms.
Specht and will be paid when the Company is financially able to do so.
9
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table indicates all persons who, as of June 30, 1998, or
the most recent particle date, are known by the Company to own beneficially more
than 5% of any class of the Company's voting securities, and all Directors of
the Company and all Officers who are not Directors of the Company, as a group.
Percent of class for all beneficial owners assumes that all options and warrants
have been exercised and the Preferred Stock has been converted.
(a) Security ownership of certain beneficial owners.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
NAME AND ADDRESS AMOUNT AND NATURE
TITLE OF BENEFICIAL OF BENEFICIAL PERCENT
OF CLASS OWNER OWNERSHIP IN NUMBER OF CLASS
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Common Gerald L. Kuhr 18,000,000(a) 52.00
5000 S. Himes Ave., # 332
Tampa, Florida 33611
Common Dan O. Erickson 3,000,000(b) 8.70
5000 S. Himes Ave., # 332
Tampa, Florida 33611
Common Linda Specht 100,000(c) .003
5000 S. Himes Ave., #332
Tampa, Florida 33611
</TABLE>
Notes:
(a) Subsequent to this report, the Company cancelled all of these shares as a
result of mr. Kuhr's termination and the later recission of the EPi
acquisition which included the cancellation of the Connecticut ACLF-zoned
property and the Board Cove Colony alleged ownership. Therefore, the total
shares outstanding does not reflect this reduction in shares.
(b) 150,000 shares of this total were provided to I. Backman as a part of a
settlement in an action brought against Kuhr, EPi and Viking.
(c) Although authorized, these shares have not yet been issued. Therefore, the
total shares outstanding does not reflect this addition in shares.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Qualifying Transactions Involving Interested Persons or Entities
----------------------------------------------------------------
There were no transactions involving interested persons or entities
during this period.
10
<PAGE>
PART IV
-------
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
------------------------------------------------------------------
(a) Financial Statements. The following Consolidated Financial
Statements of Viking Resources International, Inc. are included in PART II, ITEM
7:
Page
----
Independent Auditors' Report on Consolidated
Financial Statements F-1
Consolidated Balance Sheets - June 30, 1997 F-2 & F-3
Consolidated Statements of Operations - Year Ended
June 30, 1997 F-4
Consolidated Statements of Stockholders' Equity -
Year Ended June 30, 1997 F-5
Consolidated Statement of Cash Flows - Year
Ended June 30, 1997 F-6
Notes to Consolidated Financial Statements - Year
Ended June 30, 1997 F-7 through F-8
(b) Exhibits None
--------
(c) Reports on Form 8-K None
-------------------
11
<PAGE>
WANT & ENDER, CPA, P.C.
- -----------------------
CERTIFIED PUBLIC ACCOUNTANTS
386 Park Avenue South, Suite 1613
New York, NY 10016
MARTIN ENDER, CPA Telephone (212) 684-2414
STANLEY Z. WANT. CPA. CFP Fax (212) 684-5433
Independent Auditor's Report
To the Shareholders' and Board of Directors of:
VIKING RESOURCES INTERNATIONAL, INC.
3301 West Gandy Blvd.
Tampa, FL 33611
We have audited the accompanying balance sheet of VIKING RESOURCES
INTERNATIONAL, INC. at June 30, 1998 and the related statements of income,
retained earnings, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We have conducted our audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit also 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 our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of VIKING RESOURCES INTERNATIONAL,
INC. at June 30, 1998, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
//S//
Martin Ender
Want & Ender CPA, P.C.
Certified Public Accountants
New York, NY
June 30, 1999
F-1
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
Balance Sheet
As At June 30, 1998
Current Year Prior Year 1
6-30-98 6-30-97
Assets
Current Assets
Cash - Checking $ 2,196.54 $ 472.86
Loan Receivable (See Note 3) 3,700.00 3,538.47
Other Receivable 1,825.00 0
------------- ------------
Total Current Assets: 7,721.54 4,011.33
Fixed Assets
Office Equipment 31,440.23 27,937.77
Acc Depr Office Eqpt (16,474.59) (11,410.40)
------------- ------------
Total Fixed Assets: 14,965.64 16,527.37
Other Assets
Organization Costs (See Note 5) 76,111.18 126,111.18
Acc Amort Org Costs (42,828.25) (28,428.25)
Security Deposits 0 195.32
------------- ------------
Total Other Assets: 33,282.83 97,878.25
Total Assets: $ 55,970.11 $ 118,416.95
============= ============
The accompanying notes are an integral part of the financial statements
F-2
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
Balance Sheet
As At June 30, 1998
<TABLE>
<CAPTION>
Current Year Prior Year 1
6-30-98 6-30-97
<S> <C> <C>
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $ 28,165.51 $ 88,560.53
Comp Hdw-CapitaL Lease 14,003.90 23,727.90
Notes Payable (See Note 4) 0.00 75,000.00
Wages Payable 106,000.00 44,400.00
Notes Payable Offr 0.00 19,265.25
Federal P/R Taxes 81,775.36 78,669.86
State And City P/r Taxes 0.00 2,338.34
Tax Interest & Penalties Payable 123,110.00 87,410.00
Accr Other Taxes 0.00 3,105.50
Accr Expenses 9,400.00 36,989.20
---------------- ------------
Total Current Liabilities: 362,454.77 439,128.24
Long Term Liabilities
Total Long Term Liabilities: 0.00 0.00
---------------- ------------
Total Liabilities: (362,454.77) (439,128.24)
Stockholders' Equity
Common Stock 3468.78 608.15
100,000,000 Authorized
6,081,500 Issued & outstanding at .0001 par value
Addtl Paid In Capital 840,829.24 492,492.16
Retained Earnings - Un Ap (1,150,782.68) (813,811.60)
---------------- ------------
Total Equity: (306,484.66) (320,711.29)
Total Liabilities & Equity: $ 55,970.11 $ 118,416.95
================ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
Statement of Income, Profit & Loss
For Year Ended June 30, 1998
<TABLE>
<CAPTION>
Current Year Prior Year 1
6-30-98 6-30-97
<S> <C> <C>
Income
Other Income 0.00 6,150.95
-------------- --------------
0.00 6,150.95
Operating Expenses
Officers Salary 114,904.81 15,000.00
Outside Contracting 5,313.64 15,915.00
Professional Fees 0.00 3,000.00
Rent 7,420.70 0.00
Telephone Expenses 14,471.87 0.00
Office Expenses 2,024.51 0.00
Office Supplies 2,469.27 0.00
Printing And Stationery 515.96 0.00
Postage Expenses 809.00 60.00
Utilities 345.32 0.00
Legal Fees 4,171.00 00.00
License and Permits 0.00 3057.89
Interest 12,218.91 11,748.22
Travel 15,260.76 0.00
Repairs 85.00 0.00
Bank And Finance Charges 659.50 120.00
Dues And Subscriptions 98.00 0.00
Auto Expenses 4,268.80 0.00
Advertising 31,951.11 0.00
Investor Relations 27,966.60 0.00
-------------- --------------
Total Operating Expenses: 256,791.89 48,901.11
Net Operating Income (Loss): ($256,791.89) ($42,750.16)
Taxes
Interest & Penalties 35,700.00 87,750.00
FUI and SUI 0.00 0.00
-------------- --------------
Total Taxes: 35,700.00 87,410.00
-------------- --------------
Net Income (Loss) After Taxes: (292,491.89) (130,160.16)
Other Deductions
Depreciation 5,064.18 4,623.20
Amortization 14,400.00 16,175.00
Loss on Sale of Assets 0.00 0.00
Settlement of Note 25,015.00 0.00
-------------- --------------
Total Other Deductions: 44,479.19 20,798.20
Other Income
Interest Income 0.00 0.00
-------------- --------------
Net Income (Loss) for Period: ($ 336,971.08) ($ 150,958.36)
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
Statements of Shareholders' Equity
June 30, 1998
<TABLE>
<CAPTION>
Current Year Prior Year 1
6-30-98 6-30-97
<S> <C> <C>
Retained Earnings - Un Ap (813,811.60) (662,853.24)
Common Stock issued during the year $3,468.78 $608.15
34,687,796 shares par value $ .0001
Additional Paid in Capital Contributed 840,829.24 492,492.16
Net Income/(Loss) for the year (336,971.08) (150,958.36)
------------ ------------
Balance June 30, 1998 $(306,484.66) $(320,711.25)
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
Statement of Cash Flows
For the Period Ended June 30, 1998
<TABLE>
<CAPTION>
Current Year Prior Year 1
6-30-98 6-30-97
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $ (336,971.08) $ (150,958.36)
Adjustments to Reconcile Net Income to Net
Cash Provided by operating Activities:
Depreciation and Amortization 19,464.19 20,798.20
(Increase) Decrease in Accounts Receivable (161.53) 77,213.82
(Increase) Decrease in Other Assets (1,629.68) 0.00
(Increase) Decrease in Subscriptions Receivable 0.00 25,000.00
Increase (Decrease) in Accounts Payables (60,395.02) (24,400.95)
Increase (Decrease) in Current Liabilities (51,978.45) (1,362.11)
Increase (Decrease) in Income Taxes Payable 35,700.00 87,410.00
-------------- -------------
Total Adjustments (59,000.49) 184,638.96
Net Cash Provided (Used) By Operating Activities $ (395,971.57) $ 33,680.60
Cash Flows from Investing Activities
Purchase of Fixed Assets (3,502046) 0.00
Deferred Organization Costs 50,000.00 0.00
-------------- -------------
Net Cash Provided (Used) By Investing Activities 46,497.54 0.00
Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock 351,197.71 216,146.18
Proceeds from Issuance of long-term Debt 0.00 (250,000.00)
-------------- -------------
Net Cash Provided (Used) By Financing Activities 351,197.71 (33,853.82)
Net Increase (Decrease) in Cash 1,723.68) (173.22)
Cash at Beginning of Period 472.86 646.08
-------------- -------------
Cash at End of Period $ 2,196.54 $ 472.86
============== =============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-6
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 1 - BACKGROUND
Viking Venture Capital corporation , a Florida corporation, was formed on
December 20, 1993. On May 12, 1995, Viking Venture Capital Corporation changed
its name to Viking Management Group, Inc. On May 16, 1995, the Company was
acquired by Opticorp, Inc., a publicly-held Delaware corporation formed June 10,
1987. Opticorp, Inc. was inactive with no significant assets, liabilities or
operations. Upon consummating the acquisition, Opticorp, Inc. changed its name
to Viking Management Group, Inc. Viking Management Group, Inc. changed its name
to Viking Resources International, Inc. on October 5, 1995. The purpose of this
newly formed company is to seek out acquisitions of private companies involved
in tire and plastic recycling as well as related industries.
In June, 1997, a new Chairman/CEO, Gerald L. Kuhr, was appointed and embarked on
a plan of restructuring operations and capitalization. During his tenure several
transactions took place; acquisition of EPi Systems International for 6 million
shares and the acquisition of Juleon, Inc. for 250,000 shares. Both transactions
have been subsequently rescinded. In addition, 12 million shares were issued to
Gerald L. Kuhr for collateral purposes for financing of future acquisitions.
During August 1998, the Board of Directors finalized a resolution that
terminated Mr. Kuhr and his shares cancelled by Corporate Resolution.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
- -------------------
Revenues are recognized at the time goods are delivered to the customer.
Property and Equipment
- ----------------------
Property and equipment are recorded at cost. Depreciation is provided for using
the straight-line method over the estimated useful life of the assets.
Depreciation expense was $5,064.19 for the year ended June 30, 1998.
Expenditures for maintenance and repairs are charged to income as incurred.
Major expenditures for betterments and renewals are capitalized. The carrying
amounts of assets sold or retired and related accumulated depreciation are
eliminated in the year of disposal and the resulting gains and losses are
included in income.
Income Taxes
- ------------
Certain income and expense items are accounted for differently for financial
reporting purposes and for income tax purposes. Deferred taxes in recognition of
timing differences are not reflected in the financial statements as the Company
has operating loss carry forwards. (See Note 6)
In February, 1992, the Financial Accounting Standards Board adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes, "which
supersedes SFAS No. 96. The Company adopted this pronouncement in its financial
statements for the period ended June 30,1995.
F-7
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
Statements of Cash Flows
- ------------------------
For purposes of the statements of cash flows, the Company generally considers
all highly liquid securities (consisting principally of short-term money market
investments, and certificates of deposits) with a maturity of redemption option
of three months or less, to be cash equivalents.
NOTE 3-Loan Receivable
The receivable represents the balance due from AKO Resources - $3,700.00.
NOTE 4-Subscription Receivable
None
NOTE 5-Organization Costs
Organization expense was incurred by purchase of the Opticorp, Inc. public shell
from The Worthington Company for the sum of $125,000 and $50,000 was paid
initially and the remaining amount is represented as a Note Payable for $75,000
which was due August 17, 1995. On March 31. 1998, the Note Payable was settled
and paid in full.
NOTE 6 - PROVISION FOR INCOME TAXES
The Company has experienced net loss since its inception. At June 30, 1998, the
Company has unused operating-loss carry forwards of $ 1,150,782.60.
NOTE 7 - SUBSEQUENT EVENTS
During September, 1998, the Company received a written funding commitment from a
broker in Philadelphia, PA as a result of a Letter of Intent to acquire
Executive JetPort of New Jersey, Inc. The broker failed to fund this
transaction. Subsequently, a bridge loan was negotiated and an acquisition
agreement was signed in February, 1999.
F-8
<PAGE>
SIGNATURES
- ----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
VIKING RESOURCES INTERNATIONAL, INC.
DATE: JUNE 30, 1999 BY /S/ DAN O. ERICKSON
--------------------
DAN O. ERICKSON,
PRESIDENT/CFO
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
SIGNATURE DATE
/S/ DAN O. ERICKSON JUNE 30, 1999
- -------------------
DAN O. ERICKSON,
PRESIDENT, CHIEF FINANCIAL OFFICER & DIRECTOR
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-1-1997
<PERIOD-END> JUN-30-1998
<CASH> 2,197
<SECURITIES> 0
<RECEIVABLES> 5,525
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,722
<PP&E> 31,440
<DEPRECIATION> (16,475)
<TOTAL-ASSETS> 55,970
<CURRENT-LIABILITIES> 362,455
<BONDS> 0
0
0
<COMMON> 3,469
<OTHER-SE> (306,485)
<TOTAL-LIABILITY-AND-EQUITY> 55,970
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 256,792
<OTHER-EXPENSES> 44,479
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,700
<INCOME-PRETAX> (336,971)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (336,971)
<EPS-BASIC> (0.010)
<EPS-DILUTED> (0.010)
</TABLE>
