SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
Amendment No. 1 to Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) September 4, 1997
VIKING CAPITAL GROUP, INC.
(Exact Name of Registrant as Specified in its Charter
Utah
(State or Other Jurisdiction of Incorporation)
0-22744 87-0442090
---------------------- ------------------------
Commission File Number (IRS Employer Ident. No.)
Two Lincoln Centre, 5420 LBJ Freeway, Ste 300, Dallas, Texas 75252
------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(972) 386-9996
----------------
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
The undersigned registrant hereby amends Current Report on Form 8-K dated
September 4, 1997 to include Items 7(a) and 7(b) as set forth in the attached
pages.
Item 7(a) begins on page 1 following this signature page. Item 7(b) begins on
page 8 following this signature
page.
Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
Viking Capital Group, Inc.
Date: November 18, 1997 /s/ William J. Fossen
----------------------------
William J. Fossen
President, Chief Financial and
Accounting Officer
<PAGE>
ITEM 7(a) - FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Audited Year End December 31, 1996 and Unaudited Period Ending
June 30, 1997
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TRIPLE A ANNUITY MARKETING INC.
YEAR ENDED DECEMBER 31, 1996
<PAGE>
TRIPLE A ANNUITY MARKETING INC.
Index to Financial Statements
PAGE
----
Report of Independent Certified Public Accountants 1
Financial Statements Triple A Annuity Marketing Inc.
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders
Triple A Annuity Marketing Inc.
We have audited the accompanying balance sheet of Triple A Annuity Marketing
Inc. as of December 31, 1996 and the related statements of operations,
shareholders' equity, 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 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
misstatement. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Triple A Annuity Marketing Inc.
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
KING GRIFFIN & ADAMSON P.C.
Dallas, Texas
October 24, 1997
<PAGE>
<TABLE>
<CAPTION>
TRIPLE A ANNUITY MARKETING INC.
BALANCE SHEETS
June 30, 1997 (unaudited) and December 31, 1996
ASSETS
------
<S> <C> <C>
(Unaudited)
June 30, December 31,
1997 1996
------------ -------------
CURRENT ASSETS
Cash $ 66,243 $ 35,560
PROPERTY AND EQUIPMENT
Equipment 5,745 4,446
Automobile 31,000 -
36,745 4,446
Less accumulated depreciation (4,648) (882)
----------- -----------
Total property and equipment 32,097 3,564
----------- -----------
TOTAL ASSETS $ 98,340 $ 39,124
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 28,478 $ 15,952
Accrued interest, related party - 1,750
Obligation under capital lease, current portion 1,299 -
Note payable, related party 7,525 17,500
Current portion of note payable 3,000 -
----------- -----------
Total current liabilities 40,302 35,202
----------- -----------
LONG-TERM DEBT
Note payable 10,750 -
----------- -----------
Total liabilities 51,052 35,202
SHAREHOLDERS' EQUITY
Common stock (no par value, 100,000 shares authorized,
200 shares issued and outstanding) 100 100
Retained earnings 47,188 3,822
----------- -----------
Total shareholders' equity 47,288 3,922
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 98,340 $ 39,124
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
TRIPLE A ANNUITY MARKETING INC.
STATEMENTS OF OPERATIONS
Six months ended June 30, 1997 (unaudited) and
Year ended December 31, 1996
(Unaudited)
Six months
ended Year ended
June 30, December 31,
1997 1996
------------ -----------
REVENUE $ 113,019 $ 195,503
COSTS AND EXPENSES
Selling 6,403 42,672
General and administrative 52,979 83,166
------------ ------------
59,382 125,838
------------ ------------
Income from operations 53,637 69,665
------------ ------------
OTHER INCOME (EXPENSES)
Interest expense (380) (1,750)
------------ ------------
NET INCOME $ 53,257 $ 67,915
============ ============
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
TRIPLE A ANNUITY MARKETING INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Six months ended June 30, 1997 (unaudited) and
Year ended December 31, 1996
<S> <C> <C>
Common Retained
Stock Earnings Total
------------- ----------- ------------
Balance, January 1, 1996 $ 100 $ - $ 100
Net income - 67,915 67,915
Shareholder distributions - (64,093) (64,093)
------------ ------------ ------------
Balance, December 31, 1996 100 3,822 3,922
Net income (unaudited) - 53,257 53,257
Shareholder distributions (unaudited) - (9,891) (9,891)
------------ ------------ ------------
Balance, June 30, 1997 (unaudited) $ 100 $ 47,188 $ 47,288
============ ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
TRIPLE A ANNUITY MARKETING INC.
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1997 (unaudited) and
Year ended December 31, 1996
<S> <C> <C>
(Unaudited)
Six months
ended Year ended
June 30, December 31,
1997 1996
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 53,257 $ 67,915
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 3,766 882
Change in:
Accounts payable and accrued expenses 10,776 17,702
------------ -------------
Net cash provided by operating activities 67,799 86,499
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (31,000) (4,446)
------------ -------------
Net cash used in investing activities (31,000) (4,446)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to related party - 17,500
Principal payment on note payable to related party (9,975) -
Proceeds from note payable 13,750 -
Shareholder distributions (9,891) (64,093)
------------ -------------
Net cash used in financing activities (6,116) (46,593)
------------ -------------
INCREASE IN CASH 30,683 35,560
Beginning cash 35,560 100
------------ -------------
Ending cash $ 66,243 $ 35,560
============= =============
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 2,130 $ -
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
TRIPLE A ANNUITY MARKETING INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (unaudited) and December 31, 1996
Triple A Annuity Marketing Inc. (the "Company") is a national life and health
insurance marketing agency or managing general agency. The Company was
incorporated on July 14, 1995 and commenced business in 1996. It's primary
office is in Arizona. The Company recruits agents and agencies nationwide.
Triple A currently utilizes approximately 3,000 agents in approximately 45
states to sell products for various insurance companies. The primary product of
Triple A is a combination of universal life and long term care annuities. Triple
A also sells group health insurance.
Commissions (revenues) to Triple A are based upon a percentage of the premium
(sales) dollars placed with an insurance company. These premiums/sales are
generated by Triple A's agents. Triple A has contracted with these various
insurance companies to pay commissions to their agents directly and thereby
receives a "net" commission rather than a "gross" commission.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all cash on
hand and in banks, certificates of deposit and other highly liquid debt
instruments with a maturity of three months or less when purchased to be cash
and cash equivalents.
Property and Equipment
Property and equipment is carried at cost. Depreciation for financial statement
purposes is computed using the straight-line method over the estimated useful
life of the asset of five years. Depreciation for Federal income tax reporting
purposes is calculated using statutory rates with corresponding statutory lives.
Maintenance and repairs are charged to expense as incurred. Major renewals and
betterments are capitalized.
Advertising Costs
Advertising costs are charged to operations as incurred. Advertising costs
charged to expense in 1996 totaled $5,104.
Income Taxes
The Company, with the consent of its stockholders, has elected under the
Internal Revenue Code to be an S corporation. In lieu of corporation income
taxes the stockholders of an S corporation are taxed on their proportionate
share of the company's taxable income. Therefore, no provision or liability for
federal income taxes has been included in the financial statements.
Unaudited Period
The financial information as of June 30, 1997 and for the six months ended June
30, 1997 is unaudited. In the opinion of management, such information contains
all adjustments, consisting of normal recurring adjustments, necessary for fair
presentation of the results of such period. The results of operations for the
interim period is not necessarily indicative of the results of operations for
the full fiscal year.
Use of Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported amounts of
revenues and expenses. Actual results could vary from the estimates that were
used.
6
<PAGE>
TRIPLE A ANNUITY MARKETING INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (unaudited) and December 31, 1996
NOTE B - RELATED PARTY TRANSACTIONS
At December 31, 1996, the Company owed an officer $17,500 under a note
agreement. The note is unsecured, due on demand, and bears interest at 10%.
Interest expense of $1,750 was recognized under the agreement and remains
payable at year end.
The Company shares office space with a company under common control. The Company
is not the lessee under the lease agreement but under a verbal agreement has
sub-leased the space on a month to month basis. Total rent paid to the related
company under this arrangement totaled $9,364 for the year ended December 31,
1996.
NOTE C - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure About Fair
Value of Financial Instruments" requires disclosure about the fair value of
financial assets and liabilities for which it is practicable to estimate.
Current financial assets and liabilities and notes payable are all carried at
amounts that approximate their fair values.
NOTE D - SUBSEQUENT EVENTS
On September 4, 1997, the Company was acquired in a stock-for-stock transaction
by Viking Capital Group, Inc. ("Viking"). Viking exchanged 500,000 of its shares
for 100% of the outstanding shares of the Company. In conjunction with this
transaction, the Company's tax status was changed from an S-corporation to a
C-corporation.
The Agreement provides that the acquiree may rescind the stock for stock
agreement one year from the closing (September 4, 1997) should the trading price
(Bid) of the Company's Common Stock not equal or exceed $3.00 per share.
NOTE E - CONCENTRATIONS
The Company conducts business under contractual arrangements with three
insurance companies. The loss of any one of these arrangements could have a
significant impact on the Company's results of operations. However, the risk of
loss is reduced by the large commission base of individual policyholders.
NOTE F - NOTE PAYABLE (Unaudited
Note payable at June 30, 1997 consists of a note payable to bank which is due in
monthly installments of $326, bears interest at 10.95%, and is collateralized by
an automobile. The note matures in January, 2002. Annual future principle
payments under the agreement are as follows for the years ended June 30:
1998 $ 3,000
1999 2,757
2000 3,074
2001 3,429
2002 1,490
--------
$ 13,750
7
<PAGE>
ITEM 7(b) - PROFORMA FINANCIAL INFORMATION
Year Ended December 31, 1996 and Period Ended June 30, 1997
VIKING CAPITAL GROUP, INC.
Unaudited Pro Forma Consolidated Financial Statements
Introductory Paragraph
- ----------------------
In September, 1997, Viking Capital Group, Inc. ("Viking") completed a
stock-for-stock acquisition of Triple A Annuity Marketing Inc. ("Triple A").
Triple A was incorporated in 1995 and began operations in 1996. Viking's
acquisition of Triple A was treated as an equity investment in an unconsolidated
subsidiary. In July 1997, Viking completed a stock-for-stock acquisition of
N.I.A.I. Insurance Administrators, Inc. ("NIAI"). This acquisition was also
accounted for as a pooling of interests. Through June 30, 1997, NIAI has had no
revenue or expenses.
The pro forma unaudited consolidated balance sheet at June 30, 1997 gives effect
to the acquisition of Triple A using the equity method as if it had occurred on
that date. The investments in subsidiary has been recorded at the net equity of
Triple A. The pro forma unaudited statements of operations for the six month
period ended June 30, 1997 and the year ended December 31, 1996 reflect the
results of operations of Viking and the equity income interest in the
unconsolidated subsidiary, Triple A. Due to the provisions of an employment
contract, Triple A's historical net income is assumed to be offset with officer
salary for proforma purposes. As a result, Viking's equity interest in the
proforma net income of Triple A is zero.
The unaudited pro forma financial information is not necessarily indicative of
the results of operations that would have been reported had such events occurred
on the dates specified, nor is it necessarily indicative of the future results
of the consolidated entities. The unaudited consolidated pro forma financial
statements should be read in conjunction with historical financial statements of
the Company.
The transaction was accounted for under the equity method as it is unclear
whether control of the subsidiary will be permanent.
8
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET
June 30, 1997
<S> <C> <C> <C>
Historical
------------------------------------------- Pro Forma
Viking Triple A NIAI Adjustments Total
----------- ----------- ----------- -----------
CURRENT ASSETS
Cash $ 11,832 $ - $ - $ 11,832
Notes and accounts receivable
and accrued interest 77,241 - - 77,241
Prepaid expenses 22,075 - - 22,075
----------- ----------- ----------- -----------
Total current assets 111,148 - - 111,148
Total property and equipment, net 99,133 - 10,000 109,133
Other Assets
Investment in subsidiary - - - 34,800(a) 34,800
Other Assets 31,767 - - - 31,767
----------- ----------- ----------- -----------
Total other assets 31,767 - - - 66,567
TOTAL ASSETS $ 242,048 - $ 10,000 $ 286,848
========== ========== ========== ==========
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 78,681 - $ - $ 78,681
Accrued payroll and payroll taxes 353,475 - - 353,475
Notes payable 696,732 - - 696,732
Notes payable to related parties 58,760 - - 58,760
----------- ----------- ----------- -----------
Total current liabilities 1,187,648 - - 1,187,648
LONG-TERM DEBT
Obligation under capital lease 93,546 - - 93,546
----------- ----------- ----------- -----------
TOTAL LIABILITIES 1,281,194 - - 1,281,194
----------- ----------- ----------- -----------
STOCKHOLDERS' DEFICIT
Common stock 14,323 - 200 500 15,032
Common stock Class B 100 - - 100
Additional paid-in capital 3,341,626 - 9,800 34,300(a) 3,385,726
Retained earnings (accumulated deficit) (4,388,789) - - (4,388,789)
----------- ----------- ----------- -----------
Less treasury stock (6,406) - 10,000 (6,406)
----------- ----------- ----------- -----------
Total stockholders' deficit (1,039,146) - 10,000 (994,346)
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 242,048 - $ 10,000 $ 286,848
========== ========== ========== ==========
(a) To reflect the investment in subsidiary accounted for under the equity method.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
UNAUDITED PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
Six months ended June 30, 1997
<S> <C> <C> <C>
Historical
------------------------------------------- Pro Forma
Viking Triple A NIAI Adjustments Total
----------- ----------- ----------- ----------- -----------
Revenue $ - $ - $ - $ - $ -
Cost and Expenses
Selling expenses - - - - -
General and administrative 558,004 - - - 558,004
---------- ---------- ---------- ---------- ----------
Total Costs and Expenses 558,004 - - - 558,004
Income (loss) from operations (558,004) - - - (558,004)
Other Income (Expense)
Interest income 5,168 - - - 5,168
Interest expense (41,189) - - - (41,189)
Investment income - - - - -0-(a)
---------- ---------- ---------- ---------- ----------
Total Other Income (Expense) (36,021) - - - (36,021)
Income (loss) before income taxes (594,025) - - - (594,025)
Income tax provision - - - - -
---------- ---------- ---------- ---------- ----------
Net income (loss) $ (594,025) $ - $ - $ - $ (594,025)
========== ========== ========== ========== ==========
Loss per common share
Loss per common share $ (.04) $ (.039)
Loss per common share
assuming full dilution $ (.04) $ (.039)
Weighted average common shares
outstanding 14,177,208 14,877,208
</TABLE>
(a) Assumed equityinterest in unconsolidated subsidiary's pro forma net income.
10
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
UNAUDITED PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 1996
<S> <C> <C> <C>
Historical
------------------------------------------- Pro Forma
Viking Triple A NIAI Adjustments Total
----------- ----------- ----------- ----------- -----------
Revenue $ 273,925 $ - $ - $ - $ 273,925
Cost and Expenses
Selling expenses 12,923 - - 12,923
General and Administrative 1,218,774 - - - 1,218,774
---------- ---------- ---------- ---------- ----------
Total Costs and Expenses 1,231,697 - - - 1,231,697
Income (loss) from operations (957,772) - - - (957,772)
Other Income (Expense)
Interest income 7,294 - - - 7,294
Interest expense (28,746) - - - (28,746)
Other (1,332) - - - (1,332)
Investment income 0 - -0-(a) -
---------- ---------- ---------- ---------- ----------
Total Other Income (Expense) (22,784) - - - (22,784)
Income (loss) before income taxes (980,556) - - - (980,556)
Income tax provision - - - - -
---------- ---------- ---------- ---------- ----------
Net income (loss) $ (980,556) $ - $ - - $ (980,556)
========== ========== ========== ========== ==========
Loss per common share
Loss per common share $ (.07) $ (.069)
Loss per common share
assuming full dilution $ (.07) $ (.069)
Weighted average common shares
outstanding 13,353,520 14,053,520
</TABLE>
(a) Assumed equity interest in unconsolidated subsidiary's pro forma net income.
11
