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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 20, 1998
ICHOR CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State of Incorporation)
000-25132 25-1741849
(Commission File Number) (I.R.S. Employer Identification No.)
Suite 1250, 400 Burrard Street, Vancouver, British Columbia V6C 3A6
(Address of principal executive offices, including postal code)
(604) 683-5767
(Registrant's telephone number, including area code)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Effective December 31, 1997, Nazca Holdings Ltd. ("Nazca") changed its fiscal
year end from March 31 to December 31. As a result, the audited consolidated
financial statements for the most recent fiscal year of Nazca are presented
for the nine month period ended December 31, 1997.
(a) Financial Statements:
1. Auditors' Report to the Shareholders of Nazca Holdings Ltd. dated
February 20, 1998.
2. Group Profit & Loss Account of Nazca Holdings Ltd. for the Nine
Months to 31st December 1997 (audited).
3. Group Balance Sheet of Nazca Holdings Ltd. at 31st December 1997
(audited).
4. Company Profit & Loss Account of Nazca Holdings Ltd. for the Nine
Months to 31st December 1997 (audited).
5. Company Balance Sheet of Nazca Holdings Ltd. at 31st December 1997
(audited).
6. Notes to the Audited Financial Statements of Nazca Holdings Ltd. for
the Period Ended on 31st December 1997.
7. Nazca Holdings Ltd. Consolidated Balance Sheet as of September 30,
1998 (unaudited).
8. Nazca Holdings Ltd. Consolidated Statement of Operations for Nine
Months ended September 30, 1998 (unaudited).
(b) Pro Forma Financial Information:
1. ICHOR Corporation and Subsidiaries Pro Forma Consolidated Balance
Sheet as of September 30, 1998 (unaudited).
2. ICHOR Corporation and Subsidiaries Pro Forma Consolidated Statement
of Operations for Nine Months ended September 30, 1998 (unaudited).
3. ICHOR Corporation and Subsidiaries Pro Forma Statement of Operations
for the Year Ended December 31, 1997 (unaudited).
4. ICHOR Corporation and Subsidiaries Notes to Pro Forma Financial
Statements at September 30, 1998.
(c) Exhibits:
Not Applicable.
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NAZCA HOLDINGS LTD.
AUDITORS' REPORT TO THE SHAREHOLDERS OF
NAZCA HOLDINGS LTD.
We have audited the financial statements on pages 2 to 6 which have been
prepared under the historical cost convention and the accounting policies set
out on page 6.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The company's directors are responsible for the preparation of the financial
statements. It is our responsibility to form an independent opinion, based on
our audit, on those statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with generally accepted auditing
standards. An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial statements. It also
includes an assessment of the significant estimates and judgements made by the
directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the group's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the group's and company's affairs at 31st December 1997 and of the group's
and company's results for the period then ended and have been properly
prepared in accordance with generally accepted accounting principles.
/s/ Moore Stephens
MOORE STEPHENS,
Registered Auditors,
Chartered Accountants,
Price Hill House,
23, St. Mary's Street,
Shrewsbury,
Shropshire,
SY1 1ED,
England.
Dated: 20th February, 1998.
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NAZCA HOLDINGS LTD.
GROUP PROFIT & LOSS ACCOUNT
For the 9 months to 31st December 1997
Expressed in U.S. dollars
<TABLE>
<CAPTION>
9 months to 15 months to
December 1997 March 1997
------------- ------------
<S> <C> <C>
INCOME
Consultancy 21,854 45,837
Bank interest received - 24
------------ ------------
21,854 45,861
------------ ------------
EXPENSES
Directors' fees (Nazca Holdings Ltd.) 54,000 78,000
Directors' fees (Nazca S.A.) 22,500 32,500
General consulting (WMC Inc./RT) 112,699 71,094
Water resources project expenses (WMC Inc.) - 15,550
Payroll costs 53,880 90,262
Investigation and development costs 129,172 87,929
Legal and accounting expenses 24,118 17,642
Other expenses 11,372 34,136
Bank interest paid 1 4
Bank charges (89) 160
Exchange adjustments - 191
Loan interest payable 21,131 -
------------ ------------
428,784 427,468
------------ ------------
Loss for the period USD (406,930) USD (381,607)
============ ============
</TABLE>
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NAZCA HOLDINGS LTD.
GROUP BALANCE SHEET
At 31st December 1997
Expressed in U.S. dollars
<TABLE>
<CAPTION>
December 1997 March 1997
------------- -----------
<S> <C> <C>
FIXED ASSETS
Office equipment 166 182
Database 140,000 140,000
------------ -----------
140,166 140,182
------------ -----------
CURRENT ASSETS
Tax debtors 1,776 1,776
Prepayments - 1,112
Cash in hand 10,006 1,551
------------ -----------
11,782 4,439
------------ -----------
CREDITORS
Bank overdraft - 49
Amount due to equity shareholder (MR) 231,809 74,900
Amount due to WMC Inc. 181,274 75,444
Amount due to Water Management Ltd. 5,275 6,928
Tax creditors 8,142 5,002
Accrued directors' fees 187,000 110,500
Other accrued expenses 76,985 3,405
------------ -----------
690,485 276,228
------------ -----------
Net current liabilities (678,703) (271,789)
------------ -----------
Net liabilities USD (538,537) USD(131,607)
============ ===========
CAPITAL AND RESERVES
Equity share capital 250,000 250,000
Accumulated losses (788,537) (381,607)
------------ -----------
Negative shareholders' equity USD (538,537) USD(131,607)
============ ===========
</TABLE>
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NAZCA HOLDINGS LTD.
COMPANY PROFIT & LOSS ACCOUNT
For the 9 months to 31st December 1997
Expressed in U.S. dollars
<TABLE>
<CAPTION>
9 months to 15 months to
December 1997 March 1997
------------- ------------
<S> <C> <C>
INCOME
Consultancy 21,854 45,837
Bank interest received - 24
Loan interest receivable 17,525 11,250
------------ ------------
39,379 57,111
------------ ------------
EXPENSES
Directors' fees 54,000 78,000
General consulting (WMC Inc./RT) 112,699 71,094
Water resources project expenses (WMC Inc.) - 15,550
Travel and subsistence costs 50,000 -
Formation and secretarial fees 1,112 4,844
Accounting and consulting fees 3,573 3,114
Bank interest paid 1 4
Bank charges (89) 160
Loan interest payable 21,131 -
------------ ------------
242,427 172,766
------------ ------------
Loss for the period USD (203,048) USD (115,655)
============ ============
</TABLE>
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NAZCA HOLDINGS LTD.
COMPANY BALANCE SHEET
At 31st December 1997
Expressed in U.S. dollars
<TABLE>
<CAPTION>
December 1997 March 1997
------------- -----------
<S> <C> <C>
FIXED ASSETS
Database 140,000 140,000
Shares in Nazca S.A. 10,000 10,000
------------ -----------
150,000 150,000
------------ -----------
CURRENT ASSETS
Amount due from Nazca S.A. 358,128 221,959
Prepayments - 1,112
------------ -----------
358,128 223,071
------------ -----------
CREDITORS
Bank overdraft - 49
Amount due to equity shareholder (MR) 231,809 74,900
Amount due to WMC Inc. 181,274 75,444
Amount due to Water Management Ltd. 5,275 6,928
Accrued directors' fees 132,000 78,000
Other accrued expenses 26,473 3,405
------------ -----------
576,831 238,726
------------ -----------
Net current liabilities (218,703) (15,655)
------------ -----------
Net liabilities USD (68,703) USD 134,345
============ ===========
CAPITAL AND RESERVES
Equity share capital 250,000 250,000
Accumulated losses (318,703) (115,655)
------------ -----------
Negative shareholders' equity USD (68,703) USD 134,345
============ ===========
</TABLE>
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NAZCA HOLDINGS LTD.
NOTES TO THE FINANCIAL STATEMENTS
For the period ended on 31st December 1997
1. PRINCIPAL ACCOUNTING POLICIES
i) Basis Of Accounting
-------------------
The financial statements have been prepared under the historical
cost convention. The accounts have been prepared in accordance with
generally accepted accounting principles.
ii) Basis Of Consolidation
----------------------
The consolidated financial statements include the audited financial
statements of the company and its wholly-owned subsidiary company
Nazca S.A.
iii) Fixed Assets
------------
Office equipment is stated at cost less accumulated depreciation.
Depreciation is computed on the straight-line method over the
estimated useful lives of the assets.
The investment in the database is stated at cost.
The company's investment in shares in its subsidiary company is
stated at cost.
2. SUBSIDIARY COMPANY
Nazca S.A. is a development stage enterprise incorporated in Chile in
November 1995 with the objective of exploring, developing and exploiting
natural resources. It started water exploration activities in early 1996
in the northern regions of Chile where it owns several exploration
concessions. The company keeps its accounting records in Chilean
currency, and its financial statements have first been converted to
generally accepted accounting principles and then translated into U.S.
dollars.
3. FUTURE OPERATIONS AND FINANCING
Further equity financing is expected to be completed shortly. This
financing will be used for further Phase 2 development work including
exploration for, and proving of, natural resources from a number of
concessions that the subsidiary company controls in northern Chile, over
the next three years.
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NAZCA HOLDINGS LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
(UNAUDITED)
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NAZCA HOLDINGS LTD.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(Unaudited)
ASSETS
Current Assets
Cash $ 14,419
Receivable 13,548
---------------
27,967
Fixed assets 142,755
---------------
$ 170,722
===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Accounts Payable $ 256,666
Long-term Debt 50,000
---------------
306,666
Shareholders' Equity
Share capital 1,114,021
Deficit (1,249,965)
---------------
(135,944)
---------------
$ 170,722
===============
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NAZCA HOLDINGS LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
EXPENSES
Salaries and wages $ 190,042
Exploration expenses 231,051
Legal and professional 15,550
General and administrative 24,785
---------------
Loss for the period 461,428
Deficit, beginning of period 788,537
---------------
Deficit, end of period $ 1,249,965
===============
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ICHOR CORPORATION AND SUBSIDIARIES
PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
(UNAUDITED)
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ICHOR CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(Unaudited)
(dollars in thousand)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 50 $ 14 $ 64
Accounts receivable, net 555 14 569
Note receivable 2,080 - 2,080
Advance to an affiliate 548 - 548
-------- -------- --------
3,233 28 3,261
Other Assets 76 (50) 26
Fixed Assets - 679 679
-------- -------- --------
$ 3,309 $ 657 $ 3,966
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 420 $ 257 $ 677
Advance from an affiliate 780 - 780
-------- -------- --------
1,200 257 1,457
Shareholders' Equity
Common stock 50 2 52
Preferred stock 27 - 27
Additional paid-in capital 10,121 398 10,519
Retained deficit (8,018) - (8,018)
-------- -------- --------
2,180 400 2,580
Less: treasury stock (71) - (71)
-------- -------- --------
2,109 400 2,509
-------- -------- --------
$ 3,309 $ 657 $ 3,966
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these pro forma
financial statements.
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ICHOR CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
(dollars in thousand, except loss per share)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
REVENUES
Fee income $ 132 $ - $ 132
Interest income 60 - 60
Gain on disposal of a subsidiary 437 - 437
-------- -------- --------
629 - 629
COSTS AND EXPENSES
General and administrative 418 230 648
Interest expenses 101 - 101
Exploration expenses - 241 241
Litigation settlement 260 - 260
Bad debt recovery (100) - (100)
-------- -------- --------
679 471 1,150
-------- -------- --------
Loss from operations (50) (471) (521)
Income taxes (12) - (12)
-------- -------- --------
Net loss $ (62) $ (471) $ (533)
======== ======== ========
Basic loss per common share $ (0.04) $ (0.13)
======== ========
</TABLE>
The accompanying notes are an integral part of these pro forma
financial statements.
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ICHOR CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)
(dollars in thousand, except loss per share)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Selling, general and administrative
expenses $ (418) $ (226) $ (644)
Other income (expenses)
Interest expenses (613) (21) (634)
Exploration expenses - (277) (277)
Other 6 31 37
-------- -------- --------
(607) (267) (874)
-------- -------- --------
Loss from continuing operations (1,025) (493) (1,518)
Loss from discontinued operations (3,029) - (3,029)
-------- -------- --------
Net loss $ (4,054) $ (493) $ (4,547)
======== ======== ========
Basic loss per common share
Loss from continuing operations $ (0.21) $ (0.29)
Loss from discontinued operations (0.62) (0.57)
-------- --------
$ (0.83) $ (0.86)
======== ========
</TABLE>
The accompanying notes are an integral part of these pro forma
financial statements.
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ICHOR CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
1. ACQUISITION
On October 20, 1998, ICHOR Corporation (the "Corporation") acquired all of
the issued and outstanding shares of Nazca Holdings Ltd. ("NHL"), a
corporation organized under the laws of the Bahamas, from eight
shareholders. NHL, through its subsidiary, Nazca S.A. ("Nazca"), a Chilean
company, is in the business of the exploration for and development of
ground water resources in Chile. Nazca is seeking to develop a water
utility to provide bulk water supplies to mining, agricultural and public
sectors in Chile.
Nazca has applied for eight exploration concessions (the "Concessions") in
Chile, six of which are pending and two of which are granted. Nazca is in
the process of conducting exploration and development work on the granted
Concessions. Economic quantities of water have been located on the granted
Concession sites.
Pursuant to the purchase agreement, the purchase consideration payable by
the Corporation consists of: (1) $200,000 per Concession payable upon
receipt of regulatory approval allowing a perpetual right of access to and
removal of ground water from the Concession, which payments shall be made
by delivery of shares of the Corporation having an attributed value of
between $1.00 and $1.75 per share; and (2) one share of the Corporation
for each $1.00 of net after tax income earned by the Corporation from the
Concessions, to a maximum of 1,500,000 shares of the Corporation. The
Corporation may make the payments or equivalent payments in cash, in the
event that all required shareholder approvals, if any, are not obtained.
2. PRO FORMA FINANCIAL STATEMENTS
The acquisition is accounted for using the purchase method. The purchase
will result in a purchase price discrepancy, which will be allocated to
the fixed asset, and will be amortized over its estimated useful life.
In accordance with Accounting Principles Board Opinion No. 16, Business
Combinations, contingent consideration is disclosed in the financial
statements but not recorded as a liability or as additional stock issued
until the contingency is determinable beyond a reasonable doubt. In the
pro forma financial statements, it is assumed that two Concessions were
paid for, as only two Concessions were granted as of September 30, 1998.
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The Corporation's management believes that the pro forma results are not
indicative of future operations. During the years 1996, 1997 and 1998, and
for the near foreseeable future, Nazca is a development stage enterprise,
with the objective of exploring, developing and exploiting natural
resources in Chile. It started water exploration activities in early 1996
in the northern regions of Chile. There is no assurance that the
Concessions, if granted and explored, will provide positive future cash
flows.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ICHOR CORPORATION
By: /s/ Roy Zanatta
----------------------
Roy Zanatta
Secretary and Director
Date: January 4, 1998
