<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------- ---------
Commission File Number 000-25132
ICHOR Corporation
(Exact name of Registrant as specified in its charter)
Delaware 25-1741849
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 1620, 400 Burrard Street
Vancouver, British Columbia, Canada V6C 3A6
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code: (604) 683-5767
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
(Title of Class)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $4,656,900 as of March 15, 2000, computed
on the basis of the average of the bid and ask prices on such date.
As of March 27, 2000, there were 4,918,770 shares of the Registrant's
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1999 Proxy Statement to be filed within 120
days of the period ended December 31, 1999 are incorporated by reference
into Part III.
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<PAGE> 2
FORWARD-LOOKING STATEMENTS
Statements in this report, to the extent they are not based on historical
events, constitute forward-looking statements. Forward-looking statements
include, without limitation, statements regarding the outlook for future
operations, forecasts of future costs and expenditures, evaluation of
market conditions, the outcome of legal proceedings, the adequacy of
reserves, or other business plans. Investors are cautioned that forward-
looking statements are subject to an inherent risk that actual results may
vary materially from those described herein. Factors that may result in
such variance, in addition to those accompanying the forward-looking
statements, include changes in interest rates, prices, and other economic
conditions; actions by competitors; natural phenomena; actions by
government and regulatory authorities; uncertainties associated with legal
proceedings; technological development; future decisions by management in
response to changing conditions; and misjudgments in the course of
preparing forward-looking statements.
2
<PAGE> 3
TABLE OF CONTENTS
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PAGE
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PART I
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ITEM 1. BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
ITEM 2. PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . .5
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . .6
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . .6
PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . .6
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . .7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . .7
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . 10
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . 10
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . 10
ITEM 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . 10
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . 11
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . 11
PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 11
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3
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PART I
ITEM 1. BUSINESS
The Corporation
ICHOR Corporation was incorporated in July 1994 pursuant to the laws of
the Commonwealth of Pennsylvania under the name "PDG Remediation, Inc.".
In November 1996, the Corporation reincorporated under the laws of the
State of Delaware and changed its name to "ICHOR Corporation". In this
document, unless the context otherwise requires, the "Corporation" refers
to ICHOR Corporation and its subsidiaries.
Development of the Corporation
From its inception to December 1997, the Corporation operated in the
environmental services business. The Corporation's initial operations
included a thermal treatment facility in Florida and remediation services
offices in Florida and Pennsylvania. In December 1996, the Corporation
acquired a waste oil recycling facility in Illinois.
The Corporation completed its initial public offering in February 1995.
In July 1996, Drummond Financial Corporation ("Drummond") acquired a 59.5%
interest in the Corporation from PDG Environmental, Inc. In December
1996, the Corporation issued approximately 50.3% of the Corporation's
common stock to TriMaine Holdings, Inc. ("TriMaine") (previously Logan
International Corp.) as partial consideration for a loan receivable
through which the Corporation acquired its waste oil recycling facility.
TriMaine and Drummond are controlled by MFC Bancorp Ltd. ("MFC").
In response to changes in the Florida market, the Corporation closed
certain remediation services offices and sold certain remediation
facilities in 1995 and 1996. The Corporation sold the balance of its
remediation services operations in April 1997 and its waste oil recycling
facility in December 1997. In March 1998, the Corporation sold its
wholly-owned subsidiary, ICHOR Services, Inc. ("Services"). In 1998,
following the sale of Services, ICHOR provided consulting services to an
industrial customer in Europe.
In the first quarter of 1998, the Corporation completed the issuance of an
aggregate of 467,500 shares of 5% Cumulative Redeemable Convertible
Preferred Stock, Series 1 of the Corporation to affiliates of MFC. In
December 1998, Drummond and Logan transferred all of their shares of
common stock of the Corporation to a wholly-owned subsidiary of MFC. In
the last quarter of 1999 the Corporation completed the issuance of an
aggregate of 97,206 shares of 5% Cumulative Redeemable Convertible
Preferred Stock, Series 2 of the Corporation to Drummond in consideration
of a debt forgiveness of $972,060. For further information with respect
to this transaction, including the Debt Settlement Agreement between
Drummond and the Corporation dated November 30, 1999, see the
Corporation's Form 8-K dated December 7, 1999.
On February 8, 2000, the Corporation's securities were delisted from the
Nasdaq SmallCap Market for failure to meet listing qualifications. For
further information with respect to such matter see the Corporation's Form
8-K dated February 9, 2000.
4
<PAGE> 5
Current Business
In October, 1998, the Company entered into an agreement (the "Original
Purchase Agreement") with the shareholders of Nazca Holdings Ltd.
("Nazca") to acquire all of the issued and outstanding shares of Nazca.
Effective June 30, 1999, the Corporation and the former majority
shareholders of Nazca entered into a revised agreement (the "Revised
Agreement"), pursuant to which, the Original Purchase Agreement was
replaced and the Corporation acquired approximately 87% of the issued and
outstanding shares of common stock of Nazca.
Nazca, through a subsidiary, is in the business of the exploration for and
development of ground water resources in Chile. Chile is divided into
seven regions (referred to herein as "Regions I - VII") having separate
regimes dealing with the grant and administration of Water Rights ("Water
Rights"). Nazca completed a hydrogeological reconnaissance of Regions I
and II in 1995 and 1996. Nazca's hydrogeological reconnaissance of Regions
III - VII is currently ongoing. Nazca, through a subsidiary company, has
applied for a number of exploration concessions (each a "Concession") and
has been granted three Concessions to date and expects to be granted one
additional Concession in the near future.
Exploration and development work is continuing with respect to Concessions
having a potential production capacity of 1,300 litres/ second, with the
objective of establishing perpetual Water Rights and supplying ground
water to customers under long term supply agreements. A Water Right
provides the holder a perpetual right to sell the amount of water flow
(calculated in litres/second) from the Well which the Water Right pertains
to. Following application, it can take up to two years for a Water Right
to be granted. Following the grant of Water Rights, water may be legally
sold by the holder thereof. To complete delivery of a water resource to
an end-user, construction of a pumping station and piping to transmit the
water must be completed, following which production and sales of water may
commence. An alternative available to Nazca is to sell Water Rights after
they are obtained rather than proceeding with the development of an
operating utility. To date, applications for Water Rights for 57
litres/second of flow have been applied for by Nazca and are outstanding
with the Direccion General de Aquas of Chile.
In connection with the Revised Agreement, the Corporation granted options
in favour of certain former shareholders of Nazca, allowing them to
repurchase shares of Nazca common stock sold to the Corporation in certain
circumstances. In December of 1999, two former shareholders of Nazca
purported to exercise their options to repurchase approximately 38% of
Nazca's common stock. The Corporation believes the attempted exercise of
the former shareholders' options to be invalid as certain conditions
required to be met prior to exercise were not satisfied. However, as a
result of the dispute the Corporation has accounted for its interest in
Nazca on an equity accounting basis after having given effect to the
purported option exercise.
At December 31, 1999, the Corporation had no employees.
ITEM 2. PROPERTIES
The Corporation's administrative facilities are located on leased premises
located in Vancouver, British Columbia, Canada.
5
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ITEM 3. LEGAL PROCEEDINGS
The Corporation is subject to routine litigation incidental to its
business. The Corporation does not believe that the outcome of such
litigation will have a material adverse effect on its business or
financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Market Information. The Corporation's common stock were quoted on
the NASDAQ SmallCap Market under the trading symbol "ICHR" until February
8, 2000 when the Corporation's securities were delisted from The Nasdaq
Stock Market. The following table sets forth the quarterly high and low
sale price per share of the Corporation's common stock for the periods
indicated:
Fiscal Quarter Ended High Low
- - -------------------- ---- ----
1998
March 31 $ 1.75 $ 1.25
June 30 2.00 1.25
September 30 2.25 1.25
December 31 3.25 1.25
1999
March 31 $ 2.88 $ 1.25
June 30 3.25 1.50
September 30 4.63 1.00
December 31 5.00 2.00
(b) Shareholders. At March 27, 2000, the Corporation had approximately
15 holders of record of its common stock, some of which are securities
clearing agencies and intermediaries.
(c) Dividends. The Corporation has not paid any dividends on its common
stock and does not anticipate that it will pay any dividends in the
foreseeable future.
6
<PAGE> 7
ITEM 6. SELECTED FINANCIAL DATA
The following table reflects selected consolidated financial data for the
Corporation for the fiscal years ended December 31, 1999, 1998 and 1997,
respectively, the 11 months ended December 31, 1996 and the fiscal year
ended January 31, 1996. In September 1996, the Corporation changed its
fiscal year end from January 31 to December 31.
<TABLE>
<CAPTION>
For the Year For the Year For the Year For the 11 For the Year
Ended Ended Ended Months Ended Ended
December 31, December 31, December 31, December 31, January 31,
------------ ------------ ------------ ------------ ------------
1999 1998 1997 1996 1996
------------ ------------ ------------ ------------ ------------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Fee income $ - $ 144 $ - $ - $ -
General and
administrative expenses 373 497 418 1,042 791
Interest expense 192 102 613 423 406
Loss from continuing
operations (470) (178) (1,025) (1,320) (1,183)
Net loss (470) (178) (4,054) (1,399) (2,858)
COMMON SHARE DATA<F1>
Loss from continuing
operations per
common share (0.14) (0.08) (0.21) (0.51) (0.48)
Net loss per
common share (0.14) (0.08) (0.83) (0.54) (1.16)
Weighted average common
shares outstanding
(in thousands) 4,910 4,908 4,913 2,586 2,456
BALANCE SHEET DATA
Working capital 2,289 2,141 89 3,903 2,417
Total assets 2,681 3,281 2,028 5,582 5,578
Long-term obligations - - - 1,916 -
Total stockholders'
equity 2,652 2,141 89 1,987 2,438
- - ------------
<FN>
<F1>
(1) Basic and diluted common share data is the same.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations and
financial condition of the Corporation for the years ended December 31,
1999, 1998 and 1997, respectively, should be read in conjunction with the
Corporation's audited consolidated financial statements and related notes
included elsewhere herein. .
The Corporation sold its environmental remediation services operations in
April 1997 and a waste oil recycling facility in December 1997. These
operations have been accounted for as discontinued operations for the year
ended December 31, 1997. Certain reclassifications have been made to the
prior periods' financial statements to conform to the current period's
method of presentation.
7
<PAGE> 8
Results of Operations for the Year Ended December 31, 1999 Compared to the
Year Ended December 31, 1998
Revenues for the year ended December 31, 1999 decreased to $0.2 million,
from $0.7 million for the comparative period of 1998 primarily as a result
of the sale by the Corporation of Ichor Services, Inc. ("Services"), a
wholly-owned subsidiary of the Corporation, in the first quarter of 1998
which was reported as a gain on disposal of a subsidiary in 1998.
Costs and expenses decreased to $0.7 million in the year ended December
31, 1999 from $0.9 million in the year ended December 31, 1998 primarily
as a result of a decrease in general and administrative expenses resulting
from the sale of Services and lower head office expenses, partially offset
by an equity loss related to Nazca. In the year ended December 31, 1998,
the Corporation had accrued $0.3 million in settlement of a class action
lawsuit. Interest expense increased to $0.2 million in the year ended
December 31, 1999 from $0.1 million in the year ended December 31, 1998
primarily as a result of interest paid on an amount owing under a line of
credit with an affiliate. General and administrative expenses for the year
ended December 31, 1999 decreased to $0.4 million from $0.5 million in the
comparative period of 1998, primarily as a result of a decrease in
employees of the Corporation.
The Corporation reported a net loss of $0.5 million, or $0.14 per share,
in the year ended December 31, 1999. In the year ended December 31, 1998,
the Corporation reported a net loss of $0.2 million, or $0.08 per share.
Results of Operations for the Year Ended December 31, 1998 Compared to the
Year Ended December 31, 1997
Revenues for the year ended December 31, 1998 increased to $0.7 million,
from $6,000 for the comparative period of 1997. In the year ended
December 31, 1998, the Corporation reported income of $0.1 million from
consulting fees. Effective March 31, 1998, the Corporation sold Services
and recognized a non-cash accounting gain of $0.4 million on the sale as a
result of the disposal of net liabilities of Services.
Costs and expenses decreased to $0.9 million in the year ended December
31, 1998 from $1.0 million in the year ended December 31, 1997. Interest
expense decreased to $0.1 million in the year ended December 31, 1998 from
$0.6 million in the year ended December 31, 1997, primarily as a result of
the sale of Services in the first quarter of 1998, which had financed
certain receivables for work performed under certain Florida State
rehabilitation programs. General and administrative expenses for the year
ended December 31, 1998 increased to $0.5 million from $0.4 million in the
comparative period of 1997, primarily as a result of an increase in
professional fees.
In the year ended December 31, 1998, the Corporation paid $0.3 million in
settlement of a class action lawsuit.
The Corporation reported a net loss of $0.2 million, or $0.08 per share,
in the year ended December 31, 1998. In the year ended December 31, 1997,
the Corporation reported a net loss of $4.1 million, or $0.83 per share,
which included a loss of $3.0 million, or $0.62 per share, from
discontinued operations.
8
<PAGE> 9
Liquidity and Capital Resources
The Corporation had cash of $2.3 million at December 31, 1999, compared to
$50,000 at December 31, 1998. The Corporation maintains a line of credit
with an affiliate in the amount of $0.8 million to fund working capital
requirements. The line of credit was fully utilized and repaid by the
issuance of preferred stock as at December 31, 1999.
Net cash provided by operating activities was $0.6 million in the year
ended December 31, 1999, compared to cash used by operating activities of
$0.9 million in the year ended December 31, 1998. A decrease in accounts
receivable provided cash of $0.5 million in the year ended December 31,
1999, compared to an increase in same using cash of $0.3 million in the
comparable period of 1998. An increase in accounts payable and other
liabilities provided cash of $21,000 in the year ended December 31, 1999
and used cash of $0.1 million in the year ended December 31,1998.
Investing activities provided cash of $1.6 million in the year ended
December 31, 1999 primarily as a result of payment received on a
promissory notes held by the Corporation. Investing activities in the
year ended December 31, 1998 used cash of $1.5 million, primarily as a
result of the acquisition of a note receivable. On October 20, 1998, the
Corporation entered into an agreement to acquire all of the issued and
outstanding shares of common stock of Nazca, which is in the business of
the exploration for and development of ground water resources in Chile.
See "Item 1. Business - Current Business" herein for further details with
respect to the agreement. Under a revised agreement entered into with the
majority shareholders of Nazca in July 1999, the original purchase
agreement was replaced and the Corporation acquired approximately 87% of
the issued and outstanding shares of common stock of Nazca effective June
30, 1999. For further information with respect to the transaction,
including the revised agreement, see the Corporation's Form 8-K/A dated
August 12, 1999, which is incorporated herein by reference.
In November of 1999, the Corporation collected all outstanding principal
and interest due on a note receivable in the principal amount of $1.4
million, and collected the full amount of approximately $0.6 million due
from an affiliate. In addition, in November of 1999 the Corporation
repaid approximately $0.3 million in advances from affiliates.
Financing activities provided cash of $9,000 in the year ended December
31, 1999, compared to $2.2 million in the year ended December 31, 1998.
The Corporation believes that its assets and line of credit should enable
the Corporation to meet its current ongoing requirements. The Corporation
anticipates that it may require substantial capital to pursue current and
future acquisitions of businesses and/or operating assets and will seek
such capital through debt and/or equity financing.
9
<PAGE> 10
Year 2000
Many of the world's computer systems currently record years in a two-digit
format. These computer systems may be unable to properly interpret dates
beyond the year 1999, which could lead to business disruptions and is
commonly referred to as the "Year 2000" issue. To date, the Corporation
has not experienced any significant problems as a result of the Year 2000
issue and based on its current information, management of the Corporation
has determined that the Year 2000 issue will not pose significant
operational problems for its computer systems as it only utilizes
commercially available software and personal computers, which are Year
2000 compliant. The total cost to the Corporation of Year 2000 compliance
activities has not been and is not currently anticipated to be material to
its financial position or results of operations in any given year. In
addition, management of the Corporation has had communications with
clients to ascertain their Year 2000 readiness and developed contingency
plans as required. The determination by management and costs relating to
the Year 2000 issue are based on management's best estimates, which were
derived utilizing numerous assumptions of future events. However, there
can be no assurance that these estimates will be achieved and actual
results could vary materially from those anticipated.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and supplementary data required with
respect to this Item 8, and as identified in Item 14 of this annual
report, are included in this annual report commencing on page 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference from the Corporation's definitive proxy
statement to be filed within 120 days of the end of the Corporation's
fiscal year.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from the Corporation's definitive proxy
statement to be filed within 120 days of the end of the Corporation's
fiscal year.
10
<PAGE> 11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Incorporated by reference from the Corporation's definitive proxy
statement to be filed within 120 days of the end of the Corporation's
fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from the Corporation's definitive proxy
statement to be filed within 120 days of the end of the Corporation's
fiscal year.
PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) (1) Index to Financial Statements
Independent Auditors' Report
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules
Independent Auditors' Report
Schedule II - Valuation and Qualifying Accounts
Schedule III - Unaudited Financial Statements of Nazca Holdings Ltd.
All other schedules have been omitted because they are not applicable or
the required information is shown in the financial statements or notes
thereto.
<TABLE>
<CAPTION>
(3) List of Exhibits
<S> <C>
2.1 Agreement and Plan of Merger dated October 1, 1996 between
ICHOR Corporation and PDG Remediation, Inc. Incorporated by
reference to the Corporation's Schedule 14C dated September
17, 1996.
3.1 Articles of Incorporation.<F1>
3.2 Certificate of Designations. Incorporated by reference to the
Corporation's Form 8-K dated March 12, 1998.
3.3 Certificate of Designations. Incorporated by reference to the
Corporation's Form 8-K dated December 7, 1999.
3.4 Bylaws.<F1>
11
<PAGE> 12
10.1 Amended 1994 Stock Option Plan.<F2>
10.2 1995 Qualified Incentive Stock Option Plan.<F2>
10.3 Loan Agreement dated January 15, 1997 among Drummond Financial
Corporation, the Corporation and ICHOR Services, Inc.<F5>
10.4 Debt Settlement Agreement between Logan International Corp.
and the Corporation dated February 20, 1998.<F4>
10.5 Debt Settlement Agreement between Sutton Park International
Ltd. and the Corporation dated February 20, 1998.<F4>
10.6 Subscription Agreement between Constable Investments Ltd. and
the Corporation dated February 26, 1998.<F4>
10.7 Subscription Agreement between Conqueror Holdings Ltd. and the
Corporation dated February 26, 1998.<F3>
10.8 Subscription Agreement between Sutton Park International Ltd.
and the Corporation dated February 26, 1998.<F4>
10.9 Subscription Agreement between Zellstoff-und Papierfabrik
Rosenthal GmbH and the Corporation dated February 26,
1998.<F3>
10.10 Purchase Agreement between the Corporation and the majority
shareholders of Nazca Holdings Ltd. dated October 17, 1998.
Incorporated by reference to the Corporation's Form 8-K dated
October 20, 1998.
10.11 Amendment to the Agreement between the Corporation and the
majority shareholders of Nazca Holdings Ltd. dated October 17,
1998. Incorporated by reference to the Corporation's Form 8-
K/A dated April 9, 1999.
10.12 Revised Purchase Agreement between the Corporation and the
majority shareholders of Nazca Holdings Ltd. dated July 28,
1999. Incorporated by reference to the Corporation's Form 8-
K/A dated August 12, 1999.
10.13 Debt Settlement Agreement between Drummond Financial
Corporation and the Corporation dated November 30, 1999.
Incorporated by reference to the Corporation's Form 8-K dated
December 7, 1999.
23 Consent of Independent Auditors.
27 Article 5 - Financial Data Schedule for the year ended
December 31, 1999.
- - ------------------
<FN>
<F1>
(1) Incorporated by reference to the Corporation's Form 10-K dated
January 31, 1996.
<F2>
(2) Incorporated by reference to the Corporation's Definitive Schedule
14A dated July 8, 1996.
<F3>
(3) Incorporated by reference to the Corporation's Form 10-K dated
December 31, 1997.
<F4>
(4) Incorporated by reference to a Schedule 13D\A dated March 13, 1998.
<F5>
(5) Incorporated by reference to the Corporation's Form 10-K dated
December 31, 1996.
</FN>
</TABLE>
12
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(b) Reports on Form 8-K
The Corporation filed the following reports with respect to the indicated
items:
Form 8-K dated October 26, 1999:
Item 5. Other Events
Form 8-K/A dated November 15, 1999:
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Form 8-K dated December 7, 1999:
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Form 8-K/A dated December 8, 1999:
Item 5. Other Events
Form 8-K dated February 9, 2000:
Item 5. Other Events
13
<PAGE> 14
- - --------------------------------------------------------------------------
PETERSON SULLIVAN P.L.L.C.
601 UNION STREET SUITE 2300 SEATTLE WA 98101 (206) 382-7777 FAX 382-7700
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors and Shareholders
Ichor Corporation and Subsidiary
We have audited the consolidated balance sheets of Ichor Corporation and
Subsidiary as of December 31, 1999 and 1998, and the related consolidated
statements of operations, changes in shareholders' equity, and cash flows
for the years ended December 31, 1999, 1998 and 1997. 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 audits.
We conducted our audits 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 audits
provide 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 Ichor
Corporation and Subsidiary as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for the years ended
December 31, 1999, 1998 and 1997, in conformity with generally accepted
accounting principles.
/s/ Peterson Sullivan P.L.L.C.
March 24, 2000
Seattle, Washington
14
<PAGE> 15
ICHOR CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1999 and 1998
(In Thousands of Dollars)
<TABLE>
<CAPTION>
ASSETS 1999 1998
--------- ---------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 2,262 $ 50
Accounts receivable 56 560
Notes receivable - 2,080
Advances to affiliates - 540
Other assets - 51
--------- ---------
Total current assets 2,318 3,281
Investment in and advances to
unconsolidated subsidiary 363 -
--------- ---------
$ 2,681 $ 3,281
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE> 16
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 1999 1998
--------- ---------
<S> <C> <C>
Current Liabilities
Accounts payable and other liabilities $ 29 $ 8
Advances from affiliates - 1,132
--------- ---------
Total current liabilities 29 1,140
Shareholders' Equity
Preferred stock, $.01 par value; 5,000,000
shares authorized; Series 1, nonvoting;
shares issued and outstanding 564,706
at December 31, 1999, and 467,500 at
December 31, 1998 6 5
Common stock, $.01 par value; 30,000,000
shares authorized; shares issued
4,981,570 at December 31, 1999, and
4,970,320 at December 31, 1998 50 50
Additional paid-in capital on preferred
stock 5,371 4,400
Additional paid-in capital on common
stock 5,752 5,743
Retained deficit (8,456) (7,986)
--------- ---------
2,723 2,212
Less cost of 62,800 shares of common
stock held in treasury at December 31,
1999 and 1998 (71) (71)
--------- ---------
2,652 2,141
--------- ---------
$ 2,681 $ 3,281
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 17
ICHOR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 1999, 1998 and 1997
(In Thousands of Dollars, Except for Per Share Amounts)
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ --------
<S> <C> <C> <C>
Revenues
Interest $ 153 $ 92 $ 6
Fees - 144 -
Gain on disposal of a subsidiary - 437 -
Other 30 8 -
------ ------ --------
183 681 6
Costs and expenses
General and administrative 373 497 418
Interest 192 102 613
Litigation settlement - 260 -
Equity in loss of unconsolidated
subsidiary 88 - -
------ ------ --------
653 859 1,031
Loss from continuing operations (470) (178) (1,025)
Discontinued operations (any tax
benefits from losses are fully
reserved; any taxes associated with gains
are offset by tax losses)
Loss from operation of environmental
remediation services segment - - (489)
Gain on sale of environmental
remediation services segment - - 59
Loss from operation of waste oil
recycling facility - - (1,224)
Loss on sale of waste oil recycling
facility - - (1,375)
------ ------ --------
Loss from discontinued operations - - (3,029)
------ ------ --------
Net loss $ (470) $ (178) $ (4,054)
Basic loss per common share
Loss from continuing operations $ (.14) $ (.08) $ (.21)
Discontinued operations - - (.62)
------ ------ --------
Net loss $ (.14) $ (.08) $ (.83)
====== ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE> 18
ICHOR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years Ended December 31, 1999, 1998 and 1997
(In Thousands of Dollars)
<TABLE>
<CAPTION>
--------------Common Stock------------- ------------Preferred Stock-----------
Additional Additional
Number Par Paid-in Treasury Number of Par Paid-in Retained
of Shares Value Capital Stock Shares Value Capital Deficit Total
--------- ----- --------- -------- --------- ----- ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December
31, 1996 4,922,720 $ 50 $ 5,743 $ (52) - $ - $ - $ (3,754) $1,987
Net loss - - - - - - - (4,054) (4,054)
Conversion of debt
by other subsidiaries
of the Company's
parent - - - - 217,500 2 2,173 - 2,175
Repurchase of common
stock held in
treasury (15,200) - - (19) - - - - (19)
--------- ----- -------- -------- ------ ------- ------- ----------- -------
Balance at December
31, 1997 4,907,520 50 5,743 (71) 217,500 2 2,173 (7,808) 89
Net loss - - - - - - - (178) (178)
Preferred shares issued
for cash (215,000
shares purchased by
related parties at
$10 per share) - - - - 250,000 3 2,227 - 2,230
--------- ----- -------- --------- ------- ------ ------- --------- -------
Balance at December
31, 1998 4,907,520 50 5,743 (71) 467,500 5 4,400 (7,986) 2,141
Net loss - - - - - - - (470) (470)
Shares issued for
exercise of options 11,250 - 9 - - - - - 9
Preferred shares issued
for payment of debt
to another subsidiary
of MFC - - - - 97,206 1 971 - 972
--------- ----- -------- --------- ------- ------- ------ --------- ------
Balance at December
31, 1999 4,918,770 $ 50 $ 5,752 $ (71) 467,500 5 4,400 (7,986) 2,141
========= ===== ======== ========= ======= ======= ====== ========== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE> 19
ICHOR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1999, 1998 and 1997
(In Thousands of Dollars)
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net loss $ (470) $ (178) $(4,054)
Adjustments to reconcile net loss
to cash flows from operating
activities
Equity in loss of unconsolidated
subsidiary 88 - -
Gain on disposal of subsidiary - (437) -
Changes in current assets and
liabilities
Cash held in escrow - 145 637
Accounts receivable 504 (254) (185)
Advances to affiliates 540 (270) (270)
Prepaid expenses and other assets - - 106
Accounts payable and other liabilities 21 (115) (403)
Advances from affiliates (160) 352 360
Net assets of discontinued operations - - 2,723
Other 51 (100) 42
------ ------ ------
Net cash provided by (used in)
operating activities 574 (857) (1,044)
Cash Flows from Investing Activities
Change in note receivable 2,080 (1,400) -
Advances to unconsolidated subsidiary (451) - -
Investment - (50) -
------ ------ ------
Net cash provided by (used in)
investing activities 1,629 (1,450) -
Cash Flows from Financing Activities
Proceeds from issuance of preferred
shares - 2,230 -
Proceeds from issuance of common shares 9 - -
Purchase of stock held in treasury - - (19)
Proceeds from debt - - 750
Principal payments on debt - - (188)
------ ------ ------
Net cash provided by financing
activities 9 2,230 543
------ ------ ------
Increase (decrease) in cash 2,212 (77) (501)
Cash, beginning of year 50 127 628
------ ------ ------
Cash, end of year $ 2,262 $ 50 $ 127
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE> 20
ICHOR CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands of Dollars, Except for Per Share Amounts)
Note 1. The Company and Summary of Significant Accounting Policies
The Company
- - -----------
Under an agreement, effective June 30, 1999, Ichor Corporation ("the
Company") completed the acquisition of its present interest in Nazca
Holdings Ltd. ("NHL"). A wholly-owned subsidiary of NHL is in the
business of locating and developing ground water resources in Chile to be
sold to mining, agricultural and public utility customers. NHL is
included in these consolidated financial statements under the equity
method beginning July 1, 1999. The Company was a subsidiary of MFC Bancorp
Ltd. ("MFC") until December 1999. Prior to December 1997, the Company was
in the environmental industry, providing environmental remediation
services and operating a recycling waste oil facility. The Company sold
the remediation services segment of its business in April 1997 for $147 in
cash and retained the segment's current assets and liabilities. The waste
oil recycling facility was sold in December 1997 for $1,000 including $320
in cash and a $680 note which was paid in 1999. Both segments were
accounted for as discontinued operations and unless otherwise stated, all
notes to financial statements relate to continuing operations. Further,
in March 1998, the Company sold a subsidiary at a non-cash accounting gain
of $437 which resulted from the assumption of the subsidiary's liabilities
by the purchaser.
Principles of Consolidation
- - ---------------------------
The consolidated financial statements include the accounts of the Company
and its subsidiary. Significant intercompany accounts and transactions
have been eliminated.
Cash and Cash Equivalents
- - -------------------------
Cash equivalents consist of highly liquid debt instruments with maturities
of three months or less. Cash balances are occasionally in excess of
federally insured amounts.
Taxes on Income
- - ---------------
The Company accounts for income taxes under an asset and liability
approach that requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns. In
estimating future tax consequences, the Company generally considers all
expected future events other than enactments of changes in the tax laws or
rates.
20
<PAGE> 21
Note 1. (Continued)
Earnings Per Share
- - ------------------
Basic earnings per share is computed by dividing income available to
common shareholders by the weighted average number of common shares
outstanding in the period. Diluted earnings per share takes into
consideration common shares outstanding (computed under basic earnings per
share) and potentially dilutive common shares. The conversion of
convertible preferred stock and stock options have not been reflected as
exercised for the purposes of computing earnings or loss per share since
the conversion of such stock or exercise of such options would be
antidilutive. The weighted average number of shares was 4,910,386,
4,907,520 and 4,912,643 for the years ended December 31, 1999, 1998 and
1997. The loss from operations to compute the amount attributable to
common shareholders includes the recognition of preferred stock dividends
in arrears of $237, $214 and none for 1999, 1998 and 1997, respectively.
Preferred Stock
- - ---------------
The entire redemption value of Preferred Shares, Series 1, can be
exchanged for common stock at 90% of the common stock average market price
(as defined). Redemption value is $10 per share and shares are redeemable
only by the Company with a 30 day notice. The Preferred Shares, Series 1,
have a liquidation preference over other stock to the extent of the
redemption value plus unpaid dividends. This stock has an annual
cumulative dividend rate of 5%, payable quarterly and no dividends may be
paid on common stock if preferred share dividends are in arrears.
Stock-Based Compensation
- - ------------------------
Compensation expense for stock options is measured as the excess, if any,
of the quoted market price of the Company's stock at the date of the grant
over the amount an employee is required to pay for the stock. There is no
stock-based compensation included in these consolidated financial
statements.
Use of Estimates
- - ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Fair Value of Financial Instruments
- - -----------------------------------
The fair value of the notes receivable and advances to/from an affiliate
at December 31, 1998, were estimated to approximate their recorded values
based on the terms of the instruments. Notes receivable at December 31,
1998, included $1,400 from one company which was secured and had interest
at 8.75%. Interest paid amounted to none, $102 and $613 for 1999, 1998
and 1997, respectively.
21
<PAGE> 22
Note 1. (Continued)
New Accounting Standard
- - -----------------------
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" is effective for periods
beginning after June 15, 2000, and establishes accounting and reporting
standards for derivative instruments and for hedging activities. This
statement requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value. Because the Company does not engage in
any derivative or hedging activities, there should be no impact on its
financial statements.
Note 2. Investment In and Advances To Unconsolidated Subsidiary
The Company advanced $451 to NHL and has agreed to pay 20% of future
operating cash flows, as defined, of the Chilean operations discussed in
Note 1 for the NHL shares. The following is a summary of NHL's financial
position at December 31, 1999, and the results of its operations for the
six-month period ended December 31, 1999.
Assets $ 1,313
Liabilities 1,231
Shareholders' equity 82
Revenues $ 49
Net loss 180
Note 3. Income Taxes
The reconciliation of income tax on income from continuing operations
computed at the federal statutory rates to income tax expense is as
follows:
<TABLE>
<CAPTION>
Years Ended December 31
------------------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Tax at statutory rate $ (160) $ (60) $ (349)
Permanent difference
associated with gain on
disposal of subsidiary - (149) -
Equity in loss of
unconsolidated subsidiary 30 - -
Valuation allowance 130 209 377
Other - - (28)
-------- -------- --------
$ - $ - $ -
======== ======== ========
</TABLE>
22
<PAGE> 23
Note 3. (Continued)
The significant components of the Company's deferred tax asset as of
December 31, 1999 and 1998, is as follows:
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Net operating loss carryforward $ 1,158 $ 1,028
Valuation allowance for deferred
tax asset (1,158) (1,028)
-------- --------
Net deferred tax asset $ - $ -
======== ========
</TABLE>
The Company has a net operating loss carryforward of approximately $3,407
at December 31, 1999, which expires at: $756 in 2010; $35 in 2011; $1,449
in 2012; $785 in 2018; $382 in 2019. The Company's utilization of the
losses is subject to limitation due to ownership and operational changes,
except those that expire in 2012 and 2013.
Note 4. Stock Option Plans
1994 Amended Stock Option Plan
- - ------------------------------
The Company's 1994 stock option plan provides for the issuance of up to
350,000 shares of the Company's common stock to employees and non-employee
directors. The following table summarizes information with respect to
this plan:
<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise
Shares Price
--------- --------
<S> <C> <C>
Outstanding at January 1, 1997 179,500 $ .81
Granted 145,000 2.00
Canceled - Reusable (89,500) 1.10
--------
Outstanding at December 31, 1997 235,000 1.39
Canceled - Reusable (30,000) 1.19
--------
Outstanding at December 31, 1998 205,000 1.51
Exercised (11,250) .75
--------
Exercisable at December 31, 1999 193,750 $ 1.55
======== =======
Reserved for future grants at December 31, 1999 145,000
========
</TABLE>
Almost all options have an expiration date ten years after issuance.
23
<PAGE> 24
Note 4. (Continued)
1995 Qualified Incentive Stock Option Plan
- - ------------------------------------------
The Company's board of directors approved a second stock option plan on
August 15, 1996 which provides for the issuance of up to 150,000 shares of
the Company's common stock to key employees. The following table
summarizes information with respect to this plan:
<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise
Shares Price
--------- --------
<S> <C> <C>
Outstanding at January 1, 1997 125,000 $ .75
Granted - -
Canceled - Reusable (25,000) .75
---------
Outstanding at December 31, 1999, 1998 and 1997 100,000 $ .75
========= ========
Reserved for future grants at December 31, 1999 50,000
=========
</TABLE>
Compensation
- - ------------
For both the 1994 Amended Stock Option Plan and the 1995 Qualified
Incentive Stock Option Plan, when options are granted, or the exercise
price is adjusted, the exercise price cannot be less than the fair market
value of the Company's common stock (as defined). However, had
compensation expense been recognized on the basis of fair value pursuant
to Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," instead of the method used by the Company,
there would have been no proforma effect with respect to net loss at
either December 31, 1999 or 1998, and the effect at December 31, 1997, was
not material.
24
<PAGE> 25
- - --------------------------------------------------------------------------
PETERSON SULLIVAN P.L.L.C.
601 UNION STREET SUITE 2300 SEATTLE WA 98101 (206) 382-7777 FAX 382-7700
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Ichor Corporation and Subsidiary
Our report on the consolidated financial statements of Ichor Corporation
and Subsidiary is included on page 14 of this Form 10-K. In connection
with our audits of such financial statements, we have also audited the
related financial statement schedule listed in Item 14 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly in all material respects the information
set forth therein.
/s/ Peterson Sullivan P.L.L.C.
March 24, 2000
Seattle, Washington
25
<PAGE> 26
ICHOR CORPORATION AND SUBSIDIARY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Year Ended December 31, 1999, 1998 and 1997
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
------------------
Balance at Charged Balance at
beginning Charged to other close
of period to income accounts Deductions of period
---------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended
December 31,
1999
Allowance for
doubtful
accounts $ - $ - $ - $ - $ -
========= ======== ======== ========= ==========
Year Ended
December 31,
1998 (2)
Allowance for
doubtful
accounts $ 562 $ - $ - $ 562 $ -
========= ======== ======== ========= ==========
Year Ended
December 31,
1997 (1)
Allowance for
doubtful
accounts $ 690 $ 2 $ - $ 130 $ 562
========= ======== ======== ========= ==========
</TABLE>
(1) Allowance for uncollectibility sold in conjunction with sale of waste
oil recycling facility.
(2) Allowance for uncollectibility sold in conjunction with sale of ICHOR
Services, Inc.
26
<PAGE> 27
ICHOR CORPORATION AND SUBSIDIARY
SCHEDULE III - UNAUDITED FINANCIAL STATEMENTS
OF NAZCA HOLDINGS LTD.
NAZCA HOLDINGS LTD.
CONSOLIDATED BALANCE SHEET
December 31, 1999 and 1998
Expressed in U.S. dollars
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
ASSETS
<S> <C> <C>
Current Assets
Tax debtors $ 30,058 $ 22,492
Directors' and employees' advances - 456
Cash at bank and in hand 2,291 5,791
---------- ----------
32,349 28,739
Fixed Assets
Office Equipment 6,289 8,385
Database 140,000 140,000
Concession development direct expenditure 1,134,099 835,430
---------- ----------
$1,312,737 $1,012,554
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Amounts due to directors and employees $ 269,999 $ 78,203
Amount due to affiliates 794,941 339,619
Tax creditors - 5,002
Accrued expenses 166,047 133,120
---------- ----------
1,230,987 555,944
Shareholders' Equity
Share capital 1,079,021 1,079,021
Accumulated deficit (997,271) (622,411)
---------- ----------
81,750 456,610
---------- ----------
$1,312,737 $1,012,554
========== ==========
</TABLE>
27
<PAGE> 28
NAZCA HOLDINGS LTD.
CONSOLIDATED PROFIT & LOSS ACCOUNT
For the years ended December 31, 1999 and 1998
Expressed in U.S. dollars
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Income
Consultancy income $ 48,681 $ -
Expenses
Directors' fees - 51,000
Directors' and employees' salaries
and benefits 209,976 140,655
Legal and accounting fees 56,242 32,976
Administration and general expenses 100,835 57,599
Interest charge 22,527 16,402
Depreciation 2,096 1,000
Exchange losses 31,865 -
--------- ---------
423,541 299,632
--------- ---------
Loss for the year (374,860) (299,632)
Accumulated deficit brought forward (622,411) (322,779)
--------- ---------
Accumulated deficit carried forward $(997,271) $(622,411)
========= =========
</TABLE>
28
<PAGE> 29
NAZCA HOLDINGS LTD.
Notes to the Consolidated Accounts
For the years ended December 31, 1999 and 1998
(Unaudited)
1. PRINCIPAL ACCOUNTING POLICIES
i) Basis of accounting
The accounts have been prepared under the historical cost convention,
and in accordance with United States generally accepted accounting
principles.
ii) Basis of consolidation
The consolidated accounts include the accounts 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 to write down the cost over the estimated
useful lives of the assets.
The investment in the database is stated at cost.
Concession development direct expenditure is stated at cost.
Amortisation will be computed to write down the cost over the estimated
economic lives of the concessions, as soon as supply is commenced.
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 subsidiary company keeps its accounting
records in Chilean currency, and its accounts have first been
converted to United States generally accepted accounting principles
and then translated into U.S. dollars.
3. FUTURE OPERATIONS AND FINANCING
Further financing arrangements through the sale of equity and offtake
agreements for the sale of water are being negotiated. This financing
will be used for development work including exploration and production
well drilling and securing water rights on a number of concessions
that the subsidiary company controls in northern Chile over the next 2
years.
29
<PAGE> 30
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.
Date: March 29, 2000 ICHOR CORPORATION
By: /s/ J. Choi
----------------------------
J. Choi, President, and Director
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.
/s/ J. Choi March 29, 2000
- - -------------------------
J. Choi
President and Director
/s/ Young-Soo Ko March 29, 2000
- - -------------------------
Young-Soo Ko
Director
/s/ Jae-Sun Lee March 29, 2000
- - -------------------------
Jae-Sun Lee
Director
/s/ Michael J. Smith March 29, 2000
- - -------------------------
Michael J. Smith, Chief
Financial Officer,
Treasurer and Secretary
30
<PAGE> 31
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
2.1 Agreement and Plan of Merger dated October 1, 1996 between ICHOR
Corporation and PDG Remediation, Inc. Incorporated by reference
to the Corporation's Schedule 14C dated September 17, 1996.
3.1 Articles of Incorporation.(1)
3.2 Certificate of Designations. Incorporated by reference to the
Corporation's Form 8-K
dated March 12, 1998.
3.3 Certificate of Designations. Incorporated by reference to the
Corporation's Form 8-K dated December 7, 1999.
3.4 Bylaws.(1)
10.1 Amended 1994 Stock Option Plan.(2)
10.2 1995 Qualified Incentive Stock Option Plan.(2)
10.3 Loan Agreement dated January 15, 1997 among Drummond Financial
Corporation, the Corporation and ICHOR Services, Inc.(5)
10.4 Debt Settlement Agreement between Logan International Corp. and
the Corporation dated February 20, 1998.(4)
10.5 Debt Settlement Agreement between Sutton Park International Ltd.
and the Corporation dated February 20, 1998.(4)
10.6 Subscription Agreement between Constable Investments Ltd. and the
Corporation dated February 26, 1998.(4)
10.7 Subscription Agreement between Conqueror Holdings Ltd. and the
Corporation dated February 26, 1998.(3)
10.8 Subscription Agreement between Sutton Park International Ltd. and
the Corporation dated February 26, 1998.(4)
10.9 Subscription Agreement between Zellstoff-und Papierfabrik
Rosenthal GmbH and the Corporation dated February 26, 1998. (3)
10.10 Purchase Agreement between the Corporation and the majority
shareholders of Nazca Holdings Ltd. dated October 17, 1998.
Incorporated by reference to the Corporation's Form 8-K dated
October 20, 1998.
10.11 Amendment to the Agreement between the Corporation and the
majority shareholders of Nazca Holdings Ltd. dated October 17,
1998. Incorporated by reference to the Corporation's Form 8-K/A
dated April 9, 1999.
31
<PAGE> 32
10.12 Revised Purchase Agreement between the Corporation and the
majority shareholders of Nazca Holdings Ltd. dated July 28, 1999.
Incorporated by reference to the Corporation's Form 8-K/A dated
August 12, 1999.
10.13 Debt Settlement Agreement between Drummond Financial Corporation
and the Corporation dated November 30, 1999. Incorporated by
reference to the Corporation's Form 8-K dated December 7, 1999.
23 Consent of Independent Auditors.
27 Article 5 - Financial Data Schedule for the year ended December
31, 1999.
- - -----------------
(1) Incorporated by reference to the Corporation's Form 10-K dated
January 31, 1996.
(2) Incorporated by reference to the Corporation's Definitive Schedule
14A dated July 8, 1996.
(3) Incorporated by reference to the Corporation's Form 10-K dated
December 31, 1997.
(4) Incorporated by reference to a Schedule 13D\A dated March 13, 1998.
(5) Incorporated by reference to the Corporation's Form 10-K dated
December 31, 1996.
32
<PAGE> 1
- - --------------------------------------------------------------------------
PETERSON SULLIVAN P.L.L.C.
601 UNION STREET SUITE 2300 SEATTLE WA 98101 (206) 382-7777 FAX 382-7700
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Consent
-----------------------------
We hereby consent to the incorporation by reference in the registration
statements (No. 333-15831 and 333-15829) on Form S-8 of Ichor Corporation
and Subsidiary of our report dated March 24, 2000, relating to the balance
sheets of Ichor Corporation and Subsidiary as of December 31, 1999 and
1998, and the related statements of operations, shareholders' equity and
cash flows for the years ended December 31, 1999, 1998 and 1997, which
report appears in the Annual Report of Form 10-K for the year ended
December 31, 1999, of Ichor Corporation and Subsidiary.
/s/ Peterson Sullivan P.L.L.C.
March 27, 2000
Seattle, Washington
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
consolidated financial statements and notes included in this Form 10-K and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,262
<SECURITIES> 0
<RECEIVABLES> 56
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,318
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,681
<CURRENT-LIABILITIES> 29
<BONDS> 0
0
6
<COMMON> 50
<OTHER-SE> 2,596
<TOTAL-LIABILITY-AND-EQUITY> 2,681
<SALES> 0
<TOTAL-REVENUES> 183
<CGS> 0
<TOTAL-COSTS> 653
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 192
<INCOME-PRETAX> (470)
<INCOME-TAX> 0
<INCOME-CONTINUING> (470)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (470)
<EPS-BASIC> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
