SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 31, 1997
GAENSEL GOLD MINES, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
0-12825 84-0916272
(Commission File Number) (IRS Employer Identification No.)
45110 Club Drive, Suite B, Indian Wells, California 92210
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 360-1042
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Item 2. Acquisition or Disposition of Assets.
On March 31, 1997, Gaensel Gold Mines, Inc. (the "Company") acquired all of
the capital stock of Lifeline Medical Information Systems, Inc. ("Lifeline")
from the shareholder of Lifeline (the "Shareholder"), pursuant to an Agreement
and Plan of Reorganization (the "Agreement") between the Company and
Shareholder. Pursuant to the Agreement, the Company issued 800,000 Shares,
including 625,000 Shares to Shareholder and 175,000 Shares to various
consultants. Mr. Dempsey K. Mork, President of the Company is also the
Shareholder of Lifeline.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a)(b) The required proforma financial statements are held herewith.
The required audited financial statements are unavailable as of the date hereof
and will be filed by the Registrant pursuant to the requirements of the
Securities Exchange Act and the rules and regulations promulgated thereunder
within 60 days of the date of the event reported herein.
(c) Exhibits
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession.
2.1. Agreement and Plan of Reorganization dated
March 31, 1997 between the Company and Shareholder.
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.
Dated: April 22, 1997 GAENSEL GOLD MINES, INC.
By: /s/ Dempsey K. Mork
Name: Dempsey K. Mork
Title: President
GAENSEL GOLD MINES, INC. AND SUBSIDIARY
AND
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
Content Page Consolidated Pro Forma Financial Statements
Periods Ending March 31, 1997 and October 31, 1996 and 1995
Consolidated Pro Forma Balance Sheet, as of March 31, 1997.
Consolidated Pro Forma Income Statement for the periods ending March 31, 1997
and years ending October 31, 1996 and 1995.
Consolidated Pro Forma Statement of Adjustments to Shareholders' Equity as of
March 31, 1997.
Summary of Lifeline Medical Information Systems, Inc. "Significant Accounting
Policies and Notes to Pro Forma Financial Statements" for the period ending
March 31, 1997,
Summary of Gaensel Gold Mines, Inc. and Subsidiary "Significant Accounting
Policies and Notes to Audited Financial Statements" for the fiscal year ending
October 31, 1996, as contained in the October 31, 1996 10KSB Report, the 10Q
Report for the 3 months ended January 31, 1997 and the 8K Report of March 31,
1997.
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
CONSOLIDATED PRO FORMA BALANCE SHEET
MARCH 31, 1997
Lifeline
Gaensel Gold Medical
Mines, Inc. & Information Pro Forma Consolidated
Subsidiary Systems, Inc. Adjustments Pro Forma
ASSETS
Current Assets
Cash $ 576 $ 18,300 $ - $ 18,876
Stock Subscription Recv. - - 800 (7) 800
Prepaid Rent - 1,997 - 1,997
Total Current Assets 576 20,297 800 21,673
Other Assets
Property & Equipment-Net - 155,957 (3) - 155,957
Intangibles - 1 (2) - 1
Total Other Assets - 155,958 - 155,958
TOTAL ASSETS $ 576 $ 176,255 $ 800 $ 177,631
LIABILITIES & EQUITY
Current Liabilities
Accounts Payable $ 7,635 - (5/6) - 7,635
Accrued Expenses - 3,000 (4) - 3,000
TOTAL LIABILITIES $ 7,635 3,000 - 10,635
SHAREHOLDERS EQUITY
Common Stock
Common 218 (8) (7) 800 (7) 1,018
Paid-in Capital 3,471,741 568,139 (3,479,018)(9) 560,862
Retained Earnings (Deficit) (3,479,018) (394,884) 3,479,018 (9) ( 394,884)
TOTAL SHAREHOLDERS
EQUITY (DEFICIT) ( 7,059) 173,255 800 166,996
TOTAL LIABILITIES
AND SHAREHOLDERS
EQUITY $ 576 $ 176,255 $ 800 $ 177,631
The accompanying notes are an integral part of the financial statements
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
CONSOLIDATED PRO FORMA INCOME STATEMENT
MARCH 31, 1997
Period Ending Year Ended
3/31/97 10/31/96 10/31/95
Net Sales $ - $ - $ -
Cost of Goods Sold - - -
Gross Profits - - -
General, Administrative
and Selling Expenses 394,884 103,263 7,836
Operating Income (Loss) (394,884) (103,263) ( 7,836)
Other Expenses - - -
Income (Loss) Before
Taxes and Extraordinary
Items (394,884) (103,263) (7,836)
Income Taxes (Benefit) - - -
Income Before
Extra Ordinary Items (394,884) (103,263) (7,836)
Extraordinary Items -
Non-Operating Income - 5,895 -
NET INCOME (LOSS) $ (394,884) $ (97,368) $ (7,836)
Income (Loss) Per Share $ (0.90) $ (0.080) $ (0.170)
Weighted Average Number
of Shares 436,294* 1,164,020 46,282
**Reflects 1 for 10 Gaensel
reverse Common Stock Split
effected February 1997.
Shares Outstanding:
@ 10/31/95 year end 72,125
@ 10/31/96 year end 218,379**
@ 3/31/97 1,018,379 (Includes 800,000 shares
issued for Lifeline
Weighted Average Medical Information Systems,
Inc. Acquisition)
Number of Shares 436,294*
The accompanying notes are an integral part of the financial statements
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
PRO FORMA ADJUSTMENTS TO SHAREHOLDERS EQUITY
MARCH 31, 1997
Total
Number Common Paid-In Earnings Equity
Of Shares Stock Capital (Loss) (Deficit)
Before Acquisition of
Lifeline Medical
Information Systems, Inc.
Gaensel Gold Mines, Inc.
Common Stock & Equity 218,379 $ 218 3,471,741 $(3,479,018)* $ (7,059)
Acquisition of Lifeline Medical
Information Systems, Inc.
Issuance of Gaensel Common
Shares; Par Value $.001/share
for all Lifeline Medical
Information Systems, Inc.
Preferred and Common Stock 800,000 (7) 800 568,139 (394,884) 174,055
Transfer Gaensel Gold Mines
Retained Earnings (Deficit)*
Prior to Acquisition to Paid-in
Capital Surplus Account - - (3,479,018)(9) 3,479,018 (9) -
SHAREHOLDERS EQUITY
MARCH 31, 1997 AFTER
ACQUISITION OF LIFELINE
MEDICAL INFORMATION
SYSTEMS, INC. 1,018,379(8) $ 1,018 $ 560,862 $ (394,884) $ 166,996
The accompanying notes are an integral part of the
financial statements
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS FOR PRO FORMA ADJUSTMENTS
APPLICABLE TO LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
For The Period Ending March 31, 1997
Note 1: Organization and Significant Accounting Policies
Nature of Organization:
Lifeline Medical Information Systems, Inc. (the "Company") is a service
corporation organized in the State of Nevada for the purpose of providing a
medical database information system readily accessible to the medical profession
and the general public through the Internet Web System on a world-wide basis.
Basis of Presentation:
All references in these Notes refer solely to the Financial Statement Data for
Lifeline Medical Information Systems, Inc. The Pro Forma Financial Statements
were prepared in accordance with Generally Accepted Accounting Principles. All
significant intercompany accounts and transactions have been eliminated.
Intangible Assets:
Intangible Assets consists of the Intellectual Properties of the medical
database which has been developed by the Company and have been valued at $1.00
for financial statement presentation. All costs incurred for this item through
the date of these financial statements have been expensed on the Company's
books.
Property and Equipment:
Property and Equipment is stated at cost. Depreciation is computed using
straight line methods over the estimated five to ten year useful lives of the
assets.
Expenditures for additions and improvements are capitalized. Repairs and
maintenance are expensed as incurred.
Industry and Geographical Segment Reporting;
Not applicable for this reporting period.
Use of Estimates:
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make certain estimates and
assumptions about the future outcome of current transactions which may affect
reporting and disclosure of these transactions. Accordingly, actual results
could differ from those estimates used in preparing these financial statements.
Newly-Issued Accounting Standards:
In March 1995, Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for the Long-Lived Assets to be
disposed of" (SFAS No. 121) was issued. The Company will adopt SFAS No. 121
for the issuance of its Financial Statements.
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS FOR PRO FORMA ADJUSTMENTS
APPLICABLE TO LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
For The Period Ending March 31, 1997
Note 1: Organization and Significant Accounting Policies (Continued)
Newly-Issued Accounting Standards (continued)
This standard requires that long-lived assets and certain intangibles be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value of an asset may not be recoverable. In adopting this
standard, the Company will be required to estimate the future cash flows
expected from the use of the asset and its eventual disposition. If the sum of
the future cash flows (undiscounted and without interest charges) is less than
the carrying amount of the asset, and impairment loss would be recognized and
reflected in the Company's Financial Statements for the fiscal period involved.
Management believes that the impact of SFAS No. 121 on the Company's financial
position and results of operations is not expected to be material.
Note 2: Intangible Assets
Intangible Assets arose in the Company developing a Medical Database Information
System. All costs associated with these efforts which have been incurred to date
have been expensed. Management has assigned a $1.00 value for the presentations
of these financial statements.
Note 3: Property and Equipment - Fixed Assets
These assets consisted of the following asset categories at March 31, 1997:
Office Furniture and Equipment $ 116,549
Improvements and Fixtures 63,828
Total Actual Costs Capitalized $ 180,377
Less Accumulated Depreciation (24,420)
Net Property and Equipment $ 155,957
Depreciation expense totalled $24,420 for fiscal 1997.
Note 4: Accrued Liabilities
As of the close of fiscal 1997, the Company reflects at estimate of $3,000
covering Legal and Accounting Expenses which may be incurred in the rendering of
Audited Financial Statements which would be required for a potential merger
transaction in the near future.
Note 5: Accounts Payable/Commitments and Contingencies
Operating Leases:
Lifeline Medical Information Systems, Inc. currently shares offices with its
present owner, Magellan Capital
Corporation. Accordingly, the Company has no firm commitments or long term
obligations to address on this item.
The share rent expense for fiscal 1997 was $7,627.
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS FOR PRO FORMA ADJUSTMENTS
APPLICABLE TO LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
For the Period Ending March 31, 1997
Note 5: Accounts Payable/Commitments and Contingencies (continued)
Contingencies:
There are no known contingencies to provide for as of the date of these
financial statements.
Note 6: Income Taxes
There have been no provisions made for fiscal 1997 since this is the first year
of operations and a pretax loss has
been recorded by the Company.
Note 7: Consideration given by Gaensel Gold Mines, Inc. & Subsidiary for the
acquisition of Lifeline Medical
Information Systems, Inc.
In accordance with terms and conditions stated in the AGREEMENT AND PLAN OF
REORGANIZATION (the "Agreement") dated March 31, 1997, between Gaensel Gold
Mines, Inc. & Subsidiary (the Company) and Magellan Capital Corporation
("Shareholder"), the owner of all of the Capital Stock of Lifeline Medical
Information Systems, Inc., the Company acquired all of the common stock of
Lifeline Medical Information Systems, Inc. in exchange for 800,000 shares of the
voting Common Stock of Gaensel Gold Mines, Inc., at a par value of $.001 per
share.
The total value of this transaction is a Stock Subscription Receivable from
Magellan Capital Corporation of $800.00 for the 800,000 shares of Gaensel Gold
Mines, Inc. Common Stock, in exchange for the 50,000,000 shares of Common Stock
(par value of $.0012 per share) and 10,000,000 shares of Preferred Stock (par
value of $.001 per share) of Lifeline Medical Information Systems, Inc.
Note 8: Gaensel Gold Mines, Inc. & Subsidiary Capital Stock
The capital stock structure of Gaensel Gold Mines, Inc. consists of 50,000,000
shares of Common Stock Authorized, par value of $.001 per share, of which
1,018,379 shares are outstanding as of March 31, 1997, which includes the
800,000 shares issued for the acquisition of Lifeline Medical Information
Systems, Inc. This amount reflects a one-for-one hundred reverse stock split
effected as of February 20, 1997.
Note 9: Gaensel Gold Mines, Inc. & Subsidiaries Shareholders Equity
The accumulated Retained Earnings (Deficit) of Gold Mines, Inc. as of March 31,
1997 amounting to ($3,479,018) has been transferred to the Paid-in Capital
Surplus Account. The restated Retained Earnings (Deficit) as of March 31, 1997
represents the Pro Forma adjusted balance after the acquisition of Lifeline
Medical Information Systems, Inc.
Note 10: Consolidated Pro Forma Income Statement Reporting Periods
The Income Statement periods for the two preceding periods cover the 12 Months
Ended October 31, 1996 and 1995 for Gaensel Gold Mines, Inc. & Subsidiary only
since Lifeline Medical Information Systems, Inc. was not in operation during
those periods.
GAENSEL GOLD MINES, INC. & SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS FOR PRO FORMA ADJUSTMENTS
APPLICABLE TO GAENSEL GOLD MINES, INC. & SUBSIDIARY
For The Period Ending March 31, 1997
Note 10: Consolidated Pro Forma Income Statement Reporting Periods, (continued)
The Income Statement for the period ending March 31, 1997 includes the 5 month
period of Gaensel Gold Mines, Inc. & Subsidiary (November 1, 1996 to March 31,
1997, which reflected no income or expenses during that period) and the 12 month
period of Lifeline Medical Information Systems, Inc.
Note 11: Organization, Significant Accounting Policies, and Footnotes to
Financial Statements
Refer to the Gaensel Gold Mines, Inc. & Subsidiary 10KSB for the 12 months ended
October 31, 1996 and the 10Q for the 3 months ended January 31, 1997.