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) 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
--------------
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 audited financial statements are filed herewith.
(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. Previously filed.
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: June 12, 1997 GAENSEL GOLD MINES, INC.
By: /s/ Dempsey K. Mork
Name: Dempsey K. Mork
Title: President
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
APRIL 30, 1997
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
CONTENTS
PAGE
_ Independent Auditors' Report 1
_ Balance Sheet, April 30, 1997 2
_ Statement of Operations, from inception
on April 8, 1997 through April 30, 1997 3
_ Statement of Stockholders' Equity, from
inception on April 8, 1997 through
April 30, 1997 4
_ Statement of Cash Flows, from inception
on April 8, 1997 through April 30, 1997 5
_ Notes to Financial Statements 6 - 9
INDEPENDENT AUDITORS' REPORT
Board of Directors
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
Indian Wells, California
We have audited the accompanying balance sheet of Lifeline
Medical Information Systems, Inc. [a development stage
company] at April 30, 1997, and the related statements of
operations, stockholders' equity and cash flows from
inception on April 8, 1997 through April 30, 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 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 audited by us
present fairly, in all material respects, the financial
position of Lifeline Medical Information Systems, Inc. as of
April 30, 1997, and the results of its operations and its
cash flows for the period from inception through April 30,
1997, in conformity with generally accepted accounting
principles.
May 29, 1997
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
April 30,
1997
_____________
CURRENT ASSETS:
Cash in bank $ -
Accounts receivables - related party 10,017
___________
Total Current Assets 10,017
___________
PROPERTY, PLANT & EQUIPMENT, net 143,878
___________
OTHER ASSETS:
Intellectual properties 1
Organization costs, net 491
Deposits 31,997
___________
Total Other Assets 32,489
___________
$ 186,384
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,732
___________
Total Current Liabilities 4,732
___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
50,000 shares issued and
outstanding 50
Capital in excess of par value 193,519
Deficit accumulated during the
development stage (11,917)
___________
Total Stockholders' Equity 181,652
___________
$ 186,384
___________
The accompanying notes are an integral part of this financial statement.
2
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on April 8,
1997 Through
April 30, 1997
_________________
REVENUE $ -
_____________
EXPENSES:
General and administrative 11,917
_____________
LOSS BEFORE INCOME TAXES (11,917)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
_____________
NET LOSS $(11,917)
_____________
LOSS PER COMMON SHARE $ (.24)
_____________
The accompanying notes are an integral part of this financial statement.
3
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON APRIL 8, 1997
THROUGH APRIL 30, 1997
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
________________ _______________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_________________________________________________________
BALANCE,
April 8, 1997 - $ - - $ - $ - $ -
Issuance of
50,000 shares
of common stock
for assets valued
at $193,569 - - 50,000 50 193,519 -
Net loss for
the period ended
April 30, 1997 - - - - - (11,917)
__________________________________________________________
BALANCE,
April 30, 1997 - $ - 50,000 $ 50 $193,519 $(11,917)
__________________________________________________________
The accompanying notes are an integral part of this financial statement.
4
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
From Inception
on April 8,
1997 Through
April 30, 1997
__________________
Cash Flows to Operating Activities:
Net loss $ (11,917)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation and amortization 2,402
Non-cash expenses 18,301
Change in assets and liabilities:
Increase in accounts receivable -
related party (10,017)
Increase in accounts payable 1,732
________________
Net Cash Flows to Operating Activities 501
________________
Cash Flows to Investing Activities:
Payment of organization costs (500)
Payment for intellectual properties (1)
________________
Net Cash to Investing Activities (501)
________________
Cash Flows from Financing Activities:
Proceeds from common stock issuance -
________________
Net Cash from Financing
Activities -
________________
Net Increase in Cash -
Cash at Beginning of Period -
________________
Cash at End of Period $ -
________________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental schedule of Noncash Investing and Financing
Activities:
For the period ended April 30, 1997:
The Company issued 50,000 shares of stock for assets valued
at $193,569.
The accompanying notes are an integral part of this financial statement.
5
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of
the State of Nevada on April 8, 1997 as a wholly owned
subsidiary of Magellan Capital Corporation. The Company has
recently entered into a stock for stock restructuring with
Gaensel Gold Mines, Inc. a related entity [See Note 8]. The
Company has not commenced planned principal operations and
is considered a development stage company as defined in SFAS
No. 7. The Company is planning to engage in the business of
providing a medical database information system which will
be readily accessible to the medical profession and general
public through the Internet Web System on a world-wide
basis. The Company has, at the present time, not paid any
dividends and any dividends that may be paid in the future
will depend upon the financial requirements of the Company
and other relevant factors.
Financial Statements - The financial statements include only
the accounts of the Company and are presented on a stand-
alone basis. The financial statements have not been
consolidated and do not include the accounts or transactions
of its former or current parent.
Property and Equipment - Property and equipment are stated
at cost. Expenditures for major renewals and betterments
that extend the useful lives of property and equipment are
capitalized, upon being placed in service. Expenditures for
maintenance and repairs are charged to expense as incurred.
Depreciation is computed for financial statement purposes on
a straight-line basis over the estimated useful lives of the
assets which range from five to seven years. For federal
income tax purposes, depreciation is computed under the
modified accelerated cost recovery system.
Organization Costs - The Company is amortizing its
organization costs, which reflect amounts expended to
organize the Company, over sixty [60] months using the
straight line method.
Intellectual Properties - The Company is in the process of
developing a medical database information system. The costs
incurred to date by the Company as well as the costs
incurred by the Company's former Parent [See Note 8] have
been expensed as incurred.
Loss Per Share - The computation of loss per share is based
on the weighted average number of shares outstanding during
the period presented.
Statement of Cash Flows - For purposes of the statement of
cash flows, the Company considers all highly liquid debt
investments purchased with a maturity of three months or
less to be cash equivalents.
Accounting Estimates - The preparation of financial
statements in conformity with generally accepted accounting
principles required management to make estimates and
assumptions that effect the reported amounts of assets and
liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimated by management.
6
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - ACCOUNTS RECEIVABLE - RELATED PARTY
As of April 30, 1997, the Company had a receivable due from
an entity (former Parent) related to a shareholder, officer
and director of the Company in the amount of $10,017.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at April
30, 1997:
1997
_____________
Furniture and equipment $ 9,270
Leasehold improvements 63,828
Vehicles 73,173
_____________
146,271
Less Accumulated depreciation (2,393)
_____________
$ 143,878
_____________
Depreciation expense amounted to $2,393 for the period ended
April 30, 1997.
NOTE 4 - CAPITAL STOCK
Common Stock - During April, 1997, in connection with its
organization, the Company issued 50,000 shares of its
previously authorized, but unissued common stock. In
exchange for common stock the Company received net assets
with a carryover basis of $193,569 from its former parent
[See Note 8]. The following net assets and liabilities were
transferred by the former parent to the Company:
Receivable - related party $ 18,300
Property and equipment 146,271
Deposits 31,997
Intangible assets - Intellectual
properties 1
Accounts payable (3,000)
_____________
$ 193,569
_____________
Preferred Stock - The Company is authorized to issued
10,000,000 shares of $.001 par value preferred stock with
such rights and preferences and in such series as determined
by the Board of Directors at the time of issuance. As of
April 30, 1997 no shares have been issued.
7
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes". FASB 109 requires the
Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary
reporting differences between book and tax accounting
methods and any available operating loss or tax credit
carryforwards.
The Company has available at April 30, 1997, unused
operating loss carryforwards of approximately $11,000 which
may be applied against future taxable income and which
expire in 2012. The amount of and ultimate realization of
the benefits from the operating loss carryforwards for
income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other
future events, the effects of which cannot be determined.
Because of the uncertainty surrounding the realization of
the loss carryforwards the Company has established a
valuation allowance equal to the tax effect of the loss
carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax
assets are approximately $3,000 as of April 30, 1997 with an
offsetting valuation allowance of the same amount resulting
in a change in the valuation allowance of approximately
$3,000 during the period ended April 30, 1997.
NOTE 6 - OPERATING LEASE
During April, 1997 the Company assumed the underlying lease
obligation for its office space from an entity related to an
officer of the Company for a lease held in the name of its
former parent. The lease agreement provides monthly
payments of $1,997 with a security deposit of $1,997. The
lease agreement terms are for a period of two years with an
option to renew for an additional two years. The total
future minimum payments due under the lease agreement are
$23,964, and $19,970 for the years ended 1998 and 1999.
The rent expense for the period ended April 30, 1997 was
$1,997.
NOTE 7 - RELATED PARTY TRANSACTIONS
Account Receivable - The Company has an account receivable
from an entity (former Parent) related to a shareholder,
officer and director of the Company in the amount of
$10,017. The shareholder, officer and director of the
Company routinely advances cash to pay expenses on behalf of
the Company. The account receivable had a balance of
approximately $18,000 when the Company issued its stock to
acquire certain assets and liabilities from the previous
parent.
Management Compensation - The Company has not paid any
compensation to its officers and directors.
8
LIFELINE MEDICAL INFORMATION SYSTEMS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - RELATED PARTY TRANSACTIONS [Continued]
Office Space - The Company has entered into a sublease to
rent office space from an entity (former Parent) related to
an officer, director and majority shareholder of the
Company. The lease agreement provides for monthly payments
of $1,997. The lease agreement terms are for a period of
two years with an option to renew for an additional two
years [See Note 6].
NOTE 8 - BUSINESS ACQUISITION
The Company was formed as a subsidiary of Magellan Capital
Corporation ["Magellan"]. Magellan previously commenced
development of a intangible medical database information
system and business plan. Magellan transferred the database
and related assets and liabilities to the Company upon
formation in consideration for common stock. The assets
have been recorded at their historical carryover basis.
On March 31, 1997, in anticipation of the Company's
subsequent incorporation, the shareholders of the Company
received 800,000 shares of common stock of Gaensel Gold
Mines, Inc. ["Gaensel"] in exchange for all of the
outstanding common stock of the Company. Gaensel had the
same officers, directors and controlling shareholder
interest as the Company. The transaction will be accounted
for as a recapitalization of the Company. However, the
accompanying financial statements only reflect the accounts
of the Company (unconsolidated) and do not include the
accounts of Gaensel.
NOTE 9 - DEVELOPMENT STAGE COMPANY
The Company was formed with a very specific business plan.
However, the possibility exists that the Company could
expend virtually all of its working capital in a relatively
short time period and may not be successful in establishing
on-going profitable operations. The financial statements do
not contain any allowances, liabilities or other
adjustments which may need to be recorded if the Company is
not successful in achieving profitable operations.