SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Earliest Event Reported
February 20, 2002
Expressions Graphics, Inc.
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation of organization)
000-33439 88-0448389
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(Commission File Number) (IRS Employer Identification Number)
GSB Building, Suite 417
Bala Cynwyd, Pennsylvania 19004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 660-5906
Item 2. Acquisition or Disposition of Assets
On February 20, 2002, Expressions Graphics, Inc. (the "Company")
acquired an approximate 19.5% gross working interest in Louisiana State Lease
No. 16141 No. 1 Well in Hell Hole Bayou, an exploration project located in
Vermillion Parish, Louisiana, and the associated prospect, for an aggregate
purchase price of $8,500,000, of which $6,000,000 was paid at closing and
$2,500,000 is due within 45 days. The Company acquired these assets through an
assignment of rights from Touchstone Resources USA, Inc. under two Purchase and
Sale Agreements by and between Touchstone Resources USA, Inc. and SKH
Management, L.P., each dated February 17, 2002. Touchstone Resources USA, Inc.
retained an approximate 20% interest in the net profits retained by the Company
in the project.
In connection with the closing of this transaction, effective February
12, 2002, the Company's subscription to purchase a 10% secured convertible
promissory note in the principal amount of $2,000,000 and warrants to purchase
2,127,660 shares of common stock from Touchstone Resources, Ltd., a CDNX listed
company and the parent company of Touchstone Resources USA, Inc. ("Touchstone"),
was accepted. The secured convertible promissory note has an initial conversion
price of CDN$1.50 and is secured by the working interests in Hell Hole Bayou
still owned by Touchstone. Assuming full conversion of the secured convertible
promissory note and full exercise of the warrants, the Company would own
approximately 10% of the common stock of Touchstone on a fully diluted basis.
The Company's acquisition of these securities has been conditionally approved by
the CDNX. The Company anticipates that the CDNX will issue its final approval of
this transaction shortly after the date of this report.
The Company obtained the funds used to purchase these assets from two
private placements of its debt and equity securities which generated aggregate
gross proceeds of $13,000,000.
Item 4. Changes in Registrants Certifying Accountant
On March 4, 2002, the Company's board of directors approved the
dismissal of Stonefield Josephson, Inc., the principal accountants previously
engaged to audit the Company's financial statements. Except for an emphasis of
matter paragraph which indicated an uncertainty relating to the Company's
ability to continue as a going concern, the report provided by Stonefield
Josephson, Inc. for the fiscal year ended December 31, 2000 did not include an
adverse opinion or a disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope, or accounting principles. During the Company's two
most recent fiscal years ended December 31, 2001, and the subsequent period,
there were no disagreements with the former independent auditor on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreement, if not resolved to the satisfaction of
the former independent auditor, would have caused it to make reference to the
subject matter of the disagreement in connection with its report.
On March 4, 2002, the Company's board of directors approved the
engagement of L J Soldinger Associates as the principal accountants to audit the
Company's financial statements. During the Company's most recent fiscal year and
the subsequent period prior to such appointment, the Company has not consulted
the newly engaged independent auditor regarding either the application of
accounting principles to a specified transaction or the type of audit opinion
that might be rendered on the Company's financial statements, nor on any matter
that was either the subject of a disagreement or a reportable event.
L J Soldinger Associates reviewed the disclosure provided in this Form
8-K prior to its filing with the Securities and Exchange Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
10.1 Purchase and Sale Agreement dated February 17, 2002, by and
between SKH Management, L.P. and Touchstone Resources USA,
Inc.
10.2 Purchase and Sale Agreement dated February 17, 2002, by and
between SKH Management, L.P. and Touchstone Resources USA,
Inc.
10.3 Assignment Agreement by and between Touchstone Resources USA,
Inc. and Expressions Graphics, Inc. dated February 20, 2002
16.1 Letter from Stonefield Josephson, Inc. dated March 6, 2002
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 hereunto duly authorized.
EXPRESSIONS GRAPHICS, INC.
Registrant
By: /s/ Stephen P. Harrington
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President
Date: March 7, 2002