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U.S. 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, 1996
OR
[ ] 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 0-17246
GULF EXPLORATION CONSULTANTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 76-0293525
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Independent Drive, Suite 2201,
Jacksonville, Florida 32202
(Address of principal executive office) (Zip Code)
Registrant's telephone number,
including area code: (904) 745-6981
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
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 [ ] NO [ X ]
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. YES [ X ] NO [ ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant at as of March 31, 1997, cannot be
determined since there is no established public trading market
for the registrant's common stock.
At April 15, 1997, there were 1,991,092 shares of Common
Stock outstanding.
Documents incorporated by reference: None
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PART I
ITEM 1. BUSINESS.
GENERAL
Gulf Exploration Consultants Inc. ("the Company") is
presently a "shell" corporation with no active business
activities other than seeking the acquisition of an operating
business or business opportunity. Management has been
negotiating with International Form Corporation, a Florida
corporation ("IFC") with respect to a possible merger
transaction. IFC is engaged in the design, manufacture and sale
of high technology concrete forming systems to serve the domestic
and international residential housing and commercial high rise
construction markets. Any transaction would be subject to the
execution of a definitive agreement containing customary
representations, covenants and closing conditions, approval of
the Company's stockholders at a meeting to be called after filing
with and clearance of requisite proxy materials by the Securities
and Exchange Commission (the "SEC") and the satisfaction of
customary closing conditions.
The Company was incorporated under the laws of the State of
Delaware on October 2, 1987. On September 15, 1988, the Company
effected a roll-up transaction pursuant to which its wholly-owned
subsidiaries Bengal Oil & Gas Corporation, a Colorado
corporation, Gopher Exploration, Inc., a Texas corporation, GEC
Texas, Inc. (formerly Gulf Exploration Consultants, Inc.), a
Texas corporation, Dornoch Exploration, Inc., a Texas corporation
and Vanderbilt Petroleum, Inc., a Delaware corporation, were
rolled-up into the Company.
In 1988 and 1989, the Company incurred losses in the amount
of $4.3 million and $4.1 million, respectively. These substantial
losses eroded the Company's capital base and made it more
difficult to obtain additional capital through borrowing or
equity offerings. In addition, the Company had already incurred
a substantial amount of debt. In 1990, in order to repay such
debt the Company was forced to dispose of certain of its major
oil and gas interests.
In July 1989, the National Association of Securities
Dealers, Inc. ("NASD") delisted the Company's Common Stock from
the NASDAQ Small-Cap Market because of the lack of active market
makers registered to trade in the Company's securities.
An additional barrier to the Company's ability to obtain
sufficient financing to fund its operations was the presence of a
class of Preferred Stock of the Company which had a liquidation
preference over the Company's Common Stock. Management
determined that it would not be able to successfully obtain
capital through the issuance of equity securities until it
redeemed all of the Preferred Stock. Thus, over the period from
1990 through 1994, the Company redeemed all of the outstanding
Preferred Stock. The Preferred Stock redemption, however,
resulted in the Company disposing of substantially all of its
remaining oil and gas assets. Subsequent to such redemption the
Company did not have any active business or operations.
EMERGING MONEY
In December 1994, after engaging in negotiations with
several other parties in an attempt to acquire a viable business
opportunity for the Company, the Company acquired 100% interest
in Emerging Money plc, a Republic of Ireland corporation
("Emerging Money"), from Minmet plc, a Republic of Ireland
corporation ("Minmet"), for 758,845 shares* of the Company's
Common Stock. Efforts were made to raise capital for
developmental purposes and to have the Company's shares of Common
Stock included for trading on the NASDAQ Small-Cap Market;
however, the Company was not able to raise sufficient capital for
such purposes. As a result of the Company's inability to raise
sufficient capital, Minmet continued to fund Emerging Money's
operations.
Minmet had formed Emerging Money in June 1994 to hold
investments in companies which provide electronically distributed
market information on the world's emerging capital markets.
________________
* All per share data in this Report gives effect to the 1-for-
50 reverse stock split in June 1996.
-2-
Emerging Money's principal operating subsidiary was Russiamoney
Limited ("Russiamoney"), of which it held a 50% interest with the
Investment & Analytical Centre of Moscow (the "IAC") owning the
remaining 50% interest. The IAC was a Moscow based economic
consultancy. In November 1995, the IAC terminated the
arrangement as to Russiamoney because of non-payment by Emerging
Money.
The Company believes that the development of Emerging Money
was curtailed for three reasons. First, Emerging Money was
unable to meet its capital raising plan. It planned to raise
$500,000 as bridge loans by January 1995, but was only able to
raise $200,000 by March 1995. Second, sales of the existing
Russiamoney services failed to grow at a significant level.
Third, the retention of personnel placed further strains on
Emerging Money's cash resources.
By September 1995, year to date losses had reached more than
$600,000 and Minmet, which had already provided Emerging Money
with more than $350,000 in funding, was unable to continue
providing financial support.
MICRON TRANSACTION
As a result of the inability of Minmet to continue funding
Emerging Money and in order to discharge the March 1995 bridge
loans of $100,000 each from Dennis Mensch ("Mensch") and DRM&S,
Inc., now known as Osprey Investments Inc. ("Osprey"), repayable
on June 30, 1995 with interest at 9% per annum (the "Bridge
Notes") and to settle the loans advanced by Minmet to Emerging
Money and the Company, the Board of Directors of the Company
authorized, subject to stockholder approval, the transactions
contemplated on behalf of the Company under (i) the Subscription
Agreement and Option, dated December 7, 1995 (the "Micron
Subscription"), among the Company, Minmet, Micron Ltd., an Isle
of Man corporation ("Micron") and Emerging Money and (ii) the
Letter Agreement, dated December 22, 1995 (the "Letter
Agreement"), among the Company, Minmet, DRM&S and Mensch. (The
transactions contemplated on behalf of the Company under the
Micron Subscription and the Letter Agreement are collectively
referred to herein as the "Micron Transaction").
The Micron Subscription related to the acquisition by Micron
of 3,954,545 newly issued shares of the common stock of Emerging
Money. The acquisition resulted in Micron owning 72.5% of the
then outstanding shares of Emerging Money and the Company's
ownership interest in Emerging Money being reduced to 27.5% of
Emerging Money shares then to be outstanding. In consideration
for such Emerging Money shares, Micron paid Emerging Money 39,546
Irish Pounds (US$ 63,293 equivalent as of December 31, 1995) and
paid on behalf of Emerging Money approximately US$ 80,000 which
enabled Emerging Money to discharge certain agreed creditors. In
addition Micron paid or advanced additional funds to creditors of
Emerging Money to pay off certain liabilities and Micron had the
right to control the management and finances of Emerging Money on
a daily basis and to request Emerging Money to provide to Micron
exclusive editing and administration services upon a fee basis.
Furthermore, pursuant to the Micron Subscription, Micron
controlled marketing for Emerging Money's services and collected
and used in its sole discretion all revenues obtained from new
subscribers. Revenues obtained from Russiamoney subscribers as
of November 30, 1995 had been used by Emerging Money for working
capital purposes. Micron was also given the right to use all
names, trademarks and copyrights used in connection with the
business of Emerging Money or its subsidiaries on an exclusive
basis. As of the entry into the Micron Subscription, neither the
Company nor Emerging Money had sufficient capital to maintain the
continuing operations of Emerging Money. In December 1995,
Micron made a separate arrangement with the IAC as to the former
operations of Russiamoney. Prior to the Micron Subscription,
Micron had no relationship with the Company or Minmet.
CORPORATE RESTRUCTURING
Following the closing of the Micron Subscription on June 17,
1996 after approval by the Company's stockholders, (i) each of
Osprey and Mensch exchanged its Bridge Notes for Common Stock of
the Company amounting to 22% of the shares then to be
outstanding, (ii) the Company transferred its 27.5% interest in
Emerging Money to Minmet in exchange for shares of the Company's
Common Stock then owned by Minmet which reduced Minmet's holding
of the Company's Common Stock from 56.37% to 15% of the shares
then to be outstanding and the forgiveness of certain amounts due
from the Company, (iii) the existing public stockholders of the
Company then owned the balance of the outstanding shares of
Common Stock (or 41%) and (iv) the Company had no further
3
interest in Emerging Money nor any obligation for any liabilities
of Emerging Money.
Following the Micron Transaction, the Company had no
business activity; however its management began seeking business
opportunities for the Company. The intention was to identify and
enter into an arrangement for a business which would present
growth prospects to stockholders. Any arrangement will be
subject to approval by stockholders. After reviewing possible
acquisition prospects, active negotiations are being held with
IFC. The Micron Subscription contains a non-competition covenant
which restricts the Company from competing directly or indirectly
in any business activities of the type carried on by Emerging
Money and any of its subsidiaries at the closing of the Micron
Transaction for a period of two years following such closing.
Management has no plans to seek a business opportunity in the
field of dissemination of financial information on emerging
markets.
ITEM 2. DESCRIPTION OF PROPERTY
The Company having ceased to operate its oil and gas
business had no continuing interest in any properties at December
31, 1996 other than some minor [leasehold] interests. The
Company operates from leased premises in Jacksonville, Florida,
with some administrative functions carried on from Minmet's
office in Dublin, Ireland. These premises are held on a week to
week rent-free basis arrangement with the lessors. The lessor in
Florida is Osprey and the lessor in Dublin is Minmet.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party, and property of the Company is
not subject, to a material legal proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security
holders of the Company in the fourth quarter of 1996.
PART II
ITEM 5. MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Common Stock of the Company is traded in the over-the-
counter market and the trading is inactive. Currently, there is
no established public trading market for the Common Stock. The
Common Stock was deleted from the Nasdaq system in July 1989
because there were no longer any active market makers registered
to trade the securities.
As of December 31, 1996, there were approximately 1,424
stockholders of record of the Company's Common Stock.
The Company paid no dividends on the Common Stock in the
fiscal years ended December 31, 1996, 1995 and 1994. Future
dividend payments are dependent upon management's ability to
acquire a profitable business into the Company and factors to be
determined by its then Board of Directors and the absence of
contractual or legal restrictions on the payment of dividends.
No dividend payments are expected in 1997.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial information set forth below has been
taken from the consolidated financial statements of the Company
included herein and from previously published consolidated
4
financial statements of the Company not appearing herein. Such
selected financial information should be read in conjunction with
the consolidated financial statements of the Company.
FOR THE YEAR ENDED DECEMBER 31 1996 1995
------------------------------ ---- ----
INCOME STATEMENT DATA:
Revenues $ 3,183 $ 64,034
Net income (loss) 382,914 (712,694)
Net income (loss) per common share 0.20 (0.01)
BALANCE SHEET DATA:
Total assets $5,789 $85,938
Long-term obligations 0 0
Number of shares outstanding 1,991,092 99,999,000
FOR THE YEAR ENDED 1994 1993 1992
DECEMBER 31 ---- ---- ----
------------------
INCOME STATEMENT DATA:
Revenues $ 8,045 $224,285 $11,859
Net income (loss) (106,562) 121,294 (15,442)
Net income (loss) per common
share 0.00 0.00 0.00
BALANCE SHEET DATA:
Total assets $251,497 $111,491 $369,446
Long-term obligations 5,035 0 0
Number of shares
outstanding 99,999,000 62,056,731 62,056,731
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996 AND 1995
The Company had a net profit in 1996 of $382,914 compared to
net loss in 1995 of $712,694. The $382,914 profit is made up of
a gain of $479,837 from the disposition of the Company s
shareholding in Emerging Money, other income of $3,183 from the
winding up of the oil and gas businesses and these revenues being
offset by legal, accounting and stock transfer fees amounting to
approximately $84,912.
Technical, general and administrative costs decreased from
$700,672 in 1995 to $108,530 in 1996 due to the disposal of
Emerging Money activity from the Company.
Interest income amounted to $101 in 1996 compared to $322 in
1995 as the cash balances of the Company were reduced.
YEARS ENDED DECEMBER 31, 1995 AND 1994
The Company had a net loss in 1995 of $712,694 compared to
net loss in 1994 of $106,562. Of the loss of $712,694, $128,957
was incurred by the Company and $583,737 was incurred by Emerging
Money. The Company incurred the loss due to professional fees
that were incurred in maintaining the Company and the cost of a
full-time executive in the United States during the six-month
period to June 30, 1995. Emerging Money's losses were incurred
in developing its financial information on-line business.
Technical, general and administrative costs increased from
$110,588 in 1994 to $700,672 in 1995 with the inclusion of the
development stage costs of Emerging Money.
Interest income amounted to $322 in 1995 compared to $948 in
1994 as the cash balances of the Company were reduced.
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN ASSUMPTIONS
Based on the financial position of the Company at December
31, 1996 significant doubt exists about the Company's ability to
continue as a going concern as the Company has, exclusive of
5
extraordinary items, suffered recurring losses over the past
years. The Company was successful in eliminating all of its
debt, at a substantial discount, in 1991, 1992 and 1993. The
Company has also been successful in eliminating all of the
liquidation preference associated with its preferred stock by
repurchasing such stock. The elimination of this liquidation
preference has allowed management the chance to seek out new
business opportunities which culminated in 1994 with the
acquisition of Emerging Money. In June 1996, the Company
disposed of Emerging Money. Since June 1996, operations have
been limited to seeking an acquisition and preparing necessary
SEC reports to maintain its status as an SEC reporting company.
No assurance can be given that a new acquisition, such as
with IFC, will be quickly effected, or, if effected, that the
terms will be favorable or substantially non-dilutive to the
stockholders of the Company, or that an active trading market
would be created for the Common Stock.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements, financial statement schedules and
supplementary data, listed under Item 14, are presented in a
separate section of this Report beginning on Page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
In March 1995, the Company changed independent accountants
from Arthur Andersen LLP to Berry, Dunn, McNeil and Parker.
Arthur Andersen had represented the Company through its Houston,
Texas office to service more efficiently the Company's previous
oil and gas business and continued as accountant after such
business activities were terminated and the Company was inactive
and had relocated its administrative base to New York. There
were no disagreements with Arthur Andersen on any matter of
accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists the names, ages, positions, and
periods of service with the Company of its directors and
executive officers.
SERVED AS
DIRECTOR
NAME AGE SINCE POSITION
---- --- --------- --------
Daniel Murphy 54 1996 President
Michael H. Nolan 35 1995 Chief Financial
Officer, Secretary and
Director
Jeremy Metcalfe 57 1995 Director
6
Daniel Murphy was appointed as a director and the President
of the Company in July 1996. Mr Murphy has been a financial
consultant and private investor since March 1996, and serves as
President of Solutions Partners, Inc. From July 1993 to March
1996, he was an officer of Coleman & Company Securities, Inc.,
and prior thereto he was a Vice President of Brenner Securities,
both of which are securities broker-dealers.
Michael H. Nolan, a chartered accountant in Ireland, has
been the Chief Financial Officer of the Company since May 1994,
Secretary and a director since December 1995. Since April 1994,
he has also served as Finance Director of Minmet, which is
engaged in mining. From 1989 through 1994, Mr. Nolan was an
associate director of Equity and Corporate Finance plc, a London
based investment company.
Jeremy Metcalfe has been a director of the Company since
December 1995. He has served as the Chairman of the Board of
Directors of Minmet since September 1995 and is also on the Board
of Directors of several Minmet subsidiaries. Mr. Metcalfe has
also served as a director of City Venture Properties Limited, a
real estate brokerage firm since 1989 and has been senior partner
in JP Metcalfe Associates, a corporate finance firm in Kent,
England specializing in the venture capital industry since 1980.
The term of office of the directors is until the next annual
meeting of stockholders or until his earlier resignation or his
successor is duly elected and qualified.
The Board of Directors held three meetings during the 1996
fiscal year.
The Company does not have any standing audit, nominating or
compensation committee of the Board of Directors or committees
performing similar functions.
No director receives any compensation from the Company for
serving in such position.
ITEM 11. EXECUTIVE COMPENSATION
CASH COMPENSATION
No executive officer of the Company received any
compensation from the Company or any of its subsidiaries during
1996.
STOCK OPTION PLAN
The 1988 Stock Option Plan was terminated by the Board of
Directors in January 1993. No options are outstanding under this
Plan.
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of April 15, 1997 the
beneficial ownership of each person (including any "group" as
that term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) who is known by the Company to be the
beneficial owner of more than 5% of any class of voting
securities of the Company:
7
AMOUNT AND
NATURE OF
TITLE OF BENEFICIAL PERCENT OF
NAME AND ADDRESS CLASS OWNERSHIP CLASS
---------------- -------- --------- ----------
Dennis Mensch Common Stock 438,040 22.0%
300 East 75th Street
Apt. 29N
New York, New York 10021
Osprey Investments Limited Common Stock 438,040 22.0%
One Independent Drive
Suite 2201
Jacksonville, Florida
32202
Minmet plc Common Stock 298,664 15.0%
51/52 Fitzwilliam Square
Dublin 2, Ireland
Security Ownership of Management
The following table sets forth as of March 31, 1997 the
beneficial ownership of each class of equity securities of the
Company of (I) each current director of the Company and (ii) all
executive officers and directors of the Company as a group. Such
information is based solely upon information provided by such
persons to the Company.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME TITLE OF CLASS OWNERSHIP CLASS
---- -------------- --------- ----------
Daniel Murphy Common Stock -0- __
Jeremy P. Metcalfe Common Stock 298,664(1) 15.0%
Michael H. Nolan Common Stock 298,664(1) 15.0%
All directors and Common Stock 298,664(1) 15.0%
executive
officers as a
group (3
persons)
(1) Mr. Metcalfe and Mr. Nolan represent Minmet on the
Board of the Company. Mr. Metcalfe is Executive Chairman of
Minmet and Mr. Nolan is Finance Director of Minmet.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Michael H. Nolan, Chief Financial Officer, Secretary and a
director of the Company, is the Finance Director of Minmet, and
Jeremy Metcalfe, a Director of the Company, is the Chairman of
the Board of Directors of Minmet. Prior to the Micron
Transaction Minmet owned a majority of the outstanding shares of
the Company's Common Stock. Pursuant to the Letter Agreement,
Minmet assumed certain liabilities of the Company and exchanged
shares of the Company's Common Stock held by it for the Company's
interest in Emerging Money as part of the Micron Transaction.
Messrs. Nolan and Metcalfe had an indirect interest in the Micron
Transaction and the exchange of the Emerging Money Shares by
reason of their executive positions in Minmet. See Item 1 of
this Report.
Pursuant to the Letter Agreement, and letter agreement of
July 10, 1996, Mr. Mensch and Osprey, the principal stockholders
of the Company had loaned $25,866 and $10,000, respectively, to
the Company, bearing interest at 7% per annum. The maturity date
of these loans were extended from July 1, 1997 to December 31,
1997.
8
The Company uses offices premises rent-free in Florida and
in Dublin leased from Daniel Murphy, President of the Company,
and Minmet, respectively. See Item 2 of this Report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
EXHIBIT
NUMBER PAGE
--------------------------------------------------------------
(a)(1) Index to Financial Information: F-1
Report of Independent Auditors for the years
ended December 31, 1996 and 1995 . . . . . . . F-2
Consolidated Balance Sheet as of December 31,
1996 and 1995 . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Operations for the
years ended December 31, 1996, 1995 and 1994 . F-4
Consolidated Statements of Cash Flows for the
years ended December 31, 1996, 1995 and 1994 . F-5
Notes to Consolidated Financial Statements . . F-6
All other supplemental schedules are omitted because they
are not required.
(a)(3) The following exhibits are filed herewith or
incorporated by reference:
3.1 Certificate of Incorporation of the Company. (Reference
is made to Exhibit 3.1 to the Company's Registration
Statement on Form S-1, Registration No. 33-20866).
3.2 Bylaws of the Company. (Reference is made to Exhibit 3.2
to the Company's Registration Statement on Form S-1,
Registration No. 33-20866).
3.3 Certificate of Designations, Preferences and Rights of
Serial Preferred Stock, $8.00 Cumulative Convertible
Series A. (Reference is made to Exhibit 3.3 to the
Company's Registration Statement on Form S-1, Registration
No. 33-20866.)
3.4 Certificate of Designations, Preferences and Rights of
Serial Preferred Stock, $8.00 Cumulative Convertible
Series B. (Reference is made to Exhibit 4.2 to Report on
Form 8-K filed by the Company on January 11, 1989).
3.5 Certificate of Designations, Preferences and Rights of
Serial Preferred Stock, $4.00 Cumulative Convertible
Series C. (Reference is made to Exhibit 4.1 to Report on
Form 8-K filed by the Company on January 11, 1989).
10.1 Agreement between the Company and Minmet plc relating to
the purchase by the Company of Emerging Money plc dated
December 16, 1994 (Reference is made to Exhibit 1 to
Report on Form 8-K filed by the Company for an event of
December 16, 1994).
9
10.2 Agreement between the Company and Robert R. Hillery
relating to the sale to Hillery of all the outstanding
shares of Dornoch Inc. and GEC Texas Inc. in exchange for
the cancellation of 6,446,375 shares of Common Stock held
beneficially by Hillery in the Company. (Reference is
made to Exhibit 10.3 to Report on Form 10-K for the
fiscal year ended December 31, 1995).
10.3 Subscription Agreement and Option, dated December 1995
among the Company, Minmet plc, Micron Ltd and Emerging
Money Plc; (Reference is made to Exhibit 99.1 to Report on
Form 8-K for an event of December 22, 1995).
10.4 Letter Agreement dated December 22, 1995, among the
Company, Minmet plc, (Osprey Investments, Inc. (formerly
DRM&S Inc.) and Dennis Mensch (Reference is made to
Exhibit 99.2 to Report on Form 8-K for an event of
December 22, 1995).
10.5* Letter Agreement, dated July 10, 1996, between the Company
and Osprey Investments, Inc.
10.6* Letter Agreement, dated July 10, 1996, between the Company
and Dennis Mensch.
21 Subsidiaries. At December 31, 1996, the Company did not
have any active subsidiaries.
27* Financial Data Schedule.
* Filed herewith
REPORTS ON FORM 8-K
None.
10
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.
GULF EXPLORATION CONSULTANTS,
INC.
By: /s/ Daniel Murphy
---------------------------
Daniel Murphy
President
Date: July 10, 1997
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 Company and in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Daniel Murphy
------------------------- Director July 10, 1997
Daniel Murphy
/s/ Jeremy P. Metcalfe
------------------------- Director July 10, 1997
Jeremy P. Metcalfe
/s/ Michael H. Nolan
------------------------- Director and
Michael H. Nolan Chief Financial July 10, 1997
Officer
11
GULF EXPLORATION CONSULTANTS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
Page
----
Report of Independent Auditors for the years ended
December 31, 1996 and 1995 . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheets as of December 31, 1996 and
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Operations for the years ended
December 31, 1996, 1995 and 1994 . . . . . . . . . . . . F-4
Consolidated Statements of Changes in Stockholders'
Equity (Deficit) for the years ended December 31, 1996,
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statement of Cash Flow for the years ended
December 31, 1996, 1995, and 1994 . . . . . . . . . . . . F-6
Notes to Consolidated Financial Statements . . . . . . . F-7
F-1
INDEPENDENT AUDITORS' REPORT
BERRY, DUNN, MCNEIL & PARKER
Gulf Exploration Consultants, Inc.
We have audited the accompanying consolidated balance sheets of
Gulf Exploration Consultants, Inc. (a Delaware corporation) and
subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of operations, changes in stockholders'
equity (deficit), and cash flows for each of the years in the
three year period ended December 31, 1996. These consolidated
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated 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 consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
consolidated 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 Gulf Exploration Consultants, Inc. and subsidiaries
as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the years in the
three year period ended December 31, 1996, in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial
statements, the Company has suffered recurring losses and has
sold substantially all of its revenue producing assets in the oil
and gas industry and does not have an operating business. This
raises substantial doubt about the Company's ability to continue
as a going concern. Management's plans in regard to these
matters are also described in Note 1. The consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Berry, Dunn, McNeil & Parker
Manchester, New Hampshire
July 1, 1997
F-2
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
1996 1995
----------- ----------
ASSETS
------
CURRENT ASSETS:
Cash and cash $ 5,789 $ 4,973
equivalents
Certificate of Deposit - 5,452
Accounts receivable - 27,111
----------- ----------
Total Current Assets 5,789 37,536
----------- ----------
EQUIPMENT, at cost - 80,242
Less - Accumulated - 31,840
depreciation ----------- ----------
Net Equipment - 48,402
----------- ----------
$ 5,789 $ 85,938
=========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 10,530 $ 114,304
Accrued expenses 75,514 34,655
Deferred income - 36,347
Due to affiliate - 365,666
Current portion of - 5,930
capital lease
obligations
Notes payable - 35,866 200,000
related party
Advances from - 46,900
potential stockholder -------------- ----------
Total Current 121,910 803,802
Liabilities -------------- ----------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' DEFICIT
Common Stock, $0.01 19,911 999,990
par value, 10,000,000
and 100,000,000 shares
authorized, 1,991,092
and 99,999,000 shares
issued and outstanding
as of December 31,
1996 and December 31,
1995 respectively
Additional paid-in 7,629,868 6,449,789
capital
Accumulated deficit (7,765,900) (8,148,814)
Accumulated - (18,829)
translation loss ----------- -----------
Total Stockholders' (116,121) (717,864)
Deficit ----------- -----------
$ 5,789 $ 85,938
=========== ===========
The accompanying notes are an integral part of these
financial statements
F-3
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
1996 1995 1994
---- ---- ----
REVENUES
Subscription income $ - $ 60,504 $ 1,992
Royalty income 3,183 - -
Gas and oil sales - - 6,053
Other income - 3,530 -
---------- --------- ----------
3,183 64,034 8,045
---------- --------- ----------
OPERATING EXPENSES
Oil and gas production - - 4,967
costs
Technical, general, 108,530 700,672 110,588
and administrative
Depreciation and - 76,378 -
amortization ---------- --------- ----------
108,530 777,050 115,555
---------- --------- ----------
LOSS FROM (105,347) (713,016) (107,510)
OPERATIONS ---------- --------- ----------
OTHER INCOME (EXPENSE)
Interest income 101 322 948
Interest expense (1,047) - -
Gain on disposition of 479,837 - -
subsidiary
Refund of state filing 9,370 - -
fees ---------- --------- ----------
OTHER INCOME, 488,261 322 948
NET ---------- --------- ----------
INCOME (LOSS) 382,914 (712,694) (106,562)
BEFORE INCOME
TAX PROVISION
Income tax provision - - -
---------- ---------- ----------
NET INCOME (LOSS) $ 382,914 $ (712,694) $ (106,562)
========== ========== ==========
NET INCOME (LOSS) PER $ 0.20 $ (0.01) $ 0.00
COMMON SHARE ========== ========== ==========
The accompanying notes are an integral part
of these financial statements
F-4
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
Common Stock
-------------
Shares Amount
------ ------
BALANCE, DECEMBER 31, 1993 62,056,731 $ 620,567
Stock issuance for 37,942,269 379,423
acquisition
Net loss - -
----------- ----------
BALANCE, DECEMBER 31, 1994 99,999,000 999,990
Accumulated translation - -
loss
Net loss - -
----------- ----------
BALANCE, DECEMBER 31, 1995 99,999,000 999,990
Reverse stock split, (97,999,020) (979,990)
1:50 June 17, 1996
Common stock retirement (128,927) (1,290)
February 21, 1996
Common stock issuance 876,080 8,761
June 17, 1996
Common Stock retirement (756,041) (7,560)
June 17, 1996
Accumulated translation - -
gain
Net Income - -
----------- ---------
BALANCE, DECEMBER 31, 1996 1,991,092 $ 19,911
=========== =========
Additional
Paid-in Accumulated
Capital Deficit
---------- -----------
BALANCE, DECEMBER 31, 1993 $ 6,783,482 $(7,329,558)
Stock issuance for acquisition (333,693) -
Net loss - (106,562)
----------- -----------
BALANCE, DECEMBER 31, 1994 6,449,789 (7,436,120)
Accumulated translation loss - -
Net loss - (712,694)
----------- -----------
BALANCE, DECEMBER 31, 1995 6,449,789 (8,148,814)
Reverse stock split, 1:50 979,990 -
June 17, 1996
Common stock retirement 1,290 -
February 21, 1996
Common stock issuance 191,239 -
June 17, 1996
Common Stock retirement 7,560 -
June 17, 1996
Accumulated translation gain - -
Net Income - 382,914
----------- -----------
BALANCE, DECEMBER 31, 1996 $ 7,629,868 $(7,765,900)
=========== ===========
Accumulated Total
Translation Stockholders'
Gain Equity
(Loss) (Deficit)
----------- ------------
BALANCE, DECEMBER 31, 1993 $ - $ 74,491
Stock issuance for acquisition - 45,730
Net loss - (106,562)
-------- ----------
BALANCE, DECEMBER 31, 1994 - 13,659
Accumulated translation loss (18,829) (18,829)
Net loss - (712,694)
-------- ----------
BALANCE, DECEMBER 31, 1995 (18,829) (717,864)
Reverse stock split, 1:50 June - -
17, 1996
Common stock retirement February - -
21, 1996
Common stock issuance June 17, - 200,000
1996
Common Stock retirement June 17, - -
1996
Accumulated translation gain 18,829 18,829
Net Income - 382,914
-------- ----------
BALANCE, DECEMBER 31, 1996 $ - $ (116,121)
======== ==========
The accompanying notes are an integral part
of these financial statements
F-5
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
1996 1995 1994
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 382,914 $(712,694) $(106,562)
Adjustments to reconcile net
income (loss) to net cash
provided (used) by operating
activities
Depreciation and amortization - 76,378 -
Adjustment on disposal of (436,412) - -
subsidiary
Decrease in deferred expenses - 72,961 -
Accumulated translation loss - (18,829) -
(Increase) decrease in
Accounts receivable and other - (8,429) -
Receivables from related - 4,935 -
parties
Prepaid expenses - 13,636 -
Increase (decrease) in
Accounts payable (28,403) 28,589 (1,085)
Accrued expenses 41,399 (22,915) 27,570
Payables to related parties - 298,704 (10,000)
Deferred income - 28,155 -
Other - 240,087 -
--------- --------- ---------
NET CASH PROVIDED (USED) BY (40,502) 578 (90,077)
OPERATING ACTIVITIES --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash from purchased subsidiary - - 5,172
Purchase of equipment - (9,424) -
Proceeds from sale of property, - - 12,000
plant, and equipment --------- --------- ---------
NET CASH PROVIDED (USED) BY - (9,424) 17,172
INVESTING ACTIVITIES --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on capital lease - (7,315) -
obligations
Loan from affiliate 35,866 - -
--------- --------- ---------
NET CASH FLOWS PROVIDED 35,866 (7,315) -
(USED) BY FINANCING --------- --------- ---------
ACTIVITIES
NET DECREASE IN CASH AND (4,636) (16,161) (72,905)
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING 10,425 26,586 99,491
OF YEAR --------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF $ 5,789 $ 10,425 $ 26,586
YEAR ========= ========= =========
The accompanying notes are an integral part
of these financial statements
F-6
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NATURE OF BUSINESS
------------------
Gulf Exploration Consultants, Inc., a Delaware corporation (Gulf), was
formed on October 2, 1987. Gulf completed a series of transactions on
September 15, 1988, whereby it acquired all of the outstanding stock of
Bengal Oil and Gas Corporation, a Colorado corporation (Bengal), Dornoch
Exploration, Inc., a Texas corporation (Dornoch), GEC-Texas, Inc. (formerly
Gulf Exploration Consultants, Inc.), a Texas corporation (GEC), Gopher
Exploration, Inc., a Texas corporation (Gopher) and Vanderbilt Petroleum,
Inc., a Delaware corporation (Vanderbilt). As a result of these
transactions, Gulf and its consolidated subsidiaries (collectively referred
to as the Company) became a publicly owned company engaged primarily in the
businesses of oil and gas exploration, development and production.
On December 16, 1994, the Company acquired all the outstanding stock of
Emerging Money, PLC (Emerging Money), an Irish corporation which was a
development stage enterprise. With this acquisition, the Company ceased its
involvement in the oil and gas business and was involved in the provision
of a subscription-based English language information service specializing
in providing background analysis of the world's emerging capital market. In
1994, Emerging Money's activities were focused on the Russian market and
conducted its activities through a joint venture (Russiamoney Limited), 50%
owned, and whose financial activities are consolidated with Emerging Money.
This acquisition is accounted for under the purchase method of accounting.
Due to the immateriality of the activity between December 16, 1994 and
December 31, 1994, Emerging Money's operations for this period are not
reflected in the consolidated financial statements, however, the
acquisition has been reflected as of December 31, 1994 (See Note 6).
Proforma disclosures are not deemed necessary due to the subsidiary being a
development stage enterprise.
On November 30, 1995, due to continuing losses in Emerging Money, the
directors of the Company negotiated an agreement to dispose of its interest
in the subscription-based English language information business.
Consequently, the Company has no operating business subsequent to November
30, 1995. Note 2 summarizes the terms and conditions of the Company's
disposition of its subscription-based English language information
business.
1. GOING CONCERN ASSUMPTION
------------------------
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However,
substantial doubt exists about its ability to continue as a going
concern as the Company has suffered recurring losses, has sold
substantially all of its revenue producing assets in the oil and gas
industry in order to retire certain debt on which it had defaulted and
has disposed of its only operating business, as discussed above. The
accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Management's current plans are to acquire an operating corporate
entity. However, no assurance can be given that these strategies will
be effected, or, if effected, that the terms will be favorable or non-
dilutive to the stockholders of the Company.
Management of the Company is also liquidating certain other wholly-
owned subsidiaries of Gulf. Management of the Company believes that
the liquidation of the subsidiaries will not have an effect on Gulf or
the affiliate companies. However, no assurance can be given that Gulf
or the affiliate companies will not assume a contingent liability for
the amount of the subsidiary debt not fully extinguished in
liquidation.
2. AGREEMENTS TO DISPOSE OF EMERGING MONEY
---------------------------------------
The Company entered into agreements which transferred 100% of the
Company's interest in Emerging Money to creditors of the Company,
effective December 1, 1995. In exchange for the transfer, the Company's
creditors have agreed to discharge their debt. Stockholder approval
for this transaction was received on June 17, 1996.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
CONSOLIDATION
-------------
All subsidiaries of Gulf are 100% owned and accordingly are
consolidated with Gulf and all intercompany activity has been
eliminated. The result of Emerging Money's joint venture investment is
F-7
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
consolidated with Emerging Money's activity, through November 30, 1995,
due to the control it exercises over the joint venture. Since the
joint venture had a loss and negative net worth as of December 31,
1995, no value is attributed to the minority interest.
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 reported amounts of assets and
liabilities and disclosure 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 estimates.
EQUIPMENT
---------
Equipment purchased is depreciated by the straight-line method over the
estimated useful lives of the respective assets. Equipment acquired
under capital leases is amortized by the straight-line method over the
estimated useful lives of the respective assets.
INCOME TAXES
------------
Deferred income taxes are provided for the expected tax effects of
differences between the financial statement and tax bases of assets and
liabilities.
CASH AND CASH EQUIVALENTS
-------------------------
For purposes of reporting the statements of cash flows, the Company
considers all cash accounts, which are not subject to withdrawal
restrictions or penalties, and all highly liquid investments with a
maturity of three months or less to be cash equivalents.
INCOME RECOGNITION
------------------
Income is recognized when earned. Prepaid subscription fees are
included in liabilities as deferred income.
Credit is extended at regular terms without collateral after the
Company performs appropriate credit investigations.
TRANSLATION OF FOREIGN CURRENCIES
---------------------------------
Assets and liabilities recorded in functional currencies other than
U.S. dollars are translated into U.S. dollars at the year-end rate of
exchange. Revenue and expenses are translated at the weighted average
exchange rates for the year. The resulting translation adjustments are
charged or credited directly to a separate component of stockholders'
equity. Gains or losses from foreign currency transactions, such as
those resulting from the settlement of receivables or payables
denominated in foreign currency, are included in the earnings of the
current period.
NET INCOME (LOSS) PER COMMON SHARE
----------------------------------
Net income (loss) per common share is based on the weighted average
number of common shares outstanding during each year. The weighted
average number of common shares outstanding for 1996 was 1,953,956 and
99,999,000, for 1995 and 1994.
4. INCOME TAXES
------------
The Company has a deferred tax asset which is attributable primarily to
net operating loss carryforwards. Since, at this time, it is more
probable than not that the deferred tax asset will not be realized, a
valuation allowance for the entire amount has been recorded.
The net operating loss carryforwards available to the Company as of
December 31, 1996 are limited to their use due to change in ownership
of the Company and the Company having future profits.
F-8
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
No tax provision is being provided because the net income per books
arose from income of a foreign subsidiary which is not subject to
United States taxation. Without that gain of $479,837, the Company
would have had a loss of $96,923.
5. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Company is currently under audit by the Internal Revenue Service
(IRS) for the filing of its federal income tax return for year ended
December 31, 1991. The IRS has not assessed any notice of deficiency,
however, no assurances can be made that such assessment will not be
made. Management believes the possibility of additional tax liability
to be unlikely.
6. BUSINESS COMBINATION
--------------------
On December 16, 1994, Gulf Exploration Consultants, Inc. issued
37,942,269 shares of $.01 par value common stock for 100% of the
outstanding stock of Emerging Money, PLC, an Irish corporation. Gulf
acquired Emerging Money from MINMET, PLC, an Irish corporation, which,
after its sale of Emerging Money, owns 52.7% of Gulf's common stock.
Consequently, this business combination is being accounted for under
the purchase method of accounting. Emerging Money's activity between
December 16, 1994 and December 31, 1994 is not material to the
financial statements and is not shown in the statements of operations
or cash flows.
Emerging Money, through its 50% ownership investment in Russiamoney
Limited, is a development stage enterprise which was incorporated on
February 24, 1994. For financial statement reporting purposes,
Russiamoney Limited is consolidated with Emerging Money. No value has
been attributed to the minority interest due to the venture's negative
net worth as of December 31, 1994.
The results of operations for Emerging Money for 1994 are as follows:
Subscription income $6,183
Net loss $183,470
Net loss per share $0.00
7. DUE TO AFFILIATE
----------------
The amounts due to affiliate is due MINMET, PLC which owns 15% and
52.7% of the Company as of December 31, 1996 and 1995, respectively.
No interest is due on these amounts.
8. OTHER LIABILITIES
-----------------
A party to the agreement, as discussed in Note 2, has advanced $46,900
to allow the Company to pay some of its liabilities.
F-9
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
9. NOTES PAYABLE - RELATED PARTIES
-------------------------------
The following notes payable were outstanding as of December 31:
1996 1995
---- ----
Note payable -
stockholder, unsecured,
payable with interest at
7%. The note was due
July 1, 1997 and is being
extended $ 25,866 $ -
Note payable -
stockholder, unsecured,
payable with interest at
7%. The note was due
July 1, 1997 and is being
extended 10,000 -
Notes payable, unsecured
and non-interest-bearing,
converted to common stock 200,000
June 17, 1996 --------- ---------
$ 35,866 $ 200,000
========= =========
10. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Company maintains two offices, one in Dublin, Ireland and one in
Jacksonville, Florida. These two offices are owned by shareholders,
whereby rental arrangements exist in that no rent expense is incurred
by the Company. One shareholder acts on behalf of the Company in the
form of providing accounting services. Fees expensed for the year
ended December 31, 1996 were $5,000. These expenses are incurred on
an as-needed basis, thus there are no fixed fees to accrue.
11. CASH FLOW INFORMATION
---------------------
Cash paid for interest and income taxes was as follows:
1996 1995 1994
---- ---- ----
Interest $1,047 $ - $ -
Income taxes - - -
Supplemental information on non-cash
activities is as follows:
The following non-cash transactions occurred during
the year ended December 31, 1996:
Notes payable to $200,000
common stock
Retirement of stock $ 8,850
Reverse stock split, $977,990
1:50
12. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
----------------------------------------------------
The Company's financial instruments consist of cash, short-term trade
receivables and payables, and long-term debt. The carrying value of
all instruments approximate their fair value.
F-10
EXHIBIT INDEX
Exhibit Description
------- -----------
3.1 Certificate of Incorporation of the Company. (Reference
is made to Exhibit 3.1 to the Company's Registration
Statement on Form S-1, Registration No. 33-20866).
3.2 Bylaws of the Company. (Reference is made to Exhibit 3.2
to the Company's Registration Statement on Form S-1,
Registration No. 33-20866).
3.3 Certificate of Designations, Preferences and Rights of
Serial Preferred Stock, $8.00 Cumulative Convertible
Series A. (Reference is made to Exhibit 3.3 to the
Company's Registration Statement on Form S-1, Registration
No. 33-20866.)
3.4 Certificate of Designations, Preferences and Rights of
Serial Preferred Stock, $8.00 Cumulative Convertible
Series B. (Reference is made to Exhibit 4.2 to Report on
Form 8-K filed by the Company on January 11, 1989).
3.5 Certificate of Designations, Preferences and Rights of
Serial Preferred Stock, $4.00 Cumulative Convertible
Series C. (Reference is made to Exhibit 4.1 to Report on
Form 8-K filed by the Company on January 11, 1989).
10.1 Agreement between the Company and Minmet plc relating to
the purchase by the Company of Emerging Money plc dated
December 16, 1994 (Reference is made to Exhibit 1 to
Report on Form 8-K filed by the Company for an event of
December 16, 1994).
10.2 Agreement between the Company and Robert R. Hillery
relating to the sale to Hillery of all the outstanding
shares of Dornoch Inc. and GEC Texas Inc. in exchange for
the cancellation of 6,446,375 shares of Common Stock held
beneficially by Hillery in the Company. (Reference is
made to Exhibit 10.3 to Report on Form 10-K for the
fiscal year ended December 31, 1995).
10.3 Subscription Agreement and Option, dated December 1995
among the Company, Minmet plc, Micron Ltd and Emerging
Money Plc; (Reference is made to Exhibit 99.1 to Report on
Form 8-K for an event of December 22, 1995).
10.4 Letter Agreement dated December 22, 1995, among the
Company, Minmet plc, (Osprey Investments, Inc. (formerly
DRM&S Inc.) and Dennis Mensch (Reference is made to
Exhibit 99.2 to Report on Form 8-K for an event of
December 22, 1995).
10.5* Letter Agreement, dated July 10, 1996, between the Company
and Osprey Investments, Inc.
10.6* Letter Agreement, dated July 10, 1996, between the Company
and Dennis Mensch.
21 Subsidiaries. At December 31, 1996, the Company did not
have any active subsidiaries.
27* Financial Data Schedule.
* Filed herewith