SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K/A
AMENDMENT #3
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: June 5, 2002
(Date of earliest event reported)
INTREPID TECHNOLOGY & RESOURCES, INC.
(Exact Name of Registrant as Specified in its Charter)
Idaho 000-30065 82-0230842
- ----------------------- -------------------- -----------------
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification #
501 Broadway Suite 200 Idaho Falls, Idaho 83402
(Address and Zip Code of the Principal Executive Offices)
Registrant's telephone number including area code: (208) 529-5337
FKA: IRON MASK MINING COMPANY, INC.
656 Cedera Street, Ponderay, Idaho 83852.
(Former Name and Address)
(208) 529-5337
----------------------------------------------------------
(Registrants telephone number, including area code)
Indicate by a check mark whether Registrant (1)
has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
EXPLANATION OF AMENDMENT #3
The Registrant, Intrepid Technology & Resources, Inc., (the "Company"), received
two letters from the Securities and Exchange Commission dated November 24, 2003
and February 3, 2004. The Commission made comments and requested the registrant
amend the original filing of the Report on 8-K dated April 8,2002 and subsequent
amendments to describe the purchase in Item 2. This amendment 3 makes the
necessary changes to Item 2. Acquisition or Disposition of Assets, and Item 7.
Financial Statements and Exhibits.
EXPLANATION OF AMENDMENT #2 dated June 13, 2003
The Registrant received a letter from the Securities and Exchange Commission
dated April 14, 2003. The Commission made comments and requested financial
statements to be included for the acquired company. Amendment 2 made those
changes.
EXPLANATION OF AMENDMENT #1 dated June 11, 2002
The Registrant filed an initial report on Form 8-K on April 8, 2002 with the
Securities and Exchange Commission. That report amended Item 2 and Item 7.,
Financial Statements and Exhibits, to include the historical, pro forma, and
other required financial statements for the merger of Intrepid Engineering
Services Inc. and Western Technology and Management Inc. within 75 days of March
25, 2002, the date the initial report on Form 8-K was required to be filed.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 25, 2002, the Company was created by merging with Intrepid Engineering
Services, Inc., an Idaho corporation ("IES"), Western Technology and Management,
Inc., an Idaho corporation ("WTM"), and Iron Mask Mining Company (IMKG). The
merger was accounted for as a capital transaction with IES as the accounting
acquiror. The accounting for this type of transaction is identical to a reverse
merger except that no goodwill or intangible assets are recorded. Subsequent to
the merger the name was changed to Intrepid Technology and Resources, Inc.
The consideration paid in connection with the merger, determined through
arms-length negotiations between executive management resulted in IMKG issuing
25 million shares of its common stock for the shares of WTM and IES. As a result
of the merger WTM and IES shareholders own 25% and 6%, respectively, of the
outstanding shares of stock.
ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA INFORMATION AND EXHIBITS
The following unaudited pro forma combined condensed financial information of
the Registrant relating to the reverse merger include:
<Table>
(a) Pro Forma Combined Financial Statements
Pro Forma Combined Balance Sheet December 31, 2001 ...................... II-2
Pro Forma Combined Statement of Operations at December 31, 2001 ......... II-3
Notes to Pro Forma Combined Financial Statement ......................... II-4
(b) Financial Statements for Intrepid Engineering Services, Inc. ...................
Report of Independent Auditors .......................................... II-5
Balance Sheet as of December 31, 2001 ................................... II-6
Statement of Operations for December 31, 2001 ........................... II-7
Statement of Shareholders' Equity for Year Ended December 31, 2001 ...... II-8
Statement of Cash Flows for Year Ended December 31, 2001 ................ II-9
Notes to Financial Statements ........................................... II-10
</Table>
II-1
These financial statements do not purport to be indicative of the combined
results of operations of Iron Mask Mining Company (IMKG), Western Technology and
Management, Inc. (WTM) and Intrepid Engineering Services, Inc. (IES), that might
have occurred had the purchase been completed on such dates, nor are they
indicative of future results of operations. Other adjustments may be recorded
based upon information to be received in the future and may have a significant
impact on total assets, total liabilities, cost of operations, depreciation and
amortization, and other expense accounts.
These pro forma adjustments do not reflect possible costs related to regulatory
compliance matters, integration or certain abandonment of assets, all of which
could result in additional future charges. Any purchase accounting adjustments,
or related costs and possible charges arising from the purchase of Intrepid may
materially impact the Company's future combined financial position and combined
financial results of operations. These pro forma financial statements do not
give effect to possible future sales of assets or certain of the operations or
to any cost savings or other benefits of the business combination, which may
result from the integration of Iron Mask and Intrepid.
The unaudited pro forma combined financial statements should be read in
conjunction with the notes to the unaudited pro forma combined financial
statements, the historical consolidated financial statements of IMKG and related
notes as previously filed with the Securities and Exchange Commission and
incorporated herein.
II-2
PRO FORMA COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 2001
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
UNAUDITED
<Table>
<Caption>
HISTORICAL
----------------------------------------- PRO FORMA PRO FORMA
IES WTM IMKG ADJUSTMENT COMBINED
----------- ----------- ----------- --------------- -----------
ASSETS
Current assets:
Cash $ 51,115 $ 15,845 $ 96 $-- $ 67,056
Accounts receivable 305,439 -- -- -- 305,439
Prepaids -- -- 120,000 -- 120,000
Milestone accounts receivable 100,000 -- -- -- 100,000
----------- ----------- ----------- --------------- -----------
Total current assets 456,554 15,845 120,096 -- 592,495
Fixed assets:
Property and equipment 51,298 -- 2,800 -- 54,098
Less accumulated depreciation (16,817) -- (743) -- (17,560)
----------- ----------- ----------- --------------- -----------
Net fixed assets 34,481 2,057 -- 36,538
Other assets
Mineral rights -- -- 3,873,456 (3,873,456)a --
Goodwill-Flo Rite 15,895 -- -- -- 15,895
----------- ----------- ----------- --------------- -----------
TOTAL ASSETS $ 506,930 $ 15,845 $ 3,995,609 $ (3,873,456) $ 644,928
=========== =========== =========== =============== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 78,202 -- $ 36,703 -- $ 114,905
Accounts payable related party -- -- 2,243 -- 2,243
Accrued wages 50,417 -- -- -- 50,417
Payroll taxes 33,484 -- -- -- 33,484
Notes payable shareholders 56,434 -- -- -- 56,434
Bank line of credit 199,779 -- -- -- 199,779
Loans payable short term 48,824 -- 150,000 $ (150,000)b 48,824
Deferred compensation 100,000 -- -- -- 100,000
Accrued vacation 45,311 -- -- -- 45,311
----------- ----------- ----------- --------------- -----------
Total current liabilities 612,451 -- 188,946 (150,000) 651,397
Long-term liabilities
Loans payable 17,197 -- -- -- 17,197
----------- ----------- ----------- --------------- -----------
Total long-term liabilities 17,197 -- -- -- 17,197
Shareholders' equity
Common stock IES & WTM zero par value, IMKG $.005
par value 77,569,675 issued and outstanding
9,070 $ 16,120 985,140 (622,482)c 387,848
Additional paid in capital -- -- 4,277,604 (4,375,393)d (97,789)
Accumulated deficit (131,788) (275) (1,456,081) 1,901,869e (313,725)
----------- ----------- ----------- --------------- -----------
Total shareholders' equity (122,718) 15,845 3,806,663 (3,723,456) (23,666)
----------- ----------- ----------- --------------- -----------
TOTAL LIABILITIES AND EQUITY $ 506,930 $ 15,845 $ 3,995,609 $ (3,873,456) $ 644,928
=========== =========== =========== =============== ===========
</Table>
II-3
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
UNAUDITED
<Table>
<Caption>
HISTORICAL
------------------------------------------- PRO FORMA PRO FORMA
IES WTM IMKG ADJUSTMENT COMBINED
----------- ----------- ----------- ---------- -----------
Revenue $ 1,874,572 $-- $ 5 -- $ 1,874,572
Expense
Salary 1,091,756 -- -- -- 1,091,756
Subcontracts 406,037 -- 58,509 -- 464,546
Operating expense 294,323 275 117,588 -- 412,186
Depreciation 9,500 -- 743 -- 10,243
Interest 21,051 -- 4,827 -- 25,878
----------- ----------- ----------- -- -----------
Total Expense 1,822,667 275 181,667 -- 2,004,609
Net income before income taxes 51,905 -- (181,662) -- (130,032)
Provision for income taxes (benefit) -- -- -- -- --
----------- ----------- ----------- -- -----------
Net income (loss) $ 51,905 $ (275) $ (181,662) -- $ (130,032)
=========== =========== =========== == ===========
Net income (loss) to common shareholders $ 51,905 $ (275) $ (181,662) -- $ (130,032)
=========== =========== =========== == ===========
Weighted average shares 56,330,512
Basic earnings (loss) per share $ (.0023)
===========
Diluted earnings per share $ --
===========
Book value per share $ (.0003)
===========
</Table>
II-4
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
NOTE 1. INTREPID ENGINEERING SERVICES HISTORICAL.
The historical balances represent the balance sheet and results of operations
for IES as of each period indicated as previously reported in the historical
consolidated financial statements of IES.
NOTE 2. WESTERN TECHNOLOGY AND MANAGEMENT HISTORICAL.
Western Technology and Management Inc. had a limited balance sheet and
operations. The Company consisted of a group of individuals intending to develop
a renewable alternative energy
business plan. WTM was a part of the merger and the founders became the
executive management team of the new entity Intrepid Technology and Resources,
Inc.
NOTE 3. IRON MASK MINING COMPANY HISTORICAL.
The historical balances represent the balance sheet and results of operations
for the public traded IMKG for each period indicated as reported in the
historical consolidated financial statements. IMKG had no revenue other than $5
of interest income, and brought only its mining right assets to be a part of the
merger.
NOTE 4. PRO FORMA ADJUSTMENTS.
The pro forma adjustments were made to reflect the capital transaction and to
reflect the acquisition as if it had occurred as of January 1, 2001. The pro
forma adjustments related to the merger give effect to removing the value of the
mineral rights from the balance sheet. According to the SEC's Industry Guide 7,
the requirements outlined in the Guide does not allow for this asset to be
classified as a reserve and therefore no value can be assessed to the asset. See
Note a), below.
IES has made an adjustment to remove all of the short-term loans related to the
Garnett mineral rights that were extinguished at the time of the merger. See
note b), below.
IES also made adjustments to the common stock, and additional paid in capital
account to record the capital transaction. IMKG issued 25,000,000 common shares,
$.005 par value for the outstanding zero par value shares of IES and WTM. The
result of the transaction was a combined common stock value of $387,848 and
$(97,789) additional paid in capital. See notes c), and d) below.
The retained earnings deficit was adjusted to show the effect of the combined
companies as though they existed for the year 2001. See note e).
IES will consider future operational activities and results to determine if
appraisals to both asset and liability accounts are required due to
circumstances which may arise in the ordinary course of business. Other
adjustments may be recorded based upon information to be received in the future
and may have a significant impact on total assets, total liabilities, cost of
operations, depreciation and amortization, and other expense accounts.
These pro forma adjustments do not reflect possible costs related to
environmental matters, litigation liabilities, regulatory compliance matters,
integration or certain abandonment of assets, all of which could result in
additional future charges. Any accounting adjustments, or related costs and
possible charges arising from the merger may materially impact the Company's
future combined financial position and combined financial results of operations.
These pro forma financial statements do not give effect to possible future sales
of assets or certain of the operations or to any cost savings or other benefits
of the business combination, which may result from the integration of IES, WTM
and IMKG.
The pro forma adjustments reflected in the pro forma combined financial
statements give effect to the following (in thousands):
a). Mining Rights To eliminate all value(s) associated
with the Garnett and Copper Cliff
properties in Montana
b). Short term Loans Payable To eliminate obligations associated
with the Garnett and Copper Cliff
properties in Montana
c). Common Stock To reduce the common stock account
to match the valuation of the number
of shares outstanding at the
assigned par value of $.005
d). Additional Paid in Capital To reduce the equity of the Company
by the amount of the mining rights
and the corresponding adjustment to
common stock
e). Accumulated deficit To adjust the combined entities
accumulated deficit as of December
31, 2001.
II-5
INDEPENDENT AUDITORS' REPORT
To the Shareholders' and Board of Directors
Intrepid Engineering Services, Inc.
We have audited the accompanying balance sheet of Intrepid Engineering Services,
Inc. as of December 31, 2001, and the related statements of operations,
shareholders' equity and cash flows for the year ended December 31, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Intrepid Engineering Services,
Inc. as of December 31, 2001, and the results of their operations and their cash
flows for the year ended December 31, 2001 in conformity with generally accepted
accounting principles in the United States of America.
Balukoff, Lindstrom & Co., P.A.
Boise, Idaho
May 31, 2002
(except for Note 8, as to
which the date is February 18, 2004)
II-6
INTREPID ENGINEERING SERVICES, INC.
BALANCE SHEET
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
DECEMBER 31,
2001
------------
ASSETS
Current Assets:
Cash $ 51,115
Receivables, net of allowance for doubtful
accounts of $0 305,439
Milestone accounts receivables 100,000
---------
Total current assets 456,554
Property & Equipment 51,298
Accumulated Depreciation (16,817)
Goodwill - FloRite 15,895
Total Assets $ 506,930
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 78,202
Accrued wages 50,417
Payroll taxes 33,484
Notes payable to shareholders 56,434
Line of credit 199,779
Loans payable short-term 48,824
Deferred compensation 100,000
Accrued vacation 45,311
---------
Total current liabilities 612,451
Long term loans payable 17,197
Commitments and contingencies
Shareholders' equity:
Common stock, $.00 par value, authorized, 1,000,000
620,000 shares issued and outstanding 9,070
Accumulated deficit (131,788)
---------
Total shareholders' equity (122,718)
---------
Total Liabilities and Shareholders' Equity $ 506,930
=========
</Table>
The accompanying notes are an integral part of these financial statements.
II-7
INTREPID ENGINEERING SERVICES, INC.
STATEMENT OF OPERATIONS
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
DECEMBER 31,
2001
------------
Revenue $1,874,572
Expense
Salary 1,091,756
Subcontracts 406,037
Operating expense 294,323
Depreciation 9,500
Interest 21,051
----------
Total Expense 1,822,667
Net income before income taxes 51,905
Provision for income taxes (benefit) --
----------
Net income $ 51,905
==========
</Table>
The accompanying notes are an integral part of these financial statements
II-8
INTREPID ENGINEERING SERVICES, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2001
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
RETAINED
COMMON EARNINGS
STOCK (DEFICIT)
--------- ---------
Beginning balance, December 31, 2000 on 620,000
common shares $ 9,070 $(183,693)
Net income -- 51,905
--------- ---------
Ending balance, December 31, 2001
On 620,000 common shares $ 9,070 $(131,788)
========= =========
</Table>
The accompanying notes are an integral part of these financial statements
II-9
INTREPID ENGINEERING SERVICES, INC.
STATEMENT OF CASH FLOWS
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
DECEMBER 31,
2001
------------
Cash Flow From Operating Activities
Net income $ 51,905
Adjustments to reconcile net income to net cash
Provided by operating activities
Depreciation expense 9,500
Changes in operating assets and liabilities
(Increase) Decrease in accounts receivable (274,927)
Increase (Decrease) in accounts payable 16,248
Increase (Decrease) in deferred compensation 100,000
Increase (Decrease) in wages and payroll taxes 86,533
---------
Net Cash Used by Operating Activities $ (10,741)
=========
Cash Flow From Investing Activities
Purchase of property and equipment (35,927)
Purchase of FloRite goodwill (15,895)
---------
Net Cash Used by Operating Activities $ (51,822)
=========
Cash Flow From Financing Activities
Loan proceeds shareholders 41,980
Loan proceeds banks 50,037
Loan repayments to others (81,979)
---------
Net Cash Provided by Financing Activities $ 10,038
=========
Net Decrease in Cash (52,525)
Cash at Start of Period 71,213
---------
Cash at End of Period $ 51,115
=========
Supplemental disclosure for cash flow information
Interest paid $ 21,051
---------
</Table>
The accompanying notes are an integral part of these financial statements
II-10
INTREPID ENGINEERING SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
Note 1. Summary of Significant Accounting Policies.
Company Operations
The Company's primary operating activities include mechanical, environmental,
civil, electrical and process engineering services and project management. The
company provides engineering services and project management to the Department
of Energy, the Idaho National Engineering and Environmental Laboratory and other
government and private clients.
Cash equivalents. Cash equivalents are highly liquid investments with maturities
of three months or less when acquired.
Revenue Recognition. Revenues are recognized as services are performed.
Property and Equipment. Property and equipment are recorded at cost and
depreciated on straight-line method over estimated useful lives. Replacements
and major repairs of property and equipment are capitalized and retirements are
made when the useful life has been exhausted. Minor components and parts are
charged to expense as incurred.
Goodwill. The Company purchased Flor-Rite a Heating, Ventilation and Air
Conditioning (HVAC) company. Part of the acquisition price was allocated to
goodwill. Under Statements of Financial Accounting Standards (SFAS 142)
"Goodwill and Other Intangible Assets," the Company is not required to amortize
goodwill. The Company will evaluate the fair value of the goodwill annually and
will adjust accordingly.
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
the disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from these estimates.
Credit Risk Concentration. Concentrations of credit risk with respect to
accounts receivable are believed to be limited due to the number,
diversification and character of the obligors and the Company's credit
evaluation process. Typically, the Company has not required collateral for such
obligations.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due. The Company has a net
operating loss carryforward from prior year operations, which offset the current
year operations resulting in no income tax expense for the current year. The
remaining net operating loss was not recorded as a deferred tax asset since the
amount is considered immaterial.
New Accounting Pronouncements.
The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standards 143"Accounting for Asset Retirement Obligations"
144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" and 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB Statement No. 13, and Technical Corrections". Management believes the
adoption of these statements will have no material impact on the Company's
financial statements.
Note 2 - LONG-TERM OBLIGATIONS
A summary of long-term obligations at December 31, 2001 is as follows:
<Table>
Note payable to owners of Flo Rite, Inc. in monthly installments of $1,081,
including interest at 9 %, due May 31, 2004. The note is unsecured.
$ 28,085
Less short term 10,888
---------------------
$ 17,197
====================
Maturities on this obligations at December 31 are as follows:
2002 $ 10,888
2003 11,910
2004 5,287
---------------------
$ 28,085
=====================
</Table>
NOTE 3 - REVOLVING LINE OF CREDIT
The Company has available for borrowing a line of credit of $200,000 as of
December 31, 2001 and of which $199,776 was outstanding at December 31, 2001.
The line of credit bears interest at the prime rate plus 2%, and expires April
15, 2002. The credit is secured by all business assets and personally guaranteed
by the principals of the company.
NOTE 4 - NOTES PAYABLE SHAREHOLDERS
The Company has several notes with shareholders of the Company. These notes are
demand notes with an interest rate of 10%.
NOTE 5 - SIGNIFICANT CUSTOMERS AND VENDORS
The Company recorded revenue from services provided to customers that exceeded
10 percent of total revenues as follows:
<Table>
2001
--------
BWTX Bechtel Idaho, LLC $948,571
</Table>
NOTE 6 - LEASE COST
The Company leases space in Idaho Falls, Idaho and Kenniwick, Washington. The
Idaho Falls lease is at a monthly rate of $4,972, the Kenniwick lease is at a
monthly rate of $1,000. The Idaho Falls lease term runs through May 31, 2005,
the Kenniwick lease is month to month.
<Table>
Rent expense for Year Ended December 31, 2001 was: $ 71,664
=============
Rental expense for the lease terms are as follows:
2002 $ 59,664
2003 59,664
2004 59,664
2005 24,860
$ 203,852
=============
</Table>
NOTE 7 - ACQUISITION OF FLO RITE Inc.
On April 25, 2001 the Company purchased Flo Rite, Inc., a HVAC contractor, that
specializes in testing HVAC systems. The Company paid $34,000 cash for vehicles
and equipment. Of the $34,000 purchase price $15,895 was allocated to goodwill.
NOTE 8 -SUBSEQUENT EVENTS
On March 25, 2002, the Company and Western Technology and Management, Inc.
merged with Iron Mask Mining Company (Iron Mask) pursuant to a Stock Agreement
(the "Agreement"). The acquisition was accounted for as a capital transaction in
substance because Western Technology and Iron Mask are non operating companies.
The accounting for this type of transaction is identical to a reverse merger
except that no goodwill or intangibles assets are recorded. The assets and
liabilities, at fair value, of Western and Iron Mask were combined with the
Company's financial statements.
In consideration of the capital transaction a total of 25 million shares of Iron
Mask were exchanged for the outstanding shares of the Company and Western.