SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 26, 2001 (September 30, 2000)
Empire Energy Corporation
(Exact Name of Registrant as specified in its charter)
Utah 1-10077 87-0401761
(State or other jurisdiction) (Commission file number) (IRS Employer ID No.)
7500 College Boulevard, Suite 1215 -
Overland Park, Kansas 66210
(address of principal executive offices) (zip code)
(913) 469-5615
(Registrant's telephone number,
including area code)
Item 2. Acquisition or Disposition of Assets
On September 30, 2000, Empire sold all of its investment in One E Group, Inc.
(OEG) to Peterson and Sons Holding Company, a major shareholder, in exchange for
750,000 shares of Empire common stock and forgiveness by OEG of a note
receivable from a subsidiary of Empire. On June 20, 2000, Empire had purchased
71.43% of the outstanding common stock of One E Group, Inc. in exchange for
846,675 shares of newly issued Empire common stock and warrants to allow the
purchase of an additional eleven million shares at $3.00 per share. The market
value of the common stock received by Empire was determined to be $1,125,000
based on the closing price of $1.50 per share on the date of the transaction.
Item 7. Financial Statements and Exhibits.
(b) Pro forma Financial Statements
Pro forma financial information of Registrant and the reported transaction is
filed herewith.
Exhibit 2.04
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the Registrant has caused this report to be signed on its behalf by the
undersigned duly authorized officer.
Empire Energy Corporation
(Registrant)
Dated: March 26, 2001 By: /s/ Norman L. Peterson
Norman L. Peterson, Chairman
EMPIRE ENERGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The following financial statements describe the pro forma effect of the
September 30, 2000 sale of 71.43% of the outstanding common stock of One E
Group, Inc. (OEG) that was acquired June 20, 2000 by Empire Energy Corporation
("Empire") (a development stage company). The unaudited pro forma consolidated
condensed financial statements have been prepared utilizing the historical
financial statements of Empire. The unaudited pro forma consolidated condensed
financial statements should be read in conjunction with the historical financial
statements of Empire on Form 10-KSB/A and the historical financial statements of
OEG.
The following unaudited pro forma consolidated condensed statement of operations
for the six months ended June 30, 2000 and the unaudited pro forma consolidated
condensed balance sheet as of June 30, 2000 give effect to the disposition of
the majority of the stock of OEG, including the related pro forma adjustments
described in the notes thereto. The unaudited pro forma consolidated condensed
statement of operations for the six months ended June 30, 2000 gives effect to
the disposition by Empire as if the disposition had occurred on June 21, 2000.
The unaudited pro forma consolidated condensed balance sheet as of June 30, 2000
gives effect to the disposition as if it had occurred on June 30, 2000. The pro
forma financial statements reflect the preliminary allocation of the
disposition. The disposition price will be finalized upon the completion of
management's review and resolution of any contingencies.
The unaudited pro forma consolidated condensed financial statements may not be
indicative of the results that actually would have occurred if the disposition
had been effective on the dates indicated or which may be obtained in the
future.
F-1
EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
- --------------------------------------------------------------------------------------------
ASSETS
------
Unaudited
Historical Pro Forma
June 30, 2000 Pro Forma June 30,
Empire Adjustments 2000
----------- ------------ -----------
CURRENT ASSETS
Cash $ 117,637 $ (75,467) (a) $ 42,170
Accounts receivable, net 51,700 (18,940) (a) 32,760
Inventories 179,158 -- 179,158
Prepaids and deposits 6,175 (6,175) (a) --
----------- ------------ -----------
TOTAL CURRENT ASSETS 354,670 (100,582) 254,088
PROPERTY AND EQUIPMENT, NET 245,398 (178,431) (a) 66,967
OIL AND GAS PROPERTIES, NET
Properties not subject to amortization 40,760 -- 40,760
OTHER ASSETS:
Marketable securities 68,780 -- 68,780
Deposits and other 53,551 (53,551) (a) --
Receivables - related party 107,244 -- 107,244
----------- ------------- -----------
TOTAL ASSETS $ 870,403 $ (332,564) $ 537,839
=========== ============= ===========
LIABILITIES
-----------
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 95,446 $ (54,687) (a) $ 40,759
Capital leases 12,750 (12,750) (a) --
Customer prepayments 120,000 (120,000) (a) --
----------- ------------ -----------
TOTAL CURRENT LIABILITIES 228,196 (187,437) 40,759
----------- ------------ -----------
LONG-TERM DEBT 50,982 (50,982) (a) --
MINORITY INTERESTS 99,300 (99,300) (a) --
STOCKHOLDERS' EQUITY
--------------------
STOCKHOLDERS' EQUITY
Common stock 13,590 -- 13,590
Additional paid-in-capital 8,456,364 5,155 (a) 9,586,519
1,125,000 (b)
Treasury stock -- (1,125,000) (b) (1,125,000)
Accumulated other comprehensive
loss (12,417) -- (12,417)
Previous accumulated deficit (1,867,999) -- (1,867,999)
Accumulated deficit (6,097,613) -- (6,097,613)
----------- ------------ -----------
TOTAL STOCKHOLDERS' EQUITY 491,925 5,155 497,080
----------- ------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 870,403 $ (332,564) $ 537,839
=========== ============ ===========
See notes to unaudited pro forma consolidated condensed financial statements.
F-2
EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 2000
-----------------------------------------------
Adjustments Unaudited
Empire One E Group Pro Forma
------------ ------------ ------------
OIL AND GAS SALES $ 224,450 $ -- $ 224,450
COMPUTER SERVICES REVENUE 9,382 (9,382)(c) --
EXPENSES
Lease operating 6,459 -- 6,459
Depreciation, depletion, amortization
and impairment 3,580,013 (1,851,577)(d) 1,728,436
Interest, net (1,432) 889 (c) (543)
General and administrative 320,724 (30,556)(c) 290,168
Loss (gain) on partial interests (7,332) 576 (c) (6,756)
------------ ------------ ------------
TOTAL EXPENSES 3,898,432 (1,880,668) 2,017,764
------------ ------------ ------------
LOSS FROM CONTINUING OPERATIONS (3,664,600) 1,871,286 (1,793,314)
============ ============ ============
Loss Per Share:
Net loss per common share $ (0.15)
============
Weighted Average Shares Outstanding 12,316,081
============
See notes to unaudited pro forma consolidated condensed financial statements.
F-3
ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Disposition of investment in One E Group, Inc.
On September 30, 2000, Empire sold all of its investment in One E Group, Inc.
(OEG) to Peterson and Sons Holding Company, a major shareholder, in exchange for
750,000 shares of Empire common stock and forgiveness by OEG of a note
receivable from a subsidiary of Empire. Empire had purchased 71.43% of the
outstanding common stock of One E Group, Inc. in exchange for 846,675 shares of
newly issued Empire common stock on June 20, 2000 and warrants to purchase
eleven million shares of the Company's common stock at $3.00 per share.
The market value of the common stock received by Empire was determined to be
$1,125,000 based on the closing price of $1.50 per share on the date of the
transaction. At the time of the acquisition, the excess of the fair value of the
common stock issued over the fair value of the net assets acquired was not
capitalized as goodwill but was impaired and immediately charged to operations.
Because of this immediate impairment, no goodwill is carried on the financial
statements of Empire. At June 30, 2000, net operating assets were $332,564 and
the liabilities transferred were $337,719 resulting in a difference of $5,155.
The difference will be accounted for as a capital contribution due to the
related party nature of the transactions. The value of the Empire stock received
in the transaction will be recorded as an addition to paid in capital and
treasury stock. No gain or loss will be recorded for this component of the sale
proceeds.
The unaudited pro forma adjustments are as follows:
a. To record the September 30, 2000 sale of the investment by Empire in
71.43% of the common stock of OEG and remove operating assets and
liabilities from the consolidated financial statements as follows.
Current Assets $ 100,582
Property and equipment, net 178,431
Deposits and other 53,551
Current liabilities (187,437)
Long-term debt (50,982)
Minority interest (99,300)
---------
Capital Contribution $ (5,155)
=========
F-4
ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
b. To record the receipt of 750,000 shares of Empire common stock in
return for all of the common stock of OEG owned by Empire. Market
value of this stock is determined using the market closing price of
$1.50 per share.
c. To remove the operations of One E Group for the period from June 21,
2000 to June 30, 2000.
d. To reclass the impairment of goodwill incurred in connection with the
purchase of One E Group on June 20, 2000 to discontinued operations.
F-5