SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 7, 2001 (April 11, 2000)
Empire Energy Corporation
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(Exact Name of Registrant as specified in its charter)
Utah 1-10077 87-0401761
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(State or other jurisdiction) (Commission file number) (IRS Employer ID No.)
7500 College Boulevard, Suite 1215
Overland Park, Kansas 66210
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(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 April 11, 2000, Empire acquired substantially all the operating assets of,
and assumed certain liabilities of Talisman Marketing, Inc. in exchange for
562,150 shares of newly issued Empire common stock. The market value of the
common stock issued by Empire was determined to be $1,967,525 based on the
market closing price of $3.50 per share on the date of the acquisition. Fair
values of the operating assets and assumed liabilities were determined to be
similar to their book values. This acquisition will be accounted for as a
purchase and is a step to broaden the company's businesses from its dependency
on the natural resources industry.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
Financial statements of Talisman Marketing, Inc. were previously filed.
(b) Pro forma Financial Statements
Pro forma financial information of Registrant and Talisman Marketing, Inc. are
filed herewith.
(c) Exhibits
2.04 Asset acquisition agreement previously filed.
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: May 7, 2001 By: /s/ Norman L. Peterson
---------------------------------
Norman L. Peterson,
Chairman
EMPIRE ENERGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Attached are the historical audited financial statements of Talisman Marketing,
Inc. (Talisman) for the acquisition of the selected operating assets and
selected liabilities of Talisman 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 previously filed historical
financial statements of Talisman.
The following unaudited pro forma consolidated condensed statements of
operations for the year ended December 31, 1999, for the three months ended
March 31, 2000 and the unaudited pro forma consolidated condensed balance sheet
as of March 31, 2000 give effect to the acquisition of the selected operating
assets and liabilities of Talisman, including the related pro forma adjustments
described in the notes thereto. The unaudited pro forma consolidated condensed
statements of operations for the year ended December 31, 1999 and the three
months ended March 31, 2000 give effect to the acquisition by Empire as if the
acquisition, accounted for as a purchase, had occurred on January 1, 1999 for
the year ended December 31, 1999 and January 1, 2000 for the three months ended
March 31, 2000. The unaudited pro forma consolidated condensed balance sheet as
of March 31, 2000 gives effect to the acquisitions as if they had occurred on
March 31, 2000. The pro forma financial statements reflect the preliminary
allocation of the purchase price. The purchase price will be finalized upon the
completion of management's review and resolution of the purchase contingencies.
The unaudited pro forma consolidated condensed financial statements may not be
indicative of the results that actually would have occurred if the acquisitions
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 March 31, 2000 Pro Forma
-------------------------- Pro Forma March 31,
Empire Talisman Adjustments 2000
----------- ----------- ----------- -----------
CURRENT ASSETS
Cash $ 126,723 $ 76,430 (a) $ (76,430) $ 126,723
Accounts receivable, net 57,773 15,193 (a) (15,193) 57,773
Inventories -- 210,099 -- 210,099
Prepaids and deposits 18,500 77,634 (a) (77,634) 18,500
----------- ----------- ----------- -----------
TOTAL CURRENT ASSETS 202,996 379,356 (169,257) 413,095
PROPERTY AND EQUIPMENT, NET 8,462 94,852 (a) (18,841) 84,473
OIL AND GAS PROPERTIES, NET -- -- -- --
OTHER ASSETS:
Marketable securities -- 81,190 -- 81,190
Goodwill -- -- (b) 1,852,927 1,852,927
Receivables related party 101,675 -- -- 101,675
----------- ----------- ----------- -----------
TOTAL ASSETS $ 313,133 $ 555,398 $ 1,664,829 $ 2,533,360
=========== =========== =========== ===========
LIABILITIES
-----------
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 17,745 $ 60,204 (a) $ (60,204) $ 17,745
Capital leases -- 18,841 (a) (18,841) --
Notes payable related parties 8,500 841,976 (a) (589,274) 261,202
Convertible debentures 25,000 -- -- 25,000
----------- ----------- ----------- -----------
TOTAL CURRENT LIABILITIES 51,245 921,021 (668,319) 303,947
----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY
--------------------
STOCKHOLDERS' EQUITY
Common stock 12,140 1,970,758 (a) (1,970,758) 12,702
(b) 562
Additional paid in capital 4,473,426 760,390 (a) (760,390) 6,440,389
(b) 1,966,963
Accumulated other comprehensive
loss -- 46,704 (a) (46,704) --
Previous accumulated deficit (1,867,999) -- -- (1,867,999)
Accumulated deficit (2,355,679) (3,143,475) (a) 3,143,475 (2,355,679)
----------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 261,888 (365,623) 2,333,148 2,229,413
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 313,133 $ 555,398 $ 1,664,829 $ 2,533,360
=========== =========== =========== ===========
- ----------------------------------------------------------------------------------------------------
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 Year Ended December 31, 1999
------------------------------------------------------------
Pro Forma Unaudited
Empire Talisman Adjustments Pro Forma
------------ ------------ ------------ -----------
OIL AND GAS SALES $ 69,401 $ -- $ -- $ 69,401
MARKETING SALES -- 845,728 -- 845,728
EXPENSES
Lease operating 1,100 -- -- 1,100
Cost of sales -- 1,134,378 -- 1,134,378
Depreciation, depletion, amortization
and impairment 90,802 36,488 (c) 370,585 497,875
Interest, net 76,750 (5,265) -- 71,485
General and administrative 744,431 1,703,401 -- 2,447,832
------------ ------------ ------------ ------------
TOTAL EXPENSES 913,083 2,869,002 370,585 4,152,670
------------ ------------ ------------ ------------
OPERATING LOSS (843,682) (2,023,274) (370,585) (3,237,541)
Provision for income taxes -- (128,865) -- (128,865)
------------ ------------ ------------ ------------
Net Loss $ (843,682) $ (2,152,139) $ (370,585) $ (3,366,406)
============ ============ ============ ============
Net loss per common share (0.29)
============
Weighted Average Shares Outstanding 11,444,935
============
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See notes to unaudited pro forma consolidated condensed financial statements
F3
EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
- ---------------------------------------------------------------------------------------------------
For the Three Months Ended March 31, 2000
--------------------------------------------------------
Pro Forma Unaudited
Empire Talisman Adjustments Pro Forma
----------- ----------- ----------- -----------
OIL AND GAS SALES $ 122,053 $ -- $ -- $ 122,053
MARKETING SALES -- 86,916 -- 86,916
EXPENSES
Lease operating 2,032 -- -- 2,032
Cost of sales -- 130,645 -- 130,645
Depreciation, depletion, amortization
and impairment 1,682,822 9,007 (c) 92,646 1,784,475
Interest, net 6,700 6,793 -- 13,493
General and administrative 134,529 199,675 -- 334,204
----------- ----------- ----------- -----------
TOTAL EXPENSES 1,826,083 346,120 92,646 2,264,849
----------- ----------- ----------- -----------
OPERATING LOSS (1,704,030) (259,204) (92,646) (2,055,880)
Provision for income taxes -- -- -- --
----------- ----------- ----------- -----------
Net Loss $(1,704,030) $ (259,204) $ (92,646) $(2,055,880)
=========== =========== =========== ===========
Loss Per Share:
Net loss per common share $ (0.17)
===========
Weighted Average Shares Outstanding 12,047,208
===========
- ---------------------------------------------------------------------------------------------------
See notes to unaudited pro forma consolidated condensed financial statements
F-4
EMPIRE ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Acquisition of specified assets and liabilities of Talisman
On April 11, 2000, Empire entered into an agreement to acquire substantially all
the operating assets of, and assume certain liabilities of Talisman Marketing,
Inc. in exchange for 562,150 shares of newly issued Empire common stock.
The fair value of the common stock issued by Empire was determined to be
$1,967,525 based on the closing price of $3.50 per share on the date of the
agreement. Fair values of the operating assets and assumed liabilities were
determined to be similar to their book values, therefore, the excess of the fair
value of the common stock issued over the net fair value of the assets acquired
was recorded as goodwill and will be amortized over five years.
Subsequent to completing this acquisition, management was required to reevaluate
the goodwill recorded in the transaction when the Company lost the services of
key personnel and decided to discontinue operations. As a result of this
reevaluation, the goodwill was determined to be impaired and the unamortized
balance was charged to operations. This charge is not included in the pro forma
condensed income statements because the impairment of the goodwill is a
non-recurring charge that is not reflective of expected future operations.
The unaudited pro forma adjustments are as follows:
a. To record the deletion from the balance sheet of assets not
specifically acquired, liabilities not specifically assumed and equity
of Talisman unaffected by this asset purchase transaction.
b. To record the issuance of common stock to purchase selected assets and
assume certain liabilities of Talisman under the purchase method:
Net assets acquired at fair value:
Current assets $ 210,099
Property and equipment 76,011
Other assets 81,190
Goodwill 1,852,927
Current liabilities (252,702)
-----------
$1,967,525
===========
Consideration comprised of 562,150 common shares
of Empire at $3.50 $1,967,525
==========
c. To record and charge against operations the amortization of the excess
of the fair value of the common stock issued over the fair value of
the net assets acquired using a five year useful life.
F-5
EMPIRE ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
Earnings per share:
The following is a reconciliation of historical to pro forma weighted average
shares outstanding:
Year Ended Three Months Ended
December 31, 1999 March 31, 2000
----------------- --------------
Historical 10,882,785 11,485,058
Shares issued to acquire
Talisman (assumed to
be at beginning of period) 562,150 562,150
---------- ----------
Pro forma 11,444,935 12,047,208
========== ==========
Basic earnings per share of common stock was computed by dividing loss
applicable to common stockholders, by the weighted average number of common
shares outstanding for the year. Diluted loss per share is not presented because
all potential common shares are anti-dilutive.
F-6