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)
November 20, 1996
BLACK WARRIOR WIRELINE CORP.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-18754 11-2904094
(Commission file number) (IRS employer identification no.)
3748 Highway 45 North
Columbus, Mississippi 39701
(Address of principal executive offices) (Zip code)
(601) 329-1047
(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The following financial
statements of the business acquired are filed as exhibits hereto:
Financial Statements of Dyna Jet, Inc. as of and for the year ended May 31, 1996
Report of Independent Accountants
Balance Sheet as of May 31, 1996
Statement of Operations for the year ended May 31, 1996
Statement of Stockholder's Equity for the year ended May 31, 1996
Statement of Cash Flows for the year ended May 31, 1996
Notes to Financial Statements
FINANCIAL STATEMENTS OF DYNA JET, INC. AS OF AND FOR THE THREE MONTHS ENDED
AUGUST 31, 1996 (UNAUDITED)
Balance Sheet as of August 31, 1996 (Unaudited)
Statements of Operations for the three months ended August 31, 1996 and 1995
(Unaudited)
Statements of Cash Flows for the three months ended August 31, 1996 and 1995
(Unaudited)
Notes to Financial Statements (Unaudited)
(b) PRO FORMA FINANCIAL INFORMATION. The following pro forma financial
statements of the registrant are filed as an exhibit hereto:
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF BLACK
WARRIOR WIRELINE CORP. AND SUBSIDIARIES AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND FOR THE YEAR ENDED DECEMBER 31, 1995
Unaudited Pro Forma Condensed Consolidated Financial Statements
Introduction
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
year ended December 31, 1995
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
nine months ended September 30, 1996
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September
30, 1996
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS,
CONTINUED
(c) EXHIBITS.
NONE
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BLACK WARRIOR WIRELINE CORP. AND SUBSIDIARY
Date: February 7, 1997 By: /s/ William Jenkins
--------------------------------------
William Jenkins, President and Chief
Operating Officer
INDEX TO FINANCIAL STATEMENTS
SEQUENTIAL
DESCRIPTION PAGE NO.
----------- --------
Financial Statements of Dyna Jet, Inc. as of and for the
year ended May 31, 1996..................................... F-1 - F-9
Financial Statements of Dyna Jet, Inc. as of August 31, 1996
and for the three months ended August 31, 1996 and 1995..... F-10 - F-13
Unaudited Pro Forma Condensed Consolidated Financial
Statements of Black Warrior Wireline Corp. and Subsidiaries
as of and for the nine months ended September 30, 1996 and
for the year ended December 31, 1995........................ F-14 - F-19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholder
Dyna Jet, Inc.
Gillette, Wyoming
We have audited the accompanying balance sheet of Dyna Jet, Inc. as of May
31, 1996, and the related statements of operations, stockholder's equity, and
cash flows for the year then ended. 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. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the 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 Dyna Jet, Inc. as of May 31,
1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
January 20, 1997
F-1
DYNA JET, INC.
BALANCE SHEET
May 31, 1996
ASSETS
Current assets:
Cash and cash equivalents $ 23,688
Accounts receivable, less allowance for doubtful
accounts of $13,376 48,498
Other receivables 33,925
Inventories 9,232
Prepaid expenses 2,552
-----------
Total current assets 117,895
Investments 22,005
Property, plant, and equipment, less accumulated
depreciation of $1,596,808 178,330
-----------
Total assets $ 318,230
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 20,460
Other liabilities 12,345
Notes payable, related party 77,792
Deferred taxes payable - current 12,517
-----------
Total current liabilities 123,114
Deferred taxes payable - long term 5,940
-----------
Total liabilities 129,054
-----------
Commitments and contingencies
Stockholder's equity:
Common stock, no par value; 45,000 shares authorized;
4,000 shares issued at May 31, 1996 62,000
Retained earnings 556,434
Treasury stock, at cost, 2,000 shares at May 31, 1996 (349,077)
Receivable from stockholder (80,181)
-----------
Total stockholder's equity 189,176
-----------
$ 318,230
===========
The accompanying notes are an integral part of these financial statements
F-2
DYNA JET, INC.
STATEMENT OF OPERATIONS
for the year ended May 31, 1996
Net revenues $ 510,560
Operating costs 237,343
General and administrative expenses 451,414
Depreciation 43,839
-----------
Loss from operations (222,036)
Interest expense (1,909)
Loss on sale of property, plant, and equipment, net (6,003)
Other expense, net (637)
-----------
Net loss $(230,585)
===========
The accompanying notes are an integral part of these financial statements.
F-3
DYNA JET, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
for the year ended May 31, 1996
COMMON STOCK TREASURY STOCK RECEIVABLE
--------------- RETAINED ---------------- FROM TOTAL
SHARES VALUE EARNINGS SHARES VALUE STOCKHOLDER EQUITY
------ ----- -------- ------ ----- ----------- ------
Balance, May 31, 1995 4,000 $ 62,000 $ 787,019 2,000 $(349,077) $ (83,181) $ 416,761
Net loss (230,585) (230,585)
Repayment of advances to
stockholder 3,000 3,000
----- -------- --------- ----- --------- --------- ---------
Balance, May 31, 1996 4,000 $ 62,000 $ 556,434 2,000 $(349,077) $ (80,181) $ 189,176
===== ======== ========= ===== ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-4
DYNA JET, INC.
STATEMENT OF CASH FLOWS
for the year ended May 31, 1996
Cash flows from operating activities:
Net loss $(230,585)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 43,839
Allowance for doubtful accounts 11,736
Cash surrender value of life insurance 18,052
Provision for losses on inventory 23,790
Loss on sale of property, plant, and equipment, net 6,003
Change in:
Accounts receivable 64,904
Inventories 16,983
Prepaid expenses 2,662
Other assets 9,694
Accounts payable 12,062
Other liabilities 4,689
------------
Net cash used in operating activities (16,171)
------------
Cash flows from investing activities:
Investments 2,693
Receivable from stockholder 3,000
------------
Cash provided by investing activities 5,693
------------
Cash flows from financing activities:
Repayment of note payable, related party (13,856)
------------
Cash used in financing activities (13,856)
------------
Net decrease in cash and cash equivalents (24,334)
Cash and cash equivalents, beginning of year 48,022
------------
Cash and cash equivalents, end of year $ 23,688
============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 3,554
============
Income taxes $ 7,500
============
The accompanying notes are an integral part of these financial statements.
F-5
DYNA JET, INC.
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Dyna Jet, Inc. (the Company), incorporated in Wyoming, is an integrated oil
and gas well servicing company which provides wireline, drilling,
completion, and workover services primarily in Wyoming, Colorado, Montana
and South Dakota.
2. SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS - The Company considers all investments with an
original maturity of three months or less to be cash equivalents.
INVENTORIES - Inventories, which consist primarily of supplies used in well
servicing activities, have useful lives of less than one year and are
stated at the lower of cost (first-in, first-out method) or net realizable
value.
INVESTMENTS - Investments are carried at cost which approximates fair
market value.
PROPERTY, PLANT, AND EQUIPMENT - Property, plant, and equipment is stated
at cost. The cost of maintenance and repairs is charged to expense when
incurred; the cost of betterments is capitalized. The cost of assets sold
or otherwise disposed of and the related accumulated depreciation are
removed from the accounts and the gain or loss on such disposition is
included in income. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets (buildings - 31.5 years,
vehicles and other equipment - 2 to 10 years).
INCOME TAXES - The Company uses an asset and liability approach for
financial accounting and reporting for income taxes. Deferred tax assets
are recognized only to the extent of their anticipated realization.
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 amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amount of the Company's
cash and cash equivalents, accounts receivable, other receivables, and
notes payable - related parties approximates fair value because of the
short maturity of these instrument.
3. RELATED PARTY TRANSACTIONS
The Company has made advances to its sole stockholder and a company owned
by the stockholder. No advances were made during the current year. At May
31, 1996, the balance of these advances of $80,181 is included herein as a
separate component of stockholder's equity.
The Company also incurred a note payable to a former stockholder in
exchange for the repurchase of his common stock. The remaining balance of
the note at May 31, 1996 is $77,792 and is included on the balance sheet in
notes payable, related party. This note was repaid prior to the closing of
the acquisition discussed in Note 8.
F-6
DYNA JET, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment includes the following at May 31, 1996:
Land $ 77,000
Vehicles 208,259
Drilling rigs and related equipment 638,422
Operating equipment 766,499
Office equipment 39,396
Buildings 45,562
----------
1,775,138
Less accumulated depreciation 1,596,808
----------
Net property, plant, and equipment $ 178,330
==========
5. INCOME TAXES
The benefit for income taxes consists of the following for the year ended
May 31, 1996:
Federal:
Current $(11,440)
Deferred 11,440
----------
$ 0
==========
The benefit for federal income taxes differs from the amount computed by
applying the federal income tax statutory rate of 34% to the loss, as
follows:
Benefit at federal statutory rate $(78,398)
Increase in valuation allowance 11,440
Nondeductible officers life insurance 11,139
Conversion from cash basis to accrual basis 53,678
Nondeductible meals and entertainment 1,967
Other 174
--------
Benefit for federal income taxes $ 0
========
The Company has available loss carryforwards of approximately $11,440 for
federal purposes that expire May 31, 2011.
F-7
DYNA JET, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Deferred income taxes reflect the impact of temporary differences between
amounts of assets and liabilities recorded for financial reporting purposes and
such amounts as measured in accordance with tax laws. The primary cause of
temporary differences for the Company is that the tax returns are filed on the
cash basis while the financial statements are prepared on the accrual basis. The
specific items which comprise a significant portion of the deferred tax assets
and liabilities are as follows:
Gross deferred tax assets:
Accounts payable $ 6,956
Other liabilities 3,660
Operating loss carryforwards 3,890
Capital loss carryforwards 1,895
Other 315
----------
Gross deferred tax asset 16,716
----------
Gross deferred tax liabilities:
Accounts receivable 16,489
Depreciation 5,940
Inventories 3,139
Other 3,820
----------
Gross deferred tax liability 29,388
----------
Net deferred tax liability (12,672)
Less: valuation allowance 5,785
----------
Net deferred taxes payable $(18,457)
==========
The Company is required to record a valuation allowance when it is more
likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of the net deferred income tax
asset depends on the Company's ability to generate sufficient taxable
income in the future. Based on the Company's results of operations, there
is substantial doubt as to the realizability of the deferred tax asset.
Accordingly, a valuation allowance has been established for operating and
capital loss carryforwards.
6. MAJOR CUSTOMERS
Most of the Company's business activity is with customers engaged in
drilling and operating natural gas wells primarily in Wyoming.
Substantially all of the Company's accounts receivable at May 31, 1996 are
from such customers. Performance in accordance with the credit arrangements
is in part dependent upon the economic condition of the natural gas
industry in the respective geographic areas. The Company does not require
its customers to pledge collateral on its accounts receivable.
F-8
DYNA JET, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
The Company earned revenues in excess of 10% of its total revenues from the
following customers for the year ended May 31, 1996:
Marathon Oil Company $ 109,884
Tom Brown, Inc. $ 83,273
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to
estimate fair value:
CASH, ACCOUNTS RECEIVABLE, NOTES PAYABLE - RELATED PARTY - The carrying
amount is a reasonable estimate of the fair value because of the short
maturity of these instruments.
INVESTMENTS - The fair value of investments is estimated based on quoted
market prices for those or similar investments.
8. SUBSEQUENT EVENT
On November 20, 1996, all outstanding stock of the Company was sold to
Black Warrior Wireline Corp. for approximately $757,000.
F-9
DYNA JET, INC.
BALANCE SHEET (UNAUDITED)
August 31, 1996
ASSETS
Current assets:
Cash and cash equivalents $ 43,303
Accounts receivable, less allowance for doubtful accounts of $13,736 105,833
Inventories 9,232
Prepaid expenses 8,664
----------
Total current assets 167,032
Investments 21,077
Property, plant, and equipment, net 122,175
----------
Total assets $ 310,284
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 20,460
Income taxes payable 18,541
Other liabilities 13,930
Notes payable, related party 77,792
Deferred taxes payable - current 12,517
----------
Total current liabilities 143,240
Deferred taxes payable - long term 5,940
----------
Total liabilities 149,180
----------
Commitments and contingencies
Stockholder's equity
Common stock, no par value; 45,000 shares authorized;
4,000 shares issued at August 31, 1996 62,000
Retained earnings 528,362
Treasury stock, at cost, 2,000 shares at August 31, 1996 (349,077)
Receivable from stockholder (80,181)
----------
Total stockholder's equity 161,104
----------
$ 310,284
==========
The accompanying notes are an integral part of these financial statements.
F-10
DYNA JET, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
for the three months ended August 31, 1996 and 1995
1996 1995
Net revenues $ 179,898 $ 127,640
Operating costs 29,415 59,336
General and administrative expenses 70,014 108,754
Depreciation 14,575 10,960
----------- -----------
Income (loss) from operations 65,894 (51,410)
Interest expense (477)
Loss on sale of property, plant, and equipment, net (1,501)
Other income (expense), net 79 (158)
----------- -----------
Income (loss) before provision for income taxes 65,973 (53,546)
Provision for income taxes 18,541
----------- -----------
Net income (loss) $ 47,432 $ (53,546)
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-11
DYNA JET, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
for the three months ended August 31, 1996 and 1995
1996 1995
Cash flows from operating activities:
Net income (loss) $ 47,432 $(53,546)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 14,575 10,847
Cash surrender value of life insurance 4,513
Allowance for doubtful accounts 2,934
Provision for losses on inventory 5,948
Loss on sale of property, plant, and equipment, net 1,501
Change in:
Accounts receivable (57,335) 16,226
Other receivable 33,925
Inventories 4,246
Prepaid expenses (6,112) 666
Other assets 2,424
Accounts payable 3,016
Income taxes payable 18,541
Other liabilities 1,586 1,172
---------- ----------
Net cash provided by (used in) operating activities 52,612 (53)
---------- ----------
Cash flows from investing activities:
Investments 928 530
Receivable from stockholder 750
---------- ----------
Cash provided by financing activities 928 1,280
---------- ----------
Cash flows from financing activities:
Repayment of note payable, related party (7,564)
Payment of dividends (33,925)
---------- ----------
Cash used in financing activities (33,925) (7,564)
---------- ----------
Net increase (decrease) in cash and cash equivalents 19,615 (6,337)
Cash and cash equivalents, beginning of period 23,688 70,046
---------- ----------
Cash and cash equivalents, end of period $ 43,303 $ 63,709
========== ==========
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest $ 0 $ 889
========== ==========
Income taxes $ 0 $ 7,500
========== ==========
Noncash investing and financing activities:
Net book value of property, plant, and equipment distributed to stockholder
as a dividend $ 41,579
==========
The accompanying notes are an integral part of these financial statements
F-12
DYNA JET, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The unaudited balance sheet as of August 31, 1996 and the unaudited
statements of operations and cash flows for the three months ended August
31, 1996 and 1995, in the opinion of management, have been prepared on the
same basis as the audited financial statements and include all significant
adjustments, consisting of normal recurring adjustments, necessary for the
fair presentation of the results of the interim periods. The data disclosed
in these notes to the financial statements for these periods are also
unaudited. The financial statements and notes thereto should be read in
conjunction with the financial statements and notes thereto as of and for
the year ended May 31, 1996. Operating results of Dyna Jet, Inc. for the
three months ended August 31, 1996 and 1995, are not necessarily indicative
of the results that may be expected for the entire years ending August 31,
1996 and 1995, respectively.
2. SUBSEQUENT EVENT
On November 20, 1996, all outstanding stock of Dyna Jet, Inc. was sold to
Black Warrior Wireline Corp. for approximately $757,000.
F-13
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS INTRODUCTION
The accompanying unaudited pro forma condensed consolidated financial statements
reflect the consolidated financial position of Black Warrior Wireline Corp. (the
Company) as of September 30, 1996, and the consolidated results of its
operations for the year ended December 31, 1995 and the nine months ended
September 30, 1996 after giving pro forma effect to (i) the purchase of Dyna
Jet, Inc. (Dyna Jet) and (ii) the private placement of 600,000 shares of common
stock (the Offering). The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the respective
historical financial statements of the Company and Dyna Jet and the related
notes thereto. The unaudited pro forma information does not purport to be
indicative of actual results that would have been achieved had the acquisition
been completed as of the dates indicated on the following pages nor which may be
achieved in the future.
F-14
DYNA JET, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
for the year ended December 31, 1995
BLACK WARRIOR
WIRELINE CORP. PRO FORMA
AND DYNA JET PRO FORMA CONSOLIDATED
SUBSIDIARIES (a) INC.(b) ADJUSTMENTS AS ADJUSTED
---------------- ------- ----------- -----------
Net revenues $ 6,179,218 $ 510,560 $ 6,689,778
Operating costs 4,522,920 237,343 4,760,263
Selling, general, and administrative expenses 1,187,900 451,414 1,639,314
Depreciation and amortization 690,601 43,839 $ 8,386(d) 742,826
----------- ----------- ----------- ----------
Loss from operations (222,203) (222,036) (8,386) (452,625)
Interest expense and amortization of debt discount (625,990) (1,909) 1,909(c) (625,990)
Net gain (loss) on sale of fixed assets 65,450 (6,003) 59,447
Other income (loss) 10,627 (637) 9,990
----------- ----------- ----------- ----------
Loss before benefit for income taxes and
extraordinary gain (772,116) (230,585) (6,477) (1,009,178)
Benefit for income taxes 226,554 226,554
----------- ----------- ----------- ----------
Loss before extraordinary gain (545,562) (230,585) (6,477) (782,624)
Extraordinary gain on extinguishment of debt 387,413 387,413
----------- ----------- ----------- ----------
Net loss $ (158,149) $ (230,585) $ (6,477) $ (395,211)
=========== =========== =========== ============
Loss per common share (e):
Loss before extraordinary gain $ (6.14) $ (1.14)
Extraordinary gain 4.36 0.56
----------- ------------
Net loss per common share (e) $ (1.78) $ (0.58)
=========== ============
Weighted average number of common shares
outstanding (e) 88,905 688,905
=========== ============
See notes to the unaudited pro forma condensed consolidated financial
statements.
F-15
DYNA JET, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
for the nine months ended September 30, 1996
BLACK WARRIOR
WIRELINE CORP PRO FORMA
AND DYNA JET PRO FORMA CONSOLIDATED
SUBSIDIARIES (f) INC.(g) ADJUSTMENTS AS ADJUSTED
----------- ------------ ----------- -------------
Net revenues $ 5,200,094 $ 435,178 $ 5,635,272
Operating costs 3,959,331 148,088 4,107,419
Selling, general, and administrative expenses 652,107 295,721 947,828
Depreciation and amortization 420,313 36,495 $ 2,674(i) 459,482
----------- ------------ ----------- -------------
Income (loss) from operations 168,343 (45,126) (2,674) 120,543
Interest expense and amortization of debt discount (312,364) (955) 955(h) (312,364)
Net loss on sale of fixed assets (3,002) (3,002)
Other income (loss) 84,861 (240) 84,621
----------- ------------ ----------- -------------
Loss before benefit (provision) for income
taxes and extraordinary gain (59,160) (49,323) (1,719) (110,202)
Benefit (provision) for income taxes 595,713 (18,541) 577,172
----------- ------------ ----------- -------------
Income (loss) before extraordinary gain 536,553 (67,864) (1,719) 466,970
Extraordinary gain on extinguishment of debt 1,014,758 1,014,758
----------- ------------ ----------- -------------
Net income (loss) $ 1,551,311 $ (67,864) $ (1,719) $ 1,481,728
=========== ============ =========== =============
Income per common share (j):
Income before extraordinary gain $ 0.37 $ 0.23
Extraordinary gain 0.70 0.50
----------- -------------
Net income per common share (j) $ 1.07 0.73
=========== =============
Weighted average number of common shares
outstanding (j) 1,448,427 2,048,427
=========== =============
See notes to the unaudited pro forma condensed consolidated financial
statements.
F-16
DYNA JET, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1996
BLACK WARRIOR
WIRELINE CORP.
AND DYNA JET PRO FORMA
SUBSIDIARIES (K) INC. (L) ADJUSTMENTS (M) PRO FORMA
---------------- -------- --------------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 163,154 $ 43,303 $ (288,357) $ (81,900)
Accounts receivable, net 1,297,760 105,833 1,403,593
Inventories 177,499 9,232 186,731
Prepaid expenses (55,954) 8,664 (47,290)
Federal income tax receivable 80,432 80,432
-----------------------------------------------------------------
Total current assets 1,662,891 167,032 (288,357) 1,541,566
Investments 21,077 (21,077)
Property, plant, and equipment, net 1,621,077 122,175 529,593 2,272,845
Goodwill 46,778 46,778
Other assets 5,772 5,772
-----------------------------------------------------------------
Total assets $ 3,289,740 $ 310,284 $ 266,937 $ 3,866,961
=================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 782,911 $ 20,460 $ 20,000 $ 823,371
Accrued salaries and vacation 33,923 33,923
Accrued interest payable 221,107 221,107
Income taxes payable 18,541 18,541
Other accrued expenses 205,217 13,930 219,147
Notes payable to banks 38,739 38,739
Notes payable, related parties 77,792 408,041 485,833
Current maturities of long-term debt
and capital lease obligations 471,775 471,775
Deferred taxes payable - current 12,517 12,517
-----------------------------------------------------------------
Total current liabilities 1,753,672 143,240 428,041 2,324,953
Long-term debt and capital lease obligations,
less current maturities 659,341 659,341
Deferred taxes payable - long term 5,940 5,940
-----------------------------------------------------------------
Total liabilities 2,413,013 149,180 428,041 2,990,234
-----------------------------------------------------------------
Stockholders' equity:
Common stock 725 62,000 (62,000) 725
Additional paid-in capital 4,237,075 4,237,075
Retained earnings (accumulated deficit) (2,777,680) 528,362 (528,362) (2,777,680)
Treasury stock (583,393) (349,077) 349,077 (583,393)
Receivable from stockholder (80,181) 80,181
-----------------------------------------------------------------
Total stockholders' equity 876,727 161,104 (161,104) 876,727
-----------------------------------------------------------------
Total liabilities and
stockholders' equity $ 3,289,740 $ 310,284 $ 266,937 $ 3,866,961
=================================================================
PRO FORMA
OFFERING CONSOLIDATED
ADJUSTMENTS (N) AS ADJUSTED
--------------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 652,500 $ 570,600
Accounts receivable, net 1,403,593
Inventories 186,731
Prepaid expenses (47,290)
Federal income tax receivable 80,432
-----------------------------
Total current assets 652,500 2,194,066
Investments
Property, plant, and equipment, net 2,272,845
Goodwill 46,778
Other assets 5,772
-----------------------------
Total assets $ 652,500 $ 4,519,461
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 823,371
Accrued salaries and vacation 33,923
Accrued interest payable 221,107
Income taxes payable 18,541
Other accrued expenses 219,147
Notes payable to banks 38,739
Notes payable, related parties 485,833
Current maturities of long-term debt
and capital lease obligations 471,775
Deferred taxes payable - current 12,517
-----------------------------
Total current liabilities 2,324,953
Long-term debt and capital lease obligations,
less current maturities 659,341
Deferred taxes payable - long term 5,940
-----------------------------
Total liabilities 2,990,234
-----------------------------
Stockholders' equity:
Common stock $ 300 1,025
Additional paid-in capital 652,200 4,889,275
Retained earnings (accumulated deficit) (2,777,680)
Treasury stock (583,393)
-----------------------------
Receivable from stockholder
Total stockholders' equity 652,500 1,529,227
-----------------------------
Total liabilities and
stockholders' equity $ 652,500 $ 4,519,461
=============================
See notes to the unaudited pro forma condensed consolidated financial
statements.
F-17
DYNA JET, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated statement of operations for the
year ended December 31, 1995 gives effect to the consolidated results of
operations for the year ended December 31, 1995, as if the acquisition of Dyna
Jet and the Offering occurred at January 1, 1995. The unaudited pro forma
condensed consolidated statement of operations for the nine months ended
September 30, 1996 gives effect to the consolidated results of operations for
the nine months ended September 30, 1996, as if the acquisition of Dyna Jet and
the Offering occurred at January 1, 1996. These results are not necessarily
indicative of the consolidated results of operations of the Company as they may
be in the future, or as they might have been had these events been effective at
January 1, 1995 and 1996, respectively. The unaudited pro forma condensed
consolidated balance sheet gives effect to the financial position at September
30, 1996, as if the acquisition of Dyna Jet and the Offering occurred at
September 30, 1996. Such consolidated financial position is not necessarily
indicative of the consolidated financial position of the Company as it may be in
the future, or as it might have been had these events been effective at
September 30, 1996. The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the historical financial
statements of the Company and Dyna Jet and the related notes thereto.
PRO FORMA ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 ARE AS FOLLOWS:
(a) Represents the condensed consolidated results of operations of the
Company for the year ended December 31, 1995.
(b) Represents the condensed results of operations of Dyna Jet for the
year ended May 31, 1996.
(c) Represents the elimination of interest expense ($1,909) on a note
payable to the former stockholder of Dyna Jet. This note payable was
repaid prior to closing.
(d) Represents the net increase to amortization ($1,871) of the cost over
the fair value of net assets acquired over a period of twenty-five
years. Depreciation expense ($19,001) has also been reduced to reflect
the distribution of certain assets to the former stockholder of Dyna
Jet and to reflect the increase to depreciation expense ($25,516) as a
result of preliminary purchase price adjustments.
(e) Pro forma weighted average number of common shares outstanding
reflects the 600,000 additional shares issued on October 25, 1996. The
proceeds of this offering were used to, among other things, purchase
Dyna Jet.
F-18
DYNA JET, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS, CONTINUED
PRO FORMA ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 ARE AS
FOLLOWS:
(f) Represents the condensed consolidated results of operations of the
Company for the nine months ended September 30, 1996.
(g) Represents the condensed results of operations of Dyna Jet for the
nine months ended August 31, 1996.
(h) Represents the elimination of interest expense ($955) on a note
payable to the former stockholder of Dyna Jet. This note payable was
repaid prior to closing.
(i) Represents the net increase to amortization ($1,403) of the cost over
the fair value of net assets acquired over a period of twenty-five
years. Depreciation expense ($14,251) has also been reduced to reflect
the distribution of certain assets to the former stockholder of Dyna
Jet and to reflect the increase to depreciation expense ($15,522) as a
result of preliminary purchase price adjustments.
(j) Pro forma weighted average number of common shares outstanding
reflects the 600,000 additional shares issued on October 25, 1996. The
proceeds of this offering were used to, among other things, purchase
Dyna Jet.
PRO FORMA ADJUSTMENTS FOR THE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AT
SEPTEMBER 30, 1996 ARE AS FOLLOWS:
(k) Represents the unaudited condensed consolidated balance sheet of the
Company as of September 30, 1996.
(l) Represents the unaudited condensed balance sheet of Dyna Jet as of
August 31, 1996.
(m) Reflects assumed adjustment based on preliminary purchase price
allocation for the Dyna Jet acquisition, including the incurrence of a
note payable to the former stockholder of Dyna Jet with the remaining
purchase price funded with cash, the allocation of the purchase price
over the fair value of the net assets acquired and the elimination of
Dyna Jet's stockholder's equity.
(n) Reflects receipt of the net proceeds and issuance of common stock
pursuant to a private placement completed on October 25, 1996. The
proceeds of this offering were used to, among other things, purchase
Dyna Jet.
F-19