UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 30, 2003
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Date of Report (Date of earliest event reported)
OCEANIC EXPLORATION COMPANY
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(Exact name of Registrant as specified in its charter)
Delaware 0-6540 84-0591071
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(State or other jurisdiction (Commission File Number) (IRS Employer ID No.)
of Incorporation)
7800 East Dorado Place, Suite 250, Englewood, Colorado 80111
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(Address of principal executive offices) (zip code)
(303) 220-8330
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(Registrant's telephone number,
including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 30, 2003, Oceanic Exploration Company ("Oceanic") sold the
assets comprising its Alliance Staffing Division, dba Alliance Employment
Solutions ("Alliance") to Cordillera Corporation ("Cordillera"). The assets sold
include all furniture and equipment used by Alliance as well as Alliance's
accounts receivable, customer contracts, trade name and other intangibles. At
the closing, Cordillera paid approximately $495,000 in cash for the purchase of
Alliance, valued at the net book value of Alliance at the close of business on
June 30, 2003. Cordillera is obligated to pay additional amounts to Oceanic
calculated as 25% of Alliance's cumulative after-tax earnings through the period
ending June 30, 2005. A combined federal and state income tax rate of 40% is
assumed for the after-tax calculation.
Cordillera is a related company having some common elements of control
with Oceanic. Cordillera is principally owned by Tenaya Corporation which is
controlled by Mr. James Neal Blue. Mr. Blue also serves as chairman of the Board
of Directors and as president of Cordillera. In addition, Mr. Blue serves as
chairman of the Board of Directors of Oceanic and is an "interested director"
with respect to the sale of assets from Oceanic to Cordillera. Other Oceanic
Board members who may be deemed to be "interested directors" due to their
relationships with Mr. Blue and Mr. Blue's affiliates are Mr. Charles N. Haas
and Dr. John L. Redmond.
The sale was approved at a special meeting of the Board of Directors of
Oceanic on June 16, 2003. All of Oceanic's directors who are not "interested
directors" approved the sale after a review of the ongoing financial losses of
Alliance and its negative impact on Oceanic's cash flow.
A copy of the Agreement of Purchase and Sale of Assets is attached
hereto as Exhibit 1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements
Not applicable
(b) Unaudited Pro Forma Consolidated Financial Information.
The following pro forma condensed consolidated balance sheet as of March 31,
2003, and the pro forma condensed consolidated statements of income for the
three-month period then ended and the year ended December 31, 2002 give effect
to the sale of Oceanic's Alliance division. The adjustments related to the pro
forma condensed consolidated balance sheet assume the transaction was
consummated at March 31, 2003, while the adjustments to the pro forma condensed
consolidated statements of income assume the transaction was consummated at the
beginning of the periods presented. The actual sale occurred on June 30, 2003
for a value equal to the net book value of the assets of the division.
The pro forma information is based on the historical financial statements of
Oceanic of which the balance sheet as of March 31, 2003 and the statement of
income for the three-month period ending March 31, 2003 have not previously been
restated to separately present Alliance as a discontinued operation. The
statement of income for the year ending December 31, 2002 has not previously
been restated as well.
These pro forma statements are not necessarily indicative of the results that
actually would have occurred if the sale had been in effect as of and for the
periods presented or what may be achieved in the future.
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
MARCH 31, 2003
<Table>
<Caption>
AS REPORTED PRO FORMA ADJUSTMENTS PRO FORMA
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ASSETS
Cash and cash equivalents, unrestricted $ 2,567,315 509,004(a) $ 3,076,319
Trade accounts receivable, net of allowance for doubtful accounts
of $15,798 184,306 (184,306)(b) 0
Due from affiliates 7,754 -- 7,754
Accounts receivable - miscellaneous 3,161 (363)(b) 2,798
Prepaid expenses and other 77,068 (52,983)(b) 24,085
------------ ------------ ------------
Total current assets 2,839,604 271,352(b) 3,110,956
------------ ------------ ------------
Oil and gas property interests, full-cost method of accounting 39,000,000 -- 39,000,000
Less accumulated amortization, depreciation, --
and impairment allowance (39,000,000) -- (39,000,000)
------------ ------------ ------------
-- -- --
------------ ------------ ------------
Furniture, fixtures, and equipment 191,349 (111,621)(b) 79,728
Less accumulated depreciation (132,647) 87,181(b) (45,466)
------------ ------------ ------------
58,702 (24,440)(b) 34,262
Restricted cash 204,218 -- 204,218
Goodwill, net of accumulated amortization of $73,534 346,659 (346,659)(b) --
Other intangible assets -- -- --
------------ ------------ ------------
Total assets $ 3,449,183 (99,747)(b) $ 3,349,436
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 141,372 (7,858)(b) $ 133,514
United Kingdom taxes payable, including accrued interest 563,159 -- 563,159
Accrued expenses 184,719 (73,957)(b) 110,762
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Total current liabilities 889,250 (81,815) 807,435
Other non-current liabilities 22,387 (8,932)(b) 13,455
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Total liabilities 911,637 (90,747)(b) 820,890
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Stockholders' equity:
Preferred stock, $10 par value. Authorized 600,000 shares;
no shares issued -- -- --
Common stock, $.0625 par value. Authorized 50,000,000 shares;
issued and outstanding 30,916,154 1,932,259 -- 1,932,259
Capital in excess of par value 1,847,241 -- 1,847,241
Retained deficit (1,241,954) (9,000)(c) (1,250,954)
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Total stockholders' equity 2,537,546 (9,000) 2,528,546
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Total liabilities and stockholders' equity $ 3,449,183 (99,747) $ 3,349,436
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</Table>
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(a) Reflects the proceeds of the sale, net of expenses of $9,000 of
transaction expenses.
(b) Reflects the sale of the net assets of Alliance Employment Solutions.
(c) Estimated retained earnings impact of the sale of the net assets.
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2003
<Table>
<Caption>
AS REPORTED PRO FORMA ADJUSTMENTS PRO FORMA
------------ --------------------- ------------
Revenue:
Staffing revenue $ 439,801 (439,801)(a) $ --
Management revenue - related parties 126,740 -- 126,740
------------ ------------ ------------
566,541 (439,801) 126,740
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Costs and expenses:
Exploration expenses 186,869 -- 186,869
Staffing direct costs 384,451 (384,451)(a) --
Amortization and depreciation 23,615 (8,096)(a) 15,519
General and administrative 498,575 (207,104)(a),(b) 291,471
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1,093,510 (599,651) 493,859
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Operating loss (526,969) (159,850) (367,119)
Other income (expense):
Interest income 7,738 (262)(a) 7,476
Interest and financing costs (5,641) -- (5,641)
Other 24,408 -- 24,408
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26,505 (262) 26,243
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Loss before income taxes (500,464) (159,588) (340,876)
Income tax expense -- -- --
------------ ------------ ------------
Net loss $ (500,464) (159,588) $ (340,876)
============ ============ ============
Basic and diluted loss per common share $ (0.05) (0.01) $ (0.03)
Weighted average number of common shares outstanding 10,836,702 10,836,702 10,836,702
</Table>
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(a) Reflects the operating results of Alliance Employment Solutions and
assumes no computation of interest on the net proceeds.
(b) Reflects $9,000 of transaction expenses associated with the sale.
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2002
<Table>
<Caption>
AS REPORTED PRO FORMA ADJUSTMENTS PRO FORMA
------------ --------------------- ------------
Revenue:
Staffing revenue $ 2,421,528 (2,421,528)(a) $ --
Management revenue - related parties 675,912 -- 675,912
------------ ------------ ------------
3,097,440 (2,421,528) 675,912
------------ ------------ ------------
Costs and expenses:
Exploration expenses 1,427,681 -- 1,427,681
Staffing direct costs 1,997,170 (1,997,170)(a) --
Amortization and depreciation 95,196 (83,094)(a) 12,102
General and administrative 2,165,901 (870,931)(a),(b) 1,294,970
------------ ------------ ------------
5,685,948 (2,951,195) 2,734,753
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Operating loss (2,588,508) (529,667) (2,058,841)
Other income (expense):
Interest income 21,773 (1,573)(a) 20,200
Interest and financing costs (25,807) -- (25,807)
Other (28,900) (1,050)(a) (29,950)
------------ ------------ ------------
(32,934) (2,623) (35,557)
------------ ------------ ------------
Loss before income taxes (2,621,442) (527,044) (2,094,398)
Income tax expense -- -- --
------------ ------------ ------------
Net loss $ (2,621,442) (527,044) $ (2,094,398)
============ ============ ============
Basic and diluted loss per common share $ (0.24) (0.05) $ (0.19)
Weighted average number of common shares outstanding 10,836,702 10,836,702 10,836,702
</Table>
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(a) Reflects the operating results of Alliance Employment Solutions and
assumes no computation of interest on the net proceeds.
(b) Reflects $9,000 of transaction expenses associated with the sale.
(c) Exhibits
1. Agreement of Purchase and Sale of Assets
SIGNATURES
Pursuant to the requirements 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.
OCEANIC EXPLORATION COMPANY
By: /s/ Charles N. Haas
-----------------------------
Charles N. Haas
President
EXHIBIT INDEX
Exhibit No. Description
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1. Agreement of Purchase and Sale of Assets