UNITED STATES
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) December 15, 2005
Indigo-Energy, Inc.
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(Formerly Procare America, Inc.)
(Exact name of Registrant as specified in charter)
Nevada 2-75313 84-0871427
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification)
4041 University Drive, Suite 302, Fairfax, VA 22030
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 703 385 8880
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.01 Change in Control
Item 5.03 Amendment to Articles of Incorporation
Item 5.06 Change in Shell Company Status
The following information is being provided on the reorganized Registrant
pursuant to the information required by a Form 10SB.
Part I
Item 1. Description of Business.
As used in this annual report, "we", "us", "our", "Indigo", the "Registrant",
the "Company" or "our Company" refers to Indigo-Energy, Inc. and its subsidiary.
Business Development of Procare America, Inc.
The Company was formed as Fuller-Banks Energy, Inc., in 1981. In 1987 it changed
its name to Royal Equity Exchange Inc. and in 1999 changed its name to Procare
America, Inc. The Company ceased all operations in 2001 and has been a dormant
shell company since 2001.
On December 15, 2005, pursuant to the terms of an Exchange Agreement, 100% of
the outstanding shares of Indigo Land & Development, Inc., a Virginia
Corporation were to be exchanged for 176,457,126 shares of the Registrant
constituting 91% of the total shares outstanding. Subsequent to execution of the
Exchange Agreement, the new board of directors and management were appointed in
December 2005 without closing of the Exchange Agreement.
New management of the Registrant and the sole shareholder of Indigo Land &
Development Inc., determined it was in the best interest of the shareholders of
the Registrant and of Indigo Land & Development Inc., to modify the terms of the
Exchange Agreement, complete the reorganization, file the Registrant's
delinquent Securities and Exchange Commission filings and carry out the business
plan of the newly acquired subsidiary despite prior management of the Registrant
having failed to do so as required by the Exchange Agreement.
In January 2006, the sole shareholder of Indigo Land & Development Inc., whom
the Exchange Agreement stated would received 176,457,126 shares of the
Registrant's common stock consented to the receipt of 49,100,000 shares in lieu
of the Exchange Agreement's stated number so that new management would be able
to achieve their desired capitalization structure through the issuance of shares
to investors in and employees/contractors of Indigo Land & Development, Inc.
Please see Recent Sales of Unregistered Securities, page 16.
Also in January 2006 the holders of 51% of the outstanding shares of the
Company's common stock executed a consent in lieu of meeting of the stockholders
of the Company to amend the Company's articles of incorporation to change the
name of the Company to Indigo-Energy Inc. The amendment to the Articles of
Incorporation was filed and effective on January 12, 2006.
1
The Current Business of the Registrant: Indigo-Energy, Inc.
Item 1. Description of Business
Development of the Business
Indigo Land and Development, Inc. is a Virginia corporation formed in 1984
(Indigo) by Dr. Jerry Moore to be a petroleum and natural gas exploration and
production company that sells its recovered products to petroleum pipelines and
processors/refiners. In 1985 Indigo purchased its 420 acres of mineral rights
from an unaffiliated party for $385,000. In September 2005, Indigo acquired
2,666 shares of its common stock from the two shareholders other than Dr. Moore
for which $350,000 was paid and $550,000 was due on or before December 5, 2005.
The due date on the $550,000 has been extended to June 30, 2006.
Indigo entered into a Service and Drill Contract with Falcon Holdings, LLC,
Mannington, WV in September 2005 for the existing acreage and for future
exploration and production endeavors in the region. Falcon is otherwise
unaffiliated with Indigo. The Service and Drill Contract requires Falcon to
handle all aspects of permitting, drilling and completion of fifty wells on a
costs plus a set fee per well of $60,000. Costs are estimated at $300,000 per
well.
Indigo has paid for and obtained the consent of Equitrans LP, Pittsburg,
Pennsylvania for a meter tap into Equitrans' natural gas gathering pipeline
system. As a result, Indigo can transmit up to 20 MMCF on a daily basis as soon
as natural gas production commences. At the time natural gas production
commences, Indigo anticipates entering into a natural gas purchase contract with
Equitrans.
Principal products or services and their markets
Indigo is a petroleum and natural gas exploration and production company that
sells its recovered products to petroleum pipelines and processors/refiners.
Distribution methods of the products or services
Recovered products are distributed from the pipeline wellhead to customer via
transmission pipeline or local product haulers. We have two sites selected to
tap existing transmission pipelines in the area with Equitrans and Peoples Gas
companies.
Competitive business conditions and the small business issuer's competitive
position in the industry and methods of competition
Business conditions that currently impact the market for Indigo's products
include the availability and production of viable, in-ground, recoverable
petroleum resources, easily accessible transmission pipelines or overland
transportation for its product and the existing world market condition of supply
and demand for natural gas and crude oil. Our primary competitive position in
the marketplace is among regional, natural gas/oil exploration and production
companies with domestic, inland reserves. There is significant competition in
the petroleum products business in which we are an insignificant participant.
However, our local business edge includes the strong partnership with Falcon
Holdings, LLC that affords relationship-based interaction among local resources
and people that may transcend larger operators. Methods of competition in the
marketplace include securing favorable, extractable oil and gas plays in the
Appalachian oil and gas region and maintaining sustainable profitability,
operating cash flow and production growth.
3
Dependence on one or a few major customers
The anticipated primary customer for Indigo natural gas production is
Equitrans, LP which is among the several regional, natural gas pipeline
transmission companies. Oil products are marketed among the local crude oil
gatherers/processors.
Patents, trademarks, licenses, franchises, concessions, royalty agreements
or labor contracts
There are no patents, trademarks, licenses, franchises, concessions or royalty
agreements associated with the Indigo minerals. There are no written labor
contracts in place.
Government Approvals
Exploration and production activities relating to oil and gas are subject to
regulation by the states in which we are drilling. All wells require permits
issued by the state governments through a well established process. These
processes have been in place for the last 75 years and are not likely to change
in the foreseeable future. A one-time bonding fee of $25,000 is required for
drilling activities in Pennsylvania and a $50,000 bonding fee is required in
West Virginia.
Existing or Probable Governmental Regulations
The Company is not aware of any existing or proposed regulations that would
significantly or adversely impact the business or markets in which Indigo
participates. Exploration and production activities relating to oil and gas
permits and leases are subject to regulation by the states in which we are
drilling. A one-time bonding fee of $20,000 and $50,000 for the states of
Pennsylvania and West Virginia, respectively, is required to begin drilling
activities.
Indigo and its subcontractors must comply with applicable local, state and
federal environmental regulations associated with drilling and production
activities. Environmental protection expenses are expected to include the cost
of site preparation that may include road construction, runoff control, fencing,
earthen berms or retaining ponds to contain re-circulating drilling fluids or
potential overflows or spillage of oil or drilling fluids. If production is
initiated, the temporary measures must be made permanent; if production is not
warranted, the temporary measures must be removed and the land restored to its
prior condition.
4
Upon beginning field activities, we believe that we will be in compliance with
applicable environmental laws, rules or regulations. Current environmental
regulations impacting oil and gas exploration and production in the states of
Pennsylvania and West Virginia have a negligible influence on our operating
ability or profitability. It is not anticipated that future environmental
regulations or costs associated with environmental regulatory compliance will
adversely impact our operations or financial bottom-line.
Item 2. Plan of Operations
Drilling operations are anticipated to begin in February, 2006. First year
drilling and production plans include advancing approximately 20 production
wells on the property and acquisition of additional leases for future growth.
Indigo-Energy Inc.'s plan of operation has been finalized with Falcon Holdings
LLC of Mannington West Virginia (Falcon) where they perform turnkey operations
for Indigo-Energy from permit to final gas in line. This evergreen contract has
been signed with Falcon who has been on-board doing a significant amount of work
for Indigo-Energy in preparation for permits, right of ways, delivery of gas
into line and signing up with Equitable for gas purchase agreements.
The operations contract allows for an estimated figure of $360,000 dollars per
well on a 20 well program for year 2006. This covers all costs associated from
finding oil and gas leases, to permits to drill and put into line for payment.
Falcon contracted with Smith Survey and Permit Company to apply for the drilling
permit in West Virginia so that gas can be delivered into line (M-33) to
Equitable Transmission Corporation, which is located in Pittsburgh Pennsylvania.
The contract work is being done through our evergreen agreement with Falcon
Holdings LLC.
Essentially, once a well has been drilled, which normally takes 5-7 days, 24
hours per day drilling, the Falcon team sets up the wire reading of the drilled
hole. Once the wire has been completed the pipe is installed, cemented and
fracked for production.
The line to the main pickup line is being installed at the same time the well is
being drilled so that if a large amount of gas is hit unexpectedly, and that has
happened frequently in this area, Falcon can turn said gas into a line and the
meter will be able to measure it and deliver to the main collection line owned
by Equitable.
From day 1 to day 30 the well is drilled and gas put into line. It then takes 3
months from the first delivery in a line to payment. Gas put into a line in
February over a 30-day period is paid for at the end of April or early May.
5
Once a well has been drilled, the landscape around it has to be put back into
order per regulations of the State of West Virginia and inspected by an oil and
gas inspector. It is drilled with seed after proper shaping by a landscaping
bulldozer has done its job.
The roadways from the oil and gas well has to be dressed, seeded after placing
an oil line down the side of the road to a common collection area which will
have enough room for 500 barrels of oil storage at a stage. This allows Falcon
to deliver oil without having to provide bulldozer access to pull tank trucks to
the well site in mid winter.
Production in the area has historically generated ten to fifteen thousand
dollars per month; however, some wells have come in as low as six thousand per
month. The average payment is $12-14 dollars per MCF average and the oil has
been going for $55-65 dollars per barrel.
Indigo-Energy anticipates drilling at least one well per month and hopefully two
wells per month when better weather occurs. It will take approximately 30 days
from permit issuance to have the first drilling rig on a site that is to be
drilled first.
Wells typically in this area have produced for over 90 years but with the
majority of the oil and gas coming out of the ground in the first 30 years. Some
wells in the area are still producing after 110 years.
Dry holes are rare in the area, approximately 1 per 100 wells drilled, and no
dry holes have been drilled near the Indigo-Energy initial site.
30 Day Chronological Summary of Actual Well Events
1. Secure a lease or purchase minerals in ground
2. Execute title work to ensure you have what you think
3. Title is good-start toward engineering and surveying for permit
4. Permit with survey attached & submitted to the state with a $5,000 bond fee
5. Permit to drill is released from state
6. Roadways and land clearing begins
7. Roadways and site is final prepared for inspection
8. Site and pit on-site prepared for inspection
9. Site approved by oil and gas inspector
10. Drilling company comes in and sets up
11. Drilling begins
12. Drilling lasts 5-6 days to 3,000 to 3,500 feet
13. Pay zones will be 5th, 3rd Sands. Gordon, Gordon Stray and Riley
14. Drill pipe is pulled and stacked
15. Appalachian wire company wires the well (measures the fracture areas
permeability for fracturing later)
16. A printout is generated with the computerized equipment on site doing wire
measurement
17. Measurements are made as to where to permeate pipe with fracturing based on
pay zones desired to fracture 18 Pipe is put into well ...4 inch first and
cemented in
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19. 7.5 inch is inserted into well and cemented in
20. 9 inch pipe is inserted and cemented
21. Fracture cups are inserted into fracture areas
22. Areas are fractured one at a time
23. Total fracture on 4 areas is concluded
24. 6.5 tons of white sand, 1 million cubic feet of nitrogen and 6,000 gallons
of water are introduced
25. After two hours we allow the well to run into the pond all the fracture
materials
26. Sand should not come out, only water and gas into the pond
27. Well is shut in and ground equipment installed for putting into line
28. Line to accepting pipe is started at point 15 and completed as this event
arrives
29. Well is allowed to flow; water into 100 barrel tanks, oil in same area
30. Dewatered gas goes through meter into the main line It will be 3 months
from this time that Indigo-Energy receives the first paycheck on this well.
At the end of 30 days we will know our flow rate for gas and oil because we
can read charts attached to the on ground well equipment
3 Month Milestones
1) First well is drilled
2) First well producing revenue
3) Second and Third wells drilled
4) Indigo-Energy is compliant in all past due pre-reorganization SEC
filings
6-Month Milestones
1) Wells two and three producing revenue
2) Three additional wells have been permited and drilled
3) Drill wells four, five and six
4) Wells one, two, three and four producing revenue
One year Milestones
1) Indigo-Energy completes a 10 well drill program as a minimum with the
goal of having completed 20 wells drilled.
2) The majority of the wells producing monthly revenue
3) Set plans for drilling an additional 10 wells in year two
Through December 15, 2005 $925,000 has been raised to cover costs associated
with pre-startup oil and gas drilling operations with Falcon. The capital raised
was from private investors in Indigo Land and Development during October,
November and December of 2005 for .25 cents per common share. Additionally, the
capital raised has supported the transformation of Procare America, Inc to
Indigo-Energy, Inc as a public trading company, which covered SEC attorney fees,
accounting and SEC audit fee as well as preparing and filing past quarterly and
yearly statements to become a public reporting company, monthly fees to
independent contractors, contract employees and contractors. In addition,
$240,000 is being held in escrow pending the filing of all past due
pre-reorganization SEC filings. A total of 960,000 shares will be released to
the investors upon the filings.
7
The Company intends to raise additional funds as required through private equity
offerings in order to fund the exploration of natural gas on the Indigo-Energy
property. Any financing program conducted by the Company will most likely result
in the issuance of additional shares of common stock which will dilute the
ownership interests of the Company's current shareholders.
Item 3. Description of Properties
Indigo-Energy owns 420 acres of mineral rights (excluding coal) in Greene
County, Pennsylvania and Monongalia County, West Virginia. The surface land is
rolling hills and valleys with intermittent streams. The production of natural
gas and oil on the property is completely owned by Indigo with no percentage of
royalties or overrides owed to any third party (e.g. property owners, production
companies, geologists, etc.).
Studies have been carried out on the minerals in the area on the Devonian Shale
which lies below the surface at about 5000 feet by the United States Department
of Energy, Morgantown Center in conjunction with the Mount Corporation.
Additionally, Indigo has commissioned four separate studies on the property by
Yedlosky, Trude, Deal and Kesterson who are geologists and petroleum engineers.
Based upon these studies, Management believes the properties are commercially
viable.
The Indigo tract of land is also geologically situated in the Rome Trough Fault
where wells have been recently drilled in the Roane, Braxton and Calhoun
Counties having potentials in the Middle Ordovician / Trenton and Black River
formations 10,000 to 12,000 feet deep.
The source for our production lies beneath the approximately 420 acres of
property, including minerals (except coal, but including coal gas), in the
Battelle District in Monongalia County, West Virginia and Spring Hill and
Gilmore Townships in Greene County, Pennsylvania. Studies have been conducted on
the oil and gas in the region that includes the property by the U. S. Department
of Energy. Further, Indigo commissioned four separate geologic and engineering
studies of the land and subsurface to qualify the potential for recoverable
reserves of natural gas, oil and coal bed methane. These collective studies and
reports by Sam M. Deal, J. R. Yedloski, Greg R. Trude and Donald C. Kesterson
indicate that there are recoverable reserves beneath the company property.
Specifically, it has been demonstrated that there are at least four natural gas
pay zones above the Devonian Era Formations and potential oil reserves in the
Devonian Formation in the vicinity of the Indigo property. These natural
resources are available via subsurface drilling and recovery techniques. In
addition, favorable structural geologic conditions exist in the vicinity of the
property including the Robinson Syncline and the Rome Trough Fault zone.
8
Production Information
As of January 25, 2006, Indigo has no production.
Reserve Information
Reserve calculations by independent petroleum engineers involve the estimation
of future net recoverable reserves of oil and gas and the timing and amount of
future net revenues to be received. Those estimates are based on numerous
factors, many of which are variable and uncertain. Reserve estimators are
required to make numerous judgments based upon professional training,
experience, and educational background. The extent and significance of the
judgments in them are sufficient to render reserve estimates inherently
imprecise. Since reserve determinations involve estimates of future events,
actual production, revenues and operating expenses may not occur as estimated.
Accordingly, it is common for the actual production and revenues later received
to vary from earlier estimates. Estimates made in the first few years of
production from a property are generally not as reliable as later estimates
based on a longer production history. Reserve estimates based upon volumetric
analysis are inherently less reliable than those based on lengthy production
history. Also, potentially productive gas wells may not generate revenue
immediately due to lack of pipeline connections and potential development wells
may have to be abandoned due to unsuccessful completion. These reserves are
available and easily extracted with existing, state of the art drilling and
production techniques.
Estimated Proven Reserves
The estimated recoverable reserves from these reports are summarized below:
Estimated Indigo Property Reserves
Gas
---
Big Injun and Fifth Sands 17,010,000 MCF
Gordon, Bayard, Riley and Gantz 10,000,000 MCF
Lower Devonian 16,800,000 MCF
Coal Bed Methane 16,610,000 MCF
Oil
---
Total Devonian 180,000 barrels
Oil And Gas Titles
We believe that the title to our properties is generally acceptable to a
reasonably prudent operator in the oil and gas industry. The properties owned by
us are not subject to royalty, overriding royalty, and other interests customary
in the industry, liens incidental to operating agreements, current taxes and
other burdens, minor encumbrances, easements, and restrictions. We do not
believe that any of these burdens materially detract from the value of the
properties or will materially interfere with their use in the operation of our
business.
9
Office Facilities
Our Fairfax, Virginia office is currently provided, without expense to the
Company. The office is located at 4041 University Drive, Suite 302, Fairfax, VA
22030.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table shows the stockholdings of all directors and executive
officers of the Registrant, principal stockholders who own beneficially more
than five percent of the Registrant's 104,679,127 issued and outstanding common
stock, and all directors and officers of the Company as a group as of January
30, 2006.
Amount
Title Name and Address of shares Percent
of of Beneficial held by of
Class Owner of Shares Position Owner Class
- -----------------------------------------------------------------------------------------------
Common Lois Moore (1) 5%> Shareholder 49,100,000 47%
4100 Meadow Hill Lane
Fairfax, VA 22033
Curtis Lee Fleming Director, President 1,000,000 1%
1106 Lakeview Drive
Cross Junction, VA 22625
David Albanese Director, Sec.-Treasurer 1,000,000 1%
2301 Whitcomb Place
Falls Church, VA 22046-1853
James Holland Director, V-P 1,000,000 1%
Officers & Directors
As a Group (3 persons) 3,000,000 3%
(1) Includes deemed beneficial ownership for gifted shares
Item 5. Directors and Executive Officers, Promoters and Control Persons
The directors and executive officers of the Company currently serving are as
follows:
Name Age Positions Held and Tenure
- ---- --- -------------------------
Curtis Lee Fleming 39 Director and President since 12/2005
David Alan Albanese 57 Director and Secretary Treasurer since 12/2005
James Holland 59 Director and Vice President of Corporate
Communications and Investor Relations
since 12/2005
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Biographical Information
Curtis Lee Fleming is President and a Director for Indigo-Energy, Inc.
Academic History
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Old Dominion University, B.S. in Education
Fairmont State College, Fairmont, West Virginia; B.S. in Industrial Psychology
Minor in Management/Marketing, August 1990
University of Virginia, Continuing Graduate Education
Curtis Fleming graduated with a college degree in Industrial Psychology and
Business Developmental Fairmont State College
For the past five years, Curtis Fleming has been involved in the corporate
structure of a company involved in special education for persons in crisis
management and behavioral modification. In this area Mr. Fleming excelled by
developing new programs, which are being used in schools across America. He also
became involved in inmate testing and demonstrating to them that educational
opportunities would raise them up out of the incarceration arena to civil
residence with graduation.
While in college the incumbent was involved in football at Fairmont State
College where he excelled and upon graduation took a job at the Timber Ridge
School in 1991 where the school assigned him with 25 individuals who were
disruptive members of society. He developed recreational efforts, extensive
counseling and development of community service projects. While there he
assisted in developing a new residential unit called the Aspen. Curtis has
always been involved in outdoor activities such as hunting, fishing and hiking.
David Alan Albanese is a Director for Indigo-Energy, Inc. and is also the
Secretary Treasurer.
Academic History
Cristobal High School / 1966
Middle Tennessee State University / 1971 / BS Marketing
For the last five years David has been a licensed Closing Agent/Notary for real
estate settlements in the Greater Metro DC area. In the mid-eighties David
formed Tri-Sands Petroleum Group, Inc. to purchase and resell oil and gas wells
located in southeast Ohio. Over David's business career he has been involved in
numerous equity real estate transactions. He co-founded Universal Systems, Inc
(USI) two days after College graduation, which was the first company to
successfully computerize the Real Estate Settlement Procedures Act of 1974
(RESPA) which standardized the real estate closing process in the United States.
Over the years, David has been an active participant with the US Jaycees and
Kiwanis International to round out his civic involvement.
11
James Holland is a Director for Indigo-Energy, Inc. and Vice President of
Corporate Communications and Investor Relations
Academic History
----------------
Secondary School Walkerville Collegiate Institute, Windsor Ontario
Senior Matriculation - Honours
University University of Windsor. Windsor Ontario
University of Guelph, Guelph, Ontario
Hons. BA - English, Political Economics
College George Brown College, Toronto, Ontario
Degree - Graphic Art and Design
1997 - Present James Holland Corporate Communications / Break Media
Group / Diesel Edge Communications / Investor
Presentation.com
Contract Consultant to Industry - Principal
Since 1997 James Holland has been the principal in James Holland Corporate
Communications. His business experience covers Investor Relations, corporate
communications, web development, computer graphics, product marketing and
Business Development consulting positions with numerous companies. There are no
family relationships between any of the directors or officers of the Registrant
or its subsidiaries. The Registrant has no standing audit, nominating or
compensation committees of the Board of Directors, or any committees performing
similar functions.
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (SEC).
Officers, directors, and greater than 10 percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company, all reports under Section 16(a) required to be
filed by its officers and directors and greater than ten percent beneficial
owners were not timely filed as of the date of this filing.
Item 6. Executive Compensation
Mr. Fleming, the newly appointed CEO / President of the Registrant, does not
have an employment agreement with Indigo. Mr. Fleming's first year salary is
$48,000 plus a grant of 1 million shares of restricted common stock.
12
Stock Options Granted In Last Fiscal Year
- -----------------------------------------
During the fiscal years ended June 30, 2005, 2004 and 2003, the Company did not
grant any options to its Chief Executive Officer or any other officer or
director.
Employment Agreements
- ---------------------
No employment agreements exist between any executive and the Company.
Compensation of Directors
- -------------------------
Directors are entitled to reimbursement of expenses incurred in attendance of
Board Meeting and fulfilling their duties as a director.
Item 7. Certain Relationships and Related Transactions
Jerry Moore, the sole officer and director of Indigo Land & Development Inc.,
prior to the reorganization with the Registrant has received a monthly
consulting fee of $3,500 per month since September, 2005. Mr. Moore's wife Lois
Moore received 49,100,000 shares of common stock pursuant to the reorganization
with the Registrant. David Larson and Richard Haggard served and continue to
serve as consultants to Indigo and were instrumental in the reorganization with
Procare. Mr. Larson and Mr. Haggard have received a monthly consulting fee of
$3,500 per month since September, 2005.
Item 8. Description of Securities
The authorized capital stock of our Company consists of 500,000,000 shares of
common stock, $0.001 par value per share. The following summary of certain
provisions of the common stock of our Company does not purport to be complete
and is subject to, and qualified in its entirety by, the provisions of our
Articles of Incorporation, and the Amendments to our Articles of Incorporation,
which are included as exhibits to this document and by the provisions of
applicable law.
Common Stock
- ------------
As of January 25, 2006, the Company has 104,639,127 shares of common stock
issued and outstanding. As a holder of our common stock:
(a) you have equal rights to dividends from funds legally available,
ratably, when as and if declared by our Board of Directors;
(b) you are entitled to share, ratably, in all of our assets available for
distribution upon liquidation, dissolution, or winding up of our
business affairs;
(c) you do not have preemptive, subscription or conversion rights and
there are no redemption or sinking fund provisions applicable;
13
(d) you are entitled to 1 vote per share of common stock you own, on all
matters that stockholders may vote, and at all meetings of
shareholders; and
(e) your shares are fully paid and non-assessable.
Additionally, there is no cumulative voting for the election of directors.
Part II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters
The Company's common stock (symbol: PCAM) is listed on the "pink sheets" as
published by the National Quotation Bureau. The information provided by the
National Quotations Bureau is that there has been no bid for the Company's
common stock for the past four fiscal years ended June 30, 2005, 2004, 2003 and
2002.
As of January 25, 2006, there were 104,639,127 shares of common stock
outstanding and there were approximately 900 record holders of the Company's
common stock.
Equity Compensation Plan Information
The Company does not have any equity compensation plans in effect. As a shell
company, the Company is prohibited from filing a registration statement on Form
S-8 for shares of common stock pursuant to an equity compensation plan until 180
days after it ceased to be a shell company.
Dividends
We have not paid cash dividends on our Common Stock and do not intend to pay any
cash dividends for the foreseeable future.
Item 2. Legal Proceedings.
The Registrant and Indigo Land and Development, Inc., are not currently involved
in any litigation that it is believed could have a materially adverse effect on
its financial condition or results of operations. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the executive officers of the Registrant or any of its
subsidiaries, threatened against or affecting the Registrant, its common stock,
any of its subsidiaries or of the Registrant's or Registrant's subsidiaries'
officers or directors in their capacities as such, in which an adverse decision
could have a material adverse affect.
14
Item 3. Changes in or Disagreements with Certifying Accountants on Accounting
and Financial Disclosures.
Stirtz Bernards Boyden Surdel & Larter, P.A., had been the auditor for Procare
America, Inc., for the fiscal year ended June 30, 2001, which was the last
fiscal year for which audited statements were filed. Stirtz Bernards Boyden
Surdel & Larter, P.A., merged into Wipfli LLP in 2003. Wipfli LLP was never
engaged by Procare America, Inc. In December 2005, the Company dismissed Stirtz
Bernards Boyden Surdel & Larter, P.A. The audit reports of Stirtz Bernards
Boyden Surdel & Larter, P.A. on our financial statements as of and for the years
ended June 30, 2001 and 2000, did not contain any adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to audit scope or accounting
principles. However, the opinion did contain an uncertainty as to Procare
America, Inc.'s ability to continue as a going concern.
In connection with the audit of the financial statements prepared for the fiscal
years ended June 30, 2005, 2004, 2003, and 2002 and to the date of dismissal,
the Registrant had no disagreements with Stirtz Bernards Boyden Surdel & Larter,
P.A. with respect to accounting principles or practices, financial statement
disclosure, or auditing scope or procedures of the type discussed in Item
304(a)(iv) of Regulation S-B.
In December 2005, the Registrant engaged Michael F. Cronin, CPA, as the new
principal independent accountant for the Company. The board of directors has
approved the change of accountants.
For the fiscal years ended June 30, 2005, 2004, 2003, and 2002, Michael F.
Cronin, CPA, including the subsequent interim periods through the date of the
appointment of Michael F. Cronin CPA, neither the Registrant, nor anyone on its
behalf, consulted with Michael F. Cronin, CPA regarding any of the accounting or
auditing concerns stated in Item 304(a)(2) of Regulation S-B.
The Registrant has provided Wipfli LLP, as successors to Stirtz Bernards Boyden
Surdel & Larter, P.A., with a copy of this report prior to filing it with the
Securities and Exchange Commission (SEC). We requested that Wipfli LLP, as
successors to Stirtz Bernards Boyden Surdel & Larter, P.A., furnish separate
letters addressed to the SEC stating whether the firm concurs with the above
statements. The letter from Wipfli LLP, as successors to Stirtz Bernards Boyden
Surdel & Larter, P.A., is attached as Exhibit 16.1 to this Form 8-K.
15
Item 4. Recent Sales of Unregistered Securities
The following unregistered securities were issued by the Registrant during the
past three years:
Date # & Type of Securities To Whom Issued Consideration
- -----------------------------------------------------------------------------------------
May 2004 149,000 Shares 5 Shareholders/Creditors $50,500
debt conversion
Jan. 2005 3,024,780 Shares 7 Investors $3,024.78
$0.01 per share
Dec 2005 10,000,000. Shares 1 Investor Investment Banking
Services
20,000,000 Shares Prior Legal Counsel and
Directors Services
Jan 2006 49,100,000 Shares Lois Moore Share Exchange
4,000,000 Shares Current Officers,
Directors & Consultant Services
4,718,000 Shares 40 Investors $0.25 per share.
With respect to the sales, the Registrant relied on Section 4(2) of the
Securities Act of 1933, as amended. No advertising or general solicitation was
employed in offering the securities. The securities were offered to accredited
and sophisticated investors provided with all material information regarding the
Registrant and Indigo Land and Development Inc. The securities were
appropriately restricted.
Item 5. Indemnification of Directors and Officers
Neither our Articles of Incorporation nor our bylaws provide for the
indemnification of a present or former director or officer. However, pursuant to
Nevada Revised Statutes Section 78.750 and 751, we must indemnify any of our
directors, officers, employees or agents who are successful on the merits or
otherwise in defense on any action or suit. Such indemnification shall include
expenses, including attorney's fees actually or reasonably incurred by him.
Nevada law also provides for discretionary indemnification for each person who
serves as or at our request as one of our officers or directors. We may
indemnify such individuals against all costs, expenses and liabilities incurred
in a threatened, pending or completed action, suit or proceeding brought because
such individual is one of our directors or officers. Such individual must have
conducted himself in good faith and reasonably believed that his conduct was in,
or not opposed to, our best interests. In a criminal action, he must not have
had a reasonable cause to believe his conduct was unlawful.
16
C O N T E N T S
Page
------
Report of Certified Public Accountant F-2
Audited Financial Statements for Fiscal Year Ended December 31, 2004
Balance Sheet F-3
Statement of Income (Loss) And Retained Earnings F-4
Statement of Cash Flows F-5
Notes to Audited Financial Statements F-6
Unaudited Financial Statements for Nine Months Ended September 30, 3005
Balance Sheet F-7
Statement of Income (Loss) And Retained Earnings F-8
Statement of Cash Flows F-9
Notes to Audited Financial Statements F-10
Pro Forma Financial Statements F-11
F-1
TIMOTHY L. O'BRIEN
CERTIFIED PUBLIC ACCOUNTANT
________________________________________________________________________________
Independent Auditor's Report
Board of Directors and Stockholders
Indigo Land and Development, Inc.
We have audited the accompanying balance sheet of Indigo Land and Development,
Inc., as of December 31, 2004, and the related statements of income, retained
earnings, 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the 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 Indigo Land and Development,
Inc. as of December 31, 2004, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Timothy L. O'Brien, CPA
- ----------------------------
December 5, 2005
9697 Main Street Suite B Fairfax, Virginia 22031 703-448-1040 fax 703-448-1340
email tlo@obrien-cpa.com website www.obrien-cpa.com
F-2
INDIGO LAND AND DEVELOPMENT, INC.
BALANCE SHEET
DECEMBER 31, 2004
ASSETS
Land, Development and Exploration Costs $ 365,668
---------
TOTAL ASSETS $ 365,668
---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Due to Shareholders $ 535
---------
TOTAL CURRENT LIABILITIES 535
STOCKHOLDERS' EQUITY
Capital Stock 4,000
Capital in Excess of Par Value 362,000
Retained Earnings (Deficit) (867)
---------
TOTAL STOCKHOLDERS' EQUITY 365,133
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 365,668
---------
See accompanying auditors' report and notes to financial statements
F-3
INDIGO LAND AND DEVELOPMENT, INC.
STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2004
INCOME
Commissions Earned $ 200
EXPENSES
Licenses and Permits 113
Travel 687
-----
TOTAL EXPENSES 800
-----
NET INCOME (600)
RETAINED EARNINGS (DEFICIT) AT BEGINNING OF YEAR (267)
-----
RETAINED EARNINGS (DEFICIT) AT END OF YEAR ($867)
-----
See accompanying auditors' report and notes to financial statements
F-4
INDIGO LAND AND DEVELOPMENT, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2004
OPERATING ACTIVITIES
Net Income (Loss) ($600)
INVESTING ACTIVITIES
Reduction in Land, Development and Exploration Costs 600
FINANCING ACTIVITIES 0
-----
NET CASH INCREASE (DECREASE) FOR PERIOD 0
CASH AT BEGINNING OF PERIOD 0
-----
CASH AT END OF PERIOD 0
-----
See accompanying auditors' report and notes to financial statements
F-5
INDIGO LAND AND DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
At this time, the company recognizes income using the accrual method
of income recognition. Under this method, the company recognizes
income when earned and expenses when incurred.
NOTE 2 - PROVED RESERVES
The company owns and is invested in proved reserves of oil, natural
gas and coal. These reserves were identified as a result of geological
surveys done on the land holdings. The value of these reserves
fluctuates but based on current market conditions at the time of these
statements the reserves value is as follows:
Gas 60,420,000 mcf $ 500,000,000
Oil 180,000 barrels 10,800,000
-------------
$ 510,800,000
NOTE 3 - SUBSEQUENT EVENT
On September 3rd, 2005 the company entered into an agreement to
purchase the stock of 2 of the 3 shareholders. The total purchase
price of the shares was $1,000,000 all of which was to be paid in the
next 12 months.
F-6
INDIGO LAND AND DEVELOPMENT, INC.
BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2005
ASSETS UNAUDITED
Land, Development and Exploration Costs $ 370,645
-----------
TOTAL ASSETS $ 370,645
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Due to Shareholders $ 4,935
Customer Deposits 25,000
Current Portion of Debt Used to Purchase Treasury Stock 1,000,000
-----------
TOTAL CURRENT LIABILITIES 1,029,935
STOCKHOLDERS' EQUITY
Capital Stock 1,334
Capital in Excess of Par Value 361,666
Cost of Treasury Stock (997,000)
Retained Earnings (Deficit) (25,290)
-----------
TOTAL STOCKHOLDERS' EQUITY (659,290)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 370,645
-----------
See accompanying notes to financial statements
F-7
INDIGO LAND AND DEVELOPMENT, INC.
STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
INCOME UNAUDITED
Commissions Earned $ 292
EXPENSES
Bank Charges 98
Licenses and Permits 119
Professional Fees 24,498
--------
TOTAL EXPENSES 24,715
NET INCOME (24,423)
RETAINED EARNINGS (DEFICIT) AT BEGINNING OF YEAR (867)
--------
RETAINED EARNINGS (DEFICIT) AT END OF YEAR ($25,290)
--------
See accompanying notes to financial statements
F-8
INDIGO LAND AND DEVELOPMENT, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
OPERATING ACTIVITIES UNAUDITED
Net Income (Loss) ($24,423)
Adjustments to reconcile Net Income (Loss) to net cash
provided by operations:
Customer Deposits 25,000
Due to Shareholder 4,400
--------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,977
INVESTING ACTIVITIES
Increase in Land, Development and Exploration Costs (4,977)
FINANCING ACTIVITIES 0
--------
NET CASH INCREASE (DECREASE) FOR PERIOD 0
CASH AT BEGINNING OF PERIOD 0
--------
CASH AT END OF PERIOD 0
--------
See accompanying notes to financial statements
F-9
INDIGO LAND AND DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These unaudited financial statements include all adjustments which in the
opinion of management are necessary in order to make the financial
statements not misleading.
Revenue Recognition
-------------------
At this time, the company recognizes income using the accrual method of
income recognition. Under this method, the company recognizes income when
earned and expenses when incurred.
NOTE 2 - PROVED RESERVES
The company owns and is invested in proved reserves of oil, natural gas and
coal. These reserves were identified as a result of geological surveys done
on the land holdings. The value of these reserves fluctuates but based on
current market conditions at the time these statements were prepared -
December, 2005 - the reserves value is as follows:
Gas 60,420,000 mcf $ 1,170,904,000
Oil 180,000 barrels 10,800,000
---------------
$ 1,181,704,000
NOTE 3 - SUBSEQUENT EVENT
On September 3rd, 2005 the company entered into an agreement to purchase
the stock of 2 of the 3 shareholders. The total purchase price of the
shares was $1,000,000 all of which was to be paid in the next 12 months.
F-10
Procare America, Inc.
Combined Proforma Balance Sheet
June 30, 2005
Indigo
Procare Land and
America, Development, Eliminations
Inc. Inc. Dr(Cr) Combined
- -------------------------------------------------------------------------------------------------------------------
Assets 2005 2005 2005
- -------------------------------------------------------------------------------------------------------------------
Current Assets
Cash & cash equivalents $ 0 $ 0 $ 0
Prepaid expenses 0 0 0
Total current assets 0 0 0
----------- ----------- ------------ -----------
Property & equipment (net) 0 0 0
Land, Development and Exploration Costs 0 370,645 370,645
----------- ----------- ------------ -----------
Total Assets $ 0 $ 370,645 $ 370,645
----------- ----------- ------------ -----------
Liabilities & Stockholders' Deficiency
Current Liabilities:
Accounts payable $ 41,537 $ 0 $ 41,537
Accrued payroll taxes 323,992 0 323,992
Accrued interest 112,750 0 112,750
Due to Shareholders 0 4,935 4,935
Customer Deposits 0 25,000 25,000
Current Portion of Debt Used to Purchase Treasury Stock 0 1,000,000 1,000,000
Notes payable 4,000 0 4,000
----------- ----------- ------------ -----------
Total current liabilities 482,279 1,029,935 1,512,214
----------- ----------- ------------ -----------
Stockholders' Deficiency:
Common stock-500,000,000 authorized $0.001 par value
16,861,127 issued & outstanding (13,836,347 in 2004) 16,862 1,334 18,196
Additional paid in capital 2,957,519 361,666 3,319,185
Cost of Treasury Stock 0 (997,000) (997,000
Accumulated deficit (3,456,660) (25,290) (3,481,950
----------- ----------- ------------ -----------
Total stockholders' deficiency (482,279) (659,290) (1,141,569
----------- ----------- ------------ -----------
Total Liabilities & Stockholders' Deficiency $ 0 $ 370,645 $ 370,645
----------- ----------- ------------ -----------
F-11
Procare America, Inc.
Combined Proforma Statement of Operations
Year Ended June 30, 2005
Indigo
Procare Land and
America, Development, Eliminations
Inc. Inc. Dr(Cr) Combined
------------------------------------------------------------
2005 2005 2005
------------------------------------------------------------
Revenue:
Net patient revenue $ 0 $ 0 $ 0
Commissions Earned 0 292 292
Other 0 0 0
------------ ------------ ---------- ------------
Total revenue 0 292 292
------------ ------------ ---------- ------------
Cost of Sales:
Cost of tangible goods sold 0 0 0
Cost of services 0 0 0
------------ ------------ ---------- ------------
Costs Applicable to Sales & Revenue 0 0 0
------------ ------------ ---------- ------------
Gross Profit 0 0 0
Selling, General & Administrative Expenses 2,499 24,715 27,214
------------ ------------ ---------- ------------
Total Operating Expenses 2,499 24,715 27,214
------------ ------------ ---------- ------------
(Loss) before other income and income taxes (2,499) (24,423)
Other Income (Expense)
Interest Income 0 0 0
Interest (expense), net (4,379) 0 (4,379)
Net loss before income taxes (6,878) (24,423) (31,301)
Income taxes 0 0 0
------------ ------------ ---------- ------------
Net loss available to common shareholders $ (6,878) $ (24,423) $ (31,301)
------------ ------------ ---------- ------------
Basic and Diluted Net Loss Per Share Nil Nil Nil
------------ ------------ ---------- ------------
Weighted Average Common Shares Outstanding 15,377,742 5,000 15,382,742
------------ ------------ ---------- ------------
F-12
Procare America, Inc.
Combined Proforma Statement of Cash Flows
Year Ended June 30, 2005
Indigo
Procare Land and
America, Development, Eliminations
Inc. Inc. Dr(Cr) Combined
----------------------------------------------------
2005 2005 2005
----------------------------------------------------
Cash Flows from Operating Activities:
Net Income ($ 6,878) ($24,423) ($31,301)
Adjustments required to reconcile net loss to cash flows
from operating activities:
Expenses paid by issuance of stock 1,025 0 1,025
Changes in Operating Assets & Liabilities
Prepaid expenses 0 0 0
Accounts payable (591) 0 (591)
Accrued expenses 6,444 0 6,444
Due to Shareholder 0 4,400 4,400
Customer Deposits 0 25,000 25,000
-------- -------- --------- --------
Net cash used by operating activities 0 4,977 4,977
-------- -------- --------- --------
Cash Flows from Investing Activities:
Purchase of Equipment 0 0 0
Increase in Land, Development and Exploration Costs 0 (4,977) (4,977)
-------- -------- --------- --------
Net cash used by investing activities 0 (4,977) (4,977)
-------- -------- --------- --------
Cash Flows from Financing Activities:
Net cash used by financing activities 0 0 0
-------- -------- --------- --------
Net Change In Cash 0 0 0
Cash-Beginning 0 0 0
-------- -------- --------- --------
Cash-Ending $ 0 $ 0 $ 0
-------- -------- --------- --------
F-13
Procare America, Inc.
Combined Proforma Statement of Stockholder's Deficiency
Common
---------------------------------------------
Common Stock Additional Paid- Stock Held in Accumulated
Shares Amount In Capital Treasury Deficit Total
- -------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 2004 13,836,347 $13,837 $2,957,519 $0 ($3,449,782) ($478,426)
- -------------------------------------------------------------------------------------------------------------------------
Stock issued to pay expenses 3,024,780 3,025 3,025
Effect of Combination 5,000 1,334 361,666 (997,000) (24,423) (658,423)
Net Loss June 30, 2005 (7,745) (7,745)
- -------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 2005 16,866,127 $18,196 $3,319,185 ($997,000) ($3,481,950) ($1,141,569)
- -------------------------------------------------------------------------------------------------------------------------
Part III
Item 1 Exhibits
Exhibit No. Identification of Exhibit
2.1 Exchange Agreement dated December 15, 2005
3.1 Articles of Incorporation
3.2 Articles of Amendment dated November 8, 1982
3.3 Certificate of Amendment to Articles of Incorporation dated
May 29, 1987
3.4 Articles of Amendment dated December 4, 1987
3.5 Certificate of Amendment dated February 25, 1999
3.6 Certificate of Amendment dated January 11, 2006
3.7 By-Laws dated January 25, 2006
4.1 Form of Specimen of Common Stock
10.1 Falcon Service and Drill Agreement
14.1 Code of Ethics dated January 25, 2006
16.1 Letter from Wipfli LLP (Stirtz Bernards Boyden Surdel & Larter,
P.A.) dated January 27, 2006
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 hereunto duly authorized.
Indigo-Energy, Inc.
(Registrant)
/s/ CURTIS FLEMING
------------------
(Signature)
Date: January 27, 2006 CURTIS FLEMING