-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LtG3+116auWO50H11QFurAEOrFTBFfv4dyP5h+vzbpTaxaz6B78e+D3fQyJo/y8m ptmyxe/4J63q97NS/oeKNA== 0000922423-97-000371.txt : 19970414 0000922423-97-000371.hdr.sgml : 19970414 ACCESSION NUMBER: 0000922423-97-000371 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970127 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970411 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3-D GEOPHYSICAL INC CENTRAL INDEX KEY: 0001003382 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 133841601 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27564 FILM NUMBER: 97578675 BUSINESS ADDRESS: STREET 1: 7076 S. ALTON WAY STREET 2: BUILDING H CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3037413700 MAIL ADDRESS: STREET 1: 7076 SOUTH ALTON WAY STREET 2: BUILDING H CITY: ENGLEWOOD STATE: CO ZIP: 80112 8-K/A 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 TO 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) January 27, 1997 ------------------------------- 3-D GEOPHYSICAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-27564 13-3841601 - -------------------------------------------------------------------------------- (State or other Jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 7076 South Alton Way, Building H, Englewood, Colorado 80112 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 290-0214 ---------------------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Businesses Acquired.* (b) Pro Forma Financial Information.* * Filed herewith. 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. 3-D GEOPHYSICAL, INC. By: /s/ Joel Friedman ----------------------- Name: Joel Friedman Title: Chairman Date: April 10, 1997 GARRETT POWER CHARTERED ACCOUNTANTS January 24, 1997 Auditors' Report To the Shareholders of J.R.S. Exploration Company Limited: We have audited the balance sheets of J.R.S. Exploration Company Limited as at November 30, 1996 and 1995 and the statements of operations and retained earnings and changes in financial position for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards in Canada. Those standards require that we plan and perform an audit to obtain reasonable assurance 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. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 1996 and 1995 and the results of its operations and changes in its financial position for the years then ended in accordance with generally accepted accounting principles in Canada. /s/ GARRETT POWER - --------------------- Chartered Accountants Calgary, Alberta J.R.S. Exploration Company Limited Balance Sheet
- ------------------------------------------------------------------------------------------------------------------- November 30 1996 1995 ---- ---- ASSETS Current assets: Cash and term deposits $ 346,019 $ 711,698 Accounts receivable 3,666,481 1,855,745 Income taxes recoverable - 35,751 Prepaid expenses 41,780 77,191 Current portion of agreement receivable 100,000 66,666 ------------------- ---------------- 4,154,280 2,747,051 Fixed assets (Note 2) 4,263,817 5,430,531 Agreement receivable (Note 3) - 33,334 ------------------- ---------------- $ 8,418,097 $ 8,210,916 ================== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Bank loan (Note 4) $ 340,000 $ 200,000 Cheques issued in excess of bank balance 724,280 - Accounts payable (Note 10) 1,808,455 1,395,532 Income taxes payable 509,191 - Advances from related parties (Note 5) - 160,811 Current portion of long term debt 1,423,050 1,552,533 ------------------- ---------------- 4,804,976 3,308,876 Long term debt (Note 6) 108,047 1,488,829 Deferred income taxes 34,463 304,538 Shareholders' equity: Share capital (Note 7) 66 66 Retained earnings 3,470,545 3,108,607 ------------------- ---------------- 3,470,611 3,108,673 ------------------- ---------------- $ 8,418,097 $ 8,210,916 =================== ================
J.R.S. Exploration Company Limited Statement of Operations and Retained Earnings
- ------------------------------------------------------------------------------------------------------------------- Years Ending November 30 1996 1995 ---- ---- Revenue: Seismic revenue $ 12,532,451 $ 11,074,354 Interest 33,996 71,002 ------------------- ---------------- 12,566,447 11,145,356 Direct expenses: Consulting and management 522,338 425,785 Recording equipment repairs and maintenance 2,034,497 1,205,215 Small tools and field supplies 31,765 31,129 Turnkey costs (Note 10) 1,727,969 2,459,422 Vehicle and equipment rentals (Note 10) 371,206 343,969 Vehicle repairs and fuel 472,446 412,325 Wages and benefits, including office 3,669,788 3,146,860 Depreciation 1,950,929 1,971,583 ------------------- ---------------- 10,780,938 9,996,288 ------------------- ---------------- Gross profit 1,785,509 1,149,068 General and administrative expenses (Schedule) 1,230,161 1,238,547 ------------------- ---------------- Income (loss) before following 555,348 (89,479) Gain on sale of fixed assets 68,199 4,507 ------------------- ---------------- Income (loss) before provision for income taxes 623,547 (84,972) Provision for (recovery of) income taxes (Note 8): Current 531,684 117,514 Deferred (270,075) (182,454) -------------------- ----------------- 261,609 (64,940) ------------------- ----------------- Net income (loss) for the year 361,938 (20,032) Retained earnings at beginning of year 3,108,607 3,128,639 ------------------- ---------------- Retained earnings at end of year $ 3,470,545 $ 3,108,607 =================== ================
-2- J.R.S. Exploration Company Limited Schedule of General and Administration
- ------------------------------------------------------------------------------------------------------------------- Years Ending November 30 1996 1995 ---- ---- Depreciation $ 29,571 $ 33,406 Entertainment 115,218 77,125 Freight 55,097 33,687 Insurance and licenses 145,736 150,457 Interest and bank charges 23,231 19,435 Interest on long term debt 206,860 396,647 Office and miscellaneous 162,404 189,182 Professional fees 91,500 17,713 Rent, utilities and taxes (Note 10) 130,856 143,816 Telephone 90,935 87,886 Travel 178,753 89,193 ------------------- ---------------- $ 1,230,161 $ 1,238,547 ================== ===============
-3- J.R.S. Exploration Company Limited Statement of Changes in Financial Position
- ------------------------------------------------------------------------------------------------------------------- Years Ending November 30 1996 1995 ---- ---- Operations: Net income (loss) for the year $ 361,938 $ (20,032) Add: Items not requiring a current cash outlay -- Depreciation 1,980,500 2,004,989 Deferred income taxes (270,075) (182,454) Gain on sale of fixed assets (68,199) (4,507) -------------------- ----------------- Funds from operations 2,004,164 1,797,996 Increase in non-cash working capital (817,460) (270,008) Investing: Acquisition of fixed assets: (815,147) (285,410) Proceeds on sale of fixed assets 69,560 8,150 Decrease in investment tax credits - 55,843 -------------------- ----------------- Cash used in investing (745,587) (221,417) --------------------- ------------------ Financing: Decrease in long term debt (1,510,265) (2,079,356) Decrease in advances from related parties (160,811) (326,000) --------------------- ------------------ Cash used in financing (1,671,076) (2,405,356) --------------------- ------------------ Decrease in cash* (1,229,959) (1,098,785) Cash at beginning of year 511,698 1,610,483 -------------------- ----------------- Cash at end of year $ (718,261) $ 511,698 ==================== =================
* For the purpose of this statement, cash is defined as cash and term deposits, net of bank loan and cheques issued in excess of bank balance. -4- J.R.S. Exploration Company Limited Notes to Financial Statements November 30, 1996 - ------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES: Depreciation - Depreciation is calculated using the straight-line (equipment - 20%) and declining balance (vehicles - 30%; office - 20%) methods at rates which will depreciate the assets over their estimated useful lives. 2. FIXED ASSETS: Fixed assets are recorded at cost and comprised of the following:
1996 1995 Accumulated Net Book Net Book Cost Depreciation Value Value ----------------------------------------------------------------------------------------------------- Equipment $ 12,418,707 $ 8,786,264 $ 3,632,443 $ 4,872,841 Vehicles 1,667,303 1,189,929 477,374 411,403 Office 352,732 198,732 154,000 146,287 ---------------- ----------------- ----------------- ----------------- $ 14,438,742 $ 10,174,925 $ 4,263,817 $ 5,430,531 ============ ============ ============= =============
3. AGREEMENT RECEIVABLE: The agreement receivable is unsecured, bears interest at 7% and is repayable in annual installments of $33,333 plus interest. The 1995 and 1996 installments are in arrears. 4. BANK LOANS: The revolving bank loans are payable on demand and bear interest at prime plus 1/2% on the first $250,000 and prime plus 1% on the remainder. Security on the loan is described in Note 6. -5- J.R.S. Exploration Company Limited Notes to Financial Statements November 30, 1996 - -------------------------------------------------------------------------------- 5. ADVANCES FROM RELATED PARTIES: The advances from related parties, including shareholders and companies controlled by shareholders, are non-interest bearing and have no fixed terms of repayment. The loans were repaid in fiscal 1996.
6. LONG-TERM DEBT: 1996 1995 ---- ---- Bank loans, bearing interest at prime + 1 1/2%, are payable on demand. The bank has agreed to accept blended monthly installments of $144,000. $ 1,344,424 $ 2,711,997 Finance contracts, bearing interest at rates ranging from 8.9% to 13%, repayable in blended monthly installments. The contracts ____________ ___________ will be repaid at various times to April 1999. 186,673 227,367 Loan, repaid in fiscal 1996 - 101,998 1,531,097 3,041,362 Less: amount due within one year 1,423,050 1,552,533 -------------- ------------- $ 108,047 $ 1,488,829 ============== =============
The bank loans are secured by a general security agreement, a debenture providing a first charge on specific equipment and a floating charge on all assets of the Company and postponement of claim by certain shareholders and directors. The finance contracts are secured by specific equipment and vehicles. Estimated principal repayments over the next three years are as follows: 1997 $ 1,423,050 1998 $ 98,381 1999 $ 9,666 -6- J.R.S. Exploration Company Limited Notes to Financial Statements November 30, 1996 - -------------------------------------------------------------------------------- 7. SHARE CAPITAL:
1996 1995 Authorized - Unlimited number of Class A voting shares Unlimited number of Class B non-voting shares Unlimited number of Class D preferred shares Issued - 33 Class A voting shares 33 Class B non-voting shares $ 66 $ 66 ============== ============== 8. INCOME TAXES: The income tax provision on the income statements differs from the expected income tax provision as follows: 1996 1995 ---- ---- Expected income taxes @ 44.62% $ 278,229 $ (37,677) Add (deduct) effects of: Small business tax reduction (51,000) (51,000) Non deductible expenses 34,380 23,737 ---------------- ---------------- $ 261,609 $ (64,940) ============== ================
9. COMMITMENTS: Effective January 1, 1997, the Company amended the lease agreement, with a related company (see Note 10), for their business premises. The amended lease calls for annual payments of $79,188 and expires in May 2001. -7- J.R.S. Exploration Company Limited Notes to Financial Statements November 30, 1996 - -------------------------------------------------------------------------------- 10. RELATED PARTY TRANSACTIONS: The following summarizes transactions and balances with Companies which are owned by parties related to the shareholders: 1996 1995 ---- ---- Pavelow Investments Ltd. $ 96,840 $ 96,840 Rent charged on premises Malpaso Surveys Ltd. Survey fees charged $ 218,753 $ 280,707 Balance included in accounts payable $ 30,036 $ 28,109 C.M.J. Holdings Ltd. Equipment lease charges $ 42,185 $ 42,185 Sale of leased equipment $ 36,500 - Balance included in accounts payable $ - $ 67,909 -8- 3-D GEOPHYSICAL INC. AND SUBSIDIARIES PRO FORMA BALANCE SHEET AS OF DECEMBER 31, 1996 (IN THOUSANDS)
3-D J.R.S. U.S.$ Pro Forma Adjusted Geophysical U.S. GAAP Adjustments Pro Forma ----------- --------- ----------- --------- ASSETS Cash and Cash equivalents 17,624 257 (2,665) A 15,216 Restricted cash 820 - - 820 Accounts receivable Trade 11,268 2,721 - 13,989 Other 282 - - 282 Deferred income tax asset 108 - - 108 Prepaid expenses and other assets 999 105 (49) B 1,055 -------- ------------ -------- -------- Total current assets 34,034 3,083 (2,714) 34,403 Property and equipment, net 35,529 3,165 124 C 38,818 Goodwill 6,115 - 2,641 D 8,756 Other assets 1,588 - (24) B 1,564 -------- --------------- -------- -------- Total assets 77,266 6,248 27 83,541 ======== ============= ======== ======== LIABILITIES Current liabilities Current maturities of long-term debt and capital leases 7,559 1,846 - 9,405 Accounts payable 12,912 1,342 - 14,254 Accrued liabilities 1,560 - - 1,560 Income taxes payable - 378 - 378 Deferred revenue 1,536 - - 1,536 -------- --------------- -------- -------- Total current liabilities 23,567 3,566 - 27,133 ======== ============= ======== ======== Long-term debt and capital leases 4,597 80 - 4,677 Deferred income tax liability 937 26 - 963 Stockholders' equity Preferred stock - - - - Common Stock 111 - 3 E 114 Additional paid-in capital 51,426 - 2,600 F 54,026 Retained earnings 739 2,575 (2,575) G 739 Cumulative foreign currency translation adjustments (4,111) 1 (1) G (4,111) -------- -------------- -------- -------- Total stockholders' equity 48,165 2,576 27 50,768 -------- ------------- -------- -------- Total liabilities and stockholders' equity 77,266 6,248 27 83,541 ======== ============= ======== ========
-9- For purpose of these calculations, an exchange rate of $.73 to C$1.00 is used. A - Cash consideration for the purchase price of J.R.S. Exploration and Siegfried & Siegfried Resource Consultants, Ltd. B - Reflects the elimination of a current receivable and long-term receivable included in other assets in the accompanying pro forma balance sheet due from Siegfried & Siegfried Resource Consultants, Ltd. totalling C$100,000 (approximately $73,000) that is eliminated upon the acquisition of Siegfried & Siegfried Resource Consultants, Ltd. C - Estimated fair market value of recording assets acquired through the acquisition of Siegfried & Siegfried Resource Consultants, Ltd. D - Associated goodwill generated through the acquisition of J.R.S. Exploration and Siegfried & Siegfried Resource Consultants, Ltd. calculated as follows:
(in thousands) $Canadian $U.S. --------- ----- Total Purchase Price 6,850 5,000 Total Purchase Price of Siegfried & Siegfried Ltd. 300 219 Receivable eliminated through acquisition of Siegfried & Siegfried Ltd. 100 73 ------------------------------- Total Purchase Price 7,250 5,292 Fair market value of underlying net assets and liabilities of J.R.S. Exploration 3,462 2,527 Estimated fair market value of Siegfried & Siegfried Resource Consultants, Ltd. assets 170 124 ------------------------------- 3,632 2,651 ------------------------------- Goodwill 3,618 2,641 ===============================
E - Par value of shares issued ($.01 per share) F - Additional paid-in capital G - Purchase price adjustments eliminating existing retained earnings and translation adjustments at J.R.S. Exploration -10- 3-D GEOPHYSICAL INC. AND SUBSIDIARIES PRO FORMA BALANCE SHEET AS OF YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS)
A Recapitalized J.R.S. U.S.$ Pro Forma Adjusted 3-D Geophysical U.S. GAAP Adjustments Pro Forma --------------- --------- ----------- --------- Net revenues 9,825 8,061 - 17,886 Expenses: Cost of data acquisition 5,968 5,841 (52) B 11,757 Depreciation and amortization 662 1,435 211 C 2,308 General and administrative expenses 1,038 599 - 1,637 -------- ----------- ---------- --------- Total operating expenses 7,668 7,875 159 15,702 Operating income 2,157 186 (159) 2,184 Other income (expenses): Interest expense (803) (303) - (1,106) Foreign currency transaction gains (120) - - (120) Miscellaneous 503 55 - 558 --------- ----------- --------- --------- Income before provision for income 1,737 (62) (159) 1,516 taxes Provision for income taxes 130 (47) (56) 27 --------- ------------- ---------- --------- Net income 1,607 (15) (103) 1,489 ======== ------------ ---------- ---------
A - The acquisitions of Geovaluaciones S.A. de C.V. ("Geovaluaciones") and Procesos Interactivos Avanzados, S.A. de C.V. ("PIASA") which occurred on February 6, 1996 were treated as a recapitalization of Geovaluaciones and PIASA with Geovaluaciones (combined with PIASA) as the acquiror and predecessor of 3-D Geophysical. B - Elimination of rental expense paid by J.R.S. Exploration to Siegfried & Siegfried Resource Consultants Ltd. in the amount of $52,000 for the year ended December 31, 1995. C - To record amortization of goodwill associated with J.R.S. Exploration and Siegfried & Siegfried Resource Consultants Ltd. over 15 years and incremental depreciation associated with the acquisition of the recording assets of Siegfried and Siegfried Resource Consultants Ltd. in the amount of $176,000 and $35,000 for the goodwill amortization and asset depreciation, respectively. -11- 3-D GEOPHYSICAL INC. AND SUBSIDIARIES PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS)
A Recapitalized J.R.S. U.S.$ Pro Forma Adjusted 3-D Geophysical U.S. GAAP Adjustments Pro Forma Net revenues 51,754 9,264 - 61,018 Expenses: Cost of data acquisition 40,032 6,527 (80) B 46,479 Depreciation and amortization 4,106 887 211 C 5,204 General and administrative expenses 6,002 1,464 - 7,466 -------- --------------- ----------- --------- Total operating expenses 50,140 8,878 131 59,149 Operating income 1,614 386 (131) 1,869 Other income (expenses): Interest expense (1,021) - - (1,021) Foreign currency transaction (losses) (91) - - (91) Miscellaneous 797 75 - 872 -------- -------------- ----------- --------- Income before provision for income taxes 1,299 461 (131) 1,629 Provision for income taxes 470 193 (46) 617 -------- -------------- ----------- --------- Income from continuing operations 829 268 (85) 1,012 -------- -------------- ----------- ---------
A - The acquisitions of Geovaluaciones S.A. de C.V. ("Geovaluaciones") and Procesos Interactivos Avanzados, S.A. de C.V. ("PIASA") which occurred on February 6, 1997 were treated as a recapitalization of Geovaluaciones and PIASA with Geovaluaciones (combined with PIASA) as the acquiror and predecessor of 3-D Geophysical. B - Elimination of rental expense paid by J.R.S. Exploration to Siegfried & Siegfried Resource Consultants Ltd. in the amount of $80,000 for the year ended December 31, 1995. C - To record amortization of goodwill associated with J.R.S. Exploration and Siegfried & Siegfried Resource Consultants Ltd. over 15 years and incremental depreciation associated with the acquisition of the recording assets of Siegfried and Siegfried Resource Consultants Ltd. in the amount of $176,000 and $35,000 for the goodwill amortization and asset depreciation, respectively. -12- -----END PRIVACY-ENHANCED MESSAGE-----