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) APRIL 23, 2002
ASSURE ENERGY, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 333-61714 13-4125563
--------------------------------- ------------------------ ---------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation or organization)
840 7TH AVENUE, SUITE 1600, CALGARY, ALBERTA T2P 3G2
----------------------------------------------------
(Address of principal executive offices)(Zip Code)
(403) 231-1230
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
----------------------------------------------------
(Former Name or Address, If Changed since Last Report.)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of 1444232 Ontario Inc. (presently known as Assure
Oil & Gas Corp.).
(b) Pro Forma Financial Information.
(c) Exhibits:
2.1 Acquisition Agreement dated April 23, 2002 by and among
Registrant, Assure Oil and Gas Corp. ("Assure") and the
shareholders of Assure. (1)
3.1 Certificate of Amendment to Registrant's Certificate of
Incorporation filed May 1, 2002. (1)
4.1 Registration Rights Agreement dated as of April 23, 2002 by
and between Registrant and the shareholders of Assure Oil and
Gas Corp. (1)
10.1 Promissory Note dated April 23, 2002. (1)
----------
(1) Previously filed with Registrant's Form 8-K dated April 23, 2002 as
filed with the Securities and Exchange Commission on May 8, 2002.
SIGNATURE
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.
ASSURE ENERGY, INC.
Dated: July 3, 2002 By: /s/ Douglas Kaplan
-----------------------------
Douglas Kaplan
President
2
ITEM 7(a) FINANCIAL STATEMENTS OF 1444232 ONTARIO INC. (PRESENTLY KNOWN AS
ASSURE OIL & GAS CORP.)
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Independent Auditor's Report - Stewart Wright ............................ 4
Balance Sheets as at December 31, 2001 and 2000 .......................... 5
Statement of Operations and Deficit for the year ended December 31,
2001 and for the period from October 11, 2000 (inception) to December
31, 2000 ................................................................. 6
Statement of Cash Flows for the year ended December 31, 2001 and for the
period October 11, 2000 (inception) to December 31, 2000 ................. 7
Notes to Financial Statements ............................................ 8
3
AUDITOR'S REPORT
================================================================================
MARCH 26, 2002
TORONTO, ONTARIO
TO THE SHAREHOLDERS OF 1444232 ONTARIO INC.
I have audited the balance sheets of 1444232 Ontario Inc. (a development stage
enterprise) as at December 31, 2001 and 2000 and the related statements of
operations and deficit, and changes in cash flows for the year ended December
31, 2001 and for the period from the date of incorporation October 11, 2000 to
December 31, 2000. These financial statements are the responsibility of the
company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audits in accordance with auditing standards generally accepted
in the United States. Those standards require that I 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. I believe that my audits a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of 1444232 Ontario Inc. as at
December 31, 2001 and 2000 and the results of its operations and cash flows for
the year ended December 31, 2001 and for the period from the date of
incorporation October 11, 2000 to December 31, 2000 in conformity with
accounting principles generally accepted in the United States.
/s/ STEWART WRIGHT
--------------------
STEWART WRIGHT
CHARTERED ACCOUNTANT
4
1444232 ONTARIO INC.
BALANCE SHEETS
AS AT DECEMBER 31,
IN UNITED STATES DOLLARS
================================================================================
2001 2000
ASSETS
Current
Cash $ 95,107 $ 7
Producing oil and gas 62,577 --
properties (Note 2)
Oil and gas properties under development 232,212 104,974
--------- ---------
(Note 2)
$ 389,896 $ 104,981
========= =========
LIABILITIES
Current
Accounts payable $ 29,001 $ 54,006
Due to shareholders (Note 4) 2,501 2,323
--------- ---------
31,502 56,329
SHAREHOLDERS' EQUITY
Capital stock (Note 3) 499,587 49,297
Deficit (141,193) (645)
--------- ---------
358,394 48,652
--------- ---------
$ 389,896 $ 104,981
========= =========
SEE NOTES TO FINANCIAL STATEMENTS
5
1444232 ONTARIO INC.
STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD FROM THE
DATE OF INCORPORATION, OCTOBER 11, 2000 TO DECEMBER 31, 2000
IN UNITED STATES DOLLARS
================================================================================
2001 2000
OIL AND GAS
Income from sale of oil and gas $ 38,837 $ --
Operating costs 35,286 --
Revaluation of oil and gas properties 89,527 --
Depreciation and depletion 50,701 --
---------
175,514 --
--------- ---------
LOSS FROM OIL AND GAS OPERATIONS (136,677) --
--------- ---------
ADMINISTRATIVE EXPENSES
Legal and audit 3,871 645
--------- ---------
NET LOSS FOR THE PERIOD (140,548) (645)
Deficit at the beginning of the period (645) --
--------- ---------
DEFICIT AT THE END OF THE PERIOD $(141,193) $ (645)
========= =========
SEE NOTES TO FINANCIAL STATEMENTS
6
1444232 ONTARIO INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD FROM THE DATE OF
INCORPORATION, OCTOBER 11, 2000 TO DECEMBER 31, 2000
IN UNITED STATES DOLLARS
================================================================================
2001 2000
CASH FLOWS FROM OPERATIONS
Net loss for the period $(140,548) $ (645)
Adjustments for:
Revaluation of oil and gas properties 89,527 --
Depreciation and depletion 50,701 --
--------- ---------
(320) (645)
Net change in working capital excluding cash
Increase (decrease) in accounts payable (25,005) 54,006
--------- ---------
(25,325) 53,361
CASH FLOWS FROM INVESTMENT ACTIVITIES
Acquisition and development of oil and gas properties (330,043) (104,974)
CASH FLOWS FROM FINANCING ACTIVITIES
Common shares issued for cash 450,290 49,297
Advances from shareholders 178 2,323
--------- ---------
450,468 51,620
INCREASE IN CASH 95,100 7
Cash at the beginning of the period 7 --
--------- ---------
CASH AT THE END OF THE PERIOD $ 95,107 $ 7
========= =========
SEE NOTES TO FINANCIAL STATEMENTS
7
1444232 ONTARIO INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
EXPRESSED IN UNITED STATES DOLLARS
NOTE 1
NATURE OF OPERATIONS
The Company is engaged in the acquisition, development, production, exploration
for, and sale of oil, natural gas and natural gas liquids in Alberta, Canada.
The Company sells its oil and gas primarily to Canadian pipelines and
refineries.
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
The Company's financial instruments include cash, accounts receivable, and
advances from shareholders and accounts payable. Unless otherwise noted it is
management's opinion that the Company is not exposed to significant interest
rate, currency and credit risks arising from these financial instruments. The
fair value of the short-term financial instruments approximates their market
value.
ADMINISTRATIVE EXPENDITURES
Administrative expenditures are charged to operations in the current year.
OIL AND GAS INTERESTS
The Company follows the successful efforts method of accounting for its oil and
gas producing activities. The costs of acquiring interests in oil and gas
properties are capitalized. Should a property be subsequently abandoned, its
costs are written off to operations in the year of abandonment. The costs of
drilling and equipping wells, both exploratory and development are capitalized
as incurred. Should a well be determined to be unsuccessful (a dry hole or not
capable of commercial production), its costs are written off in the year so
determined. All other exploration costs, including geological and geophysical
costs are expensed as incurred.
Unproven properties that are individually significant are periodically assessed
for impairment of value, and a loss is recognized at the time of the impairment.
Capitalized costs of producing oil and gas properties, after allowing for
estimated abandonment cost and salvage values are depleted on the
unit-of-production method based on estimated recoverable proven oil and gas
reserves. Support equipment and other property plant and equipment are
depreciated over their estimated useful lives.
On the sale or retirement of a complete interest of a proved property, the cost
and related accumulated depletion and depreciation are eliminated from the
property accounts, and the resultant gain or loss is recognized. On the
retirement or sale of a partial interest of proved property, the cost is charged
to accumulated depletion and depreciation with the resulting gain or loss
recognized in income.
On the sale of a complete interest of an unproved property, for cash or cash
equivalents, gain or loss is recognized, taking into consideration the amount of
any recorded impairment if the property had been assessed individually. If a
partial interest in an unproved property is sold, the amount received is treated
as a reduction of the cost of the interest retained. The Company has not
incurred any geological or geophysical costs since its inception.
INCOME TAXES
The Company uses the deferral method of accounting for income taxes. Under this
method the amount by which the provision for income taxes differs from the
income taxes currently payable is considered to represent the deferring to
future periods the benefits obtained or expenditures incurred in the current
period and accordingly was computed at the current income tax rates. Also, under
the deferral method, tax benefits related to accounting losses could only be
recognized in the period the loss was incurred if there was virtual certainty of
realizing these benefits.
8
1444232 ONTARIO INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
EXPRESSED IN UNITED STATES DOLLARS
================================================================================
NOTE 2
OIL AND GAS INTEREST
The Company holds a various working interests in developed and undeveloped
prospects in Alberta. Income from these wells is subject to crown and overriding
royalties.
PRODUCING
================================================================================
2001 2000
--------------------------------------------------------------------------------
Balance at the beginning of the year $ -- $ --
Completed 202,805 --
Depletion (50,701) --
Revaluation of oil ad gas assets (89,527) --
--------- ---------
Balance at the end of the year $ 62,577 $ --
================================================================================
UNDER DEVELOPMENT
================================================================================
2001 2000
--------------------------------------------------------------------------------
Balance at the beginning of the year $ 104,974 $ --
Acquisition and development costs 330,043 104,974
Completed (202,805) --
--------- ---------
Balance at the end of the year $ 232,212 $ 104,974
================================================================================
The Company has entered into an agreement effective January 1, 2002 to sell its
interest in its sole producing oil and gas property for a consideration of
$62,577. A provision for impairment has been charged to operations in the
current year of $89,527 to reflect the realized value on the sale.
The costs excluded from the depletion calculation consist of the following:
================================================================================
2001 2000
--------------------------------------------------------------------------------
Acquisition costs $ 69,908 $-
Exploration costs 162,304 104,974
-------- --------
$232,212 $104,974
================================================================================
NOTE 3
CAPITAL STOCK
Under the Articles of Incorporation the Company can issue an unlimited number of
common shares and an unlimited number of preference shares.
================================================================================
ISSUED: 2001 2000
--------------------------------------------------------------------------------
COMMON SHARES SHARES AMOUNT SHARES AMOUNT
OPENING BALANCE 383 $ 49,297 -- $ --
Issued for cash 297 450,290 383 49,297
-------- -------- -------- --------
CLOSING BALANCE 680 $499,587 383 $ 49,297
================================================================================
9
1444232 ONTARIO INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
EXPRESSED IN UNITED STATES DOLLARS
================================================================================
NOTE 4
RELATED PARTY TRANSACTIONS
Amounts owing to shareholders are unsecured, bear no interest and are due on
demand.
NOTE 5
The Company's income tax expense for the year is nil. There are no future income
tax assets or liabilities that have been recognized. The Company has available
various types of exploration expenses in the amount of $ 389,000 that can be
deducted from future income for tax purposes. Had these expenses been deducted
deferred income tax debits would have totaled $99,000.
NOTE 6
SUBSEQUENT EVENTS
On March 1, 2002 the Company filed Articles of Amendment changing its name to
Assure Oil & Gas Corp.
Effective January 1, 2002 the Company sold its interest in a producing gas well
for proceeds of $62,577, the carrying value of the well. Subsequent to the year
end the Company issued a further 320 common shares for proceeds of $774,000.
Effective January 1, 2002 the Company acquired further oil and gas properties in
Alberta for a cost of $582,000.
On March 29, 2002 the Company entered into a letter of intent to acquire all the
shares of Westera 2000 Inc. ("Wertera") for $516,000 and the assumption of
$1,709,000 owed by Westera. On January 1, 2002 the Company entered into a
consulting agreement for a term of two years at a cost of $ 1, 129 per month. On
January 1, 2002 the Company entered into a consulting agreement for a term of
one year at a cost of $806 per month.
10
ITEM 7(b) PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
ASSURE ENERGY, INC. (FORMERLY KNOWN AS INVENTOY.COM, INC.)
PAGE
----
Introduction 12
Consolidated Balance Sheets as at March 31, 2002 13
Consolidated Balance Sheets as at December 31, 2001 14
Consolidated Statement of Operations for the three month period
ended March 31, 2002 15
Consolidated Statement of Operations for the year ended December 31, 2001 16
Notes to Financial Statements 17
11
Assure Energy, Inc. and Subsidiaries
F/K/A Inventoy.com, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
Introduction
On April 23, 2002 the Assure Energy, Inc (f/k/a Inventoy.com, Inc.) ("Company")
acquired all of the issued and outstanding shares of common stock of Assure Oil
and Gas Corp (f/k/a 1444232 Ontario Inc.) for 2,400,000 units, each unit
consisting of one share of the Company's common stock, one A warrant entitling
the holder to acquire another share of the Company's common stock at $.50 per
share, for up to five years from the date of issue and one B warrant entitling
the holder to acquire another share of the Company's stock at $1.00 per share,
for up to five years from the date of issue. The effective date of the
acquisition is April 1, 2002.
The acquisition is accounted for as a purchase. The purchase price has been
established at the fair value of the net assets of Assure Oil and Gas Corp. as
this is considered more reliably determinable than the value of the Company's
thinly traded stock. The excess of fair value over book basis was $992,482 and
is attributed entirely to oil and gas properties based on current independent
evaluation of proven petroleum and natural gas reserves.
The accompanying condensed consolidated financial statements illustrate the
effect of the acquisition (pro forma) on the Company's financial position and
the results of operations. The Condensed Consolidated Balance Sheet as of March
31, 2002, is based on the historical balance sheets of the Company and Assure
Oil and Gas Corp as of that date and assumes the acquisition took place on that
date. The Condensed Consolidated Statements of Operations for the year ended
December 31, 2001 and the three months ended March 31, 2002 are based on the
historical operating statements of the Company and Assure Oil and Gas Corp. For
those periods the Pro forma Condensed Consolidated Statements of Operations
assume that the acquisition took place on January 1, 2001.
The Pro Forma Condensed Consolidated Financial Statements may not be indicative
of the actual results of the combined companies.
The accompanying Pro Forma Condensed Consolidated Financial Statements should be
read in connection with the historical financial statements of the Company and
Assure Oil and Gas Corp.
12
Assure Energy, Inc. and Subsidiaries
F/K/A Inventoy.com, Inc.
Unaudited Pro forma Condensed Consolidated Balance Sheet
as of March 31, 2002
Assure Assure Oil
Energy, Inc. Oil and Gas Corp Adjustments Total
----------- ----------- ----------- -----------
Current assets:
Cash $ 31,167 $ 91,376 $ -- $ 122,543
Advances receivable -- 268,988 -- 268,988
Taxes receivable -- 8,664 -- 8,664
----------- ----------- ----------- -----------
Total current assets 31,167 369,028 -- 400,195
----------- ----------- ----------- -----------
Fixed assets:
Oil and gas properties -- 894,953 (B) 992,482 1,887,435
----------- ----------- ----------- -----------
Other assets:
Investment in subsidiary 2,108,421 -- (A) (2,108,421) --
Purchased toy designs 3,000 -- (C) (3,000) --
----------- ----------- ----------- -----------
Total other assets 2,111,421 -- (2,111,421) --
----------- ----------- ----------- -----------
Total assets $ 2,142,588 $ 1,263,981 $(1,118,939) $ 2,287,630
=========== =========== =========== ===========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 25,522 $ 126,610 $ -- $ 152,132
Advances payable -- 18,776 -- 18,776
Loans payable -- 2,432 -- 2,432
Taxes payable -- 224 -- 224
Note payable 100,000 -- -- 100,000
----------- ----------- ----------- -----------
Total current liabilities 125,522 148,042 -- 273,564
----------- ----------- ----------- -----------
Shareholders' equity (deficit):
Shareholders' equity (deficit) 2,017,066 1,115,939 (A) (2,108,421) 1,024,584
-- -- (B) 992,482 992,482
-- -- (C) (3,000) (3,000)
----------- ----------- ----------- -----------
2,017,066 1,115,939 (1,118,939) 2,014,066
----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 2,142,588 $ 1,263,981 $(1,118,939) $ 2,287,630
=========== =========== =========== ===========
See notes to unaudited pro forma condensed consolidated financial statements.
13
Assure Energy, Inc. and Subsidiaries
F/K/A Inventoy.com, Inc.
Unaudited Pro forma Condensed Consolidated Balance Sheet
as of December 31, 2001
Assure Assure Oil
Energy, Inc. Oil and Gas Corp Adjustments Total
----------- ----------- ----------- -----------
Current assets:
Cash $ 17,288 $ 95,107 $ -- $ 112,395
----------- ----------- ----------- -----------
Fixed assets:
Oil and gas properties -- 294,789 -- 294,789
----------- ----------- ----------- -----------
Other assets:
Investment in subsidiary 2,108,421 -- (A) (2,108,421) --
Purchased toy designs 3,000 -- -- 3,000
----------- ----------- ----------- -----------
Total other assets 2,111,421 -- (2,108,421) --
----------- ----------- ----------- -----------
Total assets $ 2,128,709 $ 389,896 $(2,108,421) $ 410,184
=========== =========== =========== ===========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 6,145 $ 29,001 $ -- $ 35,146
Loans payable -- 2,501 -- 2,501
----------- ----------- ----------- -----------
Total current liabilities 6,145 31,502 -- 37,647
----------- ----------- ----------- -----------
Shareholders' equity:
Shareholders' equity 2,122,564 358,394 (2,108,421) 372,537
----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 2,128,709 $ 389,896 $(2,108,421) $ 410,184
=========== =========== =========== ===========
See notes to unaudited pro forma condensed consolidated financial statements.
14
Assure Energy, Inc. and Subsidiaries
F/K/A Inventoy.com, Inc.
Unaudited Pro forma Condensed Consolidated Statement of Operations
for the three months ended March 31, 2002
Assure Assure Oil
Energy, Inc. Oil and Gas Corp Adjustments Total
------------ ------------ ------------ ------------
Revenues:
Oil and gas $ -- $ 75,499 $ -- $ 75,499
Other 86 21 -- 107
------------ ------------ ------------ ------------
Total revenues 86 75,520 -- 75,606
------------ ------------ ------------ ------------
Operating costs and expenses:
Operating costs -- 30,921(C) 3,000 33,921
Depreciation & depletion -- 15,155(B) 8,836 23,991
General and administrative 105,509 5,325 -- 110,834
Income taxes 75 -- -- 75
Royalty payments -- 9,056 -- 9,056
------------ ------------ ------------ ------------
Total operating costs and
Expenses 105,584 60,457 11,836 177,877
------------ ------------ ------------ ------------
Net income/(loss) $ (105,498) $ 15,063 $ (11,836) $ (102,271)
============ ============ ============ ============
Net loss per share - primary $ (0.00)
============
Weighted average common shares
used in calculation of net
loss per share 23,244,000
============
See notes to unaudited pro forma condensed consolidated financial statements.
15
Assure Energy, Inc. and Subsidiaries
F/K/A Inventoy.com, Inc.
Unaudited Pro forma Condensed Consolidated Statement of Operations
for the year ended December 31, 2001
Assure Assure Oil Pro Forma
Energy, Inc. Oil and Gas Corp Adjustments Total
------------ ------------ ---------- ------------
Revenues:
Oil and gas $ -- $ 38,837 $ -- $ 38,837
Other 1,158 -- -- 1,158
------------ ------------ ---------- ------------
Total revenues 1,158 38,837 -- 39,995
------------ ------------ ---------- ------------
Operating costs and expenses:
Operating costs -- 35,286 -- 35,286
Revaluation of oil and gas
Properties -- 89,527 -- 89,527
Depreciation & depletion -- 50,701 -- 50,701
General and administrative 60,541 3,871 -- 64,412
------------ ------------ ---------- ------------
Total operating costs and
Expenses 60,541 179,385 -- 239,926
------------ ------------ ---------- ------------
Net income/(loss) $ (59,383) $ 140,548 $ -- $ (199,931)
============ ============ ========== ============
Net loss per share - primary $ (0.01)
============
Weighted average common shares
used in calculation of net
loss per share 23,113,841
============
See notes to unaudited pro forma condensed consolidated financial statements.
16
Assure Energy, Inc. and Subsidiaries
F/K/A Inventoy.com, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
Note A
On April 23, 2002, Assure Energy, Inc. ("Company") acquired all of the
outstanding shares of Assure Oil and Gas, Corp. in exchange for 2,400,000 units,
each unit consisting of one share of the Company's common stock, one A warrant
entitling the holder to acquire another share of the Company's common stock at
$.50 per share, for up to five years from the date of issue and one B warrant
entitling the holder to acquire another share of the Company's stock at $1.00
per share, for up to five years from the date of issue. The effective date of
acquisition is April 1, 2002.
The acquisition is accounted for as a purchase. The purchase price has been
established at the fair value of the net assets of Assure Oil and Gas Corp. as
this is considered more reliably determinable than the value of the Company's
thinly traded stock. The excess of fair value over book basis was $992,482 and
is attributed entirely to oil and gas properties based on current independent
evaluation of proven petroleum and natural gas reserves.
Company shares were issued at fair value of the acquiree (Assure Oil and Gas
Corp) and were recorded as follows:
Capital Stock $ 2,400
Additional Paid in Capital 2,106,021
----------
$2,108,421
==========
Note B
The pro forma adjustments to the pro forma condensed consolidated statement of
operations are as follows:
Write off of the Company's purchased toy
designs to operating costs $ 3,000
========
Additional depletion of oil and gas
properties $ 8,836
========
Note C
The Company changed its name from Inventoy.com, inc. to Assure Energy, Inc. and
intends to develop and lease oil and gas properties.
Note D
Pro forma earnings per share reflect all stock splits since January 1, 2001 and
assume that the acquisition of Assure Oil and Gas Corp by the Company took place
on that date. Warrants have not been included because the effect of their
issuance is anti-dilutive.
17