EX-99.2
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dex9921.htm
US-GAAP - RECONCILED PRO-FORMA FINANCIAL STATEMENTS
US-GAAP - reconciled pro-forma financial statements
Exhibit 99.3
EMPIRE ENERGY
CORPORATION INTERNATIONAL
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Attached are the historical audited financial statements of Great South Land Minerals Ltd
("GSLM") for the acquisition of GSLM by Empire Energy Corporation International ("Empire"). The unaudited pro forma consolidated condensed financial statements have been prepared utilizing the historical financial statements of
Empire. The unaudited pro forma consolidated condensed financial statements should be read in conjunction with the historical financial statements of Empire and the attached historical financial statements of GSLM.
The following unaudited pro forma consolidated condensed statements of operations for the
year ended December 31, 2004 and the unaudited pro forma consolidated condensed balance sheet as of December 31, 2004 give effect to the acquisition of GSLM including the related pro forma adjustments described in the notes thereto. The unaudited
pro forma consolidated condensed statements of operations for the year ended December 31, 2004 give effect to the acquisition by Empire as if the acquisition had occurred on January 1, 2004. The unaudited pro forma consolidated condensed balance
sheet as of December 31, 2004 gives effect to the acquisitions as if they had occurred on December 31, 2004.
The unaudited pro forma consolidated condensed financial statements may not be indicative of the results that actually would have occurred if the acquisitions had been effective on the dates indicated or which may be
obtained in the future.
F-1
EMPIRE ENERGY CORPORATION INTERNATIONAL
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
US GAAP and
US Dollars
Historical
31-Dec-04
Empire
31-Dec-04
GSLM
Pro Forma
Adjustments
Unaudited
Pro Forma
ASSETS
CURRENT ASSETS
Cash
$
47,021
$
5,325
(c)
$
127,000
$
179,346
Accounts receivable, net
-
29,324
-
29,324
Prepaids
-
114,157
114,157
TOTAL CURRENT ASSETS
47,021
148,806
127,000
322,827
PROPERTY AND EQUIPMENT, NET
-
13,150
-
13,150
OIL AND GAS PROPERTIES, NET
-
-
(b)
22,100,000
22,100,000
TOTAL ASSETS
$
47,021
$
161,956
$
22,227,000
$
22,435,977
LIABILITIES
CURRENT LIABILITIES
Current liabilities
$
727,579
$
221,279
$
948,858
Long term liabilities
2,477,889
(a)
(265,266
)
2,212,623
Long-term Convertible debentures
195,619
-
-
195,619
TOTAL LIABILITIES
923,198
2,699,168
(265,266
)
3,357,100
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common stock
7,293
-
(b)
65,000
73,703
(c)
1,410
Additional paid-in-capital
34,129,788
6,956,808
(b)
22,035,000
29,117,398
(c)
125,590
(b)
(34,129,788
)
Accumulated other comprehensive loss
-
(420,048
)
-
(420,048
)
Accumulated deficit
(35,013,258
)
(9,073,972
)
(a)
265,266
(9,692,176
)
(b)
34,129,788
TOTAL STOCKHOLDERS' EQUITY
(876,177
)
(2,537,212
)
22,492,266
19,078,877
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
47,021
$
161,956
$
22,227,000
$
22,435,977
(a)
record advances to GSLM provided by Empire after 6/30/04, expensed by Empire when disbursed.
(b)
record shares issued to effect acquisition, assuming 100% acceptance
(d)
eliminate operating results of Empire in excess of estimated annual costs of public company operation.
See notes to unaudited pro forma consolidated condensed financial statements.
F-2
EMPIRE ENERGY CORPORATION INTERNATIONAL
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
US
GAAP and US Dollars
For the Year Ended
31-Dec-04
Empire
31-Dec-04
GSLM
Pro Forma
Adjustments
Unaudited
Pro Forma
OIL AND GAS SALES
$
-
$
13,910
$
-
$
13,910
EXPENSES
Impairment of advances to GSLM
265,266
-
(a)
(265,266
)
-
Interest
212,794
47,625
-
260,419
General and administrative
1,100,576
510,256
(d)
(900,576
)
710,256
TOTAL EXPENSES
1,578,636
557,881
(1,165,842
)
970,675
OPERATING LOSS
(1,578,636
)
(543,971
)
1,165,842
(956,765
)
Provision for income taxes
-
-
-
-
Net Loss
$
(1,578,636
)
$
(543,971
)
$
1,165,842
$
(956,765
)
See notes to unaudited
pro forma consolidated condensed financial statements.
F-3
EMPIRE ENERGY CORPORATION INTERNATIONAL
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Acquisition of GSLM
In 2002, Empire entered into an agreement to acquire up to 100% of GSLM in a stock exchange on the basis of one share of GSLM for one share of Empire. Empire also agreed
that it would effect a reverse stock split that would exchange one new share of common stock for ten existing shares of common stock. As a result, Assuming 100% acceptance, Empire will issue approximately 65 million shares of its stock to acquire
all the issued and outstanding common stock of GSLM. This number of shares represents approximately 95% of the common shares of the combined company at the time the agreement was made and approximately 88% of the common shares of the combined
company after costs of obtaining approval for the acquisition. As a result of the change in control of Empire, the operating history of the continuing company will be that of GSLM.
The unaudited pro forma adjustments are as follows:
a.
To eliminate impairment expense recorded by Empire of loans made to GSLM during last six months of 2004 and eliminate the corresponding liability.
b.
To record the acquisition of GSLM by issuance of estimated 65 million shares of Empire common stock valued at the December 31, 2004 market value of $.34 per share. Fair value of
property acquired was determined by independent valuation to be $19 to $23 million.
c.
To record the issuance of an additional 1,410,000 shares of common stock after December 31, 2004 for proceeds of $127,000 required to complete the approval of the acquisition.
d.
To record elimination of operating expenses of Empire in excess of the estimated ongoing costs of the public company.
F-4

EX - 99 . 2 4 dex9921 . htm US - GAAP - RECONCILED PRO - FORMA FINANCIAL STATEMENTS US - GAAP - reconciled pro - forma financial statements Exhibit 99 . 3 EMPIRE ENERGY CORPORATION INTERNATIONAL UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Attached are the historical audited financial statements of Great South Land Minerals Ltd ( " GSLM " ) for the acquisition of GSLM by Empire Energy Corporation International ( " Empire " ) . The unaudited pro forma consolidated condensed financial statements have been prepared utilizing the historical financial statements of Empire . The unaudited pro forma consolidated condensed financial statements should be read in conjunction with the historical financial statements of Empire and the attached historical financial statements of GSLM . The following unaudited pro forma consolidated condensed statements of operations for the year ended December 31 , 2004 and the unaudited pro forma consolidated condensed balance sheet as of December 31 , 2004 give effect to the acquisition of GSLM including the related pro forma adjustments described in the notes thereto . The unaudited pro forma consolidated condensed statements of operations for the year ended December 31 , 2004 give effect to the acquisition by Empire as if the acquisition had occurred on January 1 , 2004 . The unaudited pro forma consolidated condensed balance sheet as of December 31 , 2004 gives effect to the acquisitions as if they had occurred on December 31 , 2004 . The unaudited pro forma consolidated condensed financial statements may not be indicative of the results that actually would have occurred if the acquisitions had been effective on the dates indicated or which may be obtained in the future . F - 1 EMPIRE ENERGY CORPORATION INTERNATIONAL UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET US GAAP and US Dollars Historical 31 - Dec - 0 4 Empire 31 - Dec - 0 4 GSLM Pro Forma Adjustments Unaudited Pro Forma ASSETS CURRENT ASSETS Cash $ 47,021 $ 5,325 ( c ) $ 127,000 $ 179,346 Accounts receivable , net - 29,324 - 29,324 Prepaids - 114,157 114,157 TOTAL CURRENT ASSETS 47,021 148,806 127,000 322,827 PROPERTY AND EQUIPMENT , NET - 13,150 - 13,150 OIL AND GAS PROPERTIES , NET - - ( b ) 22,100,000 22,100,000 TOTAL ASSETS $ 47,021 $ 161,956 $ 22,227,000 $ 22,435,977 LIABILITIES CURRENT LIABILITIES Current liabilities $ 727,579 $ 221,279 $ 948,858 Long term liabilities 2,477,889 ( a ) ( 265,266 ) 2,212,623 Long - term Convertible debentures 195,619 - - 195,619 TOTAL LIABILITIES 923,198 2,699,168 ( 265,266 ) 3,357,100 STOCKHOLDERS ' EQUITY STOCKHOLDERS ' EQUITY Common stock 7,293 - ( b ) 65,000 73,703 ( c ) 1,410 Additional paid - in - capital 34,129,788 6,956,808 ( b ) 22,035,000 29,117,398 ( c ) 125,590 ( b ) ( 34,129,788 ) Accumulated other comprehensive loss - ( 420,048 ) - ( 420,048 ) Accumulated deficit ( 35,013,258 ) ( 9,073,972 ) ( a ) 265,266 ( 9,692,176 ) ( b ) 34,129,788 TOTAL STOCKHOLDERS ' EQUITY ( 876,177 ) ( 2,537,212 ) 22,492,266 19,078,877 TOTAL LIABILITIES AND STOCKHOLDERS ' EQUITY $ 47,021 $ 161,956 $ 22,227,000 $ 22,435,977 ( a ) record advances to GSLM provided by Empire after 6 / 30 / 04 , expensed by Empire when disbursed . ( b ) record shares issued to effect acquisition , assuming 100 % acceptance ( d ) eliminate operating results of Empire in excess of estimated annual costs of public company operation . See notes to unaudited pro forma consolidated condensed financial statements . F - 2 EMPIRE ENERGY CORPORATION INTERNATIONAL UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS US GAAP and US Dollars For the Year Ended 31 - Dec - 0 4 Empire 31 - Dec - 0 4 GSLM Pro Forma Adjustments Unaudited Pro Forma OIL AND GAS SALES $ - $ 13,910 $ - $ 13,910 EXPENSES Impairment of advances to GSLM 265,266 - ( a ) ( 265,266 ) - Interest 212,794 47,625 - 260,419 General and administrative 1,100,576 510,256 ( d ) ( 900,576 ) 710,256 TOTAL EXPENSES 1,578,636 557,881 ( 1,165,842 ) 970,675 OPERATING LOSS ( 1,578,636 ) ( 543,971 ) 1,165,842 ( 956,765 ) Provision for income taxes - - - - Net Loss $ ( 1,578,636 ) $ ( 543,971 ) $ 1,165,842 $ ( 956,765 ) See notes to unaudited pro forma consolidated condensed financial statements . F - 3 EMPIRE ENERGY CORPORATION INTERNATIONAL NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Acquisition of GSLM In 2002 , Empire entered into an agreement to acquire up to 100 % of GSLM in a stock exchange on the basis of one share of GSLM for one share of Empire . Empire also agreed that it would effect a reverse stock split that would exchange one new share of common stock for ten existing shares of common stock . As a result , Assuming 100 % acceptance , Empire will issue approximately 65 million shares of its stock to acquire all the issued and outstanding common stock of GSLM . This number of shares represents approximately 95 % of the common shares of the combined company at the time the agreement was made and approximately 88 % of the common shares of the combined company after costs of obtaining approval for the acquisition . As a result of the change in control of Empire , the operating history of the continuing company will be that of GSLM . The unaudited pro forma adjustments are as follows : a . To eliminate impairment expense recorded by Empire of loans made to GSLM during last six months of 2004 and eliminate the corresponding liability . b . To record the acquisition of GSLM by issuance of estimated 65 million shares of Empire common stock valued at the December 31 , 2004 market value of $ .34 per share . Fair value of property acquired was determined by independent valuation to be $ 19 to $ 23 million . c . To record the issuance of an additional 1,410,000 shares of common stock after December 31 , 2004 for proceeds of $ 127,000 required to complete the approval of the acquisition . d . To record elimination of operating expenses of Empire in excess of the estimated ongoing costs of the public company . F - 4