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Edgar Filing: TIDELANDS OIL & GAS CORP/WA - Form 10-K - page 33 / 83

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33 / 83

Edgar

Filing: TIDELANDS OIL & GAS CO

RP/WA - Form 10-K

ended

December

31,

2

$1,605,973

during

the

twelve

months

ended

director

and

two

offic

stock based

compensatio

Consulting

fees, legal

003.

Officers & Directors

Sala

twelve months ended December 31. 2003 ers to the Company n in the employment

December 31 as a result combined wi agreements o

fees,

and

financing

fees

increa

ries & , 2004

Fees

increased by

as

compared

to

the

of the

addition

of one

th the

increased

use of

f

officers

and

directors.

sed

by

$5,960,039

for

the

December 31,

2003. This

increase

resulted

compensation

for these

services

during a

twelve

months

ended

D

ecember 31, 2004 as

compared wit primarily fr period of hi

h the twelve months om the use of stock

ended based

gher

common

stock

prices.

The

remaining

increas

December

31,

2004

was

f

e in rom

G & A costs of $518,875 for

increases

in

travel

costs,

entertainmen

t, and payroll

employees.

The significant

premiums,

plus other e

additional

expansion of s

for the project

Company and t predevelopment

he need to

conserve

costs

required

the

cash

use

of

work signi

for general and adminis 31, 2004.

trative

expenses

during

the

twe

the twelve

months ended

office

rent, insurance

xpenses

associated with

cope ing

in the business plan

capital

for

certain

ficant issuances lve months ended

of stock December

GOODWILL IMPAIRMENT L International LLC partn to the sellers of the p

OSS: In

connection

with the

acquisition

of the Impact

ership interests in May 2004, the Company issued

artnership

interests

at

a

conversion

price

that

warrants required

the the

establishment of a

difference

in

the

n

asset and offsetting

strike

price

of

the

liability warrants

account to account for versus the price of the

common

stock

issuable

as of the date of issue on May 24,

2004.

The

original

  • -

    28-

amount of (utilizing

$20,558,000 was the Black-Scholes

determined under the procedures of option pricing method) and was recorded

E a

in connection

with the

acquisition on the Company's books for

June 30, Goodwill

2004.

from

the

At December

31,

2004,

Impact

acquisition

and

the Company

reviewed

after

applying

the

the pe the va recogn

measurement

determined

guidelines

stated in SFAS

that

an

impairment

charge

to

142 "Goodwill and Other Goodwill of $15,358,000 was

In ne

ITF 00-19 s Goodwill riod ended lue of the ition and tangibles" cessary.

GAIN ON REDUCTION OF WARRANTS LIABILITY: As described in the precedin a liability for the warrants issued and outstanding at May 24, 2004 wa

in accordance with EITF 00-19,

"Accounting for Derivative Financial

Indexed to, the mark to

and Potentially

market

process

Settled In,

called

for

in

A Company's Own that guidance,

Stock". As the Company

I a

g section, s recorded nstruments result of determined

that a reduction in warrants liability and corresponding $15,390,000 should be recorded at December 31, 2004.

gain in the amount of

NET LOSS: increased increase

Net loss of ($1,348,481) for the twelve mo

to in

($14,302,037)

the

amount

of

for the twelve

months

loss

of

$12,953,556.

In

nths ended December 31, 2003

ended cluded

December 31, 2004, an in the net loss from

for financing c

osts, consulting

by issuance of

common stock.

operations is $9,327,818 of expenses fees, and employee compensation paid

fees,

legal

FORWARD-LOOKING STATEMENTS:

We have included

forward-looking

statements in thi

s report.

For this purpose,

any fact

statements

contained in this report that are n

may

be

deemed

to

be

forward

looking

statements.

ot statements of Without limiting

historical the

foregoing, "estimate", comparable

words

"plan"

such as "may",

or

"continue"

"will", "expect" or the negative or

terminology

are

intended

to

identify

,

"believe", "anticipate", other variations thereof or

forward-looking

statements.

These statements by

and

actual

results

their nature may differ

involve substantia materially dependi

l ng

risks on a

and uncertainties, variety of factors.

Factors actual

that might cause

results

include,

forward-looking

statement

among

other

things,

ove

s to rall

differ

materially from

economic

and

business

conditions, industries

demand in which

for the Company's products, we compete or intend to compete

competitive

,

natural

factors

in

the

gas

availability

33

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