(new to thread)
I ran across this "glimpse" from EDGAR (if this has already been posted - my apologies):
DYNAMIC AMERICAN CORP
Filed on Nov 18 1996
Management's Discussion and Analysis of Financial Condition and Results of Operations
A major factor which management considers in evaluating the financial condition and liquidity of the company is its debt structure. Management emphasizes maintaining a low debt level to increase the liquidity and stability of the Company in an uncertain economic environment. The Company's level of debt is shown by the following ratios:
Leverage Ratios 1995 1994 1993
---------------- ------- ------- ------
Debt to assets 10.6% 8.6% 16.0%
Total debt to equity 955.4% 9.4% 19.0%
It should be noted that the total debt-to-equity ratio is effected by the "mezzanine" booking of $38,000,000 in convertible preferred shares outstanding. The Company considers these shares equity. In time the Company believes that such shares shall be recorded as equity by its auditors. If this were to occur, the total debt-to-equity ratio would be 11.9%.
Capital Requirements -
Conclusion of the acquisition of the assets of Bolivian Tin & Silver has created a condition wherein the Company will require capital to maximize the value of the investment in the acquired assets. Currently management is considering possible capital requirements of up to $10,000,000 for general capital improvements to enhance the overall viability and profitability of the projects. Generally it is considered by management that the investment, if made, would be expended as follows:
(a) About $2,000,000 for capital improvements and operating capital
for the tin smelter. Of this amount, $500,000 would be invested in a
revolving concentrate purchase fund. This revolving concentrate purchase fund,
if funded, is expected to dramatically increase revenues and earnings of the
tin smelter.
It should be noted that pursuant to certain arrangements with the German corporation, $200,000 was deposited in the revolving concentrate purchase fund as of January, 1996. The result was an immediate increase in revenue to annual rate of $6,000,000 per year.
(b) About $5,000,000 invested in mine and mill development to
increase the likelihood of a continuing long-term stream of tin concentrates
for the smelter.
(c) About $3,000,000 in a hydro-electric generation plant. Such an
investment, if funded, could substantially reduce the overall cost of
electricity, a major cost of tin production. It is estimated that electrical
cost would be reduced from $0.07 per KWH to $0.01 per KWH. Experts who have
visited the site indicate a high likelihood that there is sufficient natural
resource energy to make a hydro-electric generation plant feasible.
Except as described below, the Company has no firm plans as to how it could obtain sufficient capital to maximize its investment and meet the afore- described capital requirements. At this time, the following options are being considered by management, together with investment bankers and other consultants:
(a) Public offering of shares to raise equity capital.
(b) Borrowing.
(c) Private placements.
(d) Sale of convertible debentures or debt instruments.
At the time of publication of this report, the Company has made some progress on its capital requirement as follows:
(a) A subsidiary of the Company has entered into an agreement with a
German corporation, whereby the German corporation has delivered $1,000,000
cash to the Company's subsidiary in exchange for right to purchase a minority
interest in the Company's tin smelter in Bolivia.
(b) The Company has received an offer with Vanity A.V.V. Aruba for
$11,000,000 in financing in exchange for 25% of the Company's outstanding
shares and 30% of the Company's Bolivian assets. This offer is subject to
satisfactory completion of an on-site inspection of the Company's assets in
Bolivia and satisfactory completion of a contract memorializing the agreement
between the parties. These undertakings have commenced at the time of
publication of this report.
(c) The Company, from time to time, has issued shares for services
and in consideration of private placements to meet on-going operating expenses
and capital expenditures.
Results of Operations -
This report includes the Company's first audited financial statement for the period ending only a few days after the dynamic and sweeping reorganization of the Company's structure and assets. Accordingly, revenue and earnings or losses that are a result of the afore described reorganization will be reported in subsequent quarterly and annual reports.
Effect of Recently Issued Financial Accounting Standards - -
For a discussion of the effect of recently issued financial accounting standards, see note 2 of notes to financial Statements.
Item 8. Financial Statements and Supplementary Data
See financial statements and supplementary financial data listed in Item 14.
Change in Fiscal Year End. The Company elected to change the fiscal year end from December 31 to September 30. The purpose of this change is for the financial statement of the Company to coincide with its fiscal year end of its operating subsidiaries in Bolivia. The accompanying financial statements are for the nine months ended September 30, 1995.
Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure
There were no changes in or disagreements with accountants on accounting and financial disclosure.
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