UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 For the Quarterly Period ended December 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the tr
Commission File No. 2-42114
SIGNATURE MOTORCARS, INC.
--------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
(Formerly International Royalty & Oil Co.)
Nevada 75-1310613
--------------- --------------------
(State or other jurisdiction of (I.R.S.. Employer I.D. No.)
incorporation or organization)
7738 Forest Lane, #102, Dallas, Texas 75230
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(972) 386-7700
--------------------
Issuer's telephone number, including area code
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES NO XX
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
As of July 16, 1999, Signature had outstanding 7,449,835 shares of its common
stock, par value $0.0167 per share.
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS.................................4
PART II
PART II - OTHER INFORMATION....................................................5
SIGNATURES.....................................................................5
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]
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<PAGE>
ITEM 1. FINANCIAL STATEMENTS
The financial statements included herein have been prepared by Signature
Motorcars, Inc. without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. However, in the
opinion of management, all adjustments (which include only normal recurring
accruals) necessary to present fairly the financial position and results of
operations for the periods presented have been made. The financial statements
should be read in conjunction with the financial statements and notes thereto
included in Signature's SEC Form 10KSB for the period ended September 30, 1998.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]
3
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SIGNATURE MOTORCARS, INC.
BALANCE SHEETS
(UNAUDITED)
ASSETS
December 31, 1998 September 30, 1998
----------------------------------------------
Current Assets:
Cash $ 53 $ 173
------------------ ------------
Total Current Assets 53 173
Net Assets from
Discontinued Operations 24,446 24,446
---------- -------------
TOTAL ASSETS $ 24,499 $ 24,619
================= ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and
accrued Liabilities $ 10,950 $ 4,800
------------- -------------
TOTAL LIABILITIES 10,950 4,800
Stockholders' Equity:
Common Stock 106,860 106,860
Additional Paid in Capital 7,442,102 7,442,102
Retained Earnings (7,466,153) (7,459,883)
------------ -----------
82,809 89,079
Less Treasury Stock (69,260) (69,260)
------------- -------------
Stockholders' Equity (Deficit) 13,549 19,819
------------- -------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 24,499 $ 24,619
============== ===============
F-1
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SIGNATURE MOTORCARS, INC.
STATEMENTS OF OPERATIONS
Quarters Ended December 31, 1998 and 1997
(UNAUDITED)
1998 1997
------------------------------------------
Revenues:
Miscellaneous Income $ - $ 225
------------ ---------
Total Revenues - 225
------------ ---------
Operating Expenses:
General & Administrative 5,044 6,434
------------ ---------
Loss From Operations (5,044) (6,209)
------------ ---------
Other Income (Expense):
Interest Expense 900 900
Gain on Sale of Assets - 25,000
------------- --------
Total Other Income (Expense) (900) 24,100
------------- --------
Loss From Continuing Operations (5,944) 17,891
------------- --------
Discontinued Operations (326) 26
---------- --------
Net Income/(Loss) $ (6,270) $ 17,917
========== ============
Income (Loss) Per Common Share:
From Continuing Operations $ (0.00) $ (0.01)
====== ======
Net Income/(Loss) $ (0.00) $ (0.01)
====== ======
Weighted Average Common
Shares Outstanding 6,398,835 2,972,835
========= ============
F-2
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<TABLE>
<CAPTION>
SIGNATURE MOTORCARS, INC.
STATEMENTS OF CASH FLOWS
Quarters Ended December 31, 1998 and 1997
(UNAUDITED)
1998 1997
-----------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net Income/(Loss) $ (6,270) $ 17,917
Adjustments to reconcile net lost
to net cash provided by (used in)
operating activities:
Shares issued for services - 4,500
Gain on Sale of Assets - (25,000)
Changes in operating assets and Liabilities:
Accrued Liabilities 6,150 -
-------- ---------
Net cash provided by (used in) operating activities (120) (2,583)
-------- ---------
Cash flows from investing activities:
Proceeds from sale of equity investment - 25,000
-------- ---------
Cash flows from financing activities:
Issuance of common stock - 5,000
-------- ---------
Net Increase (decrease) in cash and cash equivalents (120) 27,417
Cash at beginning of period 173 78
-------- ---------
Cash at end of period $ 53 $ 27,495
========== ============
</TABLE>
F-3
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Caution Respecting Forward-Looking Information
This Form 10-QSB includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act and the Company desires to take advantage of
the "safe harbor" provisions thereof. Therefore, the Company is including this
statement for the express purpose of availing itself of the protections of such
safe harbor provisions with respect to all of such forward-looking statements.
The forward-looking statements in this Form 10-QSB reflect the Company's current
views with respect to future events and financial performance. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ from those anticipated. In the Form 10-QSB,
the words "anticipates," "believes, "expects," "intends," "future" and similar
expressions identify forward-looking statements. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that may arise after the date hereof. All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by this section.
Overview
This discussion should be read in conjunction with Management's Discussion and
Analysis of Financial Conditions and Results of Operations in Signature's annual
report on Form 10-KSB for the year ended September 30, 1998.
Oil prices continued to decline during the first quarter of the fiscal year so
management shifted its focus to securing a merger/acquisition candidate.
Management reviewed and investigated more than ten merger candidate
possibilities. As of December 31, 1998 no agreements or contracts were
formalized or executed.
Signature is suffering from shortages of working capital, indebtedness and due
or past due current liabilities. The Company is in need of additional investment
capital, strategic alliances, or a sale, or merger/acquisition.
Liquidity and Capital Resources
As discussed in the Overview above and as outlined in the Form 10-KSB for fiscal
year September 30, 1998 including its financial statements, the Company's
operating losses and its working capital deficit raise doubt about its ability
to continue as a going concern.
During the year ended September 30, 1998, the Company began acquiring oil and
gas properties with the intention of developing the properties and becoming an
oil and gas producer. However, with the drop in oil prices during the period,
the Company has decided to discontinue those operations. Accordingly, the oil
and gas operations are reported as discontinued in the accompanying statement of
operations and the net oil and gas assets are reported in the accompanying
balance sheet as net assets of discontinued operations. The Company's assets as
of December 31, 1998 were $24,499, and its liabilities were $10,950.
Results of Operations
The Company has suffered continuing net losses from operations and has a deficit
in working capital as of December 31, 1998. As explained above, without a merger
partner, the Company has nominal operations. The Company is dependant on a
merger partner or raising additional funds in order to provide capital for the
Company to continue as a going concern. The Company has had nominal revenues
from oil and gas activities for the three months ended December 31, 1998 and
1997.
On January 26, 1998, the Company entered into a Letter Agreement with Trebor
Resources Co. of Dallas, Texas, for acquisition of 12.5% working interest in an
oil and gas concession located in Queensland, Australia. The Company agreed to
pay $12,500 for the 12.5% working interests and paid an initial payment of
$2,500 on January 26, 1998. The balance will be paid upon notice that Authority
to Prospect (ATP) 638 has officially been issued by the Queensland government.
The concession, known as ATP 638, is located in the western part of Queensland
and covers approximately 130,000 acres. A preliminary seismic evaluation
4
<PAGE>
showed several potential structures on the concession which need to be further
evaluated in order to attempt to develop them into possible drillable prospects.
On December 10, 1998 the Company received a Cash Call notice from Trebor
Resources Co. regarding the Queensland ATP 638p requiring the Company to pay the
balance ($10,000 USD) due Trebor on or before December 31, 1998 per the terms of
the January 26, 1998 Letter Agreement between Signature and Trebor. Due to low
oil prices (approximately $10.00 per barrel or less) and the Company's financial
constraints and expanded focus, the Company was compelled to forfeit its
interest in ATP 638p, however, management was able to obtain an understanding
with Trebor on December 21, 1998 where they would return the $2,500 to the
Company subject to Trebor obtaining favorable funding for the project.
Impact of the Year 2000 Issue
The year 2000 poses certain issues for business and consumer computing,
particularly the functionality of software for two-digit storage of dates and
special meanings for certain dates such as 9/9/99. The year 2000 is also a leap
year, which may lead to incorrect calculations, functions or system failure. The
widespread use of computer programs that rely on these two-digit date programs
to perform computations and decision-making functions may cause information
technology systems to malfunction in and around the year 2000. Such malfunctions
may lead to significant business delays in the U.S. and internationally. The
problem exists for many kinds of software, including software for mainframes,
PCs and embedded systems. Many normal business activities will potentially be
impacted because information necessary to monitor and control various operations
is controlled by computers.
The Company has studied and tested its technologies systems impacted by the Year
2000 transition. The Company believes that its systems are Year 2000 compliant.
However, variability of hardware and software combinations may lead to
unforeseen problems. The Company does not believe that any problems that arise
with internal systems will be material or will require more than minimal costs
to overcome.
The Company's vendors are various and diverse and the bulk of the items
purchased by the Company are widely available. There are no problems which are
expected to arise due to vendors' failure to be Year 2000 compliant because
auxiliary channels should be available to the Company to acquire its supplies,
parts and other needs from other vendors should any particular vendor have a
problem due to noncompliance.
Due to the nature of the Company's business and its information and accounting
systems, costs to bring its systems into compliance have been immaterial.
PART II. - OTHER INFORMATION
NONE
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.
SIGNATURE MOTORCARS, INC.
Date: July 16, 1999 /s/ William R. Miertschin
-----------------------------------
By: William R. Miertschin, President, Chief
Executive Officer, Principal Accounting
Officer, Principal Financial Officer
5
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE
COMPANY'S DECEMBER 31, 1998 QUARTERLY REPORT ON FORM 10-QSB AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 53
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 24,499
<CURRENT-LIABILITIES> 10,950
<BONDS> 0
0
0
<COMMON> 106,860
<OTHER-SE> (93,311)
<TOTAL-LIABILITY-AND-EQUITY> 24,449
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 5,044
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 900
<INCOME-PRETAX> (5,944)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,944
<DISCONTINUED> (326)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,270)
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
</TABLE>
