SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM __________TO__________
COMMISSION FILE NUMBER 0-21591
MASON OIL COMPANY, INC.
(Name of small business issuer as specified in its charter)
UTAH 87-1099747
(State of Incorporation) (I.R.S. Employer Identification No.)
6337 RAVENWOOD DRIVE
SARASOTA, FLORIDA 34243
(Address of principal executive offices)
(941) 351-3102
(Issuer's telephone number)
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 X No __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
NOT APPLICABLE
APPLICABLE ONLY TO CORPORATE ISSUERS
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE:
NOVEMBER 14, 1997
There were 10,890,504 shares of the Issuer's common stock at a par value of
$.001 per share, outstanding as of November 14, 1997.
<PAGE>
PART I
FINANCIAL INFORMATION
MASON OIL COMPANY, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 JUNE 30, 1997
------------------ -------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,482,443 $ 1,587,627
Prepaid expenses 1,017 1,904
----------- ----------
Total Current Assets 1,483,460 1,589,531
---------- ----------
Property and equipment, at cost
Unproved oil and gas properties,
full cost method 216,996 192,893
Vehicles 31,603 33,825
Other 5,076 2,530
-------- ---------
253,675 229,248
Less accumulated
depreciation (5,387) (1,786)
----------- --------
248,288 227,462
----------- --------
Other noncurrent assets
Organization costs 942 1,048
Deposits 21,668 -
Total Other Assets 22,610 25,691
Total 1,754,358 1,842,684
========= =========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts Payable $ 9,655 $ 19,165
Notes payable - related party 177,207 196,591
Current portion of notes payable 11,676 11,358
Total Current Liabilities 198,538 227,114
------- -------
Notes payable - long term 7,197 11,011
Deferred salary payable 36,000 24,000
Stockholders' equity
Common Stock, $.001 par value,
50,000,000 shares authorized;
10,890,504 shares issued and
outstanding at September 30,
1997 and June 30,1997 10,890 10,890
Additional paid-in capital 1,881,801 1,881,801
Accumulated deficit (380,780) (310,554)
Foreign currency translation adjustment 712 (1,578)
--------- ---------
Total Stockholders' equity 1,512,623 1,580,559
--------- ---------
Total liabilities and stockholders'
deficit $1,754,358 $1,842,684
========== =========
See notes to financial statements.
</TABLE>
<PAGE>
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS
ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
SEP. 30, 1997 SEP. 30, 1996
------------- -------------
<S> <C> <C>
Costs and expenses
General and administrative $84,513 $56
------ --
Total operating costs
and expenses 84,513 56
Other (income) expense
Interest income (17,693) (80)
Interest expense 3,406 1,387
----- -----
Net loss $(70,226) $(1,419)
======== =======
Net loss per common share (.01) (14.19)
======== =======
Weighted average number of
shares outstanding 10,890,504 100
========== =======
</TABLE>
See notes to financial statements.
<PAGE>
- ------
MASON OIL COMPANY, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIODS
ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
SEP. 30, 1997 SEP. 30, 1996
------------- -------------
<S> <C> <C>
Cash flows used for operating
activities
Net loss $(70,226) $(1,363)
Depreciation and amortization 3,671 -
Adjustments to reconcile net
loss to net cash used in
operating activities
Prepaid expenses and other assets 2,822 -
Accounts payable and accrued
liabilities 2,560 (4,110)
----- -------
Net cash used for operating
activities (61,173) (5,473)
----- ------
Cash flows used by investing
activities
Oil and gas exploration expenses (30,189) (2,431)
-------- -------
Net cash used for investing
activities (30,189) (2,431)
-------- -------
Cash flows from financing activities
Payments on long-term debt (2,732) -
------- --------
Net cash used for financing (2,732) -
------- --------
Net effect of currency
fluctuations on cash (11,090) (81)
-------- -------
Net increase (decrease) in cash (105,184) (7,985)
Beginning cash balances 1,587,627 7,985
--------- -----
Ending cash balances $1,482,443 $ -
========= =======
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
- ---------------------------------------------
The summary of Mason Oil Company's, Inc. (the "Company") significant
accounting policies are incorporated by reference to the Company's annual
report on Form 10-KSB dated June 30, 1997.
The accompanying unaudited condensed financial statements reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the results of operations, financial position and cash flows.
The results of the interim period are not necessarily indicative of the
results for the full year.
On October 14, 1996 the stockholders of IAN Holdings Limited (IAN)
exchanged all of the issued and outstanding common stock shares of IAN for
6,000,000 newly issued unregistered shares of Mason Oil. The transaction was
accounted for as a reverse acquisition, with IAN as the acquirer. The
historical financial statements prior to October 14, 1996 are those of IAN and
its subsidiaries.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
- -------------------------------------------------------------------
The Company: An Introduction
- ----------------------------
The Company is a Utah corporation, formed in 1980. Since 1981 and until
recently, the Company was dormant with no significant assets or liabilities.
Controlling interest was acquired in September 1996 by Paul B. Ingram and John
L. Naylor. The Ingram-Naylor partnership has sold its 100% working interest
in two South Australian oil and gas exploration licenses, known as Petroleum
Exploration Licenses 61and 63 ("PEL 61 and 63"), to the Company, in exchange
for six million shares of the Company's common stock. The PELs are held by
Hemley Exploration Pty. Ltd., an Australian corporation and wholly-owned
subsidiary of the Company.
The area covered by the PELs is roughly described as a portion of the
Eastern Officer Basin, consisting of 17,188 square kilometers (4.2 million
acres), situated approximately 200 miles south of Alice Springs and
approximately 700 miles north of Adelaide. Although the location is remote
from populated areas, a modern railway and a year-round, sealed highway
service the site, and provide access from the site to a refinery at Alice
Springs to the north, and a refinery and deep water port at Port Augusta and
Adelaide to the south. The terrain is relatively flat, making access to rail
and highway uncomplicated. Due to the remoteness of the site, it is
anticipated that there will be minimal disturbance to human population, flora
or fauna. Climactic conditions typically allow operations 350 days of the
year.
Ability of Company to Continue
- ----------------------------------
The Company has not had revenues from operations in either of the last
two fiscal years. The Company's plan of operation for the next twelve months
is set forth below.
Given its current cash position and resources, the Company anticipates
that it can satisfy its cash requirements, at current operating level, for a
period of one year. The Company will continue to conduct investigations and
evaluations of promising exploration and development opportunities, and will
conduct testing and gather data with respect to such properties, but will
defer any substantial exploration or production activities pending receipt of
additional financing.
The Company plans to seek to raise additional capital to fund future
exploration and development operations, through the issuance of additional
equity in either the private or public markets within the next 12 months.
There can be no assurance that the Company will be able to obtain any such
financing.
The Company is proceeding with negotiations for the purchase of a 50%
equity interest in a drilling rig as referenced in Item 1 of Form 10KSB for
the fiscal year ended June 30, 1997, filed with the Securities and Exchange
Commission on October 14, 1997.
The Company does not anticipate any significant changes in the number of
employees, pending receipt of additional funding and commencement of
exploration and development activities.
Forward-Looking Statements
- --------------------------
The foregoing and subsequent discussion contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, which are intended to be
covered by the safe harbors created thereby. These forward-looking statements
include the plans and objectives of management for future and possible further
capitalization of the Company. The forward-looking statements contained
herein are based on current expectations that involve numerous risks and
uncertainties. Assumptions relating to such current expectations involve
judgments with respect to, among other things, future economic, competitive
and market conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are beyond and
control of the Company. Although the Company believes that the assumptions
could be inaccurate and therefore there can be no assurance that the
forward-looking statements included in this Form 10-QSB will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation of the Company or any other person
that the objectives and plans of the Company will be achieved.
Results of Operations
- -----------------------
The Company is currently in the exploration stage. During the quarterly
period ended September 30, 1997, the Company received interest income of
$17,693. Expenses during this period totaled $87,919 and the Company
sustained a net loss during this period of $70,226.
PART II
Item 1. Legal Proceedings.
- ---------------------------
Not applicable.
Item 2. Changes in Securities and Use of Proceeds.
- ---------------------------------------------------
None; not applicable.
<PAGE>
- ------
Item 3. Defaults Upon Senior Securities.
- -----------------------------------------
There has been no material default in the payment of principal, interest,
a sinking or purchase fund installment, or any other material default not
cured within 30 days with respect to any indebtedness of the Company exceeding
five percent (5%) of the total assets of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
No matters were submitted to a vote of the Company's security holders
during the third quarter of the fiscal year covered by this report.
Item 5. Other Information.
- ---------------------------
The Company has no other information to report.
Item 6. Exhibits and Reports on Form 8-K.
- ------------------------------------------
(a) Exhibits
Exhibit 24 Power of Attorney (included on page 8 herewith).
Exhibit 27 Financial Data Schedule
*Exhibits incorporated herein by reference.
(b) Forms 8-K filed during the last quarter.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
November 13, 1997 MASON OIL COMPANY, INC.
/s/ Paul B. Ingram
Director and President
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS by these presents that each person whose signature to
this Quarterly Report appears below hereby constitutes and appoints Paul B.
Ingram and John L. Naylor, and each of them as his true and lawful
attorney-in-fact and agent, with full power of substitution, to sign on his
behalf individually and in the capacity stated below and to perform any acts
necessary to be done in order to file all amendments and post-effective
amendments to this Quarterly Report, and any and all instruments or documents
filed as part of or in connection with this Quarterly Report or the amendments
thereto and each of the undersigned does hereby ratify and confirm all that
said attorney-in-fact and agent, or his substitutes, shall do or cause to be
done by virtue hereof.
In accordance with the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused this
report to be signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
November 13, 1997 /s/Paul B. Ingram____________
------------------
Paul B. Ingram, President (Principal Executive Officer) and Director.
November 13, 997 /s/John L. Naylor_____________
------------------------------
John L. Naylor, Secretary-Treasurer
(Principal Accounting and Financial
Officer)
November 13, 1997 /s/John Price__________________
-------------
John Price, Director
November 13, 1997 /s/Geoffrey J. Pickles___________
----------------------
Geoffrey J. Pickles, Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,482,443
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,483,460
<PP&E> 253,675
<DEPRECIATION> (5,387)
<TOTAL-ASSETS> 1,754,358
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 10,890
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,754,358
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 84,513
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,406
<INCOME-PRETAX> (70,226)
<INCOME-TAX> 0
<INCOME-CONTINUING> (70,226)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (70,226)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
</TABLE>
