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 DECEMBER 31, 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:
FEBRUARY 14, 1998
There were 11,757,504 shares of the Issuer's common stock at a par value of
$.001 per share, outstanding as of December 31, 1997.
<PAGE>
MASON OIL COMPANY INC
BALANCE SHEET
<TABLE>
<CAPTION>
December 31, 1997 June 30, 1997
----------------- -------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 802,957 $ 1,587,627
Prepaid expenses 100,496 1,904
------------ ------------
Total Current Assets 903,453 1,589,531
------------ ------------
Property and equipment, at cost
Unproved oil and gas properties,
full cost method 279,147 192,893
Vehicles 39,363 33,825
Oil and Gas Equipment 905,000 -
Other 7,356 2,530
------------ ------------
1,230,866 229,248
Less accumulated depreciation (6,685) (1,786)
------------ ------------
1,224,181 227,462
Other noncurrent assets
Organization costs, net of amortization 571 1,048
Deposits 22,307 -
------------ ------------
Total Other Asset 22,878 1,048
Total $ 2,150,512 $ 1,842,684
========= =========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts Payable and accrued liabilities $ 9,329 $ 19,165
Notes Payable - related parties 162,549 196,591
Current portion of notes payable 16,908 11,358
------------ -----------
Total Current Liabilities 188,786 227,114
Notes Payable - long term 6,512 11,011
Deferred Salary Payable 48,000 24,000
Stockholders' Equity
Common Stock, .001 par value, 50,000,000
shares authorized; 11,732,171 shares
issued and outstanding at December 31,
1997 and 10,890,504 issued and
outstanding at June 30, 1997 11,732 10,890
Additional paid-in-capital 2,489,459 1,881,801
Accumulated deficit (503,264) (310,554)
Foreign currency translation adjustment (90,713) (1,578)
------------ -----------
Total Stockholders' Equity 1,907,214 1,580,559
------------ ------------
Total Liabilities and Stockholders'
Equity $ 2,150,512 $ 1,842,684
========== ==========
</TABLE>
See notes to financial statements
CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIODS
ENDED DECEMBER 30, 1997
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
DEC. 31, 1997 DEC. 31, 1996
<S> <C> <C>
Costs and expenses
Selling, general and administrative $ 213,551 $ 44,735
---------- -----------
Total Operating Costs and
Expenses 213,551 44,735
Other (income) expense
Interest income (27,501) (99)
Interest expense 6,660 5,546
----------- ----------
Net income (loss) $ (192,710) $ (50,182)
========== ========
Net loss per common share $ (.01) $ (.01)
========== ========
Weighted average number of
shares outstanding 11,092,463 9,225,454
</TABLE>
See notes to financial statements
<PAGE>
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS
ENDED DECEMBER 30, 1997
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
DEC. 31, 1997 DEC. 31, 1996
<S> <C> <C>
Costs and expenses
Selling, general and administrative $ 130,491 $ 44,679
----------- ----------
Total Operating Costs and
Expenses 130,491 44,679
Other (income) expense
Interest income (12,871) (19)
Interest expense 4,864 4,159
----------- ----------
Net income (loss) $ (122,484) $ (48,819)
========= ========
Net loss per common share $ (.01) $ (.01)
Weighted average number of shares
outstanding 11,294,420 9,225,454
</TABLE>
See notes to financial statements
<PAGE>
MASON OIL COMPANY
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS
ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
DEC. 31, 1997 DEC. 31, 1996
------------- -------------
<S> <C> <C>
Cash flows used for operating activities
Net loss $ (192,710) $ (50,182)
Adjustments to reconcile net
loss to net cash used in
operating activities
Depreciation and amortization 1,950 -
Prepaid expenses and other assets (99,778) -
Accounts payable and other
liabilities 19,761 17,897
--------- ----------
Net cash used for operating
activities 270,777 (32,285)
--------- ----------
Cash flows used by investing activities
Oil and gas exploration expenses (63,317) (2,431)
Oil and gas acquisition costs (51,210) -
Purchase of drilling rig (300,000) -
Purchase of vehicles and office
furniture (17,198) -
-------- ---------
Net used for investing
activities (431,725) (2,431)
-------- --------
Cash flows from financing
activities
Advances from stockholders - 29,107
Payments on long-term debt (6,086) -
Proceeds from notes payable 10,921 -
-------- -------
Net cash flows from
financing 4,835 29,107
-------- -------
Net effect of currency fluctuations
on cash (87,003) (380)
-------- --------
Net increase (decrease) in cash (784,670) (5,589)
Beginning cash balances 1,587,627 12,277
--------- ---------
Ending cash balances 802,957 6,288
========= =========
Supplemental non-cash flow disclosures
During the quarter ended December 31, 1996, a shareholder of the Company
forgave a note in the amount of $2,500 which was recorded as additional
paid-in-capital.
During the quarter ended December 31, 1996, IAN Holdings Limited
exchanged all 100 shares issued and outstanding for 6,000,000 newly issued
unregistered shares of Mason Oil Company.
During the three months ended December 31, 1997, the Company issued
806,667 shares of stock valued at 605,000 towards the purchase of a drilling
rig.
<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.
- - -------------------------------------------------------------------
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 purchased a 50% equity interest in a Cabot 100 drilling rig
as referenced in the Company's Form 8-K filed with the Securities and Exchange
Commission on December 11, 1997. Although their can be no assurance that the
Company will commence drilling in the near future, if such drilling operations
commence, the Company could produce revenues from such drilling operations.
The Company has agreed to purchase Mataranka Oil NL of Sydney, Australia
("Mataranka") pursuant to a letter of intent signed by Mataranka. The Company
anticipates that the purchase of Mataranka will be consummated within the next
twelve (12) months. Once the purchase is consummated, the Company may begin
realizing revenue from exploration activities on certain parcels of land
licensed to Mataranka.
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, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended,
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.
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 3.1 Articles of Incorporation of the Registrant (Filed as Exhibit
3.1 to the Registrant's Form 10-SB-A1, Reg. No. 0-28184 filed May 31, 1996).
*Exhibit 3.2 Articles of Amendment to Articles of Incorporation. (Filed as
Exhibit 3.2 to the Registrant's Form 10-SB-A1, Reg. No. 0-28184 filed May 31,
1996).
*Exhibit 3.3 Bylaws of the Registrant. (Filed as Exhibit 3.3 to the
Registrant's Form 10-SB-A1 Reg. No. 0-28184 filed May 31, 1996).
*Exhibit 3.4 Amended Bylaws of the Registrant. (Filed as Exhibit 3.4 to
the Registrant's Form 10-SB-A1, Reg. No. 0-28184 filed May 31, 1996).
*Exhibit 10 Stock Purchase Agreement, dated September 10, 1996, by and
between Craig Carpenter, Mason Oil Company, Inc., Paul B. Ingram and John L.
Naylor. (Filed as Exhibit 2.1 to the Registrant's Form 10-QSB Reg. No.
000-28184 filed November 15, 1996).
*Exhibit 10.1 Stock Purchase and Sale Agreement, dated October 14, 1996,
between the Registrant, Paul Ingram and John L. Naylor. (Filed as Exhibit 2.2
to the Registrant's Form 10-QSB Reg. No. 000-28184 filed November 15, 1996).
*Exhibit 10.2 Access Agreement between Anangu Pitjantjatjara and John
Leonard and Paul Bryan Ingram. (Filed as Exhibit 2.5 to the Registrant's Form
10-QSB, Reg. No. 000-28184 filed February 21, 1997).
*Exhibit 10.3 Petroleum Exploration License (PEL) No. 61and PEL Agreement.
(Filed as Exhibit 2.3 to the Registrant's Form 10-QSB Reg. No. 000-28184 filed
February 21, 1997).
*Exhibit 10.4 Petroleum Exploration License No. 63 and PEL Agreement.
(Filed as Exhibit 2.4 to the Registrant's Form 10-QSB Reg. No. 000-28184 filed
February 21, 1997).
*Exhibit 10.5 Joint Venture Agreement between Hemley Exploration PTY.
LTD., an Australian corporation and PT.PUTRA BAKTI MAHKOTA, an Indonesian
corporation.
*Exhibit 10.6 Subscription Agreement and Investment Representation, dated
February 28, 1997. (Filed as Exhibit 10.1 to the Registrant's Form 10-QSB Reg.
No. 000-28184 filed May 20, 1997).
*Exhibit 10.7 Consulting Fee Agreement dated February 28, 1997. (Filed as
a plan to the Registrant's Registration Statement in Form S-8 Reg. No.
333-24467 filed April 3, 1997).
*Exhibit 10.8 Amendment No. 1 to Consulting Fee Agreement dated May 8,
1997, amending the Consulting Fee Agreement dated February 28, 1997, and
previously filed with the Securities and Exchange Commission on a Form S-8
Registration Statement dated March 25, 1997. (Filed as Exhibit 10.2 to the
Registrant's Form 10-QSB Reg. No. 000-28184 filed May 20, 1997).
* Exhibit 24 Power of Attorney filed with Registrants September 30, 1997
Form 10-QSB dated November 13, 1997
Exhibit 27 Financial Data Schedule
*Exhibits incorporated herein by reference.
(b) Forms 8-K filed during the last quarter. The Company filed a
report on Form 8-K on December 11, 1997.
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.
February 19, 1998 MASON OIL COMPANY, INC.
/s/ Paul B. Ingram
Director and President
February 19, 1998 /s/Paul B. Ingram
------------------
Paul B. Ingram, President
(Principal Executive Officer)
and Director.
February 19, 1998 /s/John L. Naylor
-----------------
John L. Naylor, Secretary-Treasurer
(Principal Accounting and Financial
Officer)
February 19, 1998 /s/John Price
-------------
John Price, Director
February 19, 1998 /s/Geoffrey J. Pickles
----------------------
Geoffrey J. Pickles, Director
February 19, 1998 /s/ David A. Munns
------------------
David A. Munns, Director
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1997
<CASH> 802,957
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 903,453
<PP&E> 1,230,866
<DEPRECIATION> (6,685)
<TOTAL-ASSETS> 2,150,512
<CURRENT-LIABILITIES> 188,786
<BONDS> 0
0
0
<COMMON> 11,732
<OTHER-SE> 1,895,482
<TOTAL-LIABILITY-AND-EQUITY> 2,150,512
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 213,551
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,660
<INCOME-PRETAX> (192,710)
<INCOME-TAX> 0
<INCOME-CONTINUING> (192,710)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (192,710)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
</TABLE>
