OILEX, INC.
<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 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 0-28686
OILEX, INC.
_________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Nevada 33-0194489
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3050 Post Oak Blvd.,Suite 1760 Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
(713) 629-5998
(Issuer's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
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 _X__
The aggregate number of shares outstanding of the Issuer's Common
Stock, its sole class of common equity, was 26,837,775 as of
March
31, 1997.
This report consists of 12 pages.<PAGE>
Quarterly Report on Form 10-QSB
Index
Part I. Financial Information
Item I. Financial Statements (unaudited)
Balance Sheet - March 31, 1997
Statement of Operations -
Three Months Ended March 31, 1996 and 1997
Statement of Changes in Stockholder's Equity
Three Months Ended March 31, 1997
Statement of Cash Flows -
Three Months Ended March 31, 1996 and 1997
Notes to Financial Statements
<PAGE>
BALANCE SHEET
ASSETS
(Unaudited)
March 31, 1997
Current Assets:
Cash $ 26,172
Accounts receivable - oil and gas 9,929
Prepaid expenses 11,503
Bond investment receivable 66,000
Total Current Assets 113,604
Property and Equipment:
Oil and gas properties - full cost method
Subject to amortization 8,429,000
Undeveloped properties 1,217,000
Production equipment 300,584
Furniture and equipment 61,081
Accumulated depreciation, depletion
and amortization (71,838)
Net Property and Equipment 9,935,827
Investment in marketable securities 2,200,000
Organization costs, net of amortization 59,252
Total Assets $ 12,308,683
<PAGE>
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
March 31, 1997
Current Liabilities
Amounts due for oil and gas properties $ 1,085,000
Bonds payable 171,840
Advances from related parties 293,775
Accounts payable 19,460
Note payable to related parties 35,484
Total Current Liabilities 1,605,559
Deferred income tax liability 3,032,000
Commitments and contingencies --
Stockholders' Equity
Common stock, $.001 par value; 25,000,000
shares authorized; 26,837,775 shares
issued and outstanding 26,838
Paid-in capital 15,859,036
Accumulated deficit (8,214,750)
Total Stockholders' Equity 7,671,124
Total Liabilities and Stockholders' Equity $12,308,683
<PAGE>
STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31,
1997 1996
Revenue:
Oil and gas sales $ 26,444 $ 1,960
Other 5,500 --
31,944 1,960
Expenses:
Lease operating 182,166 3,316
General and administrative 149,261 637,555
Depreciation, depletion and
amortization 5,289 4,130
Interest 5,742 5,502
342,458 650,503
Loss before income taxes (310,514) (648,543)
Provision for income taxes -- --
Net loss $ (310,514) $ (648,543)
Loss per common share:
Primary and fully diluted $ (0.01) $ (0.05)
Weighted average common shares
outstanding:
Primary and fully diluted 25,782,275 14,327,570
<TABLE>
<PAGE>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 1997
(Unaudited)
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit Total
<S> <C> <C> <C> <C> <C>
Balance,
January 1, 1997 24,726,775 24,727 12,768,434 $(7,904,236)
4,888,925
Common stock issued
in exchange for oil and
gas properties 1,500,000 1,500 748,500 -- 750,000
Common stock issued for
personal services 25,000 25 12,475 -- 12,500
Conversion of
subordinated debt 436,000 436 132,627 -- 133,063
Common stock issued
in exchange for investment
in marketable securities 3,000,000 3,000 2,197,000 -- 2,200,000
Retirement of Treasury
Stock (350,000) (350) -- -- (350)
Unlocated (2,500,000) (2,500) -- -- (2,500)
Net loss -- -- -- (310,514) (310,514)
Balance,
March 31, 1997 26,837,775 26,838 15,859,036 (8,214,750)
$7,671,124
</TABLE>
<PAGE>
STATEMENT OF CASH FLOWS
(Unaudited)
For the Three Months Ended
March 31,
1997 1996
Cash Flows from Operating Activities:
Net loss $ (310,514) $ (648,543)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation, depletion and amortization 5,289 4,130
Increase in amounts due for oil and
gas properties 160,000 --
Decrease (increase) in advances from
related party 282,165 (518,700)
Increase in bonds receivable (66,000) --
(Decrease) increase in bonds payable (61,321) 4,792
Increase in notes payable to related
parties -- 502
Increase in accounts payable 19,210 250
Net cash provided (used) by
operating activities 28,829 (1,157,569)
Cash Flows Used in Investing Activities:
Increase in oil and gas properties, net (910,000) (1,126,234)
Investment in marketable securities (2,200,000) --
Increase in deferred income tax liability -- 757,459
Other (2,850) 1,646
Net cash used by investing activities (3,112,850) (367,129)
Cash Flows from Financing Activities:
Issuance of common stock for marketable
securities 2,200,000 798,660
Issuance of common stock for oil and
gas properties 750,000 770,935
Issuance of common stock for services 12,500 --
Conversion of subordinated bonds 133,063 --
Net Cash Provided by Financing Activities 3,095,563 1,506,545
Net Change in Cash 11,542 (18,153)
Cash, beginning of period 14,630 15,272
Cash, end of period $ 26,172 $ (2,881)
<PAGE>
NOTE 1 - GENERAL
The unaudited financial statements included herein for Oilex, Inc.
("Company") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission and include all adjustments which are,
in the opinion of management, necessary for a fair presentation. Certain
information and footnote disclosure required by generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations. Certain 1996 balances have been reclassified to conform
to the 1997 presentation. These financial statements include the accounts
of the Company.
The Company was incorporated under the laws of the State of Nevada on June
10, 1986 under the name of "Akteck, Inc." The Company later changed its
name to "Oilex International Investments, Inc.," and in July, 1996 changed
its name to "Oilex, Inc."
The primary business activities of Oilex, Inc. is oil and gas exploration,
development and acquisitions. The Company currently owns oil and gas
leaseholds and fee property interests in Texas, Mississippi, Colorado, West
Virginia and Utah.
NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION
There were no cash payments for interest nor income taxes during the three
months ended March 31, 1996 and 1997.
NOTE 3 - GOING CONCERN
The Company has incurred net losses since its inception creating an
accumulated deficit balance of $8,214,750 as of March 31, 1997.
Additionally, there is a working capital deficit of $1,491,955 at March 31,
1997.
These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management intends to make an equity financing
which will infuse additional working capital into the Company so that it
can exploit and develop its newly acquired oil and gas properties, thereby
generating a positive cash flow.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates continuity of operations, realization of assets
and liquidation of liabilities in the ordinary course of business, and
therefore do not include any adjustments that result from the outcome of
this uncertainty.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company is currently in dispute with a corporation owned by certain
stockholders of the Company. These stockholders were formerly part of the
management team of Oilex. They contend that Oilex owes the company
approximately $141,000 on a demand note. The Company has recorded a
$35,484 note payable to the Company at March 31, 1997. The amount in
dispute is related to certain general and administrative expense
reimbursements. Although no lawsuit has been filed, the management of
Oilex intends to vigorously defend its position in this matter should a
lawsuit be instituted. It believes that the amounts recorded in its
financial statements at March 31, 1997, for this note payable is correct
and accurate. Accordingly, no provision has been made for the disputed
difference herein.
NOTE 5 - STOCKHOLDER'S EQUITY
On February 20, 1997, the holders of the 15.0% Convertible Subordinated
Bonds elected to convert their bonds into 238,000 shares of Oilex common
stock, par value $0.001 per share, at $0.28 per share.
Additionally, on February 20, 1997, the Company issued 198,000 shares of
Oilex common stock, par value $0.001 per share, to three individual
investors.
In January, 1997, the Board of Directors approved the acquisition from a
related party of a 20% interest it owned in Oil Retrieval Systems, Inc.
("ORS") an Arizona corporation. ORS designs, engineers, produces and sells
portable swabbing units to the oil and gas industry. ORS is a development
stage company. Oilex issued 3,000,000 shares of common stock to the related
party in exchange for its ownership of 1,205,420 common shares of ORS.
NOTE 6 - SIGNIFICANT SUBSEQUENT EVENTS
In May, 1997, Funscape Corp. (formerly Imperial Energy Corp.), a Colorado
corporation, acquired ORS. Funscape Corp. issued 2.5 million shares of its
common stock in exchange for all of the outstanding shares of ORS.
Funscape Corp. has stockholders and management who are also stockholders
and have management responsibilities in Oilex and ORS.
<PAGE>
Part 1
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the first quarter of 1997, the company continued its basic
business plan of revitalizing the existing oil leases it had previously
acquired, and to that goal, sustained an additional $182,000 in lease
operating expenses, contrasted with only $26,444 in income. The reworking
of existing wells, rebuilding of roads and pipeline infrastructure and
rehabilitation of buildings on the various properties contributed to this
imbalance of costs vs. income.
During February, 1997, the company committed to acquire additional
leasehold acreage, for operational purposes, in exchange for $40,000 cash,
which gives the company a 75% net working interest in these leases. They
are generally located in the Scurry County region of Texas, where the
Company already has a significant number of operating leases, and will fit
in with the Company's plan of aggregating leases in a geographically
clustered area so that the portable swabbing units will not have great
distances to travel between wells.
During January, the company issued 25,000 shares of its common stock
to John Craig for services rendered as an independent consultant. Also
during the first quarter, the Company retired one of its outstanding bond
obligations by exchanging its 436,000 shares of its restricted common
stock, valued at $132,627, in retirement of the debt.
Additionally, on February 20, 1997, the Company issued 198,000 shares
of Oilex common stock, par value $0.001 per share, to three individual
investors, however, these transactions are being rescinded for failure of
consideration, since the investors did not timely tender their payments.
In January, 1997, the Board of Directors approved the acquisition from
Phoenix Resources, the largest single shareholder in the Company, of a 20%
interest it owned in Oil Retrieval Systems, Inc. ("ORS") an Arizona
corporation. ORS designs, engineers, produces and sells portable swabbing
units to the oil and gas industry. ORS is a development stage company.
Oilex issued 3,000,000 shares of common stock to the related party in
exchange for its ownership of 1,205,420 common shares of ORS. The
equipment manufactured by ORS is the swabbing equipment which the Company
is utilizing in its stripper well operations. Should the Company's return
on investment be realized as anticipated, the number of swabbing units to
be acquired will increase, as will the value of its investment in ORS, as
the manufacturer of the units.
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports of Form 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OILEX, INC.
(Registrant)
By: /s/ Oliver Timmins III
Oliver Timmins III, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
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<RECEIVABLES> 66000
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<CURRENT-ASSETS> 113604
<PP&E> 300584
<DEPRECIATION> 71838
<TOTAL-ASSETS> 12308683
<CURRENT-LIABILITIES> 1605559
<BONDS> 171840
<COMMON> 26838
0
0
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<SALES> 31944
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<CGS> 182166
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<OTHER-EXPENSES> 149261
<LOSS-PROVISION> 0
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<INCOME-PRETAX> (310514)
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