<PAGE>
U. S. 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 September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-23729
CHEROKEE MINERALS AND OIL, INC.
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(Name of Small Business Issuer in its Charter)
NEVADA 87-0575839
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
8989 South Scofield Circle
Sandy, Utah 84093
--------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-2912
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
(1) Yes X No (2) Yes X No
--- --- --- ---
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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:
October 15, 1998
4,474,539
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
<TABLE>
CHEROKEE MINERALS AND OIL, INC.
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
September 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ - $ -
Total Current Assets - -
TOTAL ASSETS $ - $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 33 $ 225
Shareholder payable 1,667 1,667
Total Current Liabilities 1,700 1,892
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 2000,000,000
shares authorized, 4,474,539 and 2,474,539
shares issued and outstanding, respectively 4,475 2,475
Additional paid-in capital 513,709 493,531
Deficit accumulated during the development
stage (519,884) (497,898)
Total Stockholders' Equity (Deficit) (1,700) (1,892)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ - $ -
</TABLE>
<TABLE>
CHEROKEE MINERALS AND OIL, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<CAPTION>
From
Inception
on January 15,
For the Three Months For the Nine Months 1986 Through
Ended September 30, Ended September 30, September 30,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
REVENUE $ - $ - $ - $ - $ -
LOSS ON
DISCONTINUED
OPERATIONS (6,463) - (21,986) (1,645) (519,884)
NET LOSS $ (6,463) $ - $(21,986) $(1,645) $(519,884)
BASIC LOSS PER
SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
BASIC WEIGHTED
AVERAGE NUMBER
OF SHARES
OUTSTANDING 4,474,539 2,474,539 3,807,872 2,474,539
</TABLE>
<TABLE>
CHEROKEE MINERALS AND OIL, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
At inception on April 30, 1919 - $ - $ - $ -
Common stock issued for cash
at approximately $4.46 per share 55,200 55 245,933 -
Common stock issued for services
at approximately $0.33 per share 10,656 11 3,489 -
Common stock issued for placer
mining leases at approximately
$0.50 per share 40,000 40 19,960 -
Contributed capital - - 16,993 -
Net loss from inception April 30,
1919 to December 31, 1994 - - - (286,481)
Balance, December 31, 1994 105,856 106 286,375 (286,481)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 105,856 106 286,375 (286,481)
Common stock issued for
services at $0.09 per share 2,368,680 2,369 204,577 -
Reverse split adjustment 3 - - -
Contributed capital - - 2,125 -
Net loss for the year ended
December 31, 1996 - - - (209,525)
Balance, December 31, 1996 2,474,539 2,475 493,077 (496,006)
Contributed capital - - 454 -
Net loss for the year ended
December 31, 1997 - - - (1,892)
Balance, December 31, 1997 2,474,539 $ 2,475 $ 493,531 $(497,898)
Common stock issued for cash at
$0.01 per share (unaudited) 2,000,000 2,000 8,000 -
Contributed capital (unaudited) - - 12,178 -
Net loss for the nine months ended
September 30, 1998 (unaudited) - - - (21,986)
Balance, September 30, 1998
(unaudited) 4,474,539 $ 4,475 $ 513,709 $(519,884)
</TABLE>
<TABLE>
CHEROKEE MINERALS AND OIL, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception
on January 15,
For the Three Months For the Nine Months 1986 Through
Ended September 30, Ended September 30, September 30,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Income (loss) from
operation $ (6,463) $ - $ (21,986) $(1,645) $(519,884)
Adjustments to
reconcile net income
to net cash provided
by operating activities:
Amortization and
depreciation expense - - - - 23,500
Contributed capital for
expenses 9,883 - 12,178 1,645 31,748
Stock issued for services - - - - 206,948
Increase in shareholder
payable - - - - 1,667
Increase in accounts
payable (3,420) - (192) - 33
Net Cash Provided
(Used) by Operating
Activities - - (10,000) - (255,988)
CASH FLOWS FROM INVESTING
ACTIVITIES - - - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of common stock
for cash - - 10,000 - 255,988
Net Cash Provided (Used)
by Financing Activities - - 10,000 - 255,988
INCREASE (DECREASE IN CASH
AND CASH EQUIVALENTS - - - - -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD - - - - -
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ - $ - $ - $ - $ -
Cash Paid For:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
NON-CASH FINANCING
ACTIVITIES
Common stock issued
for services $ - $ - $ - $ - $206,948
Contributed capital for
expenses $9,883 $ - $12,178 $ 1,645 $ 31,748
Common stock issued
for subsidiary $ - $ - $ - $ - $ 20,000
</TABLE>
CHEROKEE MINERALS AND OIL, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 1998 and December 31, 1997
(Unaudited)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated in 1919 under the laws of the State of
Nevada as Lincoln Divide Mining Company. In July, 1973, the name of the
Company was changed to Lincoln Divide Industries, Inc. In February, 1980, the
name of the Company was changed to Cherokee Mineral and Oil, Inc. The
Company's operations primarily consisted of the acquisition and preliminary
exploration of two placer-mining leases situated in Canada. Presently, the
Company does not engage in any business.
The Company has authorized 200,000,000 shares of $0.001 par value
common stock. The Company has elected a calendar year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
b. Provision for Taxes
At September 30, 1998, the Company had net operating loss carryforwards
of approximately $230,000 that may be offset against future taxable income
through 2013. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the loss carryforwards are offset by a valuation account of the same amount.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal, recurring nature.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company has not established revenues
sufficient to cover its operating costs and allow it to continue as a going
concern. Management believes that the Company will soon be able to generate
revenues sufficient to cover its operating costs. Currently management is
committed to covering all operating and other costs until sufficient revenues
are generated.
NOTE 4 - DISCONTINUED OPERATIONS
The Company discontinued its operations in 1985. Therefore, all
revenues generated by the Company have been netted against the expenses and
are grouped into the discontinued operations line on the statement of
operations.
NOTE 5 - STOCK TRANSACTIONS
The Company issued 374,000 shares of common stock for services valued
at $187,000 during February, 1996. On March 3, 1996, the board of directors
approved a reverse stock split on a basis of 50 for 1. The reverse stock
split has been applied retroactively to the financial statements. The Company
subsequently issued 1,994,680 post split common shares for services valued at
$19,946.
On January 27, 1998, the Board of Directors approved a change on the
par value from $0.01 to $0.001, while retaining the currently authorized
capital. The change in par value has been applied retroactively to the annual
statements. The Company issued 2,000,000 shares of common stock for $10,000
cash, which was paid directly to the Company's attorney for legal fees.
NOTE 6 - RELATED PARTY TRANSACTION
During 1997, an officer and shareholder of the Company paid expenses on
behalf of the Company. At September 30, 1998 the amount owed to the
shareholder was $1,667.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations since the
calendar year ended December 31, 1991, or during the quarterly period ended
September 30, 1998. During this period, the Company received revenues of $0.
During the same period, losses from discontinued operations were ($6,463) and
net income totaled ($6,463).
The Company's plan of operation for the next 12 months is to continue
to seek the acquisition of assets, properties or businesses that may benefit
the Company and its stockholders. Management anticipates that to achieve any
such acquisition, the Company will issue shares of its common stock as the
sole consideration for such acquisition.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which the Company expects to pay from its cash resources.
Results of Operations.
- ----------------------
During the quarterly period ended September 30, 1998, the Company
had no business operations. During this period, the Company received total
revenues of $0 and had net income of ($6,463).
Liquidity.
- ----------
At September 30, 1998, the Company had no current assets, with total
current liabilities of $1,700. Total stockholder's equity was ($1,700).
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
- ----------------------------
None; not applicable.
Item 2. Changes in Securities.
- --------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
- ------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
- --------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
- ----------------------------
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
- -------------------------------------------
(a) Exhibits.
Financial Data Schedule.
(b) Reports on Form 8-K.
None.
<PAGE>
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.
CHEROKEE MINERALS AND OIL, INC.
Date: 10/17/98 By /s/ Joe Johnson
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Joe Johnson
Director and President
Date: 10/17/98 By /s/ Melinda Johnson
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Melinda Johnson
Director and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 001054524
<NAME> CHERKOEE MINERALS AND OIL, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1700
<BONDS> 0
0
0
<COMMON> 4475
<OTHER-SE> (6175)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (21986)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21986)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
