UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended February 29, 2000
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 0-7919
WYOMING OIL & MINERALS, INC.
(Exact name of registrant as specified in its charter)
Wyoming 83-0217330
State or other jurisdiction of incorporation I.R.S. Employer Identification
or organization Number
330 South Center
Suite 419
Casper, Wyoming 82601
(Address of principal executive offices)
Registrant's telephone number including area code: (307) 234-9638
Securities registered pursuant to section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 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.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the Registrant (151,145 shares). The aggregate market
value shall be computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
60 days prior to the date of filing. As of May 15, 2000 (based on $3.50 bid,
$3.50 asked) - $529,008.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date. May 15, 2000 -
546,500 shares.
DOCUMENTS INCORPORATED BY REFERENCE: None
Item 1. Business
Wyoming Oil & Minerals, Inc. (the Company), a Wyoming corporation, was
incorporated on February 23,1973 as Wyoming Coal Corporation. It was organized
primarily to hold and develop state and fee coal leases and secondarily to
acquire oil and gas properties and explore for, develop and produce oil and gas.
As the Company evolved, its emphasis shifted from holding and developing coal
leases to acquiring oil and gas leases and production. Some of the Company's
coal leases have been explored and found not to contain coal deposits in
commercial quantities and been dropped. As of the date of this report, the
Company's coal properties have all been sold or dropped. Since oil and gas
sales are now the Company's primary revenue source, its name was changed to
Wyoming Oil & Minerals, Inc. as approved at a shareholders meeting held August
10, 1981 to more accurately reflect the Company's business.
Generally, the economic success of the Company depends on its ability to
locate and purchase oil and gas properties or purchase or lease valuable oil and
gas prospects or mineral deposits. The Company must further operate, sell or
lease these deposits or prospects to others at a profit or develop the
properties itself or in conjunction with others.
In pursuing these goals, the Company encounters competition from major oil
and mining companies and other independent operators attempting to acquire
prospective oil and gas leases, coal leases, production and other mineral
interests. These sources of competition are both large and small energy
oriented companies operating in the states in which the Company does business or
may do business in the future. Some of these competitors are major oil and gas
and coal companies with substantial reserves and earnings records. Others are
small independents with varying degrees of stability. Some not only produce oil
and gas, but refine and market petroleum products. Some produce and market coal.
The Company may be in a position of competitive disadvantage with many of these
companies in that they have greater sources of capital, technical and management
personnel, research facilities and sources of information.
2
Compliance with statutory requirements respecting environmental quality may
necessitate significant capital outlays which may materially effect the earning
power of the Company or may cause material changes in the Company's proposed
business. In the past fiscal year, the Company expended less than $1,000 to
comply with environmental regulation. It does not contemplate spending
significant funds incidental to its operation in the present fiscal year to
comply with environmental regulations.
The Company markets its properties or interests in its properties to others
who will develop them while the Company retains an economic interest. The
Company also drills exploratory oil and gas wells by itself and in joint venture
with others. Additional funds are often needed to engage in these activities
and the Company from time to time finance all or some of its interests in these
projects by having other persons or entities bear the cost of drilling and/or
completion of wells in exchange for an interest in the particular well or
prospect.
The business of the Company is seasonal only to the extent that weather
conditions, particularly snow and cold in the winter, impede the ability of the
Company or others who may be developing properties in which the Company has an
interest to conduct exploratory activities, drilling production or mining
operations.
The Company has only one employee, its President, Jack C. Bradley, Jr., who
receives $1000 monthly and reimbursement of his actual and necessary expenses.
The Company is operating in one industry segment, the exploration,
production and sale of oil and gas. All revenues, assets and liabilities are in
the United States. See Financial Statements.
Item 2. Properties
The Company rents office space in the Goodstein Building in Casper, Wyoming
at $400 per month.
Oil and Gas Properties. For the following discussion, gross well or acre
is a well or acre in which an interest is owned. The number of gross wells is
the total number of wells in which an interest is owned.
A net well or acre is deemed to exist when the sum of fractional ownership
interest in gross wells or acres equals one. The number of net wells or acres
is the sum of the fractional ownership interests owned in gross wells or acres
expressed as whole numbers and fractions thereof.
A summary of the Company's oil and gas properties as of February 29, 2000
all located in the state of Wyoming is as follows:
Gross Acres Net Acres
Undeveloped proved and
unproved acres:
Leasehold interest:
Oil and gas 15,140 3,816
3
Developed proved acres:
Leasehold interest:
Primarily oil 7,039 3,299
Primarily gas 0 0
No properties are held in fee. All properties are held by leaseholds.
As of February 29, 2000, the Company owns the following productive wells:
Oil Gas
Gross Net Gross Net
Working Interest 58 32.7469 2 1
Royalty 36 .1046 0 0
Oil and Gas Production.
From its drilling efforts and from production purchased from others, the
Company's net yearly production of crude oil and gas has been as follows:
Year Ended
the last day
of February Crude Oil in Barrels Gas in MCF
1998 16,081 4,295
1999 10,230 3,335
2000 13,561 3,736
The average sales price (including transfers) per unit oil and gas produced
for the years ended the last day of February is as follows:
2000 1999 1998
Oil -- Barrels $19.90 $12.78 $18.50
Gas -- MCF $ 2.01 $ 1.37 $ 2.16
The average production (lifting) cost per unit of production is as follows:
2000 1999 1998
Oil -- Barrels $10.13 $15.02 $13.43
Gas -- MCF $ 1.25 $ 1.25 $ 1.25
4
Net Exploratory Wells
Fiscal Year
Drilled Producers Dry Holes Total Wells
1998 0 0 0
1999 0 0 0
2000 1/2 0 1/2
Net Development Wells
Fiscal Year
Drilled Producers Dry Holes Total Wells
1998 0 0 0
1999 0 0 0
2000 0 0 0
Reserves. The following are reserve estimates as of last day of February:
Proved Oil and Gas Reserves Oil (bbls) Gas (mcf)
1998 127,080 80,867
1999 117,443 77,549
2000 187,457 73,884
Proved Developed Oil and Gas Reserves
1998 127,080 80,867
1999 117,443 77,549
2000 187,457 73,884
The reserve estimates for all properties were computed both by management
and by independent petroleum engineers for areas in which the Company has
interest in certain wells. No reserve figures have been filed with or reported
to any other regulatory authorities or agencies.
Oil and Gas Operations. The Company follows the successful efforts method
of accounting for oil and gas exploration and development activities. Under
this method of accounting lease acquisition costs, intangible drilling costs and
other costs associated with exploration efforts which result in the discovery of
proved reserves are capitalized. Costs of well equipment, development drilling,
support facilities, major betterments and renewals and other development costs
are capitalized. Capitalized costs are amortized using the units of production
method. For leasehold costs, the basis is total estimated units and proved
developed reserves both of which are estimated by independent engineers and
management of the Company. The amortized amounts are charged to depreciation
and depletion expense. The recoverability of capitalized costs related to
proved and unproved acreage is reviewed periodically. Any impairment discovered
is charged to expenses.
Costs of drilling exploratory wells which do not result in the discovery of
proved reserves are charged to expense. Production costs, geological and
geophysical costs, and maintenance and repairs are charged to expense.
5
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
An annual meeting of shareholders was held February 2, 2000. Matters
submitted to a vote were as follows:
1. To elect five directors of the Company
2. To effectuate a reverse split of the common shares of the Company
on a one for one hundred basis; and
3. To authorize two million (2,000,000) shares of "blank check"
preferred stock.
All matters submitted were approved by the shareholders. Michael D.
Herman, Gerard Laheney, Frederick Joutz and Ray Mason were elected to serve as
directors, and Jack C. Bradley, Jr. was re-elected as a director. The following
indicates the votes cast for, against or withheld with respect to each matter.
All numbers are pre-reverse split.
The number of votes cast in favor of the nominees for the Board of
Directors were as follows:
Votes for:
J. Bradley 15,941,695
M. Herman 13,524,195
G. Laheney 13,514,195
F. Joutz 13,514,195
R. Mason 13,526,695
All five nominees were elected or re-elected, respectively.
The number of votes cast in favor of the 1-for-100 reverse stock split was
13,435,275; against, 568,500; abstained, 12,420.
The number of votes cast in favor of the authorization of 2,000,000 shares
of blank check preferred stock was 12,724,275; against, 1,268,500; abstained,
23,420.
6
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.
Bid Prices
High Low
March 1, 1999 through February 28, 1999 0.50 0.50
March 1, 1999 through May 31, 1999 1.00 1.00
June 1, 1999 through August 31, 1999 1.00 1.00
September 1, 1999 through November 30, 1999 1.75 1.75
December 1, 1999 through February 29, 2000 12.00 12.00
The source for the over-the-counter quotations is the National Discount
Brokers. Such quotations reflect inter-dealer prices without retail mark-up,
mark-down, or commission and may not necessarily represent actual transactions.
The above prices are retroactive for a 1 for 100 shares stock split on
February 2, 2000.
There were approximately 1541 holders of record of the Company's common
stock as of May 15, 2000.
No dividends have been declared or paid in the Company's history. Wyoming
law generally provides that dividends may be declared and paid only out of the
unreserved and unrestricted earned surplus of the corporation, except when the
Articles of Incorporation of a corporation engaged in the business of exploiting
natural resources so provide, dividends may be declared and paid out of
depletion reserves.
Wyoming Oil & Minerals, Inc. has no unreserved and unrestricted earned
surplus and its Articles of Incorporation do not provide that dividends may be
paid from depletion reserves.
On November 1, 1999, the Company sold 7,400,000 (pre-reverse split) shares
of its common stock to Michael D. Herman in an unregistered private placement
pursuant to Section 4(2) of the Act for consideration of $74,000. Section 4(2)
was relied upon based on representations of the purchaser, information provided
to the purchaser, and the relationship of the parties.
7
Item 6. Selected Financial Data
Year Ended February 28/29
2000 1999 1998 1997 1996
Revenues:
Operating revenues from
oil and gas sales $353,233 $131,682 $306,807 $357,765 $266,227
Other operating
revenues 7,368 14,455 19,566 22,039 24,962
Earnings (loss) from
continuing operations before
extraordinary items 108,493 (98,665) 18,197 ( 9,698) (51,635)
Extraordinary items -- -- -- -- --
Net earnings (loss) from
continuing operations 108,493 (98,665) 18,197 ( 9,698) (51,635)
Earnings (loss) per share
from continuing operations .49 (.57) .11 (.06) (.31)
Cash dividends per
common share -- -- -- -- --
At year end:
Total assets 923,952 325,199 342,140 242,330 256,806
Long-term obligations 642,630 85,556 86,693 50,000 50,000
Item 7. Management's Discussion and Analysis of
Financial Conditions and Results of Operation.
REVIEW OF 2000 RESULTS
Financial Position
During the Company's fiscal year 2000, cash increased $51,028. This
increase resulted from the net effect of cash used in operations in the amount
of $66,660, cash provided by a bank loan in the amount of $750,000; debt paid in
the amount of $150,750; cash paid for acquisition of proved properties in the
amount of $440,620; cash paid for the acquisition of unproved properties in the
amount of $90,880; and cash in the amount of $74,000 provided from the sale of
common stock. The Company has financed property acquisitions in the past with
debt and will continue to repay such borrowing with the revenues from those
properties.
The Company also paid $7,000 for a loan fee to American National Bank and
$18,062 for reorganization costs.
8
Results of Operations
The Company's oil and gas revenues increased from $131,682 in fiscal 1999
to $353,233 in fiscal 2000. The increase of $221,551 was due to an increase in
the average price per barrel during the year of $7.12 per barrel and an increase
in production of 3,331 barrels. Production increased on wells owned during
fiscal 1999 and increased due to the purchase of additional producing leases
during fiscal 2000.
Production and operating expenses decreased $17,023 from fiscal 1999 to
fiscal 2000 mainly due to a decrease in workover costs on the Wade Hill Unit in
excess of additional operating costs of the additional producing leases
purchased during fiscal 2000. New exploration costs were incurred in fiscal
2000 of $18,566.
Depreciation and depletion decreased $3,968 from fiscal 1999 to fiscal 2000
due to a change in the remaining life of the Wade Hill Unit which decreased the
rate of depletion.
General and administrative expenses did not change significantly between
fiscal years.
Interest expense increased $12,053 from fiscal 1999 to fiscal 2000 due to
new debt incurred during fiscal 2000 and a greater number of monthly interest
payments paid on bank debt incurred in fiscal 1999.
Management anticipates sufficient cash flow during 2001 to support present
operations. Management also anticipates negotiation and purchase of additional
productive properties, increased gas drilling activity, and the rework of new
and existing wells.
REVIEW OF 1999 RESULTS
Financial Position
During the Company's fiscal year 1999, net cash increased by $4,518. Of
this increase, $50,000 was from a bank loan, $1,247 went toward principal
payments on debt and 44,227 was used in operations. The Company's emphasis
regarding property additions continues to be toward acquiring existing
production rather than from drilling new wells. No new drilling was done by the
Company in fiscal 1999. Short term notes payable increased by $49,992 which was
discussed above and used in operations. The Company has financed property
acquisitions in the past with debt and will continue to repay such borrowings
with the revenues from those properties.
Results of Operations
The Company's oil and gas revenues decreased from $306,807 in fiscal 1998
to $131,682 in fiscal 1999 mainly due to a decrease in oil prices and decreased
production. Present production has the effect of decreasing Wyoming Oil &
Minerals reserves. Crude oil sales decreased significantly due to the very low
oil prices causing some wells to be shut in as they became uneconomical.
During fiscal 1999, the amount reserved for the depletion of reserves and
the depreciation of equipment was $11,605. Loss on operations for the year was
$98,665 due to the cost of working over some wells and the reasons stated above.
9
Production and operating revenues decreased approximately 21% as a
percentage from fiscal 1998 compared to fiscal 1999 due to the President's
reducing his salary by one half for most of the year. Since fiscal 1985, the
Company has resolved to avoid those activities that required additional outside
professional services and to limit operations to the management of existing
properties and the acquisition of additional properties within the Company's
ordinary course of business.
Interest expense increased over the prior year due to the additional bank
financing discussed above.
REVIEW OF 1998 RESULTS
Financial Position
During the Company's fiscal year 1998, net cash decreased by $3,976. Of
this decrease, $120,351 was for the purchase of properties, $3,500 was principal
payments on debt, and 119,875 was cash provided by operations. The Company's
emphasis regarding property additions continues to be toward acquiring existing
production rather than from drilling new wells. No new drilling was done by the
Company in fiscal 1998. Short term notes payable decreased by $3,500, which
was paid in cash. The Company has financed property acquisitions with debt and
continues to repay such borrowings with the revenues from those properties.
Result of Operations
The Company's oil and gas revenues decreased from $357,765 in fiscal 1997
to $306,807, mainly due to a decrease in oil prices in fiscal 1998. Present
production has the effect of decreasing Wyoming Oil & Minerals reserves;
however, due mainly to undertaking the waterflood of the Don Thorson #1, total
oil and gas reserves increased significantly for the fiscal year ended February
29, 1998. An independent engineering firm generated a partial reserves analysis
during fiscal year 1998. Crude oil sales stayed approximately the same.
During fiscal 1998, the amount reserved for the depletion of reserves and
the depreciation of equipment was $15,934. Income on operations for the year
was $18,197 due, in part, to the cost of abandoned nonproducing properties being
only $4,842.
Production and operating expenses decreased approximately 19% as a
percentage from fiscal 1997 to 1998, due to less workover costs.
"Total" General and Administrative expenses decreased approximately $5,498
from fiscal 1997 compared to fiscal 1998 due to a decrease in expense for well
logs, maps, etc. of $5,292. Since fiscal 1985, the Company has resolved to
avoid those activities that required additional outside professional services
and to limit operations to the management of existing properties and the
acquisition of additional properties within the Company's ordinary course of
business.
Interest expense remained approximately the same as in fiscal 1997.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
10
Item 8. Financial Statements and Supplementary Data.
For the financial statements and supplementary data required by Item 8, see
Financial Statements, Unaudited Supplemental Financial Information and
Schedules.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
Not applicable
11
PART III
Item 10. Directors and Executive Officers
of the Registrant.
The following are the present directors and executive officers of the
Company. The Board does not have any audit, compensation, nomination, or other
committees.
Jack C. Bradley Jr., age 58, has been president and director of the Company
since February 23, 1973. Mr.Bradley has also been the president, a director,
and the majority shareholder of Manx Oil Corporation based in Casper, Wyoming,
since 1969; and secretary, director and shareholder of Econoservice, Inc., based
in Casper, Wyoming, since 1986. Both of those entities are engaged in the oil
and gas exploration or production business. Since 1970, Mr. Bradley has also
been the owner of Zephyr Exploration, a sole proprietorship engaged in the oil
and gas exploration and production business and real estate investments.
Michael D. Herman, age 42, is a self-employed business consultant and has
been Chairman, CEO, Treasurer and Secretary of the Company since February, 2000.
He was the Chairman and chief executive officer of TeleMatrix, Inc., a Colorado-
based telecommunications equipment provider to the hospitality and commercial
markets, from 1991 to September 1999, when the company was sold to Meditrust
Corporation (NYSE - MT). Mr.Herman has been involved actively as an investor
and principal in the oil and gas business since 1985. Since 1997, he has been
the sole shareholder and President of Lincoln 77, Inc., which is active in the
acquisition and development of oil and gas leaseholds in eastern Kansas. In
addition to producing oil, Lincoln 77 provides contract services to outside
operators in the area of drilling, workover and the cementing and acidizing of
new and existing wells. Mr. Herman is a shareholder of Colorado-based Skyline
Resources, Inc., which is actively acquiring acreage and developing both oil and
coalbed methane gas in western Wyoming. Mr. Herman continues to be active in
the telecommunications equipment business through his involvement with American
TeleSwitch Corporation.
Gerard Laheney, age 62, a director of the Company since February, 2000, has
been President of Aegis Investment Management Company, an investment advisory
firm specializing in global investment portfolio management, since August 1993.
From July 1995 to July 1996, Mr. Laheney was a consultant for Portfolio
Resources Group, overseeing global equities, fixed income and foreign exchange
investments. Mr. Laheney has been a director of Craig Corporation (NYSE - CRG)
since 1990 and served as a director of Reading Company (NASD - RDGE) between
November 1993 and June 1996.
Frederick L. Joutz, age 46, a director of the Company since February, 2000,
has been a professor at the Department of Economics at The George Washington
University in Washington, D.C. since 1985, and has been an Associate Professor
there since 1991. He teaches graduate, undergraduate, and MBA level courses in
Econometrics, Forecasting Macroeconomics, Money and Banking, and Energy
Economics. He has also served as a consultant and technical expert to several
government agencies, including the Department of Energy and the Department of
Agriculture, as well as to various private corporations. He has been published
extensively in several academic journals, including American Economic Review,
Journal of Business and Economic Statistics, Journal of Policy Modeling, Journal
of Macroeconomics and Energy Economics. He is also an Associate Editor of The
International Journal of Forecasting. Mr. Joutz earned his Bachelor's degree at
the University of Maryland, his Master's degree at the University of British
Columbia in Vancouver, British Columbia, Canada; and a Ph.D. in Economics at the
University of Washington.
12
Ray Mason, age 52, a director of the Company since February, 2000, has been
a Spanish language teacher at Boyd Anderson High School in Lauderdale Lakes,
Florida, since 1989. He took a leave of absence from teaching to work as a
certified financial planner with American and International Financial Group in
Ft. Lauderdale, Florida from 1995 to 1997. He also served as Territorial
Manager for Life Alert Medical Systems, a provider and installer of medical
alert systems, from 1997 to 1999. Mr. Mason earned his B.A. degree at Queens
College in Flushing, New York; his Master's degree in Adelphi University in
Garden City, New York; and his Professional Diploma in Business Administration
and Management at C.W. Post College in Brookfield, New York.
Mr. Herman and Mr. Joutz are cousins. There are no other family
relationships between any of the officers and directors of the Company. The
term of the officers expires at the annual directors' meeting.
Section 16(a) Beneficial Ownership Reporting Compliance
During fiscal year 2000, Messrs. Laheney, Joutz and Mason each filed one
late report, Form 3.
Item 11. Executive Compensation
Summary Compensation Table
The following table sets forth in summary form the compensation received
during each of the Company's last three completed fiscal years by each of the
named executive officers. No employee of the Company received a total salary
and bonus exceeding $100,000 during any of the last three fiscal years.
Annual Compensation Long-Term Compensation
Securities
Name and Fiscal Year Salary Bonus Underlying
Principal Position Ended ($) ($) Options (#)
Michael D. Herman, 2000 -0- -0- 600,000
Chief Executive 1999 -0- -0- -0-
Officer 1998 -0- -0- -0-
Option Grants Table
The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended February 29, 2000 to the
Company's Chief Executive Officer. See " Stock Option Plans".
Option Grants For Fiscal Year Ended February 29, 2000
Number of % of Total
Securities Options
Underlying Granted
Options to Employees in Exercise or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
Michael D. Herman, 300,000 50% $1.00 01/31/2001
Chief Executive 300,000 50% $2.00 02/18/2003
Officer
13
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table sets forth information concerning each exercise of
stock options during the fiscal year ended February 29, 2000 by the Company's
Chief Executive Officer, and the fiscal year end value of unexercised options
held by the Chief Executive Officer.
Aggregated Option Exercises
For Fiscal Year Ended February 29, 2000
And Year-End Option Values
Value of
Unexercised
Number of In-The-Money
Unexercised Options at
Options at Fiscal Fiscal Year-End
Year-End (#)(3) ($)(4)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#)(1) Realized ($)(2) Unexercisable Unexercisable
Michael D. Herman 300,000 300,000 300,000/0 $3,000,000/0
Chief Executive
Officer
(1) The number of shares received upon exercise of options during the fiscal
year ended February 29, 2000.
(2) With respect to options exercised during the Company's fiscal year ended
February 29, 2000, the dollar value of the difference between the option
exercise price and the market value of the option shares purchased on the
date of the exercise of the options. Mr. Herman was allowed a "cashless
exercise" by the Board as a portion of consideration paid by the Company
for oil and gas rights owned by Mr. Herman.
(3) The total number of unexercised options held as of February 29, 2000
separately identifying those options that were exercisable and those
options that were not exercisable.
(4) For all unexercised options held as of February 29, 2000, the aggregate
dollar value of the excess of the market value of the stock underlying
those options over the exercise price of those unexercised options, based
on the bid price of the Company's Common Stock on February 29, 2000. The
closing bid price for the Company's Common Stock on February 29, 2000 was
$12.00 per share which was a temporary high. Based on the average bid price
for the following thirty days, which was $3.50 per share, this number would
be $450,000.
Compensation of Outside Directors
Directors of the Company who are not also employees of the Company
("Outside Directors") are not paid for meetings of the Board of Directors that
they attend.
14
Item 12. Security Ownership of Certain
Beneficial Owners and Management.
The following table shows the Common Stock ownership for each director,
named executive officer, 5% shareholder, and all directors and executive
officers as a group:
Amount and Nature
of Beneficial Percent of
Director Ownership Class
Michael D. Herman 674,000 (2) 79.6%
Chairman, CEO, Treasurer, Secretary
1565 Old Stage Road
Colorado Springs, CO 80906
Jack C. Bradley, Jr. 21,355 (1) 3.9%
President, Director
330 S. Center, Suite 419
Casper, WY 82601
Gerard P. Laheney 0 -
Director
330 S. Center, Suite 419
Casper, WY 82601
Frederick Joutz 0 -
Director
330 S. Center, Suite 419
Casper, WY 82601
Ray Mason 0 -
Director
330 S. Center, Suite 419
Casper, WY 82601
All directors and
officers as a group 695,355 82.1%
(1) Of this total, 20,855 shares are owned of record by Jack C. Bradley, Jr.,
and 500 are owned by Manx Oil Corporation, of which Bradley is the president, a
director, and owner of a majority of its outstanding common shares.
(2) Includes options held by Mr. Herman to purchase 300,000 shares for $2.00 per
share that expire February 2,2003 and 374,000 shares of Common Stock directly
owned.
(3) Equals less than actual column due to method of calculating percentages when
a portion of shares beneficially owned are pursuant to options not yet
exercised.
15
Item 13. Certain Relationships and Related Transactions.
See Footnote 11 to the financial statements.
16
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) Documents filed as a part of this Annual Report on Form 10-K:
1. Financial Statements.
The following documents are filed as part of this Annual Report on Form
10-K:
Report of Independent Accountants;
Balance Sheets as of February 28, 1999 and February 29, 2000;
Statements of Operations and Comprehensive Income for the years ended
February 28, 1998; February 28, 1999; and February 29, 2000
Statements of Stockholders' Equity for the years ended February 28,
1998; February 28, 1999; and February 29, 2000
Statements of Cash Flows for the years ended February 28, 1998;
February 28, 1999; and February 29, 2000; and
Notes to Financial Statements
2. Financial Statement Schedules.
None of the schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are required
under the related instructions, and therefore such schedules are inapplicable
and have been omitted.
3. Exhibits.
Exhibit No. Description
Exhibit 3.1 Certificate of Incorporation, as amended to date, filed as
Exhibit 3.1 to the Company's Registration Statement on Form S-8
filed on March 3, 2000, SEC File No. 333-31936 and incorporated
herein by reference.
Exhibit 3.2 By-Laws of the Company, as amended to date, filed as Exhibit 3.2
to the Company's Registration Statement on Form S-8 filed on
March 3, 2000, SEC File No. 333-31936 and incorporated herein
by reference.
Exhibit 4.1 Description of common stock (included in Exhibit 3.1 hereto).
17
Exhibit 10.1 Wyoming Oil & Minerals, Inc. Y2K Employee Benefit Plan, filed as
Exhibit 4.2 to the Company's Registration Statement of Form S-8
filed on March 3, 2000, SEC File No. 333-31936 and incorporated
herein by reference.
Exhibit 10.2 Promissory Note dated February 9 2000, payable to American
National Bank.
Exhibit 10.3 Commercial Loan Agreement dated February 9, 2000, with American
National Bank.
Exhibit 23.1 Consent of Maurice M. Morton, CPA.
Exhibit 27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
The Company filed a Form 8-K dated February 2, 2000 reporting the
acquisition of certain assets and the results of its annual shareholders'
meeting. No financial statements were filed with that report.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.
WYOMING OIL & MINERALS, INC.
A Wyoming Corporation
By: /s/ Jack C. Bradley, Jr.
Jack C. Bradley, Jr., President
DATED: June 6, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities and on the dates indicated.
/s/ Jack C. Bradley, Jr.
Jack C. Bradley, Jr., Director
DATED: June 6, 2000
/s/ Michael D. Herman
Michael D. Herman
Director, Principal Executive Officer,
Principal Financila Officer and
Principal Accounting Officer
DATED: June 6, 2000
/s/ Gerard P. Laheney
Gerard P. Laheney
Director
DATED: June 6, 2000
WYOMING OIL AND MINERALS, INC.
CASPER, WYOMING
FINANCIAL STATEMENTS
AS OF FEBRUARY 29, 2000, FEBRUARY 28, 1999
AND 1998
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Wyoming Oil and Minerals, Inc.
Casper, Wyoming
I have audited the accompanying balance sheets of Wyoming Oil and Minerals,
Inc., as of February 29, 2000 and February 28, 1999 and the related statements
of operations, changes in stockholders' equity and cash flows for the years
ended February 29, 2000 and February 28, 1999 and 1998. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wyoming Oil and Minerals, Inc. as
of February 29, 2000 and February 28, 1999, and the results of its operations
and changes in its stockholders' equity and its cash flow for the years ended
February 29, 2000 and February 28, 1999 and 1998, in conformity with generally
accepted accounting principles.
MAURICE M. MORTON
Certified Public Accountant
Casper, Wyoming
May 19, 2000 WYOMING OIL AND MINERALS, INC.
Balance Sheets
ASSETS
February 29, February 28,
2000 1999
Current assets:
Cash $ 59,000 $ 7,972
Accounts receivable 34,422 6,180
Accounts receivable - related parties 46,624 6,678
Marketable equity securities -
(Note 3) 14,536 5,850
Inventory of oil in tanks - at lower of cost (specific
identification) or market 91,100 33,865
Note receivable - related parties (Note 4) 13,333 -
Interest receivable 216 -
Total current assets 259,231 60,545
Property and equipment, at cost under the
successful efforts method of accounting
(Note 5):
Proved oil and gas properties 725,103 435,342
Unproved oil and gas properties 90,880 -
Pipeline and drilling equipment 570 570
Office furniture and equipment 7,117 3,509
823,670 439,421
Less accumulated depletion and depreciation (204,495) (201,929)
619,175 237,492
Other assets:
Accounts receivable - non current 26,352 27,101
Financing fees, net of accumulated
amortization of $1,867 19,133 -
Other assets 61 61
45,546 27,162
$ 923,952 $ 325,199
(continued)
See accompanying notes to financial statements.
F-2
WYOMING OIL AND MINERALS, INC.
Balance Sheets
(Continued)
Liabilities and Stockholders' Equity
February 29 February 28,
2000 1999
Current liabilities:
Notes payable (Note 6):
Related parties $ 3,750 $ 4,500
Bank - 49,992
Accounts payable 57,804 25,926
Accounts payable - related parties 39,712 117,008
Accrued expenses 3,698 1,337
Income taxes payable 6,636 -
Current portion of long-term debt (Note 7) 57,370 2,668
Total current liabilities 168,970 201,431
Long-term debt (Note 7) 642,630 85,556
Stockholders' equity (Note 8 and 9):
Common stock, $.01 par value:
Authorized - 25,000,000 shares
Issued - 546,500 shares in 2000
and 172,500 shares (post reverse
split) in 1999 5,465 1,725
Preferred stock, no par value,
authorized - 2,000,000
issued - none - -
Additional paid-in capital 1,533,521 1,194,300
Additional paid-in capital - stock options 20,000 -
Accumulated deficit (1,455,320) (1,157.813)
Unrealized gains on securities available for sale
net of applicable deferred income taxes 8,686 -
112,352 38,212
$ 923,952 $ 325,199
See accompanying notes to financial statements.
F-3
WYOMING OIL AND MINERALS, INC.
Statements of Operations and Comprehensive Income
February 29, February 28, February 28,
2000 1999 1998
Operating revenues:
Oil and gas sales (Note 12) $ 353,233 $ 131,682 $ 306,807
Gain (loss) on sale of oil and
gas properties and equipmet 9,013 - -
Other operating income 7,368 14,455 19,566
Total operating revenues 369,614 146,137 326,373
Operating expenses:
General and administrative 47,614 48,213 58,901
Depreciation, depletion and
amortization 9,504 11,605 15,934
Oil and gas production costs 158,415 175,438 221,403
Exploration costs 18,566 - -
Abandoned properties - - 4,842
Lease rentals - - 620
Total operating expenses 234,099 235,256 301,700
Operating income (loss) 135,515 (89,119) 24,673
Other income (expense):
Gain on sale of marketable
securities 1,000 - -
Interest income 216 4 44
Interest expense (21,602) (9,550) (6,520)
Other income (expense), net (20,386) (9,546) (6,476)
(continued)
See accompanying notes to financial statements.
F-4
WYOMING OIL AND MINERALS, INC.
Statements of Operations and Comprehensive Income
(Continued)
February 29, February 28, February 28,
2000 1999 1998
Earnings (loss) before income taxes: $ 115,129 $ (98,665) $ 18,197
Income tax expense (Note 10):
Current 6,636 - -
Net earnings (loss) 108,493 (98,665) 18,197
Other comprehensive income, net of tax:
Unrealized gains on available for sale
securities 8,686 - -
Comprehensive income $ 117,179 $ (98,665) $ 18,197
Net earnings (loss ) per
common share (Note 15):
Basic $ .49 $ (.57) $ .11
Diluted $ .34 $ (.57) $ .11
Average shares outstanding - Basic 222,167 172,500 170,000
Average shares outstanding - Diluted 323,212 172,500 170,000
See accompanying notes to financial statements.
F-5
WYOMING OIL AND MINERALS, INC.
Statements of Stockholders' Equity
Additional
Common Stock Additional Paid-in
$.01 Par Value Paid-in Capital Accumulated Unrealized
Shares Amount Capital Stock Options Deficit Gains Total
Balance at
February
28, 1997 16,750,000 167,500 1,021,025 - (1,077,345) - 111,180
Shares
issued for
properties 500,000 5,000 2,500 - - - 7,500
Net Income - - - - 18,197 - 18,197
Balance at
February
28, 1998 17,250,000 172,500 1,023,525 - 1,059,148 - 136,877
Net loss - - - - (98,665) - (98,665)
Balance at
February
28, 1999 17,250,000 172,500 1,023,525 - (1,157,813) - 38,212
Sale of
share 7,400,000 74,000 - - - - 74,000
Reverse stock
split of
1 for 100(24,403,500)(244,035) 244,035 - - - -
Shares issued for
properties 300,000 3,000 297,000 - - - 300,000
Stock options
issued for
loan
commitment fee - - - 14,000 - - 14,000
Unrealized gains
on marketable
equity
securities,
net of tax - - - - - 8,686 8,686
Net income - - - - 108,493 - 108,493
Distribution
attributed to
purchase of
properties
from stockholder- - - 6,000 (406,000) - (400,000)
Reorganization
expenses - - (31,039) - - - (31,039)
Balance at
February
29, 2000 $ 546,500 $ 5,465$1,533,521 $20,000 $(1,455,320) $8,686 $112,352
See accompanying notes to financial statements.
F-6
WYOMING OIL AND MINERALS, INC.
Statements of Cash Flows
February 29, February 28, February 28,
2000 1999 1998
Cash flows from operating activities:
Cash received from customers $ 222,594 $ 155,991 $ 369,130
Cash paid to suppliers and employees (270,012) (189,985) (244,806)
Interest income - 4 44
Interest expense (19,242) (10,237) (4,493)
Net cash provided by (used in)
operating activities (66,660) (44,227) 119,875
Cash flows from investing activities:
Purchase of oil and gas properties
and equipment (431,500) - (120,351)
Proceed from sale of marketable
securities 1,000 - -
Distribution attributable to
purchase of properties (100,000) - -
Net cash provided by (used in)
investing activities (530,500) - (120,351)
Cash flows from financing activities:
Sale of common stock 74,000 - -
Proceeds from note payable 750,000 49,992 -
Reorganization costs (18,062) - -
Principal payments (150,750) (1,247) (3,500)
Loan fee (7,000) - -
Net cash provided by (used in)
financing activities 648,188 48,745 (3,500)
Net increase (decrease) in cash and
cash equivalents 51,028 4,518 (3,976)
Cash and cash equivalents at
beginning of year 7,972 3,454 7,430
Cash and cash equivalents at end
of year $ 59,000 $ 7,972 $ 3,454
(continued)
See accompanying notes to financial statements.
F-7
\
WYOMING OIL AND MINERALS, INC.
Statements of Cash Flows
(Continued)
February 29, February 28, February 28,
2000 1999 1998
Reconciliation of net income to net cash provided
by (used in) operating activities
Net earnings (loss) $108,493 $(98,665) $ 18,197
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation, depletion and amortization 9,504 11,605 15,934
(Increase) decrease in accounts receivable (67,439) 6,234 36,917
(Increase) decrease in notes receivable (13,333)
(Increase) decrease in inventory (57,235) 3,620 5,840
(Increase) decrease in interest receivable (216)
Increase (decrease) in accounts payable (45,418) 33,666 36,121
Increase (decrease) in accrued expenses 8,997 (687) 2,024
Abandoned properties - - 4,842
Gain on sale of marketable securities (1,000) - -
Gain on sale of oil and gas properties
and equipment (9,013) - -
Net cash provided by (used in)
operating activities $(66,660) $(44,227) $119,875
Supplemental schedule of non cash investing and financing activities
For the year ended February 29, 2000, the Company issued 300,000 shares of
common stock as partial payment on properties.
Properties were sold during the year in exchange for a note receivable of
$13,333 and the payoff of a note payable of $38,224 and accrued interest of
$4,689.
For the year ended February 29, 2000 the fair value of available for sale
securities increased $8,686.
For the year ended February 28, 1999, the Company purchased properties with a
cost of $46,971 in exchange for stock and a note payable.
See accompanying notes to financial statements.
F-8
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Wyoming Oil and Minerals, Inc. engages principally in the exploration,
development and production of oil and gas which is mainly in Wyoming.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require 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 amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Accounts receivable
The Company uses the direct write off method for bad debts which expenses
uncollectible accounts in the year they become uncollectible. Any
difference between this method and the allowance method is not material.
Marketable equity securities
Marketable equity securities are classified as available-for-sale securities
and are carried at fair value at the balance sheet date, with the unrealized
gains and losses, net of tax, included in the determination of comprehensive
income and reported in stockholders' equity.
When securities are sold, the cost is based on the first-in, first-out
method.
Oil and gas properties
The Company follows the successful efforts method of accounting for oil and
gas exploration and development activities. Under this method of
accounting, lease acquisition costs, intangible drilling costs and other
costs associated with exploration efforts, which result in the discovery of
proved reserves, are capitalized. Costs of well equipment, development
drilling, support facilities, major betterment and renewals and other
development costs are also capitalized. Capitalized acquisition costs of
proved properties are amortized using the unit-of-production method on the
basis of total estimated units of proved oil and gas reserves. Other
capitalized costs are amortized using the unit-of-production method on the
basis of total estimated units of proved developed reserves. The amortized
amounts are charged to depreciation and depletion expense. The
recoverability of costs capitalized both for proved and unproved properties
is reviewed periodically. Any impairment discovered is charged to expense.
Costs of drilling exploratory wells which do not result in the discovery of
proved reserves are charged to expense. Production costs, geological and
geophysical costs, and maintenance and repairs are charged to expense when
incurred.
F-9
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Other property and equipment
The Company's pipeline and drilling equipment and office furniture and
equipment are depreciated utilizing the straight-line method to apportion
costs over an estimated useful life of five years.
Financing Fees
Financing fees for acquisition of bank and other financing sources have been
capitalized and are being amortized over the life of the debt.
Earnings (loss) per common share
The Company, in accordance with SFAS 128, Earnings Per Share, reports both
basic and diluted earnings per share. Earnings per share - basic is
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Earning per
share - diluted reflects the potential dilution that could occur if options
to issue common stock were exercised or converted into common stock.
Statement of cash flows
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Reclassifications
Certain reclassifications have been made to financial statements of prior
years to be comparative with the current year presentation.
Off-Balance-Sheet Risk
Sale of oil and gas are made to domestic petroleum purchasing and refining
companies with payment normally received within thirty to sixty days of
sale. Billings to joint interest holders are normally received within
thirty to sixty days of billing.
Stock-Based Compensation
In accordance with the provisions of SFAS 123, Accounting For Stock-Based
Compensation, the Company accounts for transactions based on fair value of
the goods or services.
F-10
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
2. FOURTH QUARTER ADJUSTMENTS
For significant purchases of properties during the fourth quarter of the
year ended February 29, 2000 see Note 5. For significant financing
transactions see Note 8.
During the fourth quarter of the year ended February 28, 1998, the Company
recorded an additional $46,971 in the purchase price of two oil and gas
leases.
3. MARKETABLE EQUITY SECURITIES
Marketable equity securities are summarized as follows:
2000 1999
Available for sale securities, at cost $ 41,077 $ 48,702
Less permanent impairments 35,227 42,852
Amortized costs $ 5,850 $ 5,850
Proceeds and gross realized gains and losses from the sale of securities
classified as available for sale for the years ended February 29, 2000 and
February 28, 1999 were as follows:
2000 1999
Gross proceeds $ 1,000 $ -
Gross realized gains $ 1,000 $ -
Gross realized losses $ - $ -
The amortized cost and estimated fair values of marketable securities are as
follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
February 29, 2000:
available for sale
securities $ 5,850 $ 8,686 $ - $ 14,536
February 28, 1999:
available for sale
securities $ 5,850 $ - $ - $ 5,850
4. NOTES RECEIVABLE
A note receivable of $13,333 from a related party (Manx Oil Corporation) was
incurred on the sale of properties on January 1, 2000. The note was payable
over five years, however, the Company received full payment on May 15, 2000.
Therefore, the note receivable is classified as current in the accompanying
financial statements.
F-11
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
5. OIL AND GAS PROPERTIES
During the fourth quarter ended February 29, 2000, the Company purchased the
following properties:
a) A 100% working interest in producing leases located in Natrona
County, Wyoming for $100,000.
b) A 100% working interest in producing leases located in Johnson County
and Natrona County, Wyoming for $185,241.
c) A 25% working interest in proved and unproved leases in Carbon
County, Wyoming and Moffat County, Colorado for $147,654 from the
major stockholder of the Company. Effective April 24, 2000 an
amendment to an exploration agreement between the other owners of the
leases reduced the Company's working interest to 16.67% in the
unproved leases and 28.75% in the proved leases.
During the fourth quarter ended February 29, 2000, the Company sold its
interest in producing leases in Hot Springs County, Wyoming in exchange for a
note payable on the leases of $38,224 and recorded a gain of $1,013. The
Company also sold its interest in another producing lease in Hot Springs
County, Wyoming in exchange for a note receivable of $13,333 and a recorded
gain of $8,000.
During fiscal 1998, the Company purchased a 13.333% working interest in a
producing lease in Hot Springs County, Wyoming and a 45% working interest in
another producing lease in the same County. Both leases were purchases from a
related party.
During fiscal 1998, the Company purchased a 50% working interest in two
producing leases in Hot Springs County, Wyoming for $54,471. Both leases were
purchased from a related party.
During fiscal 1998, the company expended $99,264 for major betterment workover
on the Wade Hill Unit. The expenditures were to a related party. This amount
is not being depleted as the results of the workover on production is not
known at this time.
See Note 2, also.
F-12
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
6. NOTES PAYABLE
The Company had outstanding notes payable as follows:
Other 2000 1999
Line of credit payable to Bank, due August 1, 1999,
interest at 8.25%, secured by producing oil and
gas wells. (Note 13) $ - $ 49,992
Note to individual (related party) due on demand, interest
at 1% over the prime rate (9.50% at February 29, 2000)
secured by a producing oil well. 3,750 4,500
$ 3,750 $ 54,492
Other information regarding short-term notes payable is as follows:
2000 1999 1998
Average aggregate short-term
borrowings $ 54,117 $ 54,500 $ 6,250
Maximum aggregate short-term borrowings
at any month-end $ 54,492 $ 54,492 $ 8,000
Weighted average interest rate 8.38% 8.60% 9.50%
The weighted average interest rate was computed by dividing interest expense
by the weighted average of such borrowings outstanding.
7. LONG-TERM DEBT
The Company had long-term debt as follows:
2000 1999
Note payable to bank, due in quarterly payments of
$38,000 including interest at .75% above Wall Street
Journal prime (9.50% at February 29, 2000), maturity
date March 18, 2005, secured by preferred stock of a
third party. $700,000 $ -
Note payable to a partnership, (a related party)
Due in monthly payments of $500 including
imputed interest at 9%, maturity date
February 12, 2007, original face amount of
note was $60,000. $ - $ 38,224
F-13
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
7. LONG-TERM DEBT (Continued)
Notes payable to two individuals (related parties), due
December 1, 1999, interest at 2% over the prime rate
(10.00% at February 28, 1999), unsecured - 50,000
700,000 88,224
Less current portion (57,370) (2,668)
$ 642,630 $ 85,556
See Note 2, also.
Estimated maturities on long-term debt for the next five years are as follows:
2001 $ 57,370
2002 $ 93,425
2003 $ 102,754
2004 $ 113,015
2005 $ 124,204
2066 $ 209,232
F-14
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
8. STOCKHOLDERS' EQUITY
a). Stock Purchase and Restructuring Agreement - Under an agreement dated
October 29, 1999, the Company issued 7,400,000 shares of common stock at
$.01 per share to a purchaser. The purchaser also agreed to infuse new
funds sufficient to pay related party accounts and notes payable of
approximately $160,000. The agreement also proposed a 1 for 100 shares
reverse stock split and the authorization of 2,000,000 shares of "blank
check" preferred stock, both of which matters were approved at the
shareholders' meeting held on February 2, 2000, and effectuated shortly
thereafter. The purchaser also agreed to assist the Company in
effectuating one or more financings of not less than $1,000,000 and up to
$2,000,000 by way of sale of stock through private placement, registered
offering or overseas offering, or by bank financing or otherwise. As
compensation for purchaser's effectuating such financing, the contract
provides that the purchaser will receive options to purchase 700,000
shares of common stock at an exercise price of $1.00 per share (post
reverse split), 350,000 of which shall have an exercise period of two
years and 350,000 of which shall have an exercise period of three years.
As of the date of this report, 300,000 of such options have been issued to
the purchaser. For financial statement purposes the above compensation
was valued at the pre reverse split market price per share of $.02 or
$14,000.
b). Employee Benefit Plan - The Company has adopted the "Wyoming Oil &
Minerals, Inc. Y2K Employee Benefit Plan". The Plan provides for a
maximum of 200,000 shares of the Company's common stock available to be
optioned pursuant to non-qualified stock options and 50,000 shares
available to be issued directly (Grants). Eligible persons are any
consultant, non-employee director, or officer or director who is an
employee of the company. No options shall be granted or grants made under
the Plan after ten years from the date of adoption of the Plan. Options
granted under the Plan shall be exercisable immediately or in accordance
with a vesting schedule. The price and other terms of each option are
determined by the administrator at the time the option is granted or the
grant of direct shares is made. The Plan is effective March 7, 2000.
Since the adoption of the Plan, no options have been granted or grants of
direct shares made.
c). Preferred Stock - Pursuant to an amendment to the Company's charter
documents which was approved at the shareholder's meeting held on
February 2, 2000, the Company is authorized to issue 2,000,000 shares of
"blank check" preferred stock, no par value. The preferred shares shall
have such other designations, preferences, and such relative,
participating, optional or other special rights as may be determined by
the Company's Board of Directors.
No dividends have ever been declared or paid.
9. STOCK OPTIONS
The Company granted options to the major shareholder during the year for
acquisition of properties and/or obtaining financing for the Company. The
changes in the outstanding stock options during the year ended February 29,
2000 are summarized as follows (there were no options transactions during the
years ended February 28, 1999 or 1998):
F-15
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
9. STOCK OPTIONS (Continued)
Three Year Options
Wt. Avg.
Shares Ex. Price
Beginning of year - $ -
Granted 600,000 1.50
Exercised (300,000) 1.00
Expired - -
End of year 300,000 $ 2.00
10. INCOME TAXES
Net income and losses differ from taxable income (loss) because certain
revenues and expenses are reported in the financial statements in periods
which differ from those in which they are subject to taxation. The principal
timing differences are with respect to intangible drilling costs, which are
deducted as incurred for tax purposes, but capitalized and depleted for proven
properties for financial statement purposes; and unrealized losses on
marketable securities, which are recognized for financial statement purposes
currently, but not until realized for tax purposes. Deferred income taxes
are not recognized on the timing differences as it is not likely that all net
operating loss carry forwards will be used.
Income tax expense for the year ended February 29, 2000 and February 28, 1999
and February 28, 1998 consists of the following:
2000 1999 1998
Current - federal $ 6,636 $ - $ -
Income tax expense is reconciled
to federal statutory rates as follows:
Federal tax expense at statutory rates $ 27,394 $ - $ -
Net operating loss carry forward (6,461) - -
Intangible drilling costs (14,297) - -
Income tax expense charged to operations $ 6,636 $ - $ -
F-16
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
10. INCOME TAXES (Continued)
The tax effects of temporary differences
that give rise to significant portions
of deferred tax assets and liabilities
consist of the following:
Non-recognized gain on marketable
securities $ 5,284 $ 6,428 $ 6,428
Intangible drilling costs (6,928) (544) (575)
Tax loss carry forwards 59,323 71,950 56,199
Net deferred tax assets(liabilities) 57,679 77,834 62,052
Valuation allowance (57,679) (77,834) (62,052)
Net deferred tax assets(liabilities) $ - $ - $ -
At February 29, 2000, the company had net operating loss carry forwards
available of $28,249 per year as limited by IRS Code Sec. 382 which will
expire beginning February 28, 2001 through 2014.
The Company also has long-term capital loss carryover of $102,565
11. RELATED PARTY TRANSACTIONS
The Company is related to the following companies by common ownership
and/or management:
Manx Oil Corporation
Manewal-Bradley Oil Company, Inc.
Zephyr Exploration
Econoservice, Inc.
Lease operating expenses paid to Manx Oil Corporation were $230,198, to
Manewal-Bradley Oil Company, Inc. were $3,640 and to Econoservice, Inc.
were $240 for the year ended February 29,2000. Oil and gas revenue
received from Manx Oil Corporation was $169,142. The Company owed Manx Oil
Corporation $39,712 at February 29, 2000 and $117,008 at February 28,
1999. Manx Oil Corporation owed the Company $46,624 at February 29, 2000
and $6,678 at February 28, 1999. See Note 4 also. The Company also
borrowed and repaid a note for $50,000 from a relative of a stockholder
and officer.
F-17
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
12. MAJOR PURCHASERS AND CONCENTRATION OF RISK
Substantially all of the Company's accounts receivable at February 29, 2000
and February 28, 1999 result from oil and gas sales to other companies in
the oil and gas industry or joint industry billings to other interest
holders. This concentration of customers may impact the Company's
overall credit risk, either positively or negatively, in that these entities
may be similarly affected by industry - wide changes in economic or other
conditions. Such receivables are generally not collateralized. One single
joint interest receivable comprises 61% of total noncurrent accounts
receivable at February 29,
2000.
The following customers each contributed 10% or more of the revenues derived
from oil and gas sales for the years ending February 29, 2000 and February
28, 1999 and 1998 as follows:
2000 1999 1998
Eighty-Eight Oil $ 198,270 $ 113,154 $ 218,696
Texaco $ - $ - $ 47,141
JN Petroleum $ - $ - $ 65,293
Amoco $ - $ 13,351 $ -
Equiva $ 51,291 $ - $ -
Teppco $ 34,505 $ - $ -
13. COMMITMENTS
The Company is subject to extensive federal, state and local environmental
laws and regulations. These requirements, which change frequently, regulate
the discharge of materials into the environment. The Company believes it is
in compliance with existing laws and regulations.
The Company has a line of credit with Security First Bank for a maximum of
$50,000. The line expires August 1, 2000. There was no balance due as of
February 29, 2000.
14. IMPAIRMENT OF LONG-LIVED ASSETS
In accordance with the provisions of SFAS 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Live Assets to be Disposed Of, the Company
reviews the carrying values of its long-lived assets whenever events or
changes in circumstances indicate that such carrying values may not be
recoverable. SFAS 121 requires that an impairment loss be recognized when the
carrying amount of an asset exceeds the sum of the undiscounted estimated
future cash flows of the asset. There were no impairments required for the
fiscal year ended February 29, 2000 or February 28, 1999 and 1998.
F-18
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
15. EARNINGS PER SHARE
For the Year Ended February 29,2000
Income Shares Per Share
(Numerator)(Denominator) Amount
Basic EPS:
Income available to common stockholders $ 108,493 222,167 $ .49
Effect of Dilutive Securities:
Common stock options $ - 101,045
Diluted EPS:
Income available to common stockholders $ 108,493 323,212 $ .34
16. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited)
Capitalized Costs
Capitalized costs relating to the Company's oil and gas producing activities
as of February 29, 2000, February 28, 1999 and 1998 are as follows:
2000 1999 1998
Proved properties $ 725,103 $ 435,342 $ 435,342
Unproved properties 90,880 - -
$ 815,983 $ 435,342 $ 435,342
Support equipment $ 570 $ 570 $ 570
Accumulated
depreciation and depletion $ 200,264 $ 197,850 $ 179,937
Costs incurred in oil and gas property acquisition, exploration and
development activities
Costs incurred in oil and gas property acquisition, exploration and
development activities, including capital expenditures, are
summarized as follows for the years ended February 29, 2000, February
28, 1999 and 1998 (all in the United States):
2000 1999 1998
Property acquisition costs:
Proved properties $ 241,959 $ - $ 68,055
Unproved properties $ 90,880 $ - $ -
Exploration costs $ 18,566 $ - $ 620
Development costs $ 47,802 $ - $ 99,264
F-19
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
16. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued)
Results of operations for oil and gas producing activities
The results of operations for oil and gas producing activities, excluding
capital expenditures and corporate overhead and interest costs, are as
follows for the years ended February 29, 2000, February 28, 1999and 1998
(all in the United States):
2000 1999 1998
Revenues $ 353,233 $ 131,682 $ 306,807
Production costs 158,415 175,438 221,403
Exploration costs 18,566 - 620
Depreciation and depletion 6,915 11,605 15,934
$ 169,337 $ (55,361) $ 68,850
Oil and Gas Reserve Quantities
The estimates of proved reserves and related valuations were determined
both by management and by independent petroleum engineers. Estimates of
proved reserves are inherently imprecise and are continually subject to
revision based on production history, results of additional exploration and
development and other factors.
Proved reserves are reserves judged to be economically producible in future
years from known reservoirs under existing economic and operating
conditions; i.e., prices and costs as of the date the estimate is made and
assuming continuation of current regulatory practice using conventional
production methods and equipment. Proved developed reserves are those
expected to be recovered through existing wells with existing equipment
and operating methods.
F-20
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
16. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued)
Presented below is a summary of the changes in estimated proved reserves of
the Company, all of which are located in the United States, for the years
ended February 29, 2000 and February 28, 1999 and 1998:
2000 1999 1998
Oil Gas Oil Gas Oil Gas
(bbls.) (mcf) (bbls.) (mcf) (bbls.) (mcf)
Proved reserves:
Beginning of year 117,443 77,549 127,080 80,867 88,197 84,255
Revisions of previous
estimates 5,543 71 593 17 40,963 907
Purchase of minerals
in place 90,437 - - - 14,000 -
Production (13,561) (3,736) (10,230) (3,335)(16,080) (4,295)
Sales of minerals
in place (12,405) - - - - -
End of year 187,457 73,884 117,443 77,549 127,080 80,867
Proved developed reserves:
Beginning of year 117,443 77,549 127,080 80,867 88,197 84,255
End of year 187,457 73,884 117,443 77,549 127,080 80,867
Standardized measure of discounted future net cash flows and changes therein
relating to proved oil and gas reserves
Statement of Financial Accounting Standards No. 69 prescribes guidelines for
computing a standardized measure of future net cash flows and changes
therein relating to estimated proved reserves. The Company has followed
those guidelines which are briefly discussed below.
Future cash inflows and future production and development costs are
determined by applying year-end prices and costs to the estimated quantities
of oil and gas to be produced. Estimated future income taxes are computed
using year-end statutory income tax rates, including consideration for
previously legislated future statutory depletion rates and investment tax
credits. The resulting future net cash flows are reduced to present value
amounts by applying a 10% annual discount factor.
The assumptions used to compute the standardized measure are those
prescribed by the Financial Accounting Standards Board and, as such, do not
necessarily reflect the Company's expectations of actual revenues to be
derived from those reserves or their present worth. The limitations
inherent in the reserve quantity estimation process, as discussed
previously, are equally applicable to the standardized measure computations
since these estimates are the basis for the valuation process.
F-21
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 2000 and February 28, 1999 and 1998
16. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued)
Presented below are the standardized measure of discounted future net cash
flows and changes therein relating to proved reserves as of and for the
years ended February 29, 2000, and February 28, 1999 and 1998.
2000 1999 1998
Future cash inflows $5,282,240 $1,411,362 $2,213,824
Future production and
development costs (761,345) (808,058) (1,047,014)
Future income tax expenses (1,133,245) - (164,009)
Future net cash flows 3,387,650 603,304 1,002,801
10% annual discount for
estimated timing of cash flows (816,470) (52,966) (385,486)
Standardized measure of discounted
future net cash flows $2,571,180 $ 550,338 $ 617,315
The following are the principal sources of changes in the standardized measure
of discounted future net cash flows:
2000 1999 1998
Sales and transfers of oil and gas
produced, net of production costs $ (191,818)$ 43,756 $ (85,404)
Net changes in prices and
production costs 1,659,105 (531,394) (832,487)
Revisions of previous quantities
estimates (39,511) (3,404) 662,797
Net change in purchases and sales
of minerals in place 2,117,008 - 346,920
Accretion of discount 55,034 61,732 53,660
Net changes in income taxes (1,133,245) 164,009 (99,274)
Other - mainly change in
production costs (445,731) 198,324 34,501
Net increase (decrease) 2,020,842 (66,977) 80,713
Estimated standardized measures:
Beginning of year 550,338 617,315 536,602
End of year $2,571,180 $550,338 $ 617,315
F-22
EXHIBIT 10.2
PROMISSORY NOTE
(Commercial - Single Advance - Variable Rate)
DATE AND PARTIES. The date of this Promissory Note (Note) is February 9, 2000.
The parties and their addresses are:
LENDER:
AMERICAN NATIONAL BANK
201 East 2nd, Suite 25
Casper, Wyoming 82601
Telephone: (307) 234-5300
BORROWER:
WYOMING OIL & MINERALS INC.
a Wyoming Corporation
330 South Center, Suite 419
Casper, Wyoming 82602
DEBRA LEE HERMAN
1565 Old Stage Road
Colorado Springs, Colorado 80906
MICHAEL D. HERMAN
1565 Old Stage Road
Colorado Springs, Colorado 80906
1. DEFINITIONS. As used in this Note, the terms have the following meanings:
A. Pronouns. The pronouns "I," "me," and "my" refer to each Borrower signing
this Note, individually and together with their heirs, successors and assigns,
and each other person or legal entity (including guarantors, endorsers, and
sureties) who agrees to pay this Note. "You" and "Your" refer to the Lender,
with its participants or syndicators, successors and assigns, or any person or
company that acquires an interest in the Loan.
B. Note. Note refers to this document, and any extensions, renewals,
modifications and substitutions of this Note.
C. Loan. Loan refers to this transaction generally, including obligations and
duties arising from the terms of all documents prepared or submitted for this
transaction such as applications, security agreements, disclosures or notes, and
this Note.
D. Property. Property is any property, real, personal or intangible, that
secures my performance of the obligations of this Loan.
E. Percent. Rates and rate change limitations are expressed as annualized
percentages.
2. PROMISE TO PAY. For value received, I promise to pay you or your order, at
your address, or at such other location as you may designate, the principal sum
of $700,000.00 (Principal) plus interest from February 9, 2000 on the unpaid
Principal balance until this Note matures or this obligation is accelerated.
3. INTEREST. Interest will accrue on the unpaid Principal balance of this Note
at the rate of 9.500 percent (Interest Rate) until February 10, 2000, after
which time it may change as described in the Variable Rate subsection.
A. Interest After Default. If you declare a default under the terms of this
Note, including for failure to pay in full at maturity, you may increase the
Interest Rate otherwise payable as described in the INTEREST section. In such
event, interest will accrue on the unpaid Principal balance of this Note at the
Interest Rate in effect from time to time under the terms of this Note, until
paid in full.
B. Maximum Interest Amount. Any amount assessed or collected as interest under
the terms of this Note or obligation will be limited to the Maximum Lawful
Amount of interest allowed by state or federal law. Amounts collected in excess
of the Maximum Lawful Amount will be applied first to the unpaid Principal
balance. Any remainder will be refunded to me.
C. Statutory Authority. The amount assessed or collected on this Note is
authorized by Wyo. Stat. 40-14-358.
D. Accrual. During the scheduled term of this Loan interest accrues using an
Actual/360 days counting method.
E. Variable Rate. The Interest Rate may change during the term of this
transaction.
(1) Index. Beginning with the first Change Date, the Interest Rate will be
based on the following index: the highest base rate on corporate loans posted by
at least 75% of the nation's 30 largest banks that The Wall Street Journal
publishes as the Prime Rate.
The Current Index is the most recent index figure available on each Change
Date. You do not guaranty by selecting this Index, or the margin, that the
Interest Rate on this Note will be the same rate you charge on any other loans
or class of loans you make to me or other borrowers. If this Index is no longer
available, you will substitute a similar index. You will give me notice of
your choice.
(2) Change Date. Each date on which the Interest Rate may change is called a
Change Date. The Interest Rate may change February 10, 2000 and daily
thereafter.
(3) Calculation Of Change. On each Change Date, you will calculate the
Interest Rate, which will be the Current Index plus 0.750 percent. The result of
this calculation will be rounded to the nearest .001 percent. Subject to any
limitations, this will be the Interest Rate until the next Change Date. The new
Interest Rate will become effective on each Change Date. The Interest Rate and
other charges on this Note will never exceed the highest rate or charge allowed
by law for this Note.
(4) Effect Of Variable Rate. A change in the Interest Rate will have the
following effect on the payments: The amount of scheduled payments will change.
4. ADDITIONAL CHARGES. As additional consideration, I agree to pay, or have
paid, the fees and charges listed on the APPENDIX: FEES AND CHARGES, which is
attached to and made part of this Note, or one or more of these fees and charges
has been paid or will be paid by a third party on my behalf.
5. GOVERNING AGREEMENT. This Note is further governed by the Commercial Loan
Agreement executed between you and me as part of this Loan, as modified, amended
or supplemented. Upon execution of this Note, I represent that I have reviewed
and am in compliance with the terms contained in the Commercial Loan Agreement.
6. PAYMENT. I agree to pay this Note in 20 payments. A payment of $38,000.00
will be due June 18,2000, and on the same day in each 3rd month thereafter. This
scheduled payment amount may change to reflect changes in the Interest Rate as
described in the Variable Rate subsection of this Note. A final payment of the
entire unpaid balance of Principal and interest will be due March 18, 2005.
Payments will be rounded to the nearest $.01. With the final payment I also
agree to pay any additional fees or charges owing and the amount of any advances
you have made to others on my behalf. Payments scheduled to be paid on the 29th,
30th or 31st day of a month that contains no such day will, instead, be made on
the last day of such month.
If the amount of a scheduled payment does not equal or exceed interest accrued
during the payment period the unpaid portion will be added to, and will be
payable with, the next scheduled payment.
Each payment I make on this Note will be applied first to interest that is due
then to principal that is due, and finally to any charges that I owe other than
principal and Interest. If you and I agree to a different application of
payments, we will describe our agreement on this Note. The actual amount of my
final payment will depend on my payment record.
7. REMEDIAL CHARGES. In addition to interest or other finance charges, I agree
that I will pay certain additional fees based on my method and pattern of
payment.
A. Prepayment. I may prepay this Loan in full or in part at any time. Any
partial prepayment will not excuse any later scheduled payments until I pay in
full.
8. LOAN PURPOSE. The purpose of this Loan is refinance existing notes with
Security First and private loans; purchase working interest throughout Wyoming;
in-field reworks on oil wells.
9. ADDITIONAL TERMS. If any payment due under this Promissory Note is ten (10)
days past due, Western National Bank, 102 N. Cascade Ave., Colorado Springs, CO
80932, will be authorized, upon proper and timely notification, to remit to
American National Bank the scheduled payment due in the amount of $38,000 taking
same from funds received in the form of dividend payments on said Meditrust
Preferred Stock securing said Promissory Note.
10. SECURITY. This Loan is secured by separate security instruments prepared
together with this Note as follows:
Document Name Parties to Document
Assignment Of Investment Property/Securities - Debra Herman
Meditrust Corporation
11. ASSUMPTIONS. Someone buying the Property cannot assume the obligation. You
may declare the entire balance of the Note to be immediately due and payable
upon the creation of, or contract for the creation of, any lien, encumbrance,
or transfer of the Property.
12. WAIVERS AND CONSENT. To the extent not prohibited by law, I waive protest,
presentment for payment, demand, notice of acceleration, notice of intent to
accelerate and notice of dishonor.
A. Additional Waivers By Borrower. In addition, I, and any party to this Note
and Loan, to the extent permitted by law, consent to certain actions you may
take, and generally waive defenses that may be available based on these actions
or based on the status of a party to this Note.
(1) You may renew or extend payments on this Note, regardless of the number of
such renewals or extensions.
(2) You may release any Borrower, endorser, guarantor, surety, accommodation
maker or any other co-signer.
(3) You may release, substitute or impair any Property securing this Note.
(4) You, or any institution participating in this Note, may invoke your right\
of set-off.
(5) You may enter into any sales, repurchases or participations of this Note
to any person in any amounts and I waive notice of such sales, repurchases or
participations.
(6) I agree that any of us signing this Note as a Borrower is authorized to
modify the terms of this Note or any instrument securing, guarantying or
relating to this Note.
B. No Waiver By Lender. Your course of dealing, or your forbearance from, or
delay in, the exercise of any of your rights, remedies, privileges or right to
insist upon my strict performance of any provisions contained in this Note, or
other Loan documents, shall not be construed as a waiver by you, unless any such
waiver is in writing and is signed by you.
13. APPLICABLE LAW. This Note is governed by the laws of Wyoming, the United
States of America and to the extent required, by the laws of the jurisdiction
where the Property is located. In the event of a dispute, the exclusive forum,
venue and place of jurisdiction will be in Wyoming, unless otherwise required by
law.
14. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay this
Loan is independent of the obligation of any other person who has also agreed to
pay it. You may sue me alone, or anyone else who is obligated on this Loan, or
any number of us together, to collect this Loan. Extending this Loan or new
obligations under this Loan, will not affect my duty under this Loan and I
will still be obligated to pay this Loan. The duties and benefits of this Loan
will bind and benefit the successors and assigns of you and me.
15. AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or
modified by oral agreement. No amendment or modification of this Note is
effective unless made in writing and executed by you and me. This Note is the
complete and final expression of the agreement. If any provision of this Note is
unenforceable, then the unenforceable provision will be severed and the
remaining provisions will still be enforceable.
16. INTERPRETATION. Whenever used, the singular includes the plural and the
plural includes the singular. The section headings are for convenience only and
are not to be used to interpret or define the terms of this Note.
17. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise
required by law, any notice will be given by delivering it or mailing it by
first class mail to the appropriate party's address listed in the DATE AND
PARTIES section, or to any other address designated in writing. Notice to one
party will be deemed to be notice to all parties. I will inform you in writing
of any change in my name, address or other application information. I agree to
sign, deliver, and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my obligations under this
Loan and to confirm your lien status on any Property. Time is of the essence.
18. CREDIT INFORMATION. I agree that from time to time you may obtain credit
information about me from others, including other lenders and credit reporting
agencies, and report to others (such as a credit reporting agency) your credit
experience with me. I agree that you will not be liable for any claim arising
from the use of information provided to you by others or for providing such
information to others.
19. SIGNATURES. By signing, I agree to the terms contained in this Note. I also
acknowledge receipt of a copy of this Note.
BORROWER:
Wyoming Oil & Minerals Inc.
/s/ Michael D. Herman
Michael D. Herman, CEO
/s/ Debra Lee Herman
Debra Lee Herman
/s/ Michael D. Herman
Michael D. Herman
LENDER:
American National Bank
/s/ Cary Brus
Cary Brus, Vice President
APPENDIX: FEES AND CHARGES
As described in the ADDITIONAL CHARGES section of the attached Note, I agree to
pay, or have paid, these additional fees and charges, or one or more of these
fees and charges has been paid or will be paid by a third party on my behalf.
The following fees are earned when collected and will not be refunded if I
prepay this Note before the scheduled maturity date. A(n) Loan fee of $7,000.00
payable from the loan proceeds.
<PAGE>
EXHIBIT 10.3
COMMERCIAL LOAN AGREEMENT
Single Advance Loan
DATE AND PARTIES. The date of this Commercial Loan Agreement (Agreement) is
February 9,2000. The parties and their addresses are as follows:
LENDER:
AMERICAN NATIONAL BANK
201 East 2nd, Suite 25
Casper, Wyoming 82601
BORROWER:
WYOMING OIL & MINERALS INC.
a Wyoming Corporation
330 South Center, Suite 419
Casper, Wyoming 82602
DEBRA LEE HERMAN
1565 Old Stage Road
Colorado Springs, Colorado 80906
MICHAEL D. HERMAN
1565 Old Stage Road
Colorado Springs, Colorado 80906
1. DEFINITIONS. For the purposes of this Agreement, the following terms have the
following meanings.
A. Accounting Terms. In this Agreement, any accounting terms that are not
specifically defined will have their customary meanings under generally accepted
accounting principles.
B. Insiders. Insiders include those defined as insiders by the United States
Bankruptcy Code, as amended; or to the extent left undefined, include without
limitation any officer, employee, stockholder or member, director, partner, or
any immediate family member of any of the foregoing, or any person or entity
which, directly or indirectly, controls, is controlled by or is under common
control with me.
C. Loan. The Loan refers to this transaction generally, including obligations
and duties arising from the terms of all documents prepared or submitted for
this transaction.
D. Pronouns. The pronouns "I," "me" and "my" refer to every Borrower signing
this Agreement,individually or together, and their heirs, successors and signs.
"You" and "your" refers to the Loan's lender, any participants or syndicators,
or any person or company that acquires an interest in the Loan and their
successors and assigns.
E. Property. Property is any property, real, personal or intangible, that
secures my performance of the obligations of this Loan.
2. SINGLE ADVANCE. In accordance with the terms of this Agreement and other Loan
documents, you will provide me with a single advance term note in the amount of
$700,000.00 (Principal).
I will receive the funds from this Loan in one advance. No additional advances
are contemplated, except those made to protect and preserve your interests as
provided in this Agreement or other Loan documents.
3. MATURITY DATE. I agree to fully repay the Loan by March 18, 2005.
4. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and
representations which will continue as long as this Loan is in affect, except
when this Agreement provides otherwise.
A. Power. I am duly organized, and validly existing and in good standing in all
jurisdictions in which I operate. I have the power and authority to enter into
this transaction and to carry on my business or activity as it is now being
conducted and, as applicable, am qualified to do so in each jurisdiction in
which I operate.
B. Authority. The execution, delivery and performance of this Loan and the
obligation evidenced by the Note are within my powers, have been duly
authorized, have received all necessary governmental approval, will not violate
any provision of law, or order of court or governmental agency, and will not
violate any agreement to which I am a party or to which I am or any of my
property is subject.
C. Name and Place of Business. Other than previously disclosed in writing to
you I have not changed my name or principal place of business within the last
10 years and have not used any other trade or fictitious name. Without your
prior written consent, I do not and will not use any other name and will
preserve my existing name, trade names and franchises.
D. Loan Purpose. This Loan is for Commercial purposes.
E. No Other Liens. I own or lease all property that I need to conduct my
business and activities. I have good and marketable title to all property that I
own or lease. All of my Property is free and clear of all liens, security
interests, encumbrances and other adverse claims and interests, except those to
you or those you consent to in writing.
F. Compliance With Laws. I am not violating any laws, regulations, rules,
orders, judgments or decrees applicable to me or my property, except for those
which I am challenging in good faith through proper proceedings after providing
adequate reserves to fully pay the claim and its challenge should I lose.
G. Legal Dispute. There are no pending or threatened lawsuits, arbitrations or
other proceedings against me or my property that singly or together may
materially and adversely affect my property, operations, financial condition, or
business.
H. Adverse Agreements. I am not a party to, nor am I bound by, any agreement
that is now or is likely to become materially adverse to my business, Property
or operations.
I. Other Claims. There are no outstanding claims or rights that would conflict
with the execution, delivery or performance by me of the terms and conditions of
this Agreement or the other Loan documents. No outstanding claims or rights
exist that may result in a lien on the Property, the Property's proceeds and the
proceeds of proceeds, except liens that were disclosed to and agreed to by you
in writing.
J. Solvency. I am able to pay my debts as they mature, my assets exceed my
liabilities and I have sufficient capital for my current and planned business
and other activities. I will not become insolvent by the execution or
performance of this Loan.
5. FINANCIAL STATEMENTS. I will prepare and maintain my financial records using
consistently applied generally accepted accounting principles then in effect. I
will provide you with financial information in a form that you accept and under
the following terms.
A. Certification. I represent and warrant that any financial statements that I
provide you fairly represents my financial condition for the stated periods, is
current, complete, true and accurate in all material respects, includes all of
my direct or contingent liabilities and there has been no material adverse
change in my financial condition, operations or business since the date the
financial information was prepared.
B. Frequency. In addition to the financial statements provided to you prior to
closing, I will provide you with current financial statements on an annual
basis, or as otherwise requested by you, until I have performed all of my
obligations under the Loan and you terminate the Loan in writing.
C. SEC Reports. I will provide you with true and correct copies of all reports,
notices or statements that I provide to the Securities and Exchange Commission,
any securities exchange or my stockholders, owners, or the holders of any
material indebtedness as soon as available or at least within 30 days after
issuance.
D. Requested Information. I will provide you with any other information about
my operations, financial affairs and condition within 30 days after your
request.
E. Additional Financial Statements Term. During the term of the loan I will
provide the following information within the timeframes outlined: (1) Annual
signed personal financial statements (on a form supplied by Lender) on Michael
D. Herman and Debra Lee Herman due to the Lender twelve (12) months following
last dated statement supplied to the Lender. (2) Annual signed federal tax
returns on Michael D. Herman and Debra Lee Herman due to the Lender on or before
April 15th of each year. If an extension is filed, a copy of same will be
promptly supplied to the Lender and then the signed copy of the tax return will
be due to the Lender the same day it is due to the IRS. (3) Annual 10-Q
financial statements on Wyoming Oil and Minerals Inc. due to the Lender 45 days
following fiscal quarter end. (4) Annual 10-K financial statements on Wyoming
Oil and Minerals Inc. due to the Lender 75 days following fiscal year end. (5)
Annual signed federal tax returns on Wyoming Oil and Minerals Inc. due to the
Lender 75 days following fiscal year end. If an extension is filed, a copy of
same will be promptly supplied to the Lender and then the signed copy of the
tax return will be due to the Lender the same day it is due to the IRS.
6. COVENANTS. Until the Loan and all related debts, liabilities and obligations
are paid and discharged, I will comply with the following terms, unless you
waive compliance in writing.
A. Participation. I consent to you participating or syndicating the Loan and
sharing any information that you decide is necessary about me and the Loan with
the other participants or syndicators.
B. Inspection. Upon reasonable notice, I will permit you or your agents to
enter any of my premises and any location where my Property is located during
regular business hours to do the following.
(1) You may inspect, audit, check, review and obtain copies from my books,
records, journals, orders, receipts, and any correspondence and other business
related data.
(2) You may discuss my affairs, finances and business with any one who claims
to be my creditor.
(3) You may inspect my Property, audit for the use and disposition of the
Property's proceeds and proceeds of proceeds; or do whatever you decide is
necessary to preserve and protect the Property and your interest in the
Property.
After prior notice to me, you may discuss my financial condition and business
operations with my independent accountants, if any, or my chief financial
officer and I may be present during these discussions. As long as the Loan is
outstanding, I will direct all of my accountants and auditors to permit you to
examine my records in their possession and to make copies of these records. You
will use your best efforts to maintain the confidentiality of the information
you or your agents obtain, except you may provide your regulator, if any, with
required information about my financial condition, operation and business or
that of my parent, subsidiaries or affiliates.
C. Business Requirements. I will preserve and maintain my present existence and
good standing in the jurisdiction where I am organized and all of my rights,
privileges and franchises. I will do all that is needed or required to continue
my business or activities as presently conducted, by obtaining licenses, permits
and bonds everywhere I engage in business or activities or own, lease or locate
my property. I will obtain your prior written consent before I cease my business
or before I engage in any new line of business that is materially different from
my present business.
D. Compliance with Laws. I will not violate any laws, regulations, rules,
orders, judgments or decrees applicable to me or my Property, except for those
which I challenge in good faith through proper proceedings after providing
adequate reserves to fully pay the claim and its appeal should I lose. Laws
include without limitation the Federal Fair Labor Standards Act requirements
for producing goods, the federal Employee Retirement Income Security Act of
1974's requirements for the establishment, funding and management of qualified
deferred compensation plans for employees, health and safety laws, environmental
laws, tax laws, licensing and permit laws. On your request, I will provide you
with written evidence that I have fully and timely paid my taxes, assessments
and other governmental charges levied or imposed on me, my income or profits and
my property. Taxes include without limitation sales taxes, use taxes, personal
property taxes, documentary stamp taxes, recordation taxes, franchise taxes,
income taxes, withholding taxes, FICA taxes and unemployment taxes. I will
adequately provide for the payment of these taxes, assessments and other charges
that have accrued but are not yet due and payable.
E. New Organizations. I will obtain your written consent and any necessary
changes to the Loan documents before I organize or participate in the
organization of any entity, merge into or consolidate with any one, permit any
one else to merge into me, acquire all or substantially all of the assets of any
one else or otherwise materially change my legal structure, management,
ownership or financial condition.
F. Dealings with Insiders. I will not purchase, acquire or lease any property
or services from, or sell, provide or lease any property or services to, or
permit any outstanding loans or credit extensions to, or otherwise deal with,
any Insiders except as required under contracts existing at the time I applied
for the Loan and approved by you or as this Agreement otherwise permits. I will
not change or breach these contracts existing at Loan application so as to cause
an acceleration of or an increase in any payments due.
G. Other Debts. I will pay when due any and all other debts owed or guaranteed
by me and will faithfully perform, or comply with all the conditions and
obligations imposed on me concerning the debt or guaranty.
H. Other Liabilities. I will not incur, assume or permit any debt evidenced by
notes, bonds or similar obligations, except: debt in existence on the date of
this Agreement and fully disclosed to you; debt subordinated in payment to you
on conditions and terms acceptable to you; accounts payable incurred in the
ordinary course of my business and paid under customary trade terms or contested
in good faith with reserves satisfactory to you.
I. Notice to You. I will promptly notify you of any material change in my
financial condition, of the occurrence of a default under the terms of this
Agreement, or a default by me under any agreement between me and any third party
which materially and adversely affects my property, operations, financial
condition or business.
J. Certification of No Default. On your request, my chief financial officer or
my independent accountant will provide you with a written certification that to
the best of their knowledge no event of default exists under the terms of this
Agreement or the other Loan documents, and that there exists no other action,
condition or event which with the giving of notice or lapse of time or both
would constitute a default. As requested, my chief financial officer or my
independent accountant will also provide you with computations demonstrating
compliance with any financial covenants and ratios contained in this Agreement.
If an action, condition or event of default does exist, the certificate must
accurately and fully disclose the extent and nature of this action, condition
or event and state what must be done to correct it.
K. Use of Loan Proceeds. I will not permit the loan proceeds to be used to
purchase, carry, reduce, or retire any loan incurred to purchase or carry any
margin stock.
L. Dispose of No Assets. Without your prior written consent or as the Loan
documents permit, I will not sell, lease, assign, transfer, dispose of or
otherwise distribute all or substantially all of my assets to any person other
than in the ordinary course of business for the assets' depreciated book value
or more.
M. No Other Liens. I will not create, permit or suffer any lien or encumbrance
upon any of my properties for or by anyone, other than you, except for:
nonconsensual liens imposed by law arising out of the ordinary course of
business on obligations that are not overdue or which I am contesting in good
faith after making appropriate reserves; valid purchase money security interests
on personal property; or any other liens specifically agreed to by you in
writing.
N. Guaranties. I will not guaranty or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments in the ordinary
course of business) or accommodation endorser or otherwise for the debt or
obligations of any other person or entity, except to you or as you otherwise
specifically agree in writing.
O. No Default under Other Agreements. I will not allow to occur, or to continue
unremedied, any act, event or condition which constitutes a default, or which,
with the passage of time or giving of notice, or both, would constitute a
default under any agreement, document, instrument or undertaking to which I am
a party or by which I may be bound.
P. Legal Disputes. I will promptly notify you in writing of any threatened or
pending lawsuit, arbitration or other proceeding against me or any of my
property, not identified in my financial statements, or that singly or together
with other proceedings may materially and adversely affect my property,
operations, financial condition or business. I will use my best efforts to bring
about a favorable and speedy result of any of these lawsuits, arbitrations or
other proceedings.
Q. Other Notices. I will immediately provide you with any information that may
materially and adversely affect my ability to perform this Agreement and of its
anticipated effect.
R. No Change In Capital. I will not release, redeem, retire, purchase or
otherwise acquire, directly or indirectly, any of my capital stock or other
equity security or partnership interest, or make any change in my capital
structure, except to the extent required by any agreements signed prior to this
Agreement and disclosed to you or with your prior written consent.
S. Loan Obligations. I will make full and timely payment of all principal and
interest obligations, and comply with the other terms and agreements contained
in this Agreement and in the other Loan documents.
T. Insurance. I will obtain and maintain insurance with insurers, in amounts
and coverages that are acceptable to you and customary with industry practice.
This may include without limitation insurance policies for public liability,
fire, hazard and extended risk, workers compensation, and, at your request,
business interruption and/or rent loss insurance. At your request, I will
deliver to you certified copies of all of these insurance policies, binders or
certificates. I will obtain and maintain a mortgagee or loss payee endorsement
for you when these endorsements are available. I will immediately notify you of
cancellation or termination of insurance. I will require all insurance policies
to provide you with at least 10 days prior written notice to you of cancellation
or modification. I consent to you using or disclosing information relative to
any contract of insurance required by the Loan for the purpose of replacing this
insurance. I also authorize my insurer and you to exchange all relevant
information related to any contract of insurance required by any document
executed as part of this Loan.
U. Property Maintenance. I will keep all tangible and intangible property that
I consider necessary or useful in my business in good working condition by
making all needed repairs, replacements and improvements and by making all
rental, lease or other payments due on this property.
V. Property Loss. I will immediately notify you, and the insurance company when
appropriate, of any material casualty, loss or depreciation to the Property or
to my other property that affects my business.
W. Additional Covenants. (1) American National Bank will be notified in writing
of any additional loan requests proposed to be secured with the 1,000 shares of
Meditrust Preferred stock. (2) Upon the payoff of the loan at Western National
Bank currently secured with 1,000 shares of Meditrust Preferred stock, said
shares will be physically delivered to American National Bank if the loan
covered by this Loan Agreement is still outstanding. (3) If any payment due
under this Loan is ten (10) days past due, Western National Bank will be
authorized, upon proper and timely notification, to remit to American National
Bank the scheduled payment due in the amount of $38,000 taking some from funds
received in the form of dividend payments on said Meditrust Preferred stock.
7. DEFAULT. I will be in default if any one or more of the following occur.
A. Payments. I fail to make a payment in full when due.
B. Insolvency. I make an assignment for the benefit of creditors or become
insolvent, either because my liabilities exceed my assets or I am unable to pay
my debts as they become due.
C. Death or Incompetency. I die or am declared incompetent.
D. Business Termination. I merge, dissolve, reorganize, end my business or
existence, or a partner or majority stockholder dies or is declared incompetent.
E. Failure of Condition or Term. I fail to pay, or perform any condition or to
keep any promise or covenant on this or any debt or agreement I have with you.
F. Misrepresentation. I make any verbal or written statement or provide any
financial information that is untrue, inaccurate, or conceals a material fact at
the time it is made or provided.
G. Judgment. I fail to pay or discharge any judgment against me for the payment
of money, unless, within 10 days of its entry, the judgment is satisfied or a
stay of enforcement is granted pending an appeal.
H. Forfeiture. The Property is used in a manner or for a purpose which
threatens confiscation by a legal authority.
I. Name Change. I change my name or assume an additional name without notifying
you before making such a change.
J. Property Transfer. I transfer all or a substantial part of my money or
property.
K. Material Change. Without first notifying you, there is a material change in
my business, including ownership, management, and financial conditions.
L. Property Loss. The Property is damaged, destroyed or stolen.
M. Additional Security or Guaranty. I fail to provide any additional security
or guaranty that you may require.
N. Insurance. I fail to keep the Property insured, if required.
O. Other Instruments. A default occurs under the terms of any instrument
evidencing or pertaining to the Loan.
P. Insecurity. Anything else happens that causes you to reasonably believe that
you will have difficulty collecting the amount I owe you or significantly
impairs the value of the Property.
8. REMEDIES. After I default, and after you give any legally required notice and
opportunity to cure the default, you may at your option do any one or more of
the following.
A. Acceleration. You may make all or any part of the amount owing by the terms
of the Loan immediately due.
B. Additional Security. You may demand security, additional security, or
additional parties to be obligated to pay the Loan.
C. Sources. You may use any and all remedies you have under state or federal
law or in any instrument securing the Loan.
D. Insurance Benefits. You may make a claim for any and all insurance benefits
or refunds that may be available on my default.
E. Payments Made On My Behalf. Amounts advanced on my behalf will be
immediately due and may be added to the balance owing under the terms of the
Loan, and accrue interest at the highest post-maturity interest rate.
F. Attachment. You may attach or garnish my wages or earnings.
G. Set-Off. You may use the right of set-off. This means you may set-off any
amount due and payable under the terms of the Loan against any right I have to
receive money from you. My right to receive money from you includes any deposit
or share account balance I have with you; any money owed to me on an item
presented to you or in your possession for collection or exchange; and any
repurchase agreement or other non-deposit obligation. "Any amount due and
payable under the terms of the Loan" means the total amount to which you are
entitled to demand payment under the terms of the Loan at the time you set-off.
Subject to any other written contract, if my right to receive money from you is
also owned by someone who has not agreed to pay the Loan, your right of setoff
will be limited to my proportionate interest in the obligation. In the absence
of reasonable proof of net contributions, my proportionate interest equals the
amount of such obligation divided equally by all parties having present rights
to receive such money.
Your right of set-off does not apply to an account or other obligation where my
rights arise only in a representative capacity. It also does not apply to any
Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check or share draft when the
dishonor occurs because you set-off against any of my accounts. I agree to hold
you harmless from any such claims arising as a result of your exercise of your
right of set-off.
H. Waiver. Except as otherwise required by law, by choosing any one or more of
these remedies you do not give up your right to use any other remedy. You do not
waive a default if you choose not to use a remedy. By electing not to use any
remedy, you do not waive your right to later consider the event a default and to
use any remedies if the default continues or occurs again.
9. COLLECTION EXPENSES AND ATTORNEYS' FEES. On or after Default, to the extent
permitted by law, I agree to pay all expenses of collection, enforcement or
protection of your rights and remedies under this Agreement. Expenses include,
but are not limited to, attorneys' fees, court costs and other legal expenses.
These expenses are due and payable immediately. It not paid immediately, these
expenses will bear interest from the date of payment until paid in full at the
highest interest rate in effect as provided for in the terms of this Loan. All
fees and expenses will be secured by the Property I have granted to you, if any.
To the extent permitted by the United States Bankruptcy Code, I agree to pay the
reasonable attorneys' fees you incur to collect this debt as awarded by any
court exercising jurisdiction under the Bankruptcy Code.
10. APPLICABLE LAW. This Agreement is governed by the laws of Wyoming, the
United States of America and to the extent required, by the laws of the
jurisdiction where the Property is located. In the event of a dispute, the
exclusive forum, venue and place of jurisdiction will be in Wyoming, unless
otherwise required by law.
11. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay this
Loan is independent of the obligation of any other person who has also agreed
to pay it. You may sue me alone, or anyone else who is obligated on this Loan,
or any number of us together, to collect this Loan. Extending this Loan or new
obligations under this Loan, will not affect my duty under this Loan and I will
still be obligated to pay this Loan. The duties and benefits of this Loan will
bind and benefit the successors and assigns of you and me.
12. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended
or modified by oral agreement. No amendment or modification of this Agreement is
effective unless made in writing and executed by you and me. This Agreement is
the complete and final expression of the understanding between you and me. If
any provision of this Agreement is unenforceable, then the unenforceable
provision will be severed and the remaining provisions will still be
enforceable.
13. INTERPRETATION. Whenever used, the singular includes the plural and the
plural includes the singular. The section headings are for convenience only and
are not to be used to interpret or define the terms of this Agreement.
14. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise
required by law, any notice will be given by delivering it or mailing it by
first class mail to the appropriate party's address listed in the DATE AND
PARTIES section, or to any other address designated in writing. Notice to one
party will be deemed to be notice to all parties. I will inform you in writing
of any change in my name, address or other application information. I will
provide you any financial statement or information you request. All financial
statements and information I give you will be correct and complete. I agree to
sign, deliver, and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my obligations under this
Loan and to confirm your lien status on any Property. Time is of the essence.
15. SIGNATURES. By signing, I agree to the terms contained in this Agreement.
I also acknowledge receipt of a copy of this Agreement.
BORROWER:
Wyoming Oil & Minerals Inc.
/s/ Michael D. Herman
Michael D. Herman, CEO
/s/ Debra Lee Herman
Debra Lee Herman
/s/ Michael D. Herman
Michael D. Herman
LENDER:
American National Bank
/s/ Cary Brus
Cary Brus, Vice President
