U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-29129
SOURCE ENERGY CORPORATION
(Exact name of small business issuer as specified in its charter)
Utah 87-0370820
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
3040 Granite Meadow Lane, Sandy Utah 84092
(Address of principal executive offices)
(801) 943-5490
(Issuer's telephone number)
7412 Rosalind Circle, Salt Lake City, Utah 84121
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required
to be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to
the distribution of securities under a plan confirmed by a court. Yes [ ]
No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
404,451 shares of common stock.
FORM 10-QSB
SOURCE ENERGY CORPORATION
PART I.
Financial Information
Item 1. Financial Statements
The Financial Statements of the Registrant required to be filed with this
10-QSB Quarterly Report have been reviewed and are on file with the Company's
auditor, Mantyla McReynolds. In the opinion of management, the Financial
Statement fairly present the financial condition of the Registrant.
Incorporated herein are the Company's financials for the period ended
September 30, 2000:
Unaudited Balance Sheet at September 30, 2000
Unaudited Statements of Operations for the Three and Nine Months Ended
September 30, 2000 and 1999
Unaudited Statements of Cash Flows for the Three and Nine Months Ended
September 30, 2000 and 1999
Item 2. Management's Discussion and Analysis of Financial
Condition or Plan of Operation
Incorporated herein by this reference is the discussion of the registrant's
business and plan of operation under Item 2 of the current report on Form 8-K of
the registrant filed with the Securities and Exchange Commission on April 17,
2000.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 1. Legal Proceedings
On September 22, 2000, the Securities and Exchange Commission ("SEC") filed
a complaint in the United States District Court, case no. 2:00CV 0757B, naming
Source and Timothy R. Kraft, a former officer and director of Source, as
defendants.
On May 20, 1997, Source entered into an agreement with Timothy R. Kraft and
Point Source Energy ("Point") to engage in the business of distillate fuel
systems process plants, and in connection with that transaction issued
12,305,800 shares of common stock.
Subsequently, Craig Carpenter, a former officer and director of Source and
a stockholder, filed a shareholder derivative suit in the United States District
Court, District of Utah, case no. 2:99CV0332K, against Mr. Kraft, Point, and
Source alleging that Kraft and Point committed fraud to induce plaintiffs to
enter into the original transaction ("Carpenter Suit").
On March 10, 2000 the District Court issued a judgment and order in the
Carpenter Suit rescinding the May 20, 1997 transaction. The judgment states that
Source be returned, as nearly as possible, to its status prior to consummation
of said transaction. This included canceling 12,305,800 shares of common stock
issued in the transaction to Kraft by Source, reinstating Craig Carpenter, Helen
G. Carpenter, and Kathy Morrison as officers and directors of Source, and the
return of 182,852 shares of Common Stock from Kraft to Carpenter, which were
originally sold directly by Carpenter to Kraft. Craig Carpenter was granted an
award against Source in the amount of $75,000 to compensate him for the benefit
he conferred on the stockholders of Source by prosecuting the action against
Kraft and Point. Source was awarded damages against Kraft in the amount of
$75,000.
During his tenure as an officer and director of Source, Mr. Kraft issued
two press releases that the SEC alleges are false and misleading. The SEC
further alleges that the press releases were issued by Kraft in an effort to
manipulate the public market price for Source common stock in violation of
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The SEC is seeking an order enjoining Source from violating these
provisions of the Securities Exchange Act of 1934 in the future.
In the course of the Carpenter Suit, Mr. Carpenter informed the SEC of the
conduct of Mr. Kraft, and regularly kept the SEC informed of the progress of the
case and his efforts to remove Mr. Kraft. Although Source received no monetary
or other benefit from Mr. Kraft's alleged fraud, Mr. Kraft was removed from any
position of control over Source by order of the District Court in the Carpenter
Suit, Mr. Carpenter was reinstated as an officer and director, and Mr. Carpenter
cooperated fully with the SEC in providing to it information on the Carpenter
Suit, the SEC still included Source in its lawsuit against Mr. Kraft apparently
because the press releases were issued with Source's name on them. Under these
circumstances, Source is reviewing its options for filing an answer to the
complaint filed by the SEC and defending itself against the allegations of the
SEC.
Exhibits and Reports On Form 8-K
EXHIBITS: None
REPORTS ON FORM 8-K: None
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
SOURCE ENERGY CORPORATION
Date: NOVEMBER 13, 2000 By: /S/ CRAIG CARPENTER
<PAGE>
SOURCE ENERGY CORPORATION
(Formerly known as Parker Energy Technology, Inc.)
Condensed Financial Statements
September 30, 2000
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<TABLE>
<CAPTION>
SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Condensed Balance Sheet
September 30, 2000
(Unaudited)
ASSETS
<S> <C>
Current Assets
Cash and cash equivalents $ 30,280
Accounts receivable 3,685
----------------------
Total Current Assets 33,965
Property and Equipment
Equipment 5,476
Proved oil and gas properties 597,353
----------------------
Total Property and Equipment 602,829
Less: Accumulated Depreciation and Depletion (522,535)
----------------------
Net Property and Equipment 80,294
----------------------
Total Assets $ 114,259
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Judgement payable 75,000
Accounts Payable $ 371
---------------------
Total Current Liabilities 75,371
---------------------
Total Liabilities 75,371
Stockholders' Equity
Capital Stock -- 200,000,000 shares authorized having a
par value of $.00025 per share; 404,451 issued and
outstanding 101
Additional Paid-in Capital 1,243,454
Accumulated Deficit (1,204,667)
---------------------
Total Stockholders' Equity 38,888
---------------------
Total Liabilities and Stockholders' Equity $ 114,259
=====================
</TABLE>
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<TABLE>
<CAPTION>
SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Condensed Statements of Operations
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2000 30, 1999 30, 2000 30, 1999
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Revenues from Oil and Gas Activities $ 13,513 6,687 43,028 11,381
Oil and Gas Producing Expense:
Production costs 3,390 1,734 10,327 3,927
Depletion 3,918 3,583 11,754 5,151
---------------- ---------------- ---------------- ---------------
Total Oil and Gas Producing Expense 7,308 5,317 22,081 9,078
Income/(Loss) from Oil and Gas
Activities 6,205 1,370 20,947 2,303
Other Income/(Expense):
General and administrative expense (8,660) (30) (14,983) (2,733)
Judgment expense -0- -0- (90,039) -0-
Interest 41 -0- 61 3
---------------- ---------------- ---------------- ---------------
Total Other Income/(Expense) (8,619) ( 30) (104,961) (2,730)
---------------- ---------------- ---------------- ---------------
Net income/(loss) before income tax (2,414) 1,340 (84,014) (427)
Provision for income tax -0- -0- 447 -0-
---------------- ---------------- ---------------- ---------------
Net Income/(Loss) $ (2,414) 1,340 (84,461) (427)
================ ================ ================ ===============
Income/(Loss) per Share $ (.01) .01 (.021) (.01)
================ ================ ================ ===============
Weighted Average Shares Outstanding 404,451 404,451 404,451 404,451
================ ================ ================ ===============
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Statements of Cash Flows
For the Three Months and Six Ended September 30, 2000 and 1999
(Unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2000 30, 1999 30, 2000 30, 1999
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net Income/(loss) $ (2,414) 1,340 (84,461) (427)
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation and depletion 3,918 -0- 11,754 5,152
Stock issued for debt -0- 15,604
(Increase)/decrease in accounts receivable 2,878 3,584 1,398 -0-
Increase/(decrease) in current liabilities 86 -0- 75,272 -0-
---------------- ---------------- ---------------- ----------------
Net Cash Provided by/(Used for) Operating 4,468 4,924 19,567 4,725
Activities
---------------- ---------------- ---------------- ----------------
Cash Flows From Financing Activities
Proceeds from issuance of shares -0- -0- -0- -0-
---------------- ---------------- ---------------- ----------------
Net Cash Provided by Financing Activities -0- -0- -0- -0-
---------------- ---------------- ---------------- ----------------
Net Increase/(Decrease) in Cash 4,468 4,924 19,567 4,725
Beginning Cash Balance 25,812 1,990 10,713 2,189
---------------- ---------------- ---------------- ----------------
Ending Cash Balance $ 30,280 6,914 30,280 6,914
================ ================ ================ ================
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the year for income taxes $-0- -0- 447 -0-
</TABLE>
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SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Notes to Financial Statements
September 30, 2000
(Unaudited)
Note 1 PRELIMINARY NOTE
The accompanying condensed consolidated financial statements have been
prepared without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Audit for the year
ended December 31, 1999.
Note 2 ORGANIZATION
The Company was originally incorporated under the name Exit, Inc. in
accordance with the laws of the State of Utah on January 30, 1981. In
April of 1984, the Company changed its name to Parker Energy
Technology, Inc. From its inception until May 20, 1997, the Company
had been in the business of oil and gas exploration and production
activities. Currently, the Company has one producing well, located in
Grand County, Utah. On May 20, 1997, the Company effected a reverse
split of its outstanding shares from 81,637,100 to 1,632,742.
Simultaneous thereto, the Company entered into an agreement with an
individual to engage in the business of distillate fuel systems
process plants and changed its name to Source Energy Corporation. On
March 10, 2000 a U.S. district court judge rescinded the May 20, 1997
agreement and ordered that the Company be returned, as nearly as
possible, to its status prior to consummation of said agreement. This
included cancelling 12,305,800 shares of common stock issued in the
transaction.
Note 3 JUDGEMENT
On March 10, 2000, a U.S. district court judge rescinded the May 20,
1997 agreement referenced in Note 2, and ordered that the Company be
returned, as nearly as possible, to its status prior to consummation
of said agreement. The Court further ordered that the Company pay the
plaintiff in the legal action his attorneys fees in the amount of
$15,039 and an award of $75,000 to compensate him for the benefit
conferred on Source Energy Corporation shareholders in prosecuting
this action. The plaintiff in this case was returned by the Court to
the presidency of Source Energy Corporation, a position
5
<PAGE>
SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Notes to Financial Statements
September 30, 2000
(Unaudited)
Note 3 JUDGEMENT (cont.)
he held prior to the May 20, 1997 agreement.
The Court also ordered that the other defendants in the case, T.R.
Kraft, and Point Source Energy Corporation, an Oregon corporation, to
pay an award to the Company in the amount of $225,000. The Company
does not intend to record this amount as a receivable on its books
because the defendants' whereabouts are unknown and ability to collect
from them is questionable.
Note 4 REVERSE SPLIT OF COMMON SHARES
The Company effected a 1 for 40 reverse split, which became effective
April 10, 2000.
Note 5 ACQUISITION/MERGER
On April 13, 2000, the Company acquired Newven Acquisition
Corporation, A Nevada Corporation ("Newven"), as a wholly owned
subsidiary through a stock for stock exchange. Immediately following
the exchange, the Company and Newven entered into a Plan of Merger
pursuant to which Newven was merged with the Company. All of Newven's
outstanding stock (500,000 shares) were exchanged for 25,000 shares of
the Company's restricted common stock. Newven's assets at the time of
the merger were $565 in cash; there were no liabilities.
Note 6 STOCK ISSUED FOR DEBT
On April 13, 2000, the Company issued 200,000 shares to its President,
who is also a shareholder, in exchange for a debt reduction of
$15,039.
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