U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(x) QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ending September 30, 2000.
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
COMMISSION FILE NUMBER 0-29613
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TIDELANDS OIL & GAS CORPORATION
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NEVADA 66-0549380
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(State of Incorporation) (IRS Employer Identification No.)
13330 Leopard St., Corpus Christi, TX 78410
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(Address of Principal Executive Offices) Zip Code
Issuer's telephone number, (361-241-2244)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No .
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The number of shares of common stock, par value $.001 per share, outstanding as
of November 14, 2000 was 17,980,489 shares.
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TIDELANDS OIL & GAS CORPORATION
FORM 10-QSB
INDEX
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Page
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PART I - Financial Information
Item 1 - Financial Statements
Condensed Consolidated Balance sheets as of
September 30, 2000 and December 31, 1999 ....................... 3 - 4
Condensed Consolidated Statements of Operations
For the Three Months Ended September 30, 2000 and 1999......... 5
Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2000 and 1999........... 6
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 1999........... 7 - 8
Notes to Condensed Consolidated Financial Statements ........... 9
Item 2 - Management's Discussion and Analysis or Plan of Operation ...... 10
PART II - Other Information
Item 1 - Legal Proceedings .............................................. 11
Item 2 - Changes in Securities and Use of Proceeds....................... 11
Item 3 - Defaults Upon Senior Securities................................. 11
Item 4 - Submission of Matters to a Vote of Security Holdings............ 11
Item 5 - Other Information............................................... 11
Item 6 - Exhibits and Reports on Form 8K ................................ 11
Signature................................................................ 12
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<PAGE>
TIDELANDS OIL & GAS CORPORATION (NOTE 3)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
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September 30, 2000 December 31, 1999
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(Unaudited)
Current Assets:
Cash $ 183,585 $ 51,065
Accounts Receivable 13,487 14,365
Prepaid Expenses 3,094 11,851
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Total Current Assets 200,166 77,281
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Oil and Gas Properties (Net) 486,040 506,310
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Other Assets:
Deposits and Organizational
Costs, Net 1,658 1,101
Investments 159,675 115,742
Intangible Assets, Net 3,369,458 3,503,633
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Total Other Assets 3,530,791 3,620,476
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Total Assets $ 4,216,997 $ 4,204,067
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See Accompanying Notes to Condensed Consolidated Financial Statements
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<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION (NOTE 3)
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDER'S EQUITY
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September 30, 2000 December 31, 1999
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(Unaudited)
<S> <C> <C>
Current Liabilities:
Accounts Payable and
Accrued Expenses $ 510,830 $ 415,051
Current Maturities of Long-Term Debt 19,552 19,552
Drilling Advances 0 25,967
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Total Current Liabilities 530,382 460,570
Long-Term Debt 264,925 60,405
Due to Related Parties 667,499 430,218
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Total Liabilities 1,462,806 951,193
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Commitments and Contingencies
Stockholders' Equity
Common stock $.001 par value
per share, 100,000,000 shares
authorized; 17,980,489 shares issued
and outstanding September 30, 2000,
17,420,489 shares issued and
outstanding, December 31, 1999 17,980 17,420
Additional Paid-in Capital 4,845,780 4,682,270
Subscriptions Receivable (67,500) (124,575)
Accumulated (Deficit) (2,042,069) (1,322,241)
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Total Stockholders' Equity 2,754,191 3,252,874
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Total Liabilities and
Stockholders' Equity $ 4,216,997 $ 4,204,067
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</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
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<PAGE>
TIDELANDS OIL & GAS CORPORATION (NOTE 3)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Three Months Ended
September 30, 2000 September 30, 1999
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Revenues:
Oil and Gas Sales $ 62,487 $ 13,753
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Expenses:
Lease Expirations 27,809 0
Lease Operating 89,983 53,603
Depreciation and Amortization 53,602 50,629
(Gain) Loss in Equity Investments (16,184) 12,593
General and Administrative 146,834 179,236
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Total Expenses 302,044 296,061
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(Loss) Before Provision
for Income Taxes (239,557) (282,308)
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Provision For Income Taxes 0 0
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Net (Loss) (239,557) (282,308)
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Net(Loss) Per Common Share-Basic $ (0.013) $ (0.018)
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Weighted Average Number of
Common Shares Outstanding-Basic 17,930,489 15,498,030
================ ================
Net(Loss) Per Common Share
Diluted $ (0.012) $ (0.015)
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Weighted Average Number of
Common Shares Outstanding-
Diluted 19,630,489 18,528,030
================ ================
See Accompanying Notes to Condensed Consolidated Financial Statements
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<PAGE>
TIDELANDS OIL & GAS CORPORATION (NOTE 3)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
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Revenues:
Oil and Gas Sales $ 99,588 $ 26,978
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Expenses:
Lease Expirations 27,809 0
Lease Operating 183,063 86,119
Depreciation, Depletion
and Amortization 159,436 151,832
Loss in Equity of Investments 30,396 12,593
General and Administrative 418,709 392,691
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Total Expenses 819,413 643,235
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(Loss) Before Provision
for Income Taxes (719,825) (616,257)
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Provision For Income Taxes 0 0
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Net (Loss) (719,825) (616,257)
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Net(Loss) Per Common Share-Basic $ (0.041) $ (0.043)
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Weighted Average Number of
Common Shares Outstanding-Basic 17,700,489 14,405,745
================ ================
Net(Loss) Per Common Share
Diluted $ (0.037) $ (0.039)
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Weighted Average Number of
Common Shares Outstanding-
Diluted 19,655,489 15,920,745
================ ================
See Accompanying Notes to Condensed Consolidated Financial Statements
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<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION (NOTE 3)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
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<S> <C> <C>
Cash Flows Provided (Required)
By Operating Activities:
Net (Loss) $ (719,825) $ (616,257)
Adjustments to Reconcile Net
(Loss) to Operating Cash Flow:
Depreciation, Depletion
And Amortization 159,436 151,832
Decrease in Receivables 878 6,319
Decrease in Prepaid Expenses 8,757 0
(Increase) in Deposits
and Organization Costs (750) (450)
(Decrease) in Drilling Advances (25,967) 0
Increase in Accounts Payable
and Accrued Expenses 215,971 3,014
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Net Cash (Required) by
Operating Activities (361,500) (455,542)
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Cash Flows Provided (Required) By
Investing Activities,
Dispositions of Oil and Gas Properties 1,172 82,673
Increase in Investments (43,933) (104,023)
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Net Cash (Required) by
Investing Activities (42,761) (21,350)
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Cash Flows Provided by
Financing Activities:
Increase (Decrease) in Long-Term Debt 227,925 (42,658)
Increase in due to Related Parties 237,281 101,192
Decrease in Subscriptions Receivable 71,575 442,728
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Net Cash Provided by Financing
Activities 536,781 501,262
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Net Increase in Cash $ 132,520 $ 24,370
================ ================
Supplemental Disclosure of Cash
Flow Information:
Interest Paid $ 1,064 $ 23,943
================ ================
Income Taxes Paid $ 500 $ 0
================ ================
</TABLE>
(continued)
See Accompanying Notes To Condensed Consolidated Financial Statements
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<PAGE>
TIDELANDS OIL & GAS CORPORATION (SEE NOTE 3)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(CONTINUED)
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
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Supplemental Disclosure of
Non-Cash Transactions:
Common Stock Issued in
Payment of Accrued
Expenses and Accounts Payable $ 143,600 $ 19,000
================ ================
Common Stock Issued in
Payment of Notes and
Loans Payable $ 0 $ 423,553
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Common Stock Issued in
Settlement of Litigation $ 0 $ 175
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Common Stock Issued for
An Acquisition $ 5,970 $ 0
================ ================
See Accompanying Notes To Condensed Consolidated Financial Statements
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
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The accompanying unaudited condensed consolidated financial statements
for the three month and nine month periods ended September 30, 2000 and
1999, have been prepared in conformity with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Regulation S-B. The financial
information as of December 31, 1999, is derived from the registrant's
Form 10-KSB for the year ended December 31, 1999. Certain information
or footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of
the Securities and Exchange Commission.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. In the opinion of
management, the accompanying financial statements include all
adjustments necessary (which are of a normal and recurring nature) for
the fair presentation of the results of the interim periods presented.
While the registrant believes that the disclosures presented are
adequate to keep the information from being misleading, it is suggested
that these accompanying financial statements be read in conjunction
with the registrant's audited consolidated financial statements and
notes for the year ended December 31, 1999, included in the
registrant's Form 10-KSB for the year ended December 31, 1999.
Operating results for the three month and nine month period ended
September 30, 2000 are not necessarily indicative of the results that
may be expected for the remainder of the fiscal year ending December
31, 2000. The accompanying unaudited condensed consolidated financial
statements include the accounts of the registrant and its wholly-owned
subsidiaries. All significant inter-company accounts and transactions
have been eliminated in consolidation.
NOTE 2 - INTANGIBLES
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The registrant evaluates the amortization period of intangibles on an
ongoing basis in light of changes in any business conditions, events or
circumstances that may indicate the potential impairment of intangible
assets.
The adoption of Statement of Accounting Standards 121, "Accounting for
the Impairment of Long-Lived Assets to be Disposed of", and the
evaluation by the registrant, did not have a significant effect on the
consolidated financial position or results of operations of the
registrant for the three months and nine months ended September 30,
2000.
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
ITEM 2 - MANAGEMENT'S PLAN OF OPERATION
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FORWARD LOOKING STATEMENTS
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This Form 10-QSB contain forward-looking statements. For this purpose,
any statements contained in this Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may", "will", "expect",
"believe", "anticipate", "estimate" or "continue" or the negative or
other variations thereof or comparable terminology are intended to
identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may
differ materially depending on a variety of factors.
PLAN OF OPERATION
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The Company's plan of operation for the next twelve (12) months through
its wholly-owned subsidiaries, Tidelands Oil Corporation and Tidelands
Gas Corporation is to continue to rework existing oil and gas wells,
subject to budgetary limitations, for the purpose of achieving
increased production revenues and to assist in developing its fifty
percent (50%) owned gas processing plant and fifty percent (50%) owned
pipeline system to their capacities.
Rio Bravo Energy, LLC and its subsidiary, Sonora Pipeline, LLC, the 50%
owned pipeline and processing plant entities achieved their first
profitable quarter during this period and are expected to continue
recording both increased revenues and increased net income.
In addition, subject to available funding, the Company would seek to
acquire additional oil and/or gas producing properties..
FINANCIAL CONDITIONS
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The Company currently does not have the liquidity or capital resources
to fund its operations until revenues and profits increase as described
in it's "Plan of Operations" without utilizing its one million dollar
($1,000,000) line of credit which has been drawn in the amount of
$227,925, as of September 30, 2000 or obtaining additional borrowing
and/or sales of common stock.
Tidelands has secured a $20 million dollar agreement from an
institutional equity investor providing for a private equity line for
the purchase on common stock, subject to registration and certain other
conditions. Additionally, the financing will be limited to a percentage
of dollar trading volume of the company's stock as quoted on the OTC
Bulletin Board.
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
PART II - OTHER INFORMATION
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ITEM 1 - LEGAL PROCEEDINGS
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The Company is not a party to any pending or threatened legal
proceedings.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
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During the quarterly period ended September 30, 2000, the Company
issued restricted common stock, for private transactions in reliance on
Section 4 (2) of the Act, as described below:
(a) The Company issued 100,000 shares of restricted common stock for
public relation services rendered, valued and recorded at $15,600.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
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None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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No matter was submitted to a vote of the security holders, through the
solicitation of proxies or otherwise, during the second quarter of the
fiscal year covered by this report.
ITEM 5 - OTHER INFORMATION
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Tidelands has secured a $20 million dollar agreement from an
institutional equity investor providing for a private equity line for
the purchase on common stock, subject to registration and certain other
conditions. Additionally, the financing will be limited to a percentage
of dollar trading volume of the Company's stock as quoted on the OTC
Bulletin Board.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8K
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(a) Exhibits - 27.1 Financial Data Schedule - September 30, 2000
(b) Reports on Form 8-K - None
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
SIGNATURE
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.
Dated: November 14, 2000
TIDELANDS OIL & GAS CORPORATION
/s/ Michael Ward
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By: Michael Ward
President
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