U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ending June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 0-29613
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TIDELANDS OIL & GAS CORPORATION
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(Name of Small Business Issuer in its Charter)
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
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9309 North Star Road, Corpus Christi, TX 78409
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Former Name, former address and former fiscal year if changed
since last report
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
Applicable only to issuers involved in bankruptcy proceedings during
the preceding five years
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes No
--- ---
Applicable on to corporate issuers
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date: 17,880,489
Transitional Small Business Disclosure Format
(Check One)
Yes No
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
FORM 10-QSB
INDEX
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Page
PART I - Financial Information
Item 1 - Financial Statements
Condensed Consolidated Balance sheets as of
June 30, 2000 and December 31, 1999 ............................. 3-4
Condensed Consolidated Statements of Operations
For the Three Months Ended June 30, 2000 and 1999 .............. 5
Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 2000 and 1999 ................. 6
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 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 ................................. 11-12
Signature................................................................. 12
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<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION (NOTE 3)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
June 30, 2000 December 31, 1999
---------------- -----------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 42,256 $ 51065
Accounts Receivable 15,319 14,365
Prepaid Expenses 6,099 11,851
---------------- ----------------
Total Current Assets 63,674 77,281
---------------- ----------------
Oil and Gas Properties (Net) 499,035 506,310
---------------- ----------------
Other Assets:
Deposits and Organizational
Costs, Net 1,721 1,101
Investments 143,491 115,742
Intangible Assets, Net 3,416,173 3,503,633
---------------- ----------------
Total Other Assets 3,561,385 3,620,476
---------------- ----------------
Total Assets $ 4,124,094 $ 4,204,067
================ ================
</TABLE>
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
------------------------------------
June 30, 2000 December 31, 1999
---------------- ----------------
(Unaudited)
<S> <C> <C>
Current Liabilities:
Accounts Payable and
Accrued Expenses $ 290,329 $ 415,051
Current Maturities of Long-Term Debt 19,552 19,552
Drilling Advances 25,967 25,967
---------------- ----------------
Total Current Liabilities 335,848 460,570
Long-Term Debt 239,925 60,405
Due to Related Parties 582,170 430,218
---------------- ----------------
Total Liabilities 1,157,943 951,193
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Commitments and Contingencies
Stockholders' Equity
Common stock $.001 par value
per share, 100,000,000 shares
authorized; 17,880,489 shares issued
and outstanding June 30, 2000,
17,420,489 shares issued and
outstanding, December 31, 1999 17,880 17,420
Additional Paid-in Capital 4,815,780 4,682,270
Subscriptions Receivable (65,000) (124,575)
Accumulated (Deficit) (1,802,509) (1,322,241)
---------------- ----------------
Total Stockholders' Equity 2,966,151 3,252,874
---------------- ----------------
Total Liabilities and
Stockholders' Equity $ 4,124,094 $ 4,204,067
================ ================
</TABLE>
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 OPERATIONS
(UNAUDITED)
Three Months Ended Three Months Ended
June 30, 2000 June 30, 1999
---------------- ----------------
<S> <C> <C>
Revenues:
Oil and Gas Sales $ 21,331 $ 4,500
---------------- ----------------
Expenses:
Lease Operating 53,518 20,915
Depreciation and Amortization 52,917 50,602
(Loss) in Equity of Investments 24,331 0
General and Administrative 144,251 110,858
---------------- ----------------
Total Expenses 275,017 182,375
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(Loss) Before Provision
for Income Taxes (253,686) 177,875)
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Provision For Income Taxes 0 0
---------------- ----------------
Net (Loss) (253,686) (177,875)
================ ================
Net(Loss) Per Common Share-Basic $ (0.014) $ (0.12)
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Weighted Average Number of
Common Shares Outstanding-Basic 17,575,489 14,409,530
================ ================
Net(Loss) Per Common Share
Diluted $ (0.013) $ (0.011)
---------------- ----------------
Weighted Average Number of
Common Shares Outstanding-
Diluted 19,530,489 15,924,530
================ ================
</TABLE>
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 OPERATIONS
(UNAUDITED)
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
---------------- ----------------
<S> <C> <C>
Revenues:
Oil and Gas Sales $ 37,101 $ 13,225
---------------- ----------------
Expenses:
Lease Operating 93,080 32,516
Depreciation and Amortization 105,834 101,203
Loss in Equity of Investments 46,580 0
General and Administrative 271,875 213,455
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Total Expenses 517,369 347,174
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(Loss) Before Provision
for Income Taxes (480,268) (333,949)
---------------- ----------------
Provision For Income Taxes 0 0
---------------- ----------------
Net (Loss) (480,268) (333,949)
================ ================
Net(Loss) Per Common Share-Basic $ (0.027) $ (0.023)
---------------- ----------------
Weighted Average Number of
Common Shares Outstanding-Basic 17,575,489 14,317,745
================ ================
Net(Loss) Per Common Share
Diluted $ (0.025) $ (0.021)
---------------- ----------------
Weighted Average Number of
Common Shares Outstanding-
Diluted 19,530,489 15,832,745
================ ================
</TABLE>
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)
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
----------------- ----------------
<S> <C> <C>
Cash Flows Provided (Required)
By Operating Activities:
Net (Loss) $ (480,268) $ (333,949)
Adjustments to Reconcile Net
(Loss) to Operating Cash Flow:
Depreciation, Depletion
And Amortization 105,834 101,203
(Increase) Decrease in Receivables (954) 1,529
(Increase) Decrease in Prepaid Expenses 5,752 0
Decrease in Current Maturities 0 (581,623)
Increase in Deposits
and Organization Costs (750) 0
Increase in Accounts Payable
and Accrued Expenses (3,279) 3,469
---------------- ----------------
Net Cash (Required) by
Operating Activities (367,107) (809,371)
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Cash Flows From (Required) By
Investing Activities (Acquisitions),
Dispositions of Oil and Gas Properties (5,000) 113,929
Increase in Investments (27,749) (116,331)
---------------- ----------------
Net Cash (Required) by
Investing Activities 32,749 (2,402)
---------------- ----------------
Cash Flows Provided by
Financing Activities:
Increase in Long-Term Debt 179,520 320,934
Increase in due to Related Parties 151,952 67,925
Decrease in Subscriptions Receivable 59,575 442,553
---------------- ----------------
Net Cash Provided by Financing
Activities 391,047 831,412
---------------- ----------------
Net Increase (Decrease) in Cash $ (8,809) $ 19,639
================ ================
Supplemental Disclosure of Cash
Flow Information:
Interest Paid $ 617 $ 266
================ ================
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)
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
---------------- ----------------
Supplemental Disclosure of
Non-Cash Transactions:
Common Stock Issued in
Payment of Accrued
Expenses and Accounts Payable $ 128,000 $ 19,000
================ ================
Common Stock Issued in
Payment of Notes and
Loans Payable $ 0 $ 423,553
================ ================
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 six month periods ended June 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 six month period ended June
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 six months ended June 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
--------------------------
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
-----------------
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 for
the purpose of achieving increased revenues and to assist in developing
its fifty percent (50%) owned gas processing plant and fifty percent
(50%) owned pipeline system to their capacities.
In addition, subject to available funding, the Company would seek to
acquire additional oil and/or gas producing properties..
FINANCIAL CONDITIONS
--------------------
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
$202,925, as of June 30, 2000 or obtaining additional borrowing and/or
sales of common stock.
The Company anticipates raising further funding through short-term and
mid-term loans and/or sale of restricted common stock to accredited
investors.
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
PART II - OTHER INFORMATION
---------------------------
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
------ -----------------------------------------
On April 19, 2000, the Company acquired all of the issued and
outstanding common stock of Omni Acquisition Corporation in exchange
for 250,000 restricted common stock. The share exchange was an exempt
transaction under Section 4 (2) of the Securities Act of 1933 (the
"Securities Act"), as amended. In April 2000, the Company issued
150,000 shares of restricted common stock under Section 3 (b) of the
Securities Act in exchange for services valued at $30,000.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
------ -------------------------------
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------ ---------------------------------------------------
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
------ -----------------
On May 11, 2000, Omni Acquisition Corporation, a wholly-owned
subsidiary of Tidelands Oil & Gas Corporation, was merged into and with
Tidelands. Tidelands was the surviving corporation.
On May 26, 2000, Tidelands Oil & Gas Corporation director, Danny Vines,
tendered his resignation. Mr. Vines' resignation has created a vacancy
on the board of directors which has not been filled. The letter of
resignation did not express any disagreement with the company on any
matter relating to operations, policies or practices.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 80K
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(a) Exhibits
Exhibit Number Description
-------------- -----------
*(2.0) Business Combination Agreement
*(3.1) Articles of Incorporation of C2
Technologies, Inc.
*(3.2) Certificate of Amendment of Articles of
Incorporation of C2 Technologies, Inc.
*(3.3) By-Laws
*(3.4) Articles of Merger
*(3.5) Plan of Merger
*(21) List of Subsidiaries
(27) Financial Data Schedule
-----------------
*Previously filed.
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<PAGE>
TIDELANDS OIL & GAS CORPORATION
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 80K (CONTINUED)
------ --------------------------------------------
(b) Reports on Form 8-K. One report was filed on form 8-K during the
second quarter of 2000. The report was filed on April 19, 2000. The
reported items were Item 1-Changes in Control of Registrant; Item
2-Acquisition or Disposition of Assets; Item 5-Other Events; and Item
7-financial Statements.
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: August 10, 2000
TIDELANDS OIL & GAS CORPORATION
/s/ Michael Ward
-----------------
By: Michael Ward
Title: President
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