2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report Pursuant Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1996
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: 0-8447
DOL RESOURCES, INC.
(Exact Name of Registrant as specified in its Charter)
Wyoming 82-0219465
(State of other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
13636 Neutron Road, Dallas, Texas 75244
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (Area code (214) 661 5869)
Indicate by check mark whether 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 such shorter period that Registrant was required to file such
reports and (2) has been subject to such filing requirements
for the past 90 days YES: X NO:
The number of shares outstanding of each of the Issuer's Classes
of Common Stock, as of the close of the period covered by this
report:
Common - $0.01 Par Value - 20,671,254 shares as of September 30,
1996.
DOL RESOURCES, INC.
Index to Form 10-Q for Fiscal Quarter ended September 30, 1996
Page No.
PART 1 - Financial Information
Condensed Unaudited Balance Sheet, September 30, 1996
and December 31, 1995 2 - 3
Condensed Unaudited Statement of Income,
Nine Months ended September 30, 1996 and 1995 4
Condensed Unaudited Statement of Shareholder's
Equity Nine Months ended September 30, 1996 and 1995 5
Condensed Unaudited Statement of Changes in
Financial Position Nine-Months Ended
September 30, 1996 and 1995 5
Summary of Significant Accounting Policies and
Notes to Condensed Unaudited Financial Statements 6-11
Management's Discussion and Analysis of Condensed
Financial Condition and Results of Operations 12
PART 11 - Other Information
Item 6(b) - Exhibits and Reports on Form 8-K 13
Signature Pursuant to General Instruction E 13
All other items called for by the instructions are omitted as
they are inapplicable, not required, or the information is
included in the condensed financial statements or notes thereto.
-1-
DOL RESOURCES, Inc.
BALANCE SHEET
(Unaudited)
ASSETS
Sept. 30 Dec. 31
1996 1995
CURRENT ASSETS
Cash $ 35,253 $ 49,215
Marketable securities, at
lower or aggregate cost
or market, cost $24,175
in 1996 and 1995 - Note 2 1,924 1,924
Trade accounts receivable,
less allowance for doubtfiul
accounts of $1,711, ($1,711 in 1995
Note 1) 24,443 18,347
Due from related parties-Note 4 255,123 272,743
Prepaid Expenses 37,500 37,500
Total Current Assets 354,243 379,729
PROPERTIES - Using full costing-
Note 1
Production payment 100,000 100,000
Exploration, acquisition &
development, cost, net of
allowance for reduction of
oil & gas assets of $137,083
in 1985 1,656,365 1,654,290
Total cost 1,756,365 1,754,290
Less accumulated deplation 1,307,851 1,297,651
448,514 456,639
AUTOMOBILES, FURNITURE & FIXTURES
At cost - Note 1
Furniture and fixtures 6,476 6,476
Less accumulated deprecition 4,371 3,885
Net Furniture and Fixtures -0- 2,591
Total Cost 2,105 2,591
OTHER ASSETS
Undeveloped coal royalties-Note 9 10,156 10,155
Other accounts receivable-Note 12 72,362 78,027
Total Other Assets 82,518 88,183
TOTAL ASSETS 887,380 927,142
DOL Resources, Inc.
BALANCE SHEET
Sept. 30 December 31,
1996 1995
CURRENT LIABILITIES
Notes payable - Note 3 355,000 375,000
Accounts payable 38,129 28,592
Accrued expenses -0- -0-
Total current liabilities 393,129 403,592
LONG-TERM LIABILITIES
Notes payable - Note 4 and 12 297,003 77,669
Total Long-Term Liabilities 297,003 77,669
STOCKHOLDERS' EQUITY
Capital Stock, common,
$.01 par value:
Authorized 25,000,000 shares
issued and outstanding
20,671,234 shares at 9-30-96
and 12-31-95 206,713 206,713
Capital in excess of
par value 1,502,741 1,502,741
Accumulated deficit (1,511,831) (1,263,198)
Treasury Stcok ( 375) ( 375)
197,248 445,881
TOTAL 887,380 927,142
DOL RESOURCES, INC.
CONDENSED UNAUDITED STATEMENT OF INCOME
3 Months 9 Months
Ended Ended
9-30-96 9-30-96 9-30-95
Operating Revenue:
Oil and Gas Sales 14,775 43,338 36,060
Interest and other income 2,189 6,713 7,797
Total 16,964 50,051 43,857
Operating Expenses:
Depletion,depreciation
and amortization 3,562 10,686 10,986
General and administrative 221 1,790 1,574
Interest -0- 4,865 2,585
Consulting & Mgmt Fees 17,874 254,619 -0-
Production Taxes 1,639 4,505 3,796
Lease Operating Expense 7,964 22,219 17,178
Lease Rentals -0- -0- -0-
Total Operating Expenses 31,260 298,684 36,119
Net Income (Loss) before income
taxes (14,296) (248,633) 7,738
Provision for income taxes
(note 6) -0- -0- -0-
Net Income (Loss) (14,296) (248,633) 7,738
Weighted Average Number of Common
Shares Outstanding 20,671,254 20,671,254 20,671,254
Earnings (Loss) for Common Share $(.00069) $(.012) $.0004
The accompany notes are an integral part of this statement.
DOL RESOURCES, INC.
CONDENSED UNAUDITED STATEMENT OF STOCKHOLDER'S equity
Nine Months ended September 30, 1996 and 1995
Capital Stock Capital in
Number of Excess of Accumulated
Treasury
Shares Amount Par Value Deficit Stock
Balance at
1/1/95 20,671,254 206,713 1,502,741 (1,267,319) (
375)
Net Income -0- -0 -0- 7,738 -
0-
Balance at
9/30/95 20,671,254 206,713 1,502,741 (1,259,581 (
375)
Balance at
1/1/96 20,671,254 206,713 1,502,741 (1,263,198) (
375)
Net Income -0- -0- -0- ( 248,633) -
0-
Balance at
9/30/96 20,671,254 206,713 1,502,741 (1,511,831) (
375)
CONDENSED UNAUDITED STATEMENT
OF CHANGES IN FINANCIAL POSITION
Nine Months Ended:
Sept. 30, 1996 Sept. 30,
1995
Financial Resources Provided
By Operations:
Net Income (248,633) 7,738
Items not requiring outlay
of working Capital:
Depletion, Deprec. and
Amortization 10,686 10,986
Working Capital provided by
operations (237,947) 18,724
Reduction in Properties -0- -0-
Reduction in other Assets 5,665 5,150
Increase in long term debt 219,334 -0-
Total Resources ( 12,948) 23,874
Financial Resources Applied to:
Retirement of long-term debt -0- 5,532
Increase in Properties 2,075 -0-
Total 2,075 5,532
Net Increase (Decrease) in
Working Capital (15,023) 18,342
Working Capoital at being of period (23,863) (42,310)
Working Capital at end of period (38,886 (23,968)
DOL Resources, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. Summary of Significant Accounting Policies
Organization and Operations
The Company was organized on November 6, 1973 under the
laws of the State of Wyoming. Its primary activities
have been the acquisition of interests in various oil
and
gas properties, coal properties (Note 8) and
exploration
for oil and gas.
Allowance for Bad Debts:
Accounts receivable from participants in oil
and gas exploration are estimated to be at
least 95% collectible, consequently a 5%
allowance for bad debts has been established
against those receivables. Receivables from
the sale of oil and gas are fully collectible,
as accruals are based primarily on collection
of oil and gas sales subsequent to year-end.
Properties:
The Company uses the full cost method of
accounting for oil and gas acqusition,
exploration and development costs. The Company
has operations only within the continental
United States and consequently has only one cost
center.
All costs associated with property
acquisition, exploration and development
activities are capitalized within the cost
center. No costs related to production, general
corporate overhead or similar activities are
capitalized.
Capitalized costs within the cost center are
amortized on the units-of-production basis
using proved oil and gas reserves. The
carrying value of capitalized cost is limited
to the sum of (A) the present value of future
net revenues from estimated production of
proved oil and gas reserves, plus (B) the cost
of properties not being amortized, plus (C)
the lower cost or estimated fair value of
unproved properties included in the costs
being amortized less (D) income tax effects
related to differences between book and tax
basis of the properties involved. For the
year ended December 31, 1985, total
capitalized costs exceeded the cost center
ceiling by $137,083. The excess was expense
to current operations.
DOL RESOURCES, INC
NOTES TO FINANCIAL STATEMENTS (CONT.)
NOTE 1: Sales and abandonments of oil and gas properties are
accounted for as adjustment of capitalized costs, with
no gain or loss recognized.
Drilling in progress is included in the cost center
with depletion being calculated on all costs with
cost center.
Earnings per Common Share
Earnings per common share were computed by
dividing the net loss by the weighted average
number of common shares outstanding during the
year.
NOTE 2. Notes Payable
Notes payable consist of the following:
December 31, 1995
Monthly Interest Due Within Due After
Installment Rate One Year One Year
1995
Note 1 due 2-24-97 $375,000 $ -0-
Gateway Natiobnal Bank. Interest only payable
monthly at 6.66% per annum over a year of 360 days.
NOTE 3. Related Party Transactions
The Company ended 1995 with accounts
receivable from Glauber Management Corp. (the parent
company) of $272,743. The balance of this account on
September 30, 1996 was $255,123.
NOTE 4. Income Taxes
The Company as of December 31, 1995 had a net operating
income loss carryover for income tax purposes of
approximately $936,000. The carryover is available
to offset taxable income of future years and expires as
follows:
1996 265,000
1997 148,000
1998 241,000
1999 14,000
2000 109,000
2001 40,000
2002 48,000
2003 3,000
2004 34,000
2007 14,000
2008 19,000
2009 1,000
936,000
The Company also had approximately $27,000 of
investment tax credits available for carryover against
future federal income tax liabilities.
For financial reporting purposes, the net operating
loss has been used to offset prior deferred income
taxes. To the extend that the net operating loss
carryovers are utilized for income tax purposes in
future years, the deferred income taxes eliminated to
give
credits related to timing differences of the current year
not recorded, will be reinstated.
Because of timing differences related principally to
intangible drilling costs, cumulative losses for income
tax
reporting purposes exceed those reported by approximately
$576,000. Because of the uncertainly as to realization,
no future tax benefits are recognized at December 31,
1995.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
CONDENSED UNAUDITED STATEMENT OF INCOME
The following is Management's discussion and analysis of
certain significant factors which have affected the Company's
earnings during the period included in the accompanying Condensed
Unaudited Statement of Income.
A summary of the period to period changes in the principal
items included in the Condensed Unaudited Statement of Income is
as shown below:
Six Months
ending Sept. 30
1996 and 1995
Net Sales 7,278
Interest and Other Income ( 1,084)
General and Administrative 216
Depletion, Depreciation
and Amortization ( 300)
Consulting & Management Fees 254,619
Interest Expense 2,280
Net Income (Loss) ( 256,371)
Oil and gas sales increased as compared to the same period
last year due to an increase in the price per BBL of oil.
The recurring cash flow for the first nine months of 1996 was
approximately $7,700 per month. General and Administrative
expenses increased slightly. Interest expense increased due to
restructuring of debt. Accumulated managements fees due to
Comtec Superior Management Co. since 1986 were booked during this
period.
Management expects a slow upward trend in oil and gas prices
to continue beyond $20.00 per Bbl. This would not only increase
revenues and cash flow but would enhance our ability to raise
much needed funds for drilling additional wells. It is the
opinion of management that a minimum of $25.00 per Bbl. oil is
needed in order to expand operations and replace depleted
reserves. Meanwhile a continuing effort is being made to
increase production, and consequently revenues by seeking out and
negotiating joint-venture recompletion projects where positive
reserve information exists.
Management is also seeking out possible merger
opportunities. There have been several negotiations with private
companies desiring to go public. One is currently progressing
and stockholders will be advised of any definitive agreement.
Review of Independent Public Accountants:
The information contained in substantially all financial
statements accompanying this report were supplied by internal
accountant of registrant. Although such statements have not been
reviewed by registrant's certified public accountant they are
available for review.
Office Information
No reports on Form 8-K were filed by the Company in the
quarter for which this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned there unto duly authorized.
DOL RESOURCES, INC.
/s/ Fred M. Updegraff
Fred M. Updegraff
Vice President, Treasurer and
Principal Accounting Officer
Date: October 29, 1996
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