U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
{ X }QUARTERLY REPORT UNDER SECTION 10 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
{ }TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ________ to _________.
Commission File Number: 0-9458
Eagle Exploration Company
(Exact name of Registrant as specified in its charter)
Colorado 84-0804143
(State or other jurisdiction of (I.R.S. Employer ID Number)
incorporation or organization)
1801 Broadway, Suite 1420
Denver, Colorado 80202
(Address of principal executive offices)
(303) 296-3677
(Issuer's telephone number)
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 14(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court Yes X No .
State the number of shares outstanding of each of the issuer's classed of common
equity, as of the latest practicable date:
3,072,836.
Transitional Small Business Disclosure format: (Check One)
Yes No X
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
PART I FINANCIAL INFORMATION PAGE
Item 1 Unaudited Condensed Consolidated Balance Sheets -
- ------
December 31, 1998 and March 31, 1998 3
Unaudited Condensed Consolidated Statements of
Operations - Three Months Ended December 31, 1997
And 1998 and Nine Months Ended December 31,
1997 and 1998 4
Unaudited Condensed Consolidated Statements of Cash
Flow - Nine Months Ended December 31, 1997 and 1998 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2 Management's Discussion and Analysis of Financial
- ------
Condition and Results of Operations 7
PART II SIGNATURES 8
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1998 1998
------------ ------------
Assets
<S> <C> <C>
Current assets
Cash and cash equivalents ............................. $ 1,748,752 $ 333,450
Certificates of deposits .............................. 797,000 297,000
Other receivables ..................................... 13,343 4,143
----------- -----------
Total current assets ................................. 2,559,095 634,593
----------- -----------
Office furniture, equipment and other,
net of $239,251 of accumulated
depreciation at December 31, 1998,
and $228,797 of accumulated
depreciation at March 31, 1998 ......................... 62,967 44,066
Investment in limited liability company ................. -- 24,725
Other ................................................... 26,637 26,637
----------- -----------
Total assets ............................................ $ 2,648,699 $ 730,021
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable ...................................... $ 7,712 $ 24,825
Deposits, deferred revenue and other .................. 8,996 8,996
----------- -----------
Total current liabilities ............................ 16,708 33,821
----------- -----------
Stockholders' equity
Common stock, no par value; authorized
10,000,000 shares; 3,072,836 shares
issued and outstanding ................................ 6,632,998 6,632,998
Accumulated deficit ................................... (4,001,007) (5,936,798)
----------- -----------
2,631,991 696,200
Total liabilities and stockholders' equity .............. $ 2,648,699 $ 730,021
=========== ===========
</TABLE>
See notes to unaudited condensed consolidated financial statements
3
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the For the For the For the
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue
Income from investment in limited
liability company ........................ $ (13,150) $ -- $ 2,035,429 $ --
Interest income ........................... 35,565 16,144 68,913 37,903
Other income .............................. 27,491 6,230 37,950 18,391
----------- ----------- ----------- -----------
Total revenue ............................ 49,906 22,374 2,142,292 56,294
----------- ----------- ----------- -----------
Expenses
Depreciation .............................. 3,580 1,700 10,454 5,100
Other operating expenses .................. 49,977 52,849 196,047 162,525
----------- ----------- ----------- -----------
Total expense ............................ 53,557 54,549 206,501 167,625
----------- ----------- ----------- -----------
Net income (loss) ........................... $ (3,651) $ (32,175) $ 1,935,791 $ (111,331)
=========== =========== =========== ===========
Net income (loss) per share ................. $ (.001) $ (.01) $ .63 $ (.04)
=========== =========== =========== ===========
Weighted average number of shares outstanding 3,072,836 3,072,836 3,072,836 3,072,836
=========== =========== =========== ===========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
4
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the
Nine Months For the Nine
Ended Months Ended
December 31, December 31,
1998 1997
------------ -----------
Cash flows from operating activities
Net income (loss) ......................... $ 1,935,791 $ (111,331)
----------- -----------
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities
Depreciation .............................. 10,454 5,100
Change in assets and liabilities
(Increase) decrease in accounts receivable (9,200) 271
Decrease in accounts payable ............. (17,113) (10,150)
Total adjustments ..................... (15,859) (4,779)
----------- -----------
Net cash flows provided (used) by
operating activities .................. 1,919,932 (116,110)
----------- -----------
Cash flows from investing activities
Purchase of certificates of deposit ....... (500,000) (198,000)
Purchase of furniture and equipment ....... (29,355) (24,359)
Return on investment in limited
liability ................................ 24,725 94,695
----------- -----------
company
Net cash flows (used) by investing
activities ........................... (504,630) (127,664)
----------- -----------
Net increase (decrease) in cash and cash
equivalents ................................ 1,415,302 (243,774)
Cash and cash equivalents, beginning of year 333,450 510,055
----------- -----------
Cash and cash equivalents, end of quarter ... $ 1,748,752 $ 266,281
=========== ===========
See notes to unaudited condensed consolidated financial statements
5
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Opinion of Management
1. The financial information furnished reflects all adjustments which are, in
the opinion of management, necessary to a fair presentation of the
financial position at December 31, 1998, and March 31, 1998, and of the
condensed consolidated statements of operations and condensed consolidated
statements of cash flows for the nine months ended December 31, 1997 and
1998.
2. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information, with the above mentioned exception.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles. For further
information refer to the audited consolidated financial statements and
notes thereto for the year ended March 31, 1998, included in the Company's
10-KSB filed with the Securities and Exchange Commission on June 30, 1998.
3. During the third quarter of fiscal 1998, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" (FAS 128). FAS 128 established new definitions for calculating and
disclosing basic and diluted earnings per share. In accordance with FAS
128, all prior periods have been restated to conform to the new
methodology. The restated amounts did not differ materially from amounts
previously reported. As the Company has no dilutive potential common
shares, no diluted earnings per share is presented.
4. The Company is currently working to resolve the potential impact of the
year 2000 on the processing of date-sensitive information by the Company's
computerized information systems. Based on preliminary information, costs
of addressing potential problems are not currently expected to have a
materially adverse impact on the Company's financial position, results of
operations or cash flows in future periods. However, if the Company, its
customers or vendors are unable to resolve such processing issued in a
timely manner, it could result in a material financial risk. Accordingly,
the Company plans to devote the necessary resources to resolve all
significant year 2000 issues in a timely manner.
6
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Opeartion
Financial Condition, Liquidity and Capital Resources
Cash and cash equivalents increased for the nine months ended December 31, 1998,
$1,415,302. For the same period the certificates of deposit increased $500,000.
At December 31, 1998, the Company's cash and cash equivalents earned between
three and 4.5 percent in investment money funds and money markets. The Company's
certificates of deposit earned between 5.3 and 6.35 percent.
Stockholders' equity increased from $696,200 to $2,631,991 or $1,935,791 for the
nine months ended December 31, 1998.
Results of Operations
For the Nine Months Ended December 31, 1998, Compared to the Nine Months Ended
December 31, 1997
For the nine months ended December 31, 1998, the Company's total revenue was
$2,142,292. Aside from the income from the investment in the limited liability
company of $2,035,429, the Company's interest income and other income which
includes oil and gas revenue totaled $106,863 for the nine months ended December
31, 1998 as compared to $56,294 for the nine months ended December 31, 1997.
Total expenses for the nine month period ended December 31, 1998, were $206,501
as compared to $167,625 for the period ended December 31, 1997.
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
PART II
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE EXPLORATION COMPANY
(Registrant)
By: /s/ Raymond N. Joeckel
Raymond N. Joeckel
President/Chief Financial Officer
By: /s/ Paul M. Joeckel
Paul M. Joeckel
Secretary
Date: February 9, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> DEC-31-1998
<CASH> 1,748,752
<SECURITIES> 0
<RECEIVABLES> 13,343
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,559,095
<PP&E> 62,967
<DEPRECIATION> 10,454
<TOTAL-ASSETS> 2,648,699
<CURRENT-LIABILITIES> 16,708
<BONDS> 0
0
0
<COMMON> 6,632,998
<OTHER-SE> (4,001,007)
<TOTAL-LIABILITY-AND-EQUITY> 2,648,699
<SALES> 0
<TOTAL-REVENUES> 2,142,429
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 206,501
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,935,791
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,935,791
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,935,791
<EPS-PRIMARY> .63
<EPS-DILUTED> 0
</TABLE>
