SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period
from ____________ to ____________.
Commission File No. 0-9458
------
Eagle Exploration Company
-------------------------
(Name of small business issuer in its charter)
Colorado 84-0804143
-------- ----------
(State or other jurisdiction of (IRS Employers ID Number)
incorporation or organization)
1801 Broadway, Suite 1420, Denver, Colorado, 80202
--------------------------------------------------
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: 303/296-3677
------------
Securities registered pursuant to Section 12 (b) of the Act: None Securities
registered pursuant to Section 12 (g) of the Act:
Common Stock, No Par Value
--------------------------
(Title of Class)
Indicate by check mark whether the 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 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 ___
---
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [X]
State Registrant's revenues for its most recent fiscal year $189,019
--------
At June 29, 2000, 3,072,836 shares of common stock, no par value, the
Registrant's only class of voting stock were outstanding. The aggregate market
value of the 1,530,378 common shares of Registrant held by nonaffiliates was
approximately $1,052,133 at June 29, 2000, based on the mean between the bid and
asked prices on the OTC Bulletin Board. See Item 5 herein for additional
information in this regard.
- 1 -
<PAGE>
PART I
Item 1. Description of Business.
--------------------------------
Nature of Business and Management's Plan
----------------------------------------
Eagle Exploration Company's history of operations includes the purchase
and development of residential and commercial real estate. The Company's
operations also primarily include engaging in oil and gas exploration and
production activities, acquiring whole or partial interests in oil and gas
leases, and farming out or reselling all or part of its interest in these leases
to other companies in the oil and gas industry. The Company sold all land held
for development during the year ended March 31, 1995, and sold its commercial
property during the year ended March 31, 1999. The Company continues to hold
minor interests in certain oil and gas properties. The Company is investigating
various potential acquisitions and other business opportunities.
All statements other than statements of historical fact included in
this annual report regarding the Company's financial position and operating and
strategic initiatives and addressing industry developments are forward-looking
statements. Where, in any forward-looking statement, the Company, or its
management, expresses an expectation or belief as to future results, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished. Factors which
could cause actual results to differ materially from those anticipated, include
but are not limited to general economic, financial and business conditions; the
business abilities and judgments of personnel; the impacts of unusual items
resulting from ongoing evaluations of business strategies; and changes in
business strategy.
2000 Activities
---------------
The Company identified an interesting oil and gas investment
opportunity in the first quarter of fiscal 2000. Management carefully considered
the opportunity of acquiring a one percent working interest in an exploration
program searching for gas in a high pressured reservoir approximately 18,000
feet subsurface in Kern County, California. The three well program would test
three separate structures near or on trend to an apparent discovery well in the
East Lost Hills structure. Management had the opportunity to review the geology
supported with seismic data on each of the three prospects as well as the
prospect with the apparent discovery. After careful review, management although
intrigued with the potentially large gas reserves elected to pass due to the
risk associated with drilling wildcats, the high cost in drilling 18,000 feet
tests and the problems associated with owning a minority working interest.
However, management was interested in participating in the redrill of the
apparent discovery well and its development. In this prospect it was known that
gas was produced from the reservoir, and based on the thickness of the section
and the size of the structure, management believed the prospect had potential
reserves from one to ten trillion cubic feet of gas.
- 2 -
<PAGE>
Unfortunately a working interest in this prospect was not available for
sale. To capitalize on this investment opportunity, the Company elected to
acquire stock in three oil and gas companies owning a working interest in this
prospect.
The redrill of the apparent discovery well had mechanical problems. An
offset well approximately two miles away was drilled and subsequent to the
Company's year end, this well was logged and completed. The results were
positive and the Company acquired additional stock in companies owning a working
interest in the prospect. A third well is currently being drilled on this
prospect and is expected to be tested by November, 2000.
During fiscal 2000 the Company also acquired certain securities with
annualized yields of 6.75 percent and 9.50 percent. The Company also continued
its pursuit of our strategic objective of locating a merger or acquisition of a
profitable entity. With the assistance of an investment banker and other
resources, the Company reviewed several opportunities but elected to pass. In
management's opinion these deals were not in the best interest of the
shareholders.
Since June, 1999, almost 3,000 Over-the-Counter/Bulletin Board (OTC/BB)
companies have been delisted. Nearly 60 percent of the OTC/BB companies will be
delisted by the end of June, 2000. To date the Company is current in reporting
all of its financial statements and intends to remain current with filing its
financial reports in the future. With fewer companies available for mergers or
acquisition opportunities, management believes that this may create an increase
in value of the Company. Also the current lack of initial public offering
interest may increase opportunities for mergers with private companies with
intentions to participate in public offerings.
- 3 -
<PAGE>
Employees
---------
As of June 29, 2000, the Company had two full-time employees. The
Company has and may retain independent consultants from time to time on a
limited basis.
Item 2. Properties.
-------------------
The Company's assets consist of cash, securities, office furniture and
equipment, and very minor interests in oil and gas properties including one
lease operated by the Company.
Item 3. Legal Proceedings.
--------------------------
No litigation is pending or threatened.
Item 4. Submissions of Matters to a Vote of Security Holders.
--------------------------------------------------------------
No matter was submitted during the fourth quarter of fiscal 2000 to a
vote of the Company's security holders.
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<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
-------------------------------------------------------------------------------
The table below presents the range of high and low bid quotations for
the Company's common stock on a calendar quarter basis as reported on the OTC
Bulletin Board. The Company's trading symbol is EGXP.OB. There is little or no
trading in the Company's common stock, hence the quotations set forth below may
not represent actual transactions and do not represent transactions in any
material number of the Company's shares.
Bid High Bid Low
---------- ---------
1998
2nd quarter $ .25 $ .125
3rd quarter $ .25 $ .125
4th quarter $ .18 $ .108
1999
1st quarter $.437 $.2622
2nd quarter $ .35 $ .25
3rd quarter $ .35 $ .25
4th quarter $ .25 $ .20
2000
1st quarter $.875 $.50
As of June 29, 2000, the Company had approximately 515 holders of
record of its common stock.
Holders of common stock are entitled to receive such dividends as may
be declared by the Company's Board of Directors. No dividends on its common
stock have been paid by the Company, nor does the Company anticipate that such
dividends will be paid in the foreseeable future.
- 5 -
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
Financial Condition, Liquidity and Capital Resources
------------------------------------------------------------------
Cash and cash equivalents at March 31, 2000, were $1,569,309 as
compared to $2,350,898 at March 31, 1999. This decrease of approximately 33
percent or $781,589 is due primarily to investments available-for-sale and
operating expenses. The Company's investments available-for-sale include 20,000
shares of a Corporate Asset Backed Corporation (CABCO) Trust for BellSouth
Debentures, the Trust relating to BellSouth Telecommunications, Inc. The Trust
Certificates will evidence the right to receive semi-annual interest payments on
the principal amount of the Trust Certificates at an interest rate of 6.75
percent per annum; and 2,000 shares of preferred stock in Hospitality Properties
earning interest at a rate of 9.50 percent per annum. All of these shares were
purchased at $25.00 per share, and the Company paid no commissions on the
purchase of the preferred securities.
The Company also purchased stock in three companies involved in an
exploration project for the development of large gas reserves in Kern County,
California. The Company bought 10,000 shares of stock in PYR Energy Company,
50,000 shares in Hilton Petroleum LTD Company, and 10,000 shares in Berkeley
Petroleum in fiscal 2000.
Shareholders' equity at March 31, 2000, was $2,419,216 as compared to
$2,599,260 at March 31, 1999, resulting in a decrease of $180,044. This is due
primarily to unrealized losses on investments available-for-sale.
Results of Operations
---------------------
Fiscal 2000 Compared with Fiscal 1999
-------------------------------------
Total revenue for the year ended March 31, 2000, was $189,019 as
compared to $2,176,972 for the year ended March 31, 1999. The Company reported a
net loss of $19,740 for the year ended March 31, 2000, as compared to net income
of $1,903,060 for the prior year ended March 31, 1999. The Company did not
realize any sale of its assets in fiscal 2000 as compared to the sale of the
apartment complex in fiscal 1999; therefore, the Company experienced this
significant decrease in revenue and net income for the year ended March 31,
2000.
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<PAGE>
Total expenses for the year ended March 31, 2000, were $208,759 as
compared to $238,912 for the previous year ended March 31, 1999.
Item 7. Financial Statements.
-----------------------------
See pages F-1 through F-9.
- 7 -
<PAGE>
EAGLE EXPLORATION COMPANY
Consolidated Financial Statements and
Independent Auditors' Report
March 31, 2000
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Table of Contents
Page
----
Independent Auditors' Report...............................................F - 1
Consolidated Financial Statements
Consolidated Balance Sheet as of March 31, 2000.........................F - 2
Consolidated Statements of Operations and Comprehensive Income
for the Years Ended March 31, 1999 and 2000............................F - 3
Consolidated Statement of Stockholders' Equity and Other Accumulated
Comprehensive Income for the Years Ended March 31, 1999 and 2000.......F - 4
Consolidated Statements of Cash Flows for the Years Ended
March 31, 1999 and 2000................................................F - 5
Notes to Consolidated Financial Statements..............................F - 6
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Eagle Exploration Company
Denver, Colorado
We have audited the accompanying consolidated balance sheet of Eagle Exploration
Company and Subsidiaries as of March 31, 2000 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended March 31, 1999 and 2000. These consolidated financial statements are the
responsibility of the Company's management.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eagle Exploration Company and
Subsidiaries at March 31, 2000 and the results of their operations and their
cash flows for the years ended March 31, 1999 and 2000 in conformity with
generally accepted accounting principles.
/s/Ehrhardt Keefe Steiner & Hottman PC
Ehrhardt Keefe Steiner & Hottman PC
May 17, 2000
Denver, Colorado
F - 1
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Consolidated Balance Sheet
March 31, 2000
Assets
Current assets
Cash and cash equivalents ............................ $ 1,569,309
Certificates of deposit .............................. 200,000
Investments available-for-sale (Note 2) .............. 594,908
Other receivables .................................... 10,321
-----------
Total current assets ............................ 2,374,538
-----------
Office furniture, equipment and other, net of
$228,913 of accumulated depreciation .................... 38,898
Other assets ............................................. 26,637
-----------
Total other assets .............................. 65,535
-----------
Total assets ............................................. $ 2,440,073
===========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable ..................................... $ 12,448
Deposits, deferred revenue and other ................. 8,409
-----------
Total current liabilities ....................... 20,857
-----------
Stockholders' equity (Note 4)
Common stock, no par value; authorized 10,000,000
shares; 3,072,836 shares issued and outstanding ........ 6,632,998
Accumulated deficit ..................................... (4,053,478)
Unrealized holding loss on investments available-for-sale (160,304)
-----------
Total stockholders' equity ...................... 2,419,216
-----------
Total liabilities and stockholders' equity ............... $ 2,440,073
===========
See notes to consolidated financial statements.
F - 2
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income
<TABLE>
<CAPTION>
For the Years Ended
March 31,
---------------------------
1999 2000
----------- -----------
<S> <C> <C>
Revenues
Gain on sale of investment in LLC (Note 5) .......... $ 2,035,691 $ --
Interest income ..................................... 89,551 117,201
Other income ........................................ 51,730 71,818
----------- -----------
2,176,972 189,019
----------- -----------
Expenses
Depreciation ........................................ 18,186 17,195
Other operating expenses ............................ 220,726 191,564
----------- -----------
238,912 208,759
----------- -----------
Income (loss) before income taxes ..................... 1,938,060 (19,740)
Income taxes (Note 3) ................................. 35,000 --
----------- -----------
Net income (loss) ..................................... 1,903,060 (19,740)
Other comprehensive income (loss)
Unrealized losses on investments available-for-sale . -- (160,304)
----------- -----------
Comprehensive income (loss) ........................... $ 1,903,060 $ (180,044)
=========== ===========
Earnings (loss) per share - basic ..................... $ .62 $ (.01)
=========== ===========
Earnings (loss) per share - diluted ................... $ .62 $ (.01)
=========== ===========
Weighted average number of shares outstanding - basic . 3,072,836 3,072,836
=========== ===========
Weighted average number of shares outstanding - diluted 3,092,843 3,072,836
=========== ===========
</TABLE>
See notes to consolidated financial statements.
F - 3
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity and Other
Accumulated Comprehensive Income
For the Years Ended March 31, 1999 and 2000
<TABLE>
<CAPTION>
Other
Common Stock Accumulated Total
--------------------------- Accumulated Comprehensive Stockholders'
Shares Amount Deficit Income Equity
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance - March 31, 1998 ........................ 3,072,836 $ 6,632,998 $(5,936,798) $ -- $ 696,200
Net income for the year ......................... -- -- 1,903,060 -- 1,903,060
----------- ----------- ----------- ----------- -----------
Balance - March 31, 1999 ........................ 3,072,836 6,632,998 (4,033,738) -- 2,599,260
Net loss for the year ........................... -- -- (19,740) -- (19,740)
Unrealized loss on investments
available-for-sale ............................. -- -- -- (160,304) (160,304)
----------- ----------- ----------- ----------- -----------
Balance - March 31, 2000 ........................ 3,072,836 $ 6,632,998 $(4,053,478) $ (160,304) $ 2,419,216
=========== =========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
F - 4
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the Years Ended
March 31,
----------------------------
1999 2000
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) ......................................... $ 1,903,060 $ (19,740)
----------- -----------
Adjustments to reconcile net income (loss) to net
cash used by operating activities -
Gain on sale of investment in LLC ....................... (2,035,429) --
Depreciation ............................................ 18,186 17,195
Changes in assets and liabilities -
Other receivables ...................................... 40 (6,218)
Accounts payable ....................................... (12,672) 295
Income taxes payable ................................... 17,000 (17,000)
Deposits, deferred revenue and other ................... 322 (909)
----------- -----------
(2,012,553) (6,637)
----------- -----------
Net cash used by operating activities ............. (109,493) (26,377)
----------- -----------
Cash flows from investing activities
Redemption of certificates of deposit ....................... 97,000 --
Purchases of office furniture and equipment ................. (30,213) --
Proceeds from sale of investment in limited liability
company .................................................... 2,060,154 --
Purchase of investments available-for-sale .................. -- (755,212)
----------- -----------
Net cash provided by (used by) investing activities
2,126,941 (755,212)
----------- -----------
Net increase (decrease) in cash and cash equivalents ......... 2,017,448 (781,589)
Cash and cash equivalents, beginning of year ................. 333,450 2,350,898
----------- -----------
Cash and cash equivalents, end of year ....................... $ 2,350,898 $ 1,569,309
=========== ===========
</TABLE>
Supplemental disclosure of cash flow information:
Cash paid for income taxes for the years ended March 31, 1999 and 2000
was $18,000 and $0, respectively.
Increase in unrealized loss on investments available-for-sale for the
years ended March 31, 1999 and 2000 was $0 and $160,304, respectively.
See notes to consolidated financial statements.
F - 5
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 - Nature of Business and Summary of Significant Accounting Policies
--------------------------------------------------------------------------
Nature of Business and Management's Plans
-----------------------------------------
Eagle Exploration Company's primary operations have included the purchase and
development of residential real estate and engaging in oil and gas exploration
and production activities, acquiring whole or partial interests in oil and gas
leases, and farming out or reselling all or part of its interest in these leases
to other companies in the oil and gas industry. Currently, the Company has no
plans to acquire additional land for development and sale nor has it identified
oil and gas investment opportunities.
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of Eagle Exploration
Company and its wholly owned subsidiaries (hereinafter the Company) after
elimination of all significant intercompany accounts and transactions. The
following is a listing of the wholly owned subsidiaries of Eagle Exploration
Company; Colorado Eagle Exploration Company, Emsen Energy, Inc., Eagle
Development Company and Overland Energy, Inc.
Use of Estimates
----------------
The preparation of consolidated 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 and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
-----------------------------------
The carrying amounts of financial instruments including cash and cash
equivalents, certificates of deposit, receivables and accounts payable
approximated fair value as of March 31, 2000 because of the relatively short
maturity of these instruments.
The carrying amounts of investments available-for-sale are based on quoted
market values.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
F - 6
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 - Nature of Business and Summary of Significant Accounting Policies
(continued)
--------------------------------------------------------------------------------
Investments Available-for-Sale
------------------------------
Investments available-for-sale consist of certain equity securities not
classified as trading securities nor as securities to be held-to-maturity.
Investments available-for-sale are carried at fair value with unrealized gains
and losses reported in other comprehensive income. Realized gains and losses on
investments available-for-sale are included in other income (expense) and, when
applicable, are reported as a reclassification adjustment, net of tax, in other
comprehensive income. Gains and losses on the sale of investments
available-for-sale are determined using the specific-identification method.
Comprehensive Income
--------------------
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income," effective in 1998, requires the disclose of comprehensive income to
reflect changes in equity that result from transactions and economic events from
nonowner sources. Accumulated other comprehensive income for the periods
presented represents unrealized holding losses or gains associated with
investments available-for-sale. There was no tax expense or tax benefit
associated with these items.
Property and Equipment
----------------------
Property and equipment are recorded at cost. The Company depreciates its office
furniture and equipment over an estimated useful life of five years using
straight-line and accelerated methods.
Earnings (Loss) Per Share
-------------------------
Basic earnings per share is calculated using the average number of common shares
outstanding. Diluted earnings per share is computed on the basis of the average
number of common shares outstanding plus the effect of outstanding stock options
using the treasury stock method, which totaled 20,007 additional shares in 1999.
The Company has incurred a loss for the year ended March 31, 2000 thereby making
the inclusion of stock options in the 2000 dilutive earnings per share
computations antidilutive.
Income Taxes
------------
Deferred income taxes result from temporary differences. Temporary differences
are differences between the tax basis of assets and liabilities and their
reported amounts in the financial statements that will result in taxable or
deductible amounts in future years. The Company's temporary differences result
primarily from the depreciation of fixed assets and oil and gas property.
F - 7
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 2 - Investments Available-for-Sale
---------------------------------------
Investments available-for-sale investments at March 31, 2000 consist of the
following:
Unrealized
Fair Value Cost Loss
------------ -------- ------------
Equity securities $594,908 $755,212 $160,304
There were no sales of equity securities resulting in realized gains or losses
during the years ended March 31, 1999 and 2000.
Note 3 - Income Taxes
---------------------
During the year ended March 31, 1999, the Company paid $18,000 for alternative
minimum tax and has $17,000 accrued for income taxes payable for a total expense
of $35,000. No income tax expense or accrual was recorded for the year ended
March 31, 2000.
Reconciliations between the statutory federal income tax expense (benefit) rate
as a percentage of income/loss before income taxes is as follows:
March 31,
-------------------
1999 2000
-------- ---------
Statutory federal income tax expense rate 34.0% 34.0%
Federal net operating losses utilized ... (32.2) (34.0)
---- ----
Effective income tax expense rate ....... 1.8% - %
==== ====
F - 8
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 3 - Income Taxes (continued)
---------------------------------
At March 31, 2000, the Company has net operating loss carryforwards for federal
and state income tax purposes as follows:
Net Operating
Year of Expiration Losses
------------------- --------------
2002 $ 875,000
2003 1,162,000
2004 426,000
2005 464,000
2006 1,000
2007 33,000
2011 97,000
2012 740,000
2013 162,000
2020 18,000
-----------
$ 3,978,000
===========
The Company has an approximate $1,353,000 deferred tax asset as a result of the
net operating losses assuming a 34% effective tax rate. There is uncertainty as
to whether the Company will generate sufficient revenues in the future to
utilize the net operating loss carryforwards and therefore 100% of the deferred
tax asset resulting from the net operating loss carryforwards has been fully
impaired.
Note 4 - Stock Options
----------------------
On September 15, 1998, the Board approved the issuance of 275,000 stock options
to certain employees. The purchase price of the common stock is $.20 per share
and exercisable over a three year term.
F - 9
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 4 - Stock Options (continued)
----------------------------------
The Corporation has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation". Accordingly, no compensation cost has been recognized for the
stock option plans. Had compensation cost for the Company's stock option plans
been determined based on the fair value at the grant date for awards in 1999,
consistent with the provisions of SFAS No. 123, the Company's net earnings and
earnings per share would have been reduced to the pro forma amount indicated
below:
March 31,
1999
-----------
Net income - as reported $ 1,903,060
Net income - pro forma $ 1,861,810
Income per basic shares - as reported $ .62
Income per diluted shares - as reported $ .62
Income per basic shares - pro forma $ .60
Income per diluted shares - pro forma $ .60
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants: dividend yield of 0%; expected volatility of 122%%;
discount rate of 5.5%; and expected lives of three years.
During the year ended March 31, 2000, there were no issued, exercised or expired
options.
Note 5 - Investment in Limited Liability Company
------------------------------------------------
During the year ended March 31, 1999, the Company settled a lawsuit filed
against the managing member of the LLC relating to the managing partner's delay
and/or refusing to sell the property of the LLC and other matters relating to
transactions entered into by the managing partner. The settlement included the
sale of the LLC property resulting in cash proceeds of approximately $2,060,000
and a gain of approximately $2,035,000.
F - 10
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
--------------------------------------------------------------------------------
The disclosure requirements of Item 304 of Regulation SB are not
applicable.
- 8 -
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------------------------------------
The following are the directors and executive officers of the Company.
Raymond N. Paul M. M. D.
Joeckel (1) Joeckel (1) Young
----------- ----------- -----
Director Since October, October, February,
1979 1979 1990
Position(s) with President & Secretary & Director
the Company Director Director
Age 74 48 76
---------------
(1) Messrs. Raymond N. Joeckel and Paul M. Joeckel, the Company's only executive
officers, have served as the Company's President and Secretary, respectively,
since December, 1979. The executive officers of the Company hold office until
their death, resignation, or removal by the Board of Directors. There is no
arrangement or understanding between any director or officer or any other person
or persons pursuant to which he was or is to be selected as a director or
officer. Paul M. Joeckel is the son of Raymond N. Joeckel.
Raymond N. Joeckel attended Los Angeles City College and the University
of Southern California in programs which did not lead to degrees. He received a
LL.B. degree from Southwestern University, Los Angeles, California, in 1950. Mr.
Joeckel joined Shell Oil Company as a landman in 1950 and became Land Manager
for the Rocky Mountain region for Shell Oil Company in 1962. He remained in that
position until 1969 at which time he became an independent oil and gas operator
dealing primarily in oil and gas leases.
- 9 -
<PAGE>
Paul M. Joeckel received a B.A. degree in Economics from Colorado State
University in 1976. During 1976 and until 1977, Mr. Joeckel was self-employed as
an independent landman. From June, 1977, until joining the Company on a
full-time basis in January, 1980, he was employed as a senior landman by Diamond
Shamrock Corporation.
M. D. Young received a B.A. degree in Geology from Vanderbilt University
in 1951 at Nashville, Tennessee. From 1952 to 1960 Mr. Young worked for Gulf Oil
Corporation as an Area Geologist. Subsequently, he has been a consultant to
various companies in the industry. Mr. Young has also been a working interest
owner in many wildcat wells in the Rocky Mountain region. Mr. Young is a member
of the American Association of Petroleum Geologists.
No director serves as a member of the Board of Directors of any other
company with a class of equity securities registered under the Securities
Exchange Act of 1934 ('34 Act) or any company registered as an investment
company under the Investment Company Act of 1940. See Item 11. for information
as to compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the '34 Act (the persons who own more than ten percent
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Directors,
officers and greater than ten percent shareholders are required by the SEC
regulation to furnish the Company with copies of all Section 16(a) reports
filed.
Based solely on its review of the copies of the reports it received
from persons required to file, the Company believes that during the period ended
March 31, 2000, all filing requirements applicable to its officers, directors
and greater than ten percent shareholders were complied with.
Item 10. Executive Compensation.
--------------------------------
The following information shows the compensation of the named executive
officers for each of the Company's last two fiscal years.
- 10 -
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-----------------------------------------------------------------------------------------------------------
Name Other
and Annual Restricted All Other
Principal Compen- Stock Options/ LTIP Comp-
Position Year Salary Bonus sation* Awards SARs Payouts ensation
----------- ---- ----- ----- ------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Raymond N. 2000 N/A N/A $3,309 N/A N/A N/A N/A
Joeckel, 1999 N/A N/A $2,733 N/A 100,000** N/A
President
Paul M 2000 $60,000 N/A $4,274 N/A N/A N/A N/A.
Joeckel, 1999 $60,000 N/A $3,300 N/A 150,000** N/A N/A
Secretary
</TABLE>
---------------
* Other annual compensation does not include the amount attributable to
Company cars that the officers are allowed to use.
** All options are exercisable at $.20 per share and expire on
September 15, 2001.
It is anticipated that salary payments to officers by the Company
during the next fiscal year for services in all capacities will not exceed the
amount set forth in the above table.
There are no other compensatory plans or arrangements by which the
Company compensates its directors for services as directors, other than
director's fee of $100 per meeting of directors.
The Company provides medical insurance for all of its full-time
employees and executive officers.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------
The following table sets forth information, as of June 29, 2000,
regarding the common stock ownership of those persons known by the Company to be
the beneficial owners of more than five percent of its common stock, its
directors, and its officers and directors as a group.
- 11 -
<PAGE>
<TABLE>
<CAPTION>
Name & Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
----------------- -------------------- ------------
<S> <C> <C>
Paul M. Joeckel 195,477 shares 6.36%
1801 Broadway Direct
Suite 1420
Denver, CO 80202
M. D. Young 500 shares -0-
800 Pearl Street Direct
Suite 406
Denver, CO 80203
Paul M. Joeckel, 1,346,481 shares 43.82%
Trustee Direct
Joeckel Family Trust
1801 Broadway
Suite 1420
Denver, CO 80202
Norman K. Brown 354,641 shares 11.54%
3857 46th Ave. NE Direct
Seattle, WA 98105
All officers and 1,542,458 shares 50.20%
directors as a group Direct
</TABLE>
--------------
The Company knows of no arrangements which could at a subsequent date
result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
---------------------------------------------------------
There were no transactions during the fiscal year ended March 31, 2000,
required to be reported hereunder.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K.
-------------------------------------------
(a) Exhibits:
Item No.
Per S-K Document as Form 10-KSB Exhibit Reference
------- ------------------------------- ---------
(2) Plan of purchase, sale, reorganization - None -
arrangement, liquidation or succession
(3) Articles of Incorporation and By-Laws (1)
(4) Instruments defining the rights of - None -
security holders, including indentures
(5) Opinion re: legality - None -
(6) Opinion re: liquidation preference - None -
(7) Opinion re: tax matters - None -
(8) Voting trust agreement - None -
(9) Material contracts:
Agreement re: Meadows at Westwoods (1)
Operating Agreement re: Meadows at (1)
Westwoods
Promissory Note re: Meadows at (3)
Westwoods
Assignment of Membership Interest re: (4)
Eagle's Landing, LLC
Operating Agreement re: Eagle's (4)
Landing, LLC
Settlement Agreement re: Eagle's
Landing, LLC (5)
Real Estate Purchase and Sale
Agreements (5)
First Amendment to Purchase and
Sale Agreement (5)
(10) Statement re: Computation of per (2)
share earnings
- 13 -
<PAGE>
(11) Statement re: Computation of ratios - None -
(12) Annual report to security holders, Form - None -
10-Q or quarterly report to security
holders
(13) Material Foreign Patents - None -
(14) Letter re: unaudited interim financial - None -
statements
(15) Letter re: change in certifying - None -
accountants
(16) Letter re: director's resignation - None -
(17) Letter re: change in accounting - None -
principles
(18) Previously unfiled documents - None -
(19) Reports to securities holder - None -
(20) Other documents or statements to - None -
security holder
(21) Subsidiaries of the Registrant (1)
(22) Published report regarding matters - None -
submitted to vote of security holders
(23) Consents of experts and counsel - None -
(24) Power of attorney - None -
(25) Statement of eligibility of trustee - None -
(26) Financial data schedule (6)
(27) Information from reports furnished - None -
to state insurance regulatory
authorities
--------------
- 14 -
<PAGE>
(1) Previously filed documents incorporated herein by reference to the Company's
Registration Statement on Form S-1 (No. 2-67971) effective September 14, 1980,
and the Company's Reports on Form 10-K for the fiscal year ended March 31, 1994,
and previous years.
(2) Not required, since information is ascertainable from the basic consolidated
financial statements.
(3) Filed with the Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1995.
(4) Filed with the Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1996.
(5) Filed with the Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1998.
(6) Filed with the Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1999.
- 15 -
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EAGLE EXPLORATION COMPANY
By:/s/ Raymond N. Joeckel
-------------------------
Raymond N. Joeckel
President
Date: June 29, 2000
In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
Date
June 29, 2000 /s/ Raymond N. Joeckel
-------------------------
Raymond N. Joeckel
Principal Executive
Accounting and Financial
Officer and a director
June 29, 2000 /s/ Paul M. Joeckel
-------------------------
Paul M. Joeckel
Secretary and a director
June 29, 2000 /s/ M.D. Young
-------------------------
M. D. Young
A director
- 16 -
