UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[XX] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 2-65800
SUNBELT EXPLORATION, INC.
(Exact Name of small business issuer as specified in its charter)
Nevada 75-1667097
(State of Incorporation) (IRS Employer ID Number)
2612 East Kentucky Avenue, Salt Lake City, Utah 84117
(Address of principal executive offices)
(801) 278-8132
(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 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 [ ] NO [XX]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
June 1, 1999: 24,805,000 Shares.
Transitional Small Business Disclosure Format (check one): YES[ ] NO [XX]
<PAGE>
SUNBELT EXPLORATION, INC.
Form 10-QSB for the Quarter ended November 30, 1998
Table of Contents
Part I - Financial Information Page
Item 1. Financial Statements 3
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 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
Signatures
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
November 30, August 31,
1998 1998
--------------- ---------------
(Unaudited)
CURRENT ASSETS
Cash $ 334 $ 3,846
--------------- ---------------
TOTAL ASSETS $ 334 $ 3,846
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,500 $ 2,641
--------------- ---------------
Total Current Liabilities 1,500 2,641
--------------- ---------------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
100,000,000 shares authorized,
24,805,000 shares issued and
outstanding 24,805 24,805
Additional paid-in capital 43,245 43,245
Subscription receivable (10,000) (10,000)
Deficit accumulated during the
development stage (59,216) (56,845)
--------------- ---------------
Total Stockholders' Equity $ (1,166) $ 1,205
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 334 $ 3,846
=============== ===============
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception on
April 23
For the Three Months 1979 Through
Ended November 30, November 30,
1998 1997 1998
------------- -------------- ------------
REVENUE $ - $ - $ -
------------- -------------- ------------
EXPENSES 2,371 - 59,216
------------- -------------- ------------
TOTAL EXPENSES 2,371 - 59,216
------------- -------------- ------------
NET LOSS $ (2,371) $ - $ (59,216)
============= ============== ============
LOSS PER SHARE $ 0.00 $ 0.00
============= ==============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 24,805,000 4,805,000
============= ==============
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional Stock During the
------------------------ Paid-In Subscription Development
Shares Amount Capital Receivable Stage
-------------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Balance at inception, April 23, 1979 - $ - $ - $ - $ -
Common stock issued for
cash at $0.001 per share 4,805,000 4,805 43,245 - -
Net loss from inception on April 23, 1979
through August 31, 1995 (unaudited) - - - - (48,050)
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1995 4,805,000 4,805 43,245 - (48,050)
Net loss for the year ended
August 31, 1996 - - - - -
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1996 4,805,000 4,805 43,245 - (48,050)
Net loss for the year ended
August 31, 1997 - - - - -
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1997 4,805,000 4,805 - - (48,050)
Common stock issued for services
at $0.001 per share 2,000,000 2,000 - - -
Common stock issued for cash
at $0.001 per share 8,000,000 8,000 - - -
Common stock issued for subscription
receivable at $0.001 per share 10,000,000 10,000 - (10,000) -
Net loss for the year ended
August 31, 1998 - - - - (8,795)
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1998 24,805,000 24,805 43,245 (10,000) (56,845)
Net loss for the three months ended
November 30, 1998 - - - - (2,371)
-------------- --------- ----------- ------------- -----------
Balance, November 30, 1998 (unaudited) 24,805,000 $ 24,805 $ 43,245 $ (10,000) $ (59,216)
============== ========= =========== ============= ===========
The accompanying notes are an integral part of these financial statements.
6
</TABLE>
<PAGE>
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception on
April 23
For the Three Months 1979 Through
Ended November 30, November 30,
1998 1997 1998
----------- -------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (2,371) $ - $ (59,216)
Adjustments to reconcile net loss
to net cash:
Common stock issued for services - - 2,000
Changes in assets and liabilities
Increase (decrease) in accounts
payable (1,141) - 1,500
----------- -------------- ------------
Net Cash Used by Operating
Activities (3,512) - (55,716)
----------- -------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
----------- -------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash - - 56,050
----------- -------------- ------------
Net Cash Provided by Financing
Activities - - 56,050
----------- -------------- ------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (3,512) - 334
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 3,846 - -
----------- -------------- ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 334 $ - $ 334
=========== ============== ============
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 1998 and August 31, 1998
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Sunbelt Exploration, Inc. (Company) was incorporated on April 23, 1979 under
the laws of the State of Nevada, primarily for the purpose of exploration,
development and production of oil and gas reserves.
The Company has no operations, assets or liabilities since the Final Decree in
May 1993, other than the litigation settlement. Accordingly, the Company is
dependent upon management and/or significant shareholders to provide
sufficient working capital to preserve the integrity of the corporate entity
during this phase. It is the intent of management and significant
shareholders to provide sufficient working capital necessary to support and
preserve the integrity of the corporate entity.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
d. Loss Per Share
The computations of loss per share of common stock are based on the weighted
average number of shares outstanding at the date of the financial statements.
e. Provision for Taxes
At November 30, 1998, the Company had net operating loss carryforwards of
approximately $59,000 that may be offset against future taxable income through
2013. No tax benefit has been reported in the financial statements, because
the Company believes there is a 50% or greater chance the carryforward will
expire unused. Accordingly, the potential tax benefits of the loss
carryforward are offset by a valuation amount of the same amount.
f. Additional Accounting Policies
Additional accounting policies will be established once planned principal
operations commence.
g. Estimates
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 and disclosure of
contingent 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.
8
<PAGE>
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 1998 and August 31, 1998
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
h. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the adjustments
which, in the opinion of management, are necessary for a fair presentation.
Such adjustments are of a normal, recurring nature.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to be acquired by an existing, operating
company. Until an acquisition or merger occurs, shareholders of the Company
have committed to meeting the Company's operating expenses
NOTE 3 - REVERSE STOCK SPLIT
In 1998, the Company reverse split shares of its common stock on a 1-for-10
basis. All references to shares outstanding and earnings per share have been
adjusted to reflect the effect of the reverse split on a retroactive basis.
9
<PAGE>
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the
Company or management as well as assumptions made by and information currently
available to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view
of the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered
in light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
Sunbelt Exploration, Inc. (Company) was incorporated on April 23, 1979
under the laws of the State of Nevada, primarily for the purpose of
exploration, development and production of oil and gas reserves.
In February 1990, the US Bankruptcy Court (Court) approved an Amended
Plan of Reorganization (Plan) under Chapter 11 of the US Bankruptcy Code. The
Plan was affirmed through a Final Decree by the Court on May 11, 1993. Under
the Plan, all assets and liabilities of the Company were liquidated and
assigned to unrelated third parties. Additionally, the Plan and the Court
allowed the Company to maintain its interest in a "take or pay" lawsuit
against one of the Company's pre-bankruptcy customers. The Company was
successful in the lawsuit and received final proceeds of approximately $50,000
in December 1995.
The Company has had no operations or significant assets or liabilities
since the Final Decree in May 1993, other than the litigation settlement.
Accordingly, the Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity
of the corporate entity during this phase. It is the intent of management and
significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
10
<PAGE>
(3) Liquidity and capital resources
The Company has no operations, and essentially no assets or liabilities
and, accordingly is fully dependent upon its controlling shareholder for
operating capital. During the period(s) presented herein, the Company was
dormant and no advances were made or expenses paid on the Company's behalf.
The Company has no specific plans or future capital requirements due to
its dormant state. However, the Company will seek to enter into a business
acquisition or reorganization with an enterprise, as yet unidentified. At
such time as the Company enters into a transaction, of which there can be no
assurance, the Company will require additional capital.
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults on Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings
of shareholders during the reporting period.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
None.
11
<PAGE>
SIGNATURES
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.
SUNBELT EXPLORATION, INC.
June 1, 1999 /s/ Roger Lund
-------------------------------
Roger Lund
President and Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> NOV-30-1998
<CASH> 334
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 334
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 334
<CURRENT-LIABILITIES> 1,500
<BONDS> 0
0
0
<COMMON> 24,805
<OTHER-SE> 33,245
<TOTAL-LIABILITY-AND-EQUITY> 334
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 2,371
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,371)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
