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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File No. 0-09482
MYSTIQUE DEVELOPMENTS, INC.
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(Exact name of small business issuer as specified in its charter)
WYOMING 83-0246080
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(State or other jurisdiction of (I.R.S. Employer Iden-
incorporation or organization) tification No.)
1820 South Elena Avenue, Redondo Beach, California 90277
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(Address of principal executive offices including zip code)
(310) 546-5741
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(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 ___
There were 560,076 shares of the Registrant's $.001 par value common stock
outstanding as of September 30, 1996.
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
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MYSTIQUE DEVELOPMENTS, INC.
Balance Sheet
ASSETS September 30, June 30,
1996 1996
Current Assets:
Cash $ 5,041 $ 24,971
Accounts receivable-trade 10,441 10,553
Accounts receivable-related party -- 6,066
Total current assets 15,482 41,590
Property and equipment, at cost using
successful efforts method, net 692,046 698,046
$ 707,528 $739,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 14,563 $ 14,522
Accounts payable-related party 4,250 15,000
18,813 29,522
Stockholders' Equity:
Common stock, $.01 par value:
authorized 75,000,000 shares;
issued and outstanding 560,076
at September 30, 1996 5,600 5,500
Additional paid-in capital 1,868,518 1,866,868
Accumulated deficit (1,185,403) (1,162,254)
688,715 710,114
$ 707,528 $ 739,636
See accompanying notes to financial statements
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MYSTIQUE DEVELOPMENTS, INC.
Statement of Operations
For the Three Months Ended September 30, 1996 and 1995
1996 1995
Operating Revenue:
Oil and gas sales $ 12,072 $ 17,585
Management and consulting
fees 0 0
Property operations fee 1,050 1,050
13,122 18,635
Operating costs and expenses:
Lease operating costs 16,133 19,010
Depreciation and depletion 6,000 5,400
General and administrative expenses 14,209 15,194
36,342 39,604
Operating income (loss) (23,220) (20,969)
Other Income (expense):
Interest income 71 135
71 135
Income(loss) before income taxes (23,149) (20,834)
Income taxes -- --
Net income (loss) $(23,149) $(20,834)
Net income (loss) per common share $ (.04) $ (.04)
Weighted average common shares outstanding 560,076 550,076
See accompanying notes to financial statements.
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MYSTIQUE DEVELOPMENTS, INC.
Statements of Cash Flows
For the Three Months Ended September 30, 1996 and 1995
1996 1995
Cash Flows from operating activities:
Cash received from customers $ 19,300 $ 16,811
Cash paid to suppliers & employees (41,051) (29,263)
Interest income 71 135
Net cash provided by (used in)
operating activities (21,680) (12,317)
Cash flows from financing activities:
Proceeds from sale of stock 1,750 --
Net cash provided by (used in)
finance activities 1,750 --
Net increase (decrease) in cash and
cash equivalents (19,930) (12,317)
Cash and cash equivalents at beginning of period 24,971 27,537
Cash and cash equivalents at end of period $ 5,041 $ 15,220
Reconciliation of net income to net cash
used in operating activities:
Net income (loss) $(23,149) $(20,834)
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation, depletion and impairments 6,000 5,400
(Increase) decrease in accounts receivable 6,178 (1,824)
(Decrease) increase in accounts payable (10,709) 4,941
$(21,680) $(12,317)
See accompanying notes to financial statements.
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MYSTIQUE DEVELOPMENTS, INC.
Notes to Financial Statements
NOTE 1: BASIC OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The Company operates principally in the exploration, development and
production of oil and gas properties and consulting in the oil and gas
industry.
PROPERTY AND EQUIPMENT
The Company uses the successful efforts method of accounting for oil and gas
producing activities. Under this method, the costs of unsuccessful
exploratory wells, delay rentals, and dry hole contributions are expensed as
incurred. Lease acquisition costs and costs of drilling and equipping
productive exploratory wells and all development wells are capitalized.
Depreciation and depletion of producing properties and equipment is computed
by the unit-of-production method using management estimates or independent
engineer's estimates of unrecovered proved producing oil and gas reserves.
The total capitalized costs for individual proved oil and gas properties is
limited to the estimated future net revenues from production of proved
reserves. A recoverability test "ceiling test" of proved properties is
performed on an undiscounted basis, net of income taxes, on a well by well
basis. An impairment amount equal to all costs above ceiling is charged to
operations during the period. Other equipment is depreciated by use of
accelerated methods using estimated asset lives of 3 to 7 years. When assets
are retired or otherwise disposed of, the cost and accumulated depletion,
depreciation or impairment are removed from the accounts and any resulting
gain or loss is reflected in operations in the period realized. No accrual has
been provided for estimated future abandonment costs as management estimates
that the salvage value will approximate such costs.
INCOME TAXES
The Company uses the liability method of accounting for income taxes. Under
the liability method, income taxes are recorded for future events at tax rates
in effect when the balances are expected to be settled.
EARNINGS PER COMMON SHARE
The earnings per share is based on the weighted-average number of shares of
common stock outstanding.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents.
RISKS AND UNCERTAINTIES
Historically, the market for oil and gas has experienced significant price
fluctuations. Increases or decreases in prices received could have a
significant impact on the Company's future results of operations.
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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 asset and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
BASIS OF PRESENTATION
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, such interim statements reflect all adjustments
(consisting of normal recurring accruals) necessary to present fairly the
financial position and the results of operations and cash flows for the
interim periods presented. The results of operations for these interim
periods are not necessarily indicative of the results to be expected for the
full year. These financial statements should be read in conjunction with the
audited financial statements and footnotes for the year ended June 30, 1996,
filed with the Company's 10-KSB.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Company has a deficit in working capital of $3,331.
The Company plans to continue to provide consulting services and to acquire
producing oil and gas properties. The Company is planning a $1,000,000
private placement for the next quarter. The Company has no commitments for
any capital improvements, however subject to financing, a major improvement
project for the Canadian property is planned for the next fiscal year.
During the three months ended September 30, 1996, operating activities used
$21,680 in cash, an increase of $9,363 over the previous fiscal year. This
increase in cash used is due mainly to payments of lease operating costs.
During the three months ended September 30, 1996, financing activities
provided $1,750 in cash, an increase of $1,750 over the previous fiscal year.
This increase is due to issuance of stock for September.
In September, 1996, the old officers and directors resigned and new officers
and directors were appointed. Mystique Resources Company, the Company's major
shareholder, also gave an option for 225,000 shares to two of the new
officers.
RESULTS OF OPERATIONS
During the three months ended September 30, 1996, oil and gas sales were
$12,072, a decrease of $5,513 over the quarter ended the previous year. This
decrease is due to less production. During the three months ended September
30, 1996, lease operating costs were $16,133 a decrease of $2,877 from the
quarter ended in the previous year. This decrease is due to less production.
During the three months ended September 30, 1996, depreciation, depletion and
impairments were $6,000 an increase of $600 over the quarter ended in the
previous year. During the quarter ended September 30, 1996, general and
administrative expenses were $14,209, a decrease of $985 from the previous
year. During the quarter year ended September 30, 1996, other income was $71,
a decrease of $64 over the quarter ended in the previous year.
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Effect of Changes in Prices.
Changes in prices during the past few years have been a significant factor in
the oil and gas industry. The price received for the oil and gas produced by
Mystique fluctuated significantly during the last three years. Changes in the
price that Mystique receives for its oil and gas are set by market forces
beyond Mystique's control as well as governmental intervention. The recent
volatility and uncertainty in oil and gas prices make it more difficult for a
company like Mystique to increase its oil and gas asset base and become a
significant participant in the oil and gas industry.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27 Financial Data Schedule Filed herewith
electronically
(b) Reports on Form 8-K.
None.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Issuer caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MYSTIQUE DEVELOPMENTS, INC.
Dated: November 12, 1996 By/s/ Dennis R. Staal
Dennis R. Staal, Accounting Officer
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EXHIBIT INDEX
EXHIBIT METHOD OF FILING
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27. FINANCIAL DATA SCHEDULE Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet and statement of operations found on pages 2 and 3 of the
Company's Form 10-QSB for the year to date, and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,041
<SECURITIES> 0
<RECEIVABLES> 10,441
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,482
<PP&E> 692,046
<DEPRECIATION> 0
<TOTAL-ASSETS> 707,528
<CURRENT-LIABILITIES> 18,813
<BONDS> 0
<COMMON> 5,600
0
0
<OTHER-SE> 683,115
<TOTAL-LIABILITY-AND-EQUITY> 707,528
<SALES> 13,122
<TOTAL-REVENUES> 13,122
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,342
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (23,149)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,149)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,149)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
