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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 December 31, 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 jurisdic- (I.R.S. Employer Iden-
tion of incorporation) tification No.)
or organization)
1820 South Elena Avenue, Redondo Beach, California 90277
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(Address of Principal Executive Office including Zip Code)
(310)546-5741
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(Issuer's telephone number)
Check whether the issuer (1) has 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 1,535,076 shares of the Registrant's $.001 par value common stock
outstanding as of December 31, 1996.
Transitional Small Business Disclosure: Yes ( ) No ( X )
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MYSTIQUE DEVELOPMENTS, INC.
Balance Sheet
ASSETS December 31, June 30,
1996 1996
Current Assets:
Cash $ 916,204 $ 24,971
Accounts receivable-trade 5,066 10,553
Accounts receivable-related party -- 6,066
Other 500 --
Total current assets 921,770 41,590
Property and equipment, at cost using
successful efforts method, net 713,406 698,046
$1,635,176 $739,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 7,649 $ 14,522
Accounts payable-related party -- 15,000
7,649 29,522
Stockholders' Equity:
Common stock, $.01 par value:
authorized 75,000,000 shares;
issued and outstanding 1,535,076
at December 31, 1996 15,350 5,500
Additional paid-in capital 2,832,897 1,866,868
Accumulated deficit (1,220,720) (1,162,254)
1,627,527 710,114
$1,635,176 $ 739,636
See accompanying notes to financial statements
2
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MYSTIQUE DEVELOPMENTS, INC.
Statement of Operations
For the Three Months Ended December 31, 1996 and 1995
1996 1995
Operating Revenue:
Oil and gas sales $ 23,259 $ 25,100
Management and consulting
fees -- 499,400
Property operations fee 1,050 1,050
24,309 525,550
Operating costs and expenses:
Lease operating costs 17,278 9,330
Depreciation and depletion 6,000 6,000
General and administrative expenses 36,437 499
59,715 15,829
Operating income (loss) (35,406) 509,721
Other Income (expense):
Interest income 90 85
90 85
Income(loss) before income taxes (35,316) 509,806
Income taxes -- --
Net income (loss) $(35,316) $ 509,806
Net income (loss) per common share $ (.06) $ .93
Weighted average common shares outstanding 641,326 550,076
See accompanying notes to financial statements.
3
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MYSTIQUE DEVELOPMENTS, INC.
Statement of Operations
For the Six Months Ended December 31, 1996 and 1995
1996 1995
Operating Revenue:
Oil and gas sales $ 35,331 $ 42,685
Management and consulting
fees -- 499,400
Property operations fee 2,100 2,100
37,431 544,185
Operating costs and expenses:
Lease operating costs 33,411 28,340
Depreciation and depletion 12,000 11,400
General and administrative expenses 50,647 15,693
96,058 55,433
Operating income (loss) (58,627) 488,752
Other Income (expense):
Interest income 161 220
161 220
Income(loss) before income taxes (58,466) 488,972
Income taxes -- --
Net income (loss) $(58,466) $488,972
Net income (loss) per common share $ (.10) $ .89
Weighted average common shares outstanding 578,052 550,076
See accompanying notes to financial statements.
4
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MYSTIQUE DEVELOPMENTS, INC.
Statements of Cash Flows
For the Six Months Ended December 31, 1996 and 1995
1996 1995
Cash Flows from operating activities:
Cash received from customers $ 48,484 $ 32,758
Cash paid to suppliers & employees (105,931) (42,508)
Interest income 161 220
Net cash provided by (used in)
operating activities (57,286) (9,530)
Cash flows used in investing activities:
Purchase of assets (27,360) --
Net cash provided by (used in)
investing activities (27,360) --
Cash flows used in financing activities:
Proceeds from sale of stock 975,879 --
Net cash provided by (used in)
financing activities 975,879 --
Net increase (decrease) in cash and
cash equivalents 891,233 (9,530)
Cash and cash equivalents at beginning of year 24,971 27,537
Cash and cash equivalents at end of year $916,204 $ 18,007
Reconciliation of net income to net cash
used in operating activities:
Net income (loss) $(58,466) $488,972
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation, depletion and impairments 12,000 11,400
(Increase) decrease in accounts receivable 11,553 (501,645)
(Increase) decrease in other current assets (500) --
(Decrease) increase in accounts payable (21,873) (8,257)
$(57,286) $ (9,530)
See accompanying notes to financial statements.
5
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MYSTIQUE DEVELOPMENTS, INC.
Notes to Financial Statements
NOTE 1: BASIS 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 December 31, 1996, the Company has a working capital of $914,121. The
Company completed a $975,000 private placement this quarter. The Company
plans to acquire producing oil and gas properties. 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 six months ended December 31, 1996, operating activities used
$57,286 in cash, an increase of $47,756 over the six months ended the previous
fiscal year. This increase in cash used is due mainly to generated
administrative costs related to increasing the activities of the Company.
During the six months ended December 31, 1996, financing activities provided
$975,879 in cash, an increase of $975,879 over the six months ended the
previous fiscal year. This increase is due to sale of stock in the private
placement.
During the six months ended December 31, 1996, investing activities used
$27,360 in cash and increase of $27,360 over the six months ended the previous
year. This increase is due to property and equipment acquisitions.
RESULTS OF OPERATIONS
During the three months ended December 31, 1996, oil and gas sales were
$23,259, a decrease of $1,841 from the quarter ended the previous year. This
decrease is due to less production. During the three months ended December
31, 1996, other income was $1,050, a decrease of $499,400 from the quarter
ended the previous year. This decrease is due to a reduction in consulting
services provided. During the three months ended December 31, 1996, lease
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operating costs were $17,278 an increase of $7,948 from the quarter ended in
the previous year. This increase is due to some workovers. During the three
months ended December 31, 1996, depreciation, depletion and impairments were
$6,000, the same as the quarter ended in the previous year. During the
quarter ended December 31, 1996, general and administrative expenses were
$36,437, an increase of $35,938 from the previous year. This increase is
due to increased activity of the Company.
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 From 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: January 29, 1997 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
consolidated balance sheets and consolidated statements 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1996
<CASH> 919,204
<SECURITIES> 0
<RECEIVABLES> 5,066
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 921,770
<PP&E> 713,405
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,635,175
<CURRENT-LIABILITIES> 7,649
<BONDS> 0
<COMMON> 15,350
0
0
<OTHER-SE> 1,612,177
<TOTAL-LIABILITY-AND-EQUITY> 1,635,175
<SALES> 24,309
<TOTAL-REVENUES> 24,309
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 59,715
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (35,316)
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,316)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,316)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
