SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_____________________
For the Quarter Ended September 30, 1996
Commission File Number: 0-10701
TATONKA ENERGY, INC.
(Exact name of registrant as specified in its charter)
Oklahoma, U.S.A. 73-1457920
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
10510 Markison, Dallas, Texas 75238
(Address of principal executive offices including zip code)
(214) 340-9341
(Registrant's telephone number including area code)
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 periods 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 ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, at the close of the period covered by this report.
5,540,556 shares of common stock, $.001 par value.
135,139 shares of Series A non-voting preferred stock, $1 par value.
Transitional Small Business Disclosure Format (Check one): Yes ___ No X
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Balance Sheets at September 30, 1996 (unaudited) and 1
December 31, 1995
Statements of Operations for the three months and nine 2
months ended September 30, 1996 and 1995 (unaudited)
Statements of Cash Flows for the nine months ended 3
September 30, 1996 and 1995 (unaudited)
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition 5
and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 8
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TATONKA ENERGY, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
September 30, 1996
(Unaudited) December 31, 1995
Current Assets
Cash and cash equivalents $ 43,076 $ 111,329
Fixed Assets
Property and Equipment, At Cost, Net 31,515 1,818
Total Assets $ 74,591 $ 113,147
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable (includes $2,000 to affiliate
at 12/31/95) $ 1,598 $ 6,524
Stockholders' Equity
Series A non-voting preferred stock authorized,
5,000,000 shares of $1 par value, issued and
outstanding, 135,139 shares at 9/30/96 and
12/31/95 135,139 135,139
Common stock, authorized 50,000,000 shares
of $.001 par value, issued 5,540,556 at
9/30/96 and 12/31/95 5,540 5,540
Paid-in Capital 5,282,635 5,282,635
Accumulated deficit (5,347,611) (5,313,981)
Treasury stock, at cost - 25,000 common shares (2,710) (2,710)
Total Stockholders' Equity 72,993 106,623
Total Liabilities and Stockholders' Equity $ 74,591 $ 113,147
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
TATONKA ENERGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
<S> <C> <C> <C> <C>
1996 1995 1996 1995
Revenue
Interest Income $ 808 $ 1,447 $ 2,873 $ 3,959
Total Revenue 808 1,447 2,873 3,959
Costs and Expenses
Depreciation 101 759 303 2,277
General and administrative 16,448 9,089 36,201 35,502
Total Costs and Expenses 16,549 9,848 36,504 37,779
Net Loss $ (15,741) $ (8,401) $ (33,631) $ (33,820)
Net Loss Per Common Share $ - $ - $ - $ (.01)
Weighted Average Number of
Shares Outstanding 5,540,556 5,540,556 5,540,556 5,528,808
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
TATONKA ENERGY, INC.
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
<S> <C> <C>
1996 1995
Cash flows from operating activities:
Net loss $ (33,631) $ (33,820)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 303 2,277
Changes in operating assets and liabilities:
Decrease in accounts receivable - 10,594
Decrease in trade accounts payable (4,925) (5,132)
Cash flow from investing activities:
Fixed asset additions (30,000) -
Net cash used in operating activities (68,253) (26,081)
Cash and cash equivalents at beginning of year 111,329 146,488
Cash and cash equivalents at end of year $ 43,076 $120,407
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TATONKA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Consolidated Financial Statements
The balance sheet of Tatonka Energy, Inc. (the "Company") as of September
30, 1996 and December 31, 1995, the statements of operation for the quarters and
nine months ending September 30, 1996 and 1995, and the statements of cash flows
for the periods then ended have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows for all periods presented have been made.
The balance sheet at December 31, 1995 has been taken from the audited
financial statements at that date and condensed. Certain other information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed financial statements be read in
conjunction with the Company's audited financial statements and notes thereto
included in its December 31, 1995 annual report to shareholders. The results of
operations for the period ended September 30, 1996 are not necessarily
indicative of the operating results for the full year.
For purposes of the statements of cash flows, only cash is used as the
Company does not have any items meeting the definitions of cash equivalents
contained in Statement of Financial Accounting Standards No. 95.
4
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
(a) Plan of Operation.
As disclosed in the 8-K filed by the Company with the Securities and
Exchange Commission (SEC) on August 15, 1996 (attached hereto as an exhibit),
and the Schedule 13-D filed by Verde, Inc. with the SEC on September 19, 1996,
control of the Company was assumed in August of 1996 by Verde, Inc, an Arkansas
corporation, through the acquisition of approximately 37% of the Company's
outstanding shares of common stock. As of the end of the current reporting
period (September 30, 1996), control of the day-to-day management of Company has
been assumed by International Green Team, Inc. (IGT), a Texas corporation wholly
owned and controlled by Richard A. Green, Sr., who is also the controlling
shareholder of Verde, Inc. The assumption of management of the Company is part
of an overall plan to diversify and expand operations, possibly into non-oil and
gas related industries. As of the conclusion of the current reporting period,
Richard A. Green, Sr. is President of the Company and of IGT and directs the
day-to-day operations of the Company.
Upon assumption of control, the new Management became aware of a complete
lack of operational revenue and a further absence of any owned interest in oil &
gas properties. It is now the opinion of Management that the lack of any oil &
gas-related operations or revenue since 1994 and the lack of any apparent
prospects for future income-producing activity in that field warrant
investigation and research efforts into new fields and industries with an eye
towards re- orienting the Company for future profitable operation and an
eventual increase in per-share value. It is the plan of the Company to continue
intensive research and development until a suitable field of activity is found.
It is also the opinion of Management that without such a reorientation and
without the resulting new sources of income or new capital investment, the
Company will be unable to satisfy its current cash requirements beyond March of
1997.
As of the conclusion of the current reporting period, Management has
already begun limited research and development efforts on behalf of the Company.
These efforts have primarily been focused in fields in which the current
Management, directors or key employees have experience or comparative advantage.
Such efforts have thus far included investigations into segments of the fast
food industry and the real estate development and construction industry. These
efforts will continue as Management seeks a solution to the current lack of
operations or revenue.
As part of the aforementioned research and development, and as a direct
result of business connections of Richard A. Green, Sr., the Company has
participated in the operation of a so-called proto-type restaurant, based upon a
new concept in the industry. To facilitate this research, on September 11, 1996,
the Company purchased certain items of equipment and inventory used in the
fast-food industry to conduct short-term operation of this store, primarily in
order test the viability of the concept. The equipment cost the Company Thirty
Thousand Dollars ($30,000.00). Most of this equipment may be later liquidated on
the open market to recapture part of the Company's investment in this research.
The purchase of the equipment was deemed to be a relatively low-cost, low-risk
means of investigating the concept while there is still an opportunity to
acquire the young company which owns the intellectual property involved. At the
conclusion of the investigation, Management plans to sell the equipment either
on the open market, or to the company which owns the intellectual property used
in the concept, and then evaluate whether or not a direct capital investment is
in the best interest of the shareholders. If the concept proves viable, the
Company plans to enter the industry through a strategic acquisition, possibly
using a private placement of Company stock to raise the necessary capital. The
Company does not plan to operate restaurants itself, and there is no current
expectation of any significant increase in the number of employees in relation
to this effort.
In addition to the above investigation and research, Management has begun a
preliminary exploration of certain real estate development and construction
opportunities. These include opportunities to develop gated communities,
retirement-oriented communities, and facilities for specific age-related
conditions such as Alzheimers Disease. Management is also exploring the
possibility of operating a commercial construction company. These efforts and
inquiries are being aided by Richard A. Green's many years of experience in the
construction industry.
5
<PAGE>
It is the current plan of the Company to form a subsidiary to conduct operations
in this field, specifically to perform commercial construction. It is as yet
unclear whether or not the Company will be required to purchase significant
amounts of equipment in connection with this plan. The Company does not expect
to have a significant increase in the number of employees of Tatonka Energy,
Inc. as a result of this plan. However, it is expected that any subsidiary
formed for this purpose will necessarily include from one to ten new employees
and numerous sub-contractors.
Management is of the opinion that any plan resulting from the research
currently being conducted will include, of necessity, the need for new capital.
Currently the Company has only modest amounts of operating capital. Accordingly,
Management believes that either the placement of debt instruments, or a private
placement of Company stock is the most viable means of rasing the capital needed
for the revival of operations. Such a placement would in all probability dilute
the value of the current shares in the short term. In addition, regardless of
the plans for the Company, there is no guarantee that any such placement, if
made, would necessarily increase the per-share value of the stock in the long
term. The Company has no current plans for a placement of either debt or equity
instruments, or for incurring loan indebtedness. However, Management feels that
the options for the future of the Company are limited.
(b) Analysis of Financial Condition and Results of Operations.
Nine Months Ended September 30, 1996 Versus Nine Months Ended September 30,
1995:
Results of Operations
Interest income decreased by $1,086 for the nine month period ended
September 30, 1996 and decreased by $639 for the three month period ended
September 30, 1996, as compared to the same period for 1995. This is due to a
reduction in cash available for investment.
Depreciation decreased by $1,974 for the nine month period ended September
30, 1996, as compared to the same period for 1995. General and administrative
expenses increased by $699 for the nine month period ended September 30, 1996
and increased by $7,359 for the three month period ended September 30, 1996, as
compared to the same period for 1995. This increase is due to the payment of
administrative and legal fees in connection with the change in management, and
the investigation of business opportunities presented to management.
Liquidity and Capital Resources
The Company's working capital at September 30, 1996 was $41,478 versus
$104,805 at December 31, 1995, for a decrease in working capital of $61,729.
This is due to the fixed asset additions of $30,000 and the increase in
administrative fees in connection with investigation of new business
opportunities (see "Plan of Operation" above).
As discussed above, the Company does not yet have a final formal plan for
capital expenditures in the remainder of 1996 and will continue to depend on
internally generated funds as its major source of liquidity, as it has no unused
line of credit or any formal arrangements with any lending institution to borrow
any funds. The aforementioned plans for research and development are expected to
require additional expenditures by the Company, and there is a substantial risk
that some or most of the costs associated with those efforts will not be
recoverable by the Company. Management is attempting to balance the need for new
operations and income against the risk of losses from research and development
efforts, but there is no guarantee that the Company will realize any significant
benefits or income from such efforts.
Management is cautiously but actively exploring new ways to improve the
financial condition of the Company and is of the opinion that the past two years
of inactivity are not necessarily indicative of the future performance of the
Company. The specific trends, events or uncertainties which are reasonably
likely to have a material impact on the liquidity of the Company, or on its
general financial condition, are as of yet unknown, as the Company is still
technically devoid of active operational elements and is awaiting results of its
current research and development efforts.
6
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
See Exhibit 1 ("Exhibit 27"): Financial Data Schedule.
B. Reports on Form 8-K
The Company filed one report on Form 8-K during the third
quarter of 1996, on August 15, 1996 (see Exhibit 2)
INDEX OF EXHIBITS
- - --------------------------------------------------------------------------
Exhibit No. Description
- - --------------------------------------------------------------------------
1 ("Exhibit 27") Financial Data Schedule
- - --------------------------------------------------------------------------
2 8-K (15-Aug-96) by Tatonka Energy Inc
- - --------------------------------------------------------------------------
7
<PAGE>
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.
TATONKA ENERGY, INC.
Date: November 14, 1996 By: /s/ Richard A. Green, Sr.
Richard A. Green, Sr., President
Date: November 14, 1996 By:/s/ Lynn Jones
Lynn Jones, Secretary
8
<PAGE>
EXHIBIT 2. (8-K FILED 15-AUG-96)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
AUGUST 15, 1996
Date of Report
(AUGUST 1, 1996)
(Date of earliest event reported)
TATONKA ENERGY, INC.
(Exact name of registrant as specified in its charter)
OKLAHOMA, U.S.A.
(State or other jurisdiction of incorporation or organization)
___________________________
(Commission File Number)
73-1457920
(I.R.S. Employer Identification No.)
9320 EAST CENTRAL
WICHITA, KS
(Address of principal executive offices)
67206
(ZIP Code)
(316) 636-2667.
(Registrant's telephone number, including area code)
ITEM 1.CHANGE IN CONTROL OF REGISTRANT
On August 1, 1996, in accordance with a negotiated agreement between the
management of the company, certain shareholders, and the purchaser, Verde, Inc.,
a privately-held Arkansas corporation, purchased 2,051,136 shares of Tatonka
Common stock from Heritage Resources, Inc. for the purchase price of ninety-two
thousand, two hundred and sixteen US Dollars ($92,216.00).
<PAGE>
These shares represent 1,270,591 shares owned by Heritage Resources, Inc.,
together with 780,545 shares assigned to Heritage by El Dorado Exploration 1979
Drilling Program, Ltd. These shares of common stock represent approximately 37%
of the outstanding shares of Tatonka common stock, as of the date of the
transaction. Richard A. Green, Sr., a Dallas businessman and investor, owns
approximately 50% of Verde, Inc.'s outstanding stock and is currently President
and CEO. His son, Richard A. Green, Jr., owns the remaining outstanding stock
and is not active in the management of Verde, Inc. The funds used by Verde, Inc.
to purchase the shares of Tatonka were obtained via a private loan from Richard
A. Green, Sr. to Verde, Inc. There are no restrictions or voting agreements
resulting from or connected to this loan to Verde, Inc.
This purchase by Verde, Inc. was undertaken as part of an overall plan for
diversification and expansion of Tatonka through future strategic mergers and
acquisitions, including possible expansion into non-oil and gas industries.
In accordance with the agreement between Tatonka management, Heritage
Resources, Inc., and Verde, Inc., several Officers and Directors have been
replaced (subject to shareholder approval) resulting in an effective change in
management of the company. A notable exception is Mr. Joe Love, a long-time
Director and Officer of the Corporation, who remains on the Board of Directors.
In accordance with the planned restructuring, the following officers have been
replaced in their posts: C.J. Lett, III, D. Keith McFall, and Dean Pattison.
C.J. Lett, III has also stepped down from his post as a director. None of the
resignations of any officer or director was the result of any disagreement or
conflict between them and the management, corporation, or shareholders. All
changes in control have been effected with the full cooperation and
participation of the individuals involved in the corporate restructuring. There
are no other express agreements between management and Verde, Inc., regarding
the election of Officers or Directors. The corporate office and information will
remain the same until such time as the new management is effectively installed.
It is expected however, that the corporate Office for operations will be
relocated to Dallas, Texas in the near future.
The new Directors of Tatonka, pending the next election of Directors at the
Annual Shareholders meeting, will include Joe Foor (Dallas, Tx.), and Richard A
Green, Sr.(Dallas, Tx.).
The new Officers of Tatonka, pending the next election of Officers by the
Board of Directors, will consist of Richard A. Green, Sr. (President/CEO),
Robert Williamson (Vice President - Marketing), and Lynn Jones
(Secretary/Secretary).
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 thereto duly authorized.
TATONKA ENERGY INC
(Registrant)
Date: August 15, 1996
/s/ Richard A. Green, Sr.
Richard A. Green, Sr.
President/CEO
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 43,076
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 51,256
<DEPRECIATION> 19,741
<TOTAL-ASSETS> 74,591
<CURRENT-LIABILITIES> 1,598
<BONDS> 0
0
135,139
<COMMON> 5,540
<OTHER-SE> (67,686)
<TOTAL-LIABILITY-AND-EQUITY> 74,591
<SALES> 0
<TOTAL-REVENUES> 808
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,549
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (15,741)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,741)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
