=================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number 1-1525
GLADSTONE RESOURCES, INC.
(Exact name of Registrant as specified in its charter)
Washington 91-0234563
(State of Incorporation) (I.R.S. Employer
Identification No.)
3500 Oak Lawn, Suite 590
Dallas, Texas 75219
(Address of principal executive offices) (Zip Code)
(214) 528-9620
(Registrant's telephone number,
including area code)
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 twelve (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 ninety (90) days.
YES [X] NO [ ]
The number of shares of Common Stock, no par value, of the
Registrant outstanding at March 31, 1999 was 4,244,060 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None
=================================================================
<PAGE>
GLADSTONE RESOURCES, INC.
INDEX
Page
Part 1. Financial Information: Number
- ----------------------------- -------
Item 1.Consolidated Financial Statements 2
Consolidated Balance Sheets - March 31, 1999 (Unaudited)
and December 31, 1998 2
Consolidated Statements of Operations-
For the Three Months Ended March 31, 1999 and 1998
(Unaudited) 3
Consolidated Statements of Stockholders' Equity-
For the Three Months Ended March 31, 1999 (Unaudited)
and for the Year Ended December 31, 1998 4
Consolidated Statements of Cash Flows-
For the Three Months Ended March 31, 1999 and 1998
(Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II. Other Information:
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
Signatures
-1-
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
At March 31, 1999 and December 31, 1998
ASSETS
March 31, December 31,
1999 1998
----------- -------------
(Unaudited)
Current assets:
Cash $ 303,814 $ 23,372
Accounts receivable 6,091 6,129
---------- -----------
Total current assets 309,905 29,501
---------- -----------
Property and equipment:
Gas and oil properties
(successful efforts method) 622,675 1,811,235
Field equipment 17,128 17,128
---------- -----------
639,803 1,828,363
Less accumulated depletion and
depreciation (413,209) (1,280,631)
---------- -----------
Total property and equipment 226,594 547,732
----------- -----------
Other assets:
Cost on excess of amount assigned to
net assets of subsidiary at date
of acquisition 337,000 337,000
Less accumulated amortization (295,635) (293,783)
---------- -----------
Total other assets 41,365 43,217
---------- -----------
$ 5 77,864 $ 620,450
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,332 $ 21,729
---------- ----------
Total current liabilities 5,332 21,729
---------- ----------
Deferred income taxes
Stockholders' equity:
Common stock 150,000 150,000
Capital in excess of stated value 1,230,134 1,230,134
Retained earnings (deficit) (807,602) (781,413)
---------- ----------
Total stockholders' equity 572,532 598,721
---------- ----------
$577,864 $ 620,450
========== ==========
See accompanying notes
-2-
<PAGE>
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 1999 and 1998
(Unaudited)
For the three months
ended March 31,
----------------------------------
1999 1998
----------------------------------
Sales:
Gas and oil $ 8,139 $84,527
-------- -------
Cost of sales:
Production taxes 624 3,644
Well operating expense 3,688 33,945
-------- -------
4,312 37,589
-------- -------
Gross profit on sales 3,827 46,938
-------- -------
Expenses:
Dry hole and abandonment loss (recovery) (3,347) 13,626
Depletion 6,138 26,144
Depreciation and amortization 1,852 3,647
General and administrative 7,719 2,734
Taxes - 69
Legal, auditing and accounting 18,192 5,093
-------- -------
30,554 51,313
-------- -------
Net income (loss) from operations (26,727) (4,375)
Other income:
Interest income 538 1,436
Net unrealized gain (losses)
on marketable securities - (26,884)
-------- --------
Income (loss) before taxes (26,189) (29,823)
Income taxes - 2,067
-------- --------
NET LOSS $(26,189) $(31,890)
======== ========
Earnings per share:
Basic earnings per share $ (.01) $ (.01)
========= ========
Diluted earnings per share $ (.01) $ (.01)
========= ========
See accompanying notes
-3-
<PAGE>
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the three months ended March 31, 1999
and the year ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Capital in
Excess of Retained
Stated Stated Earnings
Value (A) Value (Deficit) Total
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance at December 31,1997 $ 150,000 $ 1,230,134 $ (295,146) $1,084,988
Net loss for the year 1998 - - (486,267) (486,267)
--------- ----------- ---------- ----------
Balance at December 31, 1998 150,000 1,230,134 (781,413) 598,721
Net loss for the period - - (26,189) (26,189)
--------- ----------- ---------- ----------
Balance at March 31, 1999 $ 150,000 $ 1,230,134 $ (807,602) $ 572,532
========= =========== ========== ==========
(A) Common stock consists of no par value shares only. There
are 6,000,000 shares authorized and 4,244,060 shares
issued and outstanding. The stated value for all
outstanding shares is $150,000.
See accompanying notes
-4-
<PAGE>
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1999 and 1998
(Unaudited)
For the three months
ended March 31,
-----------------------
1999 1998
-----------------------
Cash flows from operating activities:
Net earnings (loss) $(26,189) $ (31,890)
Adjustments to reconcile net
earnings to net cash provided
by (to) operating activities:
Depreciation, depletion and
amortization 7,990 29,791
Decrease in account
receivable 38 21,428
Marketable securities
unrealized loss - 26,884
Increase (decrease) in
accounts payable (16,397) 804
Increase (decrease) in
deferred taxes - 2,067
Net cash from (to) operating -------- --------
activities (34,558) 49,084
-------- --------
Cash flows from (to) investing activities:
(To) from investment in oil and
gas properties 315,000 (25,598)
-------- ---------
Net cash (to) from investing
activities 315,000 (25,598)
-------- ---------
Net increase in cash 280,442 23,486
Cash at beginning of period 23,372 114,071
-------- ---------
Cash at end of period $303,814 $137,557
======== =========
Supplemental disclosure of cash flow
information
Cash paid during the period for:
Interest $ - $ -
======== =========
Federal income taxes $ - $ -
======== =========
See accompanying notes
-5-
<PAGE>
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 1999
NOTE 1 - ORGANIZATION
Gladstone Resources, Inc. (the "Company") was incorporated in the
State of Washington on July 19, 1916. In March, 1973, the Company
acquired 100% ownership of Brooks NM, Inc., a Texas corporation
(now named NM Corporation). The Company sells oil and gas in
Texas and New Mexico.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On an accrual basis, the Company uses the successful efforts
method of accounting. This method follows the premise that an
enterprise is to capitalize only those costs it incurs that
directly result in an asset that has future benefits measured in
terms of future cash flows.
For purpose of consolidation all intercompany transactions have
been eliminated.
For purposes of the statements of cash flows, the Company
considers all short-term debt securities purchased with a
maturity of three months or less to be cash equivalents. There
were no cash equivalents at March 31, 1999, or December 31, 1998.
There were no significant non-cash investing or financing
activities during the periods ended March 31, 1999 and December
31, 1998.
Depreciation, depletion and amortization are calculated using the
straight-line and unit of production method over the estimated
useful lives of the assets or production of the estimated
recoverable oil and gas reserves.
For income tax reporting, the Company uses accounting methods
that recognize depreciation sooner than for financial statement
reporting As a result, the basis of property and equipment for
financial reporting exceeds its tax basis by the cumulative
amount that accelerated depreciation exceeds straight-line
depreciation. Also, for tax purposes the Company deducts
intangible drilling costs and capitalizes them on the successful
efforts accounting method. Deferred income taxes had been
recorded in prior years for the excess deductions, which will be
taxable in future periods through reduced depreciation and cost
depletion deductions for tax purposes. Currently no deferred tax
and no tax benefits have been calculated since the Company does
not have the ability to generate taxable income in excess of the
net operating loss carryover.
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported revenues and expenses.
Actual results could vary from the estimates that were used.
NOTE 3 - MARKETABLE (TRADING) SECURITIES
Cost and fair market value of marketable equity securities at
March 31, 1999, and December 31, 1998, are as follows:
Gross
Unrealized Fair
March 31, 1999 Cost Gain (Loss) Value
- ------------------- --------- ------------ --------
Trading securities:
Equity (common) securities $109,071 $ (109,071) $ -
December 31, 1998
- -------------------
Trading securities:
Equity (common) securities 109,071 (109,071) -
-6-
<PAGE>
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 1999
NOTE 4 - ACCOUNTS RECEIVABLE
Of the net revenue interest amount of $6,091 due from oil and gas
sales at March 31, 1999, $2,599 has been received from the
operators as of the date of this report. The sales to the
customers are on open accounts receivable, which are unsecured.
NOTE 5 - PROPERTY AND EQUIPMENT
Gas and oil properties
In March 1973, the Company acquired 100% ownership of Brooks NM,
Inc. (NM Corporation), a Texas corporation, in exchange for
453,000 shares of common stock. The Company currently owns oil
and gas interests in New Mexico and Texas.
NM Corporation owns a 28.71% net revenue interest in 5 producing
gas wells in San Juan County, New Mexico. In 1994, the Company
participated in a re-entry well drilled to replace a shut-in
well. The new well began production in October 1994.
Currently, the Company has producing wells in Pecos County in
Texas and San Juan County in New Mexico. On January 19, 1999, the
Company sold its oil and gas properties in Schleicher and Kent
Counties, Texas to EXCO Resources, Inc., a Texas corporation
("EXCO"). These properties included 66 gross productive wells
(9.75 net productive wells) with current net production of
approximately 42.18 barrels of oil and 126,000 cubic feet of
natural gas per day, and 6 gross (.75 net) non-producing wells.
These properties constituted approximately 90.418% of the gross
productive wells (71.17% net productive wells) and approximately
88.68% of the barrels of oil and 59.38% of the cubic feet of
natural gas per day produced by all of the Company's oil and gas
properties.
A summary of changes in the Company's gas reserves (in MCF's) is
as follows (oil reserves have been included as MCF's by
multiplying barrels by 6). ALL RESERVE AMOUNTS INCLUDING THE
REVISIONS HAVE BEEN FURNISHED BY THE COMPANY AND HAVE NOT BEEN
VERIFIED BY ANY INDEPENDENT PETROLEUM ENGINEERS. The Company
believes there are no "proved undeveloped reserves."
Total for United States in MCF's
----------------------------------
March 31 December 31,
1999 1998
----------------------------------
Beginning of period (Jan. l) 1,160,243 1,293,559
Deduction for sale of leases (976,459) -
Adjustment to reserve (1) - (4,284)
Production (total to date) (6,830) (129,032)
----------- ---------
Balance at end of period 176,954 1,160,243
=========== ==========
(1) Based on reevaluation of estimated reserves by the
Company. The estimates were based
on current production levels of all properties.
-7-
<PAGE>
GLADSTONE RESOURCES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 1999
NOTE 6 - FEDERAL AND STATE INCOME TAXES
A reconciliation of income tax expense (benefit) computed by
applying the U.S. federal tax rates to loss from continuing
operations before income taxes and extraordinary items and
recorded income tax expense (benefit) is as follows:
1998
Tax expense (benefit) at ---------
statutory rate $ (73,135)
Non-deductible items 34,158
Change in valuation allowance 37,677
---------
Provision for income tax $ (1,300)
=========
The components of the Company's deferred income taxes for 1998
are as follows:
1998
---------
Amortization of asset cost $ (5,556)
Depreciation 11,323
Cost depletion (61,237)
Intangible development costs 29,540
Impairment of asset value 27,292
Net operating loss carryforward 43,150
Valuation allowance (44,512)
--------
Total $ -
========
Net operating loss deductions and credits carryforward consists
of the following:
From year Year
ended Expires Losses Credit
-------- -------- -------- ------
12-31-84 12-31-99 $ - $ 384
12-31-94 12-31-09 100,759 -
12-31-97 12-31-12 57,877 -
12-31-98 12-31-13 129,028 -
-------- -----
$287,664 $ 384
======== =====
Utilization of losses will be limited due to change of control
which occurred in this period.
The Company files a consolidated tax return.
At December 31 1998, there was $289,609 of statutory depletion
carryforward to 1999.
At December 31 1998, there was a Section 179 depreciation
carryforward of $55,000 to 1999.
NOTE 7 - COMMITMENT AND CONTINGENCY
At March 31, 1999, the Company had no material commitments.
-8-
<PAGE>
GLADSTONE RESOURCES1 INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
NOTE 8 - COMMON STOCK
Currently the Company's common stock is not traded on any
exchange or automated quotation system.
At March 31, 1999, there were no outstanding stock options issued
by the Company.
The following shares of common stock were outstanding for the
periods under report.
March 31, December 31,
1999 1998
---------- ------------
Common stock, no par value 4,244,060 4,244,060
NOTE 9 - SIGNIFICANT ESTIMATES AND CONCENTRATIONS
Generally accepted accounting principles require disclosure of
certain significant estimates and current vulnerabilities due to
certain concentrations. Those matters included the following:
1. Year 2000 Readiness Disclosure
------------------------------
Like all entities, the Company is exposed to risks associated
with the Year 2000 issue which affects computer software and
hardware; transactions with customers, vendors and other
entities; and equipment dependent on microchips. The Company
has begun but not yet completed the process of identifying
and remediating potential Year 2000 problems. It is not
possible for any entity to guarantee the results of its own
remediation efforts or to accurately predict the impact of
the Year 2000 issue on third parties with which the Company
does business. If remediation efforts of the Company or third
parties with which it does business are not successful, the
Year 2000 problem could have negative effects on the
Company's financial condition and results of operations in
the near term.
2. Major Customers
---------------
In 1998, the Company had two customers which represented 47%
and 23% of their total revenue.
NOTE 10 - RENT EXPENSE
The Company currently does not pay any rent. The Company does not
have a commitment on a lease contract. Rent expense for 1998 was
$6,606.
-9-
<PAGE>
Item 2.
Gladstone Resources, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This quarterly report on form 10-Q of the Company contains
"forwarding-looking statements" within the meaning of, Section
27a of the Securities Act of 1933, as amended (the "Securities
Act"), and section 21e of the Securities Exchange Act of 1934, as
amended (the "exchange act"). Specifically, all statements other
than statements of historical facts included in this report
regarding the Company's financial position, business strategy and
plans and objectives of management of the Company for future
operations are forward- looking statements. These forward-looking
statements are based on the beliefs of the Company's management
as well as assumptions made by and information currently
available to the Company's management. When used in this report,
the words "anticipate," "believe," "estimate," "expect" and
"intend" and words or phrases of similar import, as they relate
to the Company or Company management, are intended to identify
forward-looking statements. Such statements reflect the current
view of the Company with respect to future events and are subject
to certain risks, uncertainties and assumptions related to
certain factors including, without limitation, price levels for
oil and natural gas, concentration of oil and natural gas
reserves and production, drilling risks, uncertainty of oil and
gas reserves, risks associated with the development of additional
revenues and with the acquisition of oil and gas properties and
other energy assets, operating hazards and uninsured risks,
general economic conditions, governmental regulation, changes in
industry practices, marketing risks, one time events and other
factors described herein ("cautionary statements"). Although the
Company believes that the expectations reflected in such forward-
looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Based upon
changing conditions, should any one or more of these risks or
uncertainties materialize, or should any underlying assumptions
prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated, expected or
intended. The Company does not intend to update these forward-
looking statements. All subsequent written and oral forward-
looking statements attributable to the Company or persons acting
on its behalf are expressly qualified in their entirety by the
applicable cautionary statements. Reference is made to
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Forward-Looking Information - Cautionary
Statements" included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1998, which is incorporated
herein by reference.
RESULTS OF OPERATIONS - COMPARISON OF THREE MONTH PERIODS ENDED
MARCH 31, 1999 AND 1998
SALE OF PROPERTIES. On January 19, 1999, the Company sold
its oil and gas properties in Schleicher and Kent Counties, Texas
(the "Properties Sale") to EXCO Resources, Inc., a Texas
corporation ("EXCO"). These properties included 66 gross
productive wells (9.75 net productive wells) with current net
production of approximately 42.18 barrels of oil and 126,000
cubic feet of natural gas per day, and 6 gross (.75 net) non-
producing wells. These properties constituted approximately
90.418% of the gross productive wells (71.17% net productive
wells) and approximately 88.68% of the barrels of oil and 59.38%
of the cubic feet of natural gas per day produced by all of the
Company's oil and gas properties. The Company's results of
operations were significantly affected by the Properties Sale.
REVENUES. Revenues for the three month period ended March
31, 1999 were $8,139 compared with $84,527 for the corresponding
period in 1998, a 90% decrease. These decreases in revenues were
primarily a result of the Properties Sale, which was effective as
of October 1, 1998.
COSTS AND EXPENSES. Costs and expenses for the three month
period ended March 31, 1999 decreased $20,759, or 40%, to $26,727
versus $51,313 for the corresponding period of 1998. Decreases in
most expense items were primarily a result of the Properties Sale
during the current period. General and administrative expenses
increased due to the addition of an officers and directors
insurance policy that had not previously been carried. Legal,
auditing, and accounting fees increased $13,099, or 257%, from
$5,093 in the first quarter of 1998 to $18,192 in the first
quarter of 1999, due to improving reporting procedures in
readiness of future activities.
-10-
<PAGE>
NET INCOME (LOSS). The Company had a net loss for the
quarter ended March 31, 1999 of ($26,727) compared to the net
loss of ($4,375) for the corresponding quarter of 1998,
representing ($.01) and ($.01) per share, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operating and capital
expenditure requirements to date principally through cash flow
from operations.
Cash increased $280,442 to $303,814 at March 31, 1999, from
$23,372 at December 31, 1998, as a result of the Properties Sale.
The sale price was $315,000, and has been utilized for the
payment of expenses with the remainder being invested in a money
market savings until it can be used for future acquisitions.
Accounts receivable decreased $38 to $6,091 from $6,129 during
the corresponding periods, and accounts payable decreased $16,397
to $5,332 from $21,729. The increase in cash as well as the
decrease in accounts payable is primarily due to the Properties
Sale in the current period.
Earnings before interest, taxes, depreciation, depletion and
amortization ("EBITDA") for the three-month period ended March
31, 1999 was ($18,737) or (.01) per share compared to $25,485, or
.01 per share for the corresponding period of 1998. Management is
of the opinion that any significant acquisitions, projects or
drilling and/or recompletion work will require debt and/or equity
financing. The Company plans to raise capital through a private
offering to qualified investors with the capital raised being
used to acquire oil and gas properties to increase and solidify
the company's cash flow and reserve base. There is no assurance
that the Company will be able to obtain debt and/or equity
financing for any significant activities.
As of the date of this report, the Company did not have bank
credit facilities.
INFLATION AND CHANGING PRICES
The impact of inflation, as always, is difficult to assess.
During the three years ended December 1998 and the three months
ended March 31, 1999, the oil and gas industry remained
depressed. As a result, the Company experienced continued
weakness in demand and in prices received for its oil and gas
production. The general softening of the market has, however,
also reduced the cost of labor, materials, contract services, and
other operating costs. The Company cannot anticipate whether the
present trend of low inflation will remain; however, a sudden
increase in inflation and/or an increase in operating costs
coupled with a continuation of low oil prices could have an
adverse effect on the operations of the Company.
YEAR 2000 READINESS DISCLOSURE
"Year 2000," or the ability of computer systems to process
dates with years beyond 1999, affects almost all companies and
organizations. Computer systems that are not Year 2000 compliant
by January 1, 2000 may cause material adverse effects to
companies and organizations that rely upon those systems.
The Company's timely receipt of royalty income will largely
depend upon performance of computer systems and computer-
controlled equipment of the operators of the Company's oil and
gas producing properties and other third parties including oil
and natural gas purchasers and significant service providers such
as electric utility companies and natural gas plant, pipeline and
gathering system operators. The Company is seeking written
verification from its operators that they will be Year 2000
compliant. The Company anticipates that the cost of seeking
verification will be minimal. The Company believes that it is not
practical to independently verify the response it receives
because the cost would not be affordable.
The Company has undertaken an inventory of its financial
software and hardware systems for Year 2000 readiness. The
Company used an outside consultant to assist in this review. The
outside consultant has completed his review and identified the
required upgrades. All required upgrades to the Company's
financial software and hardware system are expected to be
complete by October 30, 1999. The cost of the outside consultant,
as well as the cost of upgrades, is expected to be minimal.
The failure to remediate critical systems (software or
hardware), or the failure of a material third party to resolve
critical Year 2000 issues could have a serious adverse impact on
the Company's ability to continue operations and meet
obligations. Any Year 2000 problems that do occur will likely
manifest themselves in reduced production through equipment shut
down or impaired liquidity through an inability of the
-11-
<PAGE>
Company's customers to take delivery or to process payment. At
the current time, the Company believes that any interruption in
operation will be minor and short-lived. However, until the
Company's review has progressed, it is impossible to accurately
identify the risks, quantify potential impacts or establish a
contingency plan. The Company currently intends to complete its
contingency planning by October 30, 1999.
-12-
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on From 8-K
- ----------------------------------------
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K - The Company filed one Report on Form 8-
K during the three months ended March 31, 1999. On January 19,
1999, the Company filed a Report on From 8-K reporting a change
of control of the Registrant, the disposition of assets, and the
change of address of Registrant's principal executive offices.
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.
GLADSTONE RESOURCES, INC.
Date: May 17, 1999 By: /s/ KATHERINE R. MURPHY
------------------------------
Katherine R. Murphy, Treasurer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR GLADSTONE RESOURCES, INC. FOR THE THREE
MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
<CASH> 303,814
<SECURITIES> 0
<RECEIVABLES> 6,091
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 309,905
<PP&E> 639,675
<DEPRECIATION> 413,209
<TOTAL-ASSETS> 577,864
<CURRENT-LIABILITIES> 5,332
<BONDS> 0
0
0
<COMMON> 150,000
<OTHER-SE> 1,230,134
<TOTAL-LIABILITY-AND-EQUITY> 577,864
<SALES> 8,139
<TOTAL-REVENUES> 8,139
<CGS> 0
<TOTAL-COSTS> 3,827
<OTHER-EXPENSES> 30,554
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (26,189)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,189)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,189)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
