FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 2054
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
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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 0-11732
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APPALACHIAN OIL & GAS COMPANY, INC
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(Exact name of registrant as specified in its charter)
UTAH 87-0382031
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(State or other jurisdiction of (IRS Employer
Incorporation or organization) identification No.)
6975 South Union Park Center, Suite #600, Midvale, Utah 84047
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(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (801) 949-7759
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Former name, former address and former fiscal year, if changed since last
report.
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 such shorter period that the
registrant was required to file such report(s), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
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The total number of shares outstanding as of December 31, 1998 was
8,135,795. ------------------
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APPALACHIAN OIL & GAS COMPANY, INC.
Form 10-Q
Six Months Ended December 31, 1998
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INDEX
Page
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PART I Financial Information
ITEM 1 Financial Statements
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Operations . . . . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . 6
Note to Financial Statements . . . . . . . . . . . . . . . . . . 7
Management's Discussion and Analysis of
the Statement of Income. . . . . . . . . . . . . . . . . . . . . 8
PART II Other Information
ITEM 1 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 9
ITEM 2 Changes in Securities. . . . . . . . . . . . . . . . . . . . 9
ITEM 3 Defaults upon Senior Securities. . . . . . . . . . . . . . . 9
ITEM 4 Submission of Matters to a Vote of Security Holders. . . . . 9
ITEM 5 Other Information . . . . . . . . . . . . . . . . . . . . . 9
ITEM 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 9
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Appalachian Oil & Gas Company, Inc.
Balance Sheets
December 31, 1998 (Unaudited) & June 30, 1998
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<TABLE>
<CAPTION>
December June
31, 1998 30, 1998
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<S> <C> <C>
Current Assets
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Cash & Cash Equivalents $ 138 $ 75
Accounts Receivable - Trade 1,077 3,225
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Total Current Assets 1,215 3,300
Property & Equipment
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Oil & Gas Properties 140,184 140,184
Other Property & Equipment 326,574 326,574
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Total Property & Equipment 466,758 466,758
Less Accumulated Depreciation, Depletion
& Amortization 407,208 347,658
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Total 59,550 119,100
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Total Assets $ 60,765 $ 122,400
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</TABLE>
See Accompanying Notes
Page 3
Appalachian Oil & Gas Company, Inc.
Balance Sheets -Continued-
December 31, 1998 (Unaudited) & June 30, 1998
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<CAPTION>
December June
31, 1998 30, 1998
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Current Liabilities
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Accounts Payable - Trade $ 2,586 $ 12,468
Due to Officers 14,000 -0-
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Total Current Liabilities 16,586 12,468
Commitments & Contingencies
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Stockholders' Equity
Common Stock, Par Value $0.01 Per Share,
100,000,000 Shares Authorized, 8,135,795
Shares Issued & Outstanding 81,358 81,358
Additional Paid In Capital 1,814,342 1,814,342
Retained Deficit (1,851,521) ( 1,785,768)
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Total Stockholders' Equity 44,179 109,932
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Total Liabilities & Stockholders' Equity $ 60,765 $ 122,400
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</TABLE>
See Accompanying Notes
Page 4
Appalachian Oil & Gas Company, Inc.,
Consolidated Statement of Operations (Unaudited)
For the Six Month Periods Ended December 31, 1998 & 1997
and the Three Month Periods Ended December 31, 1998 & 1997
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<CAPTION>
Six Months Three Months
Periods Ended Periods Ended
December December December December
31, 1998 31, 1997 31, 1998 31, 1997
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<S> <C> <C> <C> <C>
Revenues
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Oil & Gas Sales $ -0- $ 16,930 $ -0- $ 3,305
Other -0- 514 -0- 192
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Total Revenues -0- 17,444 -0- 3,497
Costs & Expenses
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Other Operating Expenses -0- 18,321 -0- 10,876
Depreciation, Depletion
& Amortization 59,550 8,483 29,775 4,241
General & Administrative 6,203 29,832 3,638 15,799
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Total Costs & Expenses 65,753 56,636 33,413 30,916
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Net Income (Loss) ($ 65,753) ($ 39,192) ($ 33,413) ($ 27,419)
=========== =========== =========== ===========
Earnings (Loss) Per Share ($ .01) $ .00 $ .00 $ .00
</TABLE>
See Accompanying Notes
Page 5
Appalachian Oil & Gas Company, Inc., and Subsidiary
Consolidated Statement of Cash Flows (Unaudited)
For the Six Month Periods Ended December 31, 1998 & 1997
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<CAPTION>
Six-Month Periods
Ended December 31,
1998 1997
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<S> <C> <C>
Cash Flows from Operating Activities
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Net Income (Loss) ($ 65,753) ($ 39,192)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities:
Depreciation, Depletion & Amortization 59,550 8,483
Rounding -0- ( 1)
Changes in Operating Assets & Liabilities:
(Increase) Decrease in Accounts Receivable 2,148 8,710
Increase (Decrease) in Accounts Payable ( 9,882) ( 338)
Increase (Decrease) Due to Officers 14,000 -0-
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Net Cash Provided by Operating Activities 63 ( 22,338)
Cash Flows from Investing Activities -0- -0-
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Net Cash Used in Operating Activities -0- -0-
Cash Flows from Financing Activities -0- -0-
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Net Cash Used in Financing Activities -0- -0-
Increase (Decrease) in Cash &
Cash Equivalents 63 ( 22,338)
Cash & Cash Equivalents,
Beginning of Period 75 36,954
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Cash & Cash Equivalents,
End of Period $ 138 $ 14,616
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</TABLE>
See Accompanying Notes
Page 6
Appalachian Oil & Gas Company, Inc.
Note to Financial Statements
NOTE #1 - Statement Preparation
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The Company has prepared the accompanying financial statements with interim
financial reporting requirements promulgated by the Securities & Exchange
Commission. The information furnished reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of
financial position and results of operations.
The financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's June 30, 1998 10-K report.
Page 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
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On February 1, 1996, the Company sold 60.00% of all its rights, title and
interest to its oil leases and related equipment to K. Petroleum, Inc., an
Ohio Corporation. It is the Company's intention to sell the remaining
40.00% of these assets as well.
The Company no longer operates or directs the operations of the oil and gas
wells and is dependent upon K-Petroleum, Inc., for its 40% of revenues
(royalties) from the well production.
The Company hopes to sell the remaining 40% and seeks to find a new
business activity. The Company does not have sufficient cash for the next
years operations.
Results of Operations
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The Company now has limited cash flows from its 40% interest in the oil and
gas wells. It seeks to obtain from K-Petroleum, Inc., production report to
explain the dramatic decrease in gross revenues. To date K-Petroleum,
Inc., has resisted releasing these reports.
Page 8
PART II - OTHER INFORMATION
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Item 1 Legal Proceedings
In June of 1999, the Company commenced a lawsuit in Franklin
County, Ohio (Case Number 99-CVH06-4459), against K
Petroleum, Inc., and Jam Khorrami. The suit alleges, among
other things, that the Defendants breached to the operating
agreement, wrongfully withheld accounting, converted
payments owed to the Company, breached fiduciary duties, and
tortuously interfered with contractual relations and
business opportunities. The litigation is currently in the
discovery stage.
Item 2 Changes in the Rights of the Company's Security Holders. . .None
Item 3 Defaults by the Company on its Senior Securities . . . . . .None
Item 4 Results of Votes of Security Holders . . . . . . . . . . . .None
Item 5 Other Information
In April 1999, Robert Kroph, was appointed to the Board and
appointed President of the Company.
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .None
Page 9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
/S/ July 26, 1999 /S/ Robert Kroph
Date: ----------------------- By: ---------------------------
July 26, 1999 Robert Kroph, President & Director
Page 10
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732814
<NAME> APPALACHIAN OIL & GAS COMPANY, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 138
<SECURITIES> 0
<RECEIVABLES> 1,077
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 466,758
<DEPRECIATION> 407,208
<TOTAL-ASSETS> 60,765
<CURRENT-LIABILITIES> 16,586
<BONDS> 0
0
0
<COMMON> 81,358
<OTHER-SE> (37,179)
<TOTAL-LIABILITY-AND-EQUITY> 60,765
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 33,413
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (33,413)
<INCOME-TAX> 0
<INCOME-CONTINUING> (33,413)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,413)
<EPS-BASIC> .00
<EPS-DILUTED> 0
</TABLE>
