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 March 31, 1996
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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
(Exact name of registrant as specified in its charter)
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UTAH 87-0382031
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(State or other jurisdiction of (IRS Employer
Incorporation or organization) identification No.)
701 Second Avenue North, Nashville, TN. 37201
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(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (615) 254-4789
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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 March 31, 1996 was
3,135,795. ---------------
- ----------<PAGE>
APPALACHIAN OIL & GAS COMPANY, INC.
Form 10-Q
Three Months Ended March 31, 1996
INDEX
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Page
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PART I Financial Information
ITEM 1 Financial Statements
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . 2
Statements of Operations . . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . 5
Note to Financial Statements . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of
the Statement of Income. . . . . . . . . . . . . . . . . . . . 7
PART II Other Information
ITEM 1 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 8
ITEM 2 Changes in Securities. . . . . . . . . . . . . . . . . . . 8
ITEM 3 Defaults upon Senior Securities. . . . . . . . . . . . . . 8
ITEM 4 Submission of Matters to a Vote of Security Holders. . . . 8
ITEM 5 Other Information . . . . . . . . . . . . . . . . . . . . 8
ITEM 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 8
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
Appalachian Oil & Gas Company, Inc.
Balance Sheets
March 31, 1996 & June 30, 1995
<TABLE>
<CAPTION>
March June
31, 1996 30, 1995
------------ ------------
<S> <C> <C>
Current Assets
- --------------
Cash & Cash Equivalents $ 43,668 $ 12,602
Accounts Receivable - Trade 282,552 72,648
------------ ------------
Total Current Assets 326,220 85,250
Property & Equipment
- --------------------
Oil & Gas Properties 140,184 626,095
Other Property & Equipment 453,248 747,053
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Total Property & Equipment 593,432 1,373,148
Less Accumulated Depreciation, Depletion
& Amortized ( 370,219) ( 824,865)
------------ ------------
Net Property & Equipment 223,213 548,283
------------ ------------
Total Assets $ 549,433 $ 633,533
============ ============
</TABLE>
See Accompanying Notes
<PAGE>
Appalachian Oil & Gas Company, Inc.
Balance Sheets -Continued-
March 31, 1996 & June 30, 1995
<TABLE>
<CAPTION>
March June
31, 1996 30, 1995
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<S> <C> <C>
Current Liabilities
- -------------------
Current Portion of Long-Term Debt $ -0- $ 32,628
Notes Payable - Related Party 235,491 138,500
Accounts Payable
Trade 19,862 24,674
Royalties -0- 44,193
Transported Gas -0- 51,418
Accrued Expenses 4,235 5,352
------------ ------------
Total Current Liabilities 259,588 296,765
Long Term Debt Less Current Portion -0- 96,862
Total Liabilities 259,588 393,627
Stockholders' Equity
- --------------------
Common Stock, Par Value $0.01 Per Share,
10,000,000 Shares Authorized 3,135,795
Shares Issued & Outstanding 31,358 31,358
Additional Paid In Capital 1,814,342 1,814,342
Retained Deficit ( 1,555,855) ( 1,605,794)
------------ ------------
Total Stockholders' Equity 289,845 239,906
------------ ------------
Total Liabilities & Stockholders' Equity $ 549,433 $ 633,533
============ ============
</TABLE>
See Accompanying Notes
<PAGE>
Appalachian Oil & Gas Company, Inc.
Statement of Operations
For the Three Month Periods Ended March 31, 1996 & 1995
and the Nine Month Periods Ended March 31, 1996 & 1995
<TABLE>
<CAPTION>
For the Three Month For the Nine Month
Periods Ended March 31, Periods Ended March 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
- --------
Oil & Gas Sales $ 45,931 $ 131,579 $ 261,316 $ 381,642
Drilling Programs -0- -0- -0- 2,418
Other 12 ( 892) 1,764 4,976
Gain on Sale of Assets 170,051 -0- 170,051 -0-
------------ ------------ ------------ ------------
Total Revenues 215,994 130,687 433,131 389,036
Costs & Expenses
- ----------------
Cost of Drilling Programs -0- -0- -0- -0-
Other Operating Expenses 168,651 79,167 229,967 173,317
Depreciation, Depletion &
Amortization 10,417 21,559 45,141 64,678
Interest 4,821 6,571 14,323 17,585
General & Administrative 22,180 61,306 93,761 221,414
Loss on Sale Of Assets -0- -0- -0- 11,545
------------ ------------ ------------ ------------
Total Costs & Expenses 206,069 168,603 383,192 488,539
------------ ------------ ------------ ------------
Net Income (Loss) Before
Minority Interest 9,925 ( 37,916) 49,939 ( 99,503)
Minority Interest -0- ( 3,644) -0- ( 3,654)
------------ ------------ ------------ ------------
Net Income (Loss) $ 9,925 ($ 41,560) $ 49,939 ($ 103,157)
============ ============ ============ ============
Minority Interest -0- ( 3,644) -0- ( 3,654)
------------ ------------ ------------ ------------
Earnings Per Share $ .00 $ 0.01 $ 0.01 $ 0.03
</TABLE>
See Accompanying Notes
<PAGE>
Appalachian Oil & Gas Company, Inc.
Statement of Cash Flows
For the Nine Month Periods Ended March 31, 1996 & 1995
<TABLE>
<CAPTION>
For the Nine Month
Periods Ended March 31,
1996 1995
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities
- ------------------------------------
Net Income (Loss) $ 49,939 ($ 103,157)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating Activities
Depreciation, Depletion, &
Amortization 45,141 64,678
Minority Interest -0- 3,654
(Gain) Loss on Sale of Assets ( 170,051) 11,545
Changes in Operating Assets & Liabilities
(Increase) Decrease in Accounts Receivable ( 209,904) 12,099
Increase (Decrease)in Accounts Payable ( 100,423) 34,668
Increase (Decrease) in Accrued Expenses ( 1,117) 2,236
Increase (Decrease) in Drilling Advances -0- -0-
------------ ------------
Net Cash Provided by Operating
Activities ( 386,415) 25,723
Cash Flows from Investing Activities
- ------------------------------------
Purchases of Property & Equipment -0- ( 11,810)
Purchases of Oil & Gas Properties -0- ( 11,550)
Investment in Joint Venture -0- ( 109,000)
Proceeds from Sale of Assets 450,000 -0-
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Net Cash Used in Investing Activities 450,000 ( 132,360)
Cash Flows from Financing Activities
- ------------------------------------
Proceeds from Notes Payable 96,991 73,500
Principal Payments on Notes Payable ( 129,490) ( 7,500)
Principal Payments on Long-Term Debt -0- ( 21,314)
Dividends Paid -0- ( 1,173)
------------ ------------
Net Cash Used in Financing Activities ( 32,499) 43,513
Increase (Decrease) in Cash & Cash Equivalents 31,086 ( 63,124)
Cash & Cash Equivalents, Beginning of Period 12,602 66,602
------------ ------------
Cash & Cash Equivalents, End of Period $ 43,688 $ 3,478
============ ============
</TABLE>
See Accompanying Notes
<PAGE>
Appalachian Oil & Gas Company, Inc.
Note to Financial Statements
NOTE #1 - Statement Preparation
- -------------------------------
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 December 31,
1995 10-K report.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
- -------------------------------
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 believes it has sufficient cash for the next years
operations.
Results of Operations
- ---------------------
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. The Company continues to use, as frugally as
possible, its cash reserves to meet the current expenses.
<PAGE>
PART II - OTHER INFORMATION
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Item 1 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . .None
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. . . . . . . . . . . . . . . . . . . . . .None
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .None
<PAGE>
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/ April 21, 1999 /S/ Raymond A. Connelly
Date: ------------------ By: --------------------------
Raymond A. Connelly
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732814
<NAME> APPALACHIAN OIL AND GAS COMPANY, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-30-1996
<CASH> 43,668
<SECURITIES> 0
<RECEIVABLES> 282,552
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 326,220
<PP&E> 593,432
<DEPRECIATION> 370,219
<TOTAL-ASSETS> 549,433
<CURRENT-LIABILITIES> 259,588
<BONDS> 0
0
0
<COMMON> 31,358
<OTHER-SE> 258,487
<TOTAL-LIABILITY-AND-EQUITY> 549,433
<SALES> 45,931
<TOTAL-REVENUES> 215,994
<CGS> 168,651
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 37,418
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,925
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,925
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,925
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
