<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB-A1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 1998
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File No. 33-2249-FW
MILLER PETROLEUM, INC.
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(Name of Small Business Issuer in its Charter)
TENNESSEE 62-1028629
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3651 Baker Highway
Huntsville, Tennessee 37756
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (423) 663-9457
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
(1) Yes X No (2) Yes X No
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<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the Issuer has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a Plan confirmed by a court. Yes No X
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APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
July 31, 1998
6,684,703
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Balance Sheets
ASSETS
<CAPTION>
July 31, April 30,
1998 1998
Unaudited
<S> <C> <C>
CURRENT ASSETS
Cash $ 73,263 $ 66,709
Accounts receivable - trade, net 340,698 333,251
Total Current Assets 413,961 399,960
FIXED ASSETS
Machinery and equipment 1,505,099 1,445,099
Vehicles 317,765 317,765
Buildings 284,548 257,223
Office Equipment 70,607 61,067
Less: accumulated depreciation (614,174) (573,047)
Total Fixed assets 1,563,845 1,508,107
OIL AND GAS PROPERTIES 2,357,806 2,205,644
PIPELINE FACILITIES 293,867 45,457
OTHER ASSETS
Land 511,500 511,500
investments 16,642 16,784
Inventory 461,675 507,271
organization Costs 223 223
Total Other Assets 990,040 1,035,778
TOTAL ASSETS $5,619,519 $ 5,194,946
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $123,853 $189,734
Accrued expenses 41,492 36,997
Notes payable - current portion 380,006 161,772
Total Current Liabilities 545,351 388,503
LONG-TERM LIABILITIES
Notes payable - related 129,045 126,796
Notes payable 2,724,469 2,489,476
Total Long-Term Liabilities 2,853,514 2,616,272
Total Liabilities 3,398,865 3,004,775
STOCKHOLDERS' EQUITY
Common Stock: 500,000,000 shares authorized at
$0.0001 par value, 6,609,703 and 6,055,000 shares
issued and outstanding 680 666
Additional paid-in capital 2,033,190 1,705,080
Retained earnings 186,784 484,425
Total Stockholders' Equity 2,220,654 2,190,171
TOTAL LIABILITIES AND STOCKHOLDERS'S EQUITY $5,619,519 $5,194,946
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statement
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statements of Operations
(UNAUDITED)
<CAPTION>
Three Months Twelve Months
Ended Ended
July 31, 1998 April 30,1998
<S> <C> <C>
REVENUES
Service and drilling revenue $329,314 $667,929
Oil and gas revenue 123,182 703,706
Retail sales 7,357 53,917
Other revenue 26 273,451
Total Revenue 459,879 1,699,003
COSTS AND EXPENSES
Cost of oil and gas sales 238,896 548,104
Selling, general and administrative 140,830 436,719
Salaries and wages 201,845 313,080
Depreciation, depletion and amortization 78,450 197,001
Total Costs and Expenses 660,021 1,494,904
INCOME (LOSS) FROM OPERATIONS (200,142) 204,099
OTHER INCOME (EXPENSE)
Interest income 4,811 19,802
Interest expense (102,310) (148,157)
Total Other Income (Expense) (97,499) (128,355)
INCOME TAXES 0 0
NET INCOME (LOSS) (297,641) 75,744
NET EARNING (LOSS) PER SHARE (0.04) 0.01
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 6,684,703 6,395,125
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
<TABLE>
MILLER PETROLEUM, INC.
(Formerly Triple Chip Systems, Inc.)
Consolidated Statements of Stockholders Equity
<CAPTION>
Note
Additional Receivable
Common Shares Paid-in Retained From
Shares Amount Capital Earnings Stockholder Total
<S> <C> <C> <C> <C> <C> <C>
Balance,
April 30, 1997 6,055,000 $ 606 $ 684,532 $ 408,681 (304,355) $ 789,464
Net note receivable
from shareholder
with note payable
to shareholder - - - - 304,355 304,355
Common stock
issued for cash at
approximately $1.75
per share 336,222 34 586,984 - - 587,018
Common stock
issued for
equipment
at $1.80 per
share 144,444 14 259,986 - - 260,000
Common stock issued
in AKS acquisition
at $2.00 per share 45,000 5 89,995 - - 90,000
Common stock issued
to pay note payable
at $1.50 per share 29,037 3 43,587 - - 43,590
Common stock issued
as bonus @ $1.10
per share 36,364 4 39,996 - - 40,000
Net
Income for the
year ended
April 30, 1998 - - - 75,744 - 75,744
Balance,
April 30,1998 6,646,067 $ 666 $1,705,080 $484,425 $ 0 $ 2,190,171
Common stock
Issued for cash
at approximately
$2.19 per share 150,000 15 328,110 - - 328,125
Net loss for the
three months ended
July 31, 1998 (297,641) (297,641)
6,759,703 677 1,993,194 186,784 0 $2,180,655
</TABLE>
The accompanying notes are an Integral part of these consolidated financial
statements
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statement of Cash Flows
(UNAUDITED)
<CAPTION>
Three Months Twelve
Months
Ended Ended
July 31, 1998 April
30,1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($297,641) $ 75,744
Adjustments to Reconcile Net Income to Net Cash
Provided (Used) by Operating Activities:
Depreciation, depletion and amortization 78,450 197,001
Allowance for bad debt - 22,910
Common stock issued for services - 40,000
Changes in Operating Assets and Liabilities:
Decrease (increase) In accounts receivable (7,447)
(206,702)
Decrease (increase) in inventory 45,596
(153,108)
Decrease (increase) in organization costs -
(223)
Increase (decrease) in accounts payable (65,881) 204,163
Increase (decrease) in accrued expenses 4,495 20,034
Net Cash Provided (Used) by Operating Activities (242,428) 199,819
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land -
(500,000)
Purchase of equipment (96,866)
(1,171,108)
Change in investments 142 652
Purchase of oil and gas properties (189,485)
(2,020,917)
Purchase of pipeline (248,410)
(45,457)
Net Cash Provided (Used) by Investing Activities (534,619)
(3,736,830)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds on note receivable 0 304,355
Payments on notes payable (1,324,524) -
Sale of common stock 328,125 587,018
Proceeds from borrowings 1,780,000 2,647,816
Net Cash Provided (Used) by Financing Activities $ 783,601 $3,539,189
NET INCREASE IN CASH $6,554 $2,178
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 66,709 64,531
CASH AND CASH EQUIVALENTS,
END OF PERIOD $73,263 $66,709
CASH PAID FOR
Interest ($102,310)
($148,157)
Income taxes - -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $40,000
Common stock issued for equipment $260,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
MILLER PETROLEUM, INC.
Notes to the Consolidated Financial Statements
July 31, 1998 and April 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
financial statements be read in conjunction with the Registrant's April 30,
1998 Annual Report on Form 10KSB. The results of operations for the period
ended July 31, 1998 are not necessarily indicative of operating results for
the full year.
The consolidated financial statements and other information furnished herein
reflect all adjustment which are, in the opinion of management of the
Registrant, necessary for a fair presentation of the results of the interim
periods covered by this report.
NOTE 2 - RELATED PARTY TRANSACTIONS
During the three months ended July 31, 1998, the Company secured a $10 million
master note line of credit with Bank One Texas NA in Houston. A draw on said
note was used to pay off a loan from a director of $525,000.
This was the only related party transaction.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation
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Miller Petroleum, Inc., (the "Company") has completed a six mile, four-inch
and six-inch pipeline and began selling the first natural gas from its Jellico
Field on August 20, 1998, which is after the period covered by this Report.
The construction was on schedule and under budget. There are currently seven
wells tied into the system including the Cox #3, the largest natural well
drilled to date by Miller in Campbell County, Tennessee. Production is being
curtailed by Miller pending higher gas prices anticipated later in the fall.
Subsequent to this installation, the Company signed a two year contract to
market the gas through Citizens Gas Utility District. "We anticipate this
installation will provide Citizens Gas with a substantial and reliable source
of gas this winter and for years to come. This has helped us identity and
economically justify additional geologic objectives, some of which are
scheduled for drilling and completion this fall," said Deloy Miller, CEO.
Miller recently completed drilling the Robert Cox #4, Creekmore #1 and the R.
Sharp #1, all of which targeted the Jellico Mountain member of the Big Lime.
The Creekmore #1 openflowed 198 MCF per day. All three wells are producing
into the new system and are being evaluated for stimulation later this year.
Miller Petroleum Rig #3 is moving on to the Jellico Medical Investors Group
#1. This well is expected to spud September 9th and will target the Jellico
Mountain member of the Big Lime. This well is a direct offset to the Cox #1.
A 4.2 mile six-inch and four-inch pipeline is currently under construction on
Miller's Stoney Fork Field in southeastern Kentucky. This line will tie in
five CBM wells drilled earlier this year and one existing Big Lime well into
the existing Miller system. This pipeline is scheduled for completion in
October. Plans are being finalized to drill up to 50 CBM wells a year for the
next several years in this field.
The Company plans a test drilling program on the northern portion of its
"Koppers Lease" in Campbell County, Tennessee, to develop gas reserves from
the Devonian Shale and Big Lime formations. Geology has identified a possible
extention of the Jellico Mountain member of the Big Lime formation. Gas from
this lease will be transported under I75 into the new Jellico pipeline system.
Two wells are permitted at this time.
Deloy Miller, CEO, states "This (Jellico) pipeline is very strategic to the
future development of known gas reserves in and around Jellico. It will also
serve to transport gas from our previously inaccessible 40,000 acre Koppers
properties in the near future. We have a permit in place to cross Interstate
75 and anticipate tying the Koppers lease to this system this fall."
Results of Operations
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During the three months ended July 31, 1998, the Company received
total revenues of $459,879, including service and drilling revenue of
$329,314 and oil and gas revenue of $123,182. Total costs and expenses during
this period were $660,021, and the Company had a net loss from operations of
$200,142. Net loss during the quarter ended July 31, 1998, was $297,641, or
$0.04 per share.
Liquidity
- ---------
The Company as of July 31, 1998 had current assets of $413,961, with
current liabilities of $545,351.
The Company believes that its current cash flow will be sufficient to
support their cash requirements for the next twelve months.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.*
(a) Exhibits.
None.
(b) Reports on Form 8-K.
* A summary of any Exhibit is modified in its entirety by reference to the
actual Exhibit.
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.
MILLER PETROLEUM, INC.
Date: 9-25-98 By /s/ Ronnie Griffith
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Ronnie Griffith, President and
Director
Date: 9/25/98 By /s/ Lawrence L. LaRue
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Lawrence L. LaRue, Secretary/
Treasurer and Director
Date: 9-25-98 By /s/ Deloy Miller
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Deloy Miller, CEO
and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> JUL-31-1998
<CASH> 73263
<SECURITIES> 0
<RECEIVABLES> 340698
<ALLOWANCES> 0
<INVENTORY> 461675
<CURRENT-ASSETS> 413961
<PP&E> 2178019
<DEPRECIATION> 614174
<TOTAL-ASSETS> 5619519
<CURRENT-LIABILITIES> 545351
<BONDS> 0
0
0
<COMMON> 680
<OTHER-SE> 2219974
<TOTAL-LIABILITY-AND-EQUITY> 5619519
<SALES> 7357
<TOTAL-REVENUES> 459879
<CGS> 238896
<TOTAL-COSTS> 660021
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102310
<INCOME-PRETAX> (297641)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (297641)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
