<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 1999
----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
--------------- ----------------
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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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
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, 1999
6,949,691
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of Miller Petroleum, Inc., a Tennessee
corporation (the "Company"), required to be filed with this 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
<CAPTION>
ASSETS
July 31, April 30,
1999 1999
Unaudited
<S> <C> <C>
CURRENT ASSETS
Cash $58,988 $62,438
Accounts receivable - trade-, net 305,774 317,403
Inventory 473,500 472,586
Prepaid expenses 12,637 25,274
Total Current Assets 850,899 877,701
FIXED ASSETS
Machinery and equipment 1,568,038 1,568,038
Vehicles 316,862 316,862
Buildings 313,335 313,335
Office Equipment 75,561 75,311
Less: accumulated depreciation (764,633) (719,886)
Total Fixed assets 1,509,163 1,553,660
OIL AND GAS PROPERTIES 2,449,982 2,502,648
PIPELINE FACILITIES 447,323 458,997
OTHER ASSETS
Land 511,500 511,500
Investments 500 500
Organization Costs 178 178
Total Other Assets 512,178 512,178
TOTAL ASSETS $5,769,545 $5,905,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - trade $201,609 $335,207
Accrued expenses 168,658 48,040
Notes payable - current portion 627,811 586,256
Total Current Liabilities 998,078 969,503
LONG-TERM LIABILITIES
Notes payable - related 136,152 134,738
Notes payable 3,023,385 2,980,862
Total Long-Term Liabilities 3,159,537 3,115,600
Total Liabilities 4,157,615 4,085,103
STOCKHOLDERS' EQUITY
Common Stock: 500,000,000 shares
authorized at $0.0001 par value,
6,949,691 and 6,921,556 shares
issued and outstanding 695 692
Additional paid-in capital 2,301,154 2,271,157
Retained Earnings (689,919) (451,768)
Total Stockholders' Equity 1,611,930 1,820,081
TOTAL LIABILITIES AND
STOCKHOLDERS'S EQUITY $5,769,545 $5,905,184
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statements of Operations
(UNAUDITED)
Three Months Twelve Months
Ended
July 31, 1999 April 30, 1999
<S> <C> <C>
REVENUES
Service and drilling revenue $ 91,520 $1,175,033
Oil and gas revenue 203,828 742,920
Retail sales 1,765 49,707
Other revenue 3,153 39,752
Total Revenue 300,266 2,007,412
COSTS AND EXPENSES
Cost of sales 70,490 1,195,456
Selling, general and administrative 87,220 582,025
Salaries and wages 180,903 448,635
Depreciation, depletion and amortization 109,709 387,072
Total Costs and Expenses 448,322 2,613,188
INCOME (LOSS) FROM OPERATIONS (148,056) (605,776)
OTHER INCOME (EXPENSE)
Interest income 1,809 14,370
Interest expense (91,903) (344,787)
Total Other Income (Expense) (90,094) (330,417)
INCOME TAXES 0 0
NET INCOME (LOSS) (238,150) (936,193)
NET EARNING (LOSS) PER SHARE (0.03) (0.14)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 6,935,624 6,753,268
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statement of Stockholders' Equity
(UNAUDITED)
Additional
Common Shares Paid-in Retained
Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance
April 30, 1998 6,646,067 $666 $1,705,080 $484,425 $2,190,171
Common stock
issued for cash at
$2.19 per share 150,000 15 328,110 - 328,125
Common stock
issued for cash at
$2.00 per share 60,500 5 120,994 - 120,999
Common stock
issued for cash at
$1.80 per share 28,556 3 51,397 - 51,400
Common stock
issued for services
at $1.80 per share 22,000 2 39,598 - 39,600
Common stock
issued for services
at $1.80 per share 3,333 6,000 - 6,000
Common stock
issued to employees
at $1.80 per share 11,100 1 19,979 - 19,980
40,000
Net income for the
year ended
April 30,1999 (936,195) (936,195)
Balance
April 30, 1999 6,921,556 $692 $2,271,158 (451,770) $1,820,080
Common stock
issued for cash at
$1.00 per share 25,000 3 24,997 - 25,000
Common stock
issued for cash at
$1.59 per share 3,135 5,000 - 5,000
Net loss for the
three months ended
July 31, 1999 (238,150) (238,150)
Balance
July 31, 1999 6,949,691 $695 $2,301,155 $(689,920) 1,611,930
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statement of Cash Flows
(UNAUDITED)
Three Months Twelve Months
Ended
July 31, 1999 April 30, 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($238,150) ($936,193)
Adjustments to Reconcile Net Income to
Net Cash Provided (Used) by Operating
Activities:
Depreciation, depletion and amortization 109,709 387,072
Allowance for bad debts 22,938
Common stock issued for services 65,579
Disposition of equipment and property 14,420
Changes in Operating Assets and Liabilities:
Decrease (increase) in accounts receivable 11,629 (7,090)
Decrease (increase) in prepaid expense 12,637
Decrease (increase) in inventory (914) 34,685
Decrease (increase) in organizational costs 45
Increase (decrease) in accounts payable (133,598) 145,473
Increase (decrease) in accrued expenses 120,618 11,043
Net Cash Provided (Used) by Operating
Activities (118,069) (262,028)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (250) (227,914)
Change in investments 16,284
Purchase of oil and gas properties (483,350)
Purchase of pipeline (446,325)
Net Cash Provided (Used) by Investing
Activities (250) (1,141,305)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (25,497) (1,392,730)
Sale of common stock 30,000 500,524
Proceeds from borrowing 110,366 2,291,268
Net Cash Provided (Used) by Financing
Activities $114,869 $1,399,062
NET INCREASE IN CASH ($3,450) ($4,271)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 62,438 66,709
CASH AND CASH EQUIVALENTS,
END OF PERIOD $58,988 $62,438
CASH PAID FOR
Interest $91,903 $344,787
Income taxes - -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $ 0 $45,600
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
MILLER PETROLEUM, INC.
Notes to the Consolidated Financial Statements
July 31, 1999 and April 30,1999
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, 1999 Annual Report on Form 1OKSB. The results of
operations for the period ended July 31, 1999 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
None.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
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For the second quarter of fiscal year 2000, the Company plans to
stimulate the Elk Valley #14 for oil. This well is a 50/50 joint venture
between the Company and Delta Producers, Inc. of Greenville Mississippi. An
oil zone in the Maxton formation was encountered during a test of the Big
Lime. Since oil prices have rebounded, this zone has become extremely
attractive as an untested oil producer.
The Company is also planning a stimulation of the Medical Investors
Group #1. This well is located in the Jellico Field. The Cox zone in the Big
Lime and the Maxton are both targets for gas production. Gas from this well
will be sold into the Company's Jellico Pipeline to Citizens Utility District.
The Company is making extensive use of its 127,000 well database
GeoGraphix system to explore potential plays in the Knox Formation. This hot
new play is currently underway in Hancock County, Tennessee, and promises to
generate renewed interest in the deeper horizons in the southern Appalachian
Basin. This play has received considerable press coverage from the
substantial finds of Tengasco, Inc. of Knoxville, Tennessee. The Company
currently holds a strategic acreage position with plans to acquire more.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents at July 31, 1999, decreased by $3,450 from
the April 30, 1999 balance, due primarily to a payment on notes payable.
The Company believes that its current cash flow will be sufficient
to support its cash requirements for the next 12 months.
Results of Operations
- ---------------------
The Company had revenues of $300,266 for the first quarter of its
fiscal year, down from the $459,879 in revenues recognized during the first
quarter of its last fiscal year primarily due to less drilling and service
work. Working capital decreased $55,377 during the first quarter due to
reduced revenues.
The Company's net loss before depreciation, depletion and
amortization for the first quarter was $128,441.
Year 2000 Compliance
- ---------------------
The Company believes that its internal system of personal computers
is Year 2000 compliant. It has no other computer systems. Management has
confirmed with its bank and its insurer that those entities' computer system
are Year 2000 compliant.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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None; not applicable.
Item 2. Changes in Securities.
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During the quarterly period ended July 31, 1999, the Company issued
the following "unregistered" and "restricted" shares of common stock:
Name Date Number of Shares Consideration
- ---- ---- ---------------- -------------
M. E. Ratliff . 06-11-99 25,000 $25,000
Charles Quin 07-29-99 3,135 $ 5,000
The offer and sales of these securities are believed to have been
exempt from the registration requirement of Section 5 of the Securities Act of
1933 pursuant to Section 4 (2) thereof, and from similar states' securities
laws, rules and regulations.
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.
None.
* 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: 9-16-99 By: /s/ Ronnie Griffith
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Ronnie Griffith, President and
Director
Date: 9-16-99 By: /s/ Lawrence L. LaRue
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Lawrence L. LaRue,
Secretary/Treasurer and Director
Date: 9-16-99 By: /s/ Herman Gettelfinger
----------------- -----------------------------
Herman Gettelfinger Director
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> JUL-31-1999
<CASH> 58988
<SECURITIES> 0
<RECEIVABLES> 305774
<ALLOWANCES> 0
<INVENTORY> 473500
<CURRENT-ASSETS> 850899
<PP&E> 5268733
<DEPRECIATION> 764633
<TOTAL-ASSETS> 5769545
<CURRENT-LIABILITIES> 998078
<BONDS> 0
0
0
<COMMON> 695
<OTHER-SE> 1611235
<TOTAL-LIABILITY-AND-EQUITY> 5769545
<SALES> 1765
<TOTAL-REVENUES> 300266
<CGS> 70490
<TOTAL-COSTS> 448322
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 91903
<INCOME-PRETAX> (238150)
<INCOME-TAX> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (238150)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.04)
</TABLE>
