<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 October 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.
----------------------
(Name of Small Business Issuer in its Charter)
TENNESSEE 62-1028629
--------- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3651 Baker Highway
Huntsville, Tennessee 37756
----------------------------
(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
--- --- --- ---
<PAGE>
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:
October 31, 1999
7,100,691
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
October 31, April 30,
1999 1999
Unaudited
<S> <C> <C>
CURRENT ASSETS
Cash $58,101 $62,438
Accounts receivable - trade-, net 323,535 317,403
Inventory 473,500 472,586
Prepaid expenses 25,274
Total Current Assets 855,136 877,701
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 (812,042) (719,886)
Total Fixed assets 1,461,754 1,553,660
OIL AND GAS PROPERTIES 2,421,885 2,502,648
PIPELINE FACILITIES 435,029 458,997
OTHER ASSETS
Land 511,500 511,500
Investments 500 500
Organization Costs 178 178
Total Other Assets 512,178 512,178
TOTAL ASSETS $5,685,982 $5,905,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - trade $204,759 $335,207
Accrued expenses 104,311 48,040
Notes payable - current portion 617,363 586,256
Total Current Liabilities 926,433 969,503
LONG-TERM LIABILITIES
Notes payable - related 171,453 134,738
Notes payable 2,976,657 2,980,862
Total Long-Term Liabilities 3,148,110 3,115,600
Total Liabilities 4,074,543 4,085,103
STOCKHOLDERS' EQUITY
Common Stock: 500,000,000 shares
authorized at $0.0001 par value,
7,100,691 and 6,921,556 shares
issued and outstanding 710 692
Additional paid-in capital 2,452,139 2,271,157
Retained Earnings (841,410) (451,768)
Total Stockholders' Equity 1,611,439 1,820,081
TOTAL LIABILITIES AND
STOCKHOLDERS'S EQUITY $5,685,982 $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 Six Months
Ended
October 31,1999
<S> <C> <C>
REVENUES
Service and drilling revenue $ 99,425 $ 190,945
Oil and gas revenue 222,026 425,854
Retail sales 38,304 40,069
Other revenue 75,380 78,533
Total Revenue 435,135 735,401
COSTS AND EXPENSES
Cost of sales 129,354 199,844
Selling, general and administrative 79,539 166,759
Salaries and wages 167,147 348,050
Depreciation, depletion and amortization 124,600 234,309
Total Costs and Expenses 500,640 948,962
INCOME (LOSS) FROM OPERATIONS (65,505) (213,561)
OTHER INCOME (EXPENSE)
Interest income 2,332 4,141
Interest expense (88,319) (180,222)
Total Other Income (Expense) (85,987) (176,081)
INCOME TAXES 0 0
NET INCOME (LOSS) (151,492) (389,642)
NET EARNING (LOSS) PER SHARE (0.02) (0.06)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 7,025,191 6,982,229
</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
Common stock
issued for cash at
$1.00 per share 150,000 15 149,985 - 150,000
Common stock
issued for services
at $1.00 per share 1,000 1,000 - 1,000
Net loss for the
six months ended
October 31, 1999 (389,642) (389,642)
Balance
October 31, 1999 7,100,691 $710 $2,452,140 $(841,412) 1,611,438
</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 Six Months
Ended
October 31, 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($151,492) ($389,642)
Adjustments to Reconcile Net Income to
Net Cash Provided (Used) by Operating
Activities:
Depreciation, depletion and amortization 124,600 234,309
Common stock issued for services 1,000 1,000
Changes in Operating Assets and Liabilities:
Decrease (increase) in accounts receivable (17,761) (6,132)
Decrease (increase) in prepaid expense 12,637 25,274
Decrease (increase) in inventory (914)
Increase (decrease) in accounts payable 3,150 (130,448)
Increase (decrease) in accrued expenses (64,347) 56,271
Net Cash Provided (Used) by Operating
Activities (92,213) (210,282)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (250)
Purchase of oil and gas properties (36,800) (36,800)
Net Cash Provided (Used) by Investing
Activities (36,800) (37,050)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (79,222) (104,719)
Sale of common stock 150,000 180,000
Proceeds from borrowing 57,348 167,714
Net Cash Provided (Used) by Financing
Activities $128,126 $ 242,995
NET INCREASE IN CASH ($ 887) ($4,337)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 58,988 62,438
CASH AND CASH EQUIVALENTS,
END OF PERIOD $58,101 $58,101
CASH PAID FOR
Interest $88,319 $180,223
Income taxes - -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $ 1,000 $ 1,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
MILLER PETROLEUM, INC.
Notes to the Consolidated Financial Statements
July 31, 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 October 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.
----------------------------------------------------------
Miller Petroleum, Inc. has acquired a farmout from Tengasco, Inc.
adjacent to the much-publicized Swan Creek field in Hancock County, Tennessee.
With this agreement, Miller now has access to geologic maps, well logs and
seismic data from Tengasco's four-year development of the field. Of the 17
wells drilled by Tengasco, estimated proven developed reserves total 25.2 Bcf
and 474,241 Bbls. Oil. Miller will initially take industry partners to help
defer the costs of development.
Miller is planning a Knox test on a structure 14 miles from Swan
Creek. This will be a wildcat test of a geologic prospect with striking
similarities to the Swan Creek Field. Spudding and completion of the drilling
is anticipated during the third fiscal quarter. A gas contract with the local
utility has been negotiated with pipeline capacity available within two miles
of the proposed test well.
Miller is also planning a test of the Jellico Sand Member of the Big
Lime on its 9,000-acre Koppers North lease. This area is known for its higher
reservoir pressures. A Columbia Natural Resources pipeline is within two
miles of the proposed site and a Delta Producers, Inc. pipeline is located
approximately three-quarters of a mile of the well site. The location is near
the prolific Mud Creek Field in Tennessee. Should the test prove up
substantial reserves, Miller will build a pipeline across Interstate 75 to
feed gas to its Jellico Pipeline system for sale to Citizen's Gas Utility.
Miller currently sells gas through this system from its Jellico Field.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents at October 31, 1999, decreased by $887
from the July 31, 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 $435,135 for the second quarter of its
fiscal year, up from the $300,266 in revenues recognized during the last
quarter.
The Company's net loss before depreciation, depletion and
amortization for the second quarter was $26,892.
Miller's net loss for the second quarter decreased $86,658 from the
first quarter of this fiscal year. The Company expects a net profit in the
third quarter. The return to profitability is due to the recovery in oil and
gas prices and to increased drilling in the East Tennessee area.
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.
------------------
None; not applicable.
Item 2. Changes in Securities.
----------------------
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 . 09-14-99 150,000 $150,000
Charles Barker 09-14-99 1,000 Services
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: 12-14-99 By: /s/ Deloy Miller
----------------- -----------------------------
Deloy Miller, CEO and Director
Date: 12-14-99 By: /s/ Lawrence L. LaRue
----------------- -----------------------------
Lawrence L. LaRue,
Secretary/Treasurer and Director
Date: 12-14-99 By: /s/ Herman Gettelfinger
----------------- -----------------------------
Herman Gettelfinger Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> OCT-31-1999
<CASH> 58101
<SECURITIES> 0
<RECEIVABLES> 323535
<ALLOWANCES> 0
<INVENTORY> 473500
<CURRENT-ASSETS> 855136
<PP&E> 5642210
<DEPRECIATION> 812042
<TOTAL-ASSETS> 5685982
<CURRENT-LIABILITIES> 926433
<BONDS> 0
0
0
<COMMON> 710
<OTHER-SE> 1610729
<TOTAL-LIABILITY-AND-EQUITY> 5685982
<SALES> 38304
<TOTAL-REVENUES> 435135
<CGS> 129354
<TOTAL-COSTS> 500640
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88319
<INCOME-PRETAX> (151492)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (151492)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.03)
</TABLE>
