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 quarter ended September 30, 1999
Commission File No. 1-10077
EMPIRE ENERGY CORPORATION
(Name of Small Business Issuer in its Charter)
UTAH 87-0401761
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
11011 King Street, Suite 260
Overland Park, Kansas 66210
(Address of Principal Executive Offices)
Issuer's Telephone Number: (913) 469-5615
MEDIVEST, INC.
3646 West 2100 South
Salt Lake City, Utah 84120
(Former Name or Former Address, if changed since last Report)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company 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
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
November 9, 1999 Common - 11,004,098 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is contained in
Item 6 of this Report. Transitional Small Business Issuer Format Yes No X
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company 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 Consolidated Financial Statements fairly present the financial condition of
the Company.
EMPIRE ENERGY CORPORATION
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
September 30, December 31,
1999 1998
---- ----
Assets
Cash and Cash Equivalents $ 98,324 $ 5,000
Total Current Assets 98,324 5,000
Property and Equipment, at cost, less
accumulated depreciation 3,651 --
Oil and Gas Properties, not subject to
amortization using the full cost method 77,697 --
Total Assets $ 179,672 $ 5,000
Liabilities and Stockholders' Equity
Liabilities
Accounts Payable and Accrued Expenses $ 14,539 $ 805
Debentures Payable 500,000 --
Total Liabilities 514,539 805
Stockholders' Equity
Common Stock, authorized
50,000,000 shares of $.001
par value, issued and outstanding
4,372,639 as of September 30,
1999 and December 31, 1998 4,373 4,373
Additional Paid in Capital 1,675,788 1,675,788
Previous Retained Deficit (1,867,999) (1,867,999)
Earnings (Deficit) Accumulated
During Development Stage (147,029) 192,033
Total Stockholders' Equity (334,867) 4,195
Total Liabilities and Stockholders' Equity $ 179,672 $ 5,000
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
EMPIRE ENERGY CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
Since
Inception
For the Three Months Ended For the Nine Months Ended of
September 30, September 30, September 30, September 30, Development
1999 1998 1999 1998 Stage
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Revenues: $ -- $ -- $ -- $ -- $ --
Expenses:
General and Administrative (142,000) (1,290) (324,523) (6,046) (388,018)
Interest Expense (9,968) -- (14,539) -- (14,539)
Total Expense (151,968) (1,290) (339,062) (6,046) (402,557)
Net Loss Before
Extraordinary Item (151,968) (1,290) (339,062) (6,046) (402,557)
Extraordinary Item -
Gain on Restructuring
of Debt, Net of Taxes -- -- -- -- 255,528
Net Income (Loss) $ (151,968) $ (1,290) $ (339,062) $ (6,046) $ (147,029)
Earnings (Loss) Per
Common Share
Net (Loss) Per share (.03) -- (.08) --
Weighted Average Basic
Shares Outstanding 4,372,639 1,301,305 4,372,639 1,301,305
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EMPIRE ENERGY CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
Since
Inception
For the Nine Months Ended Of
September 30, September 30, Development
1999 1998 Stage
---- ---- -----
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $(339,062) $ (6,046) $(147,029)
Adjustments to Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation 192 -- 192
Common stock issued for services -- -- 21,400
Common Stock issued for finance charges -- -- 17,587
Changes in Assets and Liabilities
Increase (Decrease) in accounts
payable and accrued expenses 13,734 6,046 14,539
Decrease in other liabilities -- -- (276,825)
Net Cash Used by Operating Activities (325,136) -- (370,136)
Cash Flows From Investing Activities
Purchases of Property and Equipment (3,843) -- (3,843)
Investment in Oil and Gas Properties (77,697) -- (77,697)
Net Cash Used in Investing Activities (81,540) -- (81,540)
Cash Flows From Financing Activities
Proceeds issuance of common stock -- -- 50,000
Proceeds from debentures payable 500,000 -- 500,000
Net cash provided by financing activities 500,000 -- 550,000
Net increase in cash and cash
equivalents 93,324 -- 98,324
Cash and cash equivalents at
beginning of period 5,000 -- --
Cash and cash equivalents at
end of period $ 98,324 $ -- $ 98,324
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
EMPIRE ENERGY CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL
STATEMENTS For the Nine Months Ended
September 30, 1999
(Unaudited)
NOTE 1 - Interim Reporting
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and with Form 10-QSB
requirements. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for the
nine month period ended September 30, 1999, are not necessarily indicative of
the results that may be expected for the year ended December 31, 1999.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
The Company had not engaged in any material operations or had any revenues
from operations during the last two calendar years and through September 30,
1999. The Company's plan of operation for the most recent quarter and for the
next 12 months is to continue to explore opportunities both domestically and
internationally that may benefit the Company and its stockholders. Management
anticipates that to exploit any such major opportunities, the Company will issue
shares of its common stock as the primary consideration for any such
acquisition.
During July 1999 the company entered into an agreement to participate in
the development of oil and gas prospects in Overton County, Tennessee. An
initial well was completed and began production October 4, 1999. A second well
has been completed and is being evaluated and a third well is currently being
drilled. The Company, along with its joint venture partner, is evaluating the
exploration technology process for hydrocarbon location as well as various well
completion techniques. Once criteria are met, and based on studies of seismic
and geological information, the company anticipates drilling up to eighteen
wells on the currently leased properties during the next year as funding is
obtained for this purpose.
During the next 12 months, the Company's cash requirements will relate to
this drilling activity and payment of expenses associated with aggressively
searching for, investigating and pursuing other potential opportunities. Such
funds are expected to be provided by sales of convertible subordinated
debentures, sales of common shares, or loans to the Company. Because the Company
has not identified all of the opportunities, which may arise, it is impossible
to predict the total amount of such cash needs. As of the date of this report,
the Company has no capital commitments other than for the two wells described
above which are expected to require approximately $80,000.
Results of Operations.
Other than restoring and maintaining its good corporate standing in the
State of Utah, compromising and settling its debts and seeking the acquisition
of assets, properties or businesses that may benefit the Company and its
stockholders, the Company has had no material business operations during the two
most recent calendar years and through March 31, 1999. During the six months
ended September 30, 1999, the Company raised $500,000 from sale of convertible
subordinated debentures and has been aggressively searching for and evaluating
both domestic and international opportunities.
During the three months and nine months ended September 30, 1999, the
Company generated no revenue but incurred net losses of ($151,968) and
($339,062), respectively, from the aggressive search for opportunities and the
initial drilling of oil wells in Tennessee. During the three months ended March
31, 1999 and the nine months ended September 30, 1999, the Company had no
significant business operations and generated net losses of ($5,033) and
($6,046), respectively.
<PAGE>
Liquidity.
On September 30, 1999, the Company had $98,324 in cash with $514,539 in
total liabilities. The liabilities consist of convertible subordinated
debentures that mature May 1, 2000, including interest accrued at a rate of 10%
per annum. These debentures can be converted to the Company's common stock at
the option of the holder. The Company is authorized to and plans to sell an
additional $3,750,000 of convertible subordinated debentures. In addition, the
company is authorized to sell up to 4,000,000 shares of common stock at a price
of $3.00 per share. The Company has no assurance that the additional debentures
will be sold or that the debentures will be converted or that the additional
shares will be sold.
On October 1, 1999, a stock split of 2.5 shares for one share of common
stock became effective. Immediately following the split, there were 10,931,598
common shares issued and outstanding and earnings (loss) per share were restated
to ($0.01) and ($0.03), respectively, for the three and nine month periods ended
September 30, 1999. Restated earnings (loss) per share for the three and nine
month periods ended September 30, 1998 will be based on 3,253,263 adjusted
shares and will remain significantly unchanged at ($0.00).
Year 2000 Concerns
The Company has addressed the concerns of potential year 2000 computing
problems, both internally and with external parties and believes that
significant additional costs will not be incurred because of this circumstance.
Along with third party providers, the Company performed an evaluation of its
computer hardware and software and determined that recent enhancements and
upgrades have brought its systems significantly into compliance and existing
support agreements are adequate to handle remaining minor issues and any
exceptions which may arise. Based on equipment analysis and evaluations, the
Company does not believe that significant operational equipment modifications
are necessary. The Company is communicating with customers, vendors and business
partners and anticipates that they will be compliant by the year 2000 resulting
in no material impact to the Company.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K.
None
<PAGE>
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.
EMPIRE ENERGY CORPORATION
Date: 11/11/99 By /s/ Norman L. Peterson
- -------------- -------------------------
Norman L. Peterson
President and Director
<PAGE>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------- ----------------
27. FINANCIAL DATA SCHEDULE Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and consolidated statements of operations found on
pages 3 and 4 of the Company's Form 10-QSB for the year to date, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 98,324
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 98,324
<PP&E> 81,540
<DEPRECIATION> 192
<TOTAL-ASSETS> 179,672
<CURRENT-LIABILITIES> 514,539
<BONDS> 0
<COMMON> 4,373
0
0
<OTHER-SE> (339,240)
<TOTAL-LIABILITY-AND-EQUITY> 179,672
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 324,523
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,539
<INCOME-PRETAX> (339,062)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (339,062)
<EPS-BASIC> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
