FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 1998
Commission File No. 0-17269
Viking Resources International, Inc.
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(Exact name of small business issuer in its charter)
Delaware 59-3314928
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3301 W. Gandy Blvd., Tampa, Florida 33611
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(Address of principal executive office) (Zip Code)
Registrant's telephone number - (813) 837-2295
Securities registered under Section 12 (b) of the Exchange Act:
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 for 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. Yes _ No x
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. The total outstanding shares
reflected below as at December 31, 1998 includes adjustments made to reflect
2,150,000 shares authorized, but not yet issued and 18,057,700 shares cancelled,
but awaiting return of certificates.
Class Outstanding at December 31, 1998
- ----- --------------------------------
(Common stock, $.0001 par value) 19,380,096
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VIKING RESOURCES INTERNATIONAL, INC.
INDEX
Part I: Financial information Page No.
<S> <C>
Condensed consolidated balance sheet December 31, 1998
and September 31, 1998. 3 - 4
Condensed consolidated statement of income three months
ended December 31, 1998 and six months year to date. 5
Condensed consolidated statement of cash flows - three months
ended December 31, 1998 and six months year to date. 6
Notes to condensed consolidated financial statements 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 9
Part II: Other information
Item 1 Legal Proceedings 9
Item 2 Reports on Form 8-K 9
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2
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PART I - FINANCIAL INFORMATION
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
December 31, September 31,
1998 1998
---- ----
(Unaudited) (Unaudited)
<S> <C> <C>
Current assets
Cash - Checking 24 (15)
Loans Receivable (Note 2) 18,700 18,700
Employee Advances (Note 2) 1,225 1,325
Other Receivable (Note 2) 1,825 1,825
------- -------
Total Current Assets 21,774 21,834
Fixed Assets
Computer Equipment/Software (Note 3) 31,440 31,440
Less Accumulated Depreciation (19,295) (17,885)
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Total Fixed Assets 14,146 13,556
Other Assets
Organizational Costs 76,111 76,111
Less Accumulated Amortization (47,328) (45,078)
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Total Other Assets 28,783 31,033
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Total Assets 62,702 66,423
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements
3
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VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES
<TABLE>
<CAPTION>
December 31, September 31,
1998 1998
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(Unaudited) (Unaudited)
<S> <C> <C>
Current Liabilities
Accounts Payable 32,770 31,808
Notes Payable 14,004 14,004
Wages Payable 106,000 106,000
Federal P/R Taxes (W/Penalties & Interest) (Note 4) 200,480 200,480
State P/R Taxes 2,208 2,208
Accrued Expenses 9,400 9,400
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Total Current Liabilities 364,863 363,901
Long Term Liabilities 0 0
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Total Long Term Liabilities 364,863 363,901
Stockholders' Equity
Common Stock 3,469 3,469
100,000,000 Authorized
19,380,096 Issued/Outstanding @$.0001 Par Value (Note 6)
Additional Paid In Capital 783,453 783,453
Retained Earnings (1,045,475) (1,045,475)
Net Current Period Earnings (Loss) (43,607) (32,924)
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Total Stockholders' Equity (302,160) (297,478)
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Total Liabilities and Stockholders' Equity 62,702 66,423
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
4
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<TABLE>
<CAPTION>
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF INCOME
For the Three Months Ending December 31, 1998 and Six Months Year to Date
December 31,
1998 Year to Date
---- ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Income:
Revenue (Note 5) 0 0
Other Income (Fee Income) 0 0
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Gross Income 0 0
Operating Expenses 1,022 36,287
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Taxes
FICA & FUI Taxes 0 0
SUI 0 0
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Total Taxes 0 0
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Net Operating Income (Loss) (1,022) (36,287)
Other Deductions
Depreciation 1,410 2,820
Amortization 2,250 4,500
Loss on Sale of Assets 0 0
Loss on Investment 0 0
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Total Other Deductions 3,660 7,320
Interest Expense (Income) 0 0
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Net Operating Income (Loss) After Taxes (4,682) (43,607)
=========== ===========
Weighted average number of
shares outstanding 19,380,096 19,380,096
Net income per share (.0002) (.002)
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements
5
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VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
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<CAPTION>
December 31, Year to
1998 Date
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(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) (4,682) (43,607)
Adjustments for non-cash charges:
Depreciation and Amortization 3,660 7,320
Accounts Receivable (Increase) Decrease 100 (16,225)
Other Assets (Increase) Decrease 0 0
Accounts Payable Increase (Decrease) 962 3,035
Current Liabilities Increase (Decrease) 0 (2,197)
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Total adjustments 4,722 (8,067)
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Net Cash provided (Used) By Operating Activities (40) (51,066)
Cash Flows from Investing Activities:
Purchase of Fixed Assets 0 0
Investment in Subsidiaries 0 0
Proceeds from Issuance of Long Term Debt 0 0
Cash Used for Investments 0 0
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Net Cash Provided (Used) By Investing Activities 0 0
Cash Flows from Financing Activities:
Proceeds from Issuance of Common Stock 0 0
Paid-In Capital 0 49,500
Proceeds from Issuance of Long Term Debt 0 0
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Net Cash Flows from Financing Activities 0 49,500
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Net Increase (Decrease) in Cash (40) (2,173)
Cash At Beginning of Period 16 2,197
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Cash At End of Period 24 24
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements
6
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The current quarter financial information included herein is unaudited; however,
such information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods.
The results of operations for the three-month period ending December 31, 1998
and the six months year to date are not necessarily indicative of the results to
be expected for the full year.
The consolidated financial statements include only Viking Resources
International, Inc. corporate operations.
NOTE 2: LOANS RECEIVABLE
The loans receivable due the Company consist of the following:
Loans due from Executive JetPort of New Jersey, Inc. $ 15,000
Loans due from AKO Resources, Inc. 3,700
Employee Advances 1,225
Other Receivables - G.L. Kuhr 1,825
-----------
Total $ 21,750
NOTE 3: COMPUTER EQUIPMENT
The computer equipment listed consists of a capitalized lease originated in July
1995 which has not yet been retired due to the Company's restricted cash flow
during the period January 1996 to December 1997.
NOTE 4: INCOME TAXES
The Company continues in its communication and negotiation with the Internal
Revenue Service to settle a significant Federal payroll tax, penalties and
interest payable which was originally incurred in 1995.
NOTE 5: REVENUE
The Company has not yet had significant revenue generation and should still be
considered in the developmental stage. Revenues are recognized at the time goods
are delivered to the customer.
NOTE 6: SHARES OUTSTANDING
The total outstanding shares at September 30, 1998 includes adjustments made to
reflect 2,150,000 authorized, but not yet issued and 18,057,700 cancelled, but
awaiting return of certificates.
NOTE 7: ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 1998
Subsequent to the period ending December 31, 1998, the Company had no
acquisitions.
7
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VIKING RESOURCES INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors, which have affected the Company's financial position and
operating results during the period, ended December 31, 1998.
Three months ended December 31, 1998
- ------------------------------------
During the three months ended December 31, 1998 the Company endeavored to
secure funding to support corporate operations and move forward with its revised
business plan, including its proposed acquisition of Executive JetPort (EJP).
The Company continued to maintain communication with EJP (and other acquisition
targets). The lack of funding and any cash flow at this time prohibited any
forward movement on the planned Juleon, Inc. fiberglass operation start-up.
Juleon continues to operate as a single unit long-haul trucking operation
supporting only its two employees and reflecting minimal operating profits. The
Company worked diligently to hold in abeyance all financial obligations,
including accounts payable, notes payable, wages payable, capital lease payable,
taxes and other accrued expenses.
During this period, the Company continued with its revised business plan
to reduce the focus on environmental and move toward a more diversified holding
company approach. The revised plan included a structure of four groups:
Aviation, Environmental, Manufacturing and Real Estate. The Company was involved
in negotiations with acquisition candidates within each of these groups, EJP
representing the aviation group. Others included the planned funding of a
fiberglass products operation, the acquisition of a furniture manufacturer, the
acquisition of a new tire recycling operation in Central Florida, and a real
estate project in PA. The Company's management explored numerous sources to
obtain the funding necessary for these acquisitions and operations. Although the
Company was unsuccessful in obtaining the funding to fully support this
restructuring, it was able to elicit significant interest on funding the
aviation acquisition candidate, EJP. Through negotiations subsequent to this
period, the Company was able to enter into a bridge loan funding agreement for
the EJP project.
During the December 1998 period, an International Business Intermediary
and Zurich certified countertrader was engaged to assist in the funding goals of
the Company. A commitment for a $10.0M Financial Guarantee Bond was obtained
during this period and the Company pursued a lender to fund using this credit
enhancement instrument. The Company was unable to secure a lender in this
transaction.
On December 14, 1998, the Company entered into an agreement with NIKA
Corporation/Ronald Minges to provide capital funding in exchange for an issue of
600,000 shares of restricted common stock. These shares were issued on December
21, 1998. Subsequent to this report, this transaction was cancelled and the
Company cancelled the 600,000 shares.
In preparation for a changeover of transfer agents, the Company discovered
a reporting error relevant to a stock issuance in January of 1998. This error,
issuing 1,000 shares more than authorized, will be addressed with the recipient
of the shares and with the transfer agent.
8
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Liquidity and Capital Resources at December 31, 1998
- ----------------------------------------------------
During the period ending December 31, 1998, without significant infusion
of capital the Company's liquidity and capital resources continued to be
severely restricted in its operation, development and acquisitions. The need for
capital infusion was critical and will be necessary for the Company to move
forward in order to accomplish its goals. Despite multiple potential
transactions, the Company was unable to secure funding during this period. This
was primarily due to the market price of its shares (average price for three
months ended 12/31/98 was $ .06. For this reason, the Company determined that it
would not use its brokerage account securities for any further cash flow
purposes.
Events Subsequent to December 31, 1998
- --------------------------------------
Subsequent to this reporting period, the Company successful obtained
bridge loan financing allowing it to acquire 49.9% of Executive JetPort as a
first step to an 80.1% ownership position.
The Company continued to pursue other funding to obtain net proceeds in
excess of $8.0M for its restructured business plan including certain
transactions presented by the International Business Intermediary.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- -------------------------
To the Company's knowledge, there were no legal proceedings during the
quarter ending December 31, 1998.
Item 2. Form 8-K
- ----------------
No reports on Form 8-K were filed during this period.
9
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SIGNATURES
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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.
VIKING RESOURCES INTERNATIONAL, INC.
DATE: JUNE 30, 1999 BY /S/ DAN O. ERICKSON
---------------------
DAN O. ERICKSON
PRESIDENT/CEO/CHAIRMAN
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
SIGNATURE DATE
/S/ DAN O. ERICKSON JUNE 30, 1999
- -------------------
DAN O. ERICKSON,
PRESIDENT/CEO/CHAIRMAN
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 24
<SECURITIES> 0
<RECEIVABLES> 21,750
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,774
<PP&E> 31,440
<DEPRECIATION> (19,295)
<TOTAL-ASSETS> 62,702
<CURRENT-LIABILITIES> 364,863
<BONDS> 0
0
0
<COMMON> 3,469
<OTHER-SE> (302,160)
<TOTAL-LIABILITY-AND-EQUITY> 62,702
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,022
<OTHER-EXPENSES> 3,660
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,682)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,682)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
