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 March 31, 1999
Commission File No. 0-17269
Viking Resources International, Inc.
------------------------------------
(Exact name of small business issuer in its charter)
Delaware 59-3314928
-------- ----------
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
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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 March 31, 1999 includes adjustments made to reflect
2,150,000 shares authorized, but not yet issued and 18,657,700 shares cancelled,
but awaiting return of certificates.
Class Outstanding at March 31, 1999
- - - - - - ----- -----------------------------
(Common stock, $.0001 par value) 18,780,096
<PAGE>
<TABLE>
<CAPTION>
VIKING RESOURCES INTERNATIONAL, INC.
INDEX
Part I: Financial information Page No.
<S> <C>
Condensed consolidated balance sheet March 31, 1999
and December 31, 1998. 3 - 4
Condensed consolidated statement of income three months
ended March 31, 1999 and nine months year to date. 5
Condensed consolidated statement of cash flows - three months
ended March 31, 1999 and nine months year to date. 6
Notes to condensed consolidated financial statements 7 - 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 9 - 10
Part II: Other information
Item 1 Legal Proceedings 11
Item 2 Reports on Form 8-K 11
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
March 31, December 31,
1999 1998
---- ----
(Unaudited) (Unaudited)
Current assets
Cash - Checking (2,452) 24
Loans Receivable (Note 2) 18,700 18,700
Employee Advances (Note 2) 3,674 1,225
Other Receivable (Note 2) 0 1,825
-------- --------
Total Current Assets 19,922 21,774
Fixed Assets
Computer Equipment/Software 31,579 31,440
Less Accumulated Depreciation (20,705) (19,295)
Investment in Subsidiaries (Note 3) 499,000 0
-------- --------
Total Fixed Assets 509,874 14,146
Other Assets
Organizational Costs 76,111 76,111
Less Accumulated Amortization (49,578) (47,328)
Acquisition Deposits (Note 4) 50,000 0
Security Deposits 1,000 0
-------- --------
Total Other Assets 77,533 28,783
-------- --------
Total Assets 607,330 62,702
======== ========
The accompanying notes are an integral part of these condensed
financial statements
3
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
(Unaudited) (Unaudited)
<S> <C> <C>
Current Liabilities
Accounts Payable (Note 5) 25,482 32,770
Notes Payable (Note 5) 593,004 14,004
Wages Payable (Note 5) 106,000 106,000
Federal P/R Taxes (W/Penalties & Interest) (Note 6) 200,481 200,481
State P/R Taxes 2,208 2,208
Contingent Liabilities 9,400 9,400
---------- ----------
Total Current Liabilities 936,575 364,863
Total Long Term Liabilities 0 0
---------- ----------
Total Long Term Liabilities 0 0
Stockholders' Equity
Common Stock 3,469 3,469
100,000,000 Authorized
18,780,096 Issued/Outstanding @$.0001 Par Value (Note 7)
Additional Paid In Capital 783,453 783,453
Retained Earnings (1,045,475) (1,045,475)
Net Current Period Earnings (Loss) (70,692) (43,607)
---------- ----------
Total Stockholders' Equity (329,245) (302,160)
---------- ----------
Total Liabilities and Stockholders' Equity 607,330 62,423
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
4
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF INCOME
For the Three Months Ending March 31, 1999 and Nine Months Year to Date
<TABLE>
<CAPTION>
March 31,
1999 Year to Date
---- ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Income:
Revenue (See Note 8) 0 0
Other Income (Fee Income) 0 0
----------- -----------
Gross Income 0 0
Operating Expenses 23,425 59,712
Taxes
FICA & FUI Taxes 0 0
SUI 0 0
----------- -----------
Total Taxes 0 0
----------- -----------
Net Operating Income (Loss) (23,425) (59,712)
Other Deductions
Depreciation 1,410 4,230
Amortization 2,250 6,750
Loss on Sale of Assets 0 0
Loss on Investment 0 0
----------- -----------
Total Other Deductions 3,660 10,980
Interest Expense (Income) 0 0
----------- -----------
Net Operating Income (Loss) After Taxes (27,085) (70,692)
=========== ===========
Weighted average number of
shares outstanding (Note 7) 18,780,096 18,780,096
Net income per share (.001) (.004)
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements
5
<PAGE>
VIKING RESOURCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
March 31, Year to
1999 Date
---- ----
(Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net Income (Loss) (27,085) (70,692)
Adjustments for non-cash charges:
Depreciation and Amortization 3,660 10,980
Accounts Receivable (Increase) Decrease (624) (16,849)
Other Assets (Increase) Decrease 0 0
Accounts Payable Increase (Decrease) 571,712 574,748
Current Liabilities Increase (Decrease) 0 (2,197)
-------- --------
Total adjustments 572,923 564,857
-------- --------
Net Cash provided (Used) By Operating Activities 547,663 495,990
Cash Flows from Investing Activities:
Purchase of Fixed Assets (139) (139)
Investment in Subsidiaries (499,000) (499,000)
Cash Used for Investments (Deposits) (1,000) (1,000)
-------- --------
Net Cash Provided (Used) By Investing Activities (500,139) (500,139)
Cash Flows from Financing Activities:
Proceeds from Issuance of Common Stock 0 0
Paid-In Capital 0 49,500
Acquisition Deposit - MCDI (50,000) (50,000)
Proceeds from Issuance of Long Term Debt 0 0
-------- --------
Net Cash Flows from Financing Activities (50,000) (50,000)
Net Increase (Decrease) in Cash (2,476) (4,649)
Cash At Beginning of Period 24 2,197
-------- --------
Cash At End of Period (2,452) (2,452)
======== ========
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 March 31, 1999 and
the nine 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:
Loan due from AKO Resources, Inc. $ 3,700
Loan due from Executive JetPort of New Jersey, Inc. 15,000
Employee Advances 3,674
----------
Total $ 22,374
NOTE 3: INVESTMENT IN SUBSIDIARIES
The Company signed a Purchase Sale Agreement to acquire 49.9% ownership of
Executive JetPort of New Jersey, Inc. on February 24, 1999 for the amount of
$499,000 cash secured by a promissory note. The Agreement included an option to
purchase up to 80% ownership within 180 days.
NOTE 4: DEPOSITS
The Company entered into a Letter of Intent to purchase Masterpiece Cabinetry &
Design, Inc., a North Carolina furniture/case goods manufacturer, which required
a non-refundable deposit in the amount of $100,000. The initial deposit of
$50,000 was made by the Company on February 25, 1999. The final deposit was not
made during this period, causing default under the agreement. The Company is
still in the process of negotiating a resolution.
7
<PAGE>
NOTE 5: NOTES PAYABLE
The notes payable by the Company consist of the following:
Andrew G. Erickson $ 14,004
Peter Gianoukas 10,000
Mark Simpson 10,000
Executive JetPort of NJ, Inc. 346,500
Sierra Pacific Ventures, LLC 212,500
---------
$593,004
NOTE 6: INCOME TAXES
The Company has accrued a significant Federal payroll tax, penalties and
interest payable that was incurred in 1995. The Company expects to negotiate and
settle this payable for a reduced amount.
NOTE 7: SHARES OUTSTANDING
The total outstanding shares at March 31, 1999 include adjustments made to
reflect 2,150,000 shares authorized, but not yet issued and 18,657,700 shares
cancelled, but awaiting return of certificates.
NOTE 8: 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.
8
<PAGE>
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 March 31, 1999.
Three months ended March 31, 1999
- - - - - - ---------------------------------
During the three months ended March 31, 1999 the Company focused on its
aviation group acquisition, Executive JetPort of NJ, Inc. (EJP), a Fixed Base
Operation (FBO) servicing the aviation industry and located at the
Trenton-Mercer Airport in W. Trenton, NJ. Through the efforts of Mr. Erickson,
President of the Company, a bridge loan commitment in the amount of $650,000 was
secured with Sierra Pacific Ventures, LLC, (SPV) of Moses Lake, WA. This
commitment, announced on February 19, 1999, allowed the Company to negotiate a
purchase contract, signed on February 24, l999, to acquire 49.9% ownership of
EJP. The EJP Purchase/Sale Agreement required a series of staged payments from
the Company, collateralized by a promissory note and includes a 180 day option
for the Company to acquire additional ownership to the 80% level. At the end of
this reporting period, the Company had funded only $152,500 of the $499,000
purchase price due to delays on the part of SPV. This delay in the bridge
funding from SPV caused the Company to miss certain payment dates to EJP as
specified in the Agreement. To avoid a cancellation of the Agreement and as
further inducement to EJP to remain a party to the Agreement, Mr. Erickson,
Chairman, President/CEO agreed to a change in management control. As related in
a Company press release of March 26, 1999, Thomas E. Patterson, President/CEO of
EJP was appointed Chairman/CEO of the Company. Mr. Erickson remained as
President/CFO. This action by the Company allowed the acquisition and funding to
move forward. During March of this period, as the bridge loan funding flowed
into the Company, EJP was able to proceed with the completion of the necessary
upgrades and changes to the FBO facility and personnel. Subsequent to this
report, EJP began operations.
During this period, the Company added four new members to the Board of
Directors; Russell H. Scoville, MBA, Thomas E. Patterson, Eric R. Estoos and
Robert H. Aldrich. Mr. Scoville has been assisting the Company in the search for
funding. Mr. Patterson, President/CEO of Executive JetPort of NJ joined the BOD
under the purchase agreement to acquire 49.9% of EJP. Mr. Estoos, who introduced
the bridge lender to the Company and was contracted to be an investor relations
representative, joined the BOD. Mr. Aldrich, a minority shareholder in EJP, is
handling special projects for the JetPort.
In January, the BOD voted to rescind the Juleon acquisition since no funds
can be committed to its start up as a fiberglass production facility. The
principals of Juleon have been "on hold" since June of 1997, enduring
significant negative economic impact due to this prolonged delay on the part of
the Company. As reasonable compensation for this, they will maintain their
shares in the Company.
On February 20, 1999, the Company entered into a one-year contract with
Cornicopia Financial Inc./Eric Estoos to provide Financial Public Relations
services. The contract calls for an initial monthly payment of $3,000, with
increases tied to market price per share.
In March 1999, the Company moved to larger offices on Gandy Boulevard in
Tampa, Florida. This 2300 square foot office is leased for a period of twelve
months. The Company maintains an additional office in W. Trenton, NJ at EJP's
headquarters.
9
<PAGE>
During this period, the Company cancelled a previously reported financial
transaction with NIKA Corporation/Ronald Minges. All shares issued as a part of
this transaction have been cancelled.
Liquidity and Capital Resources at March 31, 1999
- - - - - - -------------------------------------------------
During the period ending March 31, 1999, the Company added capital to its
operating and acquisition funds through a Line of Credit Loan Agreement in the
amount of $650,000 with Sierra Pacific Ventures, LLC. This Agreement requires
interest to be paid at the rate of five percent quarterly ninety days after each
periodic payment is received, and the issuance of 2,000,000 shares of the
Company's common stock. The bulk of the funds are intended for its subsidiary,
EJP, which funding provides the necessary capital to EJP to continue with its
renovations to the FBO facility and to support its infrastructure as it nears
commencement of operations. A non-refundable deposit was paid under a Letter of
Intent to acquire 100% ownership in Masterpiece Cabinetry & Design, Inc. of
Fayetteville, NC. The balance was utilized for corporate operations, travel and
other business expenses.
Events Subsequent to March 31, 1999
- - - - - - -----------------------------------
On May 5, 1999, the Company announced that its subsidiary, EJP, signed an
agreement with the Army National Guard to provide fuel for transient military
aircraft at Trenton-Mercer Airport.
On May 10, 1999, the Company held a conference call to provide information
directly to shareholders of interest. Chairman Patterson discussed the current
status of the planned commencement of EJP operations, the multitude of services
and revenue centers at EJP, future acquisition plans and the potential of the
aviation industry. The taped call was available for replay.
After final testing of its facility, the Company announced on June 24,
1999, the opening of full operations at EJP.
10
<PAGE>
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.
11
<PAGE>
SIGNATURES
----------
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: JULY 6, 1999 BY /S/ THOMAS E. PATTERSON
------------------------
THOMAS E. PATTERSON
CHAIRMAN/CEO
DATE: JULY 6, 1999 BY /S/ DAN O. ERICKSON
---------------------
DAN O. ERICKSON
PRESIDENT/CFO
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/ THOMAS E. PATTERSON JULY 6, 1999
- - - - - - -----------------------
THOMAS E. PATTERSON,
CHAIRMAN/CEO
/S/ DAN O. ERICKSON JULY 6, 1999
- - - - - - -------------------
DAN O. ERICKSON,
PRESIDENT/CFO
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> (2,452)
<SECURITIES> 0
<RECEIVABLES> 22,374
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,922
<PP&E> 31,579
<DEPRECIATION> (20,705)
<TOTAL-ASSETS> 607,330
<CURRENT-LIABILITIES> 936,575
<BONDS> 0
0
0
<COMMON> 3,469
<OTHER-SE> (329,245)
<TOTAL-LIABILITY-AND-EQUITY> 607,330
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 23,425
<OTHER-EXPENSES> 3,660
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (27,085)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,085)
<EPS-BASIC> (0.001)
<EPS-DILUTED> (0.001)
</TABLE>
