UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1998
Commission file Number 0-20193
AMERICOMM RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 73-1238709
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15 E. 5th Street, Suite 4000, Tulsa, Oklahoma 74103-4346
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 587-8093
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 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.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Common Stock, $.001 Par Value - 13,879,589 shares as of September 30,
1998.
<TABLE>
PART I. - FINANCIAL INFORMATION
AMERICOMM RESOURCES CORPORATION
BALANCE SHEET
(Amounts in thousands, except per share data)
<CAPTION>
September 30, 1998
__________________
<S> <C>
ASSETS
Current assets
Cash and cash equivalents $ 208,191
Prepaid expenses 0
Deposits 3,244
Furniture & Fixtures 14,555
Accum. Depreciation (2,183)
______________
Total current assets 223,807
Investments in prospects 1,143,336
______________
TOTAL ASSETS $ 1,367,143
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
<S> <C>
Current liabilities
Accounts payable 0
Accruals 556
______________
Total Current Liabilities $ 556
Stockholders' equity (deficiency)
Common stock, $.001 par value;
authorized 50,000,000 shares
13,879,589 shares issued, of which
132 shares are held in Treasury 13,879
Capital in excess of par value 1,968,862
Deficit accumulated during the
development stage (616,154)
______________
Total Stockholders' Equity $ 1,366,587
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 1,367,143
<FN>
See accountants' report and accompanying notes to financial
statements </TABLE>
<TABLE>
AMERICOMM RESOURCES CORPORATION
STATEMENT OF INCOME
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1998 AND 1997
(Amounts in thousands, except per share data)
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
____________ ____________
<S> <C> <C>
Revenues
Income $ 0 $ 0
Interest income 5,483 407
____________ ____________
Total Income 5,483 407
____________ ____________
Costs and expenses
General and administrative
expenses 102,384 45,308
Abandoned prospects 0 0
Interest expense 985 0
____________ ____________
Total Costs and Expenses 103,369 45,308
____________ ____________
Net Income (Loss) $ (97,886) $ (44,901)
Net Income (Loss)
per common share $ 0 $ 0
Weighted average number of
common shares outstanding 13,879,589 11,204,592
<FN>
See accountants' report and accompanying notes to financial statements
</TABLE>
<TABLE>
AMERICOMM RESOURCES CORPORATION
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1998 AND 1997
(Amounts in thousands)
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
____________ ___________
<S> <C> <C>
Cash Flow From Operating Activities
Operations
Net income (loss) $ (97,886) $ (44,901)
Plus adjustments to reconcile
net income to net cash flows
from operating activities
Depreciation expense 2,183 0
Abandoned prospects 0 0
Changes in operating assets
and liabilities
Increase(Decrease) in accounts
payable (11,492) (11,574)
Increase(Decrease) in prepaid
expenses (350) 350
Increase(Decrease) in deposits (3,244) 0
Accruals 556 (67)
Deferred payment proceeds 0 50,000
___________ ____________
Net cash provided (used)
by operating activities (110,233) 6,192
Cash Flows From Investing Activities
Cash payments for investments in
prospects (451,188) (23,952)
Cash payments for furniture
and fixtures (14,555) 0
___________ ____________
Net cash provided (used) by
investing activities (465,743) (23,952)
___________ ____________
Cash Flows From Financing Activities
Proceeds from issuance of common
stock 680,999 0
Proceeds from note payable - related
party 0 20,000
Repayment of note payable - related
party 0 0
____________ ____________
Net cash provided (used) by
financing activities 680,999 20,000
Net Increase(Decrease) in Cash and
Cash Equivalents 105,023 (10,144)
Cash and Cash Equivalents,
beginning of quarter 103,168 29,311
____________ ____________
Cash and Cash Equivalents,
end of quarter $ 208,191 $ 19,167
<FN>
See accountants' report and accompanying notes to financial statements
</TABLE>
AMERICOMM RESOURCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
Note 1. Basis of Presentation
In the opinion of management the accompanying unaudited
financial statements contain all adjustments, all of which were of a normal
recurring nature, necessary to summarize fairly the Registrant's
financial position and results of operations. The results of operations
for the three and six months ended September 30, 1998 may not be
indicative of the results that may be expected for the year ending December
31, 1998. These statements should be read in conjunction with the financial
statements and notes thereto included in the Registrant's Form 10-KSB for
its fiscal year ended December 31, 1997.
Note 2. Summary of Significant Accounting Policies
Mining and oil and gas properties - The Company uses the successful
efforts method of accounting for its mining activities. Costs incurred
are deferred until exploration and completion results are evaluated.
At such time, costs of activities with economically recoverable reserves
are capitalized as proven properties, and costs of unsuccessful or
uneconomical development work are expensed.
Cash and cash equivalents - The Company defines cash and cash
equivalents to be cash on hand, cash in checking accounts, certificates
of deposit, cash in money market accounts and certain investments with
maturities of three months or less from the date of purchase.
Note 3. Income Taxes
As of December 31, 1997, the Company has tax net operating loss
carryforwards totaling approximately $456,000. If not used, these
carryforwards will expire in the years 2000 to 2009.
AMERICOMM RESOURCES CORPORATION
PLAN OF OPERATION
All statements other than statements of historical fact contained
herein are forward-looking statements. The forward-looking statements
were prepared on the basis of certain assumptions which relate, among
other things, to costs expected to be incurred in the acquisition,
exploration and development of the Company's properties. Even if the
assumptions on which the projections are based prove accurate and
appropriate, the actual results of the Company's operations in the future
may vary widely from the financial projections due to unforeseen,
mechanical or technological difficulties in drilling wells, general
economic conditions, increased competition, changes in government
regulation or intervention in the oil and gas or mining industries, and
other risks described in the Company's filings with the Securities
and Exchange Commission. Accordingly, the actual results of the Company's
operations in the future may vary widely from the forward-looking
statements included herein.
As of September 30, 1998, the Registrant had approximately $208,191 in
cash to fund its operations. The Registrant expects the remainder of its
cash to fund its operations for approximately 6 months, assuming no
additional amounts are expended on the acquisition or exploration of its oil
and gas prospect or the exploration of its mining properties. The Registrant
expects the exploration and development of its oil and gas prospect will
require substantial amounts of additional capital which may be raised through
debt or equity offerings, encumbering properties or entering into
arrangements whereby certain costs of exploration will be paid by others
to earn an interest in the properties. Additional capital will also be
required to pay carrying costs on the Registrant's mining prospects and on its
oil and gas prospect in Wyoming. There can be no assurance that additional
capital will be available to the Registrant on economically acceptable terms,
if at all.
The Registrant funded its operations during 1997 through amounts
received from Echo Bay Exploration Inc. ("Echo Bay") a subsidiary of Echo
Bay Mines LTD., Denver, Colorado pursuant to a Heads of Agreement covering
exploration of its Churchill County, Nevada property (the "Jessup
Property") and by borrowing $20,000 from the Albert E. Whitehead Living
Trust pursuant to the terms of a 6% Convertible Note due September 23,
1998. In November 1997, Echo Bay elected to continue its work program
during 1998 and paid an additional $100,000 to the Registrant. In March
1998, the Registrant raised an additional $275,000 through the issuance of
1,375,000 to Mr. Whitehead and agreed to use substantially all of the
proceeds of this issuance to fund its acquisition of oil and gas leases on
a prospect located in the state of Wyoming. In April 1, 1998, the Albert
E. Whitehead Living Trust converted its note into shares of Common Stock of
the Registrant at a purchase price of $0.15 per share. In June 1998 Messrs.
Whitehead and Plewes, directors of the Registrant purchased an aggregate
of 533,332 shares of Common Stock upon exercise of previously issued stock
options at an exercise price of $0.6875 per share, which provided $362,499
in additional working capital to the Registrant.
Although Echo Bay stated that it was encouraged by the results of its
exploration of the Jessup Property, in May 1998, Echo Bay elected to
discontinue its exploration program and concentrate its exploration efforts
in the United States on a limited number of projects. As Echo Bay terminated
the joint venture agreement prior to earning its interest in the property,
under the terms of the joint venture agreement, the Registrant retains
its interest in the Jessup Property and the amounts previously paid by
Echo Bay. The Registrant intends to seek a new industry partner to
continue the exploration of the Jessup Property or may elect to sell such
property if a transaction may be consummated on advantageous terms.
Exploration for mineral resources, such as gold, and for oil and gas,
is highly speculative and involves greater risks than many other businesses.
Mineral exploration and oil and gas drilling and development is frequently
marked by unprofitable efforts, not only from unproductive prospects,
but also from producing prospects which do not produce sufficient amounts
to return a profit on the amount expended. Accordingly, there can be no
assurance that the Registrant will be able to discover, develop or produce
sufficient reserves to recover the expenses incurred in connection with the
exploration of its properties, to fund additional exploration or to achieve
profitability.
The Registrant does not expect any significant change in
the number of its employees during 1998. It will employ part-
time or temporary persons and consultants in situations where
special expertise is required.
Part II OTHER INFORMATION
Item #4 Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Registrant was
held on September 24, 1998, pursuant to notice, at which the
following persons were elected directors of the Registrant to
serve until the next annual meeting of the shareholders or until
their successors are elected and qualify:
Brokers
For Against Abstain Non-Votes
Thomas R. Bradley 10,369,941 6,313 -- --
John C. Kinard 10,372,921 3,333 -- --
George H. Plewes 10,372,921 3,333 -- --
Albert E. Whitehead 10,372,921 3,333 -- --
In addition, the following proposals were approved by the
shareholders:
The proposal to amend the 1995 Stock Options Plan to increase the
number of shares issuable upon exercise of options granted and to
be granted thereunder by 600,000 shares and to increase the limit
on the number of shares which may be subject to options granted
to an employee in any calendar year to 200,000 shares was passed
with 10,336,343 votes in favor, 35,065 votes against and 4,846
abstentions.
Item #5 Other Information
The Registrant has acquired over 99,600 acres of oil and gas leases
in the Powder River Basin in Wyoming and is continuing to acquire
additional leases in that area. The Company's oil and gas prospect
is located in a mature producing area with established pipelines
and services, which has been inactive over the last 30 years
pending the development of new drilling technology. The Registrant
currently plans to utilize horizontal drilling techniques to drill
the first test well on the prospect in the fourth quarter of 1998,
subject to the availability of additional financing. Under the terms
of the agreement relating to the prospect, the Registrant is
required to drill the first test well within six months after it has
acquired 100,000 acres of oil and gas leases with respect to the
prospect or seek a buyer for the prospect. In such event, assuming
the parties are successful in locating a buyer for the prospect,
the Registrant would recover its costs in acquiring the prospect
and would receive 50% of any profits from the sale of the prospect
in excess of such costs.
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits --None
b. Reports on Form 8-K - The Registrant has not filed, during
the quarter for which this report is filed, a Form 8-K.
c. 27-Financial Data Schedule
AMERICOMM RESOURCES CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AMERICOMM RESOURCES CORPORATION
Registrant
November 11,1998 Thomas R. Bradley
Date Thomas R. Bradley
President & CEO
November 11,1998 Thomas R. Bradley
Date Thomas R. Bradley
Principal Financial and Accounting
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jul-01-1998
<PERIOD-END> Sep-30-1998
<CASH> 208,191
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 223,807
<PP&E> 1,143,336
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,367,143
<CURRENT-LIABILITIES> 556
<BONDS> 0
0
0
<COMMON> 13,879
<OTHER-SE> 1,968,862
<TOTAL-LIABILITY-AND-EQUITY> 1,367,143
<SALES> 5,483
<TOTAL-REVENUES> 5,483
<CGS> 0
<OTHER-EXPENSES> 103,369
<TOTAL-COSTS> 103,369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,886)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
