UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 2000
[] Transition report under Section 13 or 15(d) of the Exchange Act
Commission file number 0-20193
AMERICOMM RESOURCES CORPORATION
(Exact name of small business issuer 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, OK 74103-4346
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (918) 587-8093
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
Common Stock, $.001 Par Value - 14,879,589 shares outstanding as of
September 30, 2000.
Transitional Small Business Disclosure Format: [] Yes [X] No
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AMERICOMM RESOURCES CORPORATION
INDEX TO FORM 10-QSB
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Part I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Balance Sheet at September 30, 2000
(Unaudited) 3
Statement of Income for the three
months and nine months ended September
30, 2000 and September 30, 1999 (Unaudited) 4
Statement of Cash Flows for the
nine months ended September 30, 2000
and September 30, 1999
(Unaudited) 5
Notes to Financial Statements 6
Item 2. Plan of Operation 7-9
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
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Item 1. FINANCIAL STATEMENTS
AMERICOMM RESOURCES CORPORATION
BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2000
ASSETS
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Current Assets:
Cash and cash equivalents $ 93,030
________________
Total current assets 93,030
________________
Investments in prospects 868,592
Property & equipment net of accumulated
depreciation of $5,161 9,394
________________
Total property & equipment 877,986
________________
TOTAL ASSETS $ 971,016
________________
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<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Notes payable - related party $ 282,754
Accrued payroll 53,395
Payroll taxes payable 576
Other accrued expenses 13,676
________________
Total current liabilities 352,401
________________
Stockholders' equity:
Common stock $.001 par value;
authorized 50,000,000 shares
14,879,589 shares issued, of which
132 shares are held in Treasury 14,880
Capital in excess of par value 2,365,528
Retained earnings (1,654,222)
Net income (loss) ( 107,571)
________________
Total stockholders' equity 618,615
________________
TOTAL LIABILITIES AND EQUITY $ 971,016
________________
<FN>
See accompanying notes to financial statements.
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AMERICOMM RESOURCES CORPORATION
STATEMENT OF INCOME
(UNAUDITED)
FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
____________ ____________ ____________ ____________
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Revenues:
Income $ 0 $ 0 $ 0 $ 0
____________ ____________ ___________ ____________
Total income 0 0 0 0
____________ ____________ ___________ ____________
Cost and expenses:
General and
administrative
expenses 26,295 62,758 110,412 131,834
____________ ____________ ____________ ___________
Total costs and expenses 26,295 62,758 110,412 131,834
____________ ____________ ____________ ___________
Other (income) & expenses:
Interest income (976) (98) (2,697) (253)
Miscellaneous income (53) 0 (144) 0
Interest expense 0 0 0 0
Disposal of assets 0 294,620 0 793,266
____________ ____________ ____________ ___________
Total other (income)
& expenses (1,029) 294,620 (2,841) 793,013
____________ ____________ ____________ ___________
Net income (loss) $ (25,266) $ (357,280) $ (107,571) $ (924,847)
____________ ____________ ____________ ___________
Net income (loss)
per common share $ 0 $ 0
____________ ____________
Weighted average
number of common
shares outstanding 14,879,589 14,212,923
____________ ____________
<FN>
See accompanying notes to financial statements.
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AMERICOMM RESOURCES CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
2000 1999
____________ ____________
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CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net income (loss) $ (107,571) $ (924,847)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
Depreciation expense 2,043 1,575
Disposal of assets 0 793,266
Changes in operating assets
and liabilities:
Accounts payable 3,244 0
Prepaid expenses 3,244 0
Accrued Payroll & Payroll
Taxes 0 37,902
Accruals (55) (2,683)
_____________ ____________
Net cash provided (used)
By operating activities (99,095) (94,787)
_____________ ____________
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash payments for investments
in prospects (141,028) (157,105)
_____________ ____________
Net cash provided (used)
by investing activities (141,028) (157,105)
_____________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
Common stock 200,000 100,000
Proceeds from note payable
related party 110,000 171,831
_____________ ____________
Net cash provided (used)
by financing activities 310,000 271,831
_____________ ____________
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 69,877 19,939
CASH AND CASH EQUIVALENTS,
BEGINNING OF QUARTER 23,153 74,225
_____________ ____________
CASH AND CASH EQUIVALENTS,
END OF QUARTER $ 93,030 $ 94,164
_____________ ____________
<FN>
See accompanying notes to financial statements.
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AMERICOMM RESOURCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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 nine months ended September 30, 2000 may not be
indicative of the results that may be expected for the year ending
December 31, 2000. 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, 1999.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Mining and oil and gas properties - The Company uses the successful
efforts method of accounting for its mining and oil and gas 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.
3. INCOME TAXES:
As of December 31, 1999, the Company has tax net operating loss
carryforwards totaling approximately $694,000. If not used, these
carryforwards will expire in the years 2000 to 2018.
Item 2. 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
engineering, mechanical or technological difficulties in drilling wells,
general economic conditions, increased competition, changes in government
regulation or intervention in the oil and gas industry, 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 November 1, 2000, the Registrant had approximately $76,000 cash
on hand, which amount includes the proceeds of a $200,000 private placement
of its common stock which was effected on April 4, 2000. The Registrant
expects that its cash on hand will be sufficient to fund its operations for
12 months. The Registrant's material commitments consist of annual lease
payments on the Cheyenne River Prospect of approximately $144,000, of which
$136,640 were paid through November 2000 with the proceeds of a loan
described below. Additional commitments consist of office lease payments
of $3,400 per month. In January 2000 the Registrant sublet a portion of
its office space at $1,000.00 per month. Mr. Whitehead serves as an
executive officer of the Registrant without compensation. Pending receipt of
additional capital by the Registrant, Mr. Bradley suspended his salary
during 1999 and, effective January 1, 2000, agreed to serve as an executive
officer without compensation. The Registrant has recorded an accrued
liability of $55,395.00 as of December 31, 1999 which represents the amount
of Mr. Bradley's suspended salary payments during 1999.
The Registrant funded its operations in 1999 from the proceeds of a
$100,000 private placement of shares of its common stock to one
accredited investor and by borrowing from the Albert E. Whitehead Living
Trust (the "AEW Trust"). In March 1999, the Registrant borrowed $105,000
from Albert E. Whitehead Living Trust pursuant to a promissory note due
March 15, 2000 which bears interest at the rate of 10% per annum (the
"AEW Note"). The proceeds of this loan were used to pay lease rentals
on the Cheyenne River Prospect. The AEW Trust also paid the Registrant's
day-to-day operating expenses from April through September 1999 including,
without limitation, the monthly office lease payments and the salary of the
Registrant's secretary. Amounts paid by Mr. Whitehead were added to the
principal of the AEW Note which was $172,754.00 as of December 31, 1999
and $185,508 as of March 15, 2000. On March 15, 2000, the Registrant
issued a convertible promissory note due March 15, 2001 in the principal
amount of $296,430 to the AEW Trust, which note bears interest at the rate
of 10% per annum and is convertible into shares of the Registrant's
common stock at the price of $0.4370 per share, which represented the
market price of the Registrant's common stock on such date.
The convertible note was issued to the AEW Trust in consideration of the
surrender of the original AEW Note and the advancement of an additional
$110,000 to the Registrant by the AEW Trust. The proceeds of this
additional loan were used to pay lease rentals on the Cheyenne River
Prospect.
On April 4, 2000, the Registrant sold 666,666 shares of its Common Stock
at a purchase price of $200,000 to one accredited investor in a private
placement under Section 4(2) of the Securities Act. The Registrant intends
to continue to use the proceeds of this offering for working capital
purposes.
If the Registrant is not successful in raising additional capital
for the exploration and development of its share of the Cheyenne River
Prospect, the Registrant's continued operations would depend on the
continued cooperation and support of Messrs. Whitehead and Bradley and
its ability to raise additional capital or locate an industry partner
to pay the annual lease rentals on, and the costs of exploring, its
Cheyenne River Prospect.
On August 15, 2000 the Registrant announced that it had entered into a
Letter of Intent with Wells Gray Resort & Resources Ltd., a Canadian oil
and gas firm, to drill a horizontal test well in a proposed 25,000 acre
Timber Draw Federal Drilling Unit, in Niobrara County, Wyoming. The Timber
Draw Unit is included in the Registrant's 100,642 acre lease block located
in the Eastern Powder River Basin which the Registrant has designated as
its Cheyenne River Prospect. Wells Gray Resort & Resources Ltd.,
of Calgary, Alberta, Canada has advised the Registrant that it intends
to form a Delaware corporation, Empire Petroleum Corporation ("Empire"),
which with a group of oil and gas industry partners is expected to drill
a test well in a 600 acre participation unit to a vertical
depth of approximately 8,300 feet and then a horizontal leg of between
2,500 to 4,000 feet to evaluate the Newcastle/Muddy formation.
Commencement of drilling operations on the test well is projected for
December 15, 2000 pending execution of formal documentation and drilling
rig availability. Under a proposed farmout agreement, the Registrant will
be named formal operator, however it will utilize the horizontal drilling
experience of the Empire group to drill the test well. Empire will earn
a 100% working interest (75% Net Revenue Interest) in the test well
participation unit until payout of the test well after which the ownership
will be 50-50. During the payout period the Registrant will reserve an
overriding royalty. In addition to the spacing unit, Empire will earn a
50% interest in approximately 60,000 acres. The proposed agreement would
also give Empire the option to drill a second test well within six months
from completion of the first well to earn a similar interest in approximately
40,000 acres. As a part of the proposed agreement, the Registrant will
sell Empire 375,000 restricted shares of its Common Stock for U.S. $0.40
per share for a total sale price of U.S. $150,000. These propsed
arrangements are subject, among other things, to the execution of a
definitive Farmout Agreement and related agreements and federal approval
of the proposed Timber Draw Drilling Unit.
In July 1999 the Registrant notified the lessors of 94 of the claims in
its Jessup gold exploration property in Nevada, that it was canceling its
lease agreement with them. In August 1999, the Registrant transferred its
interest in the Verlee and Pancake Summit properties in Nevada to third
parties by quitclaim deed in exchange for a 1% net smelter interest in
those properties. In August 1999 the Registrant relinquished the remainder
of its gold exploration properties to concentrate its activities on its
Cheyenne River Prospect. As a result of the cancellation of the
leases on the Registrant's gold exploration property located in
Churchill County, Nevada (the "Jessup Property"), the transfer of its
interests in the Verlee and Pancake Summit Prospects and the decision
to relinquish its other gold exploration properties, the Registrant wrote
off $793,266.37 of its assets as of September 30, 1999. In August 2000
the holder of the Verlee property Quitclaim Deed notified the Registrant
that it was dropping its claims on this property. Therefore the
Registrant no longer has an interest in this property.
Exploration for oil and gas is highly speculative and involves greater
risks than many other businesses. Oil and gas drilling and development
is frequently marked by 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 2000. If the Registrant is successful in raising
additional capital, it will employ part-time or temporary persons and
consultants in situations where special expertise is required.
Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K. The Registrant has not filed,
during the quarter for which this report is filed,
a Form 8-K.
AMERICOMM RESOURCES CORPORATION
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICOMM RESOURCES CORPORATION
Date: November 14, 2000 By:/s/Thomas R. Bradley
Thomas R. Bradley
President & Chief Financial
Officer (Principal Financial and
Accounting Officer)
