SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[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 Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from __________________
to ___________________. Commission file number: 33-61888-FW
COMPRESSCO, INC.
(FORMERLY EMERGING ALPHA CORPORATION)
(Exact name of small business issuer in its charter)
DELAWARE 72-1235449
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
220 Camp Street, New Orleans, Louisiana 70130
(Address of principal executive offices) (Zip Code)
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 / /
The number of shares outstanding of the issuer's classes of Common Stock as of
September 30, 2000:
Common Stock, $1.00 Par Value - 153,235 shares
<PAGE>
COMPRESSCO, INC.
Index to Form 10-QSB
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited) Compressco, Inc.
Consolidated Balance Sheets as of September 30, 2000 and December 31,
1999 Consolidated Statements of Operations for the Three and Nine
Months Ended September 30, 2000 and 1999 Consolidated Statements of
Cash Flows for the Nine Months Ended September 30, 2000 and 1999 Notes
to the Consolidated Financial Statements Gas Jack, Inc. (Predecessor
Company) Statement of Operations for the Three and Nine Ended
September 30, 1999 Statement of Cash Flows for the Nine Months Ended
September 30, 1999
Item 2. Management's Discussion and Analysis of Financial condition and
Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
PART 1. FINANCIAL STATEMENTS
Item 1. Financial Statements
<TABLE>
<CAPTION>
COMPRESSCO, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2000 December 31, 1999
------------------ -----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $203,531 $96,256
Accounts receivable, net of allowance of $24,613 and $27,000 754,600 495,072
Inventories 1,571,032 803,411
Other 75,003 61,034
Deferred income tax asset 11,522 13,385
------------ ------------
Total current assets 2,615,688 1,469,158
PROPERTY AND EQUIPMENT:
Gas Jack Compressors 6,281,495 2,765,443
Less- Accumulated depreciation (492,184) (100,190)
------------ ------------
Total compressors, net 5,789,311 2,665,253
------------ ------------
Vehicles and Equipment 516,506 305,958
Less - Accumulated depreciation (72,131) (15,159)
------------ ------------
Total vehicles and equipment, net 444,375 290,799
OTHER ASSETS 178,324 14,344
------------ ------------
Total assets $9,027,698 $4,439,554
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,812,167 $537,567
Accrued liabilities 169,442 96,721
Current portion of long-term debt 560,238 627,971
Other 7,955 8,273
------------ ------------
Total current liabilities 2,549,802 1,270,532
LONG-TERM DEBT, net of current portion 3,596,298 2,246,418
DEFERRED INCOME TAXES 174,393 216,291
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par value; 2,000,000 shares authorized;
no shares issued or outstanding
Common stock, $1 par value; 20,000,000 shares authorized;
153,235 and 83,233 shares issued and outstanding at
September 30, 2000 and December 31, 1999, respectively 153,235 83,233
Additional paid-in capital 2,663,715 633,657
Retained earnings (deficit) (109,745) (10,577)
------------ ------------
Total stockholders' equity 2,707,205 706,313
------------ ------------
Total liabilities and stockholders' equity $9,027,698 $4,439,554
The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPRESSCO, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the For the For the For the
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES:
Leasing revenue $2,630,584 $1,036,362
Sales - Gas Jack Compressors and parts 550,756 177,642
Service and other 261,363 98,839
------------ ------------
Total revenues 3,442,703 1,312,843
------------ ------------
COST OF SALES AND EXPENSES:
Cost of sales 325,342 92,186
Operating expenses $10,648 1,075,014 $2,872
2,565,785
Depreciation expense 503,298 - 144,880 -
------------ ------------ ------------ ------------
Total cost of sales and expenses 3,394,425 10,648 1,312,080 2,872
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) 48,278 (10,648) 763 (2,872)
OTHER INCOME (EXPENSE)
Interest income 10,449 5,136 3,215
15,528
Interest expense (203,009) (78,020)
------------ ------------
Total other income (expense) (187,481) 10,449 (72,884) 3,215
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES (139,203) (199) (72,121) 343
PROVISION (BENEFIT) FOR INCOME
TAXES (40,035) - (19,766) -
------------ ------------ ------------ ------------
NET INCOME (LOSS) $(99,168) $(199) $(52,355) $343
Earnings (Loss) per share:
Basic $(.74) $(0.00) $(.34) $0.01
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPRESSCO , INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For The For The
Nine Months Nine Months
Ended Ended
September 30, 2000 September 30, 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(99,168) $(199)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities-
Depreciation and amortization 503,298 70
Gain on sales of leased units (116,262)
Other assets (163,980)
Deferred income tax
(40,035)
Changes in current assets and liabilities:
Accounts receivable (259,528) 2,103
Inventories (767,621)
Other current assets (13,969)
Accounts payable 1,274,600 160
Accrued liabilities 72,721
Other current liabilities (318)
------------ ------------
Net cash provided by (used in) operating activities 389,738 2,134
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to leased units (3,627,022)
Additions to vehicles and equipment (210,548)
Proceeds from sales of leased units 172,900
------------
Net cash used in investing activities (3,664,670)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 2,100,060
Payments of notes payable (487,742)
Proceeds from line of credit 3,262,687
Principal payments on line of credit (1,492,798)
-----------
Net cash provided by financing activities 3,382,207
------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 107,275 2,134
CASH AND CASH EQUIVALENTS, Beginning of period 96,256 289,174
------------ ------------
CASH AND CASH EQUIVALENTS, End of period $203,531 $291,308
============ ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
COMPRESSCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Compressco, Inc., formerly Emerging Alpha Corporation (the "Company"), was
incorporated in the State of Delaware on February 10, 1993, for the purpose of
creating a corporate vehicle to seek, investigate and, if the results of such
investigations warrant, acquire business opportunities. Prior to October 1999,
the primary activity of the Company had been devoted to organizational
activities and obtaining initial funding. Upon investigation and analysis by the
Company's management, the Company decided to enter certain segments of the
natural gas industry including equipment manufacturing, compression services and
production of natural gas reserves.
On October 29, 1999, the Company purchased all outstanding shares of the capital
stock of Gas Jack, Inc. ("Gas Jack"), an Oklahoma corporation, for $2.7 million
and all outstanding units of GJ Measurement, L.L.C. ("GJ Measurement") in
exchange for 33,333 shares of the Company's common stock. Both acquisitions were
accounted for using the purchase method of accounting. Subsequent to the
acquisition, Gas Jack was renamed Compressco Field Services, Inc. The Company
did not recognize any goodwill as a result of these acquisitions. In connection
with the acquisitions, the Company changed its fiscal year-end from March 31 to
December 31.
The Company, through its subsidiaries, is engaged primarily in the manufacture,
leasing and service of natural gas compressors that provide economical wellhead
compression to mature, low pressure natural gas wells. The Company's compressors
are currently sold and leased to natural gas producers located primarily in
Oklahoma, Kansas, Texas, Arkansas and New Mexico. GJ Measurement, an Oklahoma
L.L.C, is a natural gas measurement, testing and service company, based in
Oklahoma City, that began operations in September 1999.
In January 2000, the Company established a wholly owned energy production
subsidiary, Providence Natural Gas, Inc. ("Providence"), to acquire certain
pressure depleted reservoirs, having key reservoir characteristics known to be
receptive to well-head compression. The Company plans to install compressors at
the sites to enhance production and then market and sell the natural gas.
2. BASIS OF PRESENTATION
The consolidated balance sheet as of September 30, 2000, and the consolidated
statements of operations and cash flows for the periods ended September 30, 2000
and 1999 are unaudited. In the opinion of management, such financial statements
include all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the financial position, results of
operations and cash flows for the periods presented.
The consolidated balance sheet data at December 31, 1999 was derived from
audited consolidated financial statements, but does not include all disclosures
required by accounting principles generally accepted in the United States. The
consolidated financial statements presented herein should be read in connection
with the Company's December 31, 1999 consolidated financial statements included
in the Company's Form 10-KSB.
The results of operations for the three and nine months ended September 30, 2000
are not necessarily indicative of the results of operations to be expected for
the full fiscal year ending December 31, 2000.
<PAGE>
3. CHANGE IN ACCOUNTING ESTIMATE
Effective July 1, 2000, the Company changed its estimate of the useful life and
salvage value of its compressors for purposes of computing depreciation. The
estimated useful life and salvage value of its compressors was changed from
seven years with no salvage value to 12 years with a 10% salvage value. Based
upon the Company's data relating to the service history of its compressor fleet,
the Company believes that the new estimated useful life and salvage value more
accurately reflects the service life of its compressor fleet. The change is
accounted for prospectively. The effect of the change in accounting estimate was
as follows for the nine and three month periods ended September 30, 2000.
Nine Months Ended Three Months Ended
Depreciation expense decreased by $89,046 $89,046
Net loss decreased by $63,436 $63,436
Basic loss per share decreased by $ .47 $ .41
4. LONG-TERM DEBT
Long-term debt consists of the following at September 30, 2000:
(a) On October 29, 1999, the Company borrowed $2,800,000 under a term loan
agreement with a bank. The note bears interest at a fixed rate of 8.8%.
Principal payments of $46,667 plus accrued interest are due monthly until
maturity on September 30, 2004. The loan balance at September 30, 2000, is
$2,286,656 of which $1,726,656 is long term. The loan is secured with the assets
and compressor leases of Gas Jack and a personal guarantee of the Company's
President.
(b) On October 29, 1999, the Company entered into a revolving line of credit
agreement with a bank. Under the agreement, as amended, the Company can borrow
the lesser of $4,000,000 or the sum of 80% of the aggregate amount of eligible
receivables, plus 50% of the aggregate amount of eligible inventory, plus 80% of
the cost of new compressors completed since acquisition of Gas Jack, Inc. The
line of credit bears interest at Wall Street Journal Prime Rate (9.5% at
September 30, 2000). Interest is due monthly with all outstanding borrowings due
at maturity on November 30, 2000. The loan is secured with the assets and
compressor leases of Gas Jack and a personal guarantee of the Company's
President. The balance outstanding under the line of credit agreement at
September 30, 2000 was $1,867,050.
5. STOCKHOLDERS' EQUITY
The Company issued 70,002 shares of its common stock during March 2000 through a
private placement for $30.00 per share, or total proceeds of $2,100,060. The
equity proceeds are being used to fund the growth in the Company's compressor
fleet and the development of Providence Natural Gas.
6. EARNINGS PER SHARE
Basic earnings per common share is calculated using the weighted average number
of shares issued and outstanding during the period. The weighted average shares
for the nine months ending September 30, 2000 and 1999 were 134,074 and 43,600
respectively and for the three months ending September 30, 2000 and 1999 were
153,235 and 43,600 respectively. The fully diluted earnings per share is not
shown as the effect would be antidilutive.
<PAGE>
7. PRO FORMA FINANCIAL DATA FOR 1999
The following is the pro forma results of operations for Compressco, Inc., for
the three and nine months ended September 30, 1999 assuming the acquisition of
Gas Jack, Inc. had taken place on January 1, 1999.
Pro Forma Results
Nine Months Ended Three Months Ended
September 30, 1999 September 30, 1999
Revenue $2,542,886 $992,525
Net income (loss) after taxes 53,319 17,510
Earnings per share:
Basic $ .69 $ .23
<PAGE>
<TABLE>
<CAPTION>
GAS JACK, INC. (Predecessor Company)
STATEMENTS OF OPERATIONS
for the Periods Ended September 30, 1999
(Unaudited)
Nine Months Three Months
<S> <C> <C>
REVENUES:
Leasing revenue $1,891,468 $662,452
Sales - Gas Jack Compressors and parts 522,855 297,072
Service and other 128,563 33,001
------------ ------------
Total revenues 2,542,886 992,525
------------ ------------
COST OF SALES AND EXPENSES:
Cost of sales 307,880 174,932
Operating expenses 1,471,350 545,073
Depreciation expense 459,465 158,809
------------ ------------
Total cost of sales and expenses 2,238,695 878,814
------------ ------------
OPERATING INCOME 304,191 113,711
OTHER INCOME (EXPENSE)
Interest expense (27,845) (12,655)
------------ ------------
Total other income (expense) (27,845) (12,655)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 276,346 101,056
PROVISION FOR INCOME TAXES (110,537) (38,668)
------------ ------------
NET INCOME $165,809 $62,388
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GAS JACK, INC. (Predecessor Company)
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30,1999
(Unaudited)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 165,809
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization 459,465
Gain on sales of leased units (138,671)
Other assets (66,185)
Changes in current assets and liabilities:
Accounts receivable (51,098)
Inventories (383,795)
Other current assets
Accounts payable 34,999
Accrued liabilities 11,932
Other current liabilities 455
------------
Net cash provided by operating activities 32,911
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to leased units (443,748)
Additions to vehicles and equipment (61,870)
Proceeds from sales of leased units 325,410
------------
Net cash used in investing activities (180,208)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable (122,989)
Loan proceeds 308,000
------------
Net cash provided by financing activities 185,011
------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 37,714
CASH AND CASH EQUIVALENTS, Beginning of period 29,166
------------
CASH AND CASH EQUIVALENTS, End of period $66,880
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
GAS JACK, INC. (Predecessor Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. BASIS OF PRESENTATION
The accompanying financial statement of operations and statement of cash flows
for the periods ended September 30, 1999 are unaudited. In the opinion of
Predecessor company management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended September 30, 1999
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1999 or December 31, 2000.
2. SUBSEQUENT EVENT
On October 29, 1999 Compressco, Inc. acquired all outstanding capital stock of
Gas Jack, Inc. for $2.7 million in cash. The bank credit facilities of Gas Jack,
Inc. were repaid and terminated.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Prior to October 1999, the Company had no business operations; its only revenue
since its inception in 1993 was from interest income and its only expenses
related to administrative expenses. In October 1999, the Company purchased a
privately held natural gas compressor manufacturing and Service Company, Gas
Jack, for $2.7 million in cash, and also purchased GJ Measurement in exchange
for 33,333 shares of the Company's common stock. Gas Jack, Inc., is considered a
Predecessor Company for purposes of this document. These acquisitions were
accounted for under the purchase method of accounting. In connection with the
acquisitions, the Company's fiscal year end was changed from March 31 to
December 31.
In January 2000, the Company established a wholly owned energy production
subsidiary, Providence, to acquire certain pressure depleted reservoirs, having
key reservoir characteristics known to be receptive to well-head compression.
The Company plans to install compressors at the sites to enhance production and
then market and sell the natural gas. Providence completed its first gas well
acquisition on July 20, 2000 purchasing partial interest in a well in Harper
County, Oklahoma.
<PAGE>
The following table sets forth selected financial information for the fiscal
year ended December 31, 1999 and as of September 30, 2000 and for the nine
months ended September 30, 2000 and 1999 and is qualified in its entirety by the
financial statements appearing elsewhere in this Form 10-QSB. In the text below,
our financial results for the third quarter of 2000 are compared to the
financial results of Gas Jack, Inc. ("Predecessor Company") for the third
quarter of 1999.
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS
SELECTED CONSOLIDATED FINANCIAL DATA
STATEMENT OF OPERATIONS DATA:
NINE MONTHS ENDED SEPTEMBER 30,
2000 1999 1999
Consolidated (Predecessor)
<S> <C> <C> <C>
Operating Revenues $3,442,703 $ --- $2,542,886
Cost of Sales and Expenses 3,394,425 10,648 2,238,695
Operating Income (Expense) 48,278 (10,648) 304,191
Net Income (Loss) (99,168) (199) $ 165,809
September 30, 2000 December 31, 1999
BALANCE SHEET DATA (AT END OF PERIOD):
Cash $ 203,531 $ 96,256
Total Assets 9,027,698 4,439,554
Total Liabilities 6,320,493 3,733,241
Stockholders' Equity 2,707,205 706,313
</TABLE>
The following discussion regarding the consolidated financial statements of the
Company should be read in conjunction with the financial statements and notes
thereto.
NINE MONTHS ENDED SEPTEMBER 30, 2000 FOR THE COMPANY COMPARED TO NINE MONTHS
ENDED SEPTEMBER 30, 1999 FOR THE PREDECESSOR COMPANY
The Company's results of operations for the nine months ended September 30, 2000
reflect the acquisition of Gas Jack on October 29, 1999. Prior to the
acquisition, Compressco had no business operations. For all periods prior to the
acquisition, Compressco's only revenue was from interest income from equity
invested in Compressco and expenses related to administration of Compressco's
assets.
The revenues for the nine months ended September 30, 2000 of $3,442,703
increased by $899,817 or 35%, for the comparable period in 1999. The following
table sets forth the components of our revenue for the nine months ended
September 30, 2000 and the Predecessor Company revenue for the nine months ended
September 30, 1999:
2000 1999
Revenue:
Leasing revenue $2,630,584 $1,891,468
Sale of compressors and parts 550,756 522,855
Service and other 261,363 128,563
Total revenue $3,442,703 $2,542,886
<PAGE>
The Company had 355 compressors in service at September 30, 2000 compared to 209
at September 30,1999. In the nine months ended September 30, 2000 the Company
sold seven compressors compared to 15 units for the 1999 period.
The cost of sales and expenses for the 2000 period were 84% of sales revenue
compared to 70% in the 1999 period. Operating expenses for the 2000 period were
$2,565,785 or 74% of revenues, compared to $1,471,350, or 58% of revenues, for
the 1999 period. Operating expenses in the 2000 period include $206,588 of start
up expenses related to Providence Natural Gas, Inc.
The Company manufactured 156 compressors in the 2000 period compared to 9 in the
1999 period. The increase in the number of compressors was due to higher demand
as a result of increasing our sales and marketing activities and higher natural
gas prices in 2000.
Depreciation expense increased in the 2000 period to $503,298 compared to
$459,465 for the 1999 period due to more compressors being in service in 2000.
The 2000 period includes interest expense of $168,806 relating to financing the
acquisition of Gas Jack in October 1999.
The net loss before taxes was $139,203 for the 2000 period compared to net
income before taxes of $276,346 for the 1999 period. The decrease in net income
was primarily due to higher interest expense, the Providence Natural Gas
operating expenses and higher depreciation expense in 2000.
In March 2000, the Company issued 70,002 shares of its common stock through a
private placement for $30.00 per share, or total proceeds of $2,100,060. The
proceeds are being used primarily to fund the growth in the Company's compressor
fleet and development of Providence Natural Gas.
LIQUIDITY AND CAPITAL RESOURCES
On October 29, 1999, the Company borrowed $2,800,000 under a term loan agreement
with Hibernia National Bank. The related note bears interest at a fixed rate of
8.8%. Principal payments of $46,667, plus accrued interest, are due monthly
until maturity on September 30, 2004. The loan is secured with the assets and
compressor leases of Gas Jack, and a personal guarantee of the Company's
President.
On October 29, 1999, the Company and Gas Jack entered into a revolving line of
credit agreement with Hibernia. Under the agreement, the Company may borrow up
to the lesser of (i) $4,000,000 or (ii) the sum of 80% of the aggregate amount
of eligible receivables, plus 50% of the aggregate amount of eligible inventory,
plus 80% of the cost of new compressors completed since the acquisition of Gas
Jack. The line of credit bears interest at Wall Street Journal Prime Rate (9.5%
at September 30, 2000). Interest is due monthly with all outstanding borrowings
due at maturity on November 30, 2000. The loan is secured with the assets and
compressor leases of Gas Jack and a personal guarantee of the Company's
President. The balance outstanding on the line of credit at September 30, 2000
is $1,867,050. The Company expects to complete by November 30, 2000 a new line
of credit that will provide the additional funds required to meet the Company's
growth and working capital needs.
In March 2000, the Company issued 70,002 shares of its common stock through a
private placement for $30.00 per share, or total proceeds of $2,100,060. The
equity proceeds were used in part to repay borrowings under the Company's line
of credit and the remaining proceeds will be used primarily to fund the
development of Providence.
<PAGE>
The Company believes that cash flow from operations and funds available under
its credit facilities will provide the necessary working capital to fund the
Company's requirements for current operations through 2000. However, in
connection with any expansion of operations or acquisition activities, it is
likely that the Company will need additional sources of debt or equity
financing. The Company cannot provide assurance that these funds will be
available or if available will be available on satisfactory terms.
IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS
In connection with forward-looking statements contained in this Form 10-QSB and
those that may be made in the future by or on behalf of the Company which are
identified as forward-looking by such words as "believes," "intends" or words of
a similar nature, the Company notes that there are various factors that could
cause actual results to differ materially from those set forth in any such
forward-looking statements. The forward-looking statements contained in this
Form 10-QSB were prepared by management and are qualified by, and subject to,
significant business, economic, competitive, regulatory and other uncertainties
and contingencies, all of which are difficult or impossible to predict and many
of which are beyond the control of the Company. Accordingly, there can be no
assurance that the forward-looking statements contained in this Form 10-QSB will
be realized or the actual results will not be significantly higher or lower.
These forward-looking statements have not been audited by, examined by, compiled
by or subjected to agreed-upon procedures by independent accountants, and no
third-party has independently verified or reviewed such statements. Readers of
this Form 10-QSB should consider these facts in evaluating the information
contained herein. In addition, the business and operations of the Company are
subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Form 10-QSB. The inclusion of the
forward-looking statements contained in this Form 10-QSB should not be regarded
as a representation by the Company or any other person that the forward-looking
statements contained in this Form 10-QSB will be achieved. In light of the
foregoing, readers of this Form 10-QSB are cautioned not to place undue reliance
on the forward-looking statements contained herein.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. Changes in Securities and Use of Proceeds In March 2000, the
Company issued 70,002 shares of it's common stock through a
private placement under Section 4(2) of the Securities Act of
1933 for $30.00 per share, or total proceeds of $2,100,060. The
equity proceeds were used in part to repay borrowings under the
Company's line of credit and the remaining proceeds will be used
primarily to fund the growth in the Company's compressor fleet
and development of Providence Natural Gas, Inc.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits of the Company are included
herein.
3. Certificate of Incorporation and Bylaws
*3.1 Restated Certificate of Incorporation
*3.2 Bylaws
*3.3 Proposed Certificate of Amendment to the Restated
Certificate of Incorporation
10. Material Contracts
*10.1 1993 Stock Option Plan
*10.2Form of Stock Option Agreements with Messrs. Keenan,
Killeen, Jarrell and Chaffe with Schedule of Details
**10.3 Stock Purchase Agreement, dated as of October 29,
1999, by and among Emerging Alpha Corporation and the
Stockholders of Gas Jack, Inc.
**10.4 Loan Agreement, dated as of October 29, 1999, by and
between Hibernia National Bank and Emerging Alpha
Corporation. **10.5 Loan Agreement, dated as of October
29, 1999, by and among Hibernia National Bank, Emerging
Alpha Corporation and Gas Jack, Inc.
(b) Reports of Form 8-K. October 29, 1999
No reports were filed in the quarter ended September
30, 2000
-----------
* Filed with Registration Statement on Form SB-2, File No. 33-61888-FW and
incorporated by reference herein.
** Filed with Current Report on Form 8-K (October 29, 1999) and incorporated by
reference herein.
<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 on November 14, 2000.
COMPRESSCO, INC.
By: /S/ JERRY W. JARRELL
-------------------------
Jerry W. Jarrell
Chief Financial Officer
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 on November 14, 2000.
By: /S/ BURT H. KEENAN Chairman of the Board and Director
------------------------------
Burt H. Keenan
By: /S/ BROOKS MIMS TALTON Chief Executive Officer, President
------------------------------ and Director
Brooks Mims Talton
By: /S/ JERRY W. JARRELL Chief Financial Officer, Secretary
------------------------------ and Director
Jerry W. Jarrell
