UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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,
1997
or
[ ] 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: 000-25496
HYPERDYNAMICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 82-0400335
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2656 South Loop West, Suite 103
Houston, Texas 77054
(Address of principal executive offices, including zip code)
RAM-Z ENTERPRISES, INC.
(Registrant's former name)
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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS
As of October 31, 1997, 5,596,989 shares of common stock, $0.001 par
value, were outstanding.
Transitional Small Business Disclosure Format(check one):Yes[ ] No [X]
<PAGE>
HYPERDYNAMICS CORPORATION
CONTENTS
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PART I. FINANCIAL INFORMATION Page
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Item 1. Financial Statements
Balance Sheet at September 30, 1997(unaudited) 3
Consolidated Income Statements for the three
months ended September 30, 1997 and 1996
(both unaudited) 4
Consolidated Statements of Stockholders' Equity
for the three months ended September 30,
1997 and 1996 (both unaudited) 5
Consolidated Statements of Cash Flows for the three
months ended September 30, 1997 and 1996
(both unaudited) 6
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE 10
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2
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
HYPERDYNAMICS CORPORATION (Formerly
RAM-Z Enterprises, Inc.)
Balance Sheet
September 30, 1997
ASSETS
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CURRENT ASSETS
Cash $ 21,105
Certificate of deposit (restricted) 70,000
Accounts Receivable 63,086
Due from officers 8,058
Revenue interest current portion 35,970
Other 15,736
------------
TOTAL CURRENT ASSETS 213,955
PROPERTY AND EQUIPMENT 45,744
REVENUE INTEREST 136,185
OTHER ASSETS 3,348
------------
$ 399,232
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Convertible notes payable $ 200,000
Convertible notes payable to stockholders 37,500
Bank credit line 70,000
Accounts payable 124,044
Accrued expenses 37,699
--------------
TOTAL CURRENT LIABILITIES 469,243
STOCKHOLDERS' EQUITY
Common stock, par value $0.001; 50,000,000 shares
authorized; 5,596,989 shares issued and outstanding 5,597
Additional paid-in capital 696,111
Retained (deficit) ( 771,719)
-------------
TOTAL STOCKHOLDERS' EQUITY ( 70,011)
--------------
$ 399,232
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See notes to financial statements.
3
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HYPERDYNAMICS CORPORATION (Formerly
RAM-Z Enterprises, Inc.)
Consolidated Income Statements
3 Months Ended September 30, 1997 and 1996
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<CAPTION>
1997 1996
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REVENUES $ 156,003 $ 430,878
COST OF REVENUES 147,738 373,963
----------- ----------
GROSS MARGIN 8,265 56,915
----------- ----------
OPERATING EXPENSES
Selling 603 8,192
General and administrative 130,997 116,518
Interest 1,340 999
Depreciation 4,177 9,350
----------- -----------
Total operating expenses 137,117 135,059
----------- ---------
OPERATING LOSS ( 128,852) ( 78,144)
OTHER INCOME (EXPENSE)
Miscellaneous other income 550
Loss from discontinued operations ( 2,369)
----------- -----------
NET LOSS BEFORE INCOME TAXES ( 128,852) ( 79,963)
INCOME TAX (BENEFIT) ( 19,991)
----------- -----------
NET LOSS $( 128,852) $( 59,972)
========== ===========
NET LOSS PER COMMON SHARE $(0.02) $(0.01)
====== ======
Weighted average shares outstanding 5,596,989 6,284,667
</TABLE>
See notes to financial statements.
4
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HYPERDYNAMICS CORPORATION
(Formerly RAM-Z Enterprises, Inc.)
Consolidated Statements of Stockholders' Equity
3 Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
- -Common Stock - -Paid-in Retained
Shares Amount Capital (Deficit) Totals
<S> <C> <C> <C> <C> <C>
AS RESTATED
Balances, June 30, 1996 804,000 $ 804 $ 107,242 $( 9,058) $ 98,988
Issuance of stock for merger with:
Houston Creative Connections, Inc. 2,102,000 2,102 ( 2,102) 216,487 216,487
RAM-Z Enterprises, Inc. 480,175 480 ( 480)
Common stock issued for cash 59,000 59 37,941 38,000
Common stock issued for services 3,130,000 3,130 26,770 29,900
Net (loss) ( 59,972) ( 59,972)
---------------- ------------ ---------------- ---------- ----------
Balances, September 30, 1996 6,575,175 $ 6,575 $ 169,371 $ 147,457 $323,403
========= ======= ========= ========= ========
Balances, June 30, 1997 5,596,989 $ 5,597 $ 696,111 $(642,867) $ 58,841
Net (loss) (128,852) (128,852)
---------------- ------------ ---------------- --------- ---------
Balances, September 30, 1997 5,596,989 $ 5,597 $ 696,111 $(771,719) $( 70,011)
========= ======= ========= ========= =========
</TABLE>
See notes to financial statements.
5
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<TABLE>
<CAPTION>
1997 1996
--------------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ ( 128,852) $ ( 59,972)
Adjustments to reconcile net income to cash
provided from operating activities
Depreciation and amortization 4,177 26,911
Common stock issued for services 29,900
Changes in:
Accounts receivable ( 23,314) ( 86,211)
Due from officers ( 3,192)
Other assets 27,242 ( 8,060)
Accounts payable ( 67,618) ( 74,743)
Accrued expenses 6,737 34,572
Deferred revenue 76,373
Deferred income taxes ( 19,991)
------------------ ------------
NET CASH USED FOR OPERATING ACTIVITIES ( 184,820) ( 81,221)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Organizational costs incurred ( 58,251)
Increase in other assets ( 1,599)
Collection of revenue interest 4,845
Purchase of vehicles ( 84,173)
Purchase of equipment ( 28,988) ( 5,736)
------------ -------------
NET CASH USED FOR INVESTING ACTIVITIES ( 24,143) ( 149,759)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 38,000
Net increase under line of credit 4,000
Net increase of short-term notes payable 30,000
Net increase of short-term notes payable to related party 40,484
Net increase in long-term debt 84,173
Increase in short-term convertible notes 200,000
Reduction in notes payable ( 44,264)
------------ ------------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 200,000 152,393
------------ ------------
NET DECREASE IN CASH ( 8,963) ( 78,587)
</TABLE>
See notes to financial statements.
6
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HYPERDYNAMICS CORPORATION (Formerly
RAM-Z Enterprises, Inc.)
Consolidated Statement of Cash Flows
3 Months Ended September 30, 1997 and 1996
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1997 1996
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NET DECREASE IN CASH
(from previous page) $( 8,963) $( 78,587)
CASH AT BEGINNING OF PERIOD 30,068 153,462
------------- ------------
CASH AT END OF PERIOD $ 21,105 $ 74,875
============ ============
SUPPLEMENTAL INFORMATION
Interest paid $ 496 $ 7,521
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See notes to financial statements.
7
<PAGE>
HYPERDYNAMICS CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. The unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information. The financial statements contained
herein should be read in conjunction with the audited financial
statements of the Company. Accordingly, footnote disclosure which would
substantially duplicate the disclosure in those statements has been
omitted.
2. The Company received $220,000 from Emerald Bay Interests, Ltd. as
convertible debt. Interest accrues daily at a 10% annual interest rate.
The debt matured August 31, 1997 and may be converted into 7,333,334
shares of common stock at $0.03 per share at any time. Emerald Bay has
contributed $20,000 of this to offset certain acquisition activity
costs of the Company. Management is currently in the process of
negotiating new terms for the remaining balance owing of $200,000.
3. Options for 336,000 shares at $1.25 were issued to professional
consultants for services during July 1997. Management believes $1.25
represents the fair market value of the stock on the date of grant.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General Discussion
HyperDynamics Corporation is an information systems services company that
provides integrated voice, video and data technology that maximizes it's
customers return on their technology investment. The Company has spent most of
this past quarter to focus it's business plan on redefined and rejuvenated
operations for MicroData Systems, Inc. and to put these operating strategies in
place while providing for adequate capitalization through bridge funding and
related acquisition plans.
In a subsequent event, and as discussed in the most recent Form 10-KSB, the
Company has successfully retrofitted it's facility for significantly enhanced PC
integration services and custom system sales and service, the new web-site at
"www.hyd.net" has been successfully established, and two key asset purchases
have been accomplished to establish it's new subsidiary Wired & Wireless
Corporation. Mr. Ted Tarver and Mr. Joseph Barris have been hired by the
Company, with over thirty five (35) years of collective experience in the MMDS
wireless communications industry, to operate Wired and Wireless. Wired and
Wireless has shipped $160,000 of it's initial $240,000 order to date.
8
<PAGE>
Results of Operations
As a result of the re-focus and the significant changes, revenues decreased to
$156,000 for the three months ended September 30, 1997, from $430,878 for the
same period in 1996. The decrease was a result of the re-focus of the Company,
the retrofit of the MicroData facility, and the investment activity focused to
establish the new Wired & Wireless subsidiary.
Cost of Revenues decreased, correspondingly to the sales decrease, to $147,738
in the period, from $373,963 for the same period in 1996.
Selling, General and Administrative expenses increased to $137,117 in the three
month period, as compared to $135,059 for the same period in 1996.
Net Loss. The net loss of the Company was $(128,852) for the three months ended
September 30, 1997, or ($.02) per share. As stated above, this loss can be
primarily attributed to the significant operational changes made by management
which are expected to significantly improve the results of operations in future
quarters.
Liquidity and Capital Resources
As a subsequent event, the bridge financing obtained by the Company has been
negotiated by the President of the Company to be increased to as much as
$500,000 on October 20, 1997. The current bridge funding to date is $325,000.
The President of the Company is currently renegotiating the terms of the
financing. It is expected that the loan will be converted sometime in the second
quarter to an equity position based on these negotiations. The goal of
management is to obtain additional equity funding to help close additional
viable acquisitions.
In addition to the above, the Company is in a position to obtain additional
capital upon the exercise of previously-issued warrants and outstanding options
for common stock.
Prospective Information
The Company has positioned itself to support and sustain the anticipated
significant revenue growth over the remainder of the fiscal year. The
retrofitted MicroData facility is capable of handling multiples of sales volume
compared to prior years. With the diversification of the new Wired & Wireless
subsidiary, revenues and gross profit margins are expected to increase
substantially. Coupled with other business the Company is currently negotiating
and the fundamental fact of maintaining low corporate overhead, operations are
expected to show a profit by the third quarter of this fiscal year.
PART II. OTHER INFORMATION
9
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed with this Quarterly
Report or are incorporated herein by reference:
Exhibit Number Description
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements 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.
HYPERDYNAMICS CORPORATION
(Registrant)
By: /s/ Kent Watts
Kent Watts, Chairman of the Board, Chief
Executive Officer and Chief Accounting
Officer
Dated: November 14, 1997
10
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<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM PART 1
OF FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000937136
<NAME> HYPERDYNAMICS CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 21105
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<RECEIVABLES> 63086
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<CURRENT-ASSETS> 213955
<PP&E> 45744
<DEPRECIATION> 0
<TOTAL-ASSETS> 399232
<CURRENT-LIABILITIES> 469243
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0
0
<COMMON> 5597
<OTHER-SE> (75608)
<TOTAL-LIABILITY-AND-EQUITY> 399232
<SALES> 156003
<TOTAL-REVENUES> 156003
<CGS> 147738
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<OTHER-EXPENSES> 135777
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1340
<INCOME-PRETAX> (128852)
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<INCOME-CONTINUING> (128852)
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</TABLE>
