UNITED STATES
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,
1998
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 87-0400335
(State or other jurisdiction (IRS Employer
of 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, 1998, 12,208,321 shares of common stock, $0.001 par value,
were outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
Table of Contents
Part I Financial Information
<TABLE>
<S> <C>
Item 1 Financial Statements 3
Balance Sheet at September 30,1998 (unaudited) 3
Consolidated Statements of Income for the three
months ended September 30,1998
and 1997 (both unaudited) 4
Consolidated Statements of Stockholders' Equity
for the three months September 30,1998
and 1997 (both unaudited) 5
Consolidated Statements of Cash Flows for the three
months ended September 30,1998
and 1997 (both unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K 9
(a) Exhibits
(b) Reports on Form 8-K
Signatures 9
</TABLE>
<PAGE>
Part 1 Financial Information
Item 1. Financial Statements
HYPERDYNAMICS CORPORATION
(Formerly RAM-Z Enterprises, Inc.)
Balance Sheet
September 30, 1998
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<S> <C>
Assets
Current Assets
Cash $ 0
Accounts Receivable- trade 228,729
Accounts Receivable- other 1,008
Inventory 71,000
Revenue interest current portion 35,970
Other 4,000
-------------------
Total Current Assets 340,707
Property and Equipment 81,246
Revenue Interest 94,157
Other Assets 52,798
===================
$ 568,908
===================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 254,978
Accrued expenses 14,224
-------------------
Total Current Liabilities 242,326
Stockholders' Equity
Common stock, par value $0.001; 50,000,000 shares 12,208
authorized; 12,208,321 shares issued and
outstanding.
Additional paid-in capital 1,567,500
Retained (deficit) (1,280,002)
------------------
Total Stockholders' Equity 299,706
===================
$ 568,908
===================
</TABLE>
See notes to financial statements.
<PAGE>
HYPERDYNAMICS CORPORATION
(Formerly RAM-Z Enterprises, Inc.)
Consolidated Income Statements
3 Months Ended September 30, 1998 and 1997
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<CAPTION>
1998 1997
<S> <C> <C>
Revenues $ 419,403 $ 156,003
Cost of Revenues 297,677 147,738
------------------- ------------------
Gross Margin 121,726 8,265
Operating Expenses
Selling 14,677 603
General and Administrative 178,976 130,997
Interest 1,340
Depreciation 8,309 4,177
------------------- ------------------
Total Operating Expenses 201,962 137,117
------------------- ------------------
Operating Loss (80,236) (128,852)
Other Income (Expense)
Interest income 1,425
Miscellaneous other expense _____________________________________
Net Loss Before Income Taxes (78,811) (128,852)
Income Tax (Benefit)
-------------------------------------
Net Loss $(78,811) $(128,852)
=================== ==================
Net Loss per Common Share $(0.01) $(0.02)
Weighted average shares outstanding 12,208,321 5,596,989
</TABLE>
See notes to financial statements.
<PAGE>
HYPERDYNAMICS CORPORATION
(Formerly RAM-Z Enterprises, Inc.)
Consolidated Statements of Stockholders' Equity
3 Months Ended September 30, 1998 and 1997
<TABLE>
<CAPTION>
Common Stock
Shares Amount Paid in Capital Retained (Deficit) Totals
<S> <C> <C> <C> <C> <C>
As Restated
Balances - June 30, 1997 5,596,989 $5,597 $696,111 $(642,867) $58,841
Net (loss) for quarter- (128,852) (128,852)
Balances - September 30, 1998 5,596,989 $5,597 $696,111 $(771,719) $(70,011)
Balances - June 30, 1998 12,208,321 $12,208 $1,567,500 $(1,201,191) $378,517
Net (loss) (78,811) (78,811)
Balances - September 30, 1998 12,208,321 $12,208 $1,567,500 $(1,280,002) $299,706
</TABLE>
See notes to financial statements.
<PAGE>
HYPERDYNAMICS CORPORATION
(Formerly RAM-Z Enterprises, Inc.)
Consolidated Statement of Cash Flows
3 Months Ended September 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Cash flows from operating activities
Net (loss) $(78,811) $(128,852)
Adjustments to reconcile net income to cash provided from
operating activities
Depreciation and amortization 8,309 4,177
Common stock issued for services
Changes in:
Certificate of deposit - restricted 94,000 0
Accounts receivable (80,475) (23,314)
Accounts receivable- other 30,000
Due from officers (3,192)
Inventory (5,492)
Other assets 46,301 27,242
Accounts payable (16,235) (67,618)
Accrued expenses (525) 6,737
Accrued taxes 1,871
------------------ -------------------
Net cash used for operating activities (1,057) (184,820)
Cash flows from investing activities
Collection of revenue interest 4,845
Purchase of property and equipment (3,851) (28,988)
------------------ -------------------
Net cash provided (used) for investing activities (3,851) (24,143)
Cash flows from financing activities Sale of common stock Net increase
under line of credit Net increase of short-term notes payable
Net increase of short-term notes payable to related party Net increase
in long term debt
Increase in short-term convertible notes 200,000
------------------ -------------------
Net cash provided from financing activities 0 200,000
------------------ -------------------
Net decrease in cash (4,908) (8,963)
Cash at beginning of period 4,908 30,068
------------------ -------------------
Cash at end of period $ 0 $21,105
Supplemental Information
Interest paid $0 $496
</TABLE>
See notes to financial statements.
<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 has no long-term debt, contingent liabilities, obligations, or
other financing arrangements as of the end of the first quarter.
3. The Company has not issued any shares and has not granted any stock options
during the first quarter.
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
General Discussion
HyperDynamics Corporation is an information system services company that
provides integrated voice, video and data technology that maximizes it's
customers return on their technology investment. The Company is beginning to
show positive results of its investment in Wired & Wireless Corporation and it's
full service information systems strategy changes compared to last year.
During the past fiscal year, the Company focused resources available to it on
building up the potential for sales of wireless television equipment. The
results of this quarter discussed below reflects the beginnings of some positive
results in this area. During the quarter the Company has been working on
expanding its IS services and starting to invest more heavily in sales and
marketing of the Great Plains mid-range accounting system and other enterprise
level applications. The Company became certified through passing required
examinations as a Great Plains authorized and certified Dynamics CS+ SQL
reseller. Additionally, the company became certified and trained professionally
with the "Image Now" document imaging system developed by Perceptive Vision,
Inc. The Company's sales forecast is expected to continue to grow with
enterprise level technical products.
Results of Operations
As a result of the prior years focus on Wired & Wireless and the significant
changes in strategy with MicroData Systems, revenues increased to $419,403 for
the three months ended September 30, 1998, from $156,003 for the same period in
1997. Both subsidiaries contributed to the increase with 274,501 generated from
Wired and Wireless.
Wired and Wireless was not in existence in the same period last year.
Cost of Revenues increased, correspondingly to the sales increase, to $297,677
in the period from $147,738 for the same period in 1997.
Gross margin increased to 40.89% in the period from 5.59% for the same period in
1997.
Selling, General and Administrative expenses increased to $201,962 in the three
month period, as compared to $137,117 for the same period in 1997. The increase
was primarily due to the addition of the administrative overhead of Wired &
Wireless Corporation.
Net Loss. The net loss of the Company was $(78,811) for the three months ended
September 30, 1998, or ($.01) per share as compared to $(128,852) or $(.02) for
the same period in 1997. As stated above, the reduction of loss can be primarily
attributed to the increase in Wired & Wireless business and the significant
operational changes made by management over the past year. These changes in
strategy are expected to significantly improve the results of operations in
future quarters.
Liquidity and Capital Resources
At September 30, 1998 the Company's current ratio of current assets to current
liabilities was 1.27. The Company is working diligently to improve its liquidity
through positive results of operations. The Company does not have any long-term
debt or other financing arrangements. The goal of management is to continue to
improve its results of operations and obtain additional equity funding to
increase working capital, help close viable and profitable technology based
acquisitions, and provide fuel for its expected rapid growth.
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 is working diligently to start realizing increased sales and a
steady growth in profits. With the investment in and diversification of the new
Wired & Wireless subsidiary, revenues and gross profit margins are expected to
increase substantially. Coupled with improved sales and marketing strategies for
increased IS service revenues and enterprise level software application sales,
operations are expected to produce profits in the future.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
The Company is including the following cautionary statement to make applicable
and take advantage of the safe harbor provision of the Private Securities
Litigation Reform Act of 1995 for any forward-looking statements made by, or on
behalf of, the Company. This Annual Report on Form 10-KSB contains
forward-looking statements. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, expectations, future events or
performance and underlying assumptions and other statements which are other than
statements of historical facts. Certain statements contained herein are
forward-looking statements and, accordingly, involve risks and uncertainties
which could cause actual results or outcomes to differ materially from those
expressed in the forward-looking statements. The Company's expectations, beliefs
and projections are expressed in good faith and are believed by the Company to
have a reasonable basis, including without limitations, management's examination
of historical operating trends, data contained in the Company's records and
other data available from third parties, but there can be no assurance that
management's expectations, beliefs or projections will result or be achieved or
accomplished. In addition to other factors and matters discussed elsewhere
herein, the following are important factors that, in the view of the Company,
could cause actual results to differ materially from those discussed in the
forward-looking statements: the ability of the Company to respond to changes in
the information system environment, competition, the availability of financing,
and, if available, on terms and conditions acceptable to the Company, and the
availability of personnel in the future.
<PAGE>
Part II Other Information
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
On January 28, 1998, the Company filed a current report on Form
8-K regarding a change in control of the Company.
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
HyperDynamics Corporation
(Registrant)
By: /s/ Kent Watts
--------------------
Kent Watts, Chairman of the Board,
Chief Executive Officer, and Chief Accounting
Officer
Dated: November 12, 1998
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<ARTICLE> 5
<LEGEND>
The financial data schedule contains summary information extracted from Part I
of Form 10-QSB for the quarterly period ended September 30, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000937136
<NAME> Hyperdynamics Corporation
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