SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-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, 1996
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 No.0-25658
KNIGHT NATURAL GAS, INC.
(Exact name of Registrant as specified in its charter)
Colorado 84-1357927
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Tower I, Suite 340,
12835 E. Arapahoe Road
Englewood, Colorado 80112
(Address of principal executive offices) (Zip Code)
(303) 706-1606
(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) had 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 Registrant's common stock, par value $
.00001 per share, as of September 30, 1996 was 15,552,500 shares.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM I. Financial Statements
Knight Natural Gas, Inc.
(A Development Stage Company)
Balance Sheet
<TABLE>
Unaudited Audited
September December
30, 1996 31, 1995
-------- --------
ASSETS
<S> <C> <C>
Cash $ 389 $ 647
Deferred Property Acquisition Costs 119,808 0
--------- ---------
Total Current Assets 120,197 647
--------- ---------
TOTAL ASSETS $ 120,197 $ 647
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Current Maturities Of Long-Term Debt $ 39,091 0
Advances From Shareholders' 10,544 0
Other Accrued Expenses 209 0
--------- ---------
Total Current Liabilities 49,844 0
--------- ---------
Long-Term Debt 60,685 0
--------- ---------
TOTAL LIABILITIES 110,529 0
--------- ---------
SHAREHOLDERS' EQUITY
Preferred Stock, $.10 Par Value, Non Voting
Authorized 1,000,000 Shares;
Issued And Outstanding -0- Shares 0 0
Common Stock, $.00001 Par Value
Authorized 100,000,000 Shares;
Issued And Outstanding 15,552,500 and 2,052,500 156 21
Capital Paid In Excess Of
Par Value Of Common Stock 447,573 422,649
Retained Deficit Prior To January 1, 1993 (417,421) (417,421)
Deficit Accumulated During
The Development Stage (20,640) (4,602)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 9,668 647
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 120,197 $ 647
========= =========
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-1
<PAGE>
Knight Natural Gas, Inc.
(A Development Stage Company)
Unaudited Statement Of Operations
<TABLE>
Three Month Three Month
September September
30, 1996 30, 1995
-------- --------
<S> <C> <C>
Revenue $ 0 $ 0
---------- ----------
Expenses:
Licenses And Fees 0 0
Office 1,628 23
Professional 4,000 0
Salaries 4,742 0
Taxes - Payroll 363 0
---------- ----------
Total 10,733 23
---------- ----------
Net (Loss) (10,733) (23)
========== ==========
Net (Loss) Per Common Share (0) (0)
========== ==========
Weighted Average Common Shares Outstanding $3,347,021 $2,052,500
========== ==========
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-2
<PAGE>
Knight Natural Gas, Inc.
(A Development Stage Company)
Unaudited Statement Of Operations
<TABLE>
January
1, 1993
(Inception)
Nine Month Nine Month Through
September September September
30, 1996 30, 1995 30, 1996
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
---------- ---------- ----------
Expenses:
Licenses And Fees 210 0 210
Office 1,696 68 2,088
Professional 9,027 3,700 13,237
Salaries 4,742 0 4,742
Taxes - Payroll 363 0 363
---------- ---------- ----------
Total 16,038 3,768 20,640
---------- ---------- ----------
Net (Loss) Before Other (Expenses) (16,038) (3,768) (20,640)
Other Expense - Interest 0 0 0
---------- ---------- ----------
Net (Loss) $ (16,038) $ (3,768) $ (20,640)
========== ========== ==========
Net (Loss) Per Common Share (0) (0) (0)
========== ========== ==========
Weighted Average Common Shares 3,347,021 2,052,500 3,347,021
Outstanding ========== ========== ==========
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-3
<PAGE>
Knight Natural Gas, Inc.
(A Development Stage Company)
Unaudited Statement Of Cash Flows
<TABLE>
January
1, 1993
(Inception)
Nine Months Nine Months Through
September September September
30, 1996 30, 1995 30, 1996
-------- -------- --------
<S> <C> <C> <C>
Net (Loss) Accumulated
During The Development Stage (16,038) (3,768) (20,640)
Stock Issued Not For Cash 0 0 15
Increase In Accrued Expenses 209 0 209
---------- ---------- ----------
Cash Flows From Operations (15,829) (3,768) (20,416)
---------- ---------- ----------
Cash Flows From Financing Activities:
Advances From Shareholders' 10,544 0 10,544
Contribution Of Capital 5,027 3,700 8,727
---------- ---------- ----------
Cash Flows From Financing 15,571 3,700 19,271
---------- ---------- ----------
Cash Flows From Investing Activities:
0 0 0
---------- ---------- ----------
Cash Flows From Investing 0 0 0
---------- ---------- ----------
Net Increase In Cash (258) (68) (1,145)
Cash At Beginning Of Period 647 924 1,534
---------- ---------- ----------
Cash At End Of Period $ 389 $ 856 $ 389
========== ========== ==========
Summary Of Non-Cash Investing And Financing Activities:
1,500,000 Shares Issued For Service @ $.00001
Per Share $ 15
==========
Deferred Property Acquisition Costs $ 119,808 $ 119,808
Less Debt Assumed (99,776) (99,776)
---------- ----------
Acquisition Of Mining Rights $ 20,032 $ 20,032
========== ==========
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-4
<PAGE>
Knight Natural Gas, Inc.
(A Development Stage Company)
Statement Of Shareholders' Equity
<TABLE>
Deficit
Capital Accumulated
Number Of Paid In Number Of During The
Common Common Excess Of Preferred Preferred Retained Development
Notes Shares Stock Par Value Shares Stock Deficit Stage Total
----- ------ ----- --------- ------ ----- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance At January 1, 1993 ............... 552,500 6 418,949 0 0 $(417,421) 0 $ 1,534
Net (Loss) December 31, 1993 ............. (336) (336)
-------- -------- -------- -------- -------- -------- --------
Balance At December 31, 1993 ............. 552,500 6 418,949 0 0 (417,421) (336) $ 1,198
Issuance Of Common Stock: ................1,2
November 1, 1994 - Services @
$.00001 per Share ....................... 1,500,000 15 0 $ 15
Net (Loss) December 31, 1994 ............. (289) (289)
------------------------------------------------------------- -------- --------
Balance At December 31, 1994 ............. 2,052,500 21 $418,949 0 0 $(417,421)$ (625) $ 924
Capital Contribution ..................... 3,700 3,700
Net (Loss) @ December 31, 1995 ........... (3,977) (3,977)
------------------------------------------------------------- -------- --------
Balance At December 31, 1995 ............. 2,052,500 21 $422,649 0 0 $(417,421)$ (4,602) $ 647
========= ==== ======== ==== ==== ========= ======== ========
Capital Contribution ..................... 5,027 5,027
Stock Issued In Exchange For Assets Valued
@ $.0015 ................................ 13,500,000 135 19,897 20,032
Unaudited Net (Loss) @ September 30, 1996. (16,038) (16,038)
------------------------------------------------------------- -------- --------
Balance At September 30, 1996 ............ 15,552,500 $ 156 $447,573 $ 0 $ 0 $(417,421)$(20,640) $ 9,668
========= ==== ======== ==== ==== ========= ======== ========
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-5
<PAGE>
KNIGHT NATURAL GAS, INC.
Footnotes
September 30, 1996
NOTE 1
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair statemetn of (a) the results of
operations for the nine month period ended September 30, 1996 and 1995, and for
the periods from inception at January 1, 1993 to September 30, 1996, (b)
financial position at September 30, 1996 and December 31, 1995 adn (c) the cash
flows for the nine months ended September 30, 1996 and 1995 and for the period
from inception, January 1, 1993 (inception) to September 30, 1996 have been
made.
NOTE 3
The results for the nine month period ended September 30, 1996 are not
necessarily indicative of the results for the entire fiscal year ended December
31, 1996.
F-6
<PAGE>
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
The Company has generated no substantial revenues from its operations and
has been a development stage company since inception. Since the Company has not
generated revenues and has never been in a profitable position, it operates with
minimal overhead. In August, 1996, the Company effected an acquisition of
certain defined assets and liabilities of Sedcore Exploration Company Limited
("Sedcore") in exchange for 5,000,000 common shares of the Company, and an
additional acquisition, for certain additional defined assets of Sedcore in
exchange for 8,500,000 common shares of the Company. The transactions have given
the Company effective control of defined assets of Sedcore, and the current
control shareholders of Sedcore now control both companies. The Company plans to
change its name to "KALAN GOLD CORPORATION" or some derivation thereof.
The Company decided to engage in the transactions with Sedcore to develop
an asset base and increase the value of the Company's shares as a result of
acquiring a defined business venture.
During this fiscal year, the Company plans to prove up the gold reserves on
these properties , which have the potential to produce gold in commercial
quantities. During the period of this report, the Company has not engaged in any
efforts intended to prove up the gold reserves on the properties but intends to
do so before the end of the fiscal year.
During the period of this report, the Company has not engaged in any
preliminary efforts intended to identify any additional possible further gold
reserves and has neither conducted negotiations nor entered into a letter of
intent concerning any business opportunity.
Liquidity and Capital Resources
As of the end of the reporting period, the Company had no material cash or
cash equivalents. There was no significant change in working capital during this
fiscal year.
Management feels that the Company has inadequate working capital to pursue
the proving up of its gold reserves, absent an infusion of outside capital. For
the foreseeable future, the Company intends to pursue additional equity
investments, bank borrowings, joint ventures, or combinations thereof, none of
which are definitive at this time, as a means to develop sufficient working
capital. Otherwise, the Company will have negligible capital requirements prior
to the consummation of any plan for working capital and can operate in the
interim. The Company does not intend to pay dividends in the foreseeable future.
<PAGE>
PART II- OTHER INFORMATION
ITEM 1. Legal Proceedings
No legal proceedings of a material nature to which the Company is a party
were pending during the reporting period, and the Company knows of no legal
proceedings of a material nature pending or threatened or judgments entered
against any director or officer of the Company in his capacity as such.
ITEM 2. Changes in Securities. None.
ITEM 3. Defaults upon Senior Securities. None.
ITEM 4. Submission of Matters to a Vote of Security Holders. None
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-K.
No exhibits as set forth in Regulation S-K are considered necessary in this
lO-QSB filing.
<PAGE>
SIGNATURES
In accordance with 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.
Knight Natural Gas, Inc.
Dated: By: /s/ James H. Baum
-----------------
James H. Baum
President and Chief Executive 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 and on the dates indicated.
CHIEF FINANCIAL AND ACCOUNTING OFFICER
Dated: By: /s/ Robert J. Goldman
---------------------
Robert J. Goldman
Treasurer
SECRETARY
Dated: By: /s/ Robert J. Goldman
---------------------
Robert J. Goldman
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 389
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 120,197
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 120,197
<CURRENT-LIABILITIES> 49,844
<BONDS> 0
0
0
<COMMON> 156
<OTHER-SE> 9,512
<TOTAL-LIABILITY-AND-EQUITY> 120,197
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 16,038
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,038)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,038)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,038)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
