SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter Ended Commission File Number
April 30, 1998 1-7965
CASPEN OIL, INC.
(Exact name of registrant as specified in its charter)
Nevada 75-1325831
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 S. Wadsworth Boulevard
Irongate 3, Suite 201
Lakewood, CO 80226
(Address or principal executive offices)
(303) 987-0925
(Registrant's telephone number, including area 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 and 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 requirement for the past 90 days.
Yes X No
As of April 30, 1998, the Registrant had 21,092,222 shares of
Common Stock outstanding.
Transitional Small Business Disclosure Format: Yes ; No X
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
FORM 10-QSB
April 30, 1998
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets. . . . . . . . . . . 1-2
Condensed Consolidated Statements of Operations. . . . . . .3-4
Condensed Consolidated Statement of Shareholders' Equity . . 5
Condensed Consolidated Statements of Cash Flows. . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . .7-8
Item 2. Management's Discussion and Analysis or Plan of
Operation. . . . . . . . . . . . . . . . . . . . . . . . . 8-9
PART II - OTHER INFORMATION
Item 4.Submission of Matters to a Vote of Security Holders . 10
Item 6.Exhibits and Reports on Form 8- K . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
April 30, July 31,
ASSETS 1998 1997
CURRENT ASSETS
Cash and cash equivalents $ 262,173 $ 112,514
Accounts rec., trade 95,482 179,785
Other 4,919 1,633
----------- -----------
362,574 293,932
----------- -----------
PROPERTY AND EQUIPMENT, AT COST
Oil and gas properties, full cost
method of accounting 19,630,085 19,763,820
Other 102,061 302,061
----------- -----------
19,732,146 20,065,881
Less accum. depl., deprec., and amort. 17,180,802 17,252,217
------------ -----------
2,551,344 2,813,664
------------ -----------
OTHER
Investments 810,127 810,127
------------ -----------
TOTAL ASSETS $ 3,724,045 $ 3,917,723
============ ===========
1
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable-Lender (Note 2) $ 192,996 $ 1,315,333
Notes payable-other 35,404 35,404
Accounts payable, trade 586,555 670,069
Accrued interest-Lender (Note 2) --- 893,777
Accrued interest-other 496 ---
Accrued expenses 317,405 281,235
------------ -----------
1,132,856 3,195,819
LONG-TERM LIABILITIES
Note payable-Lender (Note 2) 961,504 --
Accrued interest-Lender (Note 2) 983,022 ---
------------ -----------
1,944,526 --
TOTAL LIABILITIES 3,077,382 3,195,819
------------ -----------
SHAREHOLDERS' EQUITY
Convertible preferred stock:
Series A 600,000 600,000
Series C 300,000 300,000
Series E 125,000 125,000
Common stock 210,922 210,922
Additional paid-in capital 21,094,871 21,094,871
Note receivable-Officer (33,000) (33,000)
Accumulated deficit (21,641,420)(21,566,179)
----------- -----------
656,373 731,614
Less treasury stock 9,710 9,710
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 646,663 721,904
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 3,724,045 $ 3,917,723
=========== ===========
See accompanying notes to condensed consolidated financial
statements.
2
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended
April 30,
------------------
1998 1997
REVENUE
Oil and gas sales $ 140,318 $ 325,404
Gain on sale of oil
and gas property 156,258 100,000
Interest income 1,780 825
Other 22,188 17,895
--------- ---------
320,544 444,124
--------- ---------
COSTS AND EXPENSES
Production and operating 43,376 88,795
Depl., deprec., and amort. 27,912 50,360
General and administrative 36,615 156,482
Interest expense 28,209 ( 1,562)
--------- ---------
136,112 294,075
--------- ---------
NET INCOME 184,432 150,049
DIVIDEND REQUIREMENTS ON PREFERRED STOCK 269,775 269,775
--------- ---------
LOSS APPLICABLE TO COMMON STOCK $( 85,343) $(119,726)
========= =========
LOSS PER COMMON SHARE $ * $ (.01)
========= =========
*Less than one cent ($.01)
See accompanying notes to condensed consolidated financial
statements.
3<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Nine months ended
April 30,
------------------
1998 1997
REVENUE
Oil and gas sales $ 388,662 $ 830,234
Gain on sale of oil
and gas property 156,258 100,000
Interest income 4,628 2,050
Other 18,194 45,672
--------- ---------
567,742 977,956
--------- ---------
COSTS AND EXPENSES
Production and operating 145,191 255,140
Depl., deprec., and amort. 98,585 154,400
General and administrative 308,441 474,828
Interest expense 90,765 1
--------- ---------
642,982 884,369
--------- ---------
NET INCOME (LOSS) ( 75,240) 93,587
DIVIDEND REQUIREMENTS ON PREFERRED STOCK 809,325 809,325
--------- ---------
LOSS APPLICABLE TO COMMON STOCK $(884,565) $(715,738)
========= =========
LOSS PER COMMON SHARE $ (.04) $ (.03)
========= =========
See accompanying notes to condensed consolidated financial
statements.
4
<PAGE>
<TABLE>
<CAPTION>
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders' Equity
(Unaudited)
Series A,C, E Common stock Additional Accumu- Note Total
Preferred Stock paid-in lated Rec- Treasury shlders'
Shares Amount Shares Amount capital deficit Officer stock equity
------- -------- ---------- ---------- ----------- ------------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at July 31, 1997 1,025,000 $1,025,000 21,092,222 $ 210,922 $21,094,871 $(21,566,179) $(33,000) $(9,710) $ 721,904
Net loss ( 113,531) (113,531)
--------- ---------- ---------- --------- ----------- ------------- --------- -------- ---------
Balance at October 31,1997 1,025,000 $1,025,000 21,092,222 $ 210,922 $21,094,871 $(21,679,710) $(33,000) $(9,710) $ 608,373
Net loss ( 146,141) (146,141)
--------- ---------- ---------- --------- ----------- ------------- --------- -------- ---------
Balance at January 31,1998 1,025,000 $1,025,000 21,092,222 $ 210,922 $21,094,871 $(21,825,851) $(33,000) $(9,710) $ 462,232
========= ========== ========== ========= =========== ============= ========= ======== =========
Net income 184,432 184,432
--------- ---------- ---------- --------- ----------- ------------- -------- ------- ---------
Balance at April 30, 1998 1,025,000 $1,025,000 21,092,222 $ 210,922 $21,094,871 $(21,641,419) $(33,000) $(9,710) $ 646,664
========= ========== ========== ========= ========== ============= ========= ======== =========
</TABLE>
5
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended
April 30,
------------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $( 75,240) $ 93,587
Adjustments to reconcile net income
to net cash used in operating activities:
Depletion, depreciation, and amortization ( 71,415) 154,400
Issuance of common stock --- 33,000
Disposition of junked asset 200,000 ---
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 84,303 ( 52,238)
(Increase) decrease in other assets ( 3,286) 17,450
Decrease in notes/accts. payable (244,348) (268,719)
Increase (decrease) in accrued expenses 125,910 98,177
---------- --------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 15,924 75,657
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposition of property and
equipment 138,217 4,506
Purchase of property and equipment ( 4,482) (11,021)
---------- --------
NET CASH PROVIDED BY (USED FOR)INVESTING
ACTIVITIES 133,735 ( 6,515)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 149,659 69,142
CASH AND CASH EQUIVALENTS, BEGINNING 112,514 94,131
--------- ---------
CASH AND CASH EQUIVALENTS, ENDING $ 262,173 $163,273
========= =========
See accompanying notes to condensed consolidated financial
statements.
6
CASPEN OIL, INC.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Nine Months Ended April 30, 1998
(1) Basis of Presentation
The condensed interim consolidated financial statements
included herein are unaudited but in the opinion of management
reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the financial position of
the Company at April 30, 1998, and the results of operations for
the nine month periods ended April 30, 1998 and 1997. Interim
results are not necessarily indicative of expected annual results
because of the impact of prices obtained for oil and gas and
other factors. These condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements of the Company, and related notes thereto, included in
its annual report on Form 10-KSB/A.
(2) Note payable - Lender
Note payable to Lender with interest at prime plus 1%, due
September, 2004; collateralized by 100% of the outstanding stock
of the Company's wholly-owned subsidiary, Summit Overseas
Exploration, Inc. ("Summit") and by all of the oil and gas
interests and properties owned by Summit, save and except for
Summit's interest owned through its Kern River, plc investment,
located in Bakersfield, California.
Principal only payments of $16,083 are due and payable monthly to
the Lender with interest accruing and becoming due and payable in
three (3) thirty (30) month tranches with the first payment being
due and payable September 30, 1999; the second payment due and
payable March 31, 2002; and the third payment due and payable
September 30, 2004.
Additionally, $851,192 of interest that had accrued and had
remained unpaid on the loan to the Lender for the period up to
and including March 31, 1997 will become due and payable on or
before September 30, 2004.
Current portion of principal due to Lender
at April 30, 1998 $ 192,996
Long-term portion of principal due to Lender
at April 30, 1998 961,504
---------
Total Principal due to Lender
at April 30 1998 $1,154,500
=========
7
CASPEN OIL, INC.
AND SUBSIDIARIES
(2) Note payable - Lender (continued)
Long term portion of accrued interest due
to Lender at April 30, 1998 $ 983,022
========
Item 2. Management's Discussion and Analysis or Plan of
Operation
The following discussion of the Company's financial condition and
results of operations should be read in conjunction with the
condensed consolidated financial statements included in this
report and the consolidated financial statements and notes
contained in the Company's annual report on Form 10-KSB/A for the
fiscal year ended July 31, 1997.
Liquidity and Capital Resources
During the nine months ended April 30, 1998, the working capital
deficit decreased from July 31, 1997, by approximately
$2,132,000. This decrease is due largely to the reclassification
to long-term liability that portion of lender principal and
accrued interest considered a current liability at July 31, 1997
and to the pay down of certain outstanding trade payables.
The Company's current liabilities exceed current assets by
$770,282 at April 30, 1998. The working capital deficit at
April 30, 1998, is due primarily to the Company's debt due to its
Lender (See Note 2) and to outstanding trade and note payables of
an approximate $600,000. The Company anticipates that with its
current cash position it will have sufficient working capital to
meet its obligations throughout the remaining fiscal year.
Results of Operations
Oil and gas revenues were significantly lower in the nine months
ended April 30, 1998, as compared to the nine months ended April
30, 1997. This reduction in oil and gas revenue was a result of
the sale of various oil and gas interests which facilitated the
reduction in debt, as well as lower overall oil and gas prices
received for production in the first nine months of fiscal year
1998 as compared to the same period in fiscal year 1997.
The Company experienced equal gas prices in the nine months ended
April 30, 1998, compared with those received in the same period
last year, and significantly lower oil prices were experienced in
the first nine months of fiscal year 1998 when compared with the
8
CASPEN OIL, INC.
AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of
Operation, Continued
Results of Operations (Continued)
same period last year. Average oil and gas prices received in
the nine months ended April 30, 1998, were approximately $16.00
per barrel of oil and $2.00 per mcf gas as compared to
approximately $19.00 per barrel of oil and $2.00 per mcf gas for
the nine months ended April 30, 1997.
The Company reported a net loss of $(75,240) for the nine months
ended April 30, 1998, compared to a net income of $93,587 for the
nine months ended April 30, 1997. This is primarily due to the
sale of various oil and gas interests which facilitated the
reduction in debt, as well as, to lower oil and gas revenues for
the nine months ended April 30, 1998, and an increase in interest
expense accrued but unpaid to the Company's lender, as compared
with the nine months ended April 30, 1997. Oil and gas revenues
approximated $389,000 for the nine months ended April 30, 1998,
while revenues for the same period in 1997 approximated $830,000.
Production and operating expenses for the nine months ended April
30, 1998, were approximately $145,000, as compared to the nine
months ended April 30, 1997, which were approximately $255,000.
General and administrative expenses for the nine months ended
April 30, 1998, decreased by approximately $166,000 from the
corresponding nine months ended April 30, 1997.
Series A Preferred Stock Cumulative Dividends In Arrears
The terms of the Series A Shares provide that no dividends may be
paid on the Common Shares or Series C or E Preferred Shares while
dividends on the Series A Shares are in arrears. The Company has
not paid any dividends on the Series A Shares since June 30,
1988. As of April 30, 1998, dividends on the Company's Series A
Shares are in arrears $20.24 per share for a total of
$12,133,502.
9
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
10
<PAGE>
SIGNATURES
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.
CASPEN OIL, INC.
June 19, 1998 By:/s/ Gary N. Davis
Gary N. Davis,
Treasurer
11
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000095254
<NAME> CASPEN OIL INC
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> APR-30-1998
<CASH> 262,173
<SECURITIES> 0
<RECEIVABLES> 95,482
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 362,574
<PP&E> 19,732,146
<DEPRECIATION> 17,180,802
<TOTAL-ASSETS> 3,724,045
<CURRENT-LIABILITIES> 1,132,856
<BONDS> 0
600,000
425,000
<COMMON> 210,922
<OTHER-SE> (589,259)
<TOTAL-LIABILITY-AND-EQUITY> 3,724,045
<SALES> 388,662
<TOTAL-REVENUES> 567,742
<CGS> 145,191
<TOTAL-COSTS> 642,982
<OTHER-EXPENSES> 809,325
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (884,565)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
