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
January 31, 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 January 31, 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
January 31, 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
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)
January 31, July 31,
ASSETS 1998 1997
CURRENT ASSETS
Cash and cash equivalents $ 115,907 $ 112,514
Accounts rec., trade 80,679 179,785
Other 2,797 1,633
----------- -----------
199,383 293,932
----------- -----------
PROPERTY AND EQUIPMENT, AT COST
Oil and gas properties, full cost
method of accounting 19,713,189 19,763,820
Other 102,061 302,061
----------- -----------
19,815,250 20,065,881
Less accum. depl., deprec., and amort. 17,152,890 17,252,217
------------ -----------
2,662,360 2,813,664
------------ -----------
OTHER
Investments 810,127 810,127
------------ -----------
TOTAL ASSETS $ 3,671,870 $ 3,917,723
============ ===========
1
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 1,280,738 $ 1,350,738
Accounts payable, trade 598,726 670,069
Accrued interest 955,821 893,777
Accrued expenses 374,354 281,235
------------ -----------
3,209,639 3,195,819
LONG-TERM LIABILITIES
--- ---
------------ -----------
TOTAL LIABILITIES 3,209,639 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 (21,825,852)(21,566,179)
----------- -----------
471,941 731,614
Less treasury stock 9,710 9,710
---------- -----------
TOTAL SHAREHOLDERS' EQUITY 462,231 721,904
---------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 3,671,870 $ 3,917,723
============ ============
See accompanying notes to condensed consolidated financial
statements.
2
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended
January 31,
------------------
1998 1997
REVENUE
Oil and gas sales $ 108,713 $ 278,313
Interest income 1,426 588
Other 7,678 14,299
--------- ---------
117,817 293,200
--------- ---------
COSTS AND EXPENSES
Production and operating 65,836 110,420
Depl., deprec., and amort. 26,997 51,798
General and administrative 133,388 172,615
Interest expense 37,737 510
--------- ---------
263,958 335,343
--------- ---------
NET LOSS (146,141) (42,143)
DIVIDEND REQUIREMENTS ON PREFERRED STOCK 269,775 269,775
--------- ---------
LOSS APPLICABLE TO COMMON STOCK $(415,916) $(311,918)
========= =========
LOSS PER COMMON SHARE $ (.02) $ (.01)
========= =========
See accompanying notes to condensed consolidated financial
statements.
3<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Six months ended
January 31,
------------------
1998 1997
REVENUE
Oil and gas sales $ 248,344 $ 504,830
Interest income 2,848 1,225
Other (3,994) 27,778
--------- ---------
247,198 533,833
--------- ---------
COSTS AND EXPENSES
Production and operating 101,815 166,345
Depl., deprec., and amort. 70,673 104,040
General and administrative 271,826 318,346
Interest expense 62,556 1,563
--------- ---------
506,870 590,294
--------- ---------
NET LOSS (259,672) (56,461)
DIVIDEND REQUIREMENTS ON PREFERRED STOCK 539,550 539,550
--------- ---------
LOSS APPLICABLE TO COMMON STOCK $(799,222) $(596,011)
========= =========
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
========= ========== ========== ========= =========== ============= ========= ======== =========
</TABLE>
5
CASPEN OIL, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six months ended
January 31,
------------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(259,672) $(56,461)
Adjustments to reconcile net income
to net cash used in operating activities:
Depletion, depreciation, and amortization ( 99,329) 104,040
Issuance of common stock --- 33,000
Disposition of junked asset 200,000 ---
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 99,106 ( 63,803)
(Increase) decrease in other assets ( 1,164) 8,889
Decrease in notes/accts. payable (141,343) ( 73,033)
Increase (decrease) in accrued expenses 155,163 84,883
---------- --------
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES ( 47,239) 37,515
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposition of property and
equipment 54,652 4,401
Purchase of property and equipment ( 4,020) ( 7,729)
---------- --------
NET CASH PROVIDED BY (USED FOR)INVESTING
ACTIVITIES 50,632 ( 3,328)
--------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,393 34,187
CASH AND CASH EQUIVALENTS, BEG. 112,514 94,131
--------- ---------
CASH AND CASH EQUIVALENTS, END $ 115,907 $128,318
========= =========
See accompanying notes to condensed consolidated financial
statements.
6
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Six Months Ended January 31, 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 January 31, 1998, and the results of operations
for the six month periods ended January 31, 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) Notes payable
Note payable to Lender with interest at prime
plus 1%, due in September, 2004; collateralized
by 100% of the outstanding stock of a
wholly-owned subsidiary, Summit Overseas
Exploration, Inc. $1,245,333
Non-interest bearing payable due in July, 1998; 10,000
Note payable with interest at 8%; to be paid from
net revenue interest cash flow from an oil and
gas property; unsecured 25,405
----------
$1,280,738
==========
The Lender note of $1,245,333 is in default at January 31, 1998,
and may be demanded in total, thus is classified as a current
liability. The default interest rate is an additional 4%.
7
CASPEN OIL, INC.
AND SUBSIDIARIES
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 six months ended January 31, 1998, the working
capital deficit increased from July 31, 1997, by approximately
$108,000. This increase is due largely to the pay down of
certain outstanding trade payables from July 31, 1997, offset by
an increase in accrued expenses and collections of certain trade
receivables.
The Company's current liabilities exceed current assets by
$3,010,256 at January 31, 1998. The working capital deficit at
January 31, 1998, is due primarily to the $1,245,333 of the
Company's debt due to its Lender (See Note 2) and to outstanding
trade and note payables of an approximate $634,000, as well as
accrued interest and expenses approximating $1,330,000.
The Company anticipates that with its current cash position and
with a timely and satisfactory resolution of its litigation it
will have sufficient working capital to cure its Lender default
and to meet its obligations throughout the remaining fiscal year.
Results of Operations
Oil and gas revenues were lower in the six months ended January
31, 1998, as compared to the six months ended January 31, 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 six months of fiscal year 1998 as
compared to the same period in fiscal year 1997.
The Company experienced slightly lower gas prices in the six
months ended January 31, 1998, compared with those received in
the same period last year, and significantly lower oil prices
were experienced in the first six months of fiscal year 1998 when
compared with the same period last year. Average oil and gas
prices received in the six months ended January 31, 1998, were
approximately $16.60 per barrel of oil and $2.40 per mcf gas as
compared to approximately $22.00 per barrel of oil and $2.50 per
mcf gas for the six months ended January 31, 1997.
8
<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of
Operation, Continued
Results of Operations (Continued)
The Company reported a net loss of $(259,672) for the six months
ended January 31, 1998, compared to a net loss of $(56,461) for
the six months ended January 31, 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 six months ended January 31, 1998, and an increase in
interest expense accrued but unpaid to the Company's lender, as
compared with the six months ended January 31, 1997. Oil and gas
revenues approximated $248,000 for the six months ended January
31, 1998, while revenues for the same period in 1997 approximated
$504,000. Production and operating expenses for the six months
ended January 31, 1998, were approximately $102,000, as compared
to the six months ended January 31, 1997, which were
approximately $166,000.
General and administrative expenses for the six months ended
January 31, 1998, decreased by approximately $46,500 from the
corresponding six months ended January 31, 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 January 31, 1998, dividends on the Company's Series A
Shares are in arrears $19.79 per share for a total of
$11,863,727.
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.
March 16, 1998 By:/s/ Gary N. Davis
Gary N. Davis,
Treasurer
11
11
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000095254
<NAME> CASPEN OIL INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 115,907
<SECURITIES> 0
<RECEIVABLES> 80,679
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 199,383
<PP&E> 19,815,250
<DEPRECIATION> 17,152,890
<TOTAL-ASSETS> 3,671,870
<CURRENT-LIABILITIES> 3,209,639
<BONDS> 0
600,000
425,000
<COMMON> 210,922
<OTHER-SE> (763,981)
<TOTAL-LIABILITY-AND-EQUITY> 3,671,870
<SALES> 248,344
<TOTAL-REVENUES> 247,198
<CGS> 101,815
<TOTAL-COSTS> 506,870
<OTHER-EXPENSES> 539,550
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62,556
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (799,222)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
