-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/Q1tcBmNLB6NvWRUwdk3zLVKc++1peI/Kx4+IKQBRQtQ+kkDzz702h9wD3unLF5 VRCwUGy9NqnoGBctkN/PUA== 0000025743-01-500008.txt : 20010518 0000025743-01-500008.hdr.sgml : 20010518 ACCESSION NUMBER: 0000025743-01-500008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROFF ENTERPRISES INC CENTRAL INDEX KEY: 0000025743 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 870233535 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16731 FILM NUMBER: 1642509 BUSINESS ADDRESS: STREET 1: 621 17TH ST STREET 2: SUITE 830 CITY: DENVER STATE: CO ZIP: 80293 BUSINESS PHONE: 3033831555 MAIL ADDRESS: STREET 1: 621 17TH STREET, SUITE 830 STREET 2: SUITE 830 CITY: DENVER STATE: CO ZIP: 80293 FORMER COMPANY: FORMER CONFORMED NAME: CROFF OIL CO DATE OF NAME CHANGE: 19920703 10-Q 1 q10q331.txt FORM 10-Q. QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the period ended March 31, 2001 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: 100 CROFF ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Utah 87-0233535 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 621 17th St., Suite 830, Denver, Colorado 80293 (Address of principal executive offices) (Zip Code) (303) 383-1555 (Registrants telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report.) 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 has required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuers class of common stock, as of the latest practicable date: 526,060 shares, one class only as of May 1, 2001. INDEX INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q) TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE THREE MONTHS ENDED MARCH 31, 2001(UNAUDITED). PART I. FINANCIAL INFORMATION Page Number Balance Sheets as of December 31, 2000 and March 31, 2001 3&4 Statements of Operations for the Three Months Ended March 31, 2000 and 2001 5 Statements of Cash Flows for the Three Months Ended March 31, 2000 and 2001 6 Notes to unaudited Financial Statements 7 Managements Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION ITEM 6(b)Reports on Form 8-K 9 Signatures 9 Forward-looking statements in this report, including without limitation, statements relating to the Companys plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties; including without limitation to, the following: (i) the Companys plans, strategies, objective, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Companys plans and results of operations will be affected by the Companys ability to manage its growth and inventory (iii) other risks and uncertainties indicated from time to time in the Companys filings with the Securities and Exchange Commission. Neither the Securities and Exchange Commission nor any other regulatory body takes any position as to the accuracy of forward-looking statements. PART I: FINANCIAL INFORMATION CROFF ENTERPRISES, INC. BALANCE SHEET (Unaudited) Dec. March 31, 31, 2000 2001 CURRENT ASSETS: Cash and Cash Equivalents $191,634 $238,725 Marketable equity securities 6.125 5,750 Accounts receivable: Oil and gas purchasers 88,242 88,181 Refundable income taxes 3,500 5,378 Total current assets 289,501 338.034 PROPERTY AND EQUIPMENT, AT COST: Oil & gas properties, successful efforts method: Proved properties 611,960 617,165 Unproved properties 97,102 97,102 709,062 714,267 Less accumlulated depletion & depreciation (370,391) (380,391) Net property and Equipment 338,671 333,876 Total Assets $628,172 $671,910 PART I: FINANCIAL INFORMATION CROFF ENTERPRISES, INC. BALANCE SHEET (Unaudited) Dec. March 31, 31, 2000 2001 CURRENT LIABILITIES: Accounts payable $ 10,838 $ 16,958 Accrued liabilities 5,368 3,892 Total current liabilities 16,206 20,850 STOCKHOLDERS EQUITY: Class A preferred stock, no par value; 5,000,000 shares, none issue Class B Preferred stock, no par value; 1,000,000 authorized 500,659 shares (2000 and 2001) issued and 475,359 475,359 outstanding Common stock, $.10 par value 20,000,000 shares authorized, 589,143 shares issued (2000 and 2001) 58,914 58,914 Capital in excess of par value 415,797 415,797 Accumulated deficit (255,153) (215,859) Less treasury stock at cost, 62,883 shares (2000) and 63,083 shares (2001) (82,951) (83,151 Total stockholders equity 611,966 651,060 Total liabilities & equity $ $ 628,172 671,910 CROFF ENTERPRISES, INC. Statement of Operations For the three months ending March 31, 2000 and 2001 (Unaudited) 2000 2001 REVENUE: Oil and gas sales $ 68,266 $ 122,361 Other income 1,647 3,026 Total revenue 69,913 125,387 COSTS AND EXPENSES: Lease operating expense 19,821 46,752 Depreciation and depletion 10,500 10,000 General and administrative 23,862 23,341 Rent Expense Related Party 4,800 6,000 Total cost and 58,983 86,093 expenses Net income 10,930 $ 39,294 $ Net income applicable to 9,300 $ 37,883 preferred stock $ Net income applicable to common 1,630 $ 1,411 shareholders $ Basic and diluted net per $ * $ 01 common share *-Less than .01 per share CROFF ENTERPRISES, INC. Statement of Cash Flows For the three months ending March 31, 2000 and 2001 (Unaudited) 2000 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ $ 10,930 39,294 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and depletion 10,500 10,000 Change in assets and liabilities Accounts receivable (3,417) (1,817) Other assets (625) (5,205) Accounts payable 4,154 6,120 Accrued liabilities 1,965 (1,476) Marketable securities (1,125) 375 Total adjustments 11,452 7,997 Net cash provided by operating activities 22,382 47,291 CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (200) Net cash used in financing (200) Increase in cash 22,382 47,091 Cash and cash equivalents at beginning of period $ 57,716 $ 191,634 Cash and cash equivalents at end of period $ 80,098 $ 238,725 CROFF ENTERPRISES, INC. NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2001 PART I BASIS OF PREPARATION. The condensed financial statements for the three month periods ended March 31, 2001 and 2000 in this report have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission and reflect, in the opinion of the management, all adjustments necessary to present fairly the results of the operations of the interim periods presented herein. Certain reclassifications have been made to the prior years financial statements to conform to the 2001 presentation. Certain information in footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Company believes the disclosures presented herein are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2000, which report has been filed with the Securities and Exchange Commission, and is available from the Company. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Three-Month period Ended March 31, 2001 as Compared to the Three-Month Period Ended March 31, 2000 OIL AND GAS OPERATIONS Oil and gas revenue, about equally divided between royalties and working interest, for the three months ended March 31, 2001, was $122,361 compared to $68,266 for the quarter ending March 31, 2000. The primary cause for this increase was the large run up in natural gas prices, which increased from the range of $2.50 per MCF in 2000, to as high as $9.00 per MCF in 2001. This increase in natural gas prices has reversed but the current prices are in the $4 to $5 an MCF range. Oil prices also increased slightly from one year ago. Natural gas production is up about five percent and oil production declined a few percent, so production is essentially stable. Production costs, which includes lease operating expenses, unsuccessful drilling expense, and all production related taxes, for the three months ended March 31, 2001, increased significantly to $46,752 when compared to the production costs of $19,821 incurred during the quarter ended March 31, 2000. The primary reason for this increase was the expenditure of $22,000 incurred in a five percent participation in an unsuccessful new well in Oklahoma. The well was completed but has not produced. The remaining increase is due to higher production taxes due to higher prices and inflation in oil field costs. OTHER INCOME During the three month period ended March 31, 2001, the Company had other income of $3,026. This was a increase from $1,647 in the same period in 2000. The increase was due to higher interest on larger deposits. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses for the quarter ending March 31, 2001, were $23,341 plus rent expense of $6,000 for a total of $29,341 compared to $23,862 plus $4,800 rent expense for a total of $28,622 in the same period in 2000. The rent expense from a related party increased from $1,600 a month to $2,000 a month beginning in 2001. The overhead expenses were stable and should remain stable this year. FINANCIAL RESOURCES AND LIQUIDITY As of March 31, 2001, the Companys current assets exceeded current liabilities by $317,184. As of December 31, 2000, the Companys current assets exceeded current liabilities by $273,295. The Companys current ratio is approximately 16:1. The Company is currently looking to purchase producing oil and gas assets after rebuilding its cash reserves last year. The Company expects to remain in a strong liquid position. PART II. OTHER INFORMATION ITEM 6(B) REPORTS ON FORM 8-K The registrant has filed no reports on Form 8-K for the period ending March 31, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. REGISTRANT: CROFF ENTERPRISES,Inc By: Gerald L. Jensen Chief Executive Officer and Chief Financial Officer By: Beverly Licholat Chief Accounting Officer Dated: -----END PRIVACY-ENHANCED MESSAGE-----