-----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, GlCQQwSDvOUd2HzqMJHQH5alhlAKWZp0+1AmtLMYEoEalJ7MGG6YiNYPNopjSlQ8 0I4aStZR72VexNKb1KSvTQ== 0000029504-99-000003.txt : 19990205 0000029504-99-000003.hdr.sgml : 19990205 ACCESSION NUMBER: 0000029504-99-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOL RESOURCES INC CENTRAL INDEX KEY: 0000029504 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 820219465 STATE OF INCORPORATION: WY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08447 FILM NUMBER: 99520888 BUSINESS ADDRESS: STREET 1: 13636 NEUTRON RD CITY: DALLAS STATE: TX ZIP: 75244 BUSINESS PHONE: 2146615869 MAIL ADDRESS: STREET 2: 13636 NEUTRON RD CITY: DALLAS STATE: TX ZIP: 752444410 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) Quarterly Report Pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter 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: 0-8447 DOL RESOURCES, INC. (Exact Name of Registrant as specified in its Charter) Wyoming 82-0219465 (State of other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 13636 Neutron Road, Dallas, Texas 75244 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number (Area code (214) 661 5869) Indicate by check mark whether 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 such shorter period that 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 each of the Issuer's Classes of Common Stock, as of the close of the period covered by this report: Common - $0.01 Par Value - 20,671,254 shares as of September 30, 1998. DOL RESOURCES, INC. Index to Form 10-Q for Fiscal Quarter ended September 30, 1998. Page No. PART 1 - Financial Information Condensed Unaudited Balance Sheet, September 30, 1998 and December 31, 1997 2 - 3 Condensed Unaudited Statement of Income, Nine Months ended September 30, 1998 and 1997 4 Condensed Unaudited Statement of Shareholder's Equity Nine Months ended September 30, 1998 and 1997 5 Condensed Unaudited Statement of Changes in Financial Position Nine-Months Ended September 30, 1998 and 1997 5 Summary of Significant Accounting Policies and Notes to Condensed Unaudited Financial Statements 6-11 Management's Discussion and Analysis of Condensed Financial Condition and Results of Operations 12 PART 11 - Other Information Item 6(b) - Exhibits and Reports on Form 8-K 13 Signature Pursuant to General Instruction E 13 All other items called for by the instructions are omitted as they are inapplicable, not required, or the information is included in the condensed financial statements or notes thereto. -1- DOL RESOURCES, Inc. BALANCE SHEET (Unaudited) ASSETS Sept. 30 Dec. 31 1998 1997 CURRENT ASSETS Cash $ 953 $ 1,201 Marketable securities, at lower or aggregate cost or market, cost $24,175 in 1998 and 1997 - 1,924 1,924 Trade accounts receivable, less allowance for doubtfiul accounts of $1,711, ($1,711 in 1997 Note 1) 31,105 25,685 Due from related parties-Note 3 433,694 436,222 Prepaid Expenses 37,500 37,500 Total Current Assets 505,176 502,532 PROPERTIES - Using full costing- Production payment 100,000 100,000 Exploration, acquisition & development, cost, net of allowance for reduction of oil & gas assets of $137,083 In 1985 1,649,985 1,653,485 Total cost 1,749,985 1,753,485 Less accumulated depletion 1,340,065 1,327,756 409,920 425,729 AUTOMOBILES, FURNITURE & FIXTURES At cost - Note 1 Furniture and fixtures 6,476 6,476 Less accumulated depreciation 5,667 5,181 Net Furniture and Fixtures 809 1,295 OTHER ASSETS Undeveloped coal royalties- 10,156 10,155 Other accounts receivable- 57,716 62,140 Total Other Assets 67,872 72,296 TOTAL ASSETS 983,777 1,001,852 DOL Resources, Inc. BALANCE SHEET Sept. 30 December 31, 1998 1997 CURRENT LIABILITIES Notes payable - Note 2 408,000 337,310 Accounts payable 30,231 28,151 Accrued expenses -0- -0- Total current liabilities 438,231 436,151 LONG-TERM LIABILITIES Accounts payable 331,176 335,599 Total Long-Term Liabilities 331,176 335,599 STOCKHOLDERS' EQUITY Capital Stock, common, $.01 par value: Authorized 25,000,000 shares issued and outstanding 20,671,234 shares at 9-30-98 and 12-31-97 206,713 206,713 Capital in excess of par value 1,502,741 1,502,741 Accumulated deficit (1,494,709) (1,487,977) Treasury Stock ( 375) ( 375) 214,370 230,102 TOTAL 983,777 1,001,852 DOL RESOURCES, INC. CONDENSED UNAUDITED STATEMENT OF INCOME 3 Months 9 Months Ended Ended 9-30-98 9-30-98 9-30-97 Operating Revenue: Oil and Gas Sales 7,650 35,745 67,580 Interest and other income 1,948 5,844 7,036 Total 9,598 41,589 74,616 Operating Expenses: Depletion,depreciation and amortization 4,265 12,795 10,752 General and administrative 72 217 934 Interest 6,658 20,313 3,083 Consulting & Mgmt Fees -0- -0- 7,900 Production Taxes 847 3,898 7,309 Lease Operating Expense 10,083 20,098 24,032 Lease Rentals -0- -0- 261 Total Operating Expenses 21,928 57,321 54,271 Net Income (Loss) before income taxes (12,327) (15,732) 20,345 Provision for income taxes (note 6) -0- -0- -0- Net Income (Loss) (12,327) (15,732) 20,345 Weighted Average Number of Common Shares Outstanding 20,671,254 20,671,254 20,671,254 Earnings (Loss) for Common Share $(.0006) $ (.0008) $ .0010 The accompany notes are an integral part of this statement. DOL RESOURCES, INC. CONDENSED UNAUDITED STATEMENT OF STOCKHOLDER'S equity Nine Months ended September 30, 1998 and 1997 Capital Stock Capital in Number of Excess of Accumulated Treasury Shares Amount Par Value Deficit Stock Balance at 1/1/98 20,671,254 206,713 1,502,741 (1,478,977) ( 375) Net Income -0- -0 -0- ( 15,732) - 0- Balance at 9/30/98 20,671,254 206,713 1,502,741 (1,494,709) ( 375) Balance at 1/1/97 20,671,254 206,713 1,502,741 (1,487,958) ( 375) Net Income -0- -0- -0- 20,345 -0- Balance at 9/30/97 20,671,254 206,713 1,502,741 (1,467,613) ( 375) CONDENSED UNAUDITED STATEMENT OF CHANGES IN FINANCIAL POSITION Nine Months Ended: Sept. 30, 1998 Sept. 30, 1997 Financial Resources Provided By Operations: Net Income (15,732) 20,345 Items not requiring outlay of working Capital: Depletion, Deprec. and Amortization 12,795 10,752 Working Capital provided by operations ( 2,937) 31,097 Reduction in Properties 3,500 961 Reduction in other Assets 4,424 7,166 Increase in long term debt -0- -0- Total Resources 4,987 39,224 Financial Resources Applied to: Retirement of long-term debt 4,423 7,166 Increase in Properties -0- -0- Total 4,423 7,166 Net Increase (Decrease) in Working Capital 564 32,058 Working Capital at beginning of period 66,381 ( 9,441) Working Capital at end of period 66,945 22,617 DOL Resources, Inc. NOTES TO FINANCIAL STATEMENTS NOTE 1. Summary of Significant Accounting Policies Organization and Operations The Company was organized on November 6, 1973 under the laws of the State of Wyoming. Its primary activities have been the acquisition of interests in various oil and gas properties, coal properties and exploration for oil and gas. Allowance for Bad Debts: Accounts receivable from participants in oil and gas exploration are estimated to be at least 95% collectible, consequently a 5% allowance for bad debts has been established against those receivables. Receivables from the sale of oil and gas are fully collectible, as accruals are based primarily on collection of oil and gas sales subsequent to year-end. Properties: The Company uses the full cost method of accounting for oil and gas acqusition, exploration and development costs. The Company has operations only within the continental United States and consequently has only one cost center. All costs associated with property acquisition, exploration and development activities are capitalized within the cost center. No costs related to production, general corporate overhead or similar activities are capitalized. Capitalized costs within the cost center are amortized on the units-of-production basis using proved oil and gas reserves. The carrying value of capitalized cost is limited to the sum of (A) the present value of future net revenues from estimated production of proved oil and gas reserves, plus (B) the cost of properties not being amortized, plus (C) the lower cost or estimated fair value of unproved properties included in the costs being amortized less (D) income tax effects related to differences between book and tax basis of the properties involved. For the year ended December 31, 1985, total capitalized costs exceeded the cost center ceiling by $137,083. The excess was expense to current operations. DOL RESOURCES, INC. NOTES TO FINANCIAL STATEMENTS (CON'T). Based on project gross revenues over the next 5 years, it is managements opinion that properties are currently over-valued by $200,000. NOTE 1: Sales and abandonments of oil and gas properties are accounted for as adjustment of capitalized costs, with no gain or loss recognized. Drilling in progress is included in the cost center with depletion being calculated on all costs with cost center. Earnings per Common Share Earnings per common share were computed by dividing the net loss by the weighted average number of common shares outstanding during the year. NOTE 2. Notes Payable Notes payable consist of the following: Monthly Interest Due Within Due After Installment Rate One Year One Year 1998 Note 1 due 7-14-99 $408,000 $ -0- Gateway National Bank. Interest only payable monthly at 6.64% per annum over a year of 360 days. NOTE 3. Related Party Transactions The Company ended 1997 with accounts receivable from Glauber Management Corp. (the parent company) of $351,194. The balance of this account on September 30, 1998 was $352,194. NOTE 4. Income Taxes The Company as of December 31, 1997 had a net operating income loss carryover for income tax purposes of approximately $740,000. The carryover is available to offset taxable income of future years and expires as follows: 1998 241,000 1999 14,000 2000 109,000 2001 40,000 2002 48,000 2003 3,000 2004 34,000 2007 14,000 2008 19,000 2009 1,000 2011 217,000 740,000 The Company also had approximately $17,000 of investment tax credits available for carryover against future federal income tax liabilities. For financial reporting purposes, the net operating loss has been used to offset prior deferred income taxes. To the extend that the net operating loss carryovers are utilized for income tax purposes in future years, the deferred income taxes eliminated to give credits related to timing differences of the current year not recorded, will be reinstated. Because of timing differences related principally to intangible drilling costs, cumulative losses for income tax reporting purposes exceed those reported by approximately $576,000. Because of the uncertainly as to realization,no future tax benefits are recognized at December 31, 1997. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONDENSED UNAUDITED STATEMENT OF INCOME The following is Management's discussion and analysis of certain significant factors which have affected the Company's earnings during the period included in the accompanying Condensed Unaudited Statement of Income. A summary of the period to period changes in the principal items included in the Condensed Unaudited Statement of Income is as shown below: Nine Months ending Sept. 30 1998 and 1997 Net Sales (31,835) Interest and Other Income ( 1,192) General and Administrative ( 717) Depletion, Depreciation and Amortization 2,043 Consulting & Management Fees ( 7,900) Interest Expense 17,230 Net Income (Loss) (36,077) Oil and gas sales decreased as compared to the same period last year due to a decrease in production and some increase in prices. The recurring cash flow for the first nine months of 1998 was approximately $6,100 per month. Consulting and management fee expenses decreased significantly due to the payment of accumulated fees in the prior year. Interest expense decreased due to restructuring of debt. Management expects a slow upward trend in oil and gas prices to continue beyond $20.00 per Bbl. This would not only increase revenues and cash flow but would enhance our ability to raise much needed funds for drilling additional wells. It is the opinion of management that a minimum of $25.00 per Bbl. oil is needed in order to expand operations and replace depleted reserves. Meanwhile a continuing effort is being made to increase production, and consequently revenues by seeking out and negotiating joint-venture recompletion projects where positive reserve information exists. Management is also seeking out possible merger opportunities. There have been several negotiations with private companies desiring to go public. One is currently progressing and stockholders will be advised of any definitive agreement. Review of Independent Public Accountants: The information contained in substantially all financial statements accompanying this report were supplied by internal accountant of registrant. Although such statements have not been reviewed by registrant's certified public accountant they are available for review. Office Information No reports on Form 8-K were filed by the Company in the quarter for which this report is filed. 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 there unto duly authorized. DOL RESOURCES, INC. /s/ Fred M. Updegraff Fred M. Updegraff Vice President, Treasurer and Principal Accounting Officer Date: October 31, 1998 EX-27 2
5 9-MOS DEC-31-1998 SEP-30-1998 953 1,924 32,816 1,711 0 505,176 1,756,461 1,345,732 983,777 438,231 0 0 0 206,713 7,657 983,777 35,745 41,589 0 37,008 0 0 20,313 (15,732) 0 (15,732) 0 0 0 (15,732) 0 0
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