-----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, AxQmBeqpEmtFJFp8Uhg8a5TJedVh1TcjmoIE/SSOQqdKcSvH0npJ7nWGi9tQkOEQ r8bBNJIzC8rrF1JOjpNu7A== 0000879162-99-000009.txt : 19990518 0000879162-99-000009.hdr.sgml : 19990518 ACCESSION NUMBER: 0000879162-99-000009 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AURORA ENERGY LTD CENTRAL INDEX KEY: 0000879162 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 911780941 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-29722 FILM NUMBER: 99625999 BUSINESS ADDRESS: STREET 1: 3760 NORTH US 31 SOUTH STREET 2: P O BOX 961 CITY: TRAVERSE CITY STATE: MI ZIP: 49685-0961 BUSINESS PHONE: 6169410073 MAIL ADDRESS: STREET 1: 3760 NORTH US 31 SOUTH STREET 2: P O BOX 961 CITY: TRAVERSE CITY STATE: MI ZIP: 49685-9861 10QSB 1 ELINK\FILING\10QSBSEC US SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 1999 Commission file number: 000-29722 Aurora Energy, Ltd. (Exact name of small business issuer as specified in its charter) NEVADA 91-1780941 (State or other jurisdiction (IRS Employer of incorporation) Identification No.) 3760 N. US-31 South, Traverse City, MI 49684 (Address of principal executive offices) (616) 941-0073 (Issuer's telephone number) N/A (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes x No APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of ech of the issuer's classes of common equity, as of the latest practicable date: 8,691,697 Transitional Small Business Disclosure Format (check one); Yes No X Part I - Financial Information Item 1 - Financial Statements AURORA ENERGY, LTD. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
March 31, December 31 ASSETS 1999 1998 Current assets Cash and cash equivalents $ 273,320 $ 13,967 Accounts receivable 282,516 415,732 Prepaid expenses 6,534 9,802 Total current assets 562,370 439,501 Oil and gas properties, using full cost accounting Properties not subject to amortization 764,764 1,818,043 Properties being amortized 1,327,824 233,831 Total 2,092,588 2,051,874 Less accumulated amortization 39,403 25,379 Oil and gas properties, net 2,053,185 2,026,495 Investment in oil and gas partnerships 132,885 138,026 Property and equipment, net 62,098 60,592 Total assets 2,810,538 $ 2,664,614
See accompanying notes.
March 31, December 31, LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998 Current liabilities Accounts payable $ 532,231 $ 626,074 Program designated funds 98,751 -- Current portion of capital lease obligations 58,626 14,739 Short-term bank borrowings 620,000 610,000 Accrued expenses 30,457 23,212 Total current liabilities 1,340,065 1,274,025 Capital lease obligations, net of current portion 220,480 19,087 Notes payable - affiliates 6,640 -- Total liabilities 1,567,185 1,293,112 Stockholders' equity Common stock, $.001 par value; 500,000,000 shares authorized; 8,691,697 shares issued and outstanding 8,692 8,692 Additional paid-in capital 1,869,073 1,869,073 Accumulated deficit (634,412) (506,263) Total stockholders' equity 1,243,353 1,371,502 Total liabilities and stockholders' equity $ 2,810,538 $ 2,664,614
See accompanying notes. AURORA ENERGY, LTD. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
1999 1998 Revenues Oil and gas sales $ 31,395 $ 604 Equity in loss of investee partnerships (5,142) (46,349) Interest income 1,098 7,542 Other revenue 24,351 (3,396) Total revenues 51,702 (41,599) Expenses General and administrative 100,500 147,196 Production and lease operating 43,967 2,523 Depreciation and amortization 16,334 2,196 Interest 19,050 1,498 Total expenses 179,851 153,413 Net loss $ (128,149) $ (195,012) Net loss per basic and diluted common share $ (.01) (.02)
See accompanying notes. AURORA ENERGY, LTD. and CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Common Stock Paid in Accumulated Shares Amount Capital Deficit Totals Balances at December 31, 1998 8,691,697 $8,692 $1,869,073 $(506,263) $1,371,502 Net loss -- -- -- (128,149) (128,149) Balance at March 31, 1999 8,691,697 $8,692 $1,869,073 $(634,412) $1,243,353
See accompanying notes. AURORA ENERGY, LTD. and CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998
1999 1998 Cash flows from operating activities: Net loss $(128,149) $(195,012) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 16,334 2,196 Equity in loss of investee partnership 5,142 46,349 Changes in operating assets and liabilities net of effects in 1999 from purchase of Consolidated Exploration Co., LLC and Indigas, LLC: Accounts receivable 133,920 (162,315) Prepaid expenses 3,268 3,666 Accounts payable (93,843) 132,291 Accrued expense 7,245 435 Net cash used in operating activities (56,083) (172,390) Cash flows from investing activities Capital expenditures for oil and gas Properties (377,428) (37,356) Capital expenditures for investee partnerships -- (80,773) Proceeds from sale of oil and gas properties 336,383 -- Cash acquired from purchase of Consolidated -- -- Exploration Co., LLC and Indigas, LLC 104,656 -- Capital expenditures for property and Equipment (117) (5,360) Net cash provided by (used in) investing Activities 63,494 (123,489) Cash flows from financing activities Proceeds from the sale of common stock -- 198,170 Short term bank borrowings 10,000 -- Proceeds of capital lease cash draws 250,000 -- Advances from investors -- 95,600 Payments made to reduce capital lease Obligations (8,058) (2,282) Net cash provided by financing activities 251,942 291,488 Net increase in cash and cash equivalents 259,353 (4,391) Cash and cash equivalents, beginning of period 13,967 518,408 Cash and cash equivalents, end of period $273,320 $514,017
See accompanying notes. AURORA ENERGY, LTD. and SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998, the Consolidated Statements of Operations for the three month periods ending March 31, 1999 and March 31, 1998, the Consolidated Statement of Changes in Stockholder's Equity and the Consolidated Statements of Cash Flows for the three month periods ended March 31, 1999 and March 31, 1998 have been prepared by the Company. In the opinion of management, all adjustments (which include only reclassifications and normal recurring adjustments) necessary to present fairly the balance sheet, results of operations, changes in stockholder's equity, and cash flows at March 31, 1999 and for all periods presented, have been made. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 1998 Annual Report. The results of operations for the three-month period ended March 31, 1999 are not necessarily indicative of the operating results for the full year. Loss Per Share Loss per share is computed at March 31, 1999 and March 31, 1998 using the weighted average number of common shares outstanding during the period (8,691,697 and 8,563,582 respectively) determined pursuant to Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share". This Statement requires a dual presentation and reconciliation of "basic" and "diluted" per share amounts. Diluted reflects the potential dilution of all common stock equivalents. Since the assumed exercise of common stock options would be antidilutive, such exercise is not assumed for purposes of determining diluted loss per share. Accordingly, diluted and basic per share amounts are equal. 2. ACCOUNTING AND FINANCIAL REPORTING The Company no longer considers itself in the developmental stage as the Paxton Quarry Project, of which the Company owns a 29% working interest, began revenue distributions during the first quarter of 1999. As this project is part of the planned principal operations of the Company, developmental stage presentation of accounting data is no longer applicable. AURORA ENERGY, LTD. and SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES Effective January 1, 1999, the Company acquired from principals William Deneau and John Miller, Jr., 100% of their membership interests in Consolidated Exploration Co, LLC (Conexco) and Indigas Energy, LLC (Indigas) in exchange for the issuance of 1.44% overriding royalty interests in the Company's Crossroads Project. Since the purchased entities were wholly owned by Deneau and Miller, and thus remained under the same control after acquisition by the Company as before acquisition, the acquisitions were accounted for in a manner similar to a pooling of interests. Notes payable of $3,320 each were issued to Deneau and Miller which equaled the book value of the purchased entities and quantified the value of the royalty interests. The following presents the balance sheets of Conexco and Indigas as of the date of their acquisition by the Company at January 1, 1999:
Conexco Indigas ASSETS January 1, 1999 January 1, 1999 Totals Current assets Cash $ 88,004 $ 16,652 $ 104,656 Accounts receivable -- 703 703 Total current assets 88,004 17,355 105,359 Other assets Organizational costs (net) 32 -- 32 Total assets $ 88,036 $ 17,355 $ 105,391 LIABILITIES Program designated funds (equals total liabilities) $ 82,100 $ 16,651 $ 98,751 Member's equity: Membership contributions 500 500 1,000 Distributions (91,967) (18,800) (110,767) Retained earnings 97,403 19,004 116,407 Total member's equity 5,936 704 6,640 Total liabilities and member's equity $ 88,036 $ 17,355 $ 105,391
Form 10-QSB for the three month period ended March 31, 1999 Part I, Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS Results of Operations During the first quarter of 1999, the Company operations have focused on bringing the various projects and programs that it had developed in 1998 into production. The Michigan Antrim production in the Paxton Quarry project began distributing revenues in the first quarter. The Company owns 29% interest in the project. The Paxton Quarry production revenues are a significant step in covering our general and administrative costs. The project is expanding to 16 wells, however, which is requiring additional investment. The Company continued developing the Crossroads project with additional leasing, right of way acquisitions, arranging financing of the facilities and gathering system and making contracts with transportation systems to get the gas to market. The Company currently owns 50% of the project and is the operator. Liquidity and Financial Condition The Company's financing efforts in the first quarter of 1999 were concentrated on procuring the funds necessary to bring the Crossroads Project on line. In that regard, the Company executed capital lease agreements for the Crossroads central processing facility and gathering system totaling $350,000. As of March 31, 1999, the Company had drawn $250,000 of the $350,000. The final $100,000 was received April 15, 1999. In addition, the Company sold 17% of its working interest in the Crossroads project for $336,383 cash, reducing the Company?s interest in the project to 50%. The Company rescinded a letter of credit previously issued as a blanket drilling bond to the State of Michigan which was held against the National City line of credit, providing a net $70,000 addition to the available line of credit since the first of the year. The capital leases, sale of working interests and the freeing up of the previously unavailable credit line assure that the Company will be able to complete Phase One of the Crossroads project. And despite some first quarter delays in acquiring right-of-way for the pipeline connecting the Company's Crossroads facility to NIPSCO's major pipeline, the project is currently scheduled to begin gas sales this June. The first quarter of 1998 saw the Company with considerably smaller liabilities and cash of over $500,000. Over the last twelve months the Company has invested the cash in various projects, as well as, covering general and administrative expenses. In April of 1998, the Company established a line of credit with National City Bank in the amount of $750,000. The funds obtained through the line of credit were primarily used in acquiring mineral leases and funding exploratory projects in Ohio, Indiana and Michigan. The Company contracted to acquire from affiliates the interests in two small companies (Indigas Energy, L.L.C. and Consolidated Exploration, L.L.C.) which own and manage leaseholds in Indiana and Kentucky. Approximately 200,000 acres of leasehold in a primarily New Albany Shale prospect area were acquired. Both entities are Michigan limited liability companies. During this quarter, the Company's transfer agent was acquired by American Securities Transfer & Trust, Inc. (ASTT) located in Denver, Colorado. ASTT has been in business since 1969 and are the ninth largest US transfer agent. They are owned by Scotiabank Group, one of the largest international banks in Canada. This change should bring an improvement in service to the Company and its stockholders. Form 10-QSB for the three month period ended March 31, 1999 Part II, Item 1 LEGAL PROCEEDINGS There are no pending legal proceedings. Part II, Item 2 CHANGES IN SECURITIES There are no changes in securities. Part II, Item 3 DEFAULTS UPON SENIOR SECURITIES N/A Part II, Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders during the first quarter of 1999. Part II, Item 5 OTHER INFORMATION None Part II, Item 6 INDEX TO EXHIBITS (2) Plan of acquisition None (3) (i) Restated Articles of Incorporation Incorporated by reference from Form 10-QSB For period ended September 30, 1997 (ii) Bylaws Incorporated by reference from Form 10-QSB For period ended September 30, 1997 (4) Instruments defining the rights of Security holders Incorporated by reference from Form 10-SB (10) Material contracts Incorporated by reference from Form 10-SB P Equipment Lease Agreement, Gage Leasing P Equipment Lease Agreement, Major Gathering Co. P Acquisition of Consolidated Exploration, L.L.C. P Acquisition of Indigas Energy, L.L.C. P Master Purchase/Sale Agreement with Northern Indiana Public Service Company P Agreement to Acquire Working Interest - Dubuc P Agreement for Crossroads Project - Burkhardt (11) Statement regarding computation of per Share earnings None (15) Letter on unaudited interim financial Information None (18) Letter on change in accounting Principles None (22) Published report regarding matters Submitted to vote None (24) Power of Attorney None (27) Financial Data Schedule (99) Additional Exhibits None SIGNATURES In accordance with the requirements on the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 14, 1999 AURORA ENERGY, LTD. BY: /s/ William W. Deneau William W. Deneau, President [ARTICLE] 5 [MULTIPLIER] 1 [PERIOD-TYPE] 3-MOS [FISCAL-YEAR-END] DEC-31-1998 [PERIOD-END] MAR-31-1999 [CASH] 273,320 [SECURITIES] 0 [RECEIVABLES] 282,516 [ALLOWANCES] 0 [INVENTORY] 0 [CURRENT-ASSETS] 562,370 [PP&E] 74,020 [DEPRECIATION] 11,954 [TOTAL-ASSETS] 2,810,538 [CURRENT-LIABILITIES] 1,340,065 [BONDS] 227,120 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 8,692 [OTHER-SE] 1,869,073 [TOTAL-LIABILITY-AND-EQUITY] 2,810,538 [SALES] 31,395 [TOTAL-REVENUES] 51,702 [CGS] 43,967 [TOTAL-COSTS] 43,967 [OTHER-EXPENSES] 116,834 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 19,050 [INCOME-PRETAX] (128,149) [INCOME-TAX] 0 [INCOME-CONTINUING] 0 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] (128,149) [EPS-PRIMARY] (.01) [EPS-DILUTED] (.01)
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