-----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, FpOOSjpVockfiDi+LidgstHEijcIDfiPjhNWm6es3pt1l5p91gXyV6kIf4Ya5Hze V11LSvE3L3mpKqOYUkygvQ== 0000095254-96-000020.txt : 19961211 0000095254-96-000020.hdr.sgml : 19961211 ACCESSION NUMBER: 0000095254-96-000020 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASPEN OIL INC CENTRAL INDEX KEY: 0000095254 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 751325831 STATE OF INCORPORATION: NV FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-05270 FILM NUMBER: 96678137 BUSINESS ADDRESS: STREET 1: 777 S WADSWORTH BLVD STREET 2: IRONGATE 3 STE 201 CITY: LAKEWOOD STATE: CO ZIP: 80226 BUSINESS PHONE: 3039870925 MAIL ADDRESS: STREET 1: IRONGATE 3 STE 201 STREET 2: 777 S WADSWORTH BLVD CITY: LAKEWOOD STATE: CO ZIP: 80226 FORMER COMPANY: FORMER CONFORMED NAME: SUMMIT ENERGY INC DATE OF NAME CHANGE: 19880907 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN OIL FIELDS INC DATE OF NAME CHANGE: 19701207 10QSB 1 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 October 31, 1996 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 October 31, 1996, the Registrant had 18,092,200 shares of Common Stock outstanding. Transitional Small Business Disclosure Format: Yes ; No X CASPEN OIL, INC. AND SUBSIDIARIES FORM 10-QSB October 31, 1996 PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets. . . . . . . . . . . 1-2 Condensed Consolidated Statements of Operations. . . . . . . 3 Condensed Consolidated Statement of Shareholders' Equity . . 4 Condensed Consolidated Statements of Cash Flows. . . . . . . 5 Notes to Condensed Consolidated Financial Statements . . . 6-7 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 CASPEN OIL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) October 31, July 31, ASSETS 1996 1996 CURRENT ASSETS Cash and cash equivalents $ 66,727 $ 94,131 Accounts rec., prepaid exp. net of allowance for doubtful accounts 133,324 130,985 Other 1,603 1,603 ----------- ----------- 201,654 226,719 ----------- ----------- PROPERTY AND EQUIPMENT, AT COST Oil and gas properties, full cost method of accounting 19,869,745 19,873,617 Other 302,061 302,061 ----------- ----------- 20,171,806 20,175,678 Less accum. depl., deprec., and amort. 17,058,667 17,006,425 ------------ ----------- 3,113,139 3,169,253 ------------ ----------- OTHER Investments 833,520 833,520 Notes receivable, related party 66,622 66,622 Other 8,382 8,832 ------------ ----------- 908,524 908,974 ------------ ----------- TOTAL ASSETS $ 4,223,317 $ 4,304,946 ============ =========== 1 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 1,547,500 $ 1,547,500 Accounts payable 710,485 747,918 Accrued expenses 609,768 616,167 Note payable, related party 26,521 50,000 Note payable, other 10,000 10,000 ------------ ----------- TOTAL CURRENT LIABILITIES 2,904,274 2,971,585 LONG-TERM LIABILITIES Note payable 10,000 10,000 Other 59,400 59,400 ------------ ----------- TOTAL LIABILITIES 2,973,674 3,040,985 ------------ ----------- 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 180,922 180,922 Additional paid-in capital 21,091,871 21,091,871 Accumulated deficit (21,038,440)(21,024,122) ----------- ----------- 1,259,353 1,273,671 Less treasury stock 9,710 9,710 ---------- ----------- TOTAL SHAREHOLDERS' EQUITY 1,249,643 1,263,961 ---------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 4,223,317 $ 4,304,946 ============ =========== See accompanying notes to condensed consolidated financial statements. 2 CASPEN OIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited) Three months ended October 31, ------------------ 1996 1995 REVENUE Oil and gas sales $ 226,517 $ 194,464 Overhead income 13,356 11,541 Interest income 637 3,986 Other 123 38,785 --------- --------- 240,633 248,776 --------- --------- COSTS AND EXPENSES Production and operating 55,925 117,080 Depl., deprec., and amort. 52,242 48,681 General and administrative 145,731 74,584 Interest expense 1,053 - --------- --------- 254,951 240,345 --------- --------- NET INCOME (LOSS) (14,318) 8,431 DIVIDEND REQUIREMENTS ON PREFERRED STOCK 269,775 269,775 --------- --------- LOSS APPLICABLE TO COMMON STOCK $(284,093) $(261,344) ========= ========= LOSS PER COMMON SHARE $ (.02) $ (.01) ========= ========= See accompanying notes to condensed consolidated financial statements. 3 CASPEN OIL, INC. AND SUBSIDIARIES Condensed Consolidated Statement of Shareholders' Equity (Unaudited) Preferred Stock Common Stock Additional Accumu- Total paid-in lated Treasury shareholders' Series Shares Amount Shares Amount capital deficit stock equity ------ ------- -------- ---------- ---------- ----------- ------------- ----------- ------------ Balance at July 31, 1996 A 600,000 $600,000 18,092,222 $ 180,922 $21,091,871 $(21,024,122) $( 9,710) $1,263,961 C 300,000 300,000 E 125,000 125,000 Net loss for the three months ended October 31, 1996 (14,318) (14,318) Balance at October 31, 1996 Series A 600,000 $600,000 18,092,222 $ 180,922 $21,091,871 $(21,038,440) $( 9,710) $1,249,643 Series C 300,000 $300,000 ---------- ----------- ------------- ------------ ---------- Series E 125,000 $125,000 --------
4 CASPEN OIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) Three months ended October 31, ------------------ 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $(14,318) $ 8,431 Adjustments to reconcile net income to net cash used in operating activities: Depletion, depreciation, and amortization 52,242 48,681 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable and prepaid expenses (2,339) 137,807 (Increase) decrease in other assets 450 (24,399) Decrease in notes/accts. pay./accrued exp. ( 67,311) (350,242) ---------- --------- NET CASH USED IN OPERATING ACTIVITIES ( 31,276) (179,722) ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposition of property and equipment 8,356 914 Purchase of property and equipment, net of property sales and well credits ( 4,484) (142,919) ---------- --------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,872 (142,005) --------- ---------- DECREASE IN CASH AND CASH EQUIVALENTS ( 27,404) (321,727) CASH AND CASH EQUIVALENTS, BEG. 94,131 464,876 --------- --------- CASH AND CASH EQUIVALENTS, END $ 66,727 $ 143,149 ========= ========= See accompanying notes to condensed consolidated financial statements. 5 CASPEN OIL, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Three Months Ended October 31, 1996 (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 October 31, 1996, and the results of operations for the three month periods ended October 31, 1996, and 1995. 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. (2) Daiwa Bank, Ltd. Loan On December 14, 1990, the Company entered into an amended and restated loan agreement with its principal lender, Daiwa Bank, Ltd. ("Daiwa"), formerly Lloyd's Bank plc, and satisfied all technical deficiencies as they existed prior to the renegotiation. At the request of Daiwa, the Company sold property, which was mortgaged to Daiwa, for approximately $5,200,000. From the proceeds of the sale, Daiwa received the total $5,200,000. Daiwa applied $4,700,000 to the reduction of principal. Simultaneously, the Company executed a 30-month extension note in the amount of $2,000,000, with the guarantee by Daiwa that, upon payment of $500,000 in June 1993, the note would be renewed or restructured. Daiwa recognized that the Company would be unable to make the $500,000 principal payment in June 1993 and therefore returned $500,000 from the December 1990 sale of property to the Company. In June 1993, after the Company paid interest for thirty months of approximately $425,000, Daiwa refused to accept the $500,000 principal reduction payment offered by the Company and refused to renew or restructure the note claiming no legal obligation to do so and citing its decision to divest itself of oil and gas loans. 6 CASPEN OIL, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Continued) Three Months Ended October 31, 1996 (2) Daiwa Bank, Ltd. Loan (Continued) On July 9, 1993, the Company received a demand notice from Daiwa for $1,997,500 in payment of the loan balance remaining on the $15,000,000 Credit Revolver established by Daiwa in late 1988. The interest rate on the revolving line of credit was prime plus one percent. On February 17, 1994, the Company sold certain oil and gas properties for $300,000 the proceeds of which were used to reduce the bank debt principal to $1,697,500. For years ended July 31, 1996 and 1995, the Company made payments of $50,000 and $100,000 to reduce the bank debt principal to $1,547,500 at July 31, 1996. The Company has attempted to resolve the loan dispute. The Company expects one of two developments between the Company and Daiwa in fiscal year 1997; (a) the Company and Daiwa reach an agreement to reduce to $50,000 the outstanding loan balance inclusive of interest, which, based on Generally Accepted Accounting Principles, would result in the Company recording the forgiveness of the debt. (However, there can be no assurance that Daiwa will agree to do so, nor can there be any assurance that Daiwa will not proceed to foreclose on the oil and gas properties which collateralize the debt); or (b) litigation results in which the Company will seek damages in excess of $10,000,000, and Daiwa asserts claims for default interest and attorneys' fees. Under the second alternative, the Company estimates legal fees in the range of $150,000 in fiscal year 1997. Generally accepted accounting principles require the Company to carry on its financial statements outstanding debt to Daiwa of $1,547,500 as of October 31, 1996, plus interest accrued to July 31, 1996, using prime plus one percent (9.25% at July 31, 1996), of $454,103, which is included in accrued expenses. However, the Company believes that Daiwa will reduce the $2,001,603 balance to $50,000, requiring the Company to record the forgiveness of the debt. This action on Daiwa's part will partially compensate the Company for damages created by Daiwa's breach of contract. 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 for the fiscal year ended July 31, 1996. Liquidity and Capital Resources During the three months ended October 31, 1996, the working capital deficit decreased from July 31, 1996, by approximately $(42,000). This decrease is due largely to the pay down of certain outstanding trade payables from July 31, 1996. The Company's current liabilities exceed current assets by $2,702,620 at October 31, 1996. The working capital deficit at October 31, 1996, is due primarily to the $1,547,500 of the Company's debt due to Daiwa Bank which matured in June 1993 (See Note 2) and to outstanding trade and note payables of an approximate $750,000, as well as accrued expenses approximating $150,000, including $75,000 in accrued salary, approximately $48,000 in accrued service and operations fees and other accrued expenses. The Company anticipates that given its current cash position and assuming a satisfactory resolution of the Daiwa matter, and further, and assuming no unexpected interruption of current cash flows or unanticipated expenditures, it will have sufficient working capital to meet its obligations throughout the remaining fiscal year. Results of Operations Oil and gas revenues were higher in the three months ended October 31, 1996, as compared to the three months ended October 31, 1995. This was primarily attributable to higher oil and gas prices in 1996. The Company experienced higher gas prices in the three months ended October 31, 1996, compared with those received in the same period last year, and slightly higher oil prices were experienced in the first three months of fiscal year 1996 when compared with the same period last year. Average oil and gas prices received in the three months ended October 31, 1996, were approximately $19.85 per barrel of oil and $1.85 per MCF gas as compared to approximately $16.00 per barrel of oil and $1.35 per MCF gas for the three months ended October 31, 1995. 8 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 $(14,318) for the three months ended October 31, 1996, compared to a net income of $8,431 for the three months ended October 31, 1995. This is primarily due to lower oil and gas revenues and comparatively higher production and operating expenses for the three months ended October 31, 1995, as compared with the three months ended October 31, 1996, combined with a beginning of fiscal year 1996 reversing entry of trade accounts payable that did not occur in the beginning of fiscal 1997, the effect of which caused general and administrative costs to be significantly lower than normal for the three months ended October 31, 1995. Oil and gas revenues approximated $227,000 for the three months ended October 31, 1996, while revenues for the same period in 1995 approximated $194,000. Production and operating expenses for the quarter ended October 31, 1996, were approximately $56,000, as compared to the quarter ended October 31, 1995, which were approximately $117,000. The decrease in lease operating expenses to 25 percent of oil and gas sales from 60 percent generally reflects the activities detailed above with respect to the increase in oil and gas revenues for the three months ended October 31, 1996. General and administrative expenses for the three months ended October 31, 1996, increased by approximately $71,000 from the corresponding three months ended October 31, 1995, due to an adjustment made at the beginning of fiscal year 1996 as explained above. 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 October 31, 1996, dividends on the Company's Series A Shares are in arrears $17.54 per share for a total of $10,514,852. 9 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 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. December 9, 1996 By:/s/ Gary N. Davis Gary N. Davis, Treasurer 11 EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-QSB
5 0000095254 CASPEN OIL INC 3-MOS JUL-31-1996 AUG-01-1996 OCT-31-1996 66,727 0 134,927 0 0 201,654 20,171,806 17,058,667 4,223,317 2,904,274 0 600,000 425,000 180,922 43,721 4,223,317 226,517 240,633 55,925 254,951 269,775 0 0 0 0 0 0 0 0 (284,093) (.02) 0
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