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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: June 30, 2000
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File: 0-8447
DOL RESOURCES, INC.
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(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
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(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: NO: X
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 - 25,000,000 shares as of June 30, 2000.
DOL RESOURCES, INC.
Index to Form 10-Q for Fiscal Quarter ended June 30, 1999
Page No.
PART 1 - Financial Information
Condensed Unaudited Balance Sheet, June 30, 2000
and December 31, 1999 3
Condensed Unaudited Statement of Income,
Six Months ended June 30, 2000 and 1999 4
Condensed Unaudited Statement of Shareholder's
Equity Six Months ended June 30, 2000 and 199 5
Condensed Unaudited Statement of Changes in
Financial Position Six-Months Ended
June 30, 2000 and 1999 5
Summary of Significant Accounting Policies and
Notes to Condensed Unaudited Financial Statements 6 - 8
Management's Discussion and Analysis of Condensed
Financial Condition and Results of Operations 9
PART 11 - Other Information
Item 6(b) - Exhibits and Reports on Form 8-K 10
Signature Pursuant to General Instruction E 10
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.
2
DOL RESOURCES, Inc.
BALANCE SHEET
(Unaudited)
ASSETS
June 30 Dec. 31
2000 1999
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CURRENT ASSETS
Cash $ -0- -0-
Marketable securities, at
lower or aggregate cost
or market 400,000 400,000
Due from related parties-Note 3 105,347 11,482
Prepaid Expenses -0- -0-
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Total Current Assets 505.347 411,482
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PROPERTIES - Using full costing-
Note 1
Production payment 100,000 100,000
Exploration, acquisition &
development, cost, net of
allowance for reduction of
oil & gas assets of $137,083
in 1985 1,998,262 2,057,928
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Total cost 2,098,262 2,157,928
Less accumulated depletion 1,421,617 1,395,617
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676,645 762,311
TOTAL ASSETS 1,181,992 1,173,793
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Total Liabilities -0- -0-
STOCKHOLDERS' EQUITY
Capital Stock, common,
$.01 par value:
Authorized 25,000,000 shares
issued and outstanding
25,000,000 shares at 6-30-00
and 12-31-99
and 25,000,000 shares at 6-30-99 250,000 207,835
Capital in excess of
par value 2,526,770 2,526,770
Accumulated deficit (1,594,778) (1,602,977)
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Total Stockholders Equity (1,181,992) (1,173,793)
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TOTAL LIABILITIES & EQUITY 1,181,992 1,173,793
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3
DOL RESOURCES, INC.
CONDENSED UNAUDITED STATEMENT OF INCOME
3 Months 6 Months
Ended Ended
6-30-00 6-30-00 6-30-99
----------- ----------- -----------
Operating Revenue:
Oil and Gas Sales 51,008 79,984 15,495
Interest and other income -0- -0- 3,896
----------- ----------- -----------
Total 51,008 79,984 19,391
Operating Expenses:
Depletion,depreciation
and amortization 13,000 26,000 5,594
General and administrative -0- 500 2,715
Interest -0- -0- 13,650
Consulting & Mgmt Fees 4,090 8,181 -0-
Production Taxes 4,192 6,560 1,654
Lease Operating Expense 14,306 30,544 11,241
Lease Rentals -0- -0- -0-
----------- ----------- -----------
Total Operating Expenses 35,588 71,785 34,854
Net Income (Loss) before income
taxes 15,420 8,199 (15,463)
Provision for income taxes
(note 4) -0- -0- -0-
----------- ----------- -----------
Net Income (Loss) 15,420 8,199 (15,463)
Weighted Average Number of Common
Shares Outstanding 25,000,000 25,000,000 21,392,712
20,671,254
Earnings (Loss) for Common Share $ .0006 $ .0003 $ (.00072)
----------- ----------- -----------
The accompany notes are an integral part of this statement.
4
DOL RESOURCES, INC.
CONDENSED UNAUDITED STATEMENT OF STOCKHOLDER'S equity
Six Months ended June 30, 1998 and 1999
Capital Stock Capital in
Number of Excess of Accumulated Treasury
Shares Amount Par Value Deficit Stock
------------- ------------- ------------- ------------- -------------
Balance at
1/1/00 25,000,000 250,000 2,526,770 (1,602,977) -0-
Net Income -0- -0 -0- 15,420 -0-
------------- ------------- ------------- ------------- -------------
Balance at
6/30/00 25,000,000 250,000 2,526,770 (1,594,778) -0-
------------- ------------- ------------- ------------- -------------
Balance at
1/1/99 20,783,529 207,835 1,501,618 (1,546,947) (375)
Net Income -0- -0- -0- 15,463 -0-
------------- ------------- ------------- ------------- -------------
Treas.. Stock
Canceled (375) 375
ELGT Stock
Exchange 4,216,471 42,165 357,835
Parent Con-
tribution 667,692
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Balance at
6/30/99 25,000,000 250,000 2,526,770 (1,562,410) -0-
CONDENSED UNAUDITED STATEMENT
OF CHANGES IN FINANCIAL POSITION
Six Months Ended:
June 30,2000 June 30,1999
Financial Resources Provided
By Operations:
Net Income 8,199 (15,463)
Items not requiring outlay of working Capital:
Depletion, Deprec. and
Amortization 26,000 5,594
------------ ------------
Working Capital provided by
operations 34,199 (9,869)
Decease (Increase) in Properties 59,666 (407,619)
Reduction in other Assets -0- 67,168
Increase in long term debt -0- -0-
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Total Resources 93,865 (350,320)
Financial Resources Applied to:
Retirement of long-term debt -0- (330,472)
Increase in common stock -0- 42,165
Increase in contributed stock -0- 1.025,528
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Net Increase (Decrease) in
Working Capital 93,865 386,901
Working Capital at begin of period 411,482 13,099
Working Capital at end of period 505,347 400,000
5
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 (Note 8)
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 90% collectible, consequently a 10% 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
acquisition, 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.
6
DOL RESOURCES, INC
NOTES TO FINANCIAL STATEMENTS (CONT.)
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. Related Party Transactions
--------------------------
The Company ended 1999 with accounts receivable from Glauber Management
Corp. of $11,482. The balance of this account on June 30, 2000 was
$105,347.
NOTE 3. Income Taxes
------------
The Company as of December 31, 1999 had a net operating income loss
carryover for income tax purposes of approximately $557,000. The
carryover is available to offset taxable income of future years and
expires as follows:
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
2012 57,000
2013 15,000
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557,000
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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, 1999.
8
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:
Six Months
ending June 30,
2000 and 1999
---------------
Net Sales 64,489
Interest and Other Income (3,896)
General and Administrative (2,215)
Depletion, Depreciation
and Amortization 20,409
Consulting & Management Fees 8,181
Interest Expense (13,650)
Net Income (Loss) 23,662
Oil and gas sales decreased as compared to the same period last year
due to a decrease in the price per BBL of oil and normal decline in production.
The recurring cash flow for the first six months of 2000 was
approximately $21,200 per month. Consulting and Management fee expenses
increased due to the payment to Glauber Management effective 7-1-99. Interest
expense decreased due to the assumption of bank debt by Glauber Management.
General and Administrative expenses decreased due to lack of insurance and
transfer fees.
Management expects a upward trend in oil and gas prices to level off
and hold steady at around $25,00 pr barrel through most of 2000. This not only
increases revenues and cash flow but would enhances our ability to raise much
needed funds for drilling and reworking 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. 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 has been seeking out possible merger opportunities. There
have been several negotiations with private companies desiring to go public. In
preparation for an impending merger Glauber Management, by an agreement dated
June 30, 1999 assumed all liabilities and selected assets of the company in
exchange for contributed capital. Also, Oklahoma oil properties held by Glauber
Management were contributed to the Company
9
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
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No reports on Form 8-K were filed by the Company in the quarter for which
this report is filed.
SIGNATURES
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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: August 12, 2000
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