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
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
--------------
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 0 - 24012
DEEP WELL OIL & GAS, INC.
(formerly ALLIED DEVICES CORPORATION)
-------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 13 - 3087510
- --------------------------------------------- ----------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
31 Walmer Rd., Unit 6, Toronto, Ontario, M5R 2W7, Canada
--------------------------------------------------------
(Address of principal executive offices - Zip code)
(416) 928 - 3095
----------------
(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 Exchange Act 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 requirements for
the past 90 days.
Yes No X
----- ----
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 X No ___
------
As of October 30, 2003, the Registrant had approximately 2,168,292 shares
of Common Stock, $.001 par value per share outstanding. This figure accounts
for, or takes into consideration, a reverse split of the Company's common stock
that occurred and became effective on November 21, 2003.
DEEP WELL OIL & GAS, INC.
-------------------------
INDEX
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PART I. FINANCIAL INFORMATION 4
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 31, 2003
(unaudited) and September 30, 2002 5
Condensed Consolidated Statements of Operations (unaudited) for
the three months and six months ended March 31, 2003 and 2002 6
Condensed Consolidated Statements of Cash Flows (unaudited) for
the three months and six months ended March 31, 2003 and 2002 7
Notes to Condensed Consolidated Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS 14
ITEM 4. CONTROLS AND PROCEDURES 14
PART II. OTHER INFORMATION 14
ITEM 1. LEGAL PROCEEDINGS 15
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
On February 19, 2003, Deep Well Oil & Gas, Inc. (formerly Allied Devices
Corporation) (the "Company" or the "Registrant") filed a Petition for Relief
under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy
Court in and for the Eastern District of New York titled In re: Allied Devices
Corporation, et al., Chapter 11, Case No. 03-80962-511 ("the Bankruptcy
Action"). See Form 8-K filed by the Company on February 20, 2003 for additional
information.
The Company's fiscal year-end is September 30 and the Company filed a Form 10-K
for the fiscal year-end September 30, 2002. On March 20, 2003, the Company's
auditors at the time, BDO Seidman, LLP, declined to continue as auditors of the
Company.
As a result of the Bankruptcy Action, the Registrant was unable to file
quarterly reports for the quarters ended December 31, 2002, March 31, 2003 and
June 30, 2003 with the Securities and Exchange Commission on a timely basis as
required under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
On September 10, 2003, after notice to all creditors and a formal hearing, U.S.
Bankruptcy Judge Melanie L. Cyganowski issued an "Order Confirming Liquidating
Plan of Reorganization" in the Bankruptcy Action (hereinafter "Bankruptcy
Order"). In conjunction with that Bankruptcy Order, the Company's liabilities,
among other things, were paid off and extinguished.
The Company emerged from Chapter 11 on September 11, 2003. The Bankruptcy Order,
among other things, implements a change of control whereby a group of new
investors, took control of the Company.
Upon emergence from Chapter 11 proceedings, the Company adopted fresh-start
reporting in accordance with the American Institute of Certified Public
Accountants Statement of Position 90-7, Financial Reporting By Entities in
Reorganization Under the Bankruptcy Code (SOP 90-7). In connection with the
adoption of fresh-start reporting, a new entity has been deemed created for
financial reporting purposes. For financial reporting purposes, the Company
adopted the provisions of fresh-start reporting effective September 12, 2003.
All periods presented prior to September 12, 2003, including the information
presented in this quarterly report, have been designated Predecessor Company.
The Company is filing this Form 10-Q for the quarter ended March 31, 2003 in
order to become current in its filing obligations under the Exchange Act. THE
FINANCIAL STATEMENTS IN THIS FILING ARE FOR THE PREDECESSOR COMPANY. READERS ARE
CAUTIONED THAT THE PREDECESSOR COMPANY IS NO LONGER IN OPERATION AND THE
INFORMATION PRESENTED IN THESE FINANCIAL STATEMENTS DOES NOT REFLECT THE CURRENT
BUSINESS OF THE COMPANY. SEE "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" BELOW
FOR ADDITIONAL DETAILS.
4
Deep Well Oil & Gas, Inc.
(formerly Allied Devices Corporation)
Consolidated Balance Sheets
Predecessor Predecessor
Company Company
Mar. 31 Sep. 30
2003 2002
- --------------------------------------------------------------------------------------------------------
Assets
Current
Cash $ 1,599,462 $ 1,536,299
Accounts receivable, net 1,996,928 2,291,625
Inventories 885,415 5,620,833
Prepaid expenses and other assets 643 299,511
Income tax refund receivable - 294,000
- --------------------------------------------------------------------------------------------------------
Total current assets 4,482,448 10,042,268
- --------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 6,978,541 9,368,554
Goodwill, net - 5,230,653
Other intangibles, net - 50,000
Other - 63,768
- --------------------------------------------------------------------------------------------------------
Total assets $ 11,460,989 $ 24,755,243
========================================================================================================
Liabilities and Stockholders' (Deficit) Equity
Current
Accounts payable $ 2,802,714 $ 2,017,381
Accrued expenses and other current liabilities 877,300 1,184,787
Current portion of long-term debt and capital lease obligations - 16,478,259
Prepetition liabilities subject to compromise 22,362,632 -
- --------------------------------------------------------------------------------------------------------
Total current liabilities 26,042,646 19,680,427
- --------------------------------------------------------------------------------------------------------
Long-term debt and accrued interest - 5,911,033
Other liabilities - 435,980
- --------------------------------------------------------------------------------------------------------
Total liabilities 26,042,646 26,027,440
- --------------------------------------------------------------------------------------------------------
Stockholders' (Deficit) Equity
Capital stock 5,049 5,049
Paid-in capital 3,520,970 3,520,970
Retained deficit (17,978,505) (4,669,045)
- --------------------------------------------------------------------------------------------------------
Subtotal (14,452,486) (1,143,026)
Treasury stock, at cost (129,171) (129,171)
- --------------------------------------------------------------------------------------------------------
Total stockholders' deficit (14,581,657) (1,272,197)
- --------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' deficit $ 11,460,989 $ 24,755,243
========================================================================================================
5
Deep Well Oil & Gas, Inc.
(formerly Allied Devices Corporation)
Consolidated Statements of Operations
Predecessor Predecessor Predecessor Predecessor
Company Company Company Company
Three months Three months Six months Six months
ended ended ended ended
Mar. 31 Mar. 31 Mar. 31 Mar. 31
2003 2002 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Net sales $ 3,501,617 $ 4,520,406 $ 7,336,132 $ 8,653,928
Cost of sales 3,141,619 3,745,289 6,700,503 7,134,899
Inventory write-downs - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Gross profit 359,998 775,117 635,629 1,519,029
Selling, general and administrative expenses 1,266,390 1,560,793 2,517,356 3,097,835
Write-downs - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations (906,392) (785,676) (1,881,727) (1,578,806)
- ------------------------------------------------------------------------------------------------------------------------------------
Other (income) expense - - - -
Interest expense (net) 139,627 378,605 527,986 818,590
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before reorganization items and income taxes (1,046,019) (1,164,281) (2,409,713) (2,397,396)
- ------------------------------------------------------------------------------------------------------------------------------------
Reorganization items
Inventory write-downs - - 4,231,528 -
Write-downs (recoveries) (693,924) - 6,668,219 -
- ------------------------------------------------------------------------------------------------------------------------------------
(693,924) - 10,899,747 -
Income taxes - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (352,095) $ (1,164,281) $ (13,309,460) $ (2,397,396)
====================================================================================================================================
Net income (loss) per share - basic $ (0.07) $ (0.24) $ (2.69) $ (0.48)
====================================================================================================================================
Basic weighted average number of shares
of common stock outstanding 4,948,392 4,948,392 4,948,392 4,948,392
====================================================================================================================================
Net income (loss) per share - diluted $ (0.07) $ (0.24) $ (2.69) $ (0.48)
====================================================================================================================================
Diluted weighted average number of shares
of common stock outstanding 4,948,392 4,948,392 4,948,392 4,948,392
====================================================================================================================================
6
Deep Well Oil & Gas, Inc.
(formerly Allied Devices Corporation)
Consolidated Statements of Cash Flows
Predecessor Predecessor Predecessor Predecessor
Company Company Company Company
Three months Three months Six months Six months
ended ended ended ended
Mar. 31 Mar. 31 Mar. 31 Mar. 31
2003 2002 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
Net (loss) income (352,095) (1,164,281) (13,309,460) (2,397,396)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 342,457 746,640 837,864 1,495,478
Allowance for doubtful accounts -- -- -- --
Provision (benefit) for income taxes -- -- -- --
Write-downs of assets and goodwill -- -- 11,593,671 --
Recoveries of liabilities (693,924) -- (693,924) --
Loss (gain) on sale of equipment -- -- -- --
Recoveries of debt and capital lease obligations -- -- -- --
Unrealized loss (gain) on interest rate collar -- -- (30,939) --
Changes in assets and liabilities, net of effects from acquisitions:
Decrease (increase) in:
Accounts receivable (270,529) (321,062) 294,697 (440,334)
Inventories 529,251 196,020 503,890 279,735
Prepaid expenses and other current assets 55,378 (15,960) (157,065) 156,647
Income tax refund receivable 289,699 -- 294,000 --
Other assets -- -- -- --
(Decrease) increase in: -- -- -- --
Accounts payable and accrued expenses 398,952 566,325 861,820 999,959
Other liabilities (8,962) (45,439) -- (32,726)
- -----------------------------------------------------------------------------------------------------------------------------------
Total adjustments 642,322 1,126,524 13,504,014 2,458,759
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 290,227 (37,757) 194,554 61,363
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures -- (10,915) (9,640) (13,791)
Proceeds from sale of equipment -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities -- (10,915) (9,640) (13,791)
- -----------------------------------------------------------------------------------------------------------------------------------
Financing Activities
Increase (decrease) in bank borrowings -- -- -- 200,000
Principal payments on long-term debt and capital lease obligations (117,382) (4,246) (121,751) (56,077)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (117,382) (4,246) (121,751) 143,923
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 172,845 (52,918) 63,163 191,495
Cash, beginning of period 1,426,617 299,135 1,536,299 54,722
- -----------------------------------------------------------------------------------------------------------------------------------
Cash, end of period 1,599,462 246,217 1,599,462 246,217
===================================================================================================================================
7
DEEP WELL OIL & GAS, INC.
(FORMERLY ALLIED DEVICES CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS
Deep Well Oil & Gas, Inc. (formerly Allied Devices Corporation) (the "Company")
is a company that intends to engage in the oil and gas exploration business. At
this time, the Company is in discussions to acquire properties or projects
involving "heavy oil" projects.
Prior to September 12, 2003, the Predecessor Company, known as Allied Devices
Corporation, was engaged primarily in the manufacture and distribution of
standard and custom precision mechanical assemblies and components throughout
the United States.
2. REORGANIZATION
On February 19, 2003, the Company filed a Petition for Relief under Chapter 11
of the U.S. Bankruptcy Code in the United States Bankruptcy Court in and for the
Eastern District of New York titled In re: Allied Devices Corporation, et al.,
Chapter 11, Case No. 03-80962-511 ("the Bankruptcy Action").
On July 23, 2003, a Liquidating Plan of Reorganization ("Plan") was filed and
submitted to the Bankruptcy Court for the Court's approval. See Form 8-K/A filed
by the Company on November 25, 2003 for additional information.
On September 10, 2003, after notice to all creditors and a formal hearing, U.S.
Bankruptcy Judge Melanie L. Cyganowski issued an "Order Confirming Liquidating
Plan of Reorganization" in the Bankruptcy Action (hereinafter "Bankruptcy
Order"). In conjunction with that Bankruptcy Order, the Company's liabilities,
among other things, were paid off and extinguished.
The Bankruptcy Order, among other things, implements a change of control whereby
Champion Equities, a Utah limited liability company ("Champion"), a Mr. David
Roff, of Toronto, Canada ("Roff"), and a group of new investors, took control of
the Company. The principal provisions of the Plan, which are authorized and
implemented by the Bankruptcy Order, are the following, which is not an
exhaustive list thereof:
a) the termination of present management and the present Board of Directors
and appointment of Mr. David Roff in their place and stead;
8
b) giving a Utah entity known as Champion Industries ("Champion"), the power
and authority to appoint such other directors, in addition to Mr. Roff, as
Champion, in its sole discretion deems appropriate;
c) the reverse split of the Company's common capital stock 1-for-30 on the
basis of 5,048,782 shares issued and outstanding immediately prior to the
Bankruptcy Order;
d) authorizing Champion to amend the Company's Articles of Incorporation and
Bylaws to (i) effect a quasi-reorganization for accounting purposes, (ii)
provide the maximum indemnification or other protections to the Company's
officers and directors that is allowed under applicable law, (iii) conform
to the provisions of the Plan and the corollary Confirmation Order, (iv)
set the authorized stock of the Company, post-reverse split, at fifty
million (50,000,000) common capital shares; and (v) take all action
necessary and appropriate to carry out the terms of the Plan;
e) authorizing Champion, without solicitation of or notice to shareholders, to
issue (i) 2,000,000 post-reverse split shares of the Company's common stock
to the Company's new management, and (ii) 4,000,000 post-reverse split
shares, legend free, in the sole and unfettered discretion of Champion;
f) the Company's Board of Directors, was authorized, without seeking or
obtaining shareholder approval to take any and all actions necessary or
appropriate to effectuate amendments to the Company's Certificate of
Incorporation and/or Bylaws called for under the Plan and the Company's
Board of Directors and officers was authorized to execute, verify,
acknowledge, file and publish any and all instruments or documents that may
be required to accomplish the same; and
g) the Company's charter is to be amended in conformance with applicable
bankruptcy rules and the amended charter or bylaws shall, among other
provisions, authorize the issuance of any new shares while simultaneously
prohibiting the issuance of nonvoting equity securities to the extent
required by section 1123(a)(6) of the United States Bankruptcy Code.
After the entry of the Bankruptcy Order, the Company drafted and submitted a
form of Restated and Amended Articles of Incorporation to the Secretary of State
of Nevada implementing the foregoing, including but not limited to other
provisions required of the Company under the Bankruptcy Order.
3. FRESH START REPORTING
Upon emergence from Chapter 11 proceedings, the Company adopted fresh-start
reporting in accordance with the American Institute of Certified Public
Accountants Statement of Position 90-7, Financial Reporting By Entities in
Reorganization Under the Bankruptcy Code (SOP 90-7). In connection with the
adoption of fresh-start reporting, a new entity has been deemed created for
9
financial reporting purposes. For financial reporting purposes, the Company
adopted the provisions of fresh-start reporting effective September 12, 2003.
All periods presented prior to September 12, 2003, including the financial
information contained in this quarterly report, have been designated Predecessor
Company.
In adopting the requirements of fresh-start reporting as of September 12, 2003,
the Company was required to value its assets and liabilities at fair value and
eliminate its accumulated deficit as of September 12, 2003. The Company emerged
from Chapter 11 proceedings with no assets and liabilities pursuant to the
Bankruptcy Order and its balance sheet at that time is stated as such.
4. PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Predecessor Company as of March 31, 2003 and 2002. All significant intercompany
balances and transactions have been eliminated in consolidation.
5. REORGANIZATION ITEMS
As a result of the Bankruptcy Action, the Company has written down its assets to
their estimated realizable values at March 31, 2003. Accordingly, the Company
recognized reorganization charges for asset write-downs during the three and six
months ended March 31, 2003 as follows:
Three months ended Six months ended
March 31, 2003 March 31, 2003
- ------------------------------------------------------- ----------------------
Write downs:
Inventory - $4,231,528
Prepaid expenses and other assets - 479,139
Property, plant and equipment - 1,602,351
Goodwill and other intangibles - 5,280,653
- ---------
- $11,593,671
=== ===========
As a result of the Bankruptcy Action, the Company recognized recoveries of
certain liabilities for the three and six months ended March 31, 2003 as
follows:
10
Three months ended Six months ended
March 31, 2003 March 31, 2003
- ----------------------------------------------------------- -------------------
Recoveries:
Accrued expenses and other current
liabilities $288,883 $288,883
Other liabilities 405,041 405,041
------- -------
$693,924 $693,924
======== ========
As a result of the Bankruptcy Action, the Company has classified its secured and
unsecured debt, notes and capital lease obligations as prepetition liabilities
subject to compromise.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
All statements contained herein that are not historical facts, including, but
not limited to, statements regarding the Company's current business strategy,
the Company's projected sources and uses of cash, and the Company's plans for
future development and operations, are based upon current expectations. These
statements are forward-looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are the following: the
availability of sufficient capital to finance the Company's business plans on
terms satisfactory to the Company; competitive factors; changes in labor,
equipment and capital costs; changes in regulations affecting the Company's
business; future acquisitions or strategic partnerships; general business and
economic conditions; and factors described from time to time in the reports
filed by the Company with the Securities and Exchange Commission. The Company
cautions readers not to place undue reliance on any such forward-looking
statements, which statements are made pursuant to the Private Litigation Reform
Act of 1995 and, as a result, are pertinent only as of the date made.
REORGANIZATION
On February 19, 2003, the Company filed a Petition for Relief under Chapter 11
of the U.S. Bankruptcy Code in the United States Bankruptcy Court in and for the
Eastern District of New York titled In re: Allied Devices Corporation, et al.,
Chapter 11, Case No. 03-80962-511 ("the Bankruptcy Action").
On July 23, 2003, a Liquidating Plan of Reorganization ("Plan") was filed and
submitted to the Bankruptcy Court for the Court's approval. See Form 8-K/A filed
by the Company on November 25, 2003 for additional information, a document which
attaches a complete copy of the Plan as an exhibit.
On September 10, 2003, after notice to all creditors and a formal hearing, U.S.
Bankruptcy Judge Melanie L. Cyganowski issued an "Order Confirming Liquidating
Plan of Reorganization" in the Bankruptcy Action (hereinafter "Bankruptcy
Order"). In conjunction with that Bankruptcy Order, the Company's liabilities,
among other things, were paid off and extinguished. A copy of the Bankruptcy
Order is also attached to the Form 8-K/A filed by the Company on November 25,
2003 and therefore, reference is made to such filing.
11
The Bankruptcy Order, among other things, implements a change of control whereby
Champion Equities, a Utah limited liability company ("Champion"), a Mr. David
Roff, of Toronto, Canada ("Roff"), and a group of new investors, took control of
the Company. The principal provisions of the Plan, which are authorized and
implemented by the Bankruptcy Order, are the following, which is not an
exhaustive list thereof:
a) the termination of present management and the present Board of Directors
and appointment of Mr. David Roff in their place and stead;
b) giving a Utah entity known as Champion Industries ("Champion"), the power
and authority to appoint such other directors, in addition to Mr. Roff, as
Champion, in its sole discretion deems appropriate;
c) the reverse split of the Company's common capital stock 1-for-30 on the
basis of 5,048,782 shares issued and outstanding immediately prior to the
Bankruptcy Order;
d) authorizing Champion to amend the Company's Articles of Incorporation and
Bylaws to (i) effect a quasi-reorganization for accounting purposes, (ii)
provide the maximum indemnification or other protections to the Company's
officers and directors that is allowed under applicable law, (iii) conform
to the provisions of the Plan and the corollary Confirmation Order, (iv)
set the authorized stock of the Company, post-reverse split, at fifty
million (50,000,000) common capital shares; and (v) take all action
necessary and appropriate to carry out the terms of the Plan;
e) authorizing Champion, without solicitation of or notice to shareholders, to
issue (i) 2,000,000 post-reverse split shares of the Company's common stock
to the Company's new management, and (ii) 4,000,000 post-reverse split
shares, legend free, in the sole and unfettered discretion of Champion;
f) the Company's Board of Directors, was authorized, without seeking or
obtaining shareholder approval to take any and all actions necessary or
appropriate to effectuate amendments to the Company's Certificate of
Incorporation and/or Bylaws called for under the Plan and the Company's
Board of Directors and officers was authorized to execute, verify,
acknowledge, file and publish any and all instruments or documents that may
be required to accomplish the same; and
g) the Company's charter is to be amended in conformance with applicable
bankruptcy rules and the amended charter or bylaws shall, among other
provisions, authorize the issuance of any new shares while simultaneously
prohibiting the issuance of nonvoting equity securities to the extent
required by section 1123(a)(6) of the United States Bankruptcy Code.
After the entry of the Bankruptcy Order, the Company drafted and submitted a
form of Restated and Amended Articles of Incorporation to the Secretary of State
of Nevada implementing the foregoing, including but not limited to other
provisions required of the Company under the Bankruptcy Order.
12
As a result of the Bankruptcy Order giving Mr. Roff the power and authority to
change the Company's name and direction, we decided to change our name from
"Allied Devices Corporation" to "Deep Well Oil and Gas, Inc." Accordingly, in
the form of Restated and Amended Articles of Incorporation filed with the State
of Nevada in October, we changed our name to "Deep Well Oil and Gas, Inc." Our
form of Restated and Amended Articles of Incorporation was accepted by the
Nevada Secretary of State on October 22, 2003, pursuant to provisions of Nevada
corporate law allowing the amending of corporate articles on the basis of orders
entered by U.S. Bankruptcy Courts. A copy of these Articles is also attached to
the Form 8-K/A filed by the Company on November 25, 2003 and therefore, for more
specific information, reference is made to such filing.
Prior to the Bankruptcy Order adopting the Liquidating Plan of Reorganization,
there were 5,048,782 outstanding shares of our common stock. Following the
Bankruptcy Order and the acceptance by the Nevada Secretary of State of our form
of Restated and Amended Articles which implements the 1-for-30 reverse split of
our shares, and rounding up any fractional shares to the nearest share and also,
after the issuance of 2 million shares to Mr. Roff as ordered by the Bankruptcy
Court, there are now 2,168,292 issued and outstanding shares of the Registrant's
common stock. See Form 8-K/A filed on EDGAR on November 25, 2003.
As part of the implementation of the Bankruptcy Order, the Company's stock
symbol changed from ALDVQ to DWOG. The Company's stock is quoted on the "Pink
Sheets".
PLAN OF OPERATION
The Company is no longer operating as Allied Devices Corporation, the
Predecessor Company, and has emerged from Chapter 11 protection as a development
stage company with no assets and liabilities. Accordingly, the Company has
prepared this Plan of Operations to discuss its current plans. The past results
of the Predecessor Company are no longer relevant to the operations of the
Company.
As a result of the Bankruptcy Order and the implementation of the Liquidating
Plan of Reorganization, we are currently headquartered in Toronto, Canada at the
address set forth above. We intend to enter into the oil and gas exploration
business once our restructuring is completed. At this time, we presently intend
to look for properties or projects involving "heavy oil" projects. "Heavy oil"
is a dark black, viscous oil that does not flow well and which has a high carbon
to hydrogen ratio, along with a high amount of carbon residues, asphaltenes,
sulphur, nitrogen, heavy metals, aromatics and/or waxes. Heavy oil is younger in
age than the typical oil people are familiar with. It is found at relatively
shallow depths in the earth where there is not as much heat and pressure. In
this regard, reference is made the website "Heavyoil.com". As the world's oil
supplies become depleted, we believe that there will be more reliance on heavy
oil. No assurance can be made or given that we will successfully engage in the
oil and gas business or the heavy oil business, nor can any assurance be given
that even if we are remotely or relatively successful, that we will have a
profit or that our stock will appreciate in value.
13
At this time, the Company is in discussions to acquire properties or projects
involving "heavy oil" projects. Reference is made to our Form 8-K/A filed on
EDGAR on November 25, 2003.
OFFICES
Administrative operations are conducted from the offices of a consulting firm
known as Brave Consulting located at Mr. Roff's offices in Toronto, Canada. We
expect to operate for as long as possible from these offices to minimize
operating expenses. We do not currently pay rent for these offices and do not
anticipate paying rent to Mr. Roff or Brave Consulting for any such offices in
the future. Our operations do not currently require office or laboratory space
to meet our objectives, and therefore administration from these offices is
sufficient. At some point in the future, as may be necessary to implement and
carry our plans to engage in the oil and gas business, we may require additional
office space requiring rental expense, but we do not anticipate any such need
during the next six to nine months. We will however, incur common office
operating expenses such as telephone, office supplies, postage, etc.
RAISING CAPITAL
The Company currently lacks the capital resources to implement and carry out its
business plan as described herein. Operations to date have involved
identification of properties and leases we wish to investigate for oil and gas
potential. We believe we have sufficient capital resources funded through
current shareholders to perform initial investigations in this regard. At some
point in the future we expect to raise additional capital, either through debt,
equity or any combination thereof. In the event that additional capital is
raised at some time in the future, existing shareholders will experience
dilution of their interest in the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
None.
ITEM 4.CONTROLS AND PROCEDURES:
Mr. David Roff, the Company's current President, CEO and CFO has concluded,
based on his evaluation as of a date within 90 days prior to the filing of this
report, that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in the reports
filed or submitted by it under the Securities Exchange Act of 1934, as amended,
is recorded, processed, summarized and reported as specified in the Securities
and Exchange Commission's rules and forms, and include controls and procedures
designed to ensure that information required to be disclosed by the Company in
such reports is accumulated and communicated to the Company's management, as
appropriate, to allow timely decisions regarding required disclosure.
14
Since the Company filed its Form 10-K for the year ended September 30, 2002, the
Company has entered and emerged from Chapter 11 protection under the U.S.
Bankruptcy Code with a new board of directors and new management. The Company
contracted the past management of the Company, including its CFO, to assist in
the preparation of the financial statements presented herein (for the
Predecessor Company) and believes that the control environment that existed to
prepare this financial information is not dissimilar to the control environment
in existence at the time the Company filed its Form 10-K for the year ended
September 30, 2002.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Item 1 of Part I hereof titled "Financial Information" and Item 2 of Part 1
hereof titled "Management's Discussion and Analysis or Plan of Operation" for a
detailed discussion of the Company's Bankruptcy Action.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Pursuant to the Bankruptcy Order, the Company completed a 1-for-30 reverse split
of the Company's common capital stock on November 21, 2003. Subsequent to the
completion of the reverse split and in accordance with the Bankruptcy Order, the
Company issued 2 million shares of common stock to Mr. David Roff, the Company's
President, CEO, Chairman of the Board, CFO and sole director.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
See Item 1 of Part I hereof titled "Financial Information" and Item 2 of Part 1
hereof titled "Management's Discussion and Analysis or Plan of Operation" for a
detailed discussion of the Company's Bankruptcy Action.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
o 31 - Certifications of President and Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
o 32 - Certification of President and Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
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REPORTS ON FORM 8-K
The Company has filed the following Form 8-K's since it filed a Form 10-K for
the year ended September 30, 2002 with the SEC on January 14, 2003:
o February 20, 2003 - Form 8-K filed to announce the Company's voluntary
filing for relief under Chapter 11 of the U.S. Bankruptcy Code.
o April 15, 2003 - Form 8-K filed with a press release announcing that the
Company's auditors had declined to continue as auditors of the Company and
that the Company intended at the time to wind down its operations and
liquidate its assets.
o November 18, 2003 - Form 8-K filed to announce the Company's emergence from
Chapter 11 of the U.S. Bankruptcy Code, the change in control of the
Company, the change in the Company's certifying accountant and the changes
in the Company's directors.
o November 25, 2003 - Form 8-K/A filed to amend the Company's discussion of
the change in the Company's certifying accountant.
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.
DEEP WELL OIL & GAS, INC.
(Registrant)
Dated: December 10, 2003 By: /s/ DAVID ROFF
-------------------
David Roff
President, CFO and Sole Director
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