U. S. Securities and Exchange Commission Washington, D. C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from _____ to _____.
Commission File No. 0-9458
Eagle Exploration Company
(Exact name of registrant as specified in its character)
Colorado 84-0804143
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1630 Welton Street, Suite 530, Denver, Colorado 80202
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(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (303) 296-3677
Indicated by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the 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
requirements for the past 90 days. Yes 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 __. ---
Indicate the number of shares outstanding of each of the issuer's classed
of common equity, as of the latest practicable date:
Class Number of Shares
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Common stock 3,072 836
Transitional Small Business Disclosure format: (Check one) Yes ___ No X .
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PART I FINANCIAL INFORMATION
Item 1 Condensed Consolidated Balance Sheets
March 31, 2001, and December 31, 2001 (Unaudited)
Unaudited Condensed Consolidated Statements of Operations -
Three and Nine Months Ended December 31, 2000, and 2001
Unaudited Condensed Consolidated Statements of Cash Flows -
Three and Nine Months Ended December 31, 2000, and 2001
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II SIGNATURES
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
PART I FINANCIAL INFORMATION
Item 1
Condensed Consolidated Balance Sheets
March 31, December 31,
2001 2001
------------ ------------
(Unaudited)
Assets
Current assets
Cash and cash equivalents .................................. $ 839,864 $ 938,037
Investments available-for-sale ............................. 1,308,548 520,182
Other receivables ............................................ 4,013 8,276
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Total current assets .................................... 2,152,425 1,466,495
Office furniture, equipment and other, net of $239,820
of accumulated depreciation at March 31, 2001 and
$248,328 of accumulated depreciation at December 31, 2001 ... 31,073 23,596
Land held for investment ..................................... 301,275 301,275
Investment in joint venture .................................. -- 74,000
Other assets ................................................. 26,637 26,637
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Total assets ................................................. $ 2,511,410 $ 1,892,003
============ ============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable ........................................... $ 19,385 $ 5,787
Deposits, deferred revenue and other ....................... 8,148 8,148
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Total current liabilities .............................. 27,533 13,935
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Stockholders' equity
Common stock, no par value; authorized 10,000,000
shares; 3,072,836 shares issued and outstanding ........... 6,632,998 6,632,998
Accumulated deficit ........................................ (4,105,132) (4,140,859)
Unrealized holding loss on investments available for
sale ......................................................... (43,989) (614,071)
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2,483,877 1,878,068
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Total liabilities and stockholders' equity ................... $ 2,511,410 $ 1,892,003
============ ============
See notes to unaudited condensed consolidated financial statements.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the Three For the Nine
Months Ended Months Ended
December 31, December 31,
-------------------------- --------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Revenue
Interest and dividend
income ................. $ 22,579 $ 36,649 $ 56,951 $ 98,219
Other income ............ 18,378 9,321 60,664 36,516
----------- ----------- ----------- -----------
Total revenue .......... 40,957 45,970 117,615 134,735
----------- ----------- ----------- -----------
Expenses
Depreciation ............ 2,836 4,813 8,508 13,878
Other operating expense . 48,377 51,280 144,834 160,727
----------- ----------- ----------- -----------
Total expense .......... 51,213 56,093 153,342 174,605
----------- ----------- ----------- -----------
Net loss .................. $ (10,256) $ (10,123) $ (35,727) $ (39,870)
=========== =========== =========== ===========
Other comprehensive income
Unrealized gain (loss) on
investments
available-for-sale ..... 2,088 195,307 (570,082) 257,228
----------- ----------- ----------- -----------
Comprehensive (loss) income $ (8,168) $ 185,184 $ (605,809) $ 217,358
=========== =========== =========== ===========
Basic and diluted net loss
per share $ (.003) $ (.003) $ (.01) $ (.01)
=========== =========== =========== ===========
Weighted average number of
shares outstanding ....... 3,072,836 3,072,836 3,072,836 3,072,836
=========== =========== =========== ===========
See notes to unaudited condensed consolidated financial statements.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended
December 31,
--------------------------
2001 2000
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Cash flows from operating activities
Net loss ............................................ $ (35,727) $ (39,870)
----------- -----------
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation ....................................... 8,508 13,878
Change in assets and liabilities:
Decrease in accounts receivable .................. (4,263) 4,128
Decrease in accounts payable ..................... (13,598) (2,252)
----------- -----------
(9,353) 15,754
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Net cash flows used in operating activities ..... (45,080) (24,116)
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Cash flows from investing activities
Redemption of certificates of deposit ............... -- 200,000
Purchases of office furniture and equipment ......... (1,031) (3,106)
Purchase of investment in joint venture ............. (74,000)
Purchase of investments available-for-sale .......... -- (708,178)
Proceeds from sale of investments available-for-sale 218,284 35,000
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Net cash flows used in investing activities ..... 143,253 (476,284)
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Net decrease in cash and cash equivalents ............. 98,173 (500,400)
Cash and cash equivalents, beginning of year .......... 839,864 1,569,309
----------- -----------
Cash and cash equivalents, end of quarter ............. $ 938,037 $ 1,068,909
=========== ===========
Supplemental disclosure of cash flow information:
The change in unrealized gain (loss) on investments available-for-sale for
the nine months ended December 31, 2001 and December 31, 2000 was
$(570,082) and $257,228, respectively.
See notes to unaudited condensed consolidated financial statements.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
Opinion of Management
1. The financial information furnished reflects all adjustments, which are, in
the opinion of management, necessary for a fair presentation of the
financial position at December 31, 2001, and March 31, 2001, and of the
condensed consolidated statements of operations and condensed consolidated
statements of cash flows for the three and nine months ended December 31,
2001 and 2000. The results of operations and statements of cash flows for
the periods presented are not necessarily indicative of those to be
expected for the entire year.
2. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles. For further information refer to the audited consolidated
financial statements and notes thereto for the year ended March 31, 2001,
included in the Company's 10-KSB filed with the Securities and Exchange
Commission on July 5, 2001.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition, Liquidity and Capital Resources
Cash and cash equivalents increased for the nine months ended December 31,
2001 to $938,037 from $839,864 for the year ended March 31, 2001 or $98,173.
This is primarily due to the sale of shares of a Corporate Asset Backed
corporation (CABCO) Trust for BellSouth Debentures.
On August 20, 2001, the Company and its partners formed Buffalo Highlands,
LLC. The Company owns a 25 percent interest in the LLC and is a co-manager. The
newly formed LLC entered into an Option Agreement to purchase 320 acres of land.
The Option Agreement, among other things, provides for a $25,000 earnest money
payment and $200,000 annual option payments until closing which is scheduled to
occur on or before December 31, 2005. The earnest money and option payments
apply to the purchase price of $5,000,000. It is the intent of the LLC to
improve the property by obtaining the proper entitlements for single and multi
family use. During the entitlement process and upon completion, the property
will be marketed. The LLC plans to rezone the property, plat the property for
high-density residential use, and sell the property prior to the expiration date
of the Option Agreement.
Stockholders' equity decreased from $2,483,877 at March 31, 2001 to
$1,878,068 at December 31, 2001 or $605,809. An increase in unrealized loss on
investments available-for-sale for the period ended December 31, 2001 was
$570,082, and the net operating loss was $35,727.
The unrealized loss on investments available-for-sale increased
significantly for the period ended December 31 2001. This is primarily due to
two investments. The Company invested approximately $450,000 in five companies
involved in drilling and developing a gas prospect near Bakersfield, California.
The current fair market value at December 31, 2001 was $140,342 a decrease of
approximately 69 percent. This decrease in value is a result of the decrease in
the price of gas and the result of mechanical problems encountered in completing
the last two wells drilled on the structure. Currently, two new wells are
drilling on the structure, and a new 3D seismic has recently been completed and
is under evaluation. It is management's opinion that a large quantity of gas and
hydrocarbons is in place under this structure. The question that remains is can
this exploration effort economically produce gas and hydrocarbons.
The other investment that significantly impacted the unrealized loss on
investments available-for-sale is the Company's investment in a
telecommunication company. The Company acquired bonds in the amount of $352,600.
For the period ended December 31, 2001, the value was $41,800. Market conditions
in that sector have restricted that company's ability to finance its growth, and
as a result the probability of this investment to turn around is uncertain.
Results of Operations
For the Nine Months Ended December 31, 2001, Compared to the Nine Months Ended
December 31, 2000.
For the nine months ended December 31, 2001, the Company's total revenue
was $117,615 as compared to $134,735 for the nine months ended December 31,
2000. This decrease in income is primarily due to the Company's decrease in cash
and cash equivalents and the interest and dividend income derived from those
assets along with lower interest rates.
Total expense for the nine months ended December 31, 2001, was $153,342 as
compared to $174,605 for the nine months ended December 31, 2000. This decrease
in expense is due to reduced office rent expense and other operating costs.
PART II
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.
EAGLE EXPLORATION COMPANY
(Registrant)
By: /s/ Raymond N. Joeckel
Raymond N. Joeckel
President/Chief Financial Officer
By: /s/ Paul M. Joeckel
Secretary/Vice President Operations
Date: February 14, 2002
