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 September 30, 2002
[ ] 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 .
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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 .
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Indicate the number of shares outstanding of each of the issuer's classes
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 .
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EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PART I FINANCIAL INFORMATION
- ------ ---------------------
Item 1 Condensed Consolidated Balance Sheets -
- ------ September 30, 2002 (unaudited), and March 31, 2002
Unaudited Condensed Consolidated Statements of Operations -
Three and Six Months Ended September 30, 2002 and 2001
Unaudited Condensed Consolidated Statements of Cash Flows -
Six Months Ended September 30, 2002 and 2001
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of
- ------ Financial Condition and Results of Operations
Item 3 Controls and Procedures
- ------
PART II OTHER INFORMATION
- ------- ----------
Item 6 Exhibits and Reports on Form 8-K
- ------
SIGNATURES
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
PART I FINANCIAL INFORMATION
Item 1
Condensed Consolidated Balance Sheets
September 30, March 31,
2002 2002
----------- -----------
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 455,285 $ 661,251
Investments available-for-sale 351,542 421,794
Certificates of deposit 355,043 297,043
Other receivables 6,313 5,875
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Total current assets 1,168,183 1,385,963
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Non-current assets
Office furniture, equipment and other, net of
accumulated depreciation of $230,725 and $248,328
at September 30, 2002 and March 31, 2002,
respectively 46,200 24,102
Real estate held for sale 301,275 301,275
Investment in option to purchase real estate 144,000 74,000
Other assets 26,637 26,637
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Total non-current assets 518,112 426,014
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Total assets $1,686,295 $1,811,977
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 10,784 $ 15,380
Deposits, deferred revenue and other 8,148 8,148
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Total current liabilities 18,932 23,528
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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 (4,236,495) (4,185,661)
Unrealized holding loss on investments available
for sale (729,140) (658,888)
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1,667,363 1,788,449
---------- ----------
Total liabilities and stockholders' equity $1,686,295 $1,811,977
========== ==========
See notes to unaudited condensed consolidated financial statements.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the Three For the Six
Months Ended Months Ended
September 30, September 30,
--------------------------- --------------------------
2002 2001 2002 2001
----------- ----------- ----------- ----------
Revenue
Interest and dividend
income $ 4,879 $ 7,590 $ 17,169 $ 34,372
Other income 11,394 34,586 33,771 42,286
----------- ---------- ---------- ----------
Total revenue 16,273 42,176 50,940 76,658
----------- ---------- ---------- ----------
Expenses
Depreciation 2,325 2,836 4,650 5,672
Other operating expenses 46,060 40,995 97,124 95,658
----------- ---------- ---------- ----------
Total expenses 48,385 43,831 101,774 101,330
----------- ---------- ---------- ----------
Net loss $ (32,112) $ (1,655) $ (50,834) $ (24,672)
=========== ========== ========== ==========
Other comprehensive income
Unrealized loss on
investments
available-for-sale (71,940) (545,449) (70,252) (572,170)
----------- ---------- ---------- ----------
Comprehensive loss $ (104,052) $ (547,104) $ (121,086) $ (596,842)
=========== ========== ========== ==========
Basic and diluted net loss
per share $ (.01) $ (.00) $ (.02) $ (.01)
=========== ========== ========== ==========
Weighted average number of
shares outstanding - basic
and diluted 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 Six Months Ended
September 30,
-----------------------------
2002 2001
Cash flows from operating activities
Net loss $ (50,834) $ (24,672)
------------ ------------
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 4,650 5,672
Gain on trade-in of vehicle (10,575) -
Change in assets and liabilities:
Increase in accounts receivable (438) (27,155)
Decrease in accounts payable (4,596) (11,271)
------------ ------------
(10,959) (32,754)
------------ ------------
Net cash flows used in operating activities (61,793) (57,426)
------------ ------------
Cash flows from investing activities
Purchase of certificates of deposit (58,000) -
Purchases of office furniture and equipment (16,173) (1,031)
Purchase of investments available-for-sale - (63,125)
Purchase of investment in option to purchase real
estate (70,000) -
Proceeds from sale of investments available-for-sale - 22,648
------------ ------------
Net cash flows used in investing activities (144,173) (41,508)
------------ ------------
Net decrease in cash and cash equivalents (205,966) (98,934)
Cash and cash equivalents, beginning of year 661,251 839,864
------------ ------------
Cash and cash equivalents, end of quarter $ 455,285 $ 740,930
============ ============
Supplemental disclosure of cash flow information:
The change in unrealized gain (loss) on investments available-for-sale for
the six months ended September 30, 2002 and September 30, 2001 was
$(70,252) and $(572,170), respectively.
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 September 30, 2002, and March 31, 2002, and of the condensed
consolidated statements of operations and condensed consolidated statements of
cash flows for the three and six months ended September 30, 2002 and 2002. 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, 2002, included in the Company's
10-KSB filed with the Securities and Exchange Commission on June 28, 2002.
Stockholders' Equity
In July 2002, the Company issued options to purchase 275,000 shares of the
Company's common stock to the three officers of the Company. The options were
issued at market value on the date of grant with a term of five years.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition, Liquidity and Capital Resources
Cash and cash equivalents and certificates of deposit, decreased during the
six months ended September 30, 2002 to $810,328, as compared with $958,294 at
March 31, 2002. This decrease is primarily due to the Company's operating costs,
and a real estate investment of $70,000.
Stockholders' equity decreased from $1,788,449 at March 31, 2002 to
$1,667,363 at September 30, 2002, or $121,086. The Company incurred an
unrealized loss on the investments available-for-sale of $70,252, and a net
operating loss of $50,834, for the period ended September 30, 2002.
Results of Operations
For the Six Months Ended September 30, 2002, Compared to the Six Months Ended
September 30, 2001.
For the six months ended September 30, 2002, the Company's total revenue
was $50,940 as compared to $76,658 for the six months ended September 30, 2001.
This decrease in revenue 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 operating expenses for the six months ended September 30, 2002 were
$101,774 as compared to $101,330 for the six months ended September 30, 2001.
Unrealized losses on investments available-for-sale were $70,252 and $572,170
for the periods ended September 30, 2002 and 2001, respectively. This resulted
in a comprehensive loss of $121,086 and $596,842 for the periods ended September
30, 2002 and 2001, respectively.
Item 3. Controls and Procedures
The Company, under the supervision of the chief executive and financial officer,
has conducted an evaluation of the effectiveness if the design and operation of
the Company's disclosure controls and procedures within 90 days of the filing
date of this quarterly report. Based upon the results of this evaluation, the
Company believes that they maintain proper procedures for gathering, analyzing
and disclosing all information in a timely fashion that is required to be
disclosed in its Exchange Act reports. There have been no significant changes in
the Company's controls subsequent to the evaluation date.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 99(i) Certification of Principal Executive and Accounting and
Financial Officer, Raymond N. Joeckel pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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: November 14, 2002
CERTIFICATION
I, Raymond N. Joeckel, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Eagle Exploration
Company and subsidiaries;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2002 By: /s/ Raymond N. Joeckel
Raymond N. Joeckel
Title: Director, Principal Executive and
Accounting and Financial Officer
