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, 2003
[ ] 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)
1801 Broadway, Suite 810, 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 X No ___.
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, 2003 (unaudited), and March 31, 2003
Unaudited Condensed Consolidated Statements of Operations -
Three and Six Months Ended September 30, 2003, and 2002
Unaudited Condensed Consolidated Statement of Cash Flows -
Six Months Ended September 30, 2003, and 2002
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
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Item 1
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Condensed Consolidated Balance Sheets
September 30, March 31,
2003 2003
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(Unaudited)
Assets
Current assets
Cash $ 276,680 $ 720,331
Marketable securities 328,252 317,468
Certificates of deposit 375,000 --
Accounts receivable 8,262 13,157
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Total current assets 988,194 1,050,956
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Office furniture, equipment and other, net of
accumulated depreciation of $191,487 and $233,050 at
September 30, 2003 and March 31, 2003, respectively 59,263 43,875
Real estate held for sale 298,525 301,275
Investment in option to purchase real estate 202,739 202,739
Other assets 24,837 24,837
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Total non-current assets 585,364 572,726
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Total assets $1,573,558 $1,623,682
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 9,088 $ 9,088
Deposits, deferred revenue and other 6,149 6,149
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Total current liabilities 15,237 15,237
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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 (5,089,381) (5,028,473)
Unrealized holding loss on investments available for
sale 14,704 3,920
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1,558,321 1,608,445
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Total liabilities and stockholders' equity $1,573,558 $1,623,682
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See notes to unaudited condensed consolidated financial statements.
Unaudited Condensed Consolidated Statements of Operations
For the Three For the Three For the Six For the Six
Months Ended Months Ended Months Ended Months Ended
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenue:
Oil and gas $ 14,727 $ 11,394 $ 34,653 $ 23,196
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Total revenue 14,727 11,394 34,653 23,196
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Expenses:
Depreciation 3,059 2,325 4,985 4,650
General and administrative expense 56,705 46,060 107,236 97,124
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Total expense 59,764 48,385 112,221 101,774
------------ ------------ ------------ ------------
Loss from operations (45,037) (36,991) (77,568) (78,578)
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Other income
Interest and dividend income 1,667 4,879 12,129 17,169
Miscellaneous income - - 4,531 10,575
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Total other income 1,667 4,879 16,660 27,744
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Net loss before other comprehensive
income (43,370) (32,112) (60,908) (50,834)
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Other comprehensive income (loss)
Unrealized gain (loss) on
investments available-for-sale (9,040) (71,940) 10,784 (70,252)
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Comprehensive loss $ (52,410) $ (104,052) $ (50,124) $ (121,086)
============ ============ ============ ============
Basic and diluted weighted average
common shares outstanding 3,072,836 3,072,836 3,072,836 3,072,836
============ ============ ============ ============
Basic and diluted loss per common
share $ (0.02) $ (0.03) $ (0.02) $ (0.04)
============ ============ ============ ============
See notes to unaudited condensed consolidated financial statements.
Unaudited Condensed Consolidated Statements of Cash Flows
For the Six Months Ended
September 30,
----------------------------
2003 2002
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Cash flows from operating activities
Net loss $ (60,908) $ (50,834)
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Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 4,985 4,650
Gain on trade-in of vehicle (4,531) (10,575)
Change in assets and liabilities:
Decrease (increase) in accounts receivable 4,895 (438)
Decrease in accounts payable - (4,596)
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5,349 (10,959)
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Net cash flows used in operating activities (55,559) (61,793)
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Cash flows from investing activities
Purchase of certificates of deposit (375,000) (58,000)
Purchases of office furniture and equipment and other (22,342) (16,173)
Purchase of investment in option to purchase real
estate - (70,000)
Proceeds from the sale of assets 6,500 -
Proceeds from real estate held for sale 2,750 -
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Net cash flows used in investing activities (388,092) (144,173)
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Net decrease in cash and cash equivalents (443,651) (205,966)
Cash and cash equivalents, beginning of year 720,331 661,251
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Cash and cash equivalents, end of quarter $ 276,680 $ 455,285
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Supplemental disclosure of cash flow information:
The change in unrealized gain (loss) on investments available-for-sale for
the six months ended September 30, 2003 and September 30, 2002 was $10,784
and $(70,252), 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 September 30, 2003, and March 31, 2003, and of the condensed
consolidated statements of operations and condensed consolidated statements of
cash flows for the three and six months ended September 30, 2003, 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 account principles. For
further information refer to the audited consolidated financial statements and
notes thereto for the year ended March 31, 2003, included in the Company's
10-KSB filed with the Securities and Exchange Commission on June 29, 2003.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operation
Financial Condition, Liquidity and Capital Resources
Cash decreased during the six months ended September 30, 2003 $443,651. This
decrease is primarily due to the purchase of $375,000 in certificates of deposit
and operating costs.
Stockholders' equity decreased from $1,608,445 at March 31, 2003, to $1,558,321
at September 30, 2003, or $50,124. The Company incurred an unrealized gain on
the investments available-for-sale of $10,784, and a net operating loss of
$60,908, for the period ended September 30, 2003.
Results of Operations
For the Six Months Ended September 30, 2003, Compared to the Six Months Ended
September 30, 2002.
For the six months ended September 30, 2003, the Company's total oil and gas
revenue was $34,653 as compared to $23,196 for the six months ended September
30, 2002. Other income including interest and dividend incomes was $16,660 for
the period ended September 30, 2003 and $27,744 for the period ended September
30, 2002.
Total expense for the six months ended September 30, 2003 was $112,221 as
compared to $101,774 for the six months ended September 30, 2002. Unrealized
gain on investments available-for-sale for the period ended September 30, 2003
was $10,784 and for the period ended September 30, 2002 the Company had an
unrealized loss on investments available-for-sale of $70,252. This resulted in a
comprehensive loss of $50,124 and $121,086 for the period ended September 30,
2003 and 2002, respectively.
Item 3: Controls and Procedures
As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act"). Based on this evaluation,
the principal executive officer and principal financial officer concluded that
the Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that has
materially affected or is reasonably likely to materially affect the Company's
internal control over financial reporting.
PART II
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
Exhibit 31.1 Certification of President and Chief Financial Officer
Pursuant to 18 USC Section 1350, as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 31.2 Certification of Secretary/Vice President of Operations
Pursuant to 18 USC Section 1350, as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.1 Certification of President and Chief Financial Officer
Pursuant to 18 USC Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification of Secretary/Vice President of Operations
Pursuant to 18 USC Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002
(b) No reports on Form 8-K have been filed during the quarter ended September
30, 2003.
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
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Secretary/Vice President Operations
Date: November 14, 2003
