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 June 30, 2004
[ ] 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
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1801 Broadway Street, Suite 810, Denver, Colorado 80202
(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 ___.
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
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, 2004, and June 30, 2004 (Unaudited)
Unaudited Condensed Consolidated Statements of Operations - Three Months Ended June 30, 2004 and 2003
Unaudited Condensed Consolidated Statement of Cash Flows - Three Months Ended June 30, 2004 and 2003
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3 - Disclosure Controls and Procedures
PART II
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
June 30, March 31,
2004 2004
----------- -----------
(Unaudited)
Assets
Current assets
Cash and cash equivalents ..................................................... $ 526,319 $ 264,257
Certificates of deposits ...................................................... 0 200,000
Marketable securities ......................................................... 334,259 458,406
Accounts receivable ........................................................... 3,532 4,891
----------- -----------
Total current assets .................................................... 864,110 927,554
----------- -----------
Non-current assets
Office furniture, equipment and other, net of accumulated depreciation of
$195,408 and $196,882 at March 31, 2004 and June 30, 2004, respectively ...... 55,451 56,925
Real estate held for sale ..................................................... 298,525 298,525
Investment in option to purchase real estate .................................. 212,739 212,739
Other assets .................................................................. 24,837 24,837
----------- -----------
Total non-current assets ................................................ 591,552 593,026
----------- -----------
Total assets ..................................................................... $ 1,455,662 $ 1,520,580
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable .............................................................. $ 7,565 $ 7,565
Accrued expenses .............................................................. 11,387 11,387
----------- -----------
Total current liabilities ............................................... 18,952 18,952
----------- -----------
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 ........................................................... (5,217,000) (5,176,228)
Unrealized gain on investments available-for-sale ............................. 20,712 44,858
----------- -----------
Total stockholders' equity .............................................. 1,436,710 1,501,628
----------- -----------
Total liabilities and stockholders' equity ....................................... $ 1,455,662 $ 1,520,580
=========== ===========
See notes to unaudited condensed consolidated financial statements.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the Three Months Ended
June 30,
--------------------------
2004 2003
----------- -----------
Revenues
Oil and gas .................................................. $ 6,135 $ 19,926
----------- -----------
Total revenue ............................................ 6,135 19,926
----------- -----------
Expenses
Depreciation ................................................. 1,474 1,926
General and administrative expenses .......................... 52,280 50,531
----------- -----------
Total expense ............................................ 53,754 52,457
----------- -----------
Loss from operations ............................................ (47,619) (32,531)
----------- -----------
Other income
Interest and dividend income ................................. 13,077 10,462
Realized gain (loss) on sale of investments available-for-sale (6,230) 0
Miscellaneous income ......................................... 0 4,531
----------- -----------
Total other income ....................................... 6,847 14,993
----------- -----------
Net loss before other comprehensive income (loss) ............... (40,772) (17,538)
----------- -----------
Other comprehensive income (loss)
Unrealized gain (loss) on investments available-for-sale ..... (24,146) 19,824
----------- -----------
Total other comprehensive income (loss) .................. (24,146) 19,824
----------- -----------
Comprehensive gain (loss) ....................................... $ (64,918) $ 2,286
=========== ===========
Basic and diluted weighted average common shares outstanding .... 3,072,836 3,072,836
=========== ===========
Basic and diluted loss per common share ......................... $ (.01) $ (.005)
=========== ===========
See notes to unaudited condensed consolidated financial statements.
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Months Ended
June 30,
----------------------
2004 2003
--------- ---------
Cash flows from operating activities
Net loss .................................................................. $ (40,772) $ (17,538)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation ............................................................ 1,474 1,926
Loss on disposal of investments available for sale ...................... 6,230 0
Gain on sale of assets .................................................. 0 (4,531)
Change in assets and liabilities:
Decrease in accounts receivable ....................................... 1,359 4,300
--------- ---------
9,063 1,695
--------- ---------
Net cash flows used in operating activities ......................... (31,709) (15,843)
--------- ---------
Cash flows from investing activities
(Purchase) redemption of certificates of deposit .......................... 200,000 (375,000)
Proceeds from the sale of assets .......................................... 0 6,500
Purchase of investments available-for-sale ................................ (50,000) 0
Proceeds from the sale of investments available-for-sale .................. 143,771 0
--------- ---------
Net cash flows provided by (used in) investing activities ........... 293,771 (368,500)
--------- ---------
Net increase (decrease) in cash and cash equivalents ......................... 262,062 (384,343)
Cash and cash equivalents, beginning of year ................................. 264,257 720,331
--------- ---------
Cash and cash equivalents, end of quarter .................................... $ 526,319 $ 335,988
========= =========
Supplemental disclosure of cash flow information:
The change in unrealized gain (loss) on investments available for sale for
the three months ended June 30, 2004 and June 30, 2003 was $(24,146) and
$19,824, 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 June 30, 2004, and March 31, 2004, and of the
condensed consolidated statements of operations and condensed consolidated
statements of cash flows for the three months ended June 30, 2004 and 2003.
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 and pursuant to rules and regulations of
the Securities and Exchange Commission. 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, 2004, included in the Company's 10-KSB filed with the Securities
and Exchange Commission on July 14, 2004.
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operation
Financial Condition, Liquidity and Capital Resources
The Company's cash at June 30, 2004 was $526,319 as compared to cash for
the year ended March 31, 2004 of $264,257. At year-end, the Company had $200,000
in certificates of deposit. These certificates matured during the period ended
June 30, 2004. Marketable securities at March 31, 2004 were $458,406 and at June
30, 2004 marketable securities were $334,259. The Company's investment in
Verizon Trust Certificates was also redeemed in the first quarter
Stockholders' equity decreased from $1,501,628 at March 31, 2004 to
$1,436,710 at June 30, 2004 or $64,918. The Company incurred an unrealized loss
on investments available-for-sale for the period ended June 30, 2004 of $24,146
and a net loss before other comprehensive income of $40,772.
Results of Operations
For the Three Months Ended June 30, 2004, Compared to the Three Months Ended
June 30, 2003.
For the three months ended June 30, 2004, the Company's oil and gas revenue
was $6,135 as compared to $19,926 for the three months ended June 30, 2004. This
decrease is primarily due to a well shut in. Other income, including interest
and dividend income and realized gain on sale of investments available-for-sale
was $6,847 for the period ended June 30, 2004 and $14,993 for the period ended
June 30, 2003.
Total expense for the three months ended June 30, 2004, was $53,754 as
compared to $52,457 for the three months ended June 30, 2003. Unrealized loss on
investments available-for-sale was $24,146 for the period ended June 30, 2004,
and an unrealized gain on investments available-for-sale was $19,824 for the
period ended June 30, 2003. This resulted in a comprehensive loss of $64,918 for
the period ended June 30, 2004 and a comprehensive gain of $2,286 for the period
ended June 30, 2003.
Item 3 - Disclosure 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/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 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/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 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 June 30, 2004.
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: August 16, 2004
