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, 2007 |
| ¨ | 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 incorporation or organization) | (IRS Employer Identification Number) |
1801 Broadway Street, Suite 1010, 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 |
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| June 30, 2007 | March 31, 2007 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 546,232 | $ | 550,460 | ||||
Marketable securities | 46,120 | 90,335 | ||||||
Accounts receivable | 8,827 | 5,978 | ||||||
Total current assets | 601,179 | 646,773 | ||||||
Non-current assets Office furniture, equipment and other, net of accumulated depreciation of $215,953 and $216,872 at March 31, 2007 and June 30, 2007, respectively | 22,357 | 23,276 | ||||||
Equity investment in LLC | 686,550 | 678,033 | ||||||
Other assets | 24,250 | 24,250 | ||||||
Total non-current assets | 733,157 | 725,559 | ||||||
Total assets | $ | 1,334,336 | $ | 1,372,332 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 2,738 | $ | 2,738 | ||||
Accrued expenses | — | 2,048 | ||||||
Total current liabilities | 2,738 | 4,786 | ||||||
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 | (5,297,520 | ) | (5,296,413 | ) | ||||
Unrealized gain (loss) on investments available-for-sale | (3,880 | ) | 30,961 | |||||
| 1,331,598 | 1,367,546 | |||||||
Total liabilities and stockholders’ equity | $ | 1,334,336 | $ | 1,372,332 | ||||
See notes to unaudited condensed consolidated financial statements.
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EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the Three Months Ended June 30, | ||||||||
| 2007 | 2006 | |||||||
Revenues | ||||||||
Oil and gas | $ | 12,552 | $ | 12,206 | ||||
Total revenue | $ | 12,552 | $ | 12,206 | ||||
Expenses | ||||||||
Depreciation | 919 | 908 | ||||||
General and administrative expenses | 44,596 | 53,441 | ||||||
Total expense | 45,515 | 54,349 | ||||||
Loss from operations | (32,963 | ) | (42,143 | ) | ||||
Other income (expense) | ||||||||
Interest and dividend income | 5,213 | 7,411 | ||||||
Income earned on sold investment | 39,376 | — | ||||||
Equity in losses in LLC | (12,733 | ) | (17,391 | ) | ||||
Total other income (expense) | 31,856 | (9,980 | ) | |||||
Net gain (loss) before other comprehensive income | (1,107 | ) | (52,123 | ) | ||||
Other comprehensive income | ||||||||
Gain (loss) arising during the period | 4,535 | (12,708 | ) | |||||
Reclass adjustment | (39,376 | ) | — | |||||
Total other comprehensive loss | (34,841 | ) | (12,708 | ) | ||||
Comprehensive loss | $ | (35,948 | ) | $ | (64,831 | ) | ||
Basic and diluted weighted average common shares outstanding | 3,072,836 | 3,072,836 | ||||||
Basic and diluted loss per common share | $ | (.00 | ) | $ | (.02 | ) | ||
See notes to unaudited condensed consolidated financial statements.
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EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Months Ended June 30, | ||||||||
| 2007 | 2006 | |||||||
Cash flows from operating activities | ||||||||
Net gain (loss) | $ | (1,107 | ) | $ | (52,123 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 919 | 908 | ||||||
Equity in losses in LLC | 12,733 | 17,391 | ||||||
Gain on sale of investment | (39,375 | ) | — | |||||
Change in assets and liabilities: | ||||||||
Accounts receivable | (2,850 | ) | (2,516 | ) | ||||
Accounts payable | (2,048 | ) | — | |||||
| (30,621 | ) | 15,783 | ||||||
Net cash flows used in operating activities | (31,728 | ) | (36,340 | ) | ||||
Cash flows from investing activities | ||||||||
Payment of contribution to equity investment in LLC | (21,250 | ) | (46,250 | ) | ||||
Proceeds from the sale of investments available-for-sale | 48,750 | 3,253 | ||||||
Net cash flows provided by (used in) investing activities | 27,500 | (42,997 | ) | |||||
Net (decrease) in cash and cash equivalents | (4,228 | ) | (79,337 | ) | ||||
Cash and cash equivalents, beginning of year | 550,460 | 750,843 | ||||||
Cash and cash equivalents, end of quarter | $ | 546,232 | $ | 671,506 | ||||
Supplemental disclosure of cash flow information:
The change in unrealized loss on investments available for sale for the three months ended June 30, 2007 and June 30, 2006 was $34,841 and $12,708, respectively.
See notes to unaudited condensed consolidated financial statements.
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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, 2007 and March 31, 2007, and of the condensed consolidated statements of operations and condensed consolidated statements of cash flows for the three months ended June 30, 2007 and 2006. 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, 2007, included in the Company’s 10-KSB filed with the Securities and Exchange Commission on June 29, 2007.
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EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
| 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, 2007 was $546,232 as compared to cash for the year ended March 31, 2007 of $550,460. During the quarter the Company liquidated a marketable security at a gain, realizing cash proceeds of $48,750 and paid a cash call in the amount of $21,250 to the Buffalo Highlands, LLC.
Stockholders’ equity decreased from $1,367,546 at March 31, 2007 to $1,331,598 at June 30, 2007 or $35,948. The Company incurred an unrealized loss on investments available-for-sale for the period ended June 30, 2007 of $34,841, offset by a realized gain on sales of investments of $39,376 and a net loss before other comprehensive income of $1,107.
Results of Operations
For the Three Months Ended June 30, 2007, Compared to the Three Months Ended June 30, 2006.
For the three months ended June 30, 2007, the Company’s oil and gas revenue was $12,552 as compared to $12,206 for the three months ended June 30, 2006. Other income of $44,589 includes interest and dividend income of $5,213 and income earned on sold investments of $39,376. Equity in losses of the LLC totaled $12,733 as compared with $17,391 for the previous year. Losses decreased due to the exercise of the LLC’s option to purchase real estate, since the current carrying cost of the property is less than interest incurred to extend the purchase option another year.
Unrealized loss on investments available-for-sale was $34,841 for the period ended June 30, 2007, and $12,708 for the period ended June 30, 2006. This resulted in a comprehensive loss of $35,948 for the period ended June 30, 2007 and $64,831 for the period ended June 30, 2006.
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Item 4 – 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.
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, 2007. |
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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 Executive Officer | ||
By: | /s/ Paul M. Joeckel | |
Secretary/Chief Financial Officer | ||
Date: August 13, 2007
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