UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report Pursuant Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: June 30, 1999
OR
() TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File: 0-8447
DOL RESOURCES, INC.
(Exact Name of Registrant as specified in its Charter)
Wyoming 82-0219465
(State of other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
13636 Neutron Road, Dallas, Texas 75244
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (Area code (214) 661 5869)
Indicate by check mark whether Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or such shorter period that Registrant was required to file such
reports and (2) has been subject to such filing requirements
for the past 90 days YES: X NO:
The number of shares outstanding of each of the Issuer's Classes
of Common Stock, as of the close of the period covered by this
report:
Common - $0.01 Par Value - 25,000,000 shares as of June 30, 1999.
DOL RESOURCES, INC.
Index to Form 10-Q for Fiscal Quarter ended June 30, 1999
Page No.
PART 1 - Financial Information
Condensed Unaudited Balance Sheet, June 30, 1999
and December 31, 1998 3 - 4
Condensed Unaudited Statement of Income,
Six Months ended June 30, 1999 and 1998 5
Condensed Unaudited Statement of Shareholder's
Equity Six Months ended June 30, 1999 and 1998 6
Condensed Unaudited Statement of Changes in
Financial Position Six-Months Ended
June 30, 1999 and 1998 6 - 7
Summary of Significant Accounting Policies and
Notes to Condensed Unaudited Financial Statements 8- 10
Management's Discussion and Analysis of Condensed
Financial Condition and Results of Operations 11
PART 11 - Other Information
Item 6(b) - Exhibits and Reports on Form 8-K 12
Signature Pursuant to General Instruction E 12
All other items called for by the instructions are omitted as
they are inapplicable, not required, or the information is
included in the condensed financial statements or notes thereto.
-2-
DOL RESOURCES, Inc.
BALANCE SHEET
(Unaudited)
ASSETS
June 30 Dec. 31
1999 1998
CURRENT ASSETS
Cash $ -0- 870
Marketable securities, at
lower or aggregate cost
or market 400,000 1,924
Trade accounts receivable,
less allowance for doubtful
accounts of $1,711, in 1998.
(Note 1) -0- 22,927
Due from related parties-Note 3 -0- 426,115
Prepaid Expenses -0- -0-
Total Current Assets 400,000 451,836
PROPERTIES - Using full costing-
Note 1
Production payment 100,000 100,000
Exploration, acquisition &
development, cost, net of
allowance for reduction of
oil & gas assets of $137,083
in 1985 2,057,927 1,649,985
Total cost 2,157,927 1,749,985
Less accumulated depletion 1,343,567 1,338,297
814,360 411,688
AUTOMOBILES, FURNITURE & FIXTURES
At cost - Note 1
Furniture and fixtures -0- 6,476
Less accumulated deprecation -0- 5,828
Net Furniture and Fixtures -0- 648
OTHER ASSETS
Undeveloped coal royalties- -0- 10,155
Other accounts receivable- -0- 57,012
Total Other Assets -0- 67,168
TOTAL ASSETS 1,214,360 931.340
-3-
DOL Resources, Inc.
BALANCE SHEET
June 30, 1999 December 31,
1999 1998
CURRENT LIABILITIES
Notes payable - Note 2 -0- 408,000
Accounts payable -0- 30,737
Accrued expenses -0- -0-
Total current liabilities -0- 438,737
LONG-TERM LIABILITIES
Accounts Payable -0- 330,472
Total Long-Term Liabilities -0- 330,472
STOCKHOLDERS' EQUITY
Capital Stock, common,
$.01 par value:
Authorized 25,000,000 shares
issued and outstanding
20,783,529 shares at 12-31-98
and 25,000,000 shares at 6-30-99 250,000 207,835
Capital in excess of
par value 2,526,770 1,501,618
Accumulated deficit (1,562,410) (1,546,947)
Treasury Stock ( -0- ) ( 375)
1,214,360 162,131
TOTAL 1,214,360 931,340
-4-
DOL RESOURCES, INC.
CONDENSED UNAUDITED STATEMENT OF INCOME
3 Months 6 Months
Ended Ended
6-30-99 6-30-99 6-30-98
Operating Revenue:
Oil and Gas Sales 9,024 15,495 28,095
Interest and other income 1,948 3,896 3,896
Total 10,972 19,391 31,991
Operating Expenses:
Depletion,depreciation
and amortization 2,797 5,594 8,530
General and administrative 1,665 2,715 145
Interest 6,900 13,650 13,655
Consulting & Mgmt Fees -0- -0- -0-
Production Taxes 968 1,654 3,051
Lease Operating Expense 6,510 11,241 10,015
Lease Rentals -0- -0- -0-
Total Operating Expenses 18,858 34,854 35,396
Net Income (Loss) before income
taxes (7,886) (15,463) (3,405)
Provision for income taxes
(note 4) -0- -0- -0-
Net Income (Loss) (7,886) (15,463) (3,405)
Weighted Average Number of Common
Shares Outstanding 22,114,169 21,392,712 20,671,254
Earnings (Loss) for Common Share $(.00036) $(.00072) $(.00016)
The accompany notes are an integral part of this statement.
(5)
DOL RESOURCES, INC.
CONDENSED UNAUDITED STATEMENT OF STOCKHOLDER'S equity
Six Months ended June 30, 1998 and 1999
Capital Stock Capital in
Number of Excess of Accumulated Treasury
Shares Amount Par Value Deficit Stock
Balance at
1/1/99 20,783,529 207,835 1,501,618 (1,546,947) ( 375)
Net Income -0- -0- -0- ( 15,463) -0-
Treas. Stock
Cancelled ( 375) 375
ELGT Stock
Exchange 4,216,471 42,165 357,835
Parent Con-
tribution 667,692
Balance at
6/30/99 25,000,000 250,000 2,526,770 (1,562,410) -0-
Balance at
1/1/98 20,671,254 206,713 1,502,741 (1,478,977) ( 375)
Net Income -0- -0- -0- 3,405 -0-
Balance at
6/30/98 20,671,254 206,713 1,502,741 (1,482,382) ( 375)
(6)
CONDENSED UNAUDITED STATEMENT
OF CHANGES IN FINANCIAL POSITION
Six Months Ended:
June 30,1999 June 30, 1998
Financial Resources Provided
By Operations:
Net Income (15,463) (3,405)
Items not requiring outlay
of working Capital:
Depletion, Deprec. and
Amortization 5,594 8.530
Working Capital provided by
operations ( 9,869) 5,125
Increase in Properties (407,619) 3,500
Reduction in other Assets 67,168 3,009
Increase in long term debt -0- -0-
Total Resources (350,320) 11,634
Financial Resources Applied to:
Retirement of long-term debt (330,472) (3,525)
Increase in common stock 42,165
Increase in contributed stock 1,025,528 -0-
Net Increase (Decrease) in
Working Capital 386,901 8,109
Working Capital at begin of period 13,099 66,381
Working Capital at end of period 400,000 74,490
(7)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. Summary of Significant Accounting Policies
Organization and Operations
The Company was organized on November 6, 1973 under the
laws of the State of Wyoming. Its primary activities
have been the acquisition of interests in various oil
and gas properties, coal properties (Note 8) and
exploration for oil and gas.
Allowance for Bad Debts:
Accounts receivable from participants in oil
and gas exploration are estimated to be at
least 90% collectible, consequently a 10%
allowance for bad debts has been established
against those receivables. Receivables from
the sale of oil and gas are fully collectible,
as accruals are based primarily on collection
of oil and gas sales subsequent to year-end.
Properties:
The Company uses the full cost method of
accounting for oil and gas acquisition,
exploration and development costs. The Company
has operations only within the continental
United States and consequently has only one cost center.
All costs associated with property
acquisition, exploration and development
activities are capitalized within the cost
center. No costs related to production, general
corporate overhead or similar activities are
capitalized.
Capitalized costs within the cost center are
amortized on the units-of-production basis
using proved oil and gas reserves. The
carrying value of capitalized cost is limited
to the sum of (A) the present value of future
net revenues from estimated production of
proved oil and gas reserves, plus (B) the cost
of properties not being amortized, plus
the lower cost or estimated fair value of
unproved properties included in the costs
being amortized less (D) income tax effects
related to differences between book and tax
basis of the properties involved. For the
year ended December 31, 1985, total
capitalized costs exceeded the cost center
ceiling by $137,083. The excess was expense
to current operations.
(8)
DOL RESOURCES, INC
NOTES TO FINANCIAL STATEMENTS (CONT.)
NOTE 1: Sales and abandonments of oil and gas properties are
accounted for as adjustment of capitalized costs, with
no gain or loss recognized.
Drilling in progress is included in the cost center
with depletion being calculated on all costs with
cost center.
Earnings per Common Share
Earnings per common share were computed by
dividing the net loss by the weighted average
number of common shares outstanding during the
year.
NOTE 2. Notes Payable
Notes payable consist of the following:
Monthly Interest Due Within Due After
Installment Rate One Year One Year
1998
Note 1 due 7-14-99 $408,000 $ -0-
Gateway National Bank. Interest only payable
monthly at 6.64% per annum over a year of 360 days.
This note was assumed by the parent corp. On 6-30-99.
NOTE 3. Related Party Transactions
The Company ended 1998 with accounts receivable from
Glauber Management Corp. (the parent company) of
$344,615.The balance of this account on June 30, 1999
was $337,122 and was included in assumption of assets
and liabilities agreement with the parent dated 6-30-99.
NOTE 4. Income Taxes
The Company as of December 31, 1998 had a net operating
income loss carryover for income tax purposes of
approximately $740,000. The carryover is available
to offset taxable income of future years and expires as
follows:
(9)
DOL RESOURCES, INC
NOTES TO FINANCIAL STATEMENTS (CONT.)
1998 241,000
1999 14,000
2000 109,000
2001 40,000
2002 48,000
2003 3,000
2004 34,000
2007 14,000
2008 19,000
2009 1,000
2011 217,000
740,000
The Company also had approximately $1,300 of
investment tax credits available for carryover against
future federal income tax liabilities.
For financial reporting purposes, the net operating
loss has been used to offset prior deferred income
taxes. To the extend that the net operating loss
carryovers are utilized for income tax purposes in
future years, the deferred income taxes eliminated to
give credits related to timing differences of the current
year not recorded, will be reinstated.
Because of timing differences related principally to
intangible drilling costs, cumulative losses for income
tax reporting purposes exceed those reported by
approximately $576,000. Because of the uncertainly as
to realization, no future tax benefits are recognized
at December 31, 1998.
(10)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
CONDENSED UNAUDITED STATEMENT OF INCOME
The following is Management's discussion and analysis of
certain significant factors which have affected the Company's
earnings during the period included in the accompanying Condensed
Unaudited Statement of Income.
A summary of the period to period changes in the principal
items included in the Condensed Unaudited Statement of Income is
as shown below:
Six Months
ending June 30,
1999 and 1998
Net Sales (12,600)
Interest and Other Income -0-
General and Administrative 2,570
Depletion, Depreciation
and Amortization ( 2,936)
Consulting & Management Fees -0-
Interest Expense ( 5)
Net Income (Loss) (12,058)
Oil and gas sales decreased as compared to the same period
last year due to a decrease in the price per BBL of oil and
normal decline in production.
The recurring cash flow for the first six months of 1999 was
approximately $4,300 per month. General and Administrative
expenses increased due to the legal fees and transfer fees.
Interest expense remained the same as the previous year.
Management expects a slow upward trend in oil and gas prices
to continue. This would not only increase revenues and cash flow
but would enhance our ability to raise much needed funds for
drilling additional wells. It is the opinion of management that
a minimum of $25.00 per Bbl. oil is needed in order to expand
operations and replace depleted reserves. Meanwhile a continuing
effort is being made to increase production, and consequently
revenues by seeking out and negotiating joint-venture
recompletion projects where positive reserve information exists.
Management has been seeking out possible merger
opportunities. There have been several negotiations with private
companies desiring to go public. In preparation for an impending
merger Glauber Management, (Parent) by an agreement dated June
30, 1999 assumed all liabilities and selected assets of the
company in exchange for contributed capital. Also, Oklahoma oil
properties held by the Parent were contributed to the Company.
(11)
Review of Independent Public Accountants:
The information contained in substantially all financial
statements accompanying this report were supplied by internal
accountant of registrant. Although such statements have not been
reviewed by registrant's certified public accountant they are
available for review.
Office Information
No reports on Form 8-K were filed by the Company in the
quarter for which this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned there unto duly authorized.
DOL RESOURCES, INC.
/s/ Fred M. Updegraff
Fred M. Updegraff
Vice President, Treasurer and
Principal Accounting Officer
Date: July 12, 1999
(12)