Manually Executed
As filed with the United States Securities and Exchange Commission
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the third quarter ended June 30, 1997 Commission File Number
0-9071
E.T. CAPITAL, INC.
(Exact name of registrant as specified in its charter)
Colorado 74-2026624
(State of incorporation) (I.R.S. Employer Identification No.)
3525 S. Tamarac Dr., Suite 120, Denver, CO 80237
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 329-0345
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
registered
Common Stock, $0.10 par value NASD OTC (Electronic bulletin
board)
Indicate by check mark whether the 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 for such shorter period that the
registrant was required to file such reports), and (2) has been subject to all
such filing requirements for the past 90 days.
Yes X No
As of June 30, 1996, there were 58,787,216 shares of Common Stock, $0.10 par
value, outstanding.
Documents incorporated by reference: None
INDEX
Page of
Report
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Balance Sheets:
As at June 30th, 1997 and 1996.....................1.
United Consolidated Statement of Operations:
For the nine months ended June 30th, 1997 and 1996.2.
Unaudited Consolidated Statement of Cash Flow:
For the nine months ended June 30th 1997 and 1996..3.
Unaudited Statement of Stockholders' Equity:
As at June 30th, 1997..............................4.
Item 2. Management's Discussion and Analysis of:
Financial Condition and Results of Operations .....5.
PART II OTHER INFORMATION
Other Information..................................6.
Signatures.........................................7.
Item 1.
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(Unaudited)
ASSETS
June 30, 1997 June 30, 1996
CURRENT ASSETS:
Cash on Hand$ 0 $ 0
FIXED ASSETS:
Equipment 534,886 534,886
Less accumulated
depreciation (534,885) (464,614)
Net Fixed Assets 1 70,272
OTHER ASSETS:
Rights' Title, net of
amortization 1 415,625
Product Development
Expenditures 304,801 365,761
Option to Purchase
Paraguayan Oil 0 1
Total Other Assets 304,802 781,387
TOTAL ASSETS$ 304,803 $ 851,659
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 1997 June 30, 1996
CURRENT LIABILITIES:
Accounts Payable$ 81,409 $ 65,762
LONG-TERM LIABILITIES:
Debenture Payable, Bearer 1,500,138 494,305
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value
10,000,000,000 shares authorized;
58,787,216 shares issued and
outstanding 4,516,079 4,436,079
Paid-In-Capital in excess
of par value 18,429,869 18,429,869
(Deficit) Accumulated during
the Development State (24,142,692) (22,574,536)
TOTAL STOCKHOLDERS' EQUITY 1,196,744 291,592
Treasury Stock (80,000) 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY$ 304,803 $
851,659 E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(Unaudited)
For the 9 mos. For the 9 mos.
Ended Ended
June 30, 1997 June 30, 1996
REVENUES $ 0 $ 0
GENERAL AND ADMINISTRATIVE EXPENSES:
Amortization $ 0 $ 1,246,875
Auto Expenses,
gas and repairs 9,000 9,000
Consulting Fees 475,480 501,360
Depreciation Expense 34,269 94,500
Finders' Fees 0 1,350,000
Rent Expense 37,800 37,800
Telephone Expense 27,000 27,000
Travel and Promotions 135,000 135,000
TOTAL GENERAL AND
ADMINISTRATIVE EXPENSES 718,549 3,401,535
OTHER EXPENSES
Option Expiry 1 0
Interest Expense 82,497 125,508
NET (LOSS) $ 801,047 $ 3,527,043
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
(Unaudited)
For the 9 mos. For the 9 mos.
Ended Ended
June 30, 1997 June 30, 1996
Net Cash Flows From Operating Activities:
Net (Loss) $ (801,047) $ (3,527,043)
Adjustments to Reconcile
Net (Loss) to Cash (Loss)
From Operating Activities:
Amortization 0 1,246,875
Depreciation 34,269 94,500
Sub-total (766,778) (2,185,671)
Net (Increase) Expiry of Options 1 (1)
Increase (Decrease) in Debenture (766,777) (1,564,338)
Payable
Issuance of Common Stock 0 3,750,000
INCREASE (DECREASE) IN CASH 0 0
CASH BEGINNING OF PERIOD 0 0
CASH, END OF THE PERIOD $ 0 $ 0
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
As At June 30, 1997
Common
Class Stock Additional Development
Stockholders
$0.0001 Par Value Paid-In Stage
Equity
Balance Shares Amount Capital (Deficit)
(Deficit)
September 30, 1995 25,787,216 $4,186,079 $14,929,869 $(19,047,313) $
(68,635)
Issue 25,000,000
shares @ US$0.15
April 17, 1996 25,000,000 250,000 3,500,0000 3,750,000
Issue 8,000,000
shares @US$1.25
July, 19968,000,000 80,000 9,920,0000 10,000,000
Reversal of
8,000,000 shares
issued July, 1996 0 0(9,920,000)0 (9,920,000)
Net (Loss) for the
year ended
September 30, 1996 (4,294,332) (4,294,332)
Balance,
September 30, 1996 58,787,216 $4,516,079 $18,429,869 $(23,341,645) $(
395,697)
November 17, 1997
Issuance of
1,500,000,000
common shares @
US$0.233 pursuant
to financing 1,500,000,000 15,000,000 350,000,000 350,000,000
Deficit for period (281,074) (281,074)
Balance
December 31, 1996 1,558,787,216 $19,516,079 $353,429,869 $(23,622,719)
$349,323,229
February 13, 1997
Cancel 1,500,000,000
share issue of
November 17, 1996 (1,500,000,000) 15,000,000 335,000,000 350,000,000
Deficit for period (261,750) (261,750)
Balance
March 31, 1997 58,787,216 $4,516,079 $ 18,429,869 $(23,884,469)
(938,521)
Deficit for period (258,253) (258,253)
Balance
June 30, 1997 58,787,216 $4,516,079 $ 18,429,869 $(24,142,692)
$(1,196,744)
Item 2.
Management's Discussion and Analysis
of
Financial Condition and Results of Operations
Results of Operations
June 31, 1997 v. June 31, 1996
Overall
The Company's reentry into the oil and gas exploration business has been
complicated by the breaches of agreements by Petek AG, a Swiss investment
company, and Barclays Bank in London, England, which have resulted in the
Company not receiving the agreed financing. In late 1996, the Company
negotiated a $350,000,000 financing with Petek AG, which required the Company
to issue 1,500,000,000 shares of its common stock and deliver them to Barclays
Bank in London. The Company delivered the shares electronically against
payment in November 1996. Barclays subsequently returned the shares in
February 1997 and withdrew the financing. There is some evidence that
Barclays used the shares to its financial benefit during the period of time it
held the shares; there is also some evidence that other financial institutions
and investment brokerages may have gained financially from the transactions
between the Company and Petek AG and Barclays. The Company has been
consulting with investigators and attorneys to consider its options; it has
rejected initial settlement offers as inadequate, especially if the failure of
the $350,000,000 financing prevents the Company from participating in the
Paraguayan oil exploration project. The failure of the financing means that
the development stage of the Company's program will continue to draw from the
Company's asset picture. Cash assets at the close of the first quarter were
$0 as compared to $0 at June 30, 1996, and $657 at June 30, 1995; fixed assets
were estimated to be worth $1 at June 30, 1997, as compared to $70,272 at June
30, 1996, and $199,693 at June 30, 1995; the Rights and associated product
development expenditures (subject to the amortization schedule set forth in
the Financial Statements) dropped to $304,801 as compared to $781,387 at June
30, 1996, and $2,504,846 at June 30, 1995; and total assets were $304,803 at
June 30, 1997, as compared to $851,659 at June 30, 1996, and $2,705,196 at
June 30, 1995.
Extraordinary Items - There were no extraordinary items reported in this
fiscal year.
Liquidity and Capital Resources
At June 30, 1997, the Company had no cash assets and $304,803 in total
current assets as compared to no cash assets and total current assets of
$851,659 at June 30, 1996, and cash assets of $657 and total assets of
$2,705,196 at June 30, 1995. The Company is not aware of any known trends,
demands, commitments, events or uncertainties that will result in or that are
reasonably likely to result in the Company's liquidity increasing or
decreasing in any material way.
Capital Resources and Expenditure
There were no significant capital expenditures made by the Company during
the quarter ended June 30, 1997. Further, the Company had no known material
commitments for additional capital expenditures as of June 30, 1997.
Management of the Company knows of no material trends, favorable or
unfavorable, with respect to the Company's capital resources.
Inflation - The results of the Company's operations have not been
significantly affected by inflation during the quarter ended June 30, 1997.
Part II. - Other Information
Items 1, 2, 3, 4, 5, and 6 are not applicable and have been omitted.
Signatures
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, duly authorized.
Dated: October 10, 1997
E.T. CAPITAL, INC. (the "Company")
By: /s/ Sidney B. Fowlds
Chairman of Board of Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
Date: October 10, 1997/s/ Sidney B. Fowlds
Director
Date: October 10, 1997/s/ John Johnston
Director
Date: October 10, 1997/s/ Robert Miller
Director