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 first quarter ended December 31, 1998 Commission File Number 0-9071 E.T. CAPITAL, INC. (Exact name of registrant as specified in its charter) (Formerly Caribou Energy, Inc.) Colorado 74-2026624 (State of incorporation) (I.R.S. Employer Identification No.) 650 W.Georgia St., Suite 315, P.O.11523, Vancouver, B.C. Canada V6B 4N7 (Address of principal executive offices) (Postal Code) Registrant's telephone number including area code: (604)925-0534 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 NASDAQ 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 December 31, 1998 there were 58,787,216 shares of Common Stock, $0.10 par value, outstanding. Documents incorporated by reference: None Item 1. INDEX Page of Report PART I FINANCIAL INFORMATION Item 1. Financial Statements: Unaudited Consolidated Balance Sheets: As at December 31st, 1998 and 1997...................1. Unaudited Consolidated Statement of Operations: For the three months ended December 31st, 1998 and 1997...............................................2. Unaudited Consolidated Statement of Cash Flow: For the three months ended December 31st, 1998 and 1997...............................................3. Unaudited Statement of Stockholders' Equity: As at December 31st, 1998...........................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. E.T. CAPITAL, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET (Unaudited) ASSETS December 31,December 31, 1998 1997 CURRENT ASSETS: Accounts Receivable 50,327 $ 0 FIXED ASSETS: Equipment 534,886 534,886 Less accumulated depreciation (534,885) (534,885) Net Fixed Assets (Note 1) 0 1 OTHER ASSET Rights' Title, net of amortization 1 1 Product Development Expenditures 182,881 243,881 Total Other Assets 182,882 243,842 TOTAL ASSETS $ 233,210 $ 243,843 E.T. CAPITAL, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Dec. 31, 1998Dec. 31, 1997 CURRENT LIABILITIES: Accounts Payable $120,207 107,577 LONG-TERM LIABILITIES: Debenture Payable, 546,722 183,462 Bearer STOCKHOLDERS' EQUITY: Common stock, $.10 par value 10,000,000,000 shares authorized, 58,787,216 shares issued and outstanding 4,516,079 4,516,079 Paid-In-Capital in excess of par value 20,069,869 20,069,869 (Deficit) Accumulated during the Development Stage (25,019,667)( 24,663,144) TOTAL STOCKHOLDERS' EQUITY ( 433,719) ( 47,196) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 233,210$ 243,843 E.T. CAPITAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS (Unaudited) For the 3 mos.For the 3 mos. Ended Ended Dec. 31, 1998Dec. 31, 1997 REVENUES$ 0 $ 0 GENERAL AND ADMINISTRATIVE EXPENSES: Auto Expenses, gas and repairs 3,000 3,000 Consulting Fees 72,890 Depreciation Expense0 0 Rent Expense 12,600 12,600 Telephone Expense 9,000 9,000 Travel and Promotions 45,000 45,000 TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 69,600 142,490 OTHER EXPENSES Interest Expense 12,849 2,737 NET LOSS$ 82,089$ 145,227 E.T. CAPITAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOW (Unaudited) For the 3 mos.For the 3 mos. EndedEnded Dec. 31, 1998Dec. 31, 1997 Net Cash Flows From Operating Activities: Net (Loss)$( 82,089)$( 145,227) Sub-total ( 82,089) ( 145,227) INCREASE (DECREASE) IN DEBENTURE PAYABLE 82,089 145,227 INCREASE (DECREASE) IN CASH 00 CASH BEGINNING OF PERIOD 50,327 0 CASH, END OF THE PERIOD$ 50,327$ 0 E.T. CAPITAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) As At Dec.31, 1996 Common Class Stock Additional DevelopmentStockholders $0.01 Par ValuePaid-In StageEquity Shares AmountCapital(Deficit)(Deficit) Balances, September 30, 199658,787,216$4,516,079$18,429,869$(23,341,645)$ (395,697) Issue 1,500,000,000 shares @ $0.234 on October 1, 1996 1,500,000,00015,000,000335,000,000 0 3,500,000,000 Cancellation of 1,500,000,000 shares @ $0.234 on February 15, 19971,500,000,00015,000,000335,000,000 0 3,500,000,000 Sale of 8,000,000 shares @$0.15 Sept. 21, 1997 0 0 1,640,000 0 1,640,000 Net (Loss) for the year ended Sept. 30, 1997 0 0 0 (1,146,273) (1,146,273) Balance, Sept. 30, 1997 58,787,216$4,516,079$20,069,869$(24,487,918)$ 98,030 Net (Loss) for the 3 months ended Dec. 31, 1997 0 0 0$ (145,226)$ (145,226) Balances, Dec. 30, 1997 58,787,216 $4,516,079$20,069,869$ (24,633,144)$ (47,226) Net (Loss) for the 3 months ended Dec. 31, 1998 0 0 0$ ( 82,089)$ ( 82,089) Balances, Dec. 31, 1998 58,787,216 $4,516,079$20,069,869$ (25,019,667)$ ( 433,719) Note 1. Whereas the Company's independent Auditor has depreciated equipment on an accelerated basis, the equipment has been upgraded on a continuing basis and is operating well and will continue to do so for several more years. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations December 31, 1998 v. December 31, 1997 Overall E.T. Capital, Inc. is continuing to expand its entry into "not-for-profit" fund raising using "1-900" "pay-per-call" telephone numbers as outlined in the Company's business plan. With campaign finance reform a central issue in both the Congress and the Senate, the Company is ready to conclude agreements for the use of the Company's two political "1-900" fund raising numbers: 1-900-DEMOCRAT and 1-900-REPUBLICAN. These numbers could raise hundreds of millions of dollars for both the Democratic and Republican parties. Projections indicate the Company could earn over $2.00 per share from each number. To develop cash flow from the "1-900" concept, the Company will continue to rely on Xanthos Management Corporation to finance the Company's ongoing overhead under the terms of the bearer debenture it holds until fund raising contracts have been signed. (See notes to September 30, 1998 Audit as filed and as part of the September 30, 1998 10K.) The Company has been active in its efforts to acquire and finance the Paraguayan hydrocarbon concessions, however the downward trend in the price of oil has slowed interest in this project. In late 1997 and continuing throughout 1998, the Asian economic crisis as well as a world wide warming trend adversely affected the world price of hydrocarbons. Activity in this field has historically been cyclical and the Company considers that this crisis has already been taken into account by finance professionals and should not adversely affect ongoing negotiations. Cash assets at the close of the first quarter were $50,327 as compared to $0 at December 31, 1997 and 1996; fixed assets were written down to $1 at December 31, 1998 as compared to $1 at December 31, 1997 and $2,270 at December 31, 1996. The Rights and associated product development expenditures (subject to the amortization schedule set forth in the Financial Statements) dropped to $1 at December 31, 1998 compared to $243,841 at December 31, 1997 and $304,802 at December 31, 1996. Total assets dropped to $233,210 at December 31, 1998 from $243,841 at December 31, 1997 and (because the financing that had been negotiated through Barclay's Bank in London was canceled) from $350,307,072 at December 31, 1996. During the fiscal year, the Company and its counsel continue to take the position that individuals, corporations and/or financial institutions that either profited from or participated in the above transaction through Barclay's should compensate the Company for the unauthorized use of its securities and for breach of the original contractual agreements. The Company's lawyers are investigating the Company's remedies as a result of these transactions and are confident that the Company will be successful. Extraordinary Items In August, the Company made an Agreement with, Bruce Straughn of Wilmette, Illinois, and John McConkey of Trabuco Canyon, California, whereby they would raise $5 million in working capital for the Company in order for the Company to proceed with extensive marketing studies for the two political 1 900 fund raising telephone numbers, 1 900 "Democrat" and 1 900 "Republican". The Company arranged for the delivery of 2.4 million shares of E.T. Capital, Inc., borrowed from Xanthos Management, to Straughn and McConkey on August 23, 1998. The terms of the agreement with Straughn and McConkey required them to pay $200,000 immediately and to raise $5 million by the end of 1998. Straughn and McConkey immediately violated the Agreement by not making the required $200,000 payment. When payment of the $200,000 was not made, the Company demanded the return of the 2.4 million shares. Notwithstanding this demand, Straughn and McConkey further damaged the Company by disposing of the said 2.4 million shares, by selling them into the market, with the result that the price of the stock was forced down to a level of $0.003 per share from $1.50 per share. The shareholders lost over $25 million in market capitalization as a result of the actions of these two individuals. Damages to the Company and various causes of action are being assessed by counsel for the company. Further, the Company has incurred a potential liability to Xanthos Management for the return of the Shares delivered to Straughn and McConkey. Any loss payable by the Company to Xanthos as a result of this transaction will be added to claims against Straughn and McConkey. An adverse claim has been filed by the Company with the Company's transfer agent against the said 2.4 million shares of E.T. Capital, Inc. delivered to Bruce Straughn and John McConkey. There were no other extraordinary items reported in this fiscal year other than that as stated above. Liquidity and Capital Resources At December 31, 1998, the Company had cash assets of $50,327 and total assets of $233,210 compared with cash assets of $0 and total assets of $243,943 at December 31, 1997 and $350,307,072 at December 31, 1996. Except as previously disclosed, 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 December 31, 1998. 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 December 31, 1998. Other Information Not applicable. Part II. Other Information Items 1, 2, 3, 4, 5, and 6 are not applicable and have been omitted. 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: January 3, 1999 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. Dated: January 3, 1999/s/ Sidney B. Fowlds Director Dated: January 3, 1999 /s/ John Johnston Director Dated: January 3, 1999/s/ Robert Miller Director