SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
AMENDMENT NO. 1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
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 NUMBER: 0-12185
ALASKA APOLLO RESOURCES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PROVINCE OF BRITISH COLUMBIA NOT APPLICABLE
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
131 PROSPEROUS PLACE, SUITE 17 40509-1844
LEXINGTON, KENTUCKY (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (606) 263-3948
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
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES . NO X .
----- -----
THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF MARCH 31, 1996 WAS 7,742,710.
1
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
THE INFORMATION REQUIRED BY THIS ITEM 1 APPEARS ON PAGE 11 THROUGH 13 OF
THIS REPORT, AND IS INCORPORATED HEREIN BY REFERENCE.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
In the fourth quarter of 1993, the Registrant acquired its wholly owned
subsidiary, Daugherty Petroleum, Inc. ("DPI"). Since the acquisition, the
Registrant has been the aggressively (1) acquiring natural gas and oil
properties in southeastern and western Kentucky (2) expanding its natural gas
production through joint ventures and drilling programs for its own account
and (3) diversifying its revenue and asset base to include other segments of
the oil and gas industry.
The Registrant has traditionally realized revenues from two primary sources.
The first is from its interests in the producing natural gas and oil wells it
operates or in which it owns fractional interests. The second is derived
from its activities as a "turnkey driller" and operator for various drilling
programs within its geographic area. The Registrant is expanding these
revenue sources to include pipeline construction and operation and the
marketing and aggregation of natural gas direct to commercial accounts and
utility systems. Revenues from these sources began to be realized during the
third quarter of 1995. As discussed below, during the first three months of
1996, the Registrant's revenues were derived primarily from proceeds
attributable to the sale of its natural gas and oil production. This is in
contrast to previous periods where revenues were generated primarily from its
turnkey drilling and operating contracts. The decline in first quarter
drilling revenues resulted from a delay in the completion of a drilling
program started in July 1995 and the lack of a year-end drilling program in
the fourth quarter of 1995 which would have generated first quarter activity.
For the three month period ending March 31, 1996, the Registrant drilled one
natural gas well and completed one well that was drilled in the fourth
quarter of 1995. This is in contrast to 1995 when, during the same period,
the Registrant drilled nine natural gas wells. The Registrant earns an
interest ranging from 7.5 percent to 25 percent net revenue interest in each
well it drills as a program sponsor or turnkey driller. During the second
quarter of 1995, the Registrant completed negotiations with a major joint
venture partner to develop a minimum of 15 additional wells. During the
period from July 1995 to March 31, 1996, the Registrant had drilled ten of
these wells.
LIQUIDITY
The Registrant plans to drill 25 wells during 1996 and will attempt to earn
interests ranging from 7.5 percent to 25 percent net revenue interests in
each well it drills as a program sponsor or turnkey driller. In addition,
the Registrant is currently negotiating with several prospective joint
venture partners to develop its existing leased acreage as well as acreage it
has obtained in 1996. Management believes that these negotiations could
result in the drilling of 15 to 20 of its 25 targeted wells during 1996.
During the first quarter of 1996, the Registrant realized additional revenues
from the purchase and sale of lumber related to a proposed acquisition of a
hardwood lumber manufacturing facility. Revenues related to this activity
accounted for 57 percent of the Registrant's total gross revenues.
In addition, the increase in production resulting from the acquisition of
various natural gas and oil reserves, the addition of new wells drilled and
completed in 1996, as well as projected turnkey drilling programs will, in
the opinion of management, provide sufficient cash flow to meet the short
term operating needs and financial commitments of the Registrant. The
Registrant's revenues should be further enhanced in 1996 as additional revenue
sources materialize from agreements reached during 1995 such as the operation
of a natural gas pipeline gathering system and the completion of the acquisition
of the hardwood lumber manufacturer.
Working capital for the period ending March 31, 1996, was a negative
$422,665. Compared to the same period in 1995, working capital was $139,117,
reflecting a decrease of $561,782.
2
During the first quarter of 1996, the major change in the composition of the
Registrant's current assets consisted of accounts receivable increase of
$36,036 from $509,943 to $545,979 and other current assets such as
inventories, prepaids and notes receivable increased $382,215 from $576,893
to $961,108. Current liabilities remained relatively constant at $1,699,355.
While management believes that the cash flow resulting from operating revenues
will contribute significantly to its short term financial commitments and
operating costs, it has developed a plan to meet its short term financial
obligations. This plan includes:
- Acquisition of revenue producing properties. As of December 31, 1995,
the Registrant entered into negotiations with the owner of the working
interests in a total of 35 oil wells for the acquisition of these working
interests. This transaction was completed on March 31, 1996, and was
concluded with owner financing to be paid from production revenues. After
debt service, this acquisition will result in a net increase in revenues
of approximately $54,000 per year. DPI, had been operating the properties
under a Participation Agreement whereby it paid all operating expenses.
This agreement originally anticipated the development and implementation
of an Enhancement Program whereby DPI would receive 100 percent of the
revenues over and above a base level of production until it recovered 100
percent the cost of the enhancement. Upon recovery of its enhancement
cost, DPI was to receive 50 percent of all revenues. After further
engineering analysis, it was determined that the implementation of an
enhancement program was not feasible with the net effect being DPI, paying
all expenses and receiving no revenue. The acquisition will result in the
Registrant obtaining offsetting revenues in excess of expenses currently
being incurred.
- Sponsorship of a private placement drilling/production program to
investors. DPI, will offer to investors through a network of brokers, a
drilling/production program targeted for the second quarter of 1996. This
program, if successfully completed, will generate revenues and profits for
the Registrant earlier in the year than normally occurs with a year-end,
tax driven program. Management has entered into discussions with several
potential brokers who have expressed interest in marketing a program in
early 1996. As of May 13, 1996, this program has been prepared and is
being sold.
- Sale of non revenue producing oil properties. The Registrant has entered
into negotiations for the sale of a group of oil wells. If successfully
completed, this transaction will result in a reduction of debt service
currently being paid by the Registrant. In addition, initial
negotiations indicate that the purchaser will contract with DPI for the
development, enhancement, and operation of these wells on a cost plus
basis.
- Sale of miscellaneous assets of the Registrant. The Registrant owns real
estate in Williamsburg, Kentucky, consisting of a field office and a
separate office/apartment building. The Registrant plans to sell the
office/apartment building and retain the field office which will reduce
debt service by approximately $16,000 per year. The Registrant has also
identified surplus vehicles and equipment, the sale of which will result
in a reduction of debt service in the amount of $16,740 per year. As of
May 13, 1996, these assets have been sold or have sales contracts pending.
- Negotiations related to third party loans. The Registrant is negotiating
with various third party lenders, including major shareholders, to secure
short term loans. If successful, these loans will be available during
1996. In December 1995, the Registrant received a line of credit from its
bank in the amount of $100,000. On February 23, 1996, a major
shareholder of the Registrant made available to DPI a line of credit in
the amount of $100,000.
- The Registrant has also negotiated extended payment arrangements with
various vendors.
3
RESULTS OF OPERATIONS
Compared to the first quarter of 1996, the Registrant's gross revenues
declined 28 percent to $407,093 from $519,4432 for the same period in 1995.
For the period, the Registrant experienced a net loss of $143,243 in 1996
compared to a net loss of $61,298 in 1995.
The Registrant's gross revenues are derived from turnkey contract revenues of
$38,549 (9.5 percent); natural gas and oil production revenues of $113,083
(27.8 percent); operating revenues of $23,659 (5.8 percent); lumber sales of
$230,246 (56.6 percent) and miscellaneous revenues of $1,556 (0.4 percent).
The reduction in gross revenues for the first quarter was attributable
primarily to the level of contract revenue from turnkey drilling activities
which declined by $276,933 from $315,482 in 1995 to $38,549 in 1996. These
revenues are derived from partnerships sponsored by the Registrant or others
who contract with the Registrant to drill and operate wells on a contract
basis. These partnerships are, to a large extend, driven by investors' desire
for the tax benefits associated with oil and gas investments. Historically,
the drilling activity generated from these partnerships result in year-end
revenues and drilling activity during the first three to six months of the
following year. In 1995, the Registrant sponsored a partnership that was
intended to provide these revenues and that partnership failed to reach the
minimum aggregate investment necessary for it to be completed. In addition,
other customers of the Registrant, that is other partnerships who would
typically use the Registrant as a turnkey driller and operator, encountered
similar problems in closing year-end investments which adversely impacted
these revenues.
Total operating expenses were $229,586 for the first quarter of 1996 compared
to $399,286 in for the same period in 1995 for a decrease of $169,700.
Operating expenses in for the quarter included non cash items such as
amortization and depreciation of $56,649. Non cash items include $44,739 for
the amortization of goodwill related to the Registrant's acquisition of DPI
While the Registrant is successfully achieving its goal of dramatic asset
growth, it has incurred costs and expenses above historical levels as a
result of these efforts. Management does not expect this trend to continue at
the same rate experienced in 1995, as the Registrant's infrastructure is
developed to support greater revenues before substantial increases in expenses
will be incurred again.
The Registrant believes there are three factors that will increase the price
it receives for its natural gas production. First, the acquisition of gas
reserves from the Wentzloff Energy and Michigan Southern Energy, Inc.
partnerships is providing a much larger production base with which to
negotiate contracts previously unavailable to the Registrant. Secondly, the
natural gas gathering systems completed in 1995 and currently under
construction will allow the Registrant to diversify its customer base and
access markets where prices are higher. Thirdly, natural gas prices in 1996
are up significantly over 1995, and projected market trends indicate that
higher prices will prevail throughout 1996. The combined effect will be a
higher overall price for the Registrant's production. The Registrant intends
to aggressively pursue new contracts based on its increased reserves,
increased production capacity and improved distribution.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A Civil Action was filed in the United States District Court for the Eastern
District of Michigan by J. Rudolph Oliver against the Registrant, DPI, the
Registrant's wholly-owned subsidiary, William S. Daugherty, the President of
the Registrant, Southern Drilling Company, Inc., Wentzloff Energy, Inc., and
the Registrant's attorneys, Breeding, McIntyre & Cunningham, P.S.C. and Robert
McIntyre. The plaintiff alleged he was a shareholder of Southern Drilling
Company, Inc., and Wentzloff Energy, Inc., and sought to set aside the sale in
1994 to the Registrant of 6.5 billion cubic feet of natural gas, 6,500 acres
of oil and gas leases and certain pipelines and equipment. Mr. Oliver alleged
that the sale was accomplished without the prior approval of the shareholders
or the Boards of Directors of Southern Drilling Company, Inc., and Wentzloff
Energy, Inc. This action was dismissed on February 13, 1996, for lack of
jurisdiction.
4
ITEM 5. OTHER INFORMATION.
NOT APPLICABLE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) LIST OF DOCUMENTS FILED WITH THIS REPORT.
PAGE
----
(1) FINANCIAL STATEMENTS, ALASKA APOLLO
Resources Inc., and subsidiary companies ---
Summary Consolidated Balance Sheet, for the period
ended March 31, 1996................................ 11
Summary Consolidated Statement of Profit (Loss), for
the period ended March 31, 1996..................... 12
Consolidated Statement of Change in Financial
Position, for the period ended March 31, 1996....... 13
All schedules have been omitted since the information required to be
submitted has been included in the financial statements or has been omitted
as not applicable or not required.
(2) EXHIBITS ----
The exhibits indicated by an asterisk (*) are incorporated by
reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
3(a)* Memorandum and Articles for Catalina Energy & Resources Ltd., a
British Columbia corporation, dated January 31, 1979, filed as an
exhibit to Form 10 Registration Statement filed May 25, 1984.
File No. 0-12185.
3(b)* Certificate for Catalina Energy & Resources Ltd., a British
Columbia corporation, dated November 27, 1981, changing the name
of Catalina Energy & Resources Ltd. to Alaska Apollo Gold Mines
Ltd., and further changing the authorized capital of the Company
from 5,000,000 shares of common stock, without par value per
share, to 20,000,000 shares of common stock, without par value
per share, filed as an exhibit to Form 10 Registration Statement
filed May 25, 1984. File No. 0-12185.
3(c)* Certificate of Change of Name for Alaska Apollo Gold Mines Ltd.,
a British Columbia corporation, dated October 14, 1992, changing
the name of Alaska Apollo Gold Mines Ltd. to Alaska Apollo
Resources Inc., and further changing the authorized capital of
the Company from 20,000,000 shares of common stock, without par
value per share, to 6,000,000 shares of common stock, without par
value per share.
3(d)* Altered Memorandum of Alaska Apollo Resources, Inc., a British
Columbia corporation, dated September 9, 1994, changing the
authorized capital of the Company from 6,000,000 shares of common
stock, without par value per share, to 20,000,000 shares of
common stock, without par value per share.
4* See Exhibit No. 3(a).
5
9* Voting Trust Agreements. Exhibits 3, 10 and 13 to Form 8-K for
the Company dated March 6, 1994. File No. 0-12185.
10(a)* Letter of Intent dated May 8, 1992 between Alaska Apollo Gold
Mines Limited and the Alaska Syndicate. Exhibit 10(f) to Form
10-K for the Company for the fiscal year ended December 31, 1992.
File No. 0-12185.
10(b)* Letter of Intent between Daugherty Petroleum, Inc. and Michigan
Southern Energy Corporation dated March 31, 1994 described in
Exhibit 10(b) to Form 10-K for the Company for the fiscal year
ended December 31, 1993. (File No. 0-12185).
10(c)* Redevelopment Agreement between the Company and Summit Funding,
Inc. dated July 1993 described in Exhibit 10(c) to Form 10-K for
the Company for the fiscal year ended December 31, 1993. (File
No. 0-12185).
10(d)* Agreement dated December 22, 1993 by and between Daugherty
Petroleum, Inc. and Wentzloff Energy, Inc. with respect to the
purchase by Daugherty Petroleum, Inc. of 6.5 billion cubic feet
of natural gas or its equivalent from 29 Kentucky partnerships
produced since April 1, 1993. Exhibit "1" to Form 8-K for the
Company dated March 6, 1994. File No. 0-12185.
10(e)* Trust Agreement dated December 22, 1993 by and between the
various partnerships described in Exhibit "1" to Form 8-K for
the Company dated March 6, 1994 (File No. 0-12185) and Breeding,
McIntyre & Cunningham P.S.C. with respect to the 1,086,108 shares
of the Common Stock of the Company received by the partnerships
in consideration of the sale and purchase described in Exhibit
"1" attached thereto.
10(f)* Voting Trust Agreement dated December 22, 1993 by and between
Wentzloff Energy, Inc. and the various partnerships described in
Exhibit "1" to Form 8-K for the Company dated March 6, 1994 (File
No. 0-12185) and Breeding, McIntyre & Cunningham, P.S.C. with
respect to the 1,086,108 shares of the Common Stock of the
Company received by the partnerships in consideration of the sale
and purchase described in Exhibit "1" attached thereto.
10(g)* Gas Purchase and Sale Agreement dated December 22, 1993 by and
between the various partnerships described in Exhibit "1" to Form
8-K for the Company dated March 6, 1994 (File No. 0-12185) and
Daugherty Petroleum, Inc. with respect to the production of gas
resulting from the sale and purchase of gas pursuant to the sale
and purchase described in Exhibit "1" attached thereto.
10(h)* Proxy dated December 22, 1993 by and between Wentzloff Energy,
Inc. and the various partnerships described in Exhibit "1" to
Form 8-K for the Company dated March 6, 1994 (File No. 0-12185)
in favor of Breeding, McIntyre & Cunningham, P.S.C. with respect
to the voting of the 1,086,108 shares of the Common Stock of the
Company received by the partnerships in consideration of the sale
and purchase described in Exhibit "1" attached thereto.
10(i)* Agreement for Purchase and Sale dated as of September 24, 1993
by and between Wentzloff Energy, Inc. and Daugherty Petroleum,
Inc. with respect to the purchase and sale of the of 6.5 billion
cubic feet of natural gas or its equivalent from 29 Kentucky
partnerships produced since April 1, 1993 as described in Exhibit
"1" to Form 8-K for the Company dated March 6, 1994 (File No.
0-12185), as well as the purchase by Daugherty Petroleum, Inc. of
undivided working interests in oil and gas leases and
6
certain equipment, machinery and personal property with respect
to such leases from Wentzloff Energy, Inc.
10(j)* Agreement and Amendment to Agreement dated November 16, 1993 by
and between Daugherty Petroleum, Inc., Wentzloff Energy, Inc. and
Wentzloff Partners, Inc. with respect to the amendment of the
agreement described in Exhibit "6" to Form 8-K for the Company
dated March 6, 1994 (File No. 0-12185), and the recasting of the
agreement in its current form.
10(k)* Agreement and Amendment to Agreement dated November 16, 1993 by
and between Daugherty Petroleum, Inc. Wentzloff Energy, Inc. and
Southern Drilling Co., Inc. with respect to the amendment of the
agreement described in Exhibit "6" to Form 8-K for the Company
dated March 6, 1994 (File No. 0-12185), and the recasting of the
agreement in its current form.
10(l)* Escrow Agreement dated November 15, 1993 by and between Wentzloff
Energy, Inc., Daugherty Petroleum, Inc., Alaska Apollo Resources,
Inc., and Breeding, McIntyre & Cunningham, P.S.C. with respect to
the 60,000 shares of the Common Stock of the Company received by
Wentzloff Energy, Inc. in consideration of the sale and purchase
described in Exhibit "6" to Form 8-K for the Company dated March
6, 1994. (File No. 0-12185).
10(m)* Voting Trust Agreement dated November 16, 1993 by and between
Wentzloff Energy, Inc. and Breeding, McIntyre & Cunningham,
P.S.C. with respect to the 60,000 shares of Common Stock of the
Company received by Wentzloff Energy, Inc. in consideration of
the sale and purchase described in Exhibit "6" to Form 8-K for
the Company dated March 6, 1994. (File No. 0-12185).
10(n)* Proxy executed by Wentzloff Energy, Inc. covering the 60,000
shares of the Common Stock of the Company received by Wentzloff
Energy, Inc. in consideration of the sale and purchase described
in Exhibit "6" to Form 8-K for the Company dated March 6, 1994
(File No. 0-12185).
10(o)* Escrow Agreement dated November 15, 1993 by and between Southern
Drilling Co., Inc., Daugherty Petroleum, Inc. Alaska Apollo
Resources Inc., and Breeding McIntyre & Cunningham, P.S.C. with
respect to the 20,000 shares of the Common Stock of the Company
received by Southern Drilling Co., Inc. in consideration of the
sale and purchase described in Exhibit "6" to Form 8-K for the
Company dated March 6, 1994. (File No. 0-12185).
10(p)* Voting Trust Agreement dated November 6, 1993 by and between
Southern Drilling Co., Inc. and Breeding, McIntyre & Cunningham,
P.S.C. with respect to the 20,000 shares of the Common Stock of
the Company received by Southern Drilling Co., Inc. in
consideration of the sale and purchase described in Exhibit "6"
to Form 8-K for the Company dated March 6, 1994. (File No.
0-12185).
10(q)* Proxy executed by Southern Drilling Co., Inc. covering the 20,000
shares of the Common Stock of the Company received by Southern
Drilling Co., Inc. in consideration of the sale and purchase
described in Exhibit "6" to Form 8-K for the Company dated March
6, 1994 (File No. 0-12185).
10(r)* Stock Purchase Agreement by and between William S. Daugherty,
Alaska Apollo Resources, Inc. and Daugherty Petroleum, Inc.
dated July 20, 1993. Reference is made to Form 8-K, dated
November 11, 1993, filed with the Securities and Exchange
Commission on November 12, 1993. (File No. 0-12185).
7
10(s)* Subscription Agreement dated July 30, 1992 between Alaska Apollo
Gold Mines Ltd. and Alaska Investments Ltd. described in Exhibit
10(g) to Form 20-F for the Company for the fiscal year ended
December 31, 1993. (File No. 0-12185).
10(t)* Letter of Intent dated March 15, 1993 between Alaska Apollo
Resources Inc. and Daugherty Petroleum, Inc. described in Exhibit
10(h) to Form 20-F for the Company for the fiscal year ended
December 31, 1993. (File No. 0-12185).
10(u)* Director's Incentive Stock Option Agreement dated January 10,
1994 between the Company and John R. Bogert.
10(v)* Director's Incentive Stock Option agreement dated January 10,
1994 between the Company and William S. Daugherty.
10(w)* Director's Incentive Stock Option Agreement dated January 10,
1994 between the Company and James K. Klyman-Mowczan.
10(x)* Director's Incentive Stock Option Agreement dated January 10,
1994 between the Company and Colin R. Bowdidge.
(b) REPORTS ON FORM 8-K
(1) Current Report on Form 8-K for the Company dated November 11,
1993, File No. 0-12185, reporting the acquisition of Daugherty
Petroleum, Inc. (Item 2. Acquisition or Disposition of Assets.)
(2) Current Report on Form 8-K/A for the Company dated November 30,
l993, File No. 0-12185, with respect to Financial Statements and
Stock Purchase Agreement pertaining to the acquisition of
Daugherty Petroleum, Inc. (Item 7. Financial Statements and
Exhibits.)
(3) Current Report on Form 8-K for the Company dated March 6, 1994,
File No. 0-12185, reported the acquisition by the Company of 6.5
billion cubic feet of gas or its equivalent from 29 Kentucky
partnerships, as well as 6,500 acres of oil and gas leases and
various undivided working interests in oil and gas leases and
equipment and machinery. The required financial statements and
pro forma financial information were not filed at the time the
report was filed. Instead, the financial statements and pro
forma financial information were to be filed by March 31,1994.
(Item 2. Acquisition or Disposition of Assets.)
(4) Current Report on Form 8-K for the Company dated March 24, 1994,
File No. 0-12185, reported the resignation of Milton Klyman as a
director of the Company on March 24, 1994. (Item 5. Other
Events.)
8
(5) Current Report on Form 8-K/A, Amendment No. 1, for the Company
dated March 31, 1994, File No. 0-12185, advising that the
required financial statements and pro forma financial information
with respect to the Form 8-K dated March, 1994 would be filed by
April 15, 1994. (Item 7. Financial Statements and Exhibits.)
(6) Current Report on Form 8-K/A, Amendment No. 2, for the Company
dated April 14, 1994, File No. 0-12185, advising that the
required financial statements and pro forma financial information
with respect to the Form 8-K dated March 6, 1994 would be filed
by April 29,1994. (Item 7. Financial Statements and Exhibits.)
(7) Current Report on Form 8-K/A, Amendment No. 3, for the Company
dated May 6, 1994, File No. 0-12185, filing the required
financial statements and pro forma financial information with
respect to the Form 8-K dated March 6, 1994. (Item 7. Financial
Statements and Exhibits.)
(8) Current Report on Form 8-K for the Company dated August 24, 1995,
File No. 0-12185, reported the filing of a lawsuit by J. Rudolph
Oliver. (Item 5. Other Events.)
9
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 of the
undersigned hereunto duly authorized.
ALASKA APOLLO RESOURCES INC.
(Registrant)
By: /s/ William S. Daugherty
-------------------------------------------------
William S. Daugherty, President
By: /s/ Timothy F. Guthrie
-------------------------------------------------
Timothy F. Guthrie, Chief Financial Officer
Dated: June 26, 1996
10
ALASKA APOLLO RESOURCES, INC.
SUMMARY CONSOLIDATED BALANCE SHEET
(United States Dollars)
Unaudited
31-Mar-95 31-Mar-96
----------- -----------
ASSETS
CURRENT ASSETS
Cash 29,154 151,818
Short Term Investments 108,368 0
Account Receivable 969,562 545,979
Inventory 0 79,542
Prepaid Expenses 20,300 7,159
Intercompany and Other Receivable 0 492,192
Other Current 182,503 0
- --------- ----------- -----------
Subtotal Current 1,309,887 1,276,690
MINING PROPERTY AND
RELATED EXPENDITURES-NET 11,193,316 11,235,129
OIL AND GAS PROPERTIES - NET 4,214,192 4,043,151
CAPITAL ASSETS 325,905 375,874
OTHER ASSETS
Deferred Tax Benefit 0 0
Bonds and Deposits 0 42,919
Related Party Receivable 0 99,288
NOTES RECEIVABLE 38,348 13,740
GOODWILL (Net of Accumulated
Amortization of $447,390) 1,521,130 1,342,174
INCORPORATION COSTS 428 428
- --------- ----------- -----------
TOTAL ASSETS 18,603,206 18,429,393
----------- -----------
----------- -----------
LIABILITIES
CURRENT LIABILITIES
Bank Loan 7,000 148,207
Account Payable and Accrued Liabilities 991,150 1,332,690
Long Term Debt 57,620 218,458
Loans Payable 115,000 0
- --------- ----------- -----------
Subtotal Current Liabilities 1,170,770 1,699,355
LOANS PAYABLE 757,212 1,265,428
DEFERRED INCOME TAXES 6,325 8,890
- --------- ----------- -----------
Subtotal Liabilities 1,934,307 2,973,673
SHAREHOLDER EQUITY
CAPITAL STOCK
Issued 19,784,443 20,068,190
Current Period Earnings (143,243)
Deficit (3,115,544) (4,469,227)
- --------- ----------- -----------
Subtotal Shareholder Equity 16,668,899 15,455,720
TOTAL LIABILITIES AND SHAREHOLDER EQUITY 18,603,206 18,429,393
----------- -----------
----------- -----------
0 0
Unaudited-Internally Prepared by Company Management
SUMMARY CONSOLIDATED
STATEMENT OF PROFIT (LOSS)
(United States Dollars)
Unaudited
For the Three Months Ending
31-Mar-95 31-Mar-96
--------- ---------
REVENUE
Gross Revenues 519,435 100.0% 407,093 100.0%
Direct Costs 193,908 37.3% 352,741 86.6%
----------- -----------
Gross Profit 325,527 62.7% 54,352 13.4%
GENERAL AND ADMINISTRATIVE COSTS
Salaries and Wages 65,770 12.7% 56,152 13.8%
Consulting and Management Fees 57,502 11.1% 3,555 0.9%
Office and General 104,103 20.0% 17,415 4.3%
Legal 57,672 11.1% 30,456 7.5%
Travel and Entertainment 0 0.0% 8,775 2.2%
Shareholder and Investor Information 21,720 4.2% 2,535 0.6%
Advertising and Promotion 0 0.0% 345 0.1%
Property and Payroll Taxes 0 0.0% 6,862 1.7%
Insurance 0 0.0% 10,844 2.7%
Depreciation and Amortization 78,546 15.1% 56,649 13.9%
Engineering 0 0.0% 0 0.0%
Rent 0 0.0% 7,800 1.9%
Accounting and Audit 0 0.0% 25,798 6.3%
Repairs and Maintenance 0 0.0% 2,400 0.6%
Stock Exchange Fees 4,000 0.8% 0 0.0%
Trust and Stock Exchange Company Fees 270 0.1% 0 0.0%
----------- -----------
SUBTOTAL-G&A COSTS 389,583 75.0% 229,586 56.4%
Less: Interest and Other Expense (Income) (2,759) -0.5% (31,991) -7.9%
----------- -----------
Income Before Tax and Extraordinary Items (61,297) -11.8% (143,243) -35.2%
Income Tax Expense (Benefit) 0 0.0% 0 0.0%
----------- -----------
NET PROFIT (LOSS) FOR CURRENT PERIOD (61,297) -11.8% (143,243) -35.2%
----------- -----------
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DEFICIT, beginning of period (4,469,227)
DEFICIT, end of period (61,297) (4,612,470)
Shares Outstanding 7,065,070 7,742,710
Earnings Per Share ($0.01) ($0.02)
Unaudited-Internally Prepared by Company Management
CONSOLIDATED STATEMENT
OF CHANGE IN FINANCIAL POSITION
(United States Dollars)
Unaudited
For The Three Month Period Ending
31-Mar-95 31-Mar-96
----------- -----------
OPERATING ACTIVITIES
Net Income (Loss) (61,297) (143,243)
Amort., Deprec, Depletion and Non
Cash Items 78,546 69,333
Change in Accounts Receivable (36,036)
Change in Prepaid Expenses (9,138) 4,262
Change in Accounts Payable and Accrued
Expenses (23,009) (18,383)
Change in Intercompany and Other
Accounts Receivable (202,288)
Change Other Current Assets (281,889) 1,348
----------- -----------
Net Cash From Operating Activities (296,787) (325,007)
FINANCING ACTIVITIES
Issue of Capital Stock 0 0
Change in Notes Payable 167,995 (2,184)
Change in Loan Payable (13,533) 351,442
----------- -----------
Net Cash from Financing Activities 154,462 349,258
INVESTING ACTIVITIES
Change in Resource Properties (34,735) (23,667)
Change in Oil and Gas Properties (13,667) 14,757
Change in Capital Assets (41,198) 11,909
Change in Other Assets 0 (14,412)
----------- -----------
Net Cash From Investing Activities (89,600) (11,413)
CHANGE IN CASH (231,925) 12,838
CASH, beginning of period 369,447 138,980
----------- -----------
CASH, end of period 137,522 151,818
----------- -----------
----------- -----------
Unaudited-Internally Prepared by Company Management