This is a Confirming Copy of a filing made in paper on
September 13, 1995.
SECURITIES AND EXCHANGE
-----------------------
COMMISSION
----------
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
---------
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended
June 30, 1995.
- Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period
from to
---- ----
Commission File No. 0-17246
GULF EXPLORATION CONSULTANTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0293525
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
1270 Avenue of the Americas, Suite 2900, New York, New York 10020
Registrant's telephone number including area code: (212) 247 2120
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 X NO
---------- ----------
The number of shares of common stock outstanding as of June 30 1995
was 99,999,000.
Page 1 of 9
GULF EXPLORATION CONSULTANTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30 December 31
------- -----------
1995 1994
---- ----
(unaudited) (audited)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 12,041 $ 26,586
Accounts receivable 46,252 9,211
Prepaid expenses 6,919 13,363
Due from affiliates 5,301 4,935
Other - 471
---------- ----------
Total Current Assets 70,513 54,839
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, at cost
Equipment, including assets acquired under
capital leases ($15,084 in 1995 and 1994) 80,671 70,818
Less - Accumulated depreciation, including
amortization applicable to assets
acquired under capital leases ($2,637
in 1995, and $839 in 1994) 21,530 8,552
---------- ----------
59,141 62,266
---------- ----------
DEFERRED EXPENSES 191,279 134,392
---------- ----------
$ 320,933 $ 251,497
========== ==========
The accompanying notes are an integral part
of these financial statements
GULF EXPLORATION CONSULTANTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30 December 31
------- -----------
1995 1994
---- ----
(unaudited) (audited)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accrued professional fees $ 50,813 $ 57,570
Other accrued expenses and accounts payable 203,205 94,662
Deferred income 23,390 8,192
Due to affiliates 246,420 66,692
Current portion of capital lease obligations 8,111 7,771
Short term loan 200,000 -
Other - 6,813
---------- ----------
731,939 232,803
---------- ----------
CAPITAL LEASE OBLIGATIONS, less current portion
shown above 1,352 5,035
---------- ----------
STOCKHOLDERS EQUITY
Common Stock, $0.01 par value, 100,000,000
shares authorized, 99,999,000 shares issued
and outstanding as of June 30, and
December 31, 1994 respectively 999,990 999,990
Additional paid-in capital 6,449,789 6,449,789
Retained deficit (7,862,137) (7,436,120)
----------- -----------
(412,358) 13,659
----------- -----------
$ 320,933 $ 251,497
=========== ===========
The accompanying notes are an integral part
of these financial statements
GULF EXPLORATION CONSULTANTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Six months ended
------------------ ----------------
June 30 June 30 June 30 June 30
------- ------- ------- -------
1995 1994 1995 1994
---- ---- ---- ----
(unaudited)(unaudited)(unaudited)(unaudited)
OPERATING REVENUES:
Subscription revenues $ 19,852 $ - $ 32,984 $ -
Other income 4,747 1,185 8,245 1,185
--------- --------- --------- ---------
24,599 1,185 41,229 1,185
--------- --------- --------- ---------
OPERATING EXPENSES:
On-line service
production costs (70,998) - (154,777) -
Technical, general
and administrative (140,336) (20,252) (274,926) (23,296)
Depreciation, depletion and
amortization (19,914) - (37,130) -
--------- --------- --------- ---------
(231,248) ( 20,252) (466,833) (23,296)
--------- --------- --------- ---------
LOSS FROM OPERATIONS (206,649) ( 19,067) (425,604) (22,111)
--------- --------- --------- ---------
OTHER INCOME EXPENSE
Interest expense (221) - (479) -
Interest income 42 374 66 664
--------- --------- --------- ---------
(179) 374 (413) 664
--------- --------- --------- ---------
LOSS BEFORE INCOME TAX AND
EXTRAORDINARY ITEMS (206,828) (18,693) (426,017) (21,447)
INCOME TAX PROVISION - - - -
--------- --------- --------- ---------
NET LOSS BEFORE
EXTRAORDINARY ITEMS (206,828) (18,693) (426,017) (21,447)
EXTRAORDINARY GAIN / LOSS - - - -
---------- --------- ---------- ---------
NET LOSS TO COMMON
STOCKHOLDERS $(206,828) $(18,693) $(426,017) $(21,447)
========== ========= ========== =========
LOSS PER COMMON SHARE
Net loss before
extraordinary item $ .00 $ .00 $ .00 $ .00
Net extraordinary item $ .00 $ .00 $ .00 $ .00
--------- -------- -------- --------
$ .00 $ .00 $ .00 $ .00
========= ======== ======== ========
LOSS PER COMMON SHARE -
ASSUMING FULL DILUTION
Net loss before
extraordinary item $ .00 $ .00 $ .00 $ .00
Net extraordinary item $ .00 $ .00 $ .00 $ .00
--------- -------- -------- --------
$ .00 $ .00 $ .00 $ .00
========= ======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements
GULF EXPLORATION CONSULTANTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Ended
----------------
June 30 June 30
------- -------
1995 1994
---- ----
(unaudited) (unaudited)
OPERATING ACTIVITIES:
Net loss $(426,017) $ (21,447)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation, depletion and amortization 37,130 -
Net change in accounts receivable,
accounts payable and other (30,219) -
Change in operating accounts payable and
accrued liabilities, net 119,068 17,072
---------- ----------
Net cashflows used in operating
activities (300,038) (4,375)
---------- ----------
INVESTING ACTIVITIES
Proceeds of sale of property - 12,000
Purchase of equipment (9,853) -
Deferred expenditure (81,039) -
---------- ----------
Net cash flows provided by (used in)
investing activities (90,892) 12,000
---------- ----------
FINANCING ACTIVITIES
Repayment of capital lease obligation (3,343) -
Proceeds of short term loan 200,000 -
Loan from affiliate 179,728 -
---------- ----------
Net cash flows provided by financing
activities 376,385 -
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (14,545) 7,625
CASH AND CASH EQUIVALENTS, beginning of period 26,586 99,491
---------- ----------
CASH AND CASH EQUIVALENTS, end of period $ 12,041 $ 107,116
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements
GULF EXPLORATION CONSULTANTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) GENERAL
-------
The financial statements of Gulf Exploration Consultants, Inc. (Gulf)
and subsidiaries (collectively "the Company") for the six month period
ended June 30, 1995, are unaudited but reflect, in the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to fairly present the results for such periods. The
accompanying financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Annual Report
included in the Form 10-K for the year ended December 31, 1994.
GOING CONCERN ASSUMPTION
------------------------
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However,
substantial doubt exists about its ability to continue as a going concern
as the Company has, exclusive of extraordinary items, suffered recurring
losses and has sold substantially all of its revenue producing assets in
the oil and gas industry in order to retire certain debt on which it had
defaulted. As of December 31, 1994 the Company s only active subsidiary is
a development stage enterprise, which commenced operations in 1994 and
requires capital and increased revenue to continue as a going concern. The
accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
During 1993 and 1992, management of the Company was successful in
retiring certain debt at a substantial discount. Management was also
successful in eliminating all of the liquidation preference associated with
the Company's preferred stock by purchasing the remaining stock during
1993.
Management of the Company is also liquidating certain wholly owned
subsidiaries of Gulf. Management of the Company believes that the
liquidation of a subsidiary will not have an effect on Gulf or the
affiliate companies. However, no assurance can be given that Gulf will not
assume a contingent liability for the amount of the subsidiary debt not
fully extinguished in liquidation.
Management s current plans are to raise approximately $500,000 in the
capital markets and improve operating results. The combination of which
are intended to improve capital resources and cash flow of the Company.
However, no assurance can be given that these strategies will be effected,
or, if effected, that the terms will be favorable or non-dilutive to the
stockholders of the Company.
CHANGE OF MANAGEMENT
--------------------
On May 10, 1994 Mr. Paul L H Bristol and Mr. Michael H Nolan joined
the Company as Chief Operating Officer and Chief Financial Officer
respectively. Both are executives with Minmet plc, a company incorporated
in Ireland and quoted on the Exploration Securities Market of the Dublin
Stock Exchange.
(2) LOSS PER COMMON SHARE
---------------------
Loss per common share is based on the weighted average number of
common shares outstanding during each period. The average number of common
shares outstanding for the six month periods ended June 30, 1995 and 1994
was 99,999,990 and 62,057,731 common shares respectively.
Loss per common share - assuming full dilution is based on the
weighted average number of common shares outstanding during each period
plus the additional common shares outstanding from the assumption that the
Company's serial preferred stock was converted to common stock. The
average number of shares used to compute the fully diluted loss per share
was 99,999,990 and 62,057,731 shares for the six month periods ended June
30, 1995 and 1994 respectively.
Common stock equivalents are antidilutive and are not considered in
the calculations of loss per share.
(3) PREFERRED STOCK
---------------
On March 24, 1993 the Company acquired 3,000 shares of Series A
Preferred stock for $150,000 and zero shares of common. That purchase
retired the balance of the A Preferred shares.
(4) COMMITMENTS AND CONTINGENCIES
-----------------------------
As of April 20, 1995, the Company has not filed certain federal and
state income tax returns for the years ended 1991, 1992 and 1993. The 1994
return has been extended. It is management s intent to file the required
tax returns in 1995. Management believes penalties for late filing will
not be material to the financial statements.
Russiamoney, which Emerging Money has a 50% interest in, has the
following commitments which expire December 31, 1995:
$10,000 per month, payable to a related party, for the purpose of
receiving various financial information to be provided to subscribers. The
amount is subject to increase to $17,000 per month if certain cash flow
targets of the joint venture are reached. 13,750 Irish pounds, $21,010
using the December 31, 1994 exchange rate, per month payable to various
related parties for various management and production services.
(5) SUBSEQUENT EVENTS
-----------------
The Company has received an approach which may result in the sale of
Emerging Money plc. Further details will be supplied with the 10Q for
quarter ended September 30, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
RESULTS OF OPERATIONS
Three months ended June 30, 1995.
The Company had a net loss of $206,828 for the quarter ending March
31, 1995. Production costs of the "Russiamoney" product totaled 70,998
pounds against revenues of $19,852. Other costs including administration
overhead and marketing totaled $140,336 were incurred in the establishment
of the product. The "Russiamoney" product is experiencing difficulties in
generating the levels of sales volumes budgeted and discussions are taking
place with distributors in the industry to expand the distribution outlets
of the product.
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN ASSUMPTIONS
----------------------------------------------------------
Subsequent to the purchase of Emerging Money plc the Company has been
seeking to raise additional funding through a private placement of debt.
$200,000 of short term funding has been raised and management are trying to
secure an additional $300,000 to secure the Company s funding requirement.
It is intended that after a recapitalization the Company will raise
additional capital to fund the future development of Emerging Money plc and
to repay the debt raised in the private placement.
Negotiations on the private placement of debt and the raising of additional
equity are on going and as a result there is no guarantee that these sums
will be raised.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
There are no material pending legal proceedings to which the Company
is a party or of which any Company property is the subject.
ITEM 2. CHANGES IN SECURITIES
---------------------
There have been no changes in the rights of security holders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
There are no defaults under its Senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
There were no matters submitted to a vote of security holders during the
period ended June 30, 1995.
ITEM 5. OTHER INFORMATION
-----------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
None
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 by the
undersigned thereunto duly authorized.
GULF EXPLORATION CONSULTANTS, INC.
Date: September 7, 1995
--------------------------
/S/ Paul L H Bristol
---------------------
Paul L H Bristol
Chief Operating Officer
/S/ Michael H Nolan
---------------------
Michael H Nolan
Chief Financial Officer