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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB-A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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 NUMBER: 0-12185
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DAUGHERTY RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PROVINCE OF BRITISH COLUMBIA NOT APPLICABLE
(State or other jurisdiction of incorporation or (I.R.S. EMPLOYER
organization) IDENTIFICATION NO.)
120 PROSPEROUS PLACE, SUITE 201
LEXINGTON, KENTUCKY 40509-1844
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (606) 263-3948
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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 OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF SEPTEMBER 30, 1999, WAS 2,329,352.
Transitional Small Business Disclosure Format (check one):
Yes [ ]No [X] .
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The information required by this Item 1 appears on pages 8 through 11
of this Report, and is incorporated herein by reference.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following is a discussion of the Company's financial condition and
results of operations. This discussion should be read in conjunction with the
Financial Statements of the Company described in Item 1 of this Report.
Statements contained in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which are not historical facts may be
forward looking statements. Reliance upon such information involves risks and
uncertainties, including those created by general market conditions, competition
and the possibility that events may occur which could limit the ability of the
Company to maintain or improve its operating results or execute its primary
growth strategy. Although management believes that the assumptions underlying
the forward-looking statements are reasonable, any of the assumptions could be
inaccurate, and there can be no assurances that the forward-looking statements
included herein will prove to be accurate. The inclusion of such information
should not be regarded as a representation by management or any other person
that the objectives and plans of the Company will be achieved. Moreover, such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward-looking statements
that speak only as of the date hereof.
Daugherty Resources, Inc., formerly Alaska Apollo Resources Inc., (the
"Company" or the "Registrant") is a diversified natural resources company with
assets in oil and gas, wood products manufacturing, and gold prospects.
Originally formed in 1979 to develop gold properties, the Company in the fourth
quarter of 1993, acquired its wholly owned subsidiary, Daugherty Petroleum, Inc.
Since acquiring Daugherty Petroleum, Inc., in the fourth quarter of
1993 the Company has increased its reserves through the acquisition of oil and
gas properties in the Appalachian and Illinois Basins, and the drilling of wells
through joint venture and turnkey drilling programs, where Daugherty Petroleum,
Inc. is the primary decision maker. The Company continues to aggressively seek
acquisitions and drilling programs.
At the Annual General Meeting held on June 30, 1999, shareholders
approved special resolutions, effective June 30, 1999, authorizing the
following:
1. Increasing the Company's authorized common shares from
10,000,000 common shares without par value to 100,000,000 common shares without
par value;
2. Altering the Memorandum of the Company so that the
authorized capital will be increased by creating 5,000,000 preferred shares
without par value;
3. Attaching special rights and restrictions to the common
shares and preferred shares;
Effective June 29, 1998, the Company's stock was traded on The NASDAQ
Small Cap Market under the name Daugherty Resources, Inc. and the trading symbol
"NGASF". Effective March 15, 1999, the Company's symbol was changed to "NGAS".
The creation of the preferred shares by the Company allowed the
acquisition of interests in certain oil and gas wells in Kentucky, Louisiana and
Tennessee from Environmental Energy, Inc., and its affiliated limited
partnerships. This acquisition has closed in the fourth quarter of 1999.
The acquisition of Red River Hardwoods, Inc. in November of 1996
diversified the Company by adding lumber sales and manufacturing activities.
Since its acquisition, Red River's activities have been reflected on the
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Company's Consolidated Financial Statements. However, on June 30, 1999, a Letter
of Intent was signed to sell Red River to H & S Lumber, Inc., Clay City, KY. A
definitive agreement was reached during August of 1999, that provided for H & S
to pay Daugherty Petroleum $537,000 and assume all of Red River's liabilities
with the exception of debt owed by Red River to Daugherty Petroleum. The sale
closed during December 1999 and has an effective date of June 30, 1999. The
agreement further provided for Red River's manufacturing operations to be
conducted by H & S pending the closing of the sale of the stock in the 80% owned
subsidiary. In the interim and pending the closing, the Company retained
ownership of the assets and responsibility for the secured debt, and H & S was
responsible for the operations of the facility and income and expenses related
thereto, plus debt service on secured debt. The sale of Red River allows the
Company's management to concentrate on expanding its core oil and gas
operations. These financial statements have been restated to reflect this
divestiture.
The Company continues its tradition of realizing revenues from its oil
and gas operations. For the nine months ending September 30, 1999, the Company
drilled six natural gas wells, completed five natural gas wells and extended its
gathering system by 5500 feet. By comparison, for the same period of 1998, the
Company drilled ten natural gas wells, completed nine natural gas wells, and
extended its gas system by 10,500 feet. Drilling operations for the first nine
months of 1999 were primarily related to a joint venture on the Company's
farmout acreage acquired from Equitable Resources Energy Corporation.
LIQUIDITY
The Company continues to acquire natural gas and oil properties.
Daugherty Petroleum, Inc. has provided the Company with a diversified asset base
that includes natural resources other than its original gold and silver mining
properties. During the first nine months of 1999, management continued to invest
in areas it deemed crucial in developing an infrastructure suitable to support
future growth. These areas included ongoing expenses in management, professional
and operational personnel, and other expenses deemed necessary to position the
Company for future acquisitions and financing.
Historically, the Company's revenues have been from its interests in
the producing natural gas and oil wells it operates and in which it owns
interests, from its activities as "turnkey driller" and operator for various
drilling programs in its geographic area, and sales of wood products. During the
first nine months of 1999, approximately 64% of the Company's revenues were
derived from joint venture drilling. Natural gas and oil operations and revenues
accounted for 36% of the revenues.
The Company plans to drill 5 wells during the last quarter of 1999 and
earn interests ranging from 15% to 50% interest in each well it drills.
Working capital for the period ending September 30, 1999, was a
negative $1,826,603 compared to the same period in 1998, when working capital
was a negative $2,634,237.
During the first nine months of 1999, and compared to the same period
in 1998, the changes in the composition of the Company's current assets were:
cash balances increased $309,393 from $337,142 to $646,535 accounts receivable
balances decreased $84,843 from $225,641 to $140,798. Other current assets such
as prepaids and notes receivable increased $530,000 from $0 to $530,000 due to
the sale of Red River Hardwoods, Inc. Overall, current assets increased by
$754,550 to $1,317,333.
Current liabilities for the period ended September 30, 1999 were
$3,143,936 compared to $3,197,020 for the period ended September 30, 1998.
While management believes that its cash flow resulting in operating
revenues will contribute significantly to its short-term financial commitments
and operating costs, it has continued to refine its long range strategy in 1999
to meet the Company's financial obligations. This strategy involves:
- ACQUISITION OF REVENUE-PRODUCING PROPERTIES: In November 1997,
Daugherty Petroleum signed a Letter of Intent to acquire
producing oil and gas properties in Kentucky, Louisiana and
Tennessee. In
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4
October 1999 the company finalized this acquisition and
another acquisition in which interests in 24 natural gas wells
in Knox County, Kentucky were acquired. Management believes
that the addition of these properties will favorably impact
the Company's cash flow. Daugherty Petroleum is also
continually reviewing existing properties in its area of
interest that are for sale.
- INSTALLATION OF ADDITIONAL NATURAL GAS GATHERING SYSTEM: The
Company plans to expand its natural gas pipeline by 16,500
feet in 1999. The extension will allow for substantially more
natural gas to be transported to market from wells drilled in
1998 and 1999.
- CONVERTIBLE NOTE PRIVATE PLACEMENT: During the second and
third quarters of 1999, the Company sponsored a Convertible
Note Private Placement. The notes carry a five year term and
pay 10% interest. The notes are convertible to common stock at
125% of the lowest average bid ten days prior to the closing,
which took place on August 20, 1999. As of September 30, 1999,
$850,000 had been sold.
- SALE OF RED RIVER HARDWOODS, INC.: The Company signed a Letter
of Intent to sell its 80% stake in Red River. The sale closed
during December 1999 and has an effective date of June 30,
1999. The sale of Red River will allow the Company's
management to concentrate on expanding its core oil and gas
operations. These financial statements have been restated to
reflect this divestiture.
- INCREASE OF JOINT VENTURE DRILLING: Because of lower energy
prices the Company's joint venture efforts were hampered the
first nine months of 1999. However, higher oil and gas prices
have sparked an interest in joint venture interests in natural
gas drilling. During the third quarter the company developed a
drilling program sponsored by Daugherty Petroleum that is
being sold during the forth quarter of 1999.
RESULTS OF OPERATIONS
For the nine-month period ending September 30, 1999, the Company's
gross revenues decreased $656,878 to $973,149 from $1,630,027 for the same
period in 1998. The majority of the decrease was attributable to decreased
turnkey drilling operations. The Company experienced a net loss from continuous
operations of $747,445 in this period compared to a net loss of $745,464 in the
same period of 1998. The company experienced a net loss on discontinued
operations of $520,267 for the nine months ended September 30, 1999 compared to
426,862 for the same period in 1998. Management believes that the sale of Red
River Hardwoods will result in losses being substantially less in future
periods.
The Company's gross revenues were derived from drilling contract
revenues of $618,495 (64%), from natural gas and oil operations and production
revenues of $354,654 (36%).
The decrease in gross revenues of $656,878 was primarily attributable
to the decreased in drilling activity during the period. Contract revenues from
drilling activities decreased by $584,807 from $1,203,302 in the first nine
months of 1998 to $618,495 in the first nine months of 1999.
During the first nine months of 1999, total direct costs decreased by
$576,015 to $741,519 compared to $1,317,534 in the first nine months of 1998.
These direct costs included drilling and related costs for six natural gas
wells.
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5
YEAR 2000 INFORMATION
The Company's field and administrative operations have been reviewed
for Year 2000 Compliance. Normal upgrades will result in essential operations
being Year 2000 compliant. Some remaining operations, such as non-essential
personal computers and non-financial software products, can be easily upgraded
at nominal cost and inconvenience. The Company has contacted its gas purchasers
and third party software and service vendors concerning Year 2000 compliance.
Those third parties not already compliant have indicated that they are working
to be compliant. The Company will be preparing contingency plans regarding those
third parties that do not currently meet Year 2000 compliance standards. Costs
incurred to date, future costs, implementation of contingency plans and
completion of modifications or replacements have not been and are not expected
to be material or pose a material risk.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 5. OTHER INFORMATION.
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Documents Filed with this Report.
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PAGE
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(1) Balance Sheet for the Period Ended September 30, 1999 ... i
Income Statement for the Period Ended September 30,
1999 ....................................................ii-iii
Segmented Information.................................... iv
Computation of Per Share Earnings........................ v
All schedules have been omitted since the information required to be
submitted has been included in the financial statements or notes 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
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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.
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6
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.
3(e)* Certificate of Change of Name for Alaska Apollo Resources
Inc., a British Columbia corporation, dated June 24, 1998,
changing the name of Alaska Apollo Resources Inc. to
Daugherty Resources, Inc. and further changing the
authorized capital of the Registrant from 20,000,000 shares
of common stock, without par value per share, to 50,000,000
shares of common stock, without par value, and authorizing
the creation of 6,000,000 shares of preferred stock, without
par value per share. (File No.0-12185).
3(f)* Altered Memorandum of Daugherty Resources, Inc., a British
Columbia corporation, dated June 24, 1998, changing the
authorized common stock of the Registrant from 50,000,000
shares of common stock, without par value per share, to
10,000,000 shares of common stock, without par value.
(File No.0-12185).
3(g)* Altered Memorandum of Daugherty Resources, Inc., a British
Columbia corporation, dated June 25, 1998, changing the
authorized preferred stock of the Registrant from 6,000,000
shares of preferred stock, without par value per share, to
1,200,000 shares of preferred stock, without par value.
Filed as an exhibit to Form 8-K, by the Company for
reporting an event on June 29, 1998. (File No.0-12185).
3(h)* Special Resolution of Daugherty Resources, Inc., a British
Columbia corporation, dated June 30, 1999, changing the
authorized capital of the Registration from 10,000,000
shares of common stock, without par value per share, to
100,000,000 shares of common stock, without par value per
share, and from 1,200,000 shares of preferred stock, without
par value per share, to 5,000,000 shares of preferred stock,
without par value per share. Altered Memorandum of Daugherty
Resources, Inc., dated June 30, 1999, changing the
authorized capital of the Company to 105,000,000 shares
divided into 5,000,000 shares of preferred stock, without
par value and 100,000,000 common shares without par value.
Special Resolution of Daugherty Resources, Inc., a British
Columbia corporation, dated June 30, 1999, altering Article
23.1(b) of the Company Articles by substituting a new
Article 23.1(b) that sets forth the conditions and terms
upon which the preferred shares can be converted to common
stock. Filed as an exhibit to Form 8-K, for the Company for
reporting an event on October 25, 1999. (File No.0-12185)
4* See Exhibit No. 3(a), (b). (c), (d), (e), (f), and (g).
10(a)* Alaska Apollo Resources Inc. 1997 Stock Option Plan, filed
as Exhibit 10(a) to Form 10-K for the Company for the fiscal
year ended December 31, 1996. (File No. 0-12185).
10(b)* Incentive Stock Option Agreement by and between Alaska
Apollo Resources Inc. and William S. Daugherty dated March
7, 1997, filed as Exhibit 10(b) to Form 10-K for the Company
for the fiscal year ended December 31, 1996. (File No.
0-12185).
10(c)* Warrant Agreement by and between Alaska Apollo Resources
Inc. and Jayhead Investments Limited dated March 7, 1997,
filed as Exhibit 10(c) to Form 10-K for the Company for the
fiscal year ended December 31, 1996. (File No. 0-12185).
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10(d)* Warrant Agreement by and between Alaska Apollo Resources
Inc. and Trio Growth Trust dated March 7, 1997, filed as
Exhibit 10(d) to Form 10-K for the Company for the fiscal
year ended December 31, 1996. (File No. 0-12185).
10(e)* Warrant Agreement by and between Alaska Apollo Resources
Inc. and Exergon Capital S.A. dated March 7, 1997, filed as
Exhibit 10(e) to Form 10-K for the Company.
11 Computation of Per Share Earnings.
24 Powers of Attorney.
27 Financial Data Schedule.
(b)* Reports on Form 8-K.
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Agreement of Purchase and Sale by and between Environmental
Energy Partners I, Ltd.,Environmental Energy Partners II,
Ltd., Environmental Operating Partners, Ltd., Environmental
Holding, LLC, Environmental Processing Partners, Ltd.,
Environmental Energy, Inc., and Environmental
Operating,Inc., as Sellers and Daugherty Petroleum, Inc., as
Buyer, and Daugherty Resources, Inc. as Accommodating
Party, dated as of January 26, 1999, filed as an Exhibit to
Form 8-K by the Company for reporting an event on May 25,
1999 (File No. 0-12185).
Agreement for the Purchase and Sale by and between H&S
Lumber, Inc., Buyer, and Daugherty Petroleum,Inc., Seller,
for the sale of Red River Hardwoods, Inc., an 80% subsidiary
of Daugherty Petroleum, Inc., which was effective
June 30,1999,and closed December 1, 1999, filed as Exhibit
10.1 to Form 8-K by the Company for reporting an event on
December 9,1999 (File No. 0-12185).
See, Item 3(h) above.
(c) Financial Statement Schedules.
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No schedules are required, as all information required has
been presented in the audited financial statements.
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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.
DAUGHERTY RESOURCES, INC.
By: /s/ William S. Daugherty
----------------------------------
William S. Daugherty, President
Dated: January 12, 2000
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
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ William S. Daugherty Chairman of the Board, President,
- --------------------------- Director of the Registrant January 12, 2000
WILLIAM S. DAUGHERTY
James K. Klyman* Director of the Registrant January 12, 2000
- ---------------------------
JAMES K. KLYMAN
January 12, 2000
Charles L. Cotterell* Director of the Registrant
- ---------------------------
CHARLES L. COTTERELL
*By /s/William S. Daugherty
- --------------------------------
William S. Daugherty,
Attorney-in-Fact
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DAUGHERTY RESOURCES. INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(United States Dollars)
Unaudited
9/30/98 9/30/99
------------------ ---------------
ASSETS
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CURRENT ASSETS
Cash $ 337,142 $ 646,535
Accounts receivable 225,641 140,798
Inventory -- --
Other current assets -- 530,000
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TOTAL CURRENT ASSETS 562,783 1,317,333
OIL & GAS PROPERTIES (NET) 4,388,332 4,582,621
MINING PROPERTY (NET) 11,227,733 11,232,229
PROPERTY & EQUIPMENT (NET) 123,395 93,127
OTHER ASSETS
Related party loans 717,493 95,706
Bonds & deposits 41,000 41,000
Other assets 182,437 317,450
Goodwill, net of amortization of $1,073,736 894,784 715,828
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1,835,714 1,169,984
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TOTAL ASSETS $ 18,137,957 $ 18,395,294
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LIABILITIES & STOCKHOLDER'S EQUITY
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CURRENT LIABILITIES
Short-term loans & notes $ 7,000 $ 1,029,165
Current portion of LT debt 1,206,862 138,656
Accounts payable 490,537 424,702
Accrued liabilities 469,967 869,153
Drilling prepayments 1,022,654 682,260
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TOTAL CURRENT LIABILITIES 3,197,020 3,143,936
LONG-TERM LIABILITIES 1,081,110 2,450,938
PAYABLE TO RELATED PARTIES 34,409 17,571
------------ ------------
4,312,539 5,612,445
MINORITY INTEREST -- --
STOCKHOLDER'S EQUITY
Common stock 21,209,821 21,352,915
Common stock subscribed -- --
Additional paid in capital -- --
Retained earnings (deficit) (6,638,939) (7,541,258)
Current income (loss) (745,464) (1,028,808)
------------ ------------
13,825,418 12,782,849
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TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $ 18,137,957 $ 18,395,294
============ ============
Unaudited-Internally prepared by Company management
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DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(United States Dollars)
Unaudited
For the nine month period ended
9/30/98 9/30/99
------------------------------ ------------------------------
GROSS REVENUE $ 1,630,027 100.00% $ 973,149 100.00%
DIRECT EXPENSES 1,317,534 80.83% 741,519 76.20%
----------- ------- ----------- --------
GROSS PROFIT 312,493 19.17% 231,630 23.80%
GENERAL & ADMINISTRATIVE EXPENSES
Salaries & wages 228,361 14.01% 242,341 24.90%
Accounting & audit 67,349 4.13% 51,969 5.34%
Advertising & promotion 512 0.03% -- 0.00%
Amortization 134,217 8.23% 134,217 13.79%
Bad debts -- 0.00% -- 0.00%
Depreciation 48,300 2.96% 30,600 3.14%
General consulting 112,580 6.91% 34,380 3.53%
Insurance 27,270 1.67% 24,706 2.54%
Legal 101,561 6.23% 96,263 9.89%
Office & general 108,053 6.63% 110,542 11.36%
Payroll & property tax 19,243 1.18% 14,590 1.50%
Rent 35,391 2.17% 42,163 4.33%
Repairs & maintenance 6,201 0.38% 6,326 0.65%
Shareholder & investor information 51,977 3.19% 14,342 1.47%
Travel & entertainment 39,883 2.45% 44,218 4.54%
----------- ------- ----------- --------
TOTAL G & A EXPENSES 980,898 60.18% 846,657 87.00%
OTHER INCOME (EXPENSE)
Interest & dividend income 41,058 2.52% 35,586 3.66%
Miscellaneous -- 0.00% -- 0.00%
Gain (loss) on sale of equipment -- 0.00% -- 0.00%
Interest expense (118,117) -7.25% (168,004) -17.26%
----------- ------- ----------- --------
INCOME BEFORE INCOME TAX & OTHER (745,464) -45.73% (747,445) -76.81%
Income tax expense (benefit) -- 0.00% -- 0.00%
DISCONTINUED OPERATIONS
Income (loss) from discontinued operations (426,862) -26.19% (238,904) -24.55%
Gain (loss) on disposal -- 0.00% (281,363) -28.91%
----------- ------- ----------- --------
NET INCOME (LOSS) $(1,172,326) -71.92% $(1,267,712) -101.36%
=========== ======= =========== ========
DEFICIT, beginning of period (6,638,939) $(7,541,259)
DEFICIT, end of period (7,384,403) $(8,570,067)
Shares outstanding 2,183,783 2,329,352
EARNINGS PER SHARE ($0.54) ($0.54)
Unaudited-Internally prepared by Company management
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DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(United States Dollars)
Unaudited
For the nine month period ended
9/30/98 9/30/99
------------------ ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (745,464) $(1,028,808)
Adjustments to reconcile net income (loss) to net cash
cash provided by operating activities:
Depreciation, depletion, & amortization 302,355 308,817
Minority interest --
Changes in current assets & liabilities
(Increase) decrease in:
Accounts receivable (31,764) (1,311)
Inventory -- --
Other current assets 51,935 (487,795)
Increase (decrease) in:
Short-term loans & notes (37,500) 887,336
Accounts payable (347,762) (145,120)
Accrued liabilities 176,171 108,878
Drilling prepayments (380,653) (243,250)
----------- -----------
Net cash provided by (used in) operating activities (1,012,682) (601,253)
CASH FLOWS FROM INVESTING ACTIVITIES
Change in oil & gas properties (364,689) (110,835)
Change in mining properties -- --
Change in property & equipment (60,961) (1,322)
Change in other assets 37,653 (62,044)
----------- -----------
Net cash provided by (used in) investing activities (387,997) (174,201)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 252,871 143,094
Change in long-term liabilities 595,467 340,219
Change in payable to related party (306,742) 442,920
----------- -----------
Net cash provided by (used in) financing activities 541,596 926,233
----------- -----------
NET INCREASE (DECREASE) IN CASH (859,083) 150,779
CASH AT BEGINNING OF PERIOD 1,196,225 495,756
----------- -----------
CASH AT END OF PERIOD $ 337,142 $ 646,535
=========== ===========
Unaudited-Internally prepared by Company management
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DAUGHERTY RESOURCES, INC.
SEGMENTED INFORMATION
For the nine month period ended September 30, 1999
(United States Dollars)
Unaudited
WOOD
OIL & GAS MINING PRODUCTS* CORPORATE TOTAL
--------- ------ --------- --------- -----
GROSS EXTERNAL REVENUE $ 973,149 -- -- -- $ 973,149
INTERSEGMENT REVENUES -- -- -- -- --
INTEREST REVENUE 26,093 -- -- 9,493 35,586
INTEREST EXPENSE 153,799 -- -- 14,205 168,004
DEPRECIATION 10,200 -- -- 20,400 30,600
DEPLETION 144,000 -- -- -- 144,000
AMORTIZATION OF GOODWILL -- -- -- 134,217 134,217
SEGMENT PROFIT (LOSS) $ (504,368) -- (520,267) (243,077) $ (1,267,712)
============ ========== ======== ============ ============
SEGMENT ASSETS $ 4,723,419 11,232,229 -- 2,439,646 $ 18,395,294
============ ========== ======== ============ ============
EXPENDITURES FOR SEGMENT
ASSETS $ 110,835 -- -- 1,322 $ 112,157
============ ========== ======== ============ ============
*Discontinued operation.
Unaudited-Internally prepared by Company management
iv