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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
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 (I.R.S. EMPLOYER
or 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 .
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THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF SEPTEMBER 30, 1999, WAS 2,272,182.
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 provides 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 and
approximately $170,000 owed to another lender. The sale is expected to close
during November, 1999 and has an effective date of June 30, 1999. The agreement
further provides 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 retains ownership of the assets
and responsibility for the secured debt, and H & S is responsible for the
operations of the facility and income and expenses related thereto, plus debt
service on secured debt. The sale of Red River will allow the Company's
management to concentrate on expanding its core oil and gas operations.
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 24% of the Company's revenues were derived
from joint venture drilling. Natural gas and oil operations and revenues
accounted for 14% of the revenues. Manufacturing sales related to Red River
accounted for 62% of the revenues.
The Company plans to drill 5 wells during the last quarter of 1999 and
earn interests ranging from 12.5% to 50% interest in each well it drills.
Working capital for the period ending September 30, 1999, was a negative
$3,172,708 compared to the same period in 1998, when working capital was a
negative $2,764,610.
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 $251,959 from $375,576 to $627,535 accounts receivable
balances decreased $315,027 from $548,780 to $233,753; and inventories decreased
$107,388 from $363,258 to $255,870. Other current assets such as prepaids and
notes receivable increased $7,131 from $9,073 to $16,204. Overall, current
assets decreased by $163,325 to $1,133,362.
Current liabilities for the period ended September 30, 1999 were
$4,306,070 compared to $4,061,297 for the period ended September 30, 1998. A
line of credit and new short-term bank loans accounted for $972,177 of the
increase.
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:
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o 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 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.
o INSTALLATION OF ADDITIONAL NATURAL GAS GATHERING SYSTEM: The
Company plans to expand its natural gas pipeline by 45,000 feet
in 1999. The extension will allow for substantially more natural
gas to be transported to market from wells drilled in 1998 and
1999.
o 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.
o SALE OF RED RIVER HARDWOODS, INC.: The Company has signed a
Letter of Intent to sell its 80% stake in Red River. The
divestiture of Red River will dramatically affect the Company's
financial statement by reducing outstanding debt by
approximately $3.7 million and eliminating the operating losses
generated by Red River. The closing is expected to be finalized
by November 30, 1999.
RESULTS OF OPERATIONS
For the nine-month period ending September 30, 1999, the Company's gross
revenues decreased $1,787,065 to $2,621,155 from $4,408,820 for the same period
in 1998. The majority of the decrease was attributable to the ceasing of
operations at Red River Hardwoods on July 1, 1999. The Company experienced a net
loss of $995,217 in this period compared to a net loss of $1,195,972 in the same
period of 1998. Management believes that the sale of Red River Hardwoods will
result in losses being substantially less in future periods. Red River's
operating losses were $238,904 or 24% of the Company's consolidated losses for
the nine-month period ending September 30, 1999. However, due to income and
expenses for the period from July 1 to September 30, 1999 shifting to the H & S
Lumber, the actual impact of the sale is expected to greater as Red River's
losses for the nine month period were substantially less than the same period in
1998 when Red River losses where $426,862 or 36% of the Company's total losses.
The Company's gross revenues were derived from drilling contract
revenues of $618,495 (24%), from natural gas and oil operations and production
revenues of $354,654 (14%), and lumber sales and product manufacturing revenues
of $1,648,606 (62%).
The decrease in gross revenues of $1,787,065 was primarily attributable
to the decreased lumber manufacturing and sales 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.
Manufacturing revenues related to Red River Hardwoods decreased by $1,130,167
from $2,778,793 in the first nine months of 1998 to $1,648,606 in the first nine
months of 1999.
During the first nine months of 1999, total direct costs decreased by
$1,702,267 to $2,417,614 compared to $4,119,881 in the first nine months of
1998. These direct costs included Red River Hardwoods' expenses and drilling
costs for six natural gas wells.
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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 ........ 9
Income Statement for the Period Ended September 30, 1999 ..... 10-11
Computation of Per Share Earnings ............................ 12
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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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
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William S. Daugherty, President
Dated: November 15, 1999
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, November 15, 1999
- --------------------------- President, Director of
WILLIAM S. DAUGHERTY the Registrant
James K. Klyman* Director of the Registrant November 15, 1999
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JAMES K. KLYMAN
Charles L. Cotterell* Director of the Registrant November 15, 1999
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CHARLES L. COTTERELL
*By /s/William S. Daugherty
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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
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ASSETS
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CURRENT ASSETS
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Cash $ 375,576 $ 627,535
Accounts receivable 548,780 233,753
Inventory 363,258 255,870
Other current assets 9,073 16,204
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TOTAL CURRENT ASSETS 1,296,687 1,133,362
OIL & GAS PROPERTIES (NET) 4,388,332 4,672,741
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MINING PROPERTY (NET) 11,227,733 11,232,229
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PROPERTY & EQUIPMENT (NET) 1,824,185 1,682,174
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OTHER ASSETS
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Related party loans 82,386 95,706
Bonds & deposits 54,224 54,224
Other assets 300,743 380,650
Goodwill, net of amortization of $1,182,538 1,151,592 922,131
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1,588,945 1,452,711
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TOTAL ASSETS $20,325,882 $20,173,217
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LIABILITIES & STOCKHOLDER'S EQUITY
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CURRENT LIABILITIES
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Short-term loans & notes $ 7,000 $ 1,029,165
Current portion of LT debt 1,294,939 633,150
Accounts payable 1,208,217 1,180,789
Accrued liabilities 528,487 780,706
Drilling prepayments 1,022,654 682,260
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TOTAL CURRENT LIABILITIES 4,061,297 4,306,070
LONG-TERM LIABILITIES 3,152,211 4,030,637
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PAYABLE TO RELATED PARTIES 34,409 17,571
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7,247,917 8,354,278
MINORITY INTEREST 757 --
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STOCKHOLDER'S EQUITY
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Common stock 21,209,821 21,319,145
Common stock subscribed -- --
Additional paid in capital -- --
Retained earnings (deficit) (6,936,641) (8,504,989)
Current income (loss) (1,195,972) (995,217)
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13,077,208 11,818,939
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TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $20,325,882 $20,173,217
=========== ===========
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 $ 4,408,820 100.00% $ 2,621,755 100.00%
- -------------
DIRECT EXPENSES 4,119,881 93.45% 2,417,614 92.21%
- --------------- ----------- ------ ----------- ------
GROSS PROFIT 288,939 6.55% 204,141 7.79%
GENERAL & ADMINISTRATIVE EXPENSES
- ---------------------------------
Salaries & wages 347,719 7.89% 308,913 11.78%
Accounting & audit 84,649 1.92% 61,709 2.35%
Advertising & promotion 9,461 0.21% 844 0.03%
Amortization 157,851 3.58% 157,842 6.02%
Bad debts -- 0.00% 6,157 0.23%
Depreciation 52,919 1.20% 33,228 1.27%
General consulting 147,562 3.35% 45,074 1.72%
Insurance 36,695 0.83% 36,372 1.39%
Legal 101,561 2.30% 81,493 3.11%
Office & general 152,673 3.46% 121,373 4.63%
Payroll & property tax 30,109 0.68% 31,035 1.18%
Rent 36,652 0.83% 42,163 1.61%
Repairs & maintenance 7,736 0.18% 8,116 0.31%
Shareholder & investor information 51,977 1.18% 14,342 0.55%
Travel & entertainment 51,636 1.17% 53,849 2.05%
----------- ------ ----------- ------
TOTAL G & A EXPENSES 1,269,200 28.79% 1,002,510 38.24%
OTHER INCOME (EXPENSE)
- ----------------------
Interest & dividend income 26,203 0.59% 19,878 0.76%
Miscellaneous 41,589 0.94% 42,507 1.62%
Gain (loss) on sale of equipment -- 0.00% -- 0.00%
Interest expense (283,503) -6.43% (259,233) -9.89%
----------- ------ ----------- ------
INCOME BEFORE INCOME TAX & OTHER (1,195,972) -27.13% (995,217) -37.96%
- --------------------------------
Income tax expense (benefit) -- 0.00% -- 0.00%
MINORITY PORTION -- 0.00% -- 0.00%
- ---------------- ----------- ------ ----------- ------
NET INCOME (LOSS) $(1,195,972) -27.13% $ (995,217) -37.96%
=========== ====== =========== ======
DEFICIT, beginning of period (6,936,641) $(8,504,989)
DEFICIT, end of period (8,132,613) $(9,500,206)
Shares outstanding 2,183,783 2,272,182
EARNINGS PER SHARE $ (0.55) $ (0.44)
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) $(1,195,972) $(995,217)
Adjustments to reconcile net income (loss) to net cash
cash provided by operating activities:
Depreciation, depletion, & amortization 440,447 411,192
Minority interest --
Changes in current assets & liabilities
(Increase) decrease in:
Accounts receivable (55,058) 177,743
Inventory 314,886 176,598
Other current assets 55,589 35,073
Increase (decrease) in:
Short-term loans & notes (59,100) 95,648
Accounts payable (264,495) 19,367
Accrued liabilities 168,091 (70,424)
Drilling prepayments (380,653) (240,250)
----------- ---------
Net cash provided by (used in) operating activities (976,265) (390,270)
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Change in oil & gas properties (558,969) (165,638)
Change in mining properties 4,496 --
Change in property & equipment (32,219) 15,697
Change in other assets (96,368) (253,390)
----------- ---------
Net cash provided by (used in) investing activities (683,060) (403,331)
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Issuance of common stock 255,385 109,324
Change in long-term liabilities 531,870 759,774
Change in payable to related party 8,086 23,372
----------- ---------
Net cash provided by (used in) financing activities 795,341 892,470
----------- ---------
NET INCREASE (DECREASE) IN CASH (863,984) 98,869
- -------------------------------
CASH AT BEGINNING OF PERIOD 1,239,560 528,666
- --------------------------- ----------- ---------
CASH AT END OF PERIOD $ 375,576 $ 627,535
- --------------------- =========== =========
Unaudited-Internally prepared by Company management
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DAUGHERTY RESOURCES, INC.
COMPUTATION OF PER SHARE EARNINGS
(United States Dollars)
Unaudited
The table below presents information necessary for the computation of
loss per share of the common stock, on both a primary and fully diluted basis,
for the nine months ended September 30, 1999 and 1998, and the years ended
December 31, 1998, 1997 and 1996. The computations below reflect the 1 for 5
Reverse Stock Split effective June 30, 1998.
NINE MONTHS ENDED
-----------------
SEPTEMBER 30 YEAR ENDED DECEMBER 31
------------ ----------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
Net loss applicable to share of
Common Stock and Common
Stock equivalents $ (995,217) $(1,195,972) $(1,568,348) $(1,708,418) $ (733,973)
Average number of shares of
Common Stock Outstanding 2,272,782 2,183,783 2,035,188 1,831,926 1,610,168
Common Stock equivalents 1,514,134 1,464,355 1,448,355 1,353,244 283,293
Total shares of Common Stock
and Common Stock equivalents 3,786,916 3,648,138 3,483,543 3,185,170 1,893,461
Primary loss per share of
Common Stock $ (.44) $ (.55) $ (0.77) $ (.93) $ (.46)
Fully diluted loss per share of
Common Stock $ (.26) $ (.33) $ (0.45) $ (.54) $ (.39)
- ------------------
Common Stock equivalents are considered anti-dilutive because of the net
losses incurred by the Company.
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