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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
__________________________________
FORM 10
General Form for Registration of Securities
File No. _________________________
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
QUINTESSENCE OIL COMPANY
(Exact name of registrant as specific in its charter)
Wyoming 83-0317306
(State of Incorporation) (I.R.S. Employer I.D. No.)
4424 Skylane Avenue
Riverton, Wyoming 92501
(Address of principal executive offices, including zip code)
Telephone number, including area code: (307) 856-0375
Copies to: Conrad C. Lysiak, Esq.
West 601 First Avenue, Suite 503
Spokane, Washington 99204
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
Exhibit Index begins on page ___
Page 1 of ___.
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ITEM 1. BUSINESS.
The Business
Quintessence Oil Company (the "Company") is a development stage
enterprise formed under the laws of the State of Wyoming on June 26, 1996,
for the purpose of purchasing, developing and operating oil and gas leases.
The Company has acquired one undeveloped oil and gas lease and intends
to acquire additional leases prior to deciding where to initiate drilling
operations.
Selection of Target Areas for Acquisition
The Company's proposed plans call for it to consider several factors in
choosing a region for acquisition of oil and gas leases. First, the Company
considers those regions in which one or more of its management or other
technical personal have field of experience. The Company anticipates that
additional prospects to be acquired will be located within Wyoming. At the
present time the Company has not targeted any additional oil and gas leases
for acquisition. The Company intends to acquire additional oil and gas
leases from other oil and gas companies.
The Company will determine which leases it is interested in acquiring
based upon the analysis of technical and production data, on site
verification of any well equipment and production capability, and
verification of ownership of lease hold rights. The Company anticipates that
it will take from four to six months to acquire additional leasehold
interests. Further, the Company intends upon diversifying its production
portfolio with respect to both reservoir production characteristics and to
market access. The Company believes that the overall effect of these two
unrelated characteristics is to significantly lower the overall risk of the
Company strategy.
Geological and Geophysical Techniques
The Company may employ detailed geological interpretation combined with
advanced seismic exploration techniques to identify the most promising
leases. Geological interpretation is based upon data recovered from existing
oil and gas wells in an area and other sources. Such information is either
purchased from the company that drilled the wells or becomes public knowledge
through state agencies after a period of years. Through analysis of rock
types, fossils and the electrical and chemical characteristics of rocks from
existing wells, the Company can construct a picture of rock layers in the
area. Further, the Company will have access to the logs from the existing
operating wells which will allow the Company to extrapolate a decline curve
and make an estimation of the number of recoverable barrels of oil existing
beneath a particular lease. The Company has not purchased, leased, or
entered into any agreements to purchase or lease any of the equipment
necessary to conduct the geological or geophysical testing referred to herein
and will only be able to do so upon raising additional capital through loans
or the sale of equity securities.
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Market for Oil and Gas Production
The market for oil and gas production is regulated by both the state and
federal governments. The overall market is mature and with the exception of
gas, all producers in a producing region will receive the same price. The
major oil companies will purchase all crude oil offered for sale at posted
field prices. There are price adjustments for quality difference from the
Bench Mark. Oil sales are normally contracted with a gatherer who will pick-
up the oil at the well site. In some instances there may be deductions for
transportation from the well head to the sales point. At this time the
majority of crude oil purchasers do not charge transportation fees, unless
the well is outside their service area. The oil gatherer will usually handle
all check disbursements to both the working interest and royalty owners. The
Company will be a working interest owner. By being a working interest owner,
the Company is responsible for the payment of its proportionate share of the
operating expenses of the well. Royalty owners and over-riding royalty
owners receive a percentage of gross oil production for the particular lease
and are not obligated in any manner whatsoever to pay for the costs of
operating the lease. Therefore, the Company, in most instances, will be
paying the expenses for the oil and gas revenues paid to the royalty and
over-riding royalty interests.
Gas sales are by contract. The gas purchaser will pay the well operator
100% of the sales proceeds on or about the 25th of each and every month for
the previous months sales. The operator is responsible for all checks and
distributions to the working interest and royalty owners. There is no
standard price for gas. Prices will fluctuate with the seasons and the
general market conditions. It is the Company's intention to utilize this
market when ever possible in order to maximize revenues. The Company does
not anticipate any significant change in the manner production is purchased,
however, no assurance can be given at this time that such changes will not
occur.
Acquisition of Future Leases
The principal activity for the Company in the future will be the
acquisition of producing oil and gas leases. The acquisition process may be
lengthy because of the amount of investigation which will be required prior
to submitting a bid to a major oil company. Verification of each property
and the overall acquisition process can be divided into three phases, as
follows:
Phase 1. Field identification. In some instances the seller will have
a formal divestiture department that will provide a sales catalog of leases
which will be available for sale. Review of the technical filings made to
the states along with a review of the regional geological relationships,
released well data and the production history for each lease will be
utilized. In addition a review of the proprietary technical data in the
sellers office will be made and calculation of a bid price for the field.
Phase 2. Submission of the Bid. Each bid will be made subject to
further verification of production capacity, equipment condition and status,
and title.
Phase 3. Closing. Final price negotiation will take place. Cash
transfer and issuance of title opinions. Tank gauging and execution of
transfer orders.
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After closing has occurred, the newly acquired property will be turned
over to the Company for possible work-overs or operational changes which will
in the Company's estimation increase each well's production.
In connection with the acquisition of an oil and gas lease for work-over
operations, the Company is able to assume 100% ownership of the working-
interest and surface production equipment facilities with only minor
expenses. In exchange for an assignment of the lease, the Company agrees to
assume the obligation to plug and abandon the well in the event the Company
determines that reworking operations are either to expensive or will not
result in production in paying quantities. The cost of plugging a well can
run from $500 to $15,000, depending on the condition of the well. The
Company believes that the obligation to plug an existing well will in no way
jeopardize its operations, and in the long run is economically worth the risk
involved compared with the possibility of acquiring existing production.
Utilizing these systems the Company will be able to acquire oil and gas
leases from large and small oil and gas firms with little costs. The Company
also believes that it may be able to plug the wells in question, at no cost
to the Company, in exchange for the production tubing and casing which will
be removed during the plugging process.
Several major oil companies have recently placed numerous oil and gas
properties out for competitive bidding. The Company currently does not have
sufficient revenues or funds available to it to make a bid for such
properties. The Company intends to raise additional capital through loans or
the sale of equity securities in order to have sufficient funds to make a bid
for such properties. There is no assurance that the Company will very raise
such additional capital and if the Company is unable to raise such capital,
it may have to cease operations. At the present time, the Company has not
identified any specific oil and gas leases which it intends to acquire and
will only be able to make such determination upon raising said capital.
Net Production
As of the date hereof, the Company has acquired a 100% working interest,
in one non-producing oil and gas lease. See "Item 2. Description of
Properties."
Competition
The oil and gas industry is highly competitive. The Company's
competitors and potential competitors include major oil companies and
independent producers of varying sizes of which are engaged in the
acquisition of producing properties and the exploration and development of
prospects. Most of the Company's competitors have greater financial,
personnel and other resources than does the Company and therefore have a
greater leverage to use in acquiring prospects, hiring personnel and
marketing oil and gas. Accordingly, a high degree of competition in these
areas is expected to continue.
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Governmental Regulation
The production and sale of oil and gas is subject to regulation by
state, federal and local authorities. In most areas there are statutory
provisions regulating the production of oil and natural gas under which
administrative agencies may set allowable rates of production and promulgate
rules in connection with the operation and production of such wells,
ascertain and determine the reasonable market demand of oil and gas, and
adjust allowable rates with respect thereto.
The sale of liquid hydrocarbons was subject to federal regulation under
the Energy Policy and Conservation Act of 1975 which amended various acts,
including the Emergency Petroleum Allocation Act of 1973. These regulations
and controls included mandatory restrictions upon the prices at which most
domestic crude oil and various petroleum products could be sold. All price
controls and restrictions on the sale of crude oil at the wellhead have been
withdrawn. It is possible, however, that such controls may be reimposed in
the future but when, if ever, such reimposition might occur and the effect
thereof on the Company cannot be predicted.
The sale of certain categories of natural gas in interstate commerce is
subject to regulation under the Natural Gas Act and the Natural Gas Policy
Act of 1978 ("NGPA"). Under the NGPA, a comprehensive set of statutory
ceiling prices applies to all first sales of natural gas unless the gas is
specifically exempt from regulation (i.e., unless the gas is "deregulated").
Administration and enforcement of the NGPA ceiling prices are delegated to
the FERC. In June 1986, the FERC issued Order No. 451, which, in general, is
designed to provide a higher NGPA ceiling price for certain vintages of old
gas. It is possible, though unlikely, that the Company may in the future
acquire significant amounts of natural gas subject to NGPA price regulations
and/or FERC Order No. 451.
Company's Office
The Company's offices are located at 4424 Skylane Avenue, Riverton,
Wyoming 82501. The Company leases the space from Nucor, Inc., as well as,
equipment including computers, office computer programs, fax machines, small
copy machines, a scanner, telephones, desks, files and fixtures. The lease
payment is at the rate of $400.00 per month, plus out-of-pocket expenses, on
a month-to-month basis. Nucor, Inc. is a corporation owned and operated by
Nick Bebout, the Company's President. The transaction with Nucor is no less
favorable to the Company than can be obtained from independent third parties.
Employees
The Company is a development stage company and currently has no
employees other than its Officers and Directors.
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ITEM 2. FINANCIAL INFORMATION.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected financial data presented below has been derived from the
financial statements of the Company, which financial statements have been
examined by Hocker, Lovelett, Hargens & Yennie, P.C., C.P.A., independent
certified public accountants, as indicated in their report included elsewhere
herein.
The following table summarized certain financial information and should
be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements
and related notes included elsewhere in this Prospectus. For the reasons set
forth in this Form 10 registration statement the information shown below may
not be indicative of the Company's future results of operations.
Statement of Loss and Accumulate Deficit Data from inception (June 26, 1996)
through September 30, 1996:
Income $ -0-
Operating Expenses $ 1,698
Net Loss $ (1,698)
Net Loss per Share $ 0.0017
Balance Sheet Data:
Working Capital $ 42,302
Total Assets $ 49,802
Short-term Debt $ 9,000
Stockholders' equity $ 40,802
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITIONS
Results of Operations
The Company is considered to be in the development stage as defined in
Statement of Financial Accounting Standards No. 7. There have been limited
operations to date consisting of raising capital and the acquisition of one
oil and gas lease.
Liquidity and Capital Resources
The Company sold 1,000,000 shares of its Common Stock pursuant to Reg.
504 of the Securities Act of 1933 (the "Act") to officers, directors and
others, and raised $50,000. The foregoing funds were used for organizational
matters and to acquire one oil and gas lease. The Company has $42,302 in
cash as of November 25, 1996.
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ITEM 3. DESCRIPTION OF PROPERTIES.
The Company owns one undeveloped oil and gas lease, more particularly
described as the S 1/2, SW 1/4, SW 1/4 of Section 24 and the N 1/2, NE 1/4
and the NE 1/4, NW 1/4 of Section 33 all located in Township 37 North, Range
91 West, 6th Prime Meridian containing 140 acres more or less. The foregoing
lease has never produced oil or gas.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth as of November 25, 1996, the Common Stock
ownership of each person known by the Company to be the beneficial owner of
five percent or more of the Company's Common Stock, each director
individually and all officers and directors of the Company as a group. Each
person has sole voting and investment power with respect to the shares of
Common Stock shown, and all ownership is of record and beneficial.
Name and address Number of Percent
of owner Shares Position of Class
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Nick Bebout 218,750 President, Treasurer 21.88%
1606 Major Avenue and a member of the
Riverton, Wyoming 82501 Board of Directors
Tom Kerr 0 Vice President and a 0.00%
P. O. Box 3973 member of the Board
Spokane, Washington 99220 of Directors
Tom Swanson 175,000 Secretary and a member 17.50%
P. O. Box 3215 of the Board of Directors
Casper, Wyoming 82601
All officers and 393,750 39.38%
directors as a
group (3 persons)
Eli Bebout 118,750 11.88%
112 Big Bend
Riverton, Wyoming 82501
Bebout Family
Trust [1] 37,500 3.75%
112 Big Bend
Riverton, Wyoming 82501
Bebout Land &
Livestock, Co. [2] 37,500 3.75%
112 Big Bend
Riverton, Wyoming 82501
John E. Orr and Linda
E. Erkkila 175,000 17.50%
200 Columbine Drive
Casper, Wyoming 82604
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Michael D. Zwickl 195,000 19.50%
137 North Beech
Casper, Wyoming 82601
[1] Eli Bebout, the brother of Nick Bebout, is the Trustee of the Bebout
Family Trust.
[2] Eli Bebout, the brother of Nick Bebout, is the President of Bebout Land
& Livestock, Co.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Officers and Directors.
The officers and directors of the Company are as follows:
Name Age Position
Nick Bebout 44 President, Treasurer and a member of
the Board of Directors
Tom Kerr 64 Vice President and a member of the
Board of Directors
Tom Swanson 44 Secretary and a member of the Board
of Directors
All directors hold office until the next annual meeting of shareholders
or until their successors have been elected and qualified. The Company's
officers are elected by the Board of Directors at the annual meeting after
each annual meeting of the Company's shareholders and hold office until their
death, or until they resign or have been removed from office.
Nick Bebout - President, Treasurer and a member of the Board of Directors
Mr. Bebout is a founder, President, Treasurer and a Directors of the
Company. Since 1988, Mr. Bebout has been a member of the Board of Directors
of U.S. Energy, Inc., a NASDAQ traded public company engaged in the oil and
gas industry. From January 1988 to August 1995, Mr. Bebout was President,
Treasurer and a member of the Board of Directors of S.W. Financial Corp., a
Washington blank check corporation. Since June 1984, Mr. Bebout has been
President of Nucor, Inc., an oil, gas and mineral exploration and development
corporation. From January 1979 to December 1983, Mr. Bebout was Vice
President of Corkill Drilling, a corporation which specialized in oil, gas
and mineral exploration.
Thomas K. Kerr - Vice President and a member of the Board of Directors
Mr. Kerr is a founder, Vice President and a member of the Board of
Directors of the Company. From January 1988 to August 1995, Mr. Kerr was
Vice President, Secretary and a member of the Board of Directors of S.W.
Financial Corp., a Washington blank check corporation. From August 1958 to
January 1988, Mr. Kerr was a sales representative with Massachusetts Mutual
Life Insurance Company, Mr. Kerr was also a District Manager, From January
1988 to June 1988, Mr. Kerr was employed with Independent Insurance Agents &
Brokers of Spokane and Walla Walla. Since June 1988, Mr. Kerr has been a
sales representative with Guardian Life Insurance Company of America.
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Tom Swanson - Secretary and a member of the Board of Directors
Mr. Swanson is a founder, Secretary and a member of the Board of
Directors of the Company. From July 1985 to the present, Mr. Swanson has
been exploration manager for Farleigh Oil Properties, an independent oil
company based in Casper, Wyoming. Farleigh Oil Properties is a privately
held company involved in oil field acquisition and exploration in seven Rocky
Mountain states and Texas. From November 1991 to the present, Mr. Swanson
has been the business manager for Paradigm Technologies, LLC, located in
Casper, Wyoming. Paradigm Technologies is a research and development company
that develops downhole sensory instrumentation for oil well drilling
applications. From December 1990 to July 1995, Mr. Swanson was Vice
President of Scientific Geochemical Services, LLC, an oil field service
company specializing in exploration and environmental geochemistry.
Scientific Geochemical Service was located in Casper, Wyoming until it was
sold in mid-1995.
Executive Remuneration
The Company anticipates entering into employment agreements with its
officers in the future, the terms of which are undecided at the present time.
Directors do not receive compensation for their services as directors and are
not reimbursed for expenses incurred in attending board meetings. The
Company has not paid any salaries in 1996 and will not initiate the payment
of salaries until it becomes profitable to do so.
ITEM 6. EXECUTIVE COMPENSATION.
The Company anticipates entering into employment agreements with its
officers in the near future, the terms of which are undecided at the present
time. Directors do not receive compensation for their services as directors
and are not reimbursed for expenses incurred in attending board meetings.
The Company has not paid any salaries in 1996 and will not initiate the
payment of salaries until it becomes profitable to do so.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On July 2, 1996, the Company issued 900,000 shares of Common Stock to
the following individuals and corporations in consideration of the payment of
$0.02 per share in cash.
Name Total Consideration Shares Acquired
Eli Bebout $ 2,000.00 100,000
112 Big Bend
Riverton, Wyoming 82501
Bebout Family Trust $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
Bebout Land & Livestock Co. $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
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John E. Orr and
Linda E. Erkkila $ 3,500.00 175,000
200 Columbine Drive
Casper, Wyoming 82604
Tom Swanson $ 3,500.00 175,000
P. O. Box 3215
Casper, Wyoming 82601
Michael D. Zwickl $ 3,500.00 175,000
137 North Beech
Casper, Wyoming 82601
Nick Bebout $ 4,000.00 200,000
1606 Major Avenue
Riverton, Wyoming 82501
TOTAL $ 18,000.00 900,000
On October 9, 1996, the Company issued 100,000 shares of Common Stock to
the following individuals and corporations in consideration of the payment of
$0.32 per share in cash.
Name Total Consideration Shares Acquired
Eli Bebout $ 6,000.00 18,750
112 Big Bend
Riverton, Wyoming 82501
Nick Bebout $ 6,000.00 18,750
1606 Major Avenue
Riverton, Wyoming 82501
Bill Farleigh $ 6,400.00 20,000
P. O. Box 3215
Casper, Wyoming 82602
Ken Freemole $ 6,400.00 20,000
4831 Dexter
Casper, Wyoming 82609
Hayden Investments $ 800.00 2,500
675 Fairview Drive
Suite 246
Carson City, Nevada 89701
Michael D. Zwickl $ 6,400.00 20,000
137 North Beech
Casper, Wyoming
TOTAL $ 32,000.00 100,000
On November 6, 1996, the Company acquired, by assignment, a 100% working
interest from Edward Calvert in and to an undeveloped oil and gas lease
between the United States of America and Edward D. Calvert covering the
following described real property:
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S 1/2, SW 1/4, SW 1/4 of Section 24 and the N 1/2, NE 1/4 and the
NE 1/4, NW 1/4 of Section 33 all located in Township 37 North,
Range 91 West, 6th Prime Meridian containing 140 acres more or
less.
The consideration for the assignment of the foregoing lease was $2,000 which
has been paid and a 5% overriding royalty. The foregoing lease has never
produced oil and/or gas and there is no assurance that the lease will ever
produce oil and/or gas or that the Company will ever explore for oil and/or
gas on the foregoing lease. Mr. Calvert is not affiliated with the Company
or any of its officers and directors.
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party to any litigation and to its knowledge, no
action, suit or proceedings against it has been threatened by any person.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
No market exists for the Company's securities and there is no assurance
that a regular trading market will develop, or if developed, that it will be
sustained. A shareholder in all likelihood, therefore, will be unable to
resell the securities referred to herein should he or she desire to do so.
Furthermore, it is unlikely that a lending institution will accept the
Company's securities as pledged collateral for loans unless a regular trading
market develops.
There are no plans, proposals, arrangements or understandings with any
person with regard to the development of a trading market in any of the
Company's securities.
As of November 25, 1996, the Company has 11 holders of record of its
Common Stock.
The Company has not paid any dividends since it is inception and does
not anticipate paying any dividends on its Common Stock in the foreseeable
future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On July 2, 1996, the Company issued 900,000 shares of Common Stock to
the following individuals and corporations in consideration of the payment of
$0.02 per share in cash.
Name Total Consideration Shares Acquired
Eli Bebout $ 2,000.00 100,000
112 Big Bend
Riverton, Wyoming 82501
Bebout Family Trust $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
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Bebout Land & Livestock Co. $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
John E. Orr and
Linda E. Erkkila $ 3,500.00 175,000
200 Columbine Drive
Casper, Wyoming 82604
Tom Swanson $ 3,500.00 175,000
P. O. Box 3215
Casper, Wyoming 82601
Michael D. Zwickl $ 3,500.00 175,000
137 North Beech
Casper, Wyoming 82601
Nick Bebout $ 4,000.00 200,000
1606 Major Avenue
Riverton, Wyoming 82501
TOTAL $ 18,000.00 900,000
On October 9, 1996, the Company issued 100,000 shares of Common Stock to
the following individuals and corporations in consideration of the payment of
$0.32 per share in cash.
Name Total Consideration Shares Acquired
Eli Bebout $ 6,000.00 18,750
112 Big Bend
Riverton, Wyoming 82501
Nick Bebout $ 6,000.00 18,750
1606 Major Avenue
Riverton, Wyoming 82501
Bill Farleigh $ 6,400.00 20,000
P. O. Box 3215
Casper, Wyoming 82602
Ken Freemole $ 6,400.00 20,000
4831 Dexter
Casper, Wyoming 82609
Hayden Investments $ 800.00 2,500
675 Fairview Drive
Suite 246
Carson City, Nevada 89701
Michael D. Zwickl $ 6,400.00 20,000
137 North Beech
Casper, Wyoming
TOTAL $ 32,000.00 100,000
All of the foregoing shares were sold pursuant to Reg. 504 of the
Securities Act of 1933.
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ITEM 11. DESCRIPTION OF THE COMPANY'S SECURITIES TO BE
REGISTERED.
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, $0.00001 par value per share.
Common Stock
The authorized Common Stock of the Company consists of 50,000,000 shares
of $0.00001 par value Common Stock. As of November 25, 1996, 1,000,000
shares are issued and outstanding, all of re freely tradeable, but 957,500
are subject to the limitations of Reg. 144 promulgated under the Securities
Act of 1933 (the "Act"), with the exception of the two year holding period
contained therein.
In general, under Reg. 144, an affiliate of the Company (officers,
directors, and owners of more than ten percent (10%) of the outstanding
shares of Common Stock are affiliates of the Company) may sell in ordinary
market transactions through a broker or with a market maker, within any three
(3) month period a number of shares which does not exceed the greater of one
percent (1%) of the number of outstanding shares of Common Stock or the
average of the weekly trading volume of the Common Stock during the four
calendar weeks prior to such sale. Sales under Reg. 144 require the filing
of Form 144 with the Securities and Exchange Commission. If the shares of
Common Stock have been held for more than three (3) years by a person who is
not an affiliate, there is no limitation on the manner of sale or the volume
of shares that may be sold and no Form 144 is required. Sales under Reg. 144
may have a depressive effect on the market price of the Company's Common
Stock.
Further, a person may be considered a presumptive underwriter in that it
acquired more than 10% of the total shares distributed by the Company in its
two offerings pursuant to Reg. 504 of the Securities Act of 1933, as amended.
All shares have equal voting rights and are not assessable. Voting
rights are not cumulative and, therefore, the holders of more than 50% of the
Common Stock could, if they chose to do so, elect all of the directors of the
Company.
Upon liquidation, dissolution or winding up of the Company, the assets
of the Company, after the payment of liabilities, will be distributed pro
rata to the holders of the Common Stock. The holders of the Common Stock do
not have preemptive rights to subscribe for any securities of the Company and
have no right to require the Company to redeem or purchase their shares. The
shares of Common Stock presently outstanding are fully paid and non-assessable.
Dividends
Holders of the Common Stock are entitled to share equally in dividends
when, as and if declared by the Board of Directors of the Company, out of
funds legally available therefore. No dividend has been paid on the Common
Stock since inception, and none is contemplated in the foreseeable future.
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Transfer Agent
The Company's transfer agent for its shares of Common Stock is:
Transecurities International, Inc.
2510 North Pines Road
Suite 202
Spokane, Washington 99206
(509) 927-1255
Trading
There is currently no public market for the Company's Common Stock and
there is no assurance that a public market will ever develop.
Rights of Shareholders
Shareholders of the Company have no preemptive rights to acquire
additional shares of Common Stock or other securities. The Common Stock is
not subject to redemption and carries no subscription or conversion rights.
In the event of liquidation of the Company, the shares of Common Stock are
entitled to share equally in corporate assets after satisfaction of all
liabilities. The shares of Common Stock, when issued, will be fully paid and
non-assessable.
There are no outstanding options, warrants or rights to purchase shares
of the Company's Common Stock, other than as offered herein.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 42:01 et al. of the Wyoming Revised Statutes and certain
provisions of the Company's Articles of Incorporation under certain
circumstances provide for indemnification of the Company's Officers,
Directors and controlling persons against liabilities which they may incur in
such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this description is
qualified in its entirety by reference to the Company's Articles of
Incorporation and to the statutory provisions.
In general, any Officer, Director, employee or agent may be indemnified
against expenses, fines, settlements or judgments arising in connection with
a legal proceeding to which such person is a party, if that person's actions
were in good faith, were believed to the be in the Company's best interest,
and were not unlawful. Unless such person is successful upon the merits in
such an action, indemnification may be awarded only after a determination by
independent decision of the Board of Directors, by legal counsel, or by a
vote of the shareholders, that the applicable standard of conduct was met by
the person to be indemnified.
The circumstances under which indemnification is granted in connection
with an action brought on behalf of the Company is generally the same as
those set forth above; however, with respect to such actions, indemnification
is granted only with respect to expenses actually incurred in connection with
the defense or settlement of the action. In such actions, the person to be
indemnified must have acted in good faith and in a manner believed to have
been in the Company's best interest, and have not been adjudged liable for
negligence or misconduct.
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Indemnification may also be granted pursuant to the terms of agreements
which may be entered in the future or pursuant to a vote of shareholders or
Directors. The statutory provision cited above and the Company's Articles of
Incorporation also grant the power to the Company to purchase and maintain
insurance which protects its Officers and Directors against any liabilities
incurred in connection with their service in such a position, and such a
policy may be obtained by the Company.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements are included on Pages F-1 through F-7 herein.
ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS, AND ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial disclosures
from the inception of the Company through the date of this Registration
Statement.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements begin on following page.
16
HOCKER, LOVELETT, HARGENS & YENNIE, P.C.
Certified Public Accountants
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Quintessence Oil Company, a Wyoming Corporation
Riverton, Wyoming
We have examined the balance sheet of Quintessence Oil Company, a Wyoming
Corporation, (A Development Stage Company) as of September 30, 1996 and the
related statements of operations, changes in stockholders' equity and cash
flows from the date of inception (June 26, 1996) through September 30, 1996.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quintessence Oil Company, a
Wyoming Corporation, (A Development Stage Company) at September 30, 1996 and
the results of its operations, changes in stockholders' equity and changes in
its cash flows from the date of inception (June 26, 1996) through September
30, 1996 in conformity with generally accepted accounting principles.
Hocker, Lovelett, Hargens & Yennie, P.C.
Certified Public Accountants
Riverton, Wyoming
October 16, 1996
F-1
17
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
BALANCE SHEET
September 30, 1996
ASSETS
CURRENT ASSETS
Cash $ 42,302
OTHER ASSETS (Note 1)
Organization costs 7,500
-------
Total Assets $ 49,802
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 9,000
STOCKHOLDERS' EQUITY (Notes 1 and 2)
Common Stock - $.00001 par value,
50,000,000 shares authorized,
1,000,000 shares issued and outstanding 10
Additional paid in capital 42,490
Retained earnings (deficit) (1,698)
-------
Total Liabilities and Stockholders' equity $ 49,802
=======
See accompanying notes to financial statements.
F-2
18
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF OPERATIONS
for the period from inception (June 26, 1996) through September 30, 1996
INCOME
None $ -
OPERATING EXPENSES
General and Administrative Expenses 1,698
-------
NET INCOME (LOSS) $ (1,698)
=======
NET INCOME (LOSS) PER SHARE NIL
=======
The company is in the development stage and has not commenced operations.
See accompanying notes to financial statements.
F-3
19
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF CASH FLOW
for the period from inception (June 26, 1996)
through September 30, 1996
CASH FLOWS PROVIDED (USED)
IN OPERATIONS
Net loss $ (1,698)
Increase in Accounts Payable 9,000
-------
7,302
-------
CASH FLOWS PROVIDED (USED)
IN INVESTING ACTIVITIES
Organization Costs (7,500)
-------
CASH FLOWS PROVIDED (USED)
IN FINANCING ACTIVITIES
Proceeds from sale of stock 50,000
Payment made for legal fees
on registration costs (7,500)
-------
42,500
-------
NET INCREASE IN CASH 42,302
CASH BEGINNING OF PERIOD --
-------
CASH END OF PERIOD $ 42,302
=======
See accompanying notes to financial statements.
F-4
20
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
June 26, 1996 (Inception) through September 30, 1996
Common Stock Additional
Paid-in Retained
Shares Amount Capital Earnings
BALANCE
Inception 6/26/96 -- $ -- $ -- $ --
ADD:
Sale of 900,000 shares
of common stock for
$18,000 cash 900,000 9 17,991 --
Sale of 100,000 shares
of common stock for
$32,000 cash less
$7,500 Registration
Costs 100,000 1 24,449
Net (Loss) for the
period (1,698)
--------- ------ ------- -------
BALANCE, 9/30/96 1,000,000 $ 10 $ 42,490 $ (1,698)
========= ===== ======= =======
See accompanying notes to financial statements.
F-5
21
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES:
Organization:
Quintessence Oil Company was incorporated on June 26, 1996, under the laws
of the State of Wyoming. The Company has adopted a year ending of December
31.
The Company was organized to engage in the development, production and sale
of oil and gas. since its inception, the Company has been largely inactive
and has conducted no significant operations The Company does not own any
oil and gas leases.
Because of the speculative nature of the Company, there are significant
risks which are summarized as follows:
Newly formed company with no operating history and minimal assets.
Limited funds available for exploration and development.
Conflict-of-interest, as all employees have other part-time or full-
time employment.
The Company is considered to be in the development stage as defined in
Statement of Financial Accounting Standards No. 7. There have been no
operations since incorporation.
Summary of Significant Accounting Principles:
Registration costs will include fee payments for legal expenses relating to
the public stock offering. The offering was successful, and $7,500 of
legal fees were charged to additional paid-capital.
F-6
22
QUINTESSENCE OIL COMPANY
A Wyoming Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2 - STOCKHOLDERS' EQUITY
Public Stock Offering:
The Common Stock is being offered and sold pursuant to an exemption from
registration contained in Reg. 504 of the Securities Act of 1993, as
amended, (the "Act"). Reg. 504 provides that the Company can sell
securities with an aggregate offering price not exceeding $1,000.000 within
a twelve (12) month period without registration with the Securities and
Exchange Commission.
The shares so issued will be without restriction and may be resold in
compliance with the Act. Applicable state laws, however, may impose
restrictions on sales and resales. Pursuant to Reg. 504, the Company is
not required to furnish any information to purchasers.
NOTE - 3 OFFICES AND EMPLOYEES
The company's office will be located at 4424 Skylane Avenue, Riverton,
Wyoming.
The company currently has no employees other than certain of its officers
and directors and does not anticipate a need to engage any full-time
employees so long as it is seeking and evaluating business opportunities.
the company has no retirement, pension, profit sharing or insurance plans
covering its officers and directors.
F-7
23
EXHIBITS
Exhibit No. Description
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
27 Financial Data Schedule
24
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Form 10 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated this 2nd day of December, 1996.
QUINTESSENCE OIL COMPANY
BY: /s/ Nick Bebout, President
25
EXHIBIT INDEX
Exhibit No. Description
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
27 Financial Data Schedule