UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[XX] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 2-65800
SUNBELT EXPLORATION, INC.
(Exact Name of small business issuer as specified in its charter)
Nevada 75-1667097
(State of Incorporation) (IRS Employer ID Number)
2612 East Kentucky Avenue, Salt Lake City, Utah 84117
(Address of principal executive offices)
(801) 278-8132
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YES [ ] NO [XX]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
June 1, 1999: 24,805,000 Shares.
Transitional Small Business Disclosure Format (check one): YES[ ] NO [XX]
SUNBELT EXPLORATION, INC.
Form 10-QSB for the Quarter ended February 28, 1999
Table of Contents
Part I - Financial Information Page
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis or Plan of Operation 10
Part II - Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
Signatures
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
February 28, August 31,
1999 1998
--------------- ------------------
(Unaudited)
CURRENT ASSETS
Cash $ 9,800 $ 3,846
--------------- ------------------
TOTAL ASSETS $ 9,800 $ 3,846
=============== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,500 $ 2,641
--------------- ------------------
Total Current Liabilities 1,500 2,641
--------------- ------------------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
100,000,000 shares authorized,
24,805,000 shares issued and outstanding 24,805 24,805
Additional paid-in capital 43,245 43,245
Stock subscription receivable - (10,000)
Deficit accumulated during the development
stage (59,750) (56,845)
--------------- ------------------
Total Stockholders' Equity $ 8,300 $ 1,205
--------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 9,800 $ 3,846
=============== ==================
The accompanying notes are an integral part of these financial statements.
4
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception on
April 23,
For the Three Months For the Six Months 1979 Through
Ended February 28 Ended February 28 February 28,
1999 1998 1999 1998 1999
------------ ------------ ------------ ------------ ------------
REVENUE $ - $ - $ - $ - $ -
------------ ------------ ------------ ------------ ------------
EXPENSES 534 - 2,905 - 59,750
------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES 534 - 2,905 - 59,750
------------ ------------ ------------ ------------ ------------
NET LOSS $ (534) $ - $ (2,905) $ - $ (59,750)
============ ============ ============ ============ ============
LOSS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 24,805,000 4,805,000 24,805,000 4,805,000
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements
5
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
Deficit
Accumulated
Common Stock Additional Stock During the
------------------------ Paid-In Subscription Development
Shares Amount Capital Receivable Stage
-------------- --------- ----------- ------------- -----------
Balance at inception, April 23, 1979 - $ - $ - $ - $ -
Common stock issued for
cash at $0.001 per share 4,805,000 4,805 43,245 - -
Net loss from inception on April 23, 1979
through August 31, 1995 (unaudited) - - - - (48,050)
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1995 4,805,000 4,805 43,245 - (48,050)
Net loss for the year ended
August 31, 1996 - - - - -
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1996 4,805,000 4,805 43,245 - (48,050)
Net loss for the year ended
August 31, 1997 - - - - -
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1997 4,805,000 4,805 - - (48,050)
Common stock issued for services
at $0.001 per share 2,000,000 2,000 - - -
Common stock issued for cash
at $0.001 per share 8,000,000 8,000 - - -
Common stock issued for subscription
receivable at $0.001 per share 10,000,000 10,000 - (10,000) -
Net loss for the year ended
August 31, 1998 - - - - (8,795)
-------------- --------- ----------- ------------- -----------
Balance, August 31, 1998 24,805,000 24,805 43,245 (10,000) (56,845)
Receipt of subscription receivable - - - 10,000 -
Net loss for the six months ended
February 28, 1999 (unaudited) - - - - (2,905)
-------------- --------- ----------- ------------- -----------
Balance, February 28, 1999 (unaudited) 24,805,000 $ 24,805 $ 43,245 $ - $ (59,750)
============== ========= =========== ============= ===========
The accompanying notes are an integral part of these financial statements.
6
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception on
April 23,
For the Three Months For the Six Months 1979 Through
Ended February 28 Ended February 28 February 28,
1999 1998 1999 1998 1999
------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (534) $ - $ (2,905) $ - $ (59,750)
Adjustments to reconcile net loss
to net cash
Common stock issued for services - - - - 2,000
Changes in assets and liabilities
Increase (decrease) in accounts
payable - - (1,141) - 1,500
------------ ------------ ------------ ------------ ------------
Net Cash Used by
Operating Activities (534) - (4,046) - (56,250)
------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM
INVESTING ACTIVITIES - - - - -
------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Common stock issued for cash 10,000 - 10,000 - 66,050
------------ ------------ ------------ ------------ ------------
Net Cash Provided by
Financing Activities 10,000 - - - 66,050
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 9,466 - 5,954 - 9,800
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 334 - 3,846 - -
------------ ------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 9,800 $ - $ 9,800 $ - $ 9,800
============ ============ ============ ============ ============
SUPPLEMENTAL CASH FLOW
DISCLOSURES
Interest paid $ - $ - $ - $ - $ -
Income taxes paid $ - $ - $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
7
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999 and August 31, 1998
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Sunbelt Exploration, Inc. (Company) was incorporated on April 23,
1979 under the laws of the State of Nevada, primarily for the
purpose of exploration, development and production of oil and gas
reserves.
The Company has no operations, assets or liabilities since the
Final Decree in May 1993, other than the litigation settlement.
Accordingly, the Company is dependent upon management and/or
significant shareholders to provide sufficient working capital
to preserve the integrity of the corporate entity during this
phase. It is the intent of management and significant
shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments
with maturities of three months or less at the time of
acquisition.
d. Loss Per Share
The computations of loss per share of common stock are based on
the weighted average number of shares outstanding at the date of
the financial statements.
e. Provision for Taxes
At February 28, 1999, the Company had net operating loss
carryforwards of approximately $59,000 that may be offset against
future taxable income through 2013. No tax benefit has been
reported in the financial statements, because the Company
believes there is a 50% or greater chance the carryforward will
expire unused. Accordingly, the potential tax benefits of the
loss carryforward are offset by a valuation amount of the same
amount.
f. Additional Accounting Policies
Additional accounting policies will be established once planned
principal operations commence.
8
SUNBELT EXPLORATION, INC.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999 and August 31, 1998
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
g. Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
h. Unaudited Financial Statements
The accompanying unaudited financial statements include all of
the adjustments which, in the opinion of management, are
necessary for a fair presentation. Such adjustments are of a
normal, recurring nature.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the
Company does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern. It is the intent of the Company to be acquired by an
existing, operating company. Until an acquisition or merger
occurs, shareholders of the Company have committed to meeting the
Company's operating expenses
NOTE 3 - REVERSE STOCK SPLIT
In 1998, the Company reverse split shares of its common stock on
a 1-for-10 basis. All references to shares outstanding and
earnings per share have been adjusted to reflect the effect of
the reverse split on a retroactive basis.
9
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the
Company or management as well as assumptions made by and information currently
available to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view
of the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered
in light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
Sunbelt Exploration, Inc. (Company) was incorporated on April 23, 1979
under the laws of the State of Nevada, primarily for the purpose of
exploration, development and production of oil and gas reserves.
In February 1990, the US Bankruptcy Court (Court) approved an Amended
Plan of Reorganization (Plan) under Chapter 11 of the US Bankruptcy Code. The
Plan was affirmed through a Final Decree by the Court on May 11, 1993. Under
the Plan, all assets and liabilities of the Company were liquidated and
assigned to unrelated third parties. Additionally, the Plan and the Court
allowed the Company to maintain its interest in a "take or pay" lawsuit
against one of the Company's pre-bankruptcy customers. The Company was
successful in the lawsuit and received final proceeds of approximately $50,000
in December 1995.
The Company has had no operations or significant assets or liabilities
since the Final Decree in May 1993, other than the litigation settlement.
Accordingly, the Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity
of the corporate entity during this phase. It is the intent of management and
significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
10
(3) Liquidity and capital resources
The Company has no operations, and essentially no assets or liabilities
and, accordingly is fully dependent upon its controlling shareholder for
operating capital. During the period(s) presented herein, the Company was
dormant and no advances were made or expenses paid on the Company's behalf.
The Company has no specific plans or future capital requirements due to
its dormant state. However, the Company will seek to enter into a business
acquisition or reorganization with an enterprise, as yet unidentified. At
such time as the Company enters into a transaction, of which there can be no
assurance, the Company will require additional capital.
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults on Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings
of shareholders during the reporting period.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SUNBELT EXPLORATION, INC.
June 1, 1999 /s/ Roger Lund
----------------------------
Roger Lund
President and Chief Accounting Officer