SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
Amendment No. 2
Mark One
[X] Quarterly report pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934 for
the quarterly period ended December
31, 1997; 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 No. 0-9997
United Heritage Corporation
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(Exact name of registrant as specified in charter)
Utah 87-0372864
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2 North Caddo Street, Cleburne, Texas 76031
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(Address of principal executive offices)
(817) 641-3681
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(Registrant's telephone number, including area code)
No Change
--------------------------------------------------------------
(Former name, former address and former fiscal year if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ X ] NO [ ]
The number of shares of common stock, $0.001 par value,
outstanding at February 3, 1998 was 97,375,512 shares.
PAGE
Part I, Item 1. Financial Statements
PAGE
PAGE 3
UNITED HERITAGE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, March 31,
1997 1997
UNAUDITED
ASSETS
Current Assets
Cash $ 642,315 $ 80,722
Accounts receivable-trade 109,575 134,940
Inventories 37,971 750
Other 40,753 51,999
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Total Current Assets 830,614 268,411
------------- -------------
NOTE RECEIVABLE 1,245,766 1,245,766
OIL AND GAS PROPERTIES 24,455,792 24,293,613
PROPERTY AND EQUIPMENT, at cost 281,777 85,869
Less accumulated depreciation (59,254) (51,497)
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Net Property and Equipment 222,523 34,372
------------- -------------
TOTAL ASSETS $ 26,754,695 $ 25,842,162
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 99,189 $ 119,403
------------- -------------
Total Current Liabilities 99,189 119,403
------------- -------------
SHAREHOLDERS' EQUITY
Common stock-$.001 par value;
125,000,000 shares authorized:
97,375,512 shares issued and
outstanding at December 31, 1997,
96,021,542 at March 31, 1997 97,375 96,021
Additional paid-in capital 33,394,651 32,425,853
Accumulated deficit (6,728,400) (6,714,807)
Deferred compensation (38,120) (84,308)
------------- -------------
Total Shareholders' Equity 26,655,506 25,722,759
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $26,754,695 $25,842,162
============= =============
See notes to consolidated condensed financial statements.
PAGE
PAGE 4
UNITED HERITAGE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended
December 31, December 31,
1997 1996 1997 1996
REVENUES
Processed beef products $645,446 $ 567,950 $ 1,978,771 $ 1,984,412
Oil and Gas Revenue 20,158 20,158
Interest and other income 1,433 2,779 2,231 11,441
-------- ---------- ----------- -----------
TOTAL REVENUES 667,037 570,729 2,001,160 1,995,853
-------- ---------- ----------- -----------
COSTS AND EXPENSES
Processed beef products 542,847 478,347 1,676,265 1,626,454
Selling 22,782 9,485 89,196 38,522
General and administrative 81,588 110,298 319,292 310,466
-------- ---------- ----------- -----------
TOTAL COSTS AND EXPENSES 647,217 598,130 2,084,753 1,975,442
-------- ---------- ----------- -----------
NET INCOME (LOSS) $(10,026) $ (27,401) $ (83,593) $ 20,411
======== ========== =========== ===========
Total Net Income (Loss) per share $ (0.00) $ 0.00 $ (0.00) $ 0.00
======== ========== =========== ===========
Average Number of Common Shares 96,453,492 18,262,520 96,243,848 18,123,852
========== ========== =========== ===========
See notes to consolidated condensed financial statements.
PAGE
PAGE 5
UNITED HERITAGE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
December 31,
1997 1996
OPERATING ACTIVITIES
Net income (loss) $ (83,593) $ 20,411
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 7,757 10,780
Deferred compensation recognized in current year 46,188 39,375
Changes in operating assets and liabilities:
(Increase) Decrease in account receivable 25,365 (58,341)
(Increase) Decrease in inventories (37,221) (2,841)
(Increase) Decrease in other current assets 11,245 (10,393)
Increase (Decrease) in accounts
payable and accrued expenses (20,211) 24,150
----------- --------
Net Cash Provided (Used) by Operating Activities (50,470) 23,141
----------- --------
INVESTING ACTIVITIES
Additions to property and equipment (195,908) (34,673)
Additions to oil and gas properties (162,179) (372,029)
Collections of notes receivable 16,000
----------- --------
Net Cash (Used) Provided by Investing Activities (358,087) (390,702)
----------- --------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 970,150 114,250
Principal payments on borrowings
Proceeds from loans
----------- --------
Net Cash Provided (Used) by Financing Activities 970,150 114,250
----------- --------
INCREASE (DECREASE) IN CASH THIS PERIOD 561,593 (253,311)
Cash at beginning of period 80,722 437,656
----------- --------
CASH AT END OF PERIOD $ 642,315 $184,345
=========== ========
See notes to consolidated condensed financial statements.
PAGE
PAGE 6
UNITED HERITAGE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine
month period ended December 31, 1997 are not necessarily indicative
of the results that may be expected for the year ending March 31,
1998. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended March 31, 1997.
NOTE 2 - INVENTORIES
Inventory consists of the following:
December 31, 1997 March 31, 1997
Lite beef $ 37,971 $ 750
============ =========
NOTE 3 - NOTE RECEIVABLE
Included in notes receivable at December 31, 1997, is the note
receivable from Madison Radio Group, Inc. recorded at $1,245,766.
The Madison note for $2,500,000 is recorded net of the initial
deferred gain and interest payments totaling $1,254,234.
On November 1, 1994, the Company sold its broadcasting assets
to Madison Radio Group, Inc., a wholly-owned subsidiary of Madison
Group Associates, Inc., for $2,500,000. The broadcasting assets
included AM/FM radio stations in Canyon and Amarillo, Texas. The
consideration of $2,500,000 is in the form of a three-year note
bearing interest at 7%, and pursuant to a modification of the note
on August 31, 1995, is payable in monthly payments of $5,000 for the
first nine months beginning December 1, 1994, through August 1,
1995, when such payments increased to $6,500 per month for three
months beginning September 1, 1995 through November 1, 1995.
Then payments increased to $7,500 per month for three months
beginning December 1, 1995 through February 1, 1996, when such
payments increased to $5,000 principal per month plus interest
accrued thereon until November 1, 1997, when the remaining principal
balance will be due. Madison failed to make the March 1, 1996
payment, and thus is in default. The Company filed suit to collect
this note.
The $2,500,000 note is secured by a First Purchase Money Security
Interest Lien
PAGE
PAGE 7
UNITED HERITAGE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
NOTE 3 - NOTE RECEIVABLE (CONTINUED)
on all real and personal property transferred pursuant to this
transaction, one million (1,000,000) shares of the common stock of
Madison Group Associates, Inc., and by all the outstanding stock of
Madison Radio Group, Inc., the wholly-owned subsidiary. In addition,
Madison Group Associates, Inc., has pledged a promissory note
executed on September 20, 1992, in the original amount of $1,000,000
payable to Canaveral International Corp. (now known as Madison Group
Associates, Inc.) by First Capital Trust, Sam Podany and Ted
Yashcheshen. In addition, Madison Group Associates, Inc. has filed
for bankruptcy. The Company has had the collateral securing the
note receivable appraised and has determined that the value of the
collateral exceeds the Company's carrying amount of the note
receivable. The stock of Madison Radio Group, Inc. was foreclosed on
in November 1996 and subsequently sold to Heritage Communications
Corporation, a company related to United Heritage Corporation
through common stockholders. At December 31, 1997, Madison Radio
Group, Inc. is wholly owned by Heritage Communications Corporation.
The potential gain of $1,254,234 has been deferred due to the
lack of a significant initial investment by the buyer. This
accounting treatment will continue until the buyer's cumulative
payments are sufficient to qualify the transaction for gain
recognition under generally accepted accounting principles.
Subsequent to December 31, 1997, the Company foreclosed on its
lien position pertaining to the radio stations in Canyon and
Amarillo, Texas. Sovereign Communications Corporation ("Sovereign"),
a wholly owned subsidiary of the Company, became owner of the real
estate, furniture, fixtures, equipment, etc., that will be sold under
an agreement between Sovereign and Cumulus Broadcasting, Inc.
("Cumulus") dated December 30, 1997. Cumulus is currently operating
the stations under a Local Management Agreement, pending approval by
the Federal Communications Commission ("FCC") of the application to
transfer the licenses of the stations from Sovereign (the current
license holder) to Cumulus. When FCC approval is granted, Cumulus
will pay $1,000,000 in cash for the radio stations' property and
assets. In addition, the Company is retaining certain radio station
related assets and has initiated sales efforts to market these assets,
which include an office building in Canyon, Texas, and various
furniture, fixtures, and equipment. The consummation of these
transactions may result in a minimal loss to the Company.
NOTE 4 - TRANSACTIONS WITH RELATED PARTIES
Deferred consulting costs of $52,000 were recorded as a reduction
of shareholder's equity and were expended in 1997 as the services
were rendered.
On June 28, 1996, Mr. Mize exercised stock options and bought
400,000 shares of the Company's common stock for $100,000.
PAGE
PAGE 8
UNITED HERITAGE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
NOTE 4 - TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
On February 11, 1997, the Company acquired 100% of Apex
Petroleum, L.L.C. The Company issued 77,500,000 shares of common
stock to the members of Apex. Mr. Mize, President and Chairman of
the Board of the Company, had a controlling interest in Apex.
On August 5, 1997, the Company obtained a $300,000 unsecured
revolving line of credit from ALMAC Financial Corporation, a company
owned by Walter G. Mize. At December 31, 1997, no amounts were
outstanding under the line of credit which bears interest at 8 1/2 %
and matures August 5, 1998.
NOTE 5 - INCOME (LOSS) PER COMMON SHARE
Income (loss) per share of common stock is based on the weighted
average number of shares outstanding during the periods ended
December 31, 1997 and December 31, 1996.
NOTE 6 - INCOME TAXES
As of March 31, 1997, the Company had net operating loss carry-
overs of approximately $4,550,000 available to offset future income
for income tax reporting purposes which will ultimately expire in
2012 if not previously utilized.
NOTE 7 - DEFERRED COMPENSATION
During the year ended March 31, 1997, the Company issued various
stock options and warrants. Deferred compensation costs (resulting
from the options and warrants), are recorded as a reduction of
shareholders' equity and are being amortized over their expected
lives.
NOTE 8 - OIL AND GAS PROPERTIES
In September 1995, the Company entered into an agreement to
acquire 100% of Apex Petroleum, L.L.C., (Apex) owner of certain
unproved oil and gas leases located in Edwards County, Texas. The
agreement was contingent on the Company having certain testing and
development performed and a valuation being obtained which was
acceptable to the Company. Apex is related to the Company through
members who are also shareholders of the Company including Mr. Mize,
who had a controlling interest in Apex.
PAGE
PAGE 9
UNITED HERITAGE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
NOTE 8 - OIL AND GAS PROPERTIES (CONTINUED)
Pursuant to the agreement, the Company has incurred exploration
costs necessary to obtain an evaluation of reserves. Costs incurred
have been capitalized as oil and gas properties.
A favorable valuation report was received and the transaction was
closed on February 11, 1997. The Company issued 77,500,000 shares
of common stock to the members of Apex, pursuant to the agreement
and subsequent revision.
As of December 31, 1997, a determination cannot be made about the
extent of proved reserves for this project and a limited amount of
oil and gas has been produced. Consequently, no amortization has
been computed on the exploration costs. The Company will begin to
amortize these costs when testing of the project is complete and
substantial production commences, which is currently expected to be
in 1998. All costs capitalized as of December 31, 1997 were
incurred to evaluate the project and are considered exploration
costs.
When production commences revenue from oil and gas operations
will be recognized at the point of sale. Inventory of oil in lease
tanks will not be recorded because the amount is not expected to be
material to the financial statements.
Note 9 - COMMON STOCK
On December 11, 1997, the Company sold 1,176,470 shares of its
Common Stock and Warrants to purchase an additional 117,646 shares
of Common Stock at $1.20 per share exercisable through December 11,
1999, for consideration of $1,000,000. The selling agent for
the private placement was paid a commission of $100,000 plus
warrants to purchase an additional 1,824,000 shares of Common Stock
at exercise prices ranging from $0.75 to $2.00 per share through
August 16, 2001. The Company received a net of $900,000 from the
sale, of which $1,176 was added to Common Stock and $868,975
was added to Paid in Capital on Common Stock.
During the nine month period ending December 31, 1997, there were
177,500 common shares issued as the result of exercises of options
by various optionees. Exercise prices ranged from $0.25 to $1.00
per share. The Company received $99,998.00 from the exercise of
options, of which $177.50 was added to Common Stock and $99,820.50
was added to Paid in Capital on Common Stock.
During the nine month period ending December 31, 1997, there was
a total increase of $1,354 to Common Stock and $968,798 to
Paid in Capital on Common Stock for a total increase in
Stockholder's Equity of $970,152 from the sale of 1,353,970
shares of Common Stock.
PAGE
PAGE 10
Note 10 - CONTINGENCIES
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.
PAGE
PAGE 11
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
- -------
On February 11, 1997 the Company acquired all of the membership
interests of Apex Petroleum, L.L.C. ("Apex"), a Texas limited
liability company, in consideration of 77,500,000 shares of the
Company's $0.001 par value common stock ("Common Stock") issued to
the members of Apex. On February 27, 1997, Apex was merged with and
into UHC Petroleum Corporation, a newly formed Texas corporation,
which is a wholly-owned subsidiary of the Company. The transaction
was based on an independent valuation of Apex by Surtek, Inc.
("Surtek"), a petroleum engineering company, which performed certain
tests on the primary assets of Apex, leases of an oil field in South
Texas consisting of approximately 10,502 acres, to determine the
value of the Apex assets. Based on the Surtek report, the Company's
board of directors unanimously accepted the valuation and elected to
close the transaction to purchase the Apex interests as a result of
the valuation.
After completion of a successful test, the Company acquired a
Klaeger Oil Retrieval System ("KORS") unit. Utilizing the technology
of the KORS unit, the Company has announced that it has 24 wells
capable of production.
A small amount of oil was produced from the oil field in South
Texas as a part of the testing and development of the lease in the
fourth quarter of 1997. The Company is presently engaged in the
development of procedures for larger-scale production.
Subsequent to December 31, 1997, the Company foreclosed on its
lien position pertaining to the radio stations in Canyon and
Amarillo, Texas. Sovereign Communications Corporation
("Sovereign"), a wholly owned subsidiary of the Company, became owner
of the real estate, furniture, fixtures, equipment, etc., that will
be sold under an agreement between Sovereign and Cumulus
Broadcasting, Inc. ("Cumulus") dated December 30, 1997. Cumulus is
currently operating the stations under a Local Management Agreement,
pending approval by the Federal Communications Commission ("FCC") of
the application to transfer the licenses of the stations from
Sovereign (the current license holder) to Cumulus. When FCC
approval is granted, Cumulus will pay $1,000,000 in cash for the
radio stations' property and assets. In addition, the Company is
retaining certain radio station related assets and has initiated
sales efforts to market these assets, which include an office
building in Canyon, Texas, and various furniture, fixtures, and
equipment. The consummation of these transactions may result in a
minimal loss to the Company.
The Company continues to purvey Heritage Lifestyle Lite Beef, the
lower-fat beef product marketed by the Company to a New Mexico
supermarket chain and a major West Coast supermarket chain. In
December 1997 this West Coast supermarket chain advised the Company
that it intended to begin selling Heritage Lifestyle Lite Beef (R) in an
additional 50 stores.
PAGE
PAGE 12
Material Changes in Results of Operations
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Revenues for the Company's beef products were $645,446 and $1,978,771
for the quarter and nine-month period ended December 31, 1997,
respectively. The results for the quarter are greater than the
comparable quarter in the preceding fiscal year and are similar in
amount to the nine month period totals. Revenues from the sale of
beef products reported in the prior year quarter and nine-month
period were $567,950 and $1,984,412 respectively.
Gross profit from beef products was $302,506 for the nine-month
period ended December 31, 1997, as compared with $357,958 gross
profit for the same period last year. The cost of beef products as a
percentage of sales was 84.71% for the nine months ended December 31,
1997, as compared to 81.96% for the nine months ended December 31,
1996. The increase in the cost of beef product percentage is due
primarily to an increase in transportation costs for the current
period as compared with the previous year's period.
The Company has been selling Heritage Lifestyle Lite Beef (R) in
selected stores out of the 250-store southern division of a major
West Coast supermarket chain. The southern and northern divisions of
this chain together contain approximately 450 stores. In December
1997 this West Coast supermarket chain advised the Company that it
intended to begin selling Heritage Lifestyle Lite Beef (R) in an
additional 50 stores. This will bring the total stores in their chain
selling Heritage Lifestyle Lite Beef (R) to 99 stores. The Company can
service these additional sales without adding any administrative
overhead costs. The Company also continues to sell its lower-fat
beef product to the Jewel-Osco supermarket chain in New Mexico. While
these prospects have the potential for significantly increasing the
Company's beef sales, there can be no guarantee that such will be the
case.
During the three months ending December 31,1997, the Company sold
$20,158 of oil produced during the testing of wells for development
of its oil reserves and from minimum operations of wells on the
lease.
Interest and other income for the current quarter and for the nine
months ending December 31, 1997 is below the level of the prior year
period(s). This results from having less cash available to invest in
interest-bearing accounts.
Selling expenses of $22,782 for the current quarter have increased
from that of the prior year period of $9,485 due to an increase in
outside sales representative's costs. Selling expenses of $89,196
for the current nine-month period have increased from that of the
prior year period of $38,522 also due to an increase in outside sales
representative's costs and in advertising costs. General and
administrative costs have increased to $111,434 and $349,140 for the
quarter and nine-month period ended December 31, 1997, as compared
to $110,298 and $310,466 for the same periods last year. This is a
result of increased travel, audit fees, and compensation resulting
from stock options.
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PAGE 13
On a consolidated basis, the Company had a net loss for the current
nine-month period of $83,593. The comparable period result for the
prior fiscal year was a net income of $20,411. The primary reasons
for the change from net income to a net loss are a slight decrease in
sales and a slight increase in cost of sales, together with the
increased costs of outside sales, travel, audit fees, and
compensation resulting from stock options, as previously discussed.
On November 1, 1994, the Company sold its broadcasting business to
Madison Radio Group, Inc., a wholly-owned subsidiary of Madison Group
Associates, Inc., for $2,500,000. The broadcasting business included
AM/FM radio stations in Canyon and Amarillo, Texas. The
consideration of $2,500,000 is in the form of a three-year note
bearing interest at 7%, and pursuant to a modification of the note on
August 31, 1995, is payable in monthly payments of $5,000 for the
first nine months beginning December 1, 1994, through August 1, 1995,
when such payments increased to $6,500 per month for three months
beginning September 1, 1995, through November 1, 1995. Then payments
increased to $7,500 per month for three months beginning December 1,
1995, through February 1, 1996, when such payments decreased to
$5,000 principal per month plus interest accrued thereon until
November 1, 1997, when the remaining principal balance was due.
Madison failed to make the March 1, 1996 payment, and thus is in
default. The Company filed suit to collect this note.
The $2,500,000 note is secured by a First Purchase Money Security
Interest Lien on all real and personal property transferred pursuant
to this transaction, one million (1,000,000) shares of the common
stock of Madison Group Associates, Inc., as well as all outstanding
stock of Madison Radio Group, Inc., the wholly-owned subsidiary.
The stock of Madison Radio Group, Inc. was foreclosed on in
November 1996 and subsequently sold to Heritage Communications
Corporation, a company related to United Heritage Corporation through
common stockholders. As of December 31, 1997, Madison Radio Group, Inc.
is wholly owned by Heritage Communications Corporation. In addition,
Madison Group Associates, Inc., has pledged a promissory note executed
on September 20, 1992, in the original amount of $1,000,000 payable to
Canaveral International Corp. (now known as Madison Group Associates,
Inc.) by First Capital Trust, Sam Podany and Ted Yashcheshen. Madison Group
Associates, Inc. has filed for bankruptcy. The Company has had the
collateral securing the note receivable appraised and has determined
that the value of the collateral exceeds the Company's carrying
amount of the note receivable.
The potential gain of $1,254,234 has been deferred due to
the lack of a significant initial investment by the buyer. This
accounting treatment will continue until the buyer's cumulative
payments are sufficient to qualify the transaction for gain recognition
under generally accepted accounting principles. During the year ended
March 31, 1997, the Company received $16,000 of interest payments,
which have been added to and included in the deferred gain.
PAGE
PAGE 14
Material Changes in Financial Position
- --------------------------------------
The Company's equity capital has shown an increase of $970,152
since March 31, 1997, the previous fiscal year-end. This increase results
primarily from the sale of 1,176,470 shares of Common Stock and
Warrants to purchase an additional 117,646 shares of Common Stock for
the net amount of $900,000.00 (net of commissions and selling costs)
and from the issuance of $95,000 in Common Stock as deferred
compensation. The issuance of stock for deferred compensation
contributed $15,396 to the net loss for the current quarter and
$46,188 to the net loss for the nine months ended December 31, 1997.
Other changes in equity capital resulted from the exercise of
outstanding stock options and the net loss for the period.
The working capital of the Company was $731,425 at December 31,
1997, a significant increase in the working capital from the $149,008
reported at March 31, 1997. Current assets increased $562,203 during
the current nine-month period, and current liabilities decreased
$20,214 resulting in an increase in the overall working capital
position. The increase in working capital was significantly enhanced
by the $900,000 proceeds received from the sale of Common Stock and
Warrants in December 1997. A portion of the funds received were used
to reduce current liabilities associated with the development of the
Company oil lease.
The total assets of the Company were $26,754,695 at December 31,
1997, which is $912,533 greater than total assets at the previous
year end. This increase in total assets is primarily due to an
increase in oil and gas properties, the purchase of equipment for
the oil and gas lease operations and from proceeds received from the
sale of Common Stock and Warrants in December 1997.
The Company's operating activities used $50,470 in cash flow
for the nine months ended December 31, 1997, as compared to providing
$23,141 in cash during the prior year period. The cash used in the
current period was primarily due to the net loss. The cash provided
in the prior year period was primarily from net income. Investing
activities used $358,087 during the nine months ended December 31,
1997, due to additions to the oil and gas properties and to equipment
for the oil and gas lease operations. Investing activities used
cash of $390,702 for the nine months ended December 31, 1996, due to
additions to property and equipment and additions to oil and gas
properties. Financing activities provided $970,150 cash during the
current nine months from the issuance of common stock. Financing
activities from the prior year period provided $114,250 from the
issuance of common stock.
PAGE
PAGE 15
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
3.01 Articles of Incorporation, as amended on
December 5, 1997 *
3.02 Bylaws. (1) (3.2)
4.01 Registration Rights Agreement between the
Company and Augustine Fund, L.P., dated
December 11, 1997. *
4.02 Registration Rights Agreement between the
Company and Black Sea Investments, Ltd.,
dated December 10, 1997. *
4.03 Registration Rights Agreement between the
Company and Triton Private Equities Fund, L.P.,
dated December 9, 1997. *
4.04 Warrant Agreement between the Company and
Augustine Fund, L.P., dated December 11, 1997. *
4.05 Warrant Agreement between the Company and Black Sea
Investments, Ltd., dated December 10, 1997. *
4.06 Warrant Agreement between the Company and Triton
Private Equities Fund, L.P., dated December 9,
1997. *
4.07 Warrant Agreement between the Company and Sands
Brothers & Co., Ltd. dated December 11, 1997. *
10.01 Subscription Agreement between the Company and
Augustine Fund, L.P., dated December 11, 1997. *
10.02 Subscription Agreement between the Company and
Black Sea Investments, Ltd., dated December 10,
1997. *
10.03 Subscription Agreement between the Company and
Triton Private Equities Fund, L.P., dated
December 9, 1997. *
27 Financial Data Schedule (2)
* Filed with the Company's Report on Form 10-Q for the
quarter ended December 31, 1997 and incorporated by
reference herein.
(1) Filed with the Company's Registration Statement
No. 33-43564 on Form S-1 and incorporated by
reference herein
(2) Filed herewith.
(b) No Reports on Form 8-K have been filed during this quarter
for which this report is being filed.
PAGE
PAGE 16
UNITED HERITAGE CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
UNITED HERITAGE CORPORATION
/s/ Walter G. Mize
-------------------------
Date: May 28, 1998 Walter G. Mize, President
PAGE
PAGE 17
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
27 Financial Data Schedule