UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
Commission file number
DISCOVERY OIL, LTD.
(Exact name of registrant as specified in its charter)
DELAWARE 83-0207909
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
6127 Ramirez Canyon Road
Malibu, CA
(Address of principal executive offices)
90265
(Zip Code)
(310) 457-1967
(Registrant's Telephone Number, Including Area Code)
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 No X
---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of June 30, 2000:
9,313,352
1
PART I
PAGE
----
ITEM 1
Statement of Financial Position as of June 30, 2000 and December 31, 1999 3
Statement of Operations For the Three and Six Month Periods Ended
June 30, 2000 and 1999 4
Statement of Changes in Stockholders' Equity For the Three Month Periods
Ended June 30, 2000 and 1999 5
Statement of Cash Flows For the Three and Six Month Periods
Ended June 30, 2000 and 1999 and 1999 6
Notes to Financial Statements 7
2
Statement of Financial Position as of
DISCOVERY OIL, LTD. June 30, 2000 and December 31, 1999
- --------------------- -----------------------------------------------
(Unaudited)
June 30, December 31,
2000 1999
--------------- ---------------
ASSETS
CURRENT ASSETS - Cash $ 1 $ 897
--------------- ---------------
TOTAL ASSETS $ 1 $ 897
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Related party payable $ 179,355 $ 177,355
Interest payable to related party 259,508 249,407
--------------- ---------------
Total current liabilities 438,863 426,762
--------------- ---------------
STOCKHOLDERS' EQUITY
Preferred stock; $1.00 par value;
5,000,000 shares authorized;
no shares outstanding - -
Common stock; $.01 par value;
25,000,000 shares authorized;
9,313,352 shares issued and
outstanding 93,134 93,134
Discount on common stock (4,634) (4,634)
Accumulated deficit (527,362) (514,365)
--------------- ---------------
Total stockholders' equity (438,862) (425,865)
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1 $ 897
=============== ===============
The accompanying notes are an integral part of these financial statements.
3
DISCOVERY OIL, LTD. Statement of Operations for the Three and Six
(UNAUDITED) Month Periods Ended June 30, 2000 and 1999
- ------------------ -------------------------------------------------
June 30, 2000 June 30, 1999
-------------------------- --------------------------
Three Six Three Six
Months Months Months Months
------------ ------------ ------------ ------------
REVENUES $ 8,136 $ 10,642 $ - $ -
------------ ------------ ------------ ------------
OPERATING EXPENSES
Legal and accounting 2,000 5,000 - -
Bank charges 30 60 30 60
Office expense 21 74 - -
Fees 1,275 1,544 - -
Telephone 1,835 2,880 - -
Travel - 500 - -
Miscellaneous expense 150 150 - -
Taxes and licenses - 3,330 - -
Interest 4,974 10,101 4,999 9,999
------------ ------------ ------------ ------------
Total Operating Expenses 10,285 23,639 5,029 10,059
------------ ------------ ------------ ------------
NET (LOSS) $ (2,149) $ (12,997) $ (5,029) $ (10,059)
============ ============ ============ ============
NET (LOSS) PER SHARE $ (NIL) $ (NIL) $ (NIL) $ (NIL)
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF SHARES 9,313,352 9,313,352 9,313,352 9,313,352
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
4
DISCOVERY OIL, LTD. Statement of Changes in Stockholders' Equity for
(UNAUDITED) the Six Month Periods Ended June 30, 2000 and 1999
- -------------------- --------------------------------------------------
Common Stock Discount on Accum-
------------------------ Common ulated
Shares Amount Stock Deficit Total
----------- ----------- ----------- ----------- -----------
Balances as of
December 31, 1998 9,313,352 $ 93,134 $ (4,634) $ (497,360) $ (408,860)
Net (Loss) (10,059) (10,059)
----------- ----------- ----------- ----------- -----------
Balances as of
June 30, 1999 9,313,352 $ 93,134 $ (4,634) $ (507,419) $ (418,919)
=========== =========== =========== =========== ===========
Common Stock Discount on Accum-
------------------------ Common ulated
Shares Amount Stock Deficit Total
----------- ----------- ----------- ----------- -----------
Balances as of
December 31, 1999 9,313,352 $ 93,134 $ (4,634) $(514,365) $ (425,865)
Net (Loss) (12,997) (12,997)
----------- ----------- ----------- ----------- -----------
Balances as of
June 30, 2000 9,313,352 $ 93,134 $ (4,634) $ 527,362) $ (438,862)
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
5
DISCOVERY OIL, LTD. Statement of Cash Flows for the Three and Six
(UNAUDITED) Month Periods Ended June 30, 2000 and 1999
- -------------------- ------------------------------------------------
June 30, 2000 June 30, 1999
-------------------------- --------------------------
Three Six Three Six
Months Months Months Months
------------ ------------ ------------ ------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net (Loss) $ (2,149) $ (12,997) $ (5,029) $ (10,059)
Increase in interest
payable 4,974 10,101 4,999 9,999
------------ ------------ ------------ ------------
Net cash flows used
from operating
activities 2,825 (2,896) (30) (60)
------------ ------------ ------------ ------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Increase (decrease) in
related party payable (3,000) 2,000 20 50
------------ ------------ ------------ ------------
Net cash flows used
from financing
activities (3,000) 2,000 20 50
------------ ------------ ------------ ------------
NET DECREASE IN CASH (175) (896) (10) (10)
CASH AT BEGINNING
OF PERIOD 176 897 10 10
------------ ------------ ------------ ------------
CASH AT END OF PERIOD $ 1 $ 1 $ - $ -
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
6
DISCOVERY OIL, LTD.
(UNAUDITED) Notes to Financial Statements
- ---------------------- ------------------------------
The financial statements of Discovery Oil, LTD. included herein, have been
prepared without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Although certain information normally included in
financial statements prepared in accordance with generally accepted accounting
principles has been condensed or omitted, Discovery Oil, LTD. believes that the
disclosures are adequate to make the information presented not misleading.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in Discovery Oil, LTD.'s annual report on
Form 10-K for the fiscal year ended December 31, 1999.
The financial statements included herein reflect all normal recurring
adjustments that, in the opinion of management, are necessary for a fair
presentation. The results for interim periods are not necessarily indicative of
trends or of results to be expected for a full year.
7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
The Company's current liabilities increased from $436,889 to $438,863 during the
quarter ended June 30, 2000. The Company's only asset, cash, decreased from
$176 on March 31, 2000 to $1 as of June 30, 2000.
The Company incurred a loss of $2,149 for the quarter ended June 30, 2000.
Revenues of $8,136 for the quarter were derived from royalties on oil
production. The primary expense for the quarter consisted of $2,000 for
accounting and $4,947 for accrued interest.
PART II
ITEM 1 LEGAL PROCEEDINGS
NONE
ITEM 2 CHANGES IN SECURITIES
NONE
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5 OTHER INFORMATION
NONE
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
NONE
8
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Discovery Oil, LTD.
-------------------
(Registrant)
/s/Andrew V. Ippolito Date: October 15, 2000
- -------------------------------------- -----------------------
Andrew V. Ippolito
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant and in
the capacities and as of the date indicated.
/s/Andrew V. Ippolito Date: October 15, 2000
- -------------------------------------- -----------------------
Andrew V. Ippolito
President and Director