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 September 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
PART I
ITEM 1
Statement of Financial Position as of September 30, 2000
and December 31, 1999 3
Statement of Operations For the Three and Nine Month Periods Ended
September 30, 2000 and 1999 4
Statement of Cash Flows For the Nine Month Periods
Ended September 30, 2000 and 1999 5
Notes to Financial Statements 6
Statement of Financial Position as of
DISCOVERY OIL, LTD. September 30, 2000 and December 31, 1999
- --------------------- -----------------------------------------------
(Unaudited)
September 30, December 31,
2000 1999
--------------- ---------------
ASSETS
CURRENT ASSETS - Cash $ 2,935 $ 897
--------------- ---------------
TOTAL ASSETS $ 2,935 $ 897
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Related Party payable $ 179,587 $ 177,355
Accrued interest payable related party 264,576 249,407
--------------- ---------------
Total current liabilities 444,163 426,762
--------------- ---------------
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 (529,728) (514,365)
--------------- ---------------
Total stockholders' equity (441,228) (425,865)
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,935 897
=============== ===============
The accompanying notes are an integral part of these financial statements.
3
DISCOVERY OIL, LTD. Statement of Operations for the Three and Nine
(UNAUDITED) Month Periods Ended September 30, 2000 and 1999
- ----------- -------------------------------------------------
September 30, 2000 September 30, 1999
-------------------------- --------------------------
Three Nine Three Nine
Months Months Months Months
------------ ------------ ------------ ------------
REVENUES $ 6,501 $ 17,143 $ 4,703 $ 4,703
------------ ------------ ------------ ------------
OPERATING EXPENSES
Legal and Accounting 2,500 7,500 - -
Bank Charges 50 110 30 90
Office Expense 20 94 - -
Fees - 1,544 - -
Telephone 1,227 4,107 153 153
Miscellaneous Expense - 150 - -
Travel - 500 - -
Tax & Licenses - 3,330 - -
------------ ------------ ------------ ------------
Total Operating Expenses 3,797 17,335 183 243
------------ ------------ ------------ ------------
GAIN (LOSS) FROM
OPERATIONS 2,704 (192) 4,520 4,460
------------ ------------ ------------ ------------
OTHER EXPENSE
Interest 5,068 5,068 4,999 14,999
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (2,364) (5,260) (479) (10,539)
INCOME TAXES -0- -0- -0- -0-
------------ ------------ ------------ ------------
NET LOSS $ (2,364) $ (5,260) $ (479) $ (10,539)
============ ============ ============ =============
NET LOSS PER SHARE $ (NIL) $ (NIL) $ (NIL) $ (NIL)
============ ============ ============ =============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 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 Cash Flows for the Nine Month
(UNAUDITED) Periods Ended September 30, 2000 and 1999
- --------------------- ------------------------------------------------
September 30, December 31,
2000 1999
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (15,361) $ (10,539)
Add item not requiring the use of cash:
Increase in accrued interest 15,168 14,999
--------------- ---------------
Net cash flows provided (used) by
operating activities (193) 4,460
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in related
party payable 2,231 (4,430)
--------------- ---------------
Net cash flows provided (used)
from financing activities 2,231 (4,430)
NET INCREASE IN CASH 2,038 30
--------------- ---------------
CASH AT BEGINNING OF PERIOD 897 10
--------------- ---------------
CASH AT END OF PERIOD $ 2,935 $ 40
=============== ===============
The accompanying notes are an integral part of these financial statements.
5
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.
6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
The Company's current liabilities increased from $438,863 to $444,163 during the
quarter ended September 30, 2000. The Company's only asset, cash, increased
from $1 on June 30, 2000 to $2,935 as of September 30, 2000.
The Company incurred a loss of $2,364 for the quarter ended September 30, 2000.
Revenues of $6,501 for the quarter were derived from royalties on oil
production. The primary expense for the quarter consisted of $2,500 for
accounting and $5,068 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
7
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: November 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: November 15, 2000
- -------------------------------------- -----------------------
Andrew V. Ippolito
President and Director