SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2002
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 number 000-49832
DOVER PETROLEUM CORP.
--------------------------------
(Exact name of registrant as specified in its charter)
Nevada 91-1918322
(State or Other Jurisdiction (IRS Employer Identification
of Incorporation) Number)
10225 Yonge Street, Richmond Hill, Ontario L4C 3B2 Canada
-------------------------------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
(905) 884-6958
--------------
(Registrant's Telephone Number, Including Area Code)
N/A
---
(Former Name or Former Address, if Changed Since Last Report)
Check 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 the filing requirements for at least the past 90 days:
YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: As of
August 12, 2002, there were 36,536,261 shares of the Registrant's
$.001 par value common stock outstanding.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
TABLE OF CONTENTS
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
(a) Consolidated Balance Sheets as of June 30, 2002 and December
31, 2001
(b) Consolidated Statements of Operations for the six month periods
ended June 30, 2002 and June 30, 2001
(c) Consolidated Statements of Cash Flows for the six month periods
ended June 30, 2002 and June 30, 2001
(d) Notes to Financial Statements
Item 2. Management's Discussion and Analysis or Plan of Operation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults on Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Events.
Item 6. Exhibits, Lists and Reports on Form 8-K.
SIGNATURES
ITEM 1. FINANCIAL STATEMENTS.
(a) Consolidated Balance Sheets as of June 30, 2002 and December
31, 2001
DOVER PETROLEUM CORP. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
ASSETS (unaudited) (audited)
June 30, 2002 December 31,
2001
---------- ----------
Current Assets:
Cash and cash equivalents $2,227,184 $59,150
Prepaid expenses 158,621 -
---------- ----------
Total Current Assets 2,385,805 59,150
Property and Equipment (Net) 4,321 5,834
Oil Concession Rights 800,000 -
Unproved Gas and Oil Reserves 945,000 605,000
---------- ----------
Total Assets $4,135,126 $669,984
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Note payable $100,000 -
Accounts payable and accrued liabilities 419,345 459,486
---------- ----------
Total Current Liabilities 519,345 580,986
---------- ----------
Long-Term Liabilities:
Stockholder's loan payable - 121,500
---------- ----------
Total Liabilities 519,345 580,986
---------- ----------
Stockholders' Equity:
Common Stock ($.001 par value 500,000 shares authorized, 48,549 34,949
48,549,160 and 34,949,160 issued and outstanding at
June 30, 2002 and December 31, 2001, respectively
Preferred Stock ($.001 par value 100,000,000 shares - -
authorized, 0 issued and outstanding at June 30, 2002
and December 31, 2001, respectively)
Additional paid-in capital 6,551,654 122,618
Stock subscription receivable (2,384,112) -
Foreign currency transaction adjustment 1,662 -
Accumulated Retained earnings (deficit) (601,972) (68,569)
---------- ----------
Total Stockholders' Equity (Deficit) 3,615,781 88,998
---------- ----------
Total Liabilities and Stockholders' Equity (Deficit) $4,135,126 $669,984
========== ==========
____________________
The accompanying notes are an integral part of these consolidated
financial statements.
(b) Consolidated Statements of Operations for the six month periods
ended June 30, 2002 and June 30, 2001
DOVER PETROLEUM CORP. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (unaudited) (unaudited) (unaudited)
For the For the For the Six For the Six
Three Three Months Months Ended Months Ended
Months Ended Ended June 30, June 30,
June 30, June 30, 2002 2001
2002 2001 ---------- ----------
---------- ----------
Revenues $- $- $- $-
---------- ---------- ---------- ----------
Costs:
General and administrative 291,933 - 369,468 -
expenses
Consulting expenses 41,379 - 168,379 1,000
---------- ---------- ---------- ----------
Total Costs 333,312 - 537,847 1,000
---------- ---------- ---------- ----------
Loss from Operations (333,312) - (537,847) (1,000)
---------- ---------- ---------- ----------
Other Income:
Interest income 4,444 4,444
---------- ---------- ---------- ----------
Net Loss ($328,868) - ($533,403) ($1,000)
========== ========== ========== ==========
Earnings (Loss) per Share:
Basic and diluted per share: $0.00 $0.00 $0.00 $0.00
========== ========== ========== ==========
Basic and diluted common shares 40,651,433 18,339,160 36,624,496 17,421,660
outstanding
========== ========== ========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
(c) Consolidated Statements of Cash Flows for the six month periods
ended June 30, 2002 and June 30, 2001
DOVER PETROLEUM CORP. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six For the Six
Months Ended Months Ended
June 30, 2002 June 30, 2001
---------- ----------
Cash Flows from Operating Activities:
Net loss ($533,403) ($1,000)
Adjustments to reconcile net income (loss) to
net cash (used in) provided by operating activities
Depreciation 1,513 -
Change in assets and liabilities net of effects from:
Change in foreign currency translation 1,662 -
(Increase) in prepaid expenses (158,621) -
(Decrease) in accounts payable (40,141) -
---------- ----------
Net cash (used in) provided by operating activities (728,990) (1,000)
---------- ----------
Cash Flows from Investing Activities:
Cost of acquisition (120,500)
Cost of capitalized costs of unproved gas and oil (340,000)
reserves
---------- ----------
Net cash used in investing activities (340,000) (120,500)
---------- ----------
Cash Flows from Financing Activities:
Proceeds (repayment) of stockholder loan (121,500) 121,500
Proceeds of note payable 100,000 -
Net proceeds from issuance of common stock 3,258,524 -
---------- ----------
Net cash provided by financing activities 3,237,024 121,500
---------- ----------
Net Cash Increase 2,168,034 -
Cash and cash equivalents, beginning of period 59,150 -
---------- ----------
Cash and cash equivalents, end of period $2,227,184 -
========== ==========
Supplemental Disclosure of Cash Flow Information:
Cash paid during period for:
Interest - -
========== ==========
Taxes - -
========== ==========
Supplemental Disclosures of Noncash Financing
Activities:
Stock issued for rights to oil concessions $800,000 -
========== ==========
Stock issued for subscription receivable $2,384,112 -
========== ==========
Supplemental Disclosures of Noncash Investing
Activities:
Fair value of assets acquired other than cash - $605,000
Liabilities assumed - ($300,000)
Cash acquired - ($184,500)
---------- ----------
Cost of Acquisition Net of Cash Acquired - $120,500
========== ==========
__________
The accompanying notes are an integral part of these consolidated
financial statements.
(d) Notes to Financial Statements
DOVER PETROLEUM CORP. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2002
1. DESCRIPTION OF BUSINESS
Dover Petroleum Corp. (formerly At Home Holdings, Inc. and Coretech
Industries Ltd.), ("Dover, Nevada") a development stage company, was
incorporated under the laws of the State of Nevada on July 9, 1998.
Dover, Nevada initiated business operations in 2000 as a provider of
home meal replacement food products via the Internet. Dover, Nevada
ceased business operations in late 2000 and began exploring new
business opportunities.
On September 21, 2001 Dover, Nevada completed a stock exchange
agreement ("The Stock Exchange Agreement") with Slaterdome Gas,
Inc., a Florida corporation ("Slaterdome"). Under the terms of the
agreement one share of Dover, Nevada common stock was issued and
exchanged for each of the 18,350,000 shares of common stock of
Slaterdome outstanding, thereby giving the stockholders of
Slaterdome controlling interest in Dover, Nevada. Slaterdome also
at this time changed its name to Dover Petroleum Corp. ("Slaterdome"
or the "Company") . On June 21, 2001 Slaterdome had acquired
certain assets of Wyoming Oil and Minerals, Inc., a Wyoming Corp.
("Wyoming"), the acquired assets positioning the Company as a
development stage company in the oil and gas industry.
On March 31, 2002 the Company completed a stock exchange agreement
("The Agreement") with the shareholders of Dover Egypt I, Inc. to
acquire the rights to a certain Oil and Gas Concession in the Arab
Republic of Egypt.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The accompanying financial statements consolidate the accounts of
Dover Petroleum Corp. and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been
eliminated in consolidation. Certain amounts from prior years have
been reclassified to conform to the current year presentation.
The accompanying unaudited consolidated financial statements have
been prepared pursuant to rules and regulations of the Securities
and Exchange Commission and, therefore, do not include all
information and footnote disclosures normally included in audited
financial statements. However, in the opinion of management, all
adjustments that are of a normal and recurring nature necessary to
present fairly the results of operations, financial position and
cash flows have been made. It is suggested that these statements be
read in conjunction with the financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31,
2001.
The statements of operations for the three months and six months
ended June 30, 2002 and 2001 are not necessarily indicative of
results for the full year.
Earnings (Loss) per Share
The Company computes earnings or loss per share in accordance with
the Financial Accounting Standards Board Statement No. 128 "Earnings
Per Share" (SFAS 128) which replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per share
excludes the dilutive effects of options, warrants and convertible
securities and thus is computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding. Diluted earnings per share is similar to the previous
fully diluted earnings per share. Diluted earnings per share
reflects the potential dilution that could occur if securities or
other agreements to issue common stock were exercised or converted
into common stock. Diluted earnings per share is computed based
upon the weighted average number of common shares and dilutive
common equivalent shares outstanding.
Recent Accounting Pronouncements
In July 2001, the FASB issued Statement of Financial Accounting
Standards No. 141, (SFAS 141), "Business Combinations" and Statement
of Financial Accounting Standards No. 142, (SFAS 142), "Goodwill and
Other Intangible Assets". SFAS 141 requires all business
combinations to be accounted for using the purchase method of
accounting and is effective for all business combinations initiated
after June 30, 2001. SFAS 142 requires goodwill to be tested for
impairment under certain circumstances, and written off when
impaired, rather than being amortized as previous standards
required. SFAS 142 is effective for fiscal years beginning after
December 15, 2001. Early application is permitted for entities with
fiscal years beginning after March 15, 2001 provided that the first
interim period financial statements have not been previously issued.
The adoption of SFAS 141 had no effect on the Company's operating
results or financial condition. The Company is currently assessing
the impact of SFAS 142 on its operating results and financial
condition.
3. COMMITMENTS AND CONTINGENCIES
Litigation
In connection with the litigation relating to the acquisition of the
Wyoming Assets Slaterdome settled the delinquent amount due from
Wyoming to Phillips. As of December 31, 2001 Slaterdome had paid
Phillips approximately $219,000. The balance of $300,000 was paid
pursuant to the settlement agreement agreed to between the parties
during March 2002.
4. STOCKHOLDERS' LOAN PAYABLE
During 2001 a stockholder of the Company loaned the Company $121,500
which was paid during the second quarter of 2002.
5. STOCKHOLDERS' EQUITY
Capital
During the six month ended June 30, 2002 the Company sold 12,000,000
shares of its common stock pursuant to a private placement offering
for $0.50 per share. This offering entitled the subscriber to
receive one share of common stock for $0.50 per share and warrant to
purchase one additional share of common stock for $0.80 per share.
The Company received net subscription amounts totaling $5,682,410
pursuant to this stock offering. Of this amount $2,384,112 is still
due to the company as a stock subscription receivable and is
reflected in the Stockholders' Equity section of the consolidated
balance sheet. No warrants have been exercised.
Item 2. Plan of Operation.
The following discussion of our financial condition and results
of operations should be read in conjunction with the financial
statements and the notes to the financial statements included
elsewhere in this report. The discussion may contain "forward
looking" statements or statements which arguably imply or suggest
certain things about our future. Statements, which express that we
"believe", "anticipate", "expect", or "plan to", as well as, other
statements which are not historical fact, are forward looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on assumptions that
we believe are reasonable, but a number of factors could cause our
actual results to differ materially from those expressed or implied
by these statements. We do not intend to update these forward
looking statements.
Our business efforts for the next twelve months will be
centered on the acquisition, either alone or with others, of
interests in proved and developed and unproved and undeveloped
producing and non-producing oil and gas leases, pursuing development
of our Wyoming Assets (as hereinafter described) and, primarily,
pursuing, on behalf of Dover Egypt Joint Venture, exploration and
exploitation of petroleum and natural gas under the Concession
Agreement in the East Wadi Araba Area of the Republic of Egypt (as
hereinafter described).
Our subsidiary, Slaterdome Oil & Gas, Inc. is the owner of the
Wyoming Asset. The Wyoming Asset consist of a 16.6667% working and
operating rights interest in certain oil and gas leases located in
Carbon County, Wyoming and Moffat County, Colorado. As of the date
hereof, there are no active business operations on any of the
properties in which Slaterdome has an interest.
Our subsidiary, Dover Egypt Petroleum I, Inc. Is the owner of a
fifty percent interest in Dover Egypt Joint Venture. Dover Egypt
Joint Venture, pursuant to an option agreement (the "Option
Agreement"), has the right to acquire the interest of Dover
Investments Limited ("Optionor") in a certain Concession Agreement
for Petroleum Exploration and Exploitation (the "Concession
Agreement") between Optionor, the Arab Republic of Egypt and the
Egyptian General Petroleum Corporation dated April 23, 2001. The
Concession Agreement relates to the exclusive concession for the
exploitation of petroleum and natural gas in and throughout the East
Wadi Araba Area of the Gulf of Suez. As of the date hereof, there
are no active business operations on any of the properties in which
Dover Egypt has an interest.
Under the Option Agreement and the Dover Egypt Joint Venture
Agreement, Dover Egypt is required to invest the $4,000,000 mandated
under the Concession Agreement for the drilling of two exploration
wells in the Area. This obligation serves as the consideration for
the acquisition by Dover Egypt of its interest in the Dover Egypt
Joint Venture. The Concession Agreement mandates the expenditure of
the $4,000,000 within 3 years from the date of advertisement of the
passage of the Concession Agreement into Egyptian law. If Dover
Egypt fails to meet its commitments under the Option Agreement, the
Option Agreement will be terminated and all rights under the
Concession Agreement will be extinguished. Likewise, if Dover Egypt
fails to meet its commitments under the Dover Egypt Joint Venture
Agreement, other joint venture parties may have rights of action
against Dover Egypt. As of the date hereof, Dover Egypt has funded
approximately $500,000 to Dover Egypt Joint Venture toward payment
of the $4,000,000 obligation under the Option Agreement.
We recently concluded the Current Regulation S Offering and the
Current Regulation D Offering (see, no. 1 and 2 under Item c. of
Item 2 of Part II, hereof) whereby we sold 12,000,000 shares of our
common stock and warrants to acquire 12,000,000 shares of our common
stock. Each Warrant entitles the holder thereof to purchase one
share of our common stock at a price of eighty cents no event later
than December 31, 2002.
We hope to become a global oil and gas exploration company, but
we can provide no assurance that we will be able to meet our goal.
We intend to use the proceeds of the Current Regulation S Offering
and the Current Regulation D Offering to meet certain current
commitments under the Option Agreement and the Dover Egypt Joint
Venture Agreement, which will enable the Dover Egypt Joint Venture
to undertake certain exploration phase drilling commitments under
the Concession Agreement and for general corporate purposes. We
believe that our cash requirements for the next 12 months are
fulfilled as a result of receipt of the proceeds of the Current
Regulation S Offering and the Current Regulation D Offering.
However, in the event that amounts due under the Subscription Note
are not paid (see Part II, Item 2. c.) 1.) we may be unable to meet
our obligations over the next 12 months and our stockholders can
expect to lose all of their investment.
The first exploration phase for the under the Concession
Agreement commenced during July, 2002, and there is a three-year
time frame in which to complete a minimum of two exploration drill
holes and expend $4,000,000. Drill budgets for the first two
exploration drill holes are forecast at $1,600,000 each. Drilling
of the first two exploration holes are scheduled to begin during the
4th quarter of 2002. If an economic oil discovery results during
the next 12 months, we expect to obtain a feasibility study in
connection with oil production capital requirements.
In connection with the Wyoming Asset, we are considering the
scale of development for production and the capital requirements
associated therewith. At the present time, we do not have any plans
to develop the property which forms the Wyoming Asset over the next
12 months. However, our plans are subject to change based upon
numerous factors, including but not limited to, our financial position.
Our executive officers are our only current employees, and they
are also employed by third-party companies. As a result our
executive officers devote only that portion of their time that they
deem necessary to our affairs. Our plans regarding the hiring of
additional employees depends upon the development of our business
and our financial position, existing from time to time.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
a). Not Applicable.
ITEM 2. CHANGES IN SECURITIES.
a). Not Applicable.
b). Not Applicable.
c).
1. On June 20, 2002, we concluded an offering of our common
stock to certain non U.S Persons (the "Recent Regulation S
Offering")and we expect to issue 10,820,000 shares of our
common stock to 43 Non-U.S. Persons for an aggregate of
$3,129,900 in cash and $2,280,100 in the form of a note (the
"Subscription Note"). There were no commissions or discounts
associated with such issuance of our common stock except that
we paid approximately $310,000 in finder's fees and such common
stock is not convertible or exchangeable. The purchaser of
each share of our common stock as part of the Recent Regulation
S Offering received one common stock purchase warrant,
exercisable at a price of US $0.80 on or before December 31,
2002. The Subscription Note in our favor is executed by our
Chief Executive Officer, Robert Salna and provides for payment
in eight equal monthly installments, with the first of such
installments being due on approximately August, 15, 2002. The
principal balance due under the Subscription Note bears
interest at four percent per annum. We claimed exemption from
the registration provisions of the Act with respect to the
common stock so issued pursuant to Regulation S promulgated
thereunder. Each of the parties to whom securities will be
issued in connection with the foregoing, made an informed
investment decision based upon negotiation with us and had
access to material information regarding us. We believe that
all parties that acquired our securities pursuant to the
foregoing had knowledge and experience in financial matters
such that they were capable of evaluating the merits and risks
of acquisition of our securities. All certificates
representing the shares issued pursuant to the foregoing will
bear an appropriate legend restricting the transfer of such
shares, except in accordance with the Securities Act.
2. On June 20, 2002, we concluded an offering of our common
stock (the "Recent Regulation D Offering") to certain
Accredited Investors (as such term is defined under the
Securities Act)and we expect to issue 1,180,000 shares of our
common stock to 7 such Accredited Investors for an aggregate of
$590,000 in cash. There were no commissions or discounts
associated with such issuance of our common stock except that
we paid approximately $59,000 in finder's fees and such common
stock is not convertible or exchangeable. The purchaser of
each share of our common stock as part of the Recent Regulation
D Offering received one common stock purchase warrant,
exercisable at a price of US $0.80 on or before December 31,
2002. We claimed exemption from the registration provisions of
the Act with respect to the common stock so issued pursuant to
Rule 506 under Regulation D promulgated thereunder. Each of
the parties to whom securities will be issued in connection
with the foregoing, made an informed investment decision based
upon negotiation with us and had access to material information
regarding us. We believe that all parties that acquired our
securities pursuant to the foregoing had knowledge and
experience in financial matters such that they were capable of
evaluating the merits and risks of acquisition of our
securities. The certificates representing the shares issued
pursuant to the foregoing will bear an appropriate legend
restricting the transfer of such shares, except in accordance
with the Securities Act.
After completion of the Recent Regulation S Offering and the
Recent Regulation D Offering, and assuming receipt of the
Subscription Note but without consideration of the exercise of any
of the warrants, we expect to have approximately 48,537,000 shares
of our common stock outstanding.
d). Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable
ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS, LISTS AND REPORTS ON FORM 8-K:
(a) Exhibits.
The following is a list of exhibits filed as part of this
quarterly report on Form 10-QSB. Where so indicated by footnote,
exhibits which were previously filed are incorporated by reference.
For exhibits incorporated by reference, the location of the exhibit
in the previous filing is indicated in parentheses.
2.1 Share Exchange Agreement dated August 31, 2001 between
Dover Petroleum Corp. and the shareholders of Slaterdome,
Inc.(1)
2.2 Share Exchange Agreement dated February 26, 2001 between
Dover Petroleum Corp. and the shareholders of Dover
Petroleum Egypt I, Inc.(1)
3.1 Articles of Incorporation Coretech Industries, Inc.(1)
3.2 Amendment to Articles of Incorporation changing name to At
Home Holdings, Inc.(1)
3.3 Amendment to Articles of Incorporation changing name to
Dover Petroleum Corp. and increasing capital(1)
3.4 Amendment to Articles of Incorporation reflecting the 1999
Split(1)
3.5 Articles of Incorporation of Slaterdome, Inc.(1)
3.6 Articles of Incorporation of Dover Petroleum Egypt I, Inc.(1)
3.7 Bylaws of Dover Petroleum Corp.(1)
3.8 Bylaws of Slaterdome, Inc.(1)
3.9 Bylaws of Dover Petroleum Egypt I, Inc.(1)
10.1 Dover Egypt Joint Venture Agreement(1)
10.2 Dover Egypt Joint Venture Agreement Amendment(1)
10.3 Option Agreement(1)
10.4 Concession Agreement(2)
21.1 List of Subsidiaries(2)
99.1 Sarbanes-Oxley Certification(3)
________________________
(1)Filed as part of the Company's Form 10-SB
(2)Filed electronically as part of the Company's Amendment One to
Form 10-SB
(3)Filed electronically herewith
(b) Reports on Form 8-K. None.
SIGNATURES
In accordance with the requirements of the Securities and
Exchange Act of 1934, the Registrant has caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
DOVER PETROLEUM CORP, INC.
Date: 08/19/02 By: /s/Robert Salna
Robert Salna, Chief Executive Officer
Date: 08/19/02 By: /s/Allan Ibbitson
Allan Ibbitson, Principal Financial
Officer