19-May-2000 Old NESS Press Release: Management`s Discussions: 10KSB, NESS ENERGY INTERNATIONAL INC
FRIDAY, MAY 19, 2000 5:54 PM
- Edgar Online
(Edgar Online via COMTEX)
Company Name: NESS ENERGY INTERNATIONAL INC
(SYMBOL:NESSE)
Management's Discussion and Analysis or Plan of Operation. Liquidity and Capital Resources
Prior to October 1997 several attempts were made to keep the Company active. These attempts included contacting several companies; none were ever completed due to either financing problems or lack of working capital to make the merger successful.
On October 8, 1997, the management of the Company of that time entered into an agreement with Hayseed Stephens where he would take over operations in conjunction with vending certain oil and gas leases. Included in the agreement, Mr. Stephens agreed to cause the accounting and filings to become current with the Securities and Exchange Commission and other regulatory authorities.
Change of control of the Company from Art Sykes to Hayseed Stephens was on December 22, 1997. At the time of change of control it was approved by the board of directors of Kit Karson and Mr. Stephens that Mr. Sykes would receive the assets described in paragraphs 1 and 2 under Item 2 Description of Property, as compensation for taking care of the Company during the dormant years and that Hayseed Stephens would vend in a gas asset for 14,150,000 shares of stock. Please see Item 2. Properties and "Gas Reserves" for a description of the gas asset (Greenwood Gas Field) located in Parker County, Texas.
The principle asset on both December 31, 1995 and 1996 was cash being $2,680 and $1,453 for these respective dates. The Company owned one oil and gas interest in a gas well in Beaver County, Oklahoma, which was acquired by the Company without any cost in an agreement where after the investors recaptured their investment, a 4.6125% working interest would become effective. This interest was still in effect until it was assigned to Art Sykes being a part of the closing for the change of control that occurred on December 22, 1997.
Three of the Company's assets were investments in stocks of which only one, Black Giant Oil Company, is still in existence and is currently listed on the
Electronic Bulletin Board. The Company owned 87,400 shares of Black Giant Oil Company and on December 22, 1997 (date of change of control) with a market value of $2,622 and was assigned to Art Sykes as a part of the change of control. The other two securities are considered to be worthless.
Liquidity and Capital Resources
During 1999, the Company made private placements totaling $1,401,250 for the issuance of 1,427,026 restricted shares of its common stock. Also, the Company acquired a 4% working interest in two oil and gas leases and 2,081 acres of oil and gas property through the issuance of 346,719 shares of its common stock. The Company also settled a lawsuit by issuing 2,701,500 shares of its common stock. The Company acquired a vehicle, received services during 1999, and will receive future services 30,500, 154,639, and 15,000 shares of its common stock respectively.
Results of Operations
Comparison of Year Ended December 31, 1998 and December 31, 1999.
Revenues. Operating revenues for fiscal year ended December 31, 1998 were $22,301 with an operating loss of $1,496,720.
Operating revenues for fiscal year ended December 31, 1999 were $21, 208 a 5% decrease from 1998, with an operating loss of $1,885,442. The 5% decrease in revenues over 1998 is attributed to a slight reduction in gas production.
Costs and Expenses. Costs and expenses for the fiscal year ended December 31, 1999 increased by $7,851 or 49% to $23,919 as compared to $16,068 for the corresponding period ended December 31, 1998. This was primarily due to increased lease operating costs and higher equipment depreciation expense. General and Administrative Costs in 1999 increased by 26% to $1,889,035 as compared to $1,502,953 in 1998. This increase was primarily due to a $1,229,000 expense included in costs of the Israeli project associated with the contingent liability for the rig deposit and other expenses incurred for the Israeli project in the amount of $337,704 in 1999.
Net Income. The Company had a net loss for the fiscal year ended December 31, 1999 of $1,885,442 compared to net loss of $1,496,720 for fiscal respectively. Again, as in cost and expenses, this increase was primarily due to a $1,229,000 expense included in costs of the Israeli project associated with the contingent liability for the rig deposit and other expenses incurred for the Israeli project in the amount of $337,704 in 1999.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). This statement standardized the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, requiring that an entity recognize those items as assets or liabilities in the statement of financial position and measure them at fair
value. The statement generally provides for matching the timing of gain or loss recognition on the hedging instrument with the recognition of (a) the changes in fair value of the hedged assets or liabilities that are attributable to the hedged risk, or (b) the earnings effect of the hedged transaction. The statement is effective for all fiscal quarters of all fiscal years beginning after June 15, 1999, with earlier application encouraged, and shall be applied retroactively to financial statements of prior periods. Adoption of SFAS 133 had no effect on the Company's financial statements.
Disclosure Regarding Forward-Looking Statements
This document includes "forward-looking" statements within the meaning of Section 27A of the Securities Act and the Company desires to take advantage of the "safe harbor" provisions thereof. Therefore, the Company is including this statement for the express purpose of availing itself of the protections of such safe harbor provisions with respect to all of such forward-looking statements. The forward-looking statements in this document reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated. In this document, the words "anticipates," "believes," "expects." "intends," future," and similar expressions identify forward-looking statements. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that may arise after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this section.
Year 2000 Compliance
The company did not realize any impact for the Y2K bug or any associated issues. The company does not expect to realize any negative impact in the future.
Item 7. Financial Statements.
The following financial statement information for Ness Energy International, Inc. begins following the signature page of this form. The index to the following financial statements is on page F-1.
Report of Independent Certified Public Accountant
Balance Sheets
Statements of Operations
Statements of Changes in Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
Supplemental Data
Item 8. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
Robert Early & Company, P.C. audited the following years of the Company 1995, 1996 and 1997 and Weaver & Tidwell, L.L. P. audited as of and for the years ended December 31, 1998 and 1999.
There are no disagreements between the Company and its auditor, Robert Early & Company P.C. of Abilene, Texas, and there are no disagreements between the Company and its current auditor Weaver & Tidwell P.C. of Fort Worth regarding accounting and/or financial disclosure.
(c) 1995-1999 Cybernet Data Systems, Inc. All Rights Reserved.
Received by Edgar Online: May. 19, 2000
CIK Code: 0000353634
SEC Accession Number: 0001010549-00-000327
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