EuroGas, Inc. and Subsidiaries
(An Exploration Enterprise in the Development Stage)
Condensed Consolidated Balance Sheets
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Current Assets
Cash $ 643,646 $ 642,605
Other receivables 82,905 122,047
Inventory 2,527 0
Prepaid expenses 0 4,942
------------ ------------
Total Current Assets 729,078 769,594
Property and Equipment
Mineral interest in unproved properties,
net of valuation allowance 14,664,825 14,252,754
Equipment 2,423,756 2,423,039
------------ ------------
17,088,581 16,675,793
Less: Accumulated depreciation (2,291,450) (2,144,113)
------------- ------------
Net Property and Equipment 14,797,131 14,531,680
Other Assets
Goodwill, net 14,319 14,319
Deposits 86,638 586,546
Long-term prepaid expenses 1,627,335 0
------------ ------------
Total Other Assets 1,728,292 586,546
------------ ------------
Total Assets $ 17,254,501 $ 15,902,139
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
EuroGas, Inc. and Subsidiaries
(An Exploration Enterprise in the Development Stage)
Condensed Consolidated Balance Sheet
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,715,204 $ 1,389,859
Accrued expenses 2,812,048 2,659,721
Accrued taxes 788,770 911,051
Current maturities of notes payable to related parties 1,062,092 3,688,788
Current maturities of notes payable 1,886,287 1,062,091
------------- -------------
Total Current Liabilities 8,264,401 9,711,510
Long-Term Debt
Notes payable 5,733,701 5,733,702
Notes payable to related parties 2,697,844 4,897,845
------------- -------------
Total Long-Term Debt 8,431,545 10,631,547
------------- -------------
Minority Interest 950,000 950,000
Stockholders' Equity
Preferred stock, $0.001 par value, 3,641,968 shares
authorized and outstanding 3,642 3,642
Common stock, $0.001 par value, 325,000,000
shares authorized, 50,496,492 shares issued and
outstanding 50,496 49,144
Additional paid-in capital 21,123,668 14,842,922
Cumulative foreign currency translation adjustment (14,749) (14,749)
Deficit accumulated during the development stage (21,554,502) (20,271,877)
------------- ------------
Total Stockholders' Deficit (391,445) (5,390,918)
Total Liabilities and Stockholders' Deficit $ 17,254,501 $ 15,902,139
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
EuroGas, Inc. and Subsidiaries
(An Exploration Enterprise in the Development Stage)
Condensed Consolidated Statement of Operations
For the periods ended March 31, 1997 and March 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
For the Cumulative
For the Three Months Period From
Ended March 31, June 7, 1991
---------------------------------- (date of inception)
1997 1996 to March 31, 1997
------------- ------------- -----------------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
Operating Expenses
Impairment of mineral interests in property 0 0 969,101
Depreciation and valuation allowance 40,329 206 2,136,208
General and administrative expense 940,331 371,635 14,626,445
------------- ------------- ---------------
Total Operating Expenses 980,660 371,841 17,731,754
------------- ------------- ---------------
Net Loss from Operations 980,660 371,841 17,731,754
Other Income (Expense)
Interest income 0 (42,680) 298,842
Interest expense (242,148) 0 (2,575,790)
Exchange gains (losses), net 0 0 (550,298)
Other income (expenses) 0 0 65,024
------------- ------------- ---------------
Total Other Income (Expense) (242,148) (42,680) (2,762,222)
------------- ------------- ---------------
Loss Before Income Taxes (1,222,808) (414,521) (20,493,976)
Benefit From (Provision for) Income Taxes 122,281 41,452 (641,660)
------------- ------------- ---------------
Net Loss (1,100,527) (373,069) (21,135,636)
Dividends Applicable to Preferred Shares 182,098 29,900 418,866
------------- ------------- ---------------
Net Loss Applicable to Common Shares $ 1,282,625 $ (402,969) $ (21,554,502)
============= ============= ===============
Net Loss Per Common Share $ (0.03) $ (0.01) $ (0.75)
============= ============= ===============
Weighted Average Number of Common
Shares Used in Per Share Calculation 49,354,271 33,174,033 28,909,347
The accompanying notes are an integral part of these financial statements.
EuroGas, Inc. and Subsidiaries
(An Exploration Enterprise in the Development Stage)
Condensed Consolidated Statement of Cash Flows
For the periods ended March 31, 1997 and March 31, 1996
(UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
For the Cumulative
For the Three Months Period From Since
Ended March 31, June 7, 1991
---------------------------------- (date of inception)
1997 1996 to March 31, 1997
-------------- ------------ -----------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (1,100,527) $ (373,068) $ (21,135,636)
Adjustments to reconcile net loss to cash
used by operating activities:
Impairment of mineral interest in
properties 0 0 969,101
Depreciation and amortization 147,337 159,472 2,243,215
Compensation paid with issuance of
common stock 0 0 605,592
Exchange (loss) gain 0 0 (550,298)
Changes in assets and liabilities, net of assets
acquired:
Receivables 39,142 (19,278) 63,540
Accounts payable 131,907 (134,039) 316,587
Accrued liabilities 152,327 687,906 4,739,544
Accrued taxes (122,281) (41,452) 640,394
Inventory (2,527) 442 2,415
Prepaid expenses 4,942 1,612 0
Other 9,082 23,927 (83,462)
-------------- ------------ ---------------
Net cash used in operating activities (740,598) 305,522 (12,189,008)
Cash Flows From Investing Activities
Purchases of mineral interests in properties (412,071) (287,268) (11,754,031)
Purchases of property and equipment (717) 441 (2,427,054)
Acquisition of subsidiaries, net of cash
acquired 0 0 185,093
Increases in deposits and payments 24,830 0 (515,170)
-------------- ------------ ---------------
Net Cash Used in Investing Activities (387,958) (286,827) (14,511,162)
Cash Flows From Financing Activities
Proceeds from issuance of debt-related parties 0 0 14,874,010
Repayments of debt-related parties 0 0 (4,927,441)
Proceeds from issuance of debt 0 0 7,837,526
Principal payments on debt (1,802,500) 0 (3,192,929)
Proceeds from issuances of common stock 2,932,097 0 13,048,634
Dividends paid on preferred stock 0 0 (120,000)
-------------- ------------ ---------------
Net Cash Provided by Financing
Activities 1,129,597 0 27,519,800
Effect of Exchange Rate Changes on
Cash and Cash Equivalents 0 0 (175,983)
-------------- ------------ ---------------
Cash and Cash Equivalents at Beginning
of Period 642,605 72,212 0
-------------- ------------ ---------------
Cash and Cash Equivalents at End of Period $ 643,646 $ 90,907 $ 643,646
============== ============ ===============
</TABLE>
RESULTS OF OPERATIONS
The Company has not received any revenues since inception.
The Company had a net loss applicable to common shares for the three months
ended March 31, 1997, of approximately $1,283,000 as compared to a net loss of
approximately $403,000 for the three months ended March 31, 1996. The
difference is due in large part to the expansion of the Company's activities
into Slovakia and Czechoslovakia and the increase in indebtedness incurred as a
result of such activities.
From inception on June 7, 1991, through March 31, 1997, the Company had
accumulated losses of $21,554,502 of which $21,135,636 was a net loss from
operations and $418,866 a charge for dividends applicable to preferred shares.
Due to the highly inflationary economies of the Eastern European countries
in which the Company operates, the Company is subject to extreme fluctuations in
currency exchange rates that can result in the recognition of significant gains
or losses during any period. No such gains or losses were recognized in the
quarters ended March 31, 1997, or 1996.
As of March 31, 1997, the Company reported approximately $14,665,000 in
mineral interests in unproved mineral properties, net of valuation allowance.
These properties are held under licenses or concessions that contain specific
drilling or other exploration commitments and that expire within one to three
years, unless the concession or license authority grants an extension or a new
concession license, of which there can be no assurance. If the Company is
unable to obtain any necessary future licenses or extensions, it could be forced
to write off the carrying value of the related property.
Under the full cost method by which the Company accounts for its mineral
interests in properties, costs of unproved properties are assessed periodically
and any resulting provision for impairment which is required is charged to
operations. The impact of such reassessment and resulting impairment charge
could be significant during any particular period. As a result of the
foregoing, the results of operations for any particular period may not be
indicative of the results that could be expected. |
