This 10-K reads like a pulp novel....
Not only are the officers living well but so are foreign dignitaries reaping all the profits.....The Company had revenues of $247,060 in fiscal 1998 compared to $116,275 in fiscal 1997. Included in fiscal 1998 were preparatory expenses of approximately $200,000 related to the cost of bringing a delegation of government officials, including the Prime Minister of Sao Tome, to the United States for meetings with various committees of the United Nations and the United States government, determining the boundaries of the concession and facilitating the passage of a law in Sao Tome regarding the
boundaries of the country.
Here comes more dilution....Historically, the Company has financed its operations from the sale of its debt and equity securities (including the issuance of its securities in consideration for services and/or products) and bank and other debt. The Company expects to finance its operations and further development plans during fiscal 1999 in part through additional debt or equity capital and in part through cash flow from operations. A description of the Company's most recent financing activities is included herein under the heading
"The Company."
Hell, we don't know how much it's going to cost.....The Company anticipates spending approximately $2,200,000 over the next 12 months for additional studies necessary to determine the location and depth of the targeted oil deposits. The Company has spent to date $250,000 in preparatory expenses including determining the boundaries of the concession and facilitating the passage of a law in Sao Tome regarding the boundaries of the country. The costs of further development of this project cannot be determined until a more definite development plan is established. The costs depend on the Company's determination to either independently develop the concession, take on operational partners or lease a portion of the concession for third-party development.
Now here's a bargain.....During fiscal 1997, the Company issued 4,000,000 shares of its common stock to acquire BAPCO, a non-operating oil production company with significant well rework equipment assets. How much did that cost? How much equipment was involved? Did any of it work?
OOps, there's that dilution again....To the extent that future financing requirements are satisfied through the issuance of equity securities, shareholders of the Company may experience dilution that could be substantial. The incurrence of debt financing could result in a substantial portion of operating cash flow being dedicated to the payment of principal and interest on such indebtedness, could render the Company more vulnerable to competitive pressures and economic
downturns and could impose restrictions on operations. If revenue were to decrease as a result of LOWER oil and natural gas prices, decreased production or otherwise, and the Company had no availability under a bank arrangement or other credit facility, the Company could have a reduced ability to execute current development plans, replace reserves or to maintain production levels, any of which could result in decreased production and revenue over time. Not pretty. I can't see how they're going to make it when the big boys are hurting.
Finally.....The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has experienced operating losses since inception. The Company's
financial position and operating results raise substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
There's so much more but I got tired of reading fairy tales.
And now Ira's on board....Oh brother....
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