22-Aug-2000 Old NESS Press Release Management`s Discussions: 10QSB, NESS ENERGY INTERNATIONAL INC
TUESDAY, AUGUST 22, 2000 12:42 PM
- Edgar Online
(Edgar Online via COMTEX)
Company Name: NESS ENERGY INTERNATIONAL INC
(SYMBOL:NESS)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB includes "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which can be identified by the use of forward-looking terminology such as, "may", "believe", "expect", "intend", "anticipate", "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology. All statements other than statements of historical fact included in this Form 10-QSB, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements") are disclosed in this Form 10-QSB, including, without limitation, in conjunction with the forward-looking statements included in this Form 10-QSB, and in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, the newness of the Company, the need for additional capital and additional financing, the Company's limited restaurant base, lack of geographic diversification, the risks associated with expansion, a lack of marketing experience and activities, risks of franchising, seasonability, the choice of site locations, development and construction delays, need for additional personnel, increases in operating and food costs and availability of supplies, significant industry competition, government regulation, insurance claims and the ability of the Company to meet its stated business goals. 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 the Cautionary Statements.
The following discussion of the results of operations and financial condition should be read in conjunction with the Financial Statements and related Notes thereto included herein.
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.
On June 6, 2000, the Company signed a Note to borrow up to $300,000 from Harold "Hayseed" Stephens payable with interest at prime rate plus 2% by June 6, 2001. As of June 30, 2000, $50,000 had been received and at August 15, 2000, a total of $150,000 had been advanced.
Results of Operations
COMPARISON OF THE THREE MONTH PERIOD ENDED JUNE 30, 1999 AND JUNE 30, 2000.
Revenues. Operating revenues for three month period ended June 30, 1999 were $5,076 with an operating loss of $21,882.
Operating revenues for three month period ended June 30, 2000 were $5, 646 a 11% increase from 1999, with an operating loss of $313,666. The 11% increase in revenues over 1999 is due to an increase in gas prices, partially offset by lower gas production.
Costs and Expenses. Costs and expenses for the three month period ended June 30, 2000 increased by $3888 or 96% to $7,918 as compared to $4,030 for the corresponding period ended June 30, 1999. This was primarily due to increased lease operating costs and higher equipment depreciation expense. General and Administrative Costs in 2000 increased by 1258% to $311,394 as compared to $22,928 for the same three month period in 1999 due primarily to increased corporate expenses and to costs associated with the Israel project.
Net Income (Loss). The Company had a net loss for the three month period ended June 30, 2000 of $313,178 compared to net loss of $20,133 for the same period in 1999, representing ($.01) and ($.00) per share, respectively.
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.
(c) 1995-1999 Cybernet Data Systems, Inc. All Rights Reserved.
Received by Edgar Online: Aug. 22, 2000
CIK Code: 0000353634
SEC Accession Number: 0000950134-00-007278
bigcharts.com\http2_mw |
