SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-QSB/A
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the quarterly period ended: July 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number: 333-52945
KING RESOURCES, INC
(Exact name of registrant as specified in its charter)
Delaware 13-3784149
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
2301 14th Street, Suite 900
Gulfport, Mississippi 39501
(Address of principal executive offices, including zip code)
(228) 864-6667
(Registrant's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on which Registered
Common Stock, $.001 par value
OTC / ELECTRONIC BULLETIN BOARD
Indicate by check mark whether the registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (ii) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
As of October 2, 2001, there were 34,939,804 shares of Common Stock outstanding.
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KING RESOURCES, INC & SUBSIDIARY
INDEX TO FORM 10-QSB
FOR THE QUARTER ENDED JULY 31, 2001
Part I - Financial Information Page
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Item 1. Financial Statements
Consolidated Balance Sheets - July 31, 2001 (unaudited)
and July 31, 2000.... .............................................. 3
Consolidated Statements of Operations - For the Three months
Ended July 31, 2001 (unaudited) and July 31, 2000 (unaudited)......... 4
Consolidated Statement of Stockholders' Equity - For the Three months
Ended July 31, 2001 (unaudited)....................................... 4
Consolidated Statements of Cash Flows - For the Three months
Ended July 31, 2001 (unaudited) and July 31, 2000 (unaudited)......... 5
Notes to Unaudited Consolidated Financial Statements................... 7-12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..................... 12
Part II - Other Information
Item 1. Legal Proceedings............................................ 13
Signatures.......................................................... 14
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KING RESOURCES, INC. & SUBSIDIARY
CONSOLIDATED BALANCE SHEET
July 31 July 31
2001 2000
---- ----
CURRENT ASSETS
Cash ................................................... $ 216 $ 760
Total current assets .............................. 216 760
PROPERTY AND EQUIPMENT, net of accumulated depreciation .. 10,362 12,084,772
OTHER ASSETS
Indemnification Fund ................................... 50,000
Organization cost - less amortization of $5,160 ........ 453
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50,453
$ 10,578 $ 12,135,985
CURRENT LIABILITIES
Payroll taxes .......................................... $ 3,101 $ 16,314
Notes payable .......................................... 500,000 500,000
Accrued interest on notes .............................. 106,096 47,581
Accounts payable ....................................... 21,079 --
Related parties payable ................................ 36,950 --
Other current liabilities .............................. 14,028 32,000
Judgment payable ....................................... 290,000 --
Total current liabilities ......................... 971,254 595,895
SHAREHOLDERS' (DEFICIT)
Preferred stock - $1.00 par value; 2,000,000 shares
authorized; none issued and outstanding
Common stock - $.001 par value; 100,000,000 shares
authorized; 34,939,804 shares issued and outstanding . 34,940 34,940
Additional paid-in capital ............................. 16,097,129 16,097,129
Accumulated (deficit) .................................. (17,092,745) (4,591,979)
Total shareholders' equity/(deficit) .............. (960,676) 11,540,090
$ 10,578 $ 12,135,985
See accompanying notes and accountants' review report
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KING RESOURCES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended
July 31, July 31,
2001 2000
---- ----
OIL AND GAS REVENUES ............................... $ -- 12,321
COST AND EXPENSES
Lease Operating Expenses ......................... $ -- 8,686
Depreciation, amortization ....................... 8,376 22,942
General and administrative ....................... 21,201 183,325
Rent - judgment for vacating lease premises prior
to lease termination .......................... 290,000 --
Total cost and expenses ..................... 319,577 214,953
(LOSS) FROM OPERATIONS ............................. (319,577) (202,632)
OTHER INCOME (EXPENSE)
Interest income .................................. 1,229 1
Dividend income .................................. 10 3,716
Interest expense ................................. (44,712) (47,581)
(43,473) (43,864)
NET (LOSS) ......................................... $ (363,050) $(246,496)
NET LOSS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT SHARE-BASED
DILUTED ............................................ $ (0.01) $ (0.007)
Weighted Average Common and Common Equivalent Shares 34,939,804 34,939,804
See accompanying notes and accountants' review report
KING RESOURCES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT)
Three months ended July 31, 2001
Additional
Common Stock Paid-In Accumulated Shareholders'
Shares Amount Capital (Deficit) (Deficit)
------ ------ ------- --------- ---------
BALANCES,
October 31, 2000 (deficit) 34,939,804 $ 34,940 $16,097,129 $ (16,729,695) $ (597,626)
NET (LOSS) - - - (363,050) (363,050)
BALANCES,
July 31, 2001 (deficit) 34,939,804 $ 34,940 $16,097,129 $ (17,092,745) $ (960,676)
See accompanying notes and accountants' review report
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KING RESOURCES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended
July 31, July 31,
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (363,050) $ (246,496)
Adjustments to reconcile net (loss) to net cash used in
operating activities:
Depletion, depreciation, amortization and provision for
impairment 8,376 22,942
Changes in operating assets and liabilities:
Other current liabilities 354,155 33,240
Other long term-liabilities 47,581
NET CASH (USED) IN OPERATING ACTIVITIES (519) (142,733)
(DECREASE) IN CASH AND CASH EQUIVALENTS (519) (142,733)
CASH AND CASH EQUIVALENTS, beginning of period 735 143,493
CASH AND CASH EQUIVALENTS, end of period $ 216 $ 760
See accompanying notes and accountants' review report
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Shareholders
King Resources, Inc. & Subsidiary
Gulfport, Mississippi
We have reviewed the accompanying consolidated balance sheet of King Resources,
Inc. & Subsidiary (formerly ARXA International Energy, Inc.) as of July 31, 2001
and the related consolidated statements of operations, statement of
shareholders' (deficit) and cash flows for the three months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements are the representation of the
management of King Resources, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
As discussed in Note B to the consolidated financial statements the Company has
a net (loss) of ($363,050) and negative cash flow from operations of ($519) for
the three months ended July 31, 2001 and had an accumulated (deficit) of
($17,092,745) at that date, which raises substantial doubt about its ability to
continue as a going concern. The Company is currently seeking outside sources of
financing to fund its development efforts. Should the Company be unable to
access such financing, it will have to materially curtail its development and
operating activities. These financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Gibbons Hall, L.L.C.
/s/ Gene Gibbons
October 2, 2001
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization - ARXA International Energy, Inc. ("ARXA" or "the Company"), was
incorporated in Delaware and has engaged in oil and gas exploration and
development in Utah, Louisiana and Texas. Effective December 1, 2000, the
company changed its' name to King Resources, Inc. from ARXA International
Energy, Inc. ARXA USA, Inc., a wholly owned subsidiary, was incorporated in
Delaware. All significant intercompany accounts and transactions have been
eliminated in consolidation.
Oil and Gas Revenues - The Company recognizes oil and gas revenues as the oil or
gas is produced and sold. As a result, the Company accrues revenue relating to
production for which the Company has not received payment.
Oil and Gas Property Held for Sale - Oil and gas property held for sale is
carried at the lower of cost or market.
Oil and Gas Property - The Company follows the full-cost method of accounting
for oil and gas property. Under the full-cost method, all costs associated with
property acquisition, exploration, and development activities are capitalized
into a "full-cost pool". Capitalized costs include lease acquisitions,
geological and geophysical work, delay rentals, costs of drilling, completing
and equipping successful and unsuccessful oil and gas wells and directly related
costs. Gains or losses are normally not recognized on the sale or other
disposition of oil and gas properties.
The capitalized costs of oil and gas properties, plus estimated future
development costs relating to proved reserves, are amortized on a unit-of-
production method over the estimated productive life of the proved oil and gas
reserves. There were no capitalized costs at July 31, 2001.
Capitalized oil and gas property costs, less accumulated amortization and
related deferred income taxes, are limited to an amount (the ceiling limitation)
equal to the present value of estimated future net revenues from the projected
production of proved oil and gas reserves, calculated at prices in effect as of
the balance sheet date (with consideration of price changes only to the extent
provided by contractual arrangements) at a discount factor of 10%, less the
income tax effects related to differences between the book and tax basis of the
properties.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and the accompanying notes. The actual results could differ from
those estimates.
The Company's financial statements are based on a number of significant
estimates including oil and gas reserve quantities which are the basis for the
calculation of depreciation, depletion and impairment of oil and gas properties.
The Company's reserve estimates are determined by an independent petroleum
engineering firm. However, management emphasizes that reserve estimates are
inherently imprecise and that estimates of more recent discoveries and reserves
associated with non-producing properties are more imprecise than those for
producing properties with long production histories. The company owned no oil
and gas properties at July 31, 2001. Accordingly, the Company's estimates are
expected to change as future information becomes available.
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - continued
Property and Equipment - Depreciation of property and equipment, other than oil
and gas properties, is provided generally on the straight-line basis over the
estimated useful lives of the assets as follows:
Furniture and fixtures 3 - 7 years
Equipment 5 years
Ordinary maintenance and repairs are charged to income, and expenditures which
extend the physical or economic life of the assets are capitalized. Gains or
losses on disposition of assets other than oil and gas properties and equipment
are recognized in income, and the related assets and accumulated depreciation
accounts are adjusted accordingly.
Income Taxes - The Company provides for income taxes on the liability method.
The liability method requires an asset and liability approach in the recognition
of deferred tax liabilities and assets for the expected future tax consequences
of temporary differences between the carrying amounts and the tax bases of the
Company's assets and liabilities.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
Company considers cash equivalents to include all cash items, such as time
deposits and short-term investments that mature in three months or less.
Concentrations of Credit Risk - Financial instruments which potentially expose
the Company to concentrations of credit risk consist primarily of oil and gas
receivables. Although the Company is directly affected by the well-being of the
oil and gas production industry, management does not believe a significant
credit risk existed at July 31, 2001. There were no receivables at July 31,
2001.
Earnings per share - The Company adopted SFAS No. 128, Earnings Per Share (EPS),
which was issued in February 1997, which requires presentation of both basic and
diluted EPS on the face of the income statement for all periods presented. Basic
EPS is computed by dividing net income available to common shareholders
(numerator) by the weighted average number of common shares outstanding
(denominator) during the period. Diluted EPS is computed using the
weighted-average number of common and potential common shares outstanding during
the period. In computing diluted EPS, the average stock price for the period is
used in determining the number of shares assumed to be purchased from the
exercise of stock options. There were no dilutive potential common shares
outstanding during the periods encompassed by these financial statements.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company had a net (loss) of
$(363,050) and negative cash flow from operations of $(519) for the nine months
ended July 31, 2001 and had an accumulated (deficit) of $(17,092,745) at that
date, which raises substantial doubt about its ability to continue as a going
concern.
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE B - GOING CONCERN - continued
The Company has targeted several acquisition opportunities and is aggressively
seeking financial sources to assist with the financing.
NOTE C - ACCOUNTS RECEIVABLE
There were no receivables at July 31, 2001.
NOTE D - PROPERTY AND EQUIPMENT
Property and equipment at July 31, 2001 consists of the following:
Furniture and fixtures $141,754
Equipment 750
---
142,504
Less accumulated depreciation (132,142)
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$ 10,362
NOTE E - NOTES PAYABLE
On December 01, 1999, the Company executed a Promissory Note in the amount of
$200,000 together with interest at 10% per annum on the unpaid balance to Mark
Trivette and a Promissory Note of $300,000 to Kenneth A. and Lynn R. Hubbard
together with interest at the rate of 10% per annum on the unpaid balance. These
notes matured on September 1, 2000, but have not been satisfied. The Company is
continuing to accrue interest on these notes. See Note I.
NOTE F - RELATED PARTIES
The Company owes $36,950 to companies owned by two officers of King Resources,
Inc. These amounts were advanced to the Company for operating expenses.
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE G - INCOME TAXES
The Company had net operating loss carryforwards (NOL's) for income tax
reporting purposes of approximately $14,859,055 at October 31, 2000. If not
utilized, these NOL's will begin expiring in 2019.
NOTE H - JUDGEMENT PAYABLE
In August 1998, the Company signed a non-cancelable operating lease agreement
that provides for monthly payments ranging from $7,524 to $8,495 for 60 months.
The Company canceled the lease during the year ended October 31, 1999 and
retained an attorney to represent the Company. On October 15, 1999, Radler
Enterprises Texas, Inc. filed suit against the Company for actual damages for
the unpaid lease payments. On January 18, 2001 the Company settled with Radler
Enterprises Texas, Inc. for $290,000 plus interest at the rate of 10 percent per
annum. These amounts have been recorded on the books.
NOTE I - COMMITMENTS AND CONTINGENCIES
On March 9, 2001, Kenneth A. Hubbard, Lynn R. Hubbard and Mark Trivette filed
suit against King Resources, Inc. The plaintiffs are suing for damages on
promissory notes against the defendants for $500,000 plus interest, attorney
fees and court costs. King Resources, Inc. is vigorously defending this case.
See note E.
King Resources, Inc. has filed its answer admitting that the promissory notes of
plaintiffs are unpaid as to principal and accrued interest, King Resources, Inc.
has filed a counteraction against plaintiffs for damages in excess of
$1,000,000.
Environmental Contingencies - The Company's activities are subject to existing
federal and state laws and regulations governing environmental quality and
pollution control. It is impossible to predict the impact of environmental
legislation and regulations on operations in the future, although compliance may
necessitate significant capital outlays, that would materially affect earning
power or cause other material changes. Penalties may also be assessed to the
Company for any pollution caused by the Company's operations and the Department
of Interior is authorized to suspend any operation which threatens immediate or
serious harm to life, property or environment, which suspension may remain in
effect until the damage has ceased. This regulatory burden on the oil and gas
industry increases the cost of doing business and consequently affects the
Company's profitability. It may be anticipated that state and local
environmental laws and regulations will have an increasing impact on oil and gas
exploration and operations.
The Company has never been fined or incurred liability for pollution or other
environmental damage in connection with its operations.
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE J - STOCKHOLDERS' (DEFICIT)
The Company issued warrants to acquire 3,297,000 (pre-split), 659,400 (post-
split) shares of its common stock as part of an acquisition transaction with
Phoenix Energy Resources, Inc.(Phoenix).
The warrants are exercisable at $2.00 (pre-split) $10.00 (post-split) per share.
These warrants expired without being exercised on August 9, 2000.
On August 21, 1998, the Company issued 57,700 warrants to certain Arxa (King
Resources, Inc.) shareholders to purchase the Company's common stock at $1.25.
These warrants expired on August 31, 2000, without being exercised.
Prior to the merger transaction with Phoenix, the Company issued 405,000
warrants to purchase the Company's common stock at $10.00. These warrants
expired on August 9, 2000 without being exercised.
In addition, Phoenix granted options to employees and directors to acquire
147,753 shares of Phoenix's common stock and an option to an individual to
acquire 6,146 shares of its common stock. The options, which expire on September
11, 2007, have an exercise price of $12.50 per share.
Options issued to employees to acquire 110,877 shares of Phoenix's common stock
were exercisable in equal amounts on September 12, 1998, 1999 and 2000. These
options expired without being exercises.
NOTE K - STOCK OPTION PLAN
The Company has a stock option plan under which options to purchase a maximum of
200,000 shares of common stock may be issued to employees, consultants and non-
employee directors of the Company. The stock option plan provides both for the
grant of options intended to qualify as "incentive stock options" under the
Internal Revenue Code of 1986, as amended, as well as options that do not so
qualify. As of July 31, 2001, no options had been granted under the Plan.
With respect to incentive stock options, no option may be granted more than ten
years after the effective date of the stock option plan or exercised more than
ten years after the date of grant (five years if the optionee owns more than 10%
of the common stock of the Company at the date of grant). Additionally, with
regard to incentive stock options, the exercise price of the option may not be
less than 100% of the fair market value of the common stock at the date of grant
(110% if the optionee owns more than 10% of the common stock of the Company).
Subject to certain limited exceptions, options may not be exercised unless, at
the time of exercise, the optionee is in the service of the Company.
Non-qualified options granted under the plan may not have an exercise price less
than 85% of the fair market value of the Company's common stock on the date of
grant.
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE K - STOCK OPTION PLAN - continued
On July 27, 1998 the Company authorized the issuance of warrants to management
and non-employee directors to purchase 1,000,000 shares of common stock at $.25
per share. 50% of the warrants are to be exercisable when the Company's stock
price reaches $6.25 per share, 25% when the price reaches $7.50 per share, and
25% when the stock price reaches $8.75 per share. Should the Company declare a
stock dividend the number of shares will go up and the prices will go down
proportionately. These warrants have not been issued as of July 31, 2001. The
pro forma effect of the 1,000,000 shares is shown below in this footnote.
In October 1995, the Financial Accounting Standards Board issued a new statement
titled "Accounting for Stock-Based Compensation" (SFAS 123). SFAS 123
encourages, but does not require, companies to recognize compensation expense
for grants of stock, stock options, and other equity instruments to employees
based on fair value. Fair value is generally determined under an option pricing
model using the criteria set forth in SFAS 123.
The Company applies APB Opinion 25, Accounting of Stock Issued to Employees, and
related interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized for its fixed stock option plans.
Had compensation expense for the Company's stock based compensation plans been
determined based on the fair value at the grant dates for awards under those
plans consistent with the method prescribed by SFAS 123, the Company's net loss
and loss per common share would have been increased to the pro forma amounts
indicated below:
Net loss-as reported $363,050
Net loss-Pro forma (2,145,450)
Net loss per common share-as reported (.010391)
Net loss per common share-Pro forma (.061404)
The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions: risk-free
rate of 8%; volatility of 198%, no assumed dividend yield; and expected life of
one year.
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KING RESOURCES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2001
NOTE L - SUPPLEMENTAL CASH FLOW INFORMATION
The Company paid no interest during the nine months ended July 31, 2001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
A. RESULTS OF OPERATIONS
Oil and gas revenues for the three months ended July 31, 2001 were $-0-, which
is $12,321 less than the oil and gas revenues for the three months ended July
31, 2000 and is primarily attributed to the slow down of production. Lease
operating expense decreased from $8,686 for the three months ended July 31, 2000
to $-0- for the three months ended July 31, 2001, a decrease of $8,686. The
decrease is primarily due to the cessation of production activity. General and
administrative costs decreased from $183,325 for the three months ended July 31,
2000 to $21,201 for the three months ended April 30, 2001. The decrease of
$162,124, primarily consists of a decrease in payroll and office overhead
expenses.
B. LIQUIDITY AND CAPITAL RESOURCES
Net cash flow from operating activities was a negative $519 for the three months
ended July 31, 2001 as compared to a negative of $142,733 for the three months
ended July 31, 2000.
At July 31, 2001, the Company's current assets of $216 were exceeded by current
liabilities of $971,254 by $971,038. The Company had a net loss of $363,050 and
negative cash flow from operations of $519 for the quarterly period ended July
31, 2001 and had an accumulated deficit of $17,092,745 at that date, which
raises substantial doubt about the Company's ability to continue as a going
concern. The Company is continuing to target several acquisition opportunities
and is aggressively seeking financial sources to assist with the financing.
The Company notes that there is not sufficient cash flow from operations to
continue to operate the business for the next fiscal quarter.
C. MANAGEMENT'S RESPONSE AND PLAN OF OPERATIONS
Under-capitalization continues to be the most serious problem facing the
Company.
To correct this problem the Company has acquired the rights to several high
potential oil and gas development prospects which would provide the
justification for the Company's planned additional Public Offering which will
now proceed as rapidly as possible. It is the intent of the Company to apply for
membership on the American Exchange simultaneously with the offering.
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The Company believes that a listing on a major stock exchange in preference to
the Bulletin Board will open opportunities for acquisitions with stock and cash.
The Company is confident that, with the offering completed, it will qualify for
the AMEX.
PART II - OTHER INFORMATION
ITEM I. LEGAL PROCEEDINGS
King is not engaged in any pending legal proceedings nor are any of its
properties subject to any legal proceedings except for the following discussion.
King is further not aware of any legal proceedings pending or threatened against
its officers and/or directors in their capacity as corporate officers or
directions of King except for the following discussion.
1. On October 15, 1999, Radler Enterprises Texas, Inc., filed suit
against ARXA now King and Craig Ford in the 55th Judicial District for
the District Court of Harris County, State of Texas. The lawsuit was
on a Lease Agreement executed on August 19, 1998 by Craig Ford as
President of ARXA. The Lease Agreement was not approved by the Board
of Directors of ARXA. The Plaintiff, Radler Enterprises Texas, Inc.,
is suing for actual damages for the unpaid lease payments for the term
of the lease of approximately $390,275 plus attorney fees and court
costs. On July 10, 2000, Radler amended its complaint to add as
additional defendants, Norris R. Harris and Jack R. Durland, Jr., and
requested damages in the same amount as sought against ARXA and Ford.
On or about January 18, 2001, the attorneys for King, Mr. Harris, and
Mr. Durland entered into a Agreed Interlocutory Judgment against King
in the amount of $290,000.00 plus interest thereon at the rate of 10
percent (10%) per annum, and judgment against the defendants Norris R.
Harris and Jack R. Durland, Jr., jointly and severely, in the amount
of $40,000.00 plus interest thereon at the rate of ten percent (10%)
per annum. As of June 18, 2001, Mr. Durland and Mr. Harris have paid
$10,000.00 on this judgment. The balance of $30,000.00 is to be paid
quarterly.
2. Coastal Oil & Gas Corporation filed suit against ARXA in the 33rd
Judicial District for the District of Harris County, State of Texas,
and obtained a judgment in the amount of $14,028.01 plus attorney fees
and costs in approximately June of 2000. ARXA is in the process of
attempting a settlement of this lawsuit and judgment.
3. On March 9, 2001, Kenneth A. Hubbard, Lynn R. Hubbard, and Mark
Trivette filed suit in Case No. 1:01CV94GR in the United States
District Court for the Southern District of Mississippi, Southern
Division, against the following named parties: King Resources, Inc.,
Gulfport Oil & Gas, Inc., Norris R. Harris, and Jack R. Durland, Jr.
The plaintiffs are suing for damages on promissory notes against the
Defendants for $500,000.00 plus interest, attorney fees, and court
costs. King has filed its answer admitting that the promissory notes
of plaintiffs are unpaid as to principal and accrued interest. King,
Gulfport, Mr. Harris, and Mr. Durland have filed a counterclaim
against plaintiffs for damages in excess of $1,000,000.00. King,
Gulfport, Mr.
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Harris, and Mr. Durland are vigorously defending this case. This case
will not be set for trial until April, 2002.
KING RESOURCES, INC
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KING RESOURCES, INC
(Registrant)
Date: 10-15-01 /s/ Norris R. Harris
-------------------------
Norris R. Harris
President
Date: 10-15-01 /s/ Jack R. Durland, Jr.
-------------------------
Jack R. Durland, Jr.
Vice President and CFO
THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM JULY 31, 2001 FORM 10-QSB FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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