-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V0dKn+s9rwaVZJx1iiFEk3ixCnN6pFL+a9LioAxQAlA/MYLNhys/fvLTSy2IdEoQ h2CMx5j+TOtwnxWzzk7cAQ== 0000950147-98-000972.txt : 19981124 0000950147-98-000972.hdr.sgml : 19981124 ACCESSION NUMBER: 0000950147-98-000972 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRONUS CORP CENTRAL INDEX KEY: 0000317810 STANDARD INDUSTRIAL CLASSIFICATION: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS [2840] IRS NUMBER: 363880744 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-09297 FILM NUMBER: 98757755 BUSINESS ADDRESS: STREET 1: 7660 E BROADWAY STE 210 CITY: TUCSON STATE: AZ ZIP: 85710 BUSINESS PHONE: 5207514585 MAIL ADDRESS: STREET 1: 660 SOUTH FREEMAN ROAD CITY: TUCSON STATE: AZ ZIP: 85748 FORMER COMPANY: FORMER CONFORMED NAME: THUNDERSTONE GROUP INC DATE OF NAME CHANGE: 19951219 FORMER COMPANY: FORMER CONFORMED NAME: DIVERSIFIED AMERICAN INDUSTRIES INC DATE OF NAME CHANGE: 19951116 10QSB 1 QUARTERLY REPORT FOR THE QTR ENDED 9/30/98 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal quarter ended September 30, 1998 Commission File No. 0-9297 CRONUS CORPORATION a NEVADA corporation 36-388074 (I.R.S. Employer Identification Number) 800 SEAGATE DRIVE #203, NAPLES, FLORIDA 34103 Registrant's telephone number, including area code (520) 885-1220 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the receding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Class Outstanding as of October 1, 1998 $.001 PAR VALUE 30,674,285 SHARES COMMON STOCK DOCUMENTS INCORPORATED BY REFERENCE: 1. Audited Financial Statements for the years ended December 31, 1997 and 1996, dated June 10, 1998. 1997 10- KSB filed June 15, 1998. PART 1 ITEM 1. Financial Statements J. Dennis Bartlett, P.C. Certified Public Accountant 2421 E. 6th Street Tucson, Arizona 85716 Cronus Corporation Tucson, Arizona I have compiled the accompanying balance sheet of Cronus Corporation (and subsidiary PetroSun) as of September 30, 1998, December 31, 1997 and September 30, 1997 and the related consolidated statement of Profit and Loss for the three and nine months ended September 30, 1998 and 1997, in accordance with standards established by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of management. I have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. Management has elected to omit substantially all of the disclosures and the statement of cash flows required by generally accepted accounting principles. If the omitted disclosures and statement of cash flows were included with the financial statements, they might influence the user's conclusions about the Company's financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters. /s/ J. Dennis Bartlett, P.C. November 20, 1998 J. Dennis Bartlett, P.C. Certified Public Accountant 2421 E. 6th Street Tucson, Arizona 85716 We hereby consent to the inclusion of our report dated November 20, 1998, in the quarter report of Cronus Corporation on Form 10-QSB for the period ended September 30, 1998. /s/ J. Dennis Bartlett, P.C. Tucson, Arizona November 20, 1998 CRONUS CORPORATION Balance Sheet As of September 30, 1998 SEPTEMBER SEPTEMBER DECEMBER 1998 1997 1997 ---- ---- ---- ASSETS Current Assets Cash $ 17,752 1,869 1,195 Other current assets 2,807 0 3,356 Stock Subscription receivable 127,500 0 0 Accounts receivable 3,054 0 10,338 Prepaid expenses 0 2,000 125,000 Total Current Assets $ 151,113 3,869 139,889 Fixed Assets Computer equipment 3,071 3,071 3,071 Office equipment/furniture 5,342 5,342 5,342 Less: accumulated depreciation (3,062) (1,094) (3,062) Proved property 217,729 217,500 217,728 Unproved properties 132,924 93,752 121,390 Wells and related eqiup 5,200 0 5,200 Less: accumulated depreciation (1,543) 0 (1,543) Total Fixed Assets 359,661 318,571 348,126 Other Assets Prepaid consulting 160,600 0 31,250 Deposits 1,802 1,802 1,802 Receivable from related company 0 0 19,212 Investment in mining claims 143,530 143,530 143,530 Other investments 0 4,203 0 Goodwill, net of accumulated amortization and valuation allowance 1,045,215 0 516,829 Total Other Assets 1,351,147 149,535 712,623 TOTAL ASSETS 1,861,921 471,975 1,200,638 LIABILITIES & SHAREHOLDERS' EQUITY SEPTEMBER SEPTEMBER DECEMBER 1998 1997 1997 ---- ---- ---- Current Liabilities Accounts Payable $ 153,453 151,772 171,347 Bank overdraft 0 0 4,518 Drilling advance 26,300 0 26,300 Revenue distribution 2,511 0 4,536 Due to related party 0 0 439,976 Note payable-officers, shareholders And related entitles 34,659 28,730 80,129 Notes payable-other net of Current portion 266,772 76,925 146,243 Accrued expenses 16,711 361,040 393,622 Payroll taxes payable 1,263 2,868 2,896 Liability not discharged in bankruptcy 0 0 0 TOTAL CURRENT LIABILITIES 501,669 621,335 1,269,567 LONG TERM LIABILITIES Notes payable-other 0 0 16,000 Investment in joint venture 0 0 40,508 TOTAL LIABILITIES 501,669 621,335 1,326,075 STOCKHOLDERS' EQUITY Common Stock 29,354 16,888 15,284 Additional paid in capital 3,459,983 1,034,827 1,801,826 Subscribed stock 127,500 0 0 Receivable from sale of stock 0 0 (175,981) Treasury stock (250) (3,364) (250) Retained Earnings (1,766,316) (3,857,922) (3,585,856) Net income year to date (490,019) 2,660,211 1,819,540 TOTAL STOCKHOLDERS' EQUITY 1,360,252 (149,360) (125,437) TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 1,861,921 $ 471,975 $1,200,638 CRONUS CORPORATION Profit and Loss January through March 1998 JAN-SEPT. JAN-SEPT. JULY-SEPT. JULY-SEPT. 1998 1997 1998 1997 ---- ---- ---- ---- INCOME Bayou Pierre - Gas $ 20,942 0 8,152 0 Falco - Oil 1,350 0 0 0 Grawhawk Oil & Gas 0 2,000 0 2,000 Total 22,292 2,000 8,152 2,000 OPERATING EXPENSES Automobile expense 204 80 0 30 Bank charges 591 178 81 67 Bonus 7,400 0 0 0 Commissions 0 8,000 0 0 Contributions 200 0 0 0 Dues & subscriptions 3,938 221 480 221 Education 300 0 200 0 Equipment rental 548 0 0 0 Fees 2,901 4,026 106 1,580 Insurance 300 2,933 0 1,985 Interest 34,954 0 5,723 0 Internet access 176 120 88 60 Licenses & permits 650 10 235 10 Maintenance expense 1,874 0 0 0 Marketing 0 942 0 360 Office 3,136 2,790 419 1,130 Operating expense 88,263 5,000 16,563 0 Payroll 155,233 190,250 3,500 67,750 Payroll taxes 4,694 5,104 268 1,885 Postage & delivery 2,528 1,094 421 478 Printing 0 2,361 0 0 Professional fees 53,870 34,389 6,326 7,332 Proxy 85 0 0 0 Rent 8,801 6,447 2,086 2,533 Royalties 6,450 0 2,511 0 Supplies 6,186 0 453 0 Taxes 50 50 0 0 Telephone 5,915 4,581 2,442 1,847 Travel & entertainment 8,197 2,385 22 682 Utilities 764 962 239 572 Web site hosting fee 775 0 0 0 TOTAL EXPENSE 391,583 271,923 42,163 88,473 NET OPERATING INCOME (369,291) (269,923) (34,011) (86,473) OTHER INCOME Extraordinary gain 0 2,930,134 0 2,930,134 Sales of assets (144,100) 0 (144,100) 0 Reversed interest 23,372 0 23,372 0 NET INCOME $(490,019) $ 2,660,211 $(154,739) $2,843,661 Please see Audited Financial Statements and Notes for the years ended December 31, 1997 and 1996, dated June 10, 1998, filed as an exhibit to the Company's 1997 10-KSB on June 15, 1998. ITEM 2. Management's Discussion and Analysis or Plan of Operation. Disclosure Regarding Forward-Looking Statements. This report on Form 10-KSQ 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"). All statements other than statements of historical facts included in this report, including, without limitation, statements under "Management's Discussion and Analysis or Plan of Operations" regarding the Company's financial position, reserve quantities and net present values, business strategy, plans and objectives of management of the Company for future operations and capital expenditures, are forward-looking statements and the assumptions upon which such forward-looking statements are based are believed to be reasonable. The Company can give no assurance that such expectations and assumptions will prove to have been correct. Reserve estimates of oil and gas properties are generally different from the quantities of oil and natural gas that are ultimately recovered or found. This is particularly true for estimates applied to exploratory prospects. Additionally, any statements contained in this report regarding forward-looking statements are subject to various known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company. Such things may cause actual results, performance, achievements or expectations to differ materially from the anticipated results, performance, achievements or expectations. Factors that may affect such forward-looking statements include, but are not limited to, the Company's ability to generate additional capital, risks inherent in oil and gas acquisitions, exploration, drilling, development and production, price volatility of oil and gas, competition, shortages of equipment, services and supplies, government regulation, environmental matters, financial condition of the other companies participating in the exploration, development and production of oil and gas programs and other matters. All written and oral forward- looking statements attributable to the Company or persons acting on its behalf subsequent to the date of this report are expressly qualified in their entirety by this disclosure. As described more fully below, management expects to receive income from PetroSun oil and gas leases in Louisiana during 1998. The Company has incurred losses from operations and has deficits in working capital. The Company earned minimal income from its first three quarters of operations do to the ongoing rehabilitation of the shut-in wells in Louisiana, however, it expects to receive income in the next quarter from those oil and gas leases. The drilling projects are further explained below. There can be no assurance that a cash flow will be generated or that funding will be raised. The Company currently has no commitments for any type of funding, and there is no assurance that the Company will be able to obtain any such financing or that such financing, if obtainable, will be on terms necessary to enable the Company to operate profitably. Future Business Strategy and Operations. The Company's ongoing business strategy is to create and expand its reserve base and cash flow primarily through the following: 1. Raising significant capital to conduct assessments of the economical feasibility of extracting minerals from its properties, and to take advantage of leading edge technologies such as horizontal drilling and 3-D seismic exploration projects. 2. Position itself with strategic sources of capital and partners that can react to opportunities in the oil and gas industry when they present themselves. 3. Developing alliances with oil and gas industry partners. 4. Participate in projects that have opportunities involving relatively small amounts of capital that could potentially generate significant rates of return. These projects include areas with large field potentials in Northern Arizona, New Mexico, Louisiana and Queensland, Australia. 5. Implementing the Company's investment strategy to carefully consider, analyze, and exploit the potential value of the Company's existing assets to increase the rate of return to its shareholders. 6. Reinvesting future operating cash flows into development of drilling and recompletion activities. 7. Acquiring properties that build upon and enhance the Company's existing asset base. 8. Developing a long term track record regarding stock price performance and a reasonable rate of return to the shareholder. The Company recognizes that the ability to implement its business strategies is largely dependent on the ability to increase operating cash flows by raising additional debt or equity capital to fund future drilling and developmental activities. Management believes that it will be necessary to raise additional equity or debt capital to overcome the Company's undercapitalization. The steps the Company intends to take to assess the feasibility of its current projects are described below. There can be no assurance that the Company will be able to place such oil and gas into production or to conclude such feasibility assessments, or that if it is able to do so, that it will be able to engage in oil and gas operations profitably. OIL AND GAS PLAN OF OPERATIONS The Company's primary objective is to place the oil and gas assets of its subsidiary into production. PetroSun controls oil and gas leases on approximately 2,200 acres of land in Louisiana referred to as Bayou Pierre Project. The leases contain 17 proven developed oil and gas wells. These wells were shut-in since the late 1980's due to the then low price of oil and gas and due to the property then being subject to litigation unrelated to the Company. Currently, 13 of the wells have been rehabilitated and placed into production. The Company estimates that the cost to complete the rehabilitation of the wells to be $150,000. The leases also contain an additional 105 proven undeveloped vertical or 60 horizontal locations, 4 Puluxy, 4 Glen Rose, and 2 Rodessa, which the Company plans to drill if economically feasible. Drilling Projects Louisiana: PetroSun has joint ventured with Vector Horizontal Inc. to drill a horizontal Nacatoch gas well (William Prince #20) on the Bayou Pierre lease. The drilling commenced in the second week of November 1998. The drilling cost for this project is estimated to be $80,000. Also, PetroSun has Joint Ventured with Tedan to drill a Paluxy / Glen Rose test well (William Prince #21) on the Bayou Pierre Lease. The drilling is anticipated to begin in December 1998. The drilling cost for this project is expected to be $45,000. New Mexico: On October 22, 1997, PetroSun acquired the Red Dog Prospect located in McKinley County, New Mexico, covering 1,921.18 acres. The Red Dog Prospect is situated on a northeast - southwest trending anticlinal fold on the Chaco Slope of the San Juan Basin. Seismic data indicates a feature in the Entrada formation that has been interpreted as a reflection from an oil-water contact. In a homogenous sandstone such as the Entrada a 30 foot oil column is needed before an oil-water contact can be detected. Analysis of satellite imagery confirmed that there is micro-seepage to the surface. The hydrocarbon reflectance covers approximately 1420 acres. The Entrada has excellent reservoir quality, with an average porosity of 23.6% and an average permeability of 315 millidarcies. On 40 acre spacing, recoverable reserves are estimated to be 456,800 barrels of oil for a well with 30 feet of pay and a water drive recovery of 35%. The secondary objectives of the Red Dog Prospect include the Dakota at 3,300 feet and the Mancos at 2,900 feet. PetroSun anticipates drilling the initial test well in the Entrada by the end of 1998. PetroSun has joint ventured with industry partners, including Tiger Exploration & Production, Incorporated, to raise the funds for this prospect. In the event that Tiger Exploration & Production, Incorporated does not raise sufficient funds for this project in order to drill the initial test well by the end of 1998, PetroSun will be required to renegotiate the terms of the lease of this prospect or risk losing the lease. PetroSun acquired the Cholla Tank Prospect located in McKinley County, New Mexico on November 22, 1997. The Cholla Prospect is situated on a northeast - southwest trending anticlinal fold on the Chaco Slope of the San Juan Basin. Seismic data indicates a feature in the Entrada formation that has been interpreted as a reflection from an oil-water contact. In a homogenous sandstone such as the Entrada a 30 foot oil column is needed before an oil-water contact can be detected. Analysis of satellite imagery confirmed that there is microseepage to the surface. The Entrada has excellent reservoir quality, with an average porosity of 23.6% and an average permeability of 315 millidarcies. On 40 acre spacing, recoverable reserves are estimated to be 456,800 barrels of oil for a well with 30 feet of pay and a water drive recovery of 35%. The secondary objectives of the Cholla Prospect include the Dakota at 3,300 feet and the Mancos at 2,900 feet. The Cholla Tank Prospect is a direct offset to PetroSun's Red Dog Prospect and drilling is anticipated to commence by the end of 1998. PetroSun has joint ventured with industry partners, including Tiger Exploration & Production, Incorporated, to raise the funds for this prospect. In the event that Tiger Exploration & Production, Incorporated does not raise sufficient funds for this project in order to drill the initial test well by the end of 1998, PetroSun will be required to renegotiate the terms of the lease of this prospect or risk losing the lease. Australia: Triple JJJ Resources Pty., Ltd. On February 14, 1998, the Company entered into an agreement to acquire all the outstanding shares of Triple "J" Resources Pty., LTD. ("JJJ"). JJJ is the holder of ATP 594P, a 375,000 acre oil and gas concession located in Queensland, Australia within the oil and gas producing region of the Eromanga basin. JJJ has a farmout agreement with Icon Oil, NL by which Icon agreed to drill the first test well on ATP 594P, and to thereafter provide 50% of the costs of any additional wells in return for half of the Company's interest in ATP 594P. The Company has sold a half interest in JJJ to Tiger Tool, Inc. and Tiger Exploration & Production, Inc., effectively leaving the Company with approximately a 23% working interest and 16% net revenue interest in ATP 594P. On April 16, 1998, Cronus announced the completion of drilling on the first well on ATP 594P, the Taylor Franks No. 1 well in the Eromanga Basin of east-central Australia. The well reached a total depth of 2,643 meters with gas shows from 2,520 to 2,643 meters. Two drill stem tests were performed in the Toolachee and Patchawarra formations in the Permian section. The tests indicated non-commercial gas flow rates of approximately 10,000 cubic feet per day with no water. The results of this first well indicate good structure and the presence of gas in this province. The flow results and penetration rate confirmed a tight reservoir and lack of sufficient porosity at this location, thus the well was plugged. While proving that there is gas on this concession, the next step is to drill a confirmation well in the same zone that has greater porosity and provides commercially viable flow rates to capitalize on this find. Cronus and Icon Oil NL have determining a second location for the next well and anticipates the well to be spudded in early 1999 on the concession. Pursuant to its acquisition of an interest in JJJ, Tiger Exploration & Production, Incorporated is obligated to carry Cronus for its share of the costs of drilling the next well on ATP 594P. In the event that Tiger Exploration & Production, Incorporated does not raise sufficient funds for this project in order to drill the next well Cronus will be required to raise the funds of up to $400,000 or risk losing its interest in that well. Strategic Consulting and Administration, Inc. On October 17, 1997, the Company entered into an agreement to acquire all the outstanding shares of Strategic Consulting and Administration, Inc. ("SCI"). SCI is the designated company to receive ATP 636P, a 640,000 acre oil and gas concession located in Queensland, Australia within the oil and gas producing region of the Eromanga basin. SCI cannot receive the Authority To Prospect until the issues surrounding the Native Title Claims Act have been resolved by the parliament of Queensland, Australia. The Company currently has no estimate as to how much it would cost to develop this prospect. With the establishment of commercial production on any prospect, further development wells may be drilled during the balance of 1999. Although the Company is currently pursuing prospects within the project areas described above, and has budgeted to drill the number of wells set forth, there can be no assurance that these prospects will be drilled at all or within the expected time frame. In particular, budgeted wells that are based upon statistical results of drilling activities in other project areas are subject to greater uncertainties than wells for which drillsites have been identified. The final determination with respect to the drilling of any identified drillsites or budgeted wells will be dependent on a number of factors, including (i) the results of exploration efforts and the acquisition, review and analysis of the seismic data, (ii) the availability of sufficient capital resources by the Company and the other participants for the drilling of The prospects, (iii) the approval of the prospects by other participants after additional data has been compiled, (iv) the economic and industry conditions at the time of drilling, including prevailing and anticipated prices for oil and natural gas and the availability of drilling rigs and crews, (v) the financial resources and results of the Company and (vi) the availability of leases on reasonable terms and permitting for the prospect. There can be no assurance that these projects can be successfully developed or that the identified drillsites or budgeted wells discussed will, if drilled, encounter reservoirs of commercially productive oil or natural gas. The success of the Company will be materially dependent upon the success of its exploratory and developmental drilling program. Exploratory drilling involves numerous risks, including the risk that no commercially productive oil or natural gas reservoirs will be encountered. The cost of drilling, completing and operating wells is often uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including unexpected drilling conditions, pressure or irregularities in formations, equipment failures or accidents, adverse weather conditions, compliance with governmental requirements and shortages or delays in the availability of drilling rigs and the delivery of equipment. Although the Company believes that its use of available data and other advanced technologies should increase the probability of success of its exploratory wells and should reduce average finding costs, exploratory drilling remains a speculative activity. Even when fully utilized and properly interpreted, seismic data and other advanced technologies only assist geoscientists in identifying subsurface structures and do not enable the interpreter to know whether hydrocarbons are in fact present in such structures. In addition, the use of seismic data and other advanced technologies requires greater predrilling expenditures than traditional drilling strategies and the Company could incur losses as a result of such expenditures. The Company's future drilling activities may not be successful, and if unsuccessful, such failure will have a material adverse effect on the Company's results of operations and financial condition. There can be no assurance that the Company's overall drilling success rate or its drilling success rate for activity within a particular project area will not decline. The Company may choose not to acquire option and lease rights prior to acquiring seismic data and, in many cases, the Company may identify a prospect or drilling location before seeking option or lease rights in the prospect or location. Although the Company has identified numerous drilling prospects, there can be no assurance that such prospects will ever be drilled (or drilled within the scheduled or budgeted time frame) or that oil or natural gas will be produced from any such prospects or any other prospects. In addition, prospects may initially be identified through a number of methods, some of which do not include interpretation of seismic data. Wells that are currently included in the Company's capital budget may be based upon statistical results of drilling activities in other project areas that the Company believes are geologically similar, rather than on analysis of seismic or other data. Actual drilling and results are likely to vary from such statistical results and such variance may be material. Similarly, the Company's drilling schedule may vary from its capital budget because of future uncertainties, including those described elsewhere. Financial Requirements and Source of Funds. The Company is currently rehabilitating the shut-in oil and gas wells by setting compressors and pumps which will allow it to put its revenue producing assets in Louisiana into production. The Company will need to place its oil and gas leases in Louisiana into production, and then must raise sufficient capital to fully develop its properties and acquire new prospects to develop revenues. Thereafter, the Company believes it will need to raise at least $2,000,000 in order to fully conduct the drilling of its oil and gas properties in Louisiana. Such funds may be sought through the issuance of additional shares of the Company's Common Stock or other equity securities, through debt financing, or through various arrangements, including joint ventures and/or mergers, with third parties. However, the Company currently has no commitments for any type of funding, and there is no assurance that the Company will be able to obtain any such financing or that such financing, if obtainable, will be on terms necessary to enable the Company to operate profitably. If the Company is unsuccessful in completing a private type placement, or if additional funds are necessary either before or after such a transaction, it is uncertain at this time what actions the Company will take. Possibilities include other debt or equity financings or the sale of existing assets. Competition - Oil and Gas The oil and gas industry is highly competitive in all phases. The Company will encounter strong competition from other independent oil and gas companies in acquiring economically desirable prospects as well as in marketing production therefrom and obtaining external financing. Substantially all of the Company's competitors have financial resources, personnel resources, and facilities substantially greater than those of the Company. In addition to the uncertainty surrounding the eventual development of oil and gas on the Company's properties, the success of any operation which might be conducted is dependent upon the price of oil and gas on the domestic and world markets, which is subject to fluctuations, in part as a result of actions by central banks and government policies. PART II ITEM 1. Legal Proceedings. From time to time the Company is a party to various legal proceedings arising in the ordinary course of business. The Company is not currently a party to any litigation that it believes could have a material adverse effect on the financial position of the Company. ITEM 2. Changes in Securities. None ITEM 3. Defaults Upon Senior Securities. None ITEM 4. Submission of Matters to a Vote of Security Holders. None ITEM 5. Other Information CHANGE IN CONTROL. There has been a change in the management of the Company. On July 3, 1998, Mr. Jonathan Roberts resigned as President and Director of the Company. Additionally, Thomas J. Nieman, J. Dennis Bartlett, Jim Karten and Gordon M. LeBlanc, Jr., have since resigned their respective positions as directors of the Company. James W. McCabe was appointed as the President and a Director of the Company. Mr. McCabe has over 20 years of executive oil and gas experience in Texas, Oklahoma, Kansas and Ohio. On August 6, 1998, Douglas Ohlman was appointed chairman of the Board of Directors and David Naharin was appointed as a director. Mr. McCabe holds 2,500,000 shares of the company's common stock. Mr. Ohlman holds 3,013,248 shares of the company's common stock. Mr. Naharin holds 312,500 shares of the company's common stock. As the percentage holdings of new management approximates that of the departing management, the Company does not believe that a change in control has taken place. There are no agreements or understandings with respect to the voting of the stock held any member of management. ITEM 6. Exhibits and Reports on Form 8-K. During the third quarter of 1998 ending on September 30, 1998, no form 8-K reports were filed. 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. CRONUS CORPORATION DATE: November 23, 1998 By: __/s/_________________ James W. McCabe, President and Director 15 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINACIAl INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED QUARTERLY FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1998 SEP-30-1998 18,752 0 130,554 0 0 151,113 8,413 3,062 1,861,921 501,669 0 0 0 29,354 0 1,861,921 22,292 22,292 0 391,583 120,728 0 34,954 0 0 0 0 0 0 (490,019) (.016) (.016)
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