Back to GetFilings.com






As filed with the Securities and Exchange Commission on May 23, 2005



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 10-Q


(Mark One)

[√]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 2005 OR

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _______

Commission File No. 0-24027


ENERGY EXPLORATION TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)



Alberta, Canada
(State or other jurisdiction of
incorporation or organization)

 

N/A
(I.R.S. Employer
Identification No.)



840 7th Avenue S.W., Suite 700, Calgary, Alberta, Canada T2P 3G2
(Address of principal executive offices) (Zip Code)



(403) 264–7020
(Registrant’s telephone number, including area code)



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 preceding 12 months (or for such shorter period that the registration was required to file such Reports), and (2) has been subject to such filing requirements for the past 90 days:   YES  [√]   NO  [  ]


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:


Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  YES [  ]  NO  [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

21,315,077 common shares, no par value, as of May 5, 2005










ENERGY EXPLORATION TECHNOLOGIES INC.

INDEX TO THE FORM 10-Q

For the three month period ended March 31, 2005


   

PAGE

    

PART I

FINANCIAL INFORMATION

 
 

ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

3

 


Consolidated Balance Sheets

3

 


Consolidated Statements of Loss and Comprehensive Loss

5

 


Consolidated Statements of Shareholders’ Equity (Deficit)

6

 


Consolidated Statements of Cash Flow

7

 


Notes to the Consolidated Financial Statements

8

 

ITEM 2.



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

19

 

ITEM 3.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

31

 

ITEM 4.

CONTROLS AND PROCEDURES

31

PART II

OTHER INFORMATION

 
 

ITEM 1.

LEGAL PROCEEDINGS

32

 

ITEM 2.

CHANGES IN SECURITIES AND USE OF PROCEEDS

33

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

33

 

ITEM 4.

OTHER INFORMATION

33

 

ITEM 5.

EXHIBITS

34

 


SIGNATURES

38

    








PART I


ITEM 1.   FINANCIAL INFORMATION

ENERGY EXPLORATION TECHNOLOGIES INC.

Consolidated Balance Sheets

(Unaudited)  (Expressed in U.S. dollars except share data)

  

March 31, 2005

December 31, 2004

Assets

  

Current assets

  
 

Cash

 $                       88,253

 $                            287,431

 

Short term investments

                        115,000

                               550,000

 

Accounts receivable

                          75,345

                               387,943

 

Due from officers and employees

                            1,676

                                   5,803

 

Note receivable from former officer [note 3]

                          50,418

                                 50,058

 

Prepaid expenses

                          72,884

                                 38,479

  

                        403,576

                            1,319,714

Oil and natural gas properties, on the basis of full cost accounting,

  
 

net of depletion and impairments [note 4]

                     1,148,984

                            1,161,591

Other property and equipment, net of accumulated depreciation,

  
 

amortization and impairment [note 5]

                        164,983

                               176,651

  

  $                 1,717,543

  $                        2,657,956

Liabilities And Shareholders' Equity

  

Current liabilities

  
 

Trade payables

 $                     331,987

 $                            102,562

 

Other accrued liabilities

                        374,321

                                 90,479

 

Subscriptions payable [note 6]

                        319,347

                               438,545

  

                     1,025,655

                               631,586

Long term liabilities:

  
 

Note payable [note 14]

                        235,219

                                233,253

  

                     1,260,874

                                864,839

Contingencies, continuing operations and commitments [notes 1 and 10]

  

Shareholders' equity

  
 

Preferred shares [note 7]

  
 

  Authorized: unlimited

  
 

  Issued : nil

                                   -  

                                           -  

 

Common shares

  
 

  Authorized: unlimited

  
 

  Issued : 21,288,771 and 21,055,171 at March 31, 2005 and

  
 

    December 31, 2004, respectively [note 6]

                   27,882,084

                           27,565,636

 

Warrants [notes 6 and 8 ]

                                   -  

                                           -  

 

Accumulated deficit

                 (27,662,145)

                         (26,038,158)

 

Accumulated other comprehensive income

                        236,730

                                265,639

  

                        456,669

                             1,793,117

    
  

  $                 1,717,543

  $                         2,657,956

The accompanying notes to consolidated financial statements

are an integral part of these consolidated balance sheets


3


ENERGY EXPLORATION TECHNOLOGIES INC.

Consolidated Statements Of Loss And Comprehensive Loss

(Unaudited) (Expressed in U.S. dollars except share data)

  

Three months ended

  

March 31,

  

2005

2004

Revenues

  
 

Oil and natural gas revenue

  $                    11,121

  $                16,829

 

Gain on sale of properties

                                 -  

                    27,770

  

                        11,121

                    44,599

Operating expenses

  
 

Oil and natural gas operating expenses

                          1,462

                         656

 

Administrative

                   1,097,446

                  532,176

 

Depletion and impairment of oil and

  
 

    natural gas properties [note 4]

                      503,689

                             -  

 

Amortization and depreciation [note 5]

                        24,519

                    11,959

 

Survey operations and support

                          1,141

                  529,115

  

                   1,628,257

               1,073,906

Operating loss from continuing operations

                 (1,617,136)

             (1,029,307)

Other income (expense)

  

Interest

                        (2,548)

                         593

  

                        (2,548)

                         593

Net loss from continuing operations

                 (1,619,684)

             (1,028,714)

Loss from discontinued

  

   operations [note 12]

                        (4,303)

                  (11,032)

Net loss

  $             (1,623,987)

  $         (1,039,746)

Other comprehensive loss:

  
 

Foreign currency translation adjustments

                      (28,909)

                  (64,642)

Comprehensive loss

  $             (1,652,896)

  $         (1,104,388)

Basic and diluted net loss per share from

  

   continuing operations [note 6]

  $                      (0.08)

  $                  (0.05)

Basic and diluted net loss per share from

  
 

discontinued operations [note 6]

  $                      (0.00)

  $                  (0.00)

Basic and diluted loss per share [note 6]

  $                      (0.08)

  $                  (0.06)

    

Weighted average common shares outstanding

                 21,198,655

19,638,390

The accompanying notes to consolidated financial statements are

an integral part of these consolidated statements of loss and comprehensive loss.


4




ENERGY EXPLORATION TECHNOLOGIES INC.

Consolidated Statements Of Shareholders' Equity (Deficit)

(Unaudited) (expressed in U.S. dollars except share data)

  

Accumulated Other

      
  

Comprehensive

Common Shares

Warrants

  
  

Income (loss)

Shares

Amount

Number

Amount

Deficit

Total

Beginning balance — December 31, 2003

  $       277,926

   19,306,852

  $     24,527,066

        7,496

$           -

  (22,855,919)

1,949,073

 Options exercised for cash at prices between

       
 

 $0.38 and $2.00 per share  

                      -  

               81,172

                     81,106

                       -

            -  

                               -  

            81,106

 Issued for cash at $2.00 per share on  

       
 

 February 12, 2004 net of issuance costs

                      -  

             573,269

                1,078,066

           573,269

            -  

                               -  

       1,078,066

 Net loss for the three months ended

       
 

 March 31, 2004 on continuing operations

                      -  

                       -  

                              -  

                       -

            -  

                (1,028,714)

     (1,028,714)

 Loss from discontinued operations for

       
 

 the three months ended March 31, 2004

                      -  

                       -  

                              -  

                       -

            -  

                     (11,032)

          (11,032)

 Net other comprehensive loss for the

       
 

 three months ended March 31, 2004

            (64,642)

                       -  

                              -  

                       -

            -  

                               -  

          (64,642)

Balance — March 31,2004

  $       213,284

   19,961,293

 $      25,686,238

     580,765

$            -

   (23,895,665)

  $2,003,857

Beginning balance — December 31, 2004

  $     265,639

$ 21,055,171

      $ 27,565,636

$1,327,467

$          -

  (26,038,158)

 $ 1,793,117

Issued for services at $1.75 per share on

       
 

January 13, 2005

                      -  

             100,000

                   175,000

                      -  

            -  

                               -  

          175,000

Issued for services at $1.75 per share on

       
 

January 13, 2005

                      -  

               25,000

                     43,750

                      -  

            -  

                               -  

            43,750

Options exercised for cash at $0.38 per share

                      -  

               75,000

                     28,500

                      -  

            -  

                               -  

            28,500

Issued for cash at $2.00 per share on

       
 

March 17, 2005

                      -  

               10,000

                     20,000

             10,000

            -  

                               -  

            20,000



5



Issued for cash at $2.60 Cdn per share on

       
 

March 30, 2005

                      -  

               23,600

                     49,198

             23,600

            -  

                               -  

            49,198

 Net loss for the three months ended

       
 

 March 31, 2005 on continuing operations

                      -  

                       -  

                              -  

                      -  

            -  

                (1,619,684)

     (1,619,684)

 Loss from discontinued operations for

       
 

 the three months ended March 31, 2005

                      -  

                       -  

                              -  

                      -  

            -  

                       (4,303)

            (4,303)

 Net other comprehensive loss for the

       
 

 three months ended March 31, 2005

            (28,909)

                       -  

                              -  

                      -  

            -  

                               -  

          (28,909)

Balance — March 31, 2005

  $     236,730

     21,288,771

  $       27,882,084

      1,361,067

$          -

  $       (27,662,145)

  $    456,669

      

 

  

The accompanying notes to consolidated financial statements are

an integral part of these consolidated statements of shareholders' equity (deficit)



6


ENERGY EXPLORATION TECHNOLOGIES INC.

Consolidated Statements Of Cash Flow

(Unaudited) (Expressed in U.S. dollars)

  

Three months ended

  

March 31,

  

2005

2004

Operating activities

  

Net loss from continuing operations

  $         (1,619,684)

  $         (1,028,714)

Amortization and depreciation of other property

  

   and equipment

                    24,519

                   11,959

Depletion and impairment of oil and natural gas properties

                  503,689

                            -  

Consulting costs settled by issuance of common stock

  

   and options

                  218,750

                            -  

Gain on sale of oil and natural gas properties

                             -  

                  (27,770)

Changes in non-cash working capital

  
 

Accounts receivable

                  312,598

                   20,886

 

Interest accrued on loan to former employee

                       (360)

                         (99)

 

Due from officers and employees

                      4,127

                  (20,424)

 

Prepaid expenses

                  (34,405)

                  (60,738)

 

Trade payables

                  229,425

                 165,134

 

Other accrued liabilities

                  266,637

                 114,713

Net cash used by operating activities

                  (94,704)

                (825,053)

Financing activities

  

Note payable

                      1,966

                            -  

Funds raised through the sale of common shares,

  
 

net of issuance costs

                             -  

              1,078,066

Funds raised through the exercise of options

                    28,500

                   81,106

Subscriptions payable

                  (50,000)

                   32,419

Net cash generated by (used in) financing activities

                  (19,534)

              1,191,591

Investing activities

  

Funds invested in other property and equipment

                  (12,851)

                        427

Funds invested in oil and natural gas properties

                (473,877)

                  (35,263)

Proceeds on sale of oil and natural gas properties

                             -  

                   29,015

Funds generated from short term investments

                  435,000

                            -  

Net cash used by investing activities

                  (51,728)

                    (5,821)

Net cash used by discontinued operations

                    (4,303)

                  (11,032)

Effect of net other comprehensive loss

                  (28,909)

                  (64,642)

Net cash inflow (outflow)

                (199,178)

                 285,043

Cash and Cash Equivalents, beginning of period

                  287,431

              1,024,201

    

Cash and Cash Equivalents, end of period

  $               88,253

  $          1,309,244

Non Cash Financing activities

  
 

Release of subscriptions payable through the issuance of common shares

$                  69,198

$                           -

 

Cash paid for taxes

$                            -

$                           -

 

Cash paid for interest

$                            -

$                           -

    

The accompanying notes to consolidated financial statements are an integral

part of  these consolidated statements of cash flows


7


ENERGY EXPLORATION TECHNOLOGIES INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)
(Unaudited)



1. ORGANIZATION AND ABILITY TO CONTINUE OPERATIONS


Energy Exploration Technologies Inc. ("we", "our company" or "NXT") was incorporated under the laws of the State of Nevada on September 27, 1994.


In March 2003 we divested all our U.S. properties. For reporting purposes, the results of operations and the cash flow of the U.S. properties have been presented as discontinued operations.  Accordingly, prior period financial statements have been reclassified to reflect this change.


NXT was continued from the State of Nevada to the Province of Alberta, Canada on October 24, 2003. The shareholders voted on and approved this change that  moved the jurisdiction of incorporation from the U.S. to Canada. The tax effects are disclosed in the proxy statement circulated to shareholders for the Special Meeting on October 24, 2003. As a result of the continuance into Canada, our common and preferred shares no longer have a par value assigned, as is the practice in the United States. Therefore the amount that was disclosed as “Additional paid-in Capital” in prior years on the consolidated balance sheets and consolidated statements of shareholders’ equity (deficit) has been added to the share issued amount. This is a legal jurisdiction reporting difference only.


We are a technology-based reconnaissance exploration company and we utilize our proprietary stress field detection (SFD) remote-sensing airborne survey technology to quickly and inexpensively identify