Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K/A
(Amendment
No. 1)
(Mark
One)
x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For
the
fiscal year ended December
31, 2005
OR
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For
the
transition period from _________________
to_________________
Commission
file number 001-04668
COASTAL
CARIBBEAN
OILS & MINERALS, LTD.
(Exact
name of registrant as specified in its charter)
BERMUDA
|
NONE
|
State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization
|
Identification
No.)
|
|
|
Clarendon
House
|
|
Church
Street
|
|
Hamilton,
Bermuda
|
HM
11
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code (850)
421-2024
Securities
registered pursuant to Section 12(b) of the Act:
|
Name
of each exchange on
|
Title
of each class
|
which
registered
|
|
|
NONE
|
NONE
|
Securities
registered pursuant to Section 12(g) of the Act:
Common
stock, par value $.12 per share
(Title
of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act. o
Yes x
No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. o
Yes x
No
Note-Checking
the box above will not relieve any registrant required to file reports pursuant
to Section 13 or 15(d) of the Exchange Act from their obligations under those
Sections.
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 registrant was required to file such reports), and (2) has
been
subject to such filing requirements for the past 90 days. x
Yes
o
No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K §229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
o
Yes x
No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer o Accelerated
filer o Non-accelerated
filer x
State
the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was
last sold, or the average bid and asked price of such common equity, as of
the
last business day of the registrant’s most recently completed second fiscal
quarter: $5,280,039 (U.S.) at June 30, 2005.
Note
- If a
determination as to whether a particular person or entity is an affiliate cannot
be made without involving unreasonable effort and expense, the aggregate market
value of the common stock held by non-affiliates may be calculated on the basis
of assumptions reasonable under the circumstances, provided that the assumptions
are set forth in this Form.
Indicate
the number of shares outstanding of each of the registrant's classes of common
stock, as of the latest practicable date: Common stock, par value $.12 per
share, 46,211,604 shares outstanding as of March 7, 2006.
DOCUMENTS
INCORPORATED BY REFERENCE
None
Explanatory
Note:
Coastal
Caribbean Oils and Minerals, Ltd. (the “Company”) is hereby amending its
previously filed Annual Report on Form 10-K for the fiscal year ended December
31, 2005 (the “Original Report”). This Amendment No. 1 is being filed solely to
amend certain disclosures in Part II, Item 8. Financial
Statements and Supplementary Data—Note
1.
Summary
of Significant Accounting Policies—
Section
titled “Stock Based Compensation” and Note 6. Stock Option Plans to further
comply with the disclosure requirements of paragraphs 8 through 10 and paragraph
45c of SFAS 123. We have also amended the language in Item 9A. Controls
and Procedures
to
conform to the disclosure requirements of Item 307 and 308(c) of Regulation
S-K.
Conforming changes have also been made to Exhibits 31.1 and 32.1 included
in the
Original Report, are being currently dated, and have been changed from those
filed in the Original Report in order to comply with the current format set
forth in Item 601(b)(31) of Regulation S-K. No other changes to the Original
Report have been made. This Amendment No. 1 does not reflect events occurring
after the filing of the Original Report or modify or update disclosures therein
in any way other than as described above.
Report
of Independent Registered Public Accounting Firm
To
the
Board of Directors
Coastal
Caribbean Oils & Minerals, Ltd.
Apalachicola,
Florida
We
have
audited the consolidated balance sheet of Coastal Caribbean Oils & Minerals,
Ltd. and subsidiary as of December 31, 2005, and the related consolidated
statements of operations, cash flows, and common stock and capital in excess
of
par for the year ended December 31, 2005 and for the period from January 31,
1953 (inception) to December 31, 2005. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provided a
reasonable basis for our opinion.
In
our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Coastal
Caribbean Oils & Minerals, Ltd. and subsidiary as of December 31, 2005, and
the results of their operations and cash flows for the year ended December
31,
2005, and for the period from January 31, 1953 (inception) to December 31,
2005,
in conformity with accounting principles generally accepted in the United States
of America.
The
accompanying consolidated financial statements have been prepared assuming
the
Company will continue as a going concern. As discussed in Notes 1 and 4 to
the
consolidated financial statements, the Company suffered recurring losses from
operations and has not yet realized any revenues from development activities.
This raises substantial doubt about the Company’s ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
|
|
|
|
|
|
|
/s/
Baumann, Raymondo & Company PA
|
|
|
Tampa,
Florida
February
15, 2006
|
|
Report
of Independent Registered Public Accounting Firm
To
the
Board of Directors,
Coastal
Caribbean Oils & Minerals, Ltd.:
We
have
audited the accompanying consolidated balance sheet of Coastal Caribbean Oils
& Minerals, Ltd. (a development stage company) as of December 31, 2004, and
the related consolidated statements of operations, cash flows and common stock
and capital in excess of par value for the years ended December 31, 2004 and
2003. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform
an
audit of the Company’s internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In
our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Coastal
Caribbean Oils & Minerals, Ltd. as of December 31, 2004, and the
consolidated results of its operations and cash flows for the years ended
December 31, 2004 and 2003, in conformity with accounting principles generally
accepted in the United States of America.
The
accompanying consolidated financial statements have been prepared assuming
that
the Company will continue as a going concern. As more fully described in Notes
1
and 4 to the consolidated financial statements, the Company had a working
capital deficiency, has incurred recurring losses and has a deficit accumulated
during the development stage. These situations raise substantial doubt about
the
Company’s ability to continue as a going concern. The consolidated financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or amounts and
classifications or liabilities that may result from the outcome of these
uncertainties.
|
|
|
|
|
|
|
/s/
James Moore & Co., P.L. |
|
|
March
17, 2005
Gainesville,
Florida
|
|
COASTAL
CARIBBEAN OILS & MINERALS, LTD.
(A
Bermuda Corporation)
A
Development Stage Company
CONSOLIDATED
BALANCE SHEETS
(Expressed
in U.S. dollars)
|
|
December
31,
|
|
|
|
2005
|
|
2004
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
2,250,236
|
|
$
|
179
|
|
Prepaid
expenses and other
|
|
|
199,754
|
|
|
16,322
|
|
Total
current assets
|
|
|
2,449,990
|
|
|
16,501
|
|
|
|
|
|
|
|
|
|
Certificates
of deposit
|
|
|
75,000
|
|
|
-
|
|
Petroleum
leases
|
|
|
1,860,614
|
|
|
-
|
|
Equipment,
net
|
|
|
1,771
|
|
|
-
|
|
Contingent
litigation claim (Note 4)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
4,387,375
|
|
$
|
16,501
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders’ (Deficit) Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
27,526
|
|
$
|
863,127
|
|
Income
taxes payable
|
|
|
35,000
|
|
|
-
|
|
Amounts
due to related parties
|
|
|
-
|
|
|
1,594,369
|
|
Total
current liabilities
|
|
|
62,526
|
|
|
2,457,496
|
|
|
|
|
|
|
|
|
|
Minority
interests
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Shareholders'
(deficit) equity:
|
|
|
|
|
|
|
|
Common
stock, par value $.12 per share:
|
|
|
|
|
|
|
|
Authorized
- 250,000,000 shares
|
|
|
|
|
|
|
|
Outstanding
- 46,211,604 shares,
respectively
|
|
|
5,545,392
|
|
|
5,545,392
|
|
Capital
in excess of par value
|
|
|
32,137,811
|
|
|
32,137,811
|
|
|
|
|
37,683,203
|
|
|
37,683,203
|
|
Deficit
accumulated during the development stage
|
|
|
(33,358,354
|
)
|
|
(40,124,198
|
)
|
Total
shareholders’ (deficit) equity
|
|
|
4,324,849
|
|
|
_(2,440,995
|
)
|
Total
liabilities and shareholders’ (deficit) equity
|
|
$
|
4,387,375
|
|
$
|
16,501
|
|
See
accompanying notes.
COASTAL
CARIBBEAN OILS & MINERALS, LTD.
(A
Bermuda Corporation)
A
Development Stage Company
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
For
the
period
from
|
|
|
|
|
|
|
|
|
|
Jan.
31, 1953
|
|
|
|
|
|
|
|
|
|
(inception)
|
|
|
|
Years
ended December 31,
|
|
to
|
|
|
|
2005
|
|
2004
|
|
2003
|
|
Dec.
31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on settlement
|
|
$
|
8,124,016
|
|
$
|
-
|
|
$
|
-
|
|
$
|
8,124,016
|
|
Interest
and other income
|
|
|
50
723
|
|
|
1
|
|
|
658
|
|
$
|
3,928,294
|
|
|
|
|
8,174,739
|
|
|
1
|
|
|
658
|
|
|
12,052,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal
fees and costs
|
|
|
155,388
|
|
|
327,091
|
|
|
342,451
|
|
|
17,055,067
|
|
Administrative
expenses
|
|
|
201,847
|
|
|
208,414
|
|
|
457,649
|
|
|
9,937,540
|
|
Salaries
|
|
|
112,020
|
|
|
112,838
|
|
|
118,745
|
|
|
3,867,831
|
|
Shareholder
communications
|
|
|
102,817
|
|
|
24,565
|
|
|
30,746
|
|
|
4,075,909
|
|
Goodwill
impairment
|
|
|
801,823
|
|
|
-
|
|
|
-
|
|
|
801,823
|
|
Write
off of unproved properties
|
|
|
-
|
|
|
-
|
|
|
59,247
|
|
|
5,560,494
|
|
Exploration
costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
247,465
|
|
Lawsuit
judgments
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,941,916
|
|
Minority
interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(632,974
|
)
|
Other
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
364,865
|
|
Contractual
services
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,155,728
|
|
|
|
|
1,373,895
|
|
|
672,908
|
|
|
1,008,838
|
|
|
45,375,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
35,000
|
|
|
-
|
|
|
-
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
6,765,844
|
|
$
|
(672,907
|
)
|
$
|
(1,008,180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
accumulated during the
|
|
|
|
|
|
|
|
|
|
|
|
|
|
development
stage
|
|
|
|
|
|
|
|
|
|
|
$
|
(33,358,354
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share based on weighted average number of shares
outstanding during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted EPS
|
|
$
|
.15
|
|
$
|
(.01
|
)
|
$
|
(.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding (basic and diluted)
|
|
|
46,211,604
|
|
|
46,211,604
|
|
|
46,211,604
|
|
|
|
|
See
accompanying notes.
COASTAL
CARIBBEAN OILS & MINERALS, LTD.
(A
Bermuda Corporation)
A
Development Stage Company
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
For
the period from Jan. 31, 1953
|
|
|
|
|
|
|
|
|
|
(inception)
|
|
|
|
Years
ended December 31,
|
|
To
|
|
|
|
2005
|
|
2004
|
|
2003
|
|
Dec.
31, 2005
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
6,765,844
|
|
$
|
(672,907
|
)
|
$
|
(1,008,180
|
)
|
$
|
(33,358,355
|
)
|
Adjustments
to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
used
in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on settlement
|
|
|
(8,124,016
|
)
|
|
-
|
|
|
-
|
|
|
(8,124,016
|
)
|
Goodwill
impairment
|
|
|
801,823
|
|
|
-
|
|
|
-
|
|
|
801,823
|
|
Minority
interest
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(632,974
|
)
|
Depreciation
|
|
|
120
|
|
|
-
|
|
|
-
|
|
|
120
|
|
Write
off of unproved properties
|
|
|
-
|
|
|
-
|
|
|
59,247
|
|
|
5,619,741
|
|
Common
stock issued for services
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
119,500
|
|
Compensation
recognized for stock option grant
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
75,000
|
|
Recoveries
from previously written off properties
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
252,173
|
|
Net
change in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses and other
|
|
|
(183,432
|
)
|
|
71,625
|
|
|
326,752
|
|
|
(199,755
|
)
|
Accrued
liabilities
|
|
|
(2,349,680
|
)
|
|
518,296
|
|
|
322,208
|
|
|
27,528
|
|
Income
taxes payable
|
|
|
35,000
|
|
|
-
|
|
|
-
|
|
|
35,000
|
|
Other
assets
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net
cash used in operating activities
|
|
|
(3,054,341
|
)
|
|
(82,986
|
)
|
|
(299,973
|
)
|
|
(35,384,215
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
to oil, gas, and mineral properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net
of assets acquired for common stock and reimbursements
|
|
|
(1,860,614
|
)
|
|
-
|
|
|
(59,247
|
)
|
|
(5,600,796
|
)
|
Net
proceeds from settlement
|
|
|
8,124,016
|
|
|
-
|
|
|
-
|
|
|
8,124,016
|
|
Proceeds
from relinquishment of surface rights
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
246,733
|
|
Purchase
of certificates of deposit
|
|
|
(75,000
|
)
|
|
-
|
|
|
-
|
|
|
(75,000
|
)
|
Purchase
of Minority interest in CPC
|
|
|
(801,823
|
)
|
|
—
|
|
|
-
|
|
|
(801,823
|
)
|
Purchase
of equipment
|
|
|
(1,891
|
)
|
|
-
|
|
|
-
|
|
|
(63,540
|
)
|
Net
cash provided by (used in) investing activities
|
|
|
5,384,688
|
|
|
-
|
|
|
(59,247
|
)
|
|
1,829,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
from Officers
|
|
|
31,500
|
|
|
80,290
|
|
|
-
|
|
|
111,790
|
|
Repayment
of loans to officers
|
|
|
(111,790
|
)
|
|
-
|
|
|
-
|
|
|
(111,790
|
)
|
Sale
of common stock, net of expenses
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30,380,612
|
|
Shares
issued upon exercise of options
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
884,249
|
|
Sale
of shares by subsidiary
|
|
|
-
|
|
|
-
|
|
|
70,000
|
|
|
820,000
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,720,000
|
|
Net
cash provided by financing activities
|
|
|
(80,290
|
)
|
|
80,290
|
|
|
70,000
|
|
|
35,804,861
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
2,250,057
|
|
|
(2,696
|
)
|
|
(289,220
|
)
|
|
2,250,236
|
|
Cash
and cash equivalents at beginning of period
|
|
|
179
|
|
|
2,875
|
|
|
292,095
|
|
|
-
|
|
Cash
and cash equivalents at end of period
|
|
$
|
2,250,236
|
|
$
|
179
|
|
$
|
2,875
|
|
$
|
2,250,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes.
COASTAL
CARIBBEAN OILS & MINERALS, LTD.
(A
Bermuda Corporation)
A
Development Stage Company
CONSOLIDATED
STATEMENT OF COMMON STOCK
AND
CAPITAL IN EXCESS OF PAR VALUE
(Expressed
in U.S. dollars)
For
the
period from January 31, 1953 (inception) to December 31, 2005
|
|
|
|
|
|
Capital
in
|
|
|
|
Number
of
|
|
Common
|
|
Excess
|
|
|
|
Shares
|
|
Stock
|
|
of
Par Value
|
|
Shares
issued for net assets and unrecovered costs
|
|
|
|
|
|
|
|
at
inception
|
|
|
5,790,210
|
|
$
|
579,021
|
|
$
|
1,542,868
|
|
Sales
of common stock
|
|
|
26,829,486
|
|
|
3,224,014
|
|
|
16,818,844
|
|
Shares
issued upon exercise of stock options
|
|
|
510,000
|
|
|
59,739
|
|
|
799,760
|
|
Market
value ($2.375 per share) of shares issued in
|
|
|
|
|
|
|
|
|
|
|
1953
to acquire an investment
|
|
|
54,538
|
|
|
5,454
|
|
|
124,074
|
|
Shares
issued in 1953 in exchange for 1/3rd
of
a 1/60th
|
|
|
|
|
|
|
|
|
|
|
overriding
royalty (sold in prior year) in nonproducing
|
|
|
|
|
|
|
|
|
|
|
leases
of Coastal Petroleum
|
|
|
84,210
|
|
|
8,421
|
|
|
-
|
|
Market
value of shares issued for services rendered
|
|
|
|
|
|
|
|
|
|
|
during
the period 1954-1966
|
|
|
95,188
|
|
|
9,673
|
|
|
109,827
|
|
Net
transfers to restate the par value of common stock
|
|
|
|
|
|
|
|
|
|
|
outstanding
in 1962 and 1970 to $0.12 per share
|
|
|
-
|
|
|
117,314
|
|
|
(117,314
|
)
|
Increase
in Company's investment (equity) due to
|
|
|
|
|
|
|
|
|
|
|
capital
transactions of Coastal Petroleum in 1976
|
|
|
-
|
|
|
-
|
|
|
117,025
|
|
Balance
at December 31, 1990
|
|
|
33,363,632
|
|
|
4,003,636
|
|
|
19,395,084
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
300,000
|
|
Balance
at December 31, 1991
|
|
|
33,363,632
|
|
|
4,003,636
|
|
|
19,695,084
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
390,000
|
|
Balance
at December 31, 1992
|
|
|
33,363,632
|
|
|
4,003,636
|
|
|
20,085,084
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
1,080,000
|
|
Balance
at December 31, 1993
|
|
|
33,363,632
|
|
|
4,003,636
|
|
|
21,165,084
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
630,000
|
|
Balance
at December 31, 1994
|
|
|
33,363,632
|
|
|
4,003,636
|
|
|
21,795,084
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
600,000
|
|
Balance
at December 31, 1995
|
|
|
33,363,632
|
|
|
4,003,636
|
|
|
22,395,084
|
|
Sale
of common stock
|
|
|
6,672,726
|
|
|
800,727
|
|
|
5,555,599
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
480,000
|
|
Exercise
of stock options
|
|
|
10,000
|
|
|
1,200
|
|
|
12,300
|
|
Balance
at December 31, 1996
|
|
|
40,046,358
|
|
|
4,805,563
|
|
|
28,442,983
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
240,000
|
|
Exercise
of stock options
|
|
|
10,000
|
|
|
1,200
|
|
|
10,050
|
|
Balance
at December 31, 1997,1998 and 1999
|
|
|
40,056,358
|
|
|
4,806,763
|
|
|
28,693,033
|
|
Sale
of common stock
|
|
|
3,411,971
|
|
|
409,436
|
|
|
2,729,329
|
|
Compensation
recognized for stock option grant
|
|
|
-
|
|
|
-
|
|
|
75,000
|
|
Balance
at December 31, 2000 and 2001
|
|
|
43,468,329
|
|
|
5,216,199
|
|
|
31,497,362
|
|
Sale
of common stock
|
|
|
2,743,275
|
|
|
329,193
|
|
|
570,449
|
|
Balance
as of December 31, 2002
|
|
|
46,211,604
|
|
|
5,545,392
|
|
|
32,067,811
|
|
Sale
of subsidiary shares
|
|
|
-
|
|
|
-
|
|
|
70,000
|
|
Balance
as of December 31, 2003, 2004 and 2005
|
|
|
46,211,604
|
|
$
|
5,545,392
|
|
$
|
32,137,811
|
|
See
accompanying notes.
1. Summary of significant accounting policies
Consolidation
The
accompanying consolidated financial statements include the accounts of Coastal
Caribbean Oils & Minerals, Ltd., a Bermuda corporation (Coastal Caribbean)
and its wholly owned subsidiary, Coastal Petroleum Company (“Coastal
Petroleum”), referred to collectively as the Company. The Company, which has
been engaged in a single industry and segment, is considered to be a development
stage company since its exploration for oil, gas and minerals has not yielded
any significant revenue or reserves. All intercompany transactions have been
eliminated. Certain prior year amounts have been reclassified to conform with
the current year presentation.
Cash
and Cash Equivalents
The
Company considers all highly liquid short-term investments with maturities
of
three months or less at the date of acquisition to be cash equivalents.
Use
of
Estimates
The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The outcome of the litigation and the ability
to develop the Company’s oil and gas properties will have a significant effect
on the Company’s financial position and results of operations. Actual results
could differ from those estimates.
Unproved
Oil, Gas and Mineral Properties
The
Company follows the full cost method of accounting for its oil and gas
properties. All costs associated with property acquisition, exploration and
development activities whether successful or unsuccessful are capitalized.
The
capitalized costs are subject to a ceiling test which basically limits such
costs to the aggregate of the estimated present value discounted at a 10% rate
of future net revenues from proved reserves, based on current economic and
operating conditions, plus the lower of cost or fair market value of unproved
properties.
The
Company assesses whether its unproved properties are impaired on a periodic
basis. This assessment is based upon work completed on the properties to date,
the expiration date of its leases and technical data from the properties and
adjacent areas.
1. Summary of significant accounting policies
(Cont'd)
Prior
to
2005, the
Company’s undeveloped and nonproducing Florida properties were subject to
extensive
litigation with the State of Florida and all
costs
associated with oil and gas properties were deemed impaired and had been
expensed.
Sale
of Subsidiary Shares
All
amounts realized from the sale of Coastal Petroleum shares have been credited
to
capital in excess of par value.
Net
Income (Loss) Per Share
Net
income (loss) per common share is based upon the weighted average number of
common and common equivalent shares outstanding during the period. The Company’s
basic and diluted calculations of EPS are the same because the exercise of
options is not assumed in calculating diluted EPS, as the result would be
anti-dilutive.
Financial
instruments
The
carrying value for cash and cash equivalents, and accounts payable approximates
fair value based on anticipated cash flows and current market
conditions.
Stock
Based Compensation
The
Company uses the fair value based method of accounting for its stock option
plans. The Company applies APB Opinion No. 25 and related Interpretations in
accounting for stock issued to employees. Compensation expense resulting from
stock options issued under the stock option plan (Note 6) is measured at the
grant date based upon the difference between the exercise price and the market
value of the common stock. All stock options issued to employees during 2005
were granted at an exercise price equal to the market value at the date of
grant. Stock-based compensation arrangements involving non-employees are
accounted for under Statement of Financial Accounting Standards No. 123,
Accounting
for Stock-Based Compensation (“SFAS
123”). The Company provides the disclosure requirements of SFAS 123 and the
Statement of Financial Accounting Standards No. 148, Accounting
for Stock-Based Compensation - Transition and Disclosure - an amendment of
SFAS
123 for employee arrangements.
In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS
No.
123 (Revised 2004), Share-Based
Payments,
which
requires companies to expense stock options and other share-based payments.
SFAS
No. 123R supersedes SFAS No. 123, which permitted either expensing stock options
or providing pro forma disclosure. The provisions of SFAS No. 123R, which are
effective for fiscal periods beginning after December 15, 2005, apply to all
awards granted, modified, canceled, or repurchased after December 15, 2005,
as
well as the unvested portion of the prior awards.
Under
SFAS No. 123, the fair value of each option granted is estimated using the
Black-Scholes stock option pricing model. The following assumptions were made
in
estimating fair value of options issued to employees and directors: risk-free
interest rate of 4.52% in 2005; no dividend yield; expected life of five years;
and expected volatility of 146%. Had the compensation cost of stock options
issued to employees and directors been determined on the basis of fair value
pursuant to SFAS No. 123, the net income (loss) and earnings (loss) would have
been as follows:
|
|
2005
|
|
2004
|
|
2003
|
|
Net
income (loss):
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
6,765,844
|
|
$
|
(672,907
|
)
|
$
|
(1,008,180
|
)
|
Less:
stock-based employee and director compensation determined under the
fair
value method for all awards, net of related tax effect
|
|
|
73,000
|
|
|
-
|
|
|
-
|
|
Proforma
net income (loss)
|
|
$
|
6,692,844
|
|
$
|
(672,907
|
)
|
$
|
(1,008,180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted as reported
|
|
$
|
.15
|
|
$
|
(.01
|
)
|
$
|
(.02
|
)
|
Less:
stock-based employee and director compensation determined under the
fair
value method for all awards, net of related tax effect
|
|
|
.01
|
|
|
-
|
|
|
-
|
|
Proforma
earnings (loss) per share
|
|
$
|
.14
|
|
$
|
(.01
|
)
|
$
|
(.02
|
)
|
New
Accounting Pronouncements
The
Financial Accounting Standards Board (“FASB”) has issued several new standards
which have implementation dates subsequent to the Company’s year end. Management
does not believe that any of these new standards will have a material impact
on
the Company’s financial position, results of operations or cash
flows.
Going
Concern
The
Company has no recurring revenues, had recurring losses prior to 2005 and has
a
deficit accumulated during the development stage. We, along with various other
related parties, settled several lawsuits in 2005, which were filed by the
Company, our subsidiary Coastal Petroleum Company and other related parties
against the State of Florida (See Note 4). All of these lawsuits were related
to
the State’s actions limiting our ability to commence development activities
through our subsidiary. The cost of that litigation was substantial. Management
believes its current cash position will allow the Company to move forward to
explore and develop profitable oil and gas operations, although there is no
assurance these efforts will be successful.
These
situations raise substantial doubt about the Company’s ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts and classification of liabilities, which
may
result from the outcome of this uncertainty.
2. Coastal
Petroleum Company - Minority Interests
In
2005,
as part of the settlement with the State of Florida, Lykes Minerals Corp.
(Lykes), a wholly owned subsidiary of Lykes Bros. Inc. returned its 78 Coastal
Petroleum shares (26.35%) to Coastal Petroleum in order to receive compensation
from the State of Florida for all its rights and to cancel an agreement with
Lykes that entitled Lykes to exchange each Coastal Petroleum share for 100,000
Coastal Caribbean shares, subject to adjustment for dilution and other factors
and the right to exchange Coastal Petroleum shares for overriding royalty
interests in Coastal Petroleum's properties.
In
2005,
Coastal Petroleum also acquired 45 of its shares (15.20%) from others as part
of
the settlement with the State of Florida for $802,000. As Coastal Petroleum
had
no tangible or intangible assets at the time the shares were acquired, the
full
purchase price was assigned to goodwill. The Company reviewed its goodwill
related to Coastal Petroleum for impairment and determined the goodwill was
fully impaired. Therefore, an impairment charge of $802,000 was expensed in
2005.
Coastal
Petroleum is a wholly owned subsidiary of Coastal Caribbean at December 31,
2005.
3. Unproved
Oil, Gas and Mineral Properties
North
Dakota and Montana Leases
In
November 2005, the Company acquired a group of oil and gas lease rights to
approximately 103,557 acres in Montana for $1,568,000. These leases are subject
to a various overriding royalty interests to others up to 19.5%. The leases
expire in years from 2007 to 2014.
In
July
2005, the Company acquired the rights to drill two 6,500 foot wells to test
a
Mississippian Lodgepole Reef in Valley County, in northeast Montana for a one
time fee of $50,000 from an entity controlled by one of the Company’s Directors.
The Company is obligated to drill a test well before March 31, 2006 and has
the
option to drill fifty additional prospects in the Valley County area. The
Company estimates the cost to drill each of these test wells to be approximately
$500,000 and expects partners to participate for the bulk of
expenditures.
Also
in
July 2005, the Company acquired leases to the deeper rights in approximately
21,688 acres in and near Slope County, North Dakota for a one time fee of
$50,000 from an entity controlled by one of the Company’s Directors. The Company
is obligated to drill a test well before March 31, 2006, and has the option
to
drill the remaining Lodgepole Reef prospects on these leases. The Company plans
to again partner with other entities to share the cost of the initial 9,700
foot
test well the total estimated drilling cost of which would be approximately
$1,200,000.
The
Company is currently assessing its oil and gas leases and identifying
prospective drilling sites.
Florida
Leases
The
Florida Leases were surrendered to Florida as a part of the 2005 Agreement
with
Florida and are no longer held by the Company.
Prior
to
2005, Coastal Petroleum held three unproved and nonproducing oil, gas and
mineral leases granted by the Trustees of the Internal Improvement Fund of
the
State of Florida (Trustees). These leases cover submerged and unsubmerged lands,
principally along the Florida Gulf Coast, and certain inland lakes and rivers
throughout the State. The two leases bordering the Gulf Coast were divided
into
three areas, each running the entire length of the coastline from Apalachicola
Bay to the Naples area. Coastal Petroleum held certain royalty interests in
the
inner area, no interest in the middle area and a 100% working interest in the
outside area. Coastal Petroleum also held a 100% working interest in Lake
Okeechobee, and a royalty interest in other areas. Coastal Petroleum had agreed
not to conduct exploration, drilling, or mining operations on said lake, except
with prior approval of the Trustees.
4. Litigation
Settlement
Agreement with the State of Florida
The
State
paid out the settlement through an intermediary in July 2005 The total
settlement and the amount received by the Company was as follows:
Gross
settlement proceeds
|
|
$
|
12,500,000
|
|
|
|
|
|
|
Distribution
to other parties:
|
|
|
|
|
Lykes
Mineral Corporation
|
|
|
1,390,000
|
|
Outside
Royalty Holders
|
|
|
2,540,000
|
|
Settlement
Consultant
|
|
|
465,000
|
|
|
|
|
|
|
Gross
proceeds to Coastal
|
|
|
8,105,000
|
|
|
|
|
|
|
Purchase
of other CPC shares
|
|
|
802,000
|
|
Paid
to Coastal Creditors
|
|
|
2,431,000
|
|
|
|
|
|
|
Net
proceeds to Company
|
|
$
|
4,872,000
|
|
The
Company recorded a gain on its share of the settlement of $8,124,000 after
deducting all direct settlement costs and costs to cancel various royalty rights
related to the Florida leases.
The
settlement with the State of Florida in July 2005, included the closing and
dismissal of the following legal actions:
Drilling
Permit Litigation - Lease
Taking Case (Lease 224-A)
Drilling
Permit Litigation - Lease
Taking Case (Lease 224-B)
Royalty
Taking Case
Prior
to
2005, Coastal Petroleum had agreed to pay an aggregate of 7.9% in contingent
fees based on any net recovery from execution on or satisfaction of judgment
or
from settlement of the Florida litigation. No contingency fees were deemed
due
from the proceeds of the settlement agreement with the State of Florida, as
the
past costs and fees for the Florida Litigation exceed the amount of funds the
Company will receive under the Agreement.
5. Common Stock
The
Company's Bye-Law No. 21 provides that any matter to be voted upon must be
approved not only by a majority of the shares voted at such meeting, but also
by
a majority in number of the shareholders present in person or by proxy and
entitled to vote thereon.
5. Common Stock
(Cont'd)
On
March
10, 2003, the Company concluded the sale of two shares of Coastal Petroleum
at a
price of $25,000 per share. On October 7 and 28, 2003, the Company concluded
the
sale of two shares of Coastal Petroleum at a price of $10,000 per share. The
Company realized net proceeds of $70,000 in 2003 for these sales.
There
was
no activity in Common Stock during 2005 and 2004.
The
following represents shares issued upon sales of common stock:
|
|
Number
|
|
Common
|
|
Capital
in Excess
|
|
Year
|
|
of
Shares
|
|
Stock
|
|
of
Par Value
|
|
1953
|
|
|
300,000
|
|
$
|
30,000
|
|
$
|
654,000
|
|
1954
|
|
|
53,000
|
|
|
5,300
|
|
|
114,265
|
|
1955
|
|
|
67,000
|
|
|
6,700
|
|
|
137,937
|
|
1956
|
|
|
77,100
|
|
|
7,710
|
|
|
139,548
|
|
1957
|
|
|
95,400
|
|
|
9,540
|
|
|
152,492
|
|
1958
|
|
|
180,884
|
|
|
18,088
|
|
|
207,135
|
|
1959
|
|
|
123,011
|
|
|
12,301
|
|
|
160,751
|
|
1960
|
|
|
134,300
|
|
|
13,430
|
|
|
131,431
|
|
1961
|
|
|
127,500
|
|
|
12,750
|
|
|
94,077
|
|
1962
|
|
|
9,900
|
|
|
990
|
|
|
8,036
|
|
1963
|
|
|
168,200
|
|
|
23,548
|
|
|
12,041
|
|
1964
|
|
|
331,800
|
|
|
46,452
|
|
|
45,044
|
|
1965
|
|
|
435,200
|
|
|
60,928
|
|
|
442,391
|
|
1966
|
|
|
187,000
|
|
|
26,180
|
|
|
194,187
|
|
1967
|
|
|
193,954
|
|
|
27,153
|
|
|
249,608
|
|
1968
|
|
|
67,500
|
|
|
9,450
|
|
|
127,468
|
|
1969
|
|
|
8,200
|
|
|
1,148
|
|
|
13,532
|
|
1970
|
|
|
274,600
|
|
|
32,952
|
|
|
117,154
|
|
1971
|
|
|
299,000
|
|
|
35,880
|
|
|
99,202
|
|
1972
|
|
|
462,600
|
|
|
55,512
|
|
|
126,185
|
|
1973
|
|
|
619,800
|
|
|
74,376
|
|
|
251,202
|
|
1974
|
|
|
398,300
|
|
|
47,796
|
|
|
60,007
|
|
1975
|
|
|
-
|
|
|
-
|
|
|
(52,618
|
)
|
1976
|
|
|
-
|
|
|
-
|
|
|
(8,200
|
)
|
1977
|
|
|
850,000
|
|
|
102,000
|
|
|
1,682,706
|
|
1978
|
|
|
90,797
|
|
|
10,896
|
|
|
158,343
|
|
1979
|
|
|
1,065,943
|
|
|
127,914
|
|
|
4,124,063
|
|
1980
|
|
|
179,831
|
|
|
21,580
|
|
|
826,763
|
|
1981
|
|
|
30,600
|
|
|
3,672
|
|
|
159,360
|
|
1983
|
|
|
5,318,862
|
|
|
638,263
|
|
|
1,814,642
|
|
1985
|
|
|
-
|
|
|
-
|
|
|
(36,220
|
)
|
1986
|
|
|
6,228,143
|
|
|
747,378
|
|
|
2,178,471
|
|
1987
|
|
|
4,152,095
|
|
|
498,251
|
|
|
2,407,522
|
|
1990
|
|
|
4,298,966
|
|
|
515,876
|
|
|
26,319
|
|
1996
|
|
|
6,672,726
|
|
|
800,727
|
|
|
5,555,599
|
|
2000
|
|
|
3,411,971
|
|
|
409,436
|
|
|
2,729,329
|
|
2002
|
|
|
2,743,275
|
|
|
329,193
|
|
|
570,449
|
|
|
|
|
39,657,458
|
|
$
|
4,763,370
|
|
$
|
25,674,221
|
|
5. Common Stock
(Cont'd)
The
following represents shares issued upon exercise of stock options:
|
|
Number
|
|
Common
|
|
Capital
in Excess
|
|
Year
|
|
of
Shares
|
|
Stock
|
|
of
Par Value
|
|
1955
|
|
|
73,000
|
|
$
|
7,300
|
|
$
|
175,200
|
|
1978
|
|
|
7,000
|
|
|
840
|
|
|
6,160
|
|
1979
|
|
|
213,570
|
|
|
25,628
|
|
|
265,619
|
|
1980
|
|
|
76,830
|
|
|
9,219
|
|
|
125,233
|
|
1981
|
|
|
139,600
|
|
|
16,752
|
|
|
227,548
|
|
1996
|
|
|
10,000
|
|
|
1,200
|
|
|
12,300
|
|
1997
|
|
|
10,000
|
|
|
1,200
|
|
|
10,050
|
|
|
|
|
530,000
|
|
$
|
62,139
|
|
$
|
822,110
|
|
6.
Stock
Option Plans
At
December 31, 2005, the Company maintains two stock-based employee compensation
plans.
During
1995, the Company adopted a Stock Option Plan covering 1,000,000 shares of
the
Company’s common stock. In July 2005, the Company issued an option to its
president to acquire 50,000 shares of the Company’s common stock at a price of
$.15 per share under the Company’s stock option plan. The option expires in ten
years. The Company determined the fair value of the stock did not exceed the
exercise price on the date of issue and no expense was recorded in
2005.
Unexcercised
options that existed prior to the 2005 Agreement with the State of Florida
were
terminated by the Agreement or the releases exchanged during the process of
closing the Agreement.
In
December 2005, the Company issued options to its directors to acquire 200,000
shares of the Company’s common stock at a price of $.15 per share. The option
expires in December 2015
The
Company determined the fair value of the stock did not exceed the exercise
price
on the date of issue..
During
2005, the Company adopted a Stock Option Plan covering 2,300,000 shares of
the
Company’s common stock. In September 2005, the Company issued an option to its
president to acquire 250,000 shares of the Company’s common stock at a price of
$..15 per share under the Company’s stock option plan, subject to the approval
of the Plan by shareholders. The Plan was approved at the shareholders meeting
on December 9, 2005. The option expires in ten years. The Company determined
the
fair value of the stock did not exceed the exercise price on the date of issue
.
The
Company applies APB Opinion No. 25, Accounting
for Stock Issued to Employees,
in
accounting for options issued to employees, which is referred to as the
intrinsic value method. Under that method no expense related to their issuance
has been recognized in the accompanying financial statements.
The
following table summarizes employee stock option activity:
Employee
Options outstanding
|
|
Number
of Shares
|
|
Range
of Per Share Option Price ($)
|
|
Weighted
Average Exercise Price ($)
|
|
Aggregate
Option Price ($)
|
|
Outstanding
and exercisable at December 31, 2003 and 2004
|
|
|
700,000
|
|
|
.91
|
|
|
.91
|
|
|
637,000
|
|
Nullified,
cancelled or released during 2005
|
|
|
(700,000
|
)
|
|
.91
|
|
|
.91
|
|
|
637,000
|
|
Issued
during 2005
|
|
|
500,000
|
|
|
.15
|
|
|
.15
|
|
|
75,000
|
|
Outstanding
and exercisable at December 31, 2005
|
|
|
500,000
|
|
|
.15
|
|
|
.15
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available
for grant at December 31, 2005
|
|
|
2,775,000
|
|
|
|
|
|
|
|
|
|
|
Summary
of Employee Options Outstanding at December 31,
2005
|
|
|
|
|
|
|
|
Year
Granted
|
|
Number
of Shares
|
|
Expiration
Date
|
|
Exercise
Prices ($)
|
|
Granted
2005
|
|
|
50,000
|
|
|
July
25, 2015
|
|
|
.15
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
2005
|
|
|
250,000
|
|
|
Dec.
20, 2015
|
|
|
.15
|
|
Granted
2005
|
|
|
200,000
|
|
|
Dec.
20, 2015
|
|
|
.15
|
|
The
weighted-average remaining contractual life of the outstanding stock options
at
December 31, 2005, 2004 and 2003 was 10 years, 8 years and 9 years,
respectively.
Nonqualified
Stock Options
In
July
2005, the Company issued an option to its legal counsel to acquire 25,000 shares
of the Company’s common stock at a price of $.15 per share. The option expires
in July 2015. The market value of the stock equaled the exercise price on the
date of issue.
A
summary
of non-employee option activity follows:
Non-Employee
Options outstanding
|
|
Number
of Shares
|
|
Range
of Per Share Option Price ($)
|
|
Weighted
Average Exercise Price ($)
|
|
Aggregate
Option Price ($)
|
|
Outstanding
and exercisable at December 31, 2003 and 2004.
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Nullified,
cancelled or released during 2005.
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Issued
during 2005.
|
|
|
25,000
|
|
|
.15
|
|
|
.15
|
|
|
3,750
|
|
Outstanding
and exercisable at December 31, 2005.
|
|
|
25,000
|
|
|
.15
|
|
|
.15
|
|
|
3,750
|
|
The
Company follows SFAS 123 in accounting for stock options issued to
non-employees. The fair value of each option granted is estimated using the
Black-Scholes stock option pricing model. The following assumptions were made
in
estimating fair value: risk-free interest rate of 4.52% in 2005; no dividend
yield; expected life of five years; expected volatility of 144%.
The
following table summarizes information about non-employee stock
options:
Summary
of Non Employee Options Outstanding at December 31,
2005
|
Year
Granted
|
|
Number
of Shares
|
|
Expiration
Date
|
|
Exercise
Prices ($)
|
|
Granted
2005
|
|
|
25,000
|
|
|
July
25, 2015
|
|
|
.15
|
|
7. Income taxes
Bermuda
currently imposes no taxes on corporate income or capital gains outside of
Bermuda. The Company currently has net taxable income as the result of the
gain
on settlement. The Company will be able to deduct approximately $1,600,000
in
temporary differences and offset the remaining income tax liability using
approximately $1,900,000 of its $10,700,000 net operating loss carry forward.
However, the Company estimates it will have approximately $35,000 due under
the
Alternative Minimum Tax. The Company will have approximately $8,800,000 in
net
operating losses to carry forward to 2006.The remaining net operating loss
carry
forwards expire in periods from 2009 through 2024 as follows: $61,000 in 2009,
$571,000 in 2010, $955,000 in 2011, $1,281,000 in 2012, $757,000 in 2018,
$622,000 in 2019, $749,000 in 2020, $1,884,000 in 2021, $1,693,000 in 2022,
$132,000 in 2023 and $51,000 in 2024. For financial reporting purposes, a
valuation allowance has been recognized to offset the deferred tax assets
relating to those carry forwards. Significant components of the Company’s
deferred tax assets were as follows:
|
|
2005
|
|
2004
|
|
Net
operating losses
|
|
$
|
3,300,000
|
|
$
|
4,024,000
|
|
Accruals
to related parties
|
|
|
-
|
|
|
268,000
|
|
Write
off of unproved properties
|
|
|
-
|
|
|
1,831,000
|
|
Total
deferred tax assets
|
|
|
3,300,000
|
|
|
6,123,000
|
|
Valuation
allowance
|
|
|
(3,300,000
|
)
|
|
(6,123,000
|
)
|
Net
deferred tax assets
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Components
of the income tax provision are as follows:
|
|
2005
|
|
2004
|
|
Provision
for income taxes
|
|
|
|
|
|
Current
provision for income taxes
|
|
$
|
1,345,000
|
|
$
|
-
|
|
Provision
for deferred tax liability
|
|
|
-
|
|
|
-
|
|
Benefit
of other deductible carryforward items
|
|
|
(617,000
|
)
|
|
-
|
|
Benefit
of net operating loss
|
|
|
(693,000
|
)
|
|
(253,000
|
)
|
Deferred
asset valuation allowance (reversal)
|
|
|
-
|
|
|
253,000
|
|
|
|
|
|
|
|
|
|
Net
income tax provision
|
|
$
|
35,000
|
|
$
|
-
|
|
8. Related
party transactions
Oil
and Gas Exploration Activities
In
2005,
the Company acquired various oil and gas rights for one time fees of $100,000
from an entity controlled by one of the Company’s Directors.
The
Company uses an entity controlled by one of the Company’s Directors to perform
geotechnical analysis of potential drilling sites at a cost of $500 per site
plus expenses. The Company has paid $50,000 to this entity as of
2005.
Loans
Since
2003, Robert Angerer Sr. and Phillip Ware loaned the Company a total of
$112,000, which was repaid in 2005.
Services
The
Company was billed $72,000 in fees by Angerer & Angerer during 2005 and was
billed annually $288,000 by Angerer & Angerer in 2004 and 2003. Robert
Angerer, Sr. was elected a director of Coastal Caribbean and of Coastal
Petroleum on January 30,
2003
and
re-elected a Vice President of Coastal Caribbean and Coastal Petroleum in
December 2005.
The
Company was billed $44,022 for legal fees by the law firm of Igler &
Dougherty, PA, during 2005 and $7,725 in fees during 2004. Mr. Herbert D.
Haughton, a shareholder of the firm, was elected a director of Coastal Caribbean
and of Coastal Petroleum in December 2005.
At
December 31, 2004, accounts payable included accrued fees from related parties
of $129,000, $268,000 and $597,000 due to G&OD, INC, Murtha Cullina LLP and
Angerer & Angerer, respectively and those amounts were paid in 2005.
Murtha
Cullina LLP provided legal services to the Company prior to 2004. Mr. Timothy
L.
Largay, a partner of the firm of Murtha Cullina LLP, was a director and Vice
President of the Company from January 15, 2001 until his resignation on October
7, 2002. G&O’D INC provided accounting and administrative services prior to
2004. G&O’D INC was owned by Mr. James R. Joyce, who was the Company
Treasurer and Assistant Secretary, until his retirement in December 2002.
9. Selected
quarterly financial data (unaudited)
The
following is a summary (in thousands, except for per share amounts) of the
quarterly results of operations for the years ended December 31, 2005 and
2004:
2005
|
|
QTR
1
|
|
QTR
2
|
|
QTR
3
|
|
QTR
4
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Expenses
|
|
|
(88
|
)
|
|
(66
|
)
|
|
(185
|
)
|
|
(233
|
)
|
Gains
and other income
|
|
|
-
|
|
|
-
|
|
|
8,147
|
|
|
28
|
|
Income
Taxes
|
|
|
-
|
|
|
-
|
|
|
(35
|
)
|
|
-
|
|
Impairment
of goodwill
|
|
|
-
|
|
|
-
|
|
|
(802
|
) |
|
-
|
|
Net
income (loss)
|
|
|
(88
|
)
|
|
(66
|
)
|
|
7,125
|
|
|
(205
|
)
|
Per
share (basic & diluted)
|
|
|
(.002
|
)
|
|
(.001
|
)
|
|
.154
|
|
|
(.004
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
46,212
|
|
|
46,212
|
|
|
46,212
|
|
|
46
212
|
|
2004
|
|
QTR
1
|
|
QTR
2
|
|
QTR
3
|
|
QTR
4
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Expenses
|
|
|
(192
|
)
|
|
(171
|
)
|
|
(152
|
)
|
|
(158
|
)
|
Gains
and other income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Income
Taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net
income (loss)
|
|
|
(192
|
)
|
|
(171
|
)
|
|
(152
|
)
|
|
(158
|
)
|
Per
share (basic & diluted)
|
|
|
(.004
|
)
|
|
(.004
|
)
|
|
(.003
|
)
|
|
(.003
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
46,212
|
|
|
46,212
|
|
|
46,212
|
|
|
46,212
|
|
Item
9A. Controls
and Procedures
|
a. |
Evaluation
of disclosure controls and procedures.
The Company maintains controls and procedures designed to ensure
that
information required to be disclosed in the reports that the Company
files
or submitsunder the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified
in
the rules and forms of the Securities and Exchange Commission. As
required by Rule 13a-15(b) under the Exchange Act, our Chief Executive
Officer who is also our Chief Financial Officer carried out an evaluation
of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this
report. The Company’s Chief Executive Officer has concluded that the
Company’s disclosure controls and procedures, as of December 31, 2005 were
effective.
|
|
b. |
Changes
in internal controls.
The Company made no changes in its internal control over financial
reporting that occurred during the Company’s fourth fiscal quarter that
has materially affected, or which is reasonably likely to materially
affect the Company’s internal control over financial
reporting.
|
Exhibits
The
following exhibits are filed as part of this report:
|
31.1 |
Certification
of Chief Executive Officer and Principal Financial Officer Required
by
Rule 13a-14(a)-15d-14(a) under the Exchange
Act
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 executed
by Phillip W. Ware. |
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this amended report to be signed on its
behalf by the undersigned, thereunto duly authorized.
|
|
|
|
COASTAL
CARIBBEAN OILS & MINERALS, LTD.
(Registrant)
|
|
|
|
Dated:
January
31, 2007 |
By: |
/s/
Phillip W. Ware |
|
Phillip
W. Ware,
President and
Chief
Executive Officer
|
|
|
INDEX
TO EXHIBITS
Exhibit
No.
|
31.1 |
Certification
pursuant to Rule 13a-14 by Phillip W.
Ware
|
|
32.1 |
Certification
pursuant to Section 906 by Phillip W.
Ware
|