from the 10q released Nov 5,2019:
"As of September 30, 2019, we had approximately $3,380,000 in cash and cash equivalents compared to $2,791,000 at December 31, 2018, which does not include any restricted funds. Our working capital (current assets minus current liabilities) was $2,987,000 at September 30, 2019 and $537,000 at December 31, 2018. The derivative liability at September 30, 2019 was $173,000 and $345,000 at December 31, 2018, and this non-cash liability negatively impacts the working capital figure. Our working capital balances, exclusive of the non-cash derivative liability amounts, were $3,160,000 at September 30, 2019 and $882,000 at December 31, 2018.
As of September 30, 2019, we provided bank guarantees to various governmental bodies (approximately $1,183,000) and others (approximately $87,000) in respect of our drilling operation and seismic program in the aggregate amount of approximately $1,270,000. The (cash) funds backing these guarantees and additional amounts added to support currency fluctuations as required by the bank are held in restricted interest-bearing accounts and are reported on the Company’s balance sheets as fixed short-term bank deposits – restricted.
During the nine months ended September 30, 2019, cash used in operating activities totaled $4,429,000. Cash provided by financing activities during the nine months ended September 30, 2019 was $8,890,000 and is primarily attributable to proceeds received from the DSPP. Net cash used in investing activities, primarily related to the 3-D seismic shoot in the MJL, and other assets was $3,944,000 for the nine months ended September 30, 2019.
During the nine months ended September 30, 2018, cash used in operating activities totaled $4,174,000. Cash provided by financing activities during the nine months ended September 30, 2018 was $15,659,000 and is primarily attributable to proceeds received from the DSPP and Subscription Rights Offering. Net cash used in investing activities, primarily for oil and gas exploration and testing on the MJL #1 well, and other assets was $13,908,000 for the nine months ended September 30, 2018.
We expect to incur additional significant expenditures to further our exploration and development programs. While we raised approximately $8,900,000 during the nine months ended September 30, 2019, we will need to raise additional funds in order to interpret and analyze new 3-D seismic data in our license area. Additionally, we estimate that, when we are not actively drilling a well, our expenditures are approximately $500,000 per month excluding exploratory operational activities. However, when we are actively drilling a well, we estimate an additional minimum expenditure of approximately $2,500,000 per month. Zion expects that during a period of active seismic data acquisition the expenditures to be approximately $1,500,000 to $2,500,000. The above estimates are subject to change. Management believes that our existing cash balance, coupled with anticipated proceeds under the DSPP, will be sufficient to finance our plan of operations through March 2020. In addition, reference is also made to the legal proceedings referred to in Item 1 of this report relating to lawsuits filed against us following the disclosure of the SEC investigation. While we paid an advanced deposit in the amount of $500,000, any unforeseen or unexpected outlays in this regard may adversely affect our available funds or additional amounts that we may need to raise.
No assurance can be provided that we will be able to raise the needed operating capital on commercially acceptable terms or at all.
41
Even if we raise the needed funds, there are factors that can nevertheless adversely impact our ability to fund our operating needs, including (without limitation), unexpected or unforeseen cost overruns in planned non-drilling exploratory work (e.g., seismic acquisition costs, permitting and surface damages and importation of equipment into Israel, etc.) in existing license areas, the costs associated with extended delays in undertaking the required exploratory work, and plugging and abandonment activities which is typical of what we have experienced in the past.
Reference is made to the discussion above under Capital Resources Highlights for information relating to working capital that we raised through September 30, 2019. Additionally, reference is made to Footnote 9 (Subsequent Events) with respect to an additional estimated amount of $1,658,000 raised during October 2019.
"As of September 30, 2019, we had approximately $3,380,000 in cash and cash equivalents compared to $2,791,000 at December 31, 2018, which does not include any restricted funds. Our working capital (current assets minus current liabilities) was $2,987,000 at September 30, 2019 and $537,000 at December 31, 2018. The derivative liability at September 30, 2019 was $173,000 and $345,000 at December 31, 2018, and this non-cash liability negatively impacts the working capital figure. Our working capital balances, exclusive of the non-cash derivative liability amounts, were $3,160,000 at September 30, 2019 and $882,000 at December 31, 2018.
As of September 30, 2019, we provided bank guarantees to various governmental bodies (approximately $1,183,000) and others (approximately $87,000) in respect of our drilling operation and seismic program in the aggregate amount of approximately $1,270,000. The (cash) funds backing these guarantees and additional amounts added to support currency fluctuations as required by the bank are held in restricted interest-bearing accounts and are reported on the Company’s balance sheets as fixed short-term bank deposits – restricted.
During the nine months ended September 30, 2019, cash used in operating activities totaled $4,429,000. Cash provided by financing activities during the nine months ended September 30, 2019 was $8,890,000 and is primarily attributable to proceeds received from the DSPP. Net cash used in investing activities, primarily related to the 3-D seismic shoot in the MJL, and other assets was $3,944,000 for the nine months ended September 30, 2019.
During the nine months ended September 30, 2018, cash used in operating activities totaled $4,174,000. Cash provided by financing activities during the nine months ended September 30, 2018 was $15,659,000 and is primarily attributable to proceeds received from the DSPP and Subscription Rights Offering. Net cash used in investing activities, primarily for oil and gas exploration and testing on the MJL #1 well, and other assets was $13,908,000 for the nine months ended September 30, 2018.
We expect to incur additional significant expenditures to further our exploration and development programs. While we raised approximately $8,900,000 during the nine months ended September 30, 2019, we will need to raise additional funds in order to interpret and analyze new 3-D seismic data in our license area. Additionally, we estimate that, when we are not actively drilling a well, our expenditures are approximately $500,000 per month excluding exploratory operational activities. However, when we are actively drilling a well, we estimate an additional minimum expenditure of approximately $2,500,000 per month. Zion expects that during a period of active seismic data acquisition the expenditures to be approximately $1,500,000 to $2,500,000. The above estimates are subject to change. Management believes that our existing cash balance, coupled with anticipated proceeds under the DSPP, will be sufficient to finance our plan of operations through March 2020. In addition, reference is also made to the legal proceedings referred to in Item 1 of this report relating to lawsuits filed against us following the disclosure of the SEC investigation. While we paid an advanced deposit in the amount of $500,000, any unforeseen or unexpected outlays in this regard may adversely affect our available funds or additional amounts that we may need to raise.
No assurance can be provided that we will be able to raise the needed operating capital on commercially acceptable terms or at all.
41
Even if we raise the needed funds, there are factors that can nevertheless adversely impact our ability to fund our operating needs, including (without limitation), unexpected or unforeseen cost overruns in planned non-drilling exploratory work (e.g., seismic acquisition costs, permitting and surface damages and importation of equipment into Israel, etc.) in existing license areas, the costs associated with extended delays in undertaking the required exploratory work, and plugging and abandonment activities which is typical of what we have experienced in the past.
Reference is made to the discussion above under Capital Resources Highlights for information relating to working capital that we raised through September 30, 2019. Additionally, reference is made to Footnote 9 (Subsequent Events) with respect to an additional estimated amount of $1,658,000 raised during October 2019.
1
