UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
Form 10-QSB
(x) Quarterly Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1999
( ) Transition Report Pursuant To Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the transition period from
Commission File Number 000-25579
HADRO RESOURCES INC.
(Exact name of registrant as specified in charter)
Nevada 87-0571853
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
145 Tyee Road #1526
Point Roberts, Washington 98281
(Address of principal executive offices and Zip Code)
604-943-7515
Registrant's telephone number, including area code
None
(Former name, address, and fiscal year, if changed since last report)
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), Yes (X) No ( ) and
(X) has been subject to filing requirements for the past 90 days Yes (X) 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 last practicable date.
Class Outstanding as of September 30, 1999
Common Stock, $0.001 per share 13,054,200
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INDEX
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<S> <C> <C>
PART 1. Description Page No
- ------- ----------- -------
ITEM 1. Financial Statements (unaudited) 3
Balance Sheet as at September 30, 1999 4
Statement of Operations
For the three and six months
ended September 30, 1999 and 1998
and for the period from December 3,
1997 (Date of Incorporation) to
September 30, 1999 5
Statement of Changes in Shareholders
Equity 6
For the period from December 3, 1997\
Date of Incorporation) to September 30,1999 6
Statement of Cash Flows
For the six months ended September 30,
1999 and 1998 and the period from
December 3,1997 (Date of Incorporation)
to September 30, 1999 7
Notes to the Financial Statements 8
ITEM 2. Plan of Operations 10
ITEM 5. Exhibits and Reports on Form 8-K 10
PART 11 Signatures 10
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheet of Hadro Resources Inc. (an exploration stage
company) at September 30, 1999 and December 31, 1998, and the statements of
operations for the three and six months ended September 30, 1999 and 1998 and
the period from December 3, 1997 (date of incorporation) to September 30, 1999
the cash flows and the statement of stockholders' equity for the six months
ended September 30, 1999 and 1998, and the period from December 3, 1997 (date
of Incorporation) to September 30, 1999 have been prepared by the Company's
management and they do not include all information and notes to the financial
statements necessary for a complete presentation of the financial position,
results of operations, cash flows, and stockholders' equity in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature.
Operating results for the quarter ended September 30, 1999 are not necessarily
indicative of the results that can be expected for the year ending December 31,
1999.
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<CAPTION>
HADRO RESOURCES, INC.
(Exploration Stage Company)
BALANCE SHEETS
September 30, 1999 and December 31, 1998
- --------------------------------------------------------------------------
September 30 Dec 31
1999 1998
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 18,635 $ 59,139
---------- ---------
Total Current Asset 18,635 59,139
OTHER ASSETS
Mineral leases - Note 3 - -
-------- --------
$ 18,635 $ 59,139
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related parties. . . . .$ 509 $ 115
Accounts payable 8,152 15
-------- --------
Total Current Liabilities 8,661 130
STOCKHOLDERS' EQUITY
Common stock
100,000,000 shares authorized, at $0.001
par value; 13,054,200 shares issued and
outstanding 13,054 13,054
Capital in excess of par value 111,995 76,994
Deficit accumulated during the
development stage (115,075) (31,039)
--------- ---------
Total Stockholders' Equity 9,974 57,009
$ 18,635 $ 57,139
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The accompanying notes are an integral part of these financial statements.
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<CAPTION>
HADRO RESOURCES, INC.
(Exploration Stage Company)
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 1999, and 1998
and the Period from December 3, 1997 (Date of Inception) to September 30, 1999
- -------------------------------------------------------------------------------
Three Months Three Months Nine Months Nine Months Dec 3, 1997
Sept 30, Sept 30, Sept 30, Sept 30, to
1999 1998 1999 1998 Sept 30, 1999
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
EXPENSES 4,120 1,656 84,036 20,530 115,075
NET LOSS $(4,120) $(1,656) $(84,036) $(20,530) $(115,075)
GAIN (LOSS)
PER COMMON
SHARE -
Basic $ - $ - $ - $ - $ -
AVERAGE
OUTSTANDING
SHARES 13,054,200 12,910,000 13,054,200 12,910,000
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The accompanying notes are an integral part of these financial statements.
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<CAPTION>
HADRO RESOURCES INC.
(Exploration Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from December 3, 1997 (Date of Inception)
to September 30, 1999
- -------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
------ ------ ----------- -----------
<S> <C> <C> <C> <C>
Balance December 3, 1997
date of inception) - $ - $ - $ -
Issuance of common stock
for cash at $.001 -
February through July 1998 12,350,000 12,350 - -
Issuance of common stock for
Cash at $.01 - July 1998 560,000 560 5,040 -
Issuance of common stock for
Cash at $.50 - July 1998 114,000 114 56,886 -
Issuance of common stock for
Cash at $.50 - August 1998 30,200 30 15,068 -
Net operating loss for the
Year Ended December 31, 1998 - - - (31,038)
---------- ------- ------- ---------
Balance December 31, 1998 13,054,200 13,054 76,994 (31,038)
Contribution to capital -
expenses paid by officers - - 35,001 -
Net operating loss for the
six months ended September 30, 1999 - - - (84,036)
---------- ------- ------- --------
Balance September 30, 1999 13,054,200 $ 13,054 $111,995 (115,075)
========== ======== ======== ========
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The accompanying notes are an integral part of these financial statements.
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<CAPTION>
HADRO RESOURCES, INC.
(Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the Six Months Ended September 30, 1999 and 1998 and the
Period from December 3, 1997 (Date of Inception) to September 30, 1999
- -------------------------------------------------------------------------------
Sept 30 Sept 30 Dec 3, 1998
1999 1998 to Sept 30, 1999
---------- -------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(84,036) $(20,530) $ (111,075)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Contributions to capital -
expenses 35,001 - 35,001
Changes in accounts payable 8,531 10,002 8,661
------- -------- ---------
Net (decrease) in Cash From
Operations (40,504) (10,528) (71,413)
-------- -------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of mineral lease - - -
-------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of
common stock - 68,948 90,048
Net Increase (Decrease) --------- ------- --------
in Cash (40,504) 58,420 18,635
Cash at Beginning of Period 59,139 - -
------- ------- --------
Cash at End of Period $ 18,635 $58,420 $ 18,635
======== ======= ========
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The accompanying notes are an integral part of these financial statements
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HADRO RESOURCES, INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on December
3, 1997 with authorized common stock of 100,000,000 shares at $0.001 par value
with the name "Hadrosaurus Resources, Inc". On January 12, 1998 the name was
changed to Hadro Resources Inc.
The Company was organized for the purpose of acquiring and developing oil and
gas leases.
The Company is in the exploration stage.
Since its inception the Company has completed a Regulation D offering of
4,174,200 shares of its capital stock for cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1998, the Company had a net operating loss carry forward of
$31,039. The tax benefit from the loss carry forward has been fully offset by
a valuation reserve because the use of the future tax benefit is doubtful, since
the Company has no operations and is unable to project any reliable future
net profits.
Earnings (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding in accordance with FASB statement No.
128.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity,
at the time of purchase, of less than three months, to be cash equivalents.
Capitalization of Oil Leases Costs
The Company uses the successful efforts cost method for recording its oil
lease interests, which provides for capitalizing the purchase price of the
project and the additional costs directly related to proving the properties and
amortizing these amounts over the life of the reserve when operations begin or a
shorter period if the property is shown to have an impairment in value or
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expensing the remaining balance if proven of no value. Expenditures for oil
well equipment are capitalized and depreciated over their useful lives.
Environmental Requirements
At the report date environmental requirements related to the oil and gas
leases acquired (note 3) are unknown and therefore an estimate of any future
cost cannot be made.
Financial Instruments
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values. These
values are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
3. ACQUISITION OF MINERAL LEASES
During September 1999 the Company acquired a 100% working interest in 35 oil
And Gas leases covering 6,174 acres located in Union County, New Mexico with
An Annual rental of $.25 per acre until 2002 and then $.50 per acre until 2007.
The Leases carry a royalty of 16.5%
4. RELATED PARTY TRANSACTIONS
Related parties have acquired 58% of the common stock issued.
5. GOING CONCERN
The Company does not have the necessary assets to be successful in its efforts
to develop its oil and gas properties and will need to acquire additional
working capital.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding, and long term financing, which will enable the Company to
operate in the future.
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ITEM 2. PLAN OF OPERATIONS
During the next 12 months, the Company will acquire additional oil and gas
leases in Union County, New Mexico and Animas County, Colorado and any
additional properties that may warrant acquisition. The Company will have to
raise additional funds either by way of advances from the officers and
directors, institutional borrowing or through the issuance of the Company's
common stock.
The Company is currently seeking a joint venture partner/operator to perform
exploration activities on the properties. Proposed activities include
consolidating lease blocks through purchase or optioning leases, continue
research and exploration to include drilling, if warranted. Successful
completion will result in gas well production by August 2000.
Liquidity and Capital Resources
The Company will need additional working capital to finance its activities on
the New Mexico leases.
Results of Operations
There are no operations at this time.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Registrant incorporates herein by reference all exhibits previously
filed with Form 10SB on March 18, 1999, except for the following new
exhibits filed herein:
Exhibit No. 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
----------
In accordance with Section 12 of the Securities Exchange Act of 1934, the
company caused this Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.
HADRO RESOURCES INC.
(Registrant)
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<S> <C>
September 27, 1999 /s/ Frank W. Donis
Date Chief Executive Officer
September 27, 1999 /s/ Marilyn Rafter
Date Director
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<ARTICLE> 5
<CIK> 0001057226
<NAME> Hadro Resources Inc.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 18635
<SECURITIES> 0
<RECEIVABLES> 0
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0
0
<COMMON> 13054
<OTHER-SE> 111995
<TOTAL-LIABILITY-AND-EQUITY> 18635
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<CGS> 0
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<OTHER-EXPENSES> 84036
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (84036)
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<EXTRAORDINARY> 0
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<NET-INCOME> (84036)
<EPS-BASIC> 0
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