UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-KSB
( ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES ACT OF
1934 9(FEE REQUIRED)
For the fiscal year ended December 31, 1999
-------------------
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES
EXCHANGE AGE OF 1934 (NO FEE REQUIRED)
for the transaction period from to
Commission File number 000-25579
---------
HADRO RESOURCES, INC.
(Exact name of Company as specified in charter)
NEVADA 87-0571853
------ ----------
State or other jurisdiction of (I.R.S. Employee
Incorporation I.D. No.)
145 Tyee Road #1526 Point Roberts, Washington 98281
- --------------------------------------------------- -------
(Address of principal executive offices) (Zip code)
Issuer's telephone number, incl area code: (604) 943-7515
---------------
Securities registered pursuant to section 12 (b) of the Act:
TITLE OF EACH SHARE NAME OF EACH EXCHANGE ON WHICH
- -------------------- ------------------------------
REGISTERED:
-----------
None None
---- ----
Securities registered pursuant to Section 12 (g) of the Act:
None
--------------
(Title of Class)
Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act
during the past 12 months (or for a shorter period that the Company was
required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes( X ) No ( ) (2) Yes( X ) No( )
<PAGE>
Check if there is no disclosure of delinquent filers in repsonse to Item 405 of
Regulation S-B is not contained in
this form, and no disclosure will be contained, to the best of the Company's
knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to
this Form 10-KSB ( )
State issuer's revenues for its most recent fiscal year $ -0-
---
State the aggregate market value of the voting stock held by nonaffiliates of
the Company. The aggregate
market value shall be computed by reference to the price at which the stock was
sold, of the
average bid and asked prices of such stock, as of a specific date within the
past 60 days.
As at December 31, 1999 the aggregate market value of the voting stock held by
nonaffiliates is undeterminable
and is considered to be 0
THE COMPANY INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE LAST FIVE YEARS.
Not applicable
APPLICABLE ONLY TO CORPORATE COMPANYS
As of December 31, 1999, the Company has 13.054,200 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the part
of this Form 10-KSB (eg.
Part I, part II, etc) into which the documents is incorporated:
(1) Any annual report to securities holders;
(2) Any proxy or other information statement;
(3) Any prospectus filed pursuant to Rule 424 (b) or (c) under the
Securities act of 1933.
NONE
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1 DESCRIPTION OF BUSINESS
ITEM 2 DESCRIPTION OF PROPERTY
ITEM 3 LEGAL PROCEEDINGS
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SECURITIES HODLERS
PART II
ITEM 5 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
ITEM 7 FINANCIAL STATEMENTS
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT.
ITEM 10 EXECUTIVE COMPENSATION
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
ITEM 13 EXHIBITS
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Hadro Resources, Inc. (the "Company") was incorporated in the State of Nevada on
December 3, 1997 under the name Hadrosaurus Resources, Inc. On January 20,
1998, the Company filed an Amendment to its Articles of Incorporation changing
the name of the Company to Hadro Resources, Inc. The Company is engaged in the
production of oil and gas.
The Company expects to generate revenues from operations and obtain additional
working capital through future equity and/or financings.
The Company maintains principal business offices at (1) 145 Tyee Road #1526,
Point Roberts, Washington 98281 and (2) 5405 12th Avenue, Suite 204, Delta,
B.C., Canada V4M 2B2. Its statutory office is located at 3230 East Flamingo
Road, Suite 156, Reno, Nevada 89121. The Company's fiscal year end is December
31.
The Company is a natural resource exploration company engaged in the
acquisition, exploration and development of oil and natural gas properties. On
August 1, 1998, the Company entered into an Option Agreement to acquire an
interest in an oil and gas property in Alberta, Canada from Donn Capital Corp.,
a privately-held company wholly owned by frank W. Donis, President of the
Company. On June 15, 1999, the Company terminated the Agreement and has no
further right, title and/or interest in or to the property subject of the
Agreement and has no further obligation to Donn Capital regarding this property.
On November 1, 1998, the Company entered into an Agreement and Declaration of
Trust with W. G. Van Bebber, an unrelated third party, whereby Mr. Van Bebber
will research and acquire available oil and gas leases on behalf of the Company.
Pursuant to the terms of the Agreement, leases will be taken in the name of W.
G. Van Bebber, as Trustee for the exclusive use and benefit of the Company and
all approved costs and expenses incurred in such leasing and acquisition will be
paid by the Company.
ITEM 2. DESCRIPTION OF PROPERTIES
In June, 1999, Mr. Van Bebber, on behalf of the Company, entered into an
Assignment Agreement with Ibis Petroleum, Inc. ("Ibis"), whereby Ibis sold,
assigned, transferred and conveyed all of its right, title and interest in and
to a total of 35 oil and gas leases located in the Hadrosaurus Area of Union
County, New Mexico. The leasehold interests are as follows:
<PAGE>
1. 28 State of New Mexico Leases, covering a total of 6174.23 acres, with
an annual rental rate of $0.25 per acre until 2002, at which time the rate
increases to $0.50 per acre through expiration. 22 of the leases will expire on
January 31, 2007 and the remaining 6 will expire on March 31, 2007. The State
of New Mexico will receive a 12.5% royalty payment on any oil or gas production
on the properties; Ibis will receive a 2% overriding royalty; and three other
unrelated third parties will receive a total of 2% overriding royalties on any
production. The Company's total royalty burden for these leases is 16.5%. The
Company's working interest in and to these leases is 100% and its net revenue
interest (after royalty payments) is 83.5%.
2. 2 federal leases, covering a total of 2323.33 acres, with an annual
rental rate of $1.50 per acre. These leases will expire on May 31, 2009. The
federal government will receive a 12.5% royalty payment on any oil or gas
production on the properties. The Company's total royalty burden for these
leases if 12.5%. The Company's working interest in and to these leases is 100%
and its net revenue interest (after royalty payments) is 87.5%.
3. 5 State of New Mexico Leases, covering a total of 1252.04 acres, with an
annual rental rate of $0.25 per acre until 2004, at which time the rate
increases to $0.50 per acre through expiration. The leases will expire on July
31, 2009. The State of New Mexico will receive a 12.5% royalty payment on any
oil or gas production on the properties. The Company's total royalty burden for
these leases is 12.5%. The Company's working interest in and to these leases is
100% and its net revenue interest (after royalty payments) is 87.5%
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings to which the Company is a party or to which its
property is subject, nor to the best of management's knowledge are any material
legal proceedings contemplated.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during the
period year ended December 31, 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
<PAGE>
The company's application to trade and list its securities on the NASD over the
counter Bulletin Board was approved on February 9, 2000. Since its inception,
the Company has not paid any dividends on its common stock, and the Company does
not anticipate that it will pay dividends in the foreseeable future. As at
December 31, 1999 the Company had 39 shareholders; three of these shareholders
are officers and directors of the Company.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Overview
- --------
Since its formation in December, 1997, the Company has been engaged in
research and development activities relating to the acquisition of possible oil
and gas producing properties. Currently, it has a total of 35 oil and gas
leases acquired by and held in the name of its agent, W. G. Van Bebber. The
properties subject of the Leases are located in Union County, New Mexico. The
Company intends to acquire additional oil and gas leases in Union County, and
Los Animas County, Colorado and any additional properties that may warrant
acquisition. The Company is currently seeking a joint venture partner/operator
to perform exploration activities on the properties.
Liquidity and Capital Resources
- ----------------------------------
As at December 31, 1999, the Company had $ 9,197 of assets, and $5,748 of
liabilities, including cash or cash equivalents amounting to $ 9,197. The
liabilities of $5,748 consist of amounts accrued for audit and accounting of
$ 2,859.57 and amounts due to related parties.
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 7. FINANCIAL STATEMENTS
The financial statements of the Company are included following the signature
page to this Form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
<PAGE>
From inception to date, the Company's principal accountant is Andersen Andersen
& Strong L.C. of Salt Lake City, Utah. The firm's report for the period from
inception to December 31,1999 did not contain any adverse opinion or disclaimer,
nor were there any disagreements between management and the Company's
accountants.
PART III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
Each director of the Company is elected by the stockholders to a term of one (1)
year and serves until his or her successor is elected and qualified. Each
officer of the Company is elected by the Board of Directors to a term of one (1)
year and serves until his or her successor is duly elected and qualified, or
until he or she is removed from office. The Board of Directors has no
nominating, auditing or compensation committees.
The names, addresses, ages and positions of the present officers and directors
of the Company are set forth below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Term
Director
Name and Address. . . . . Age Position(s) Since
- ------------------------- --- ----------- ---------
Frank W. Donis 55 President and Director 1997
413 Tsawwassen Beach Road
Delta, British Columbia
Canada, V4M 2J2
Marilyn Rafter 47 Secretary, Treasurer 1997
5268 IA Avenue and Director
Delta, British Columbia
Canada, V4M ICI
Gene D. Wilson 70 Director 1997
8 10 Four Hills Road
Albuquerque, NM
USA, 8712-3
</TABLE>
<PAGE>
FRANK W. DONIS has been the President and a Director of the Company since
inception. Since September 1980, he has also been the President of Epic Oil and
Gas Ltd., a publicly traded Canadian corporation engaged in oil and gas
exploration. Since June 1968, he has also been a self-employed Dentist. He
graduated from the University of Alberta in 1968 with a Degree in Dentistry.
Mr. Donis devotes his time as required to the business of the Company.
MARILYN RAFTER has been the Secretary, Treasurer and a Director of the Company
since inception. Since April 1995, she has also been the Manager of A.D. Garnet
Investments, Ltd., a privately held Canadian corporation, engaged in the
business of real estate development and management. From October 1991 to August
1993, she was a Consultant for ExperDent Consulting, Inc., a Canadian
corporation engaged in the business dental consulting. Ms. Rafter devotes her
time as required to the business of the Company.
GENE WILSON has been a Director of the Company since inception. Since 1960, he
has also been a self-employed Consulting Geologist. He graduated from Marshall
University in Huntington, W. Virginia, in 1950 with a Degree in Geology and
from the University of Illinois 9n 1954 with a Masters Degree in Geology. Mr.
Wilson devotes his time as required to the business of the Company.
Each of the persons named above has held his/her office/position since inception
of the Company and is expected to hold said office/position until the next
annual meeting of stockholders.
To the knowledge of management, during the past five years, no present or former
director, executive officer or person nominated to become a director or an
executive officer of the Company:
4. filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed by
the court for the business or property of such person, or any partnership in
which he was a general partner at or within two years before the time of such
filings;
5. was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);
6. was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting, the
following activities:
<PAGE>
(4) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, associated person of any of the foregoing, or as an
investment advisor, underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment company, or engaging in
or continuing any conduct or practice in connection with such activity:
(5) engaging in any type of business practice: or
(6) engaging in any activities in connection with the purchase or sale
of any security
or commodity or in connection with any violation of federal or state
securities
laws or federal commodities laws:
7. was the subject of any order, judgement, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described above under this Item or to be associated
with persons engaged in any such activities:
8. was found by a court of competent jurisdiction in a civil action or by
the Securities and
Exchange Commission to have violated any federal or state securities law,
and the
judgement in such civil action or finding by the Securities and Exchange
Commission has
not been subsequently reversed, suspended, or vacated.
9. was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgement in such civil action or finding by the
Commodity Futures Trading Commission ahs not been subsequently reversed,
suspended or vacated.
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
The Company knows of no director, officer, beneficial owner of more than ten
percent of any class of equity securities of the Company registered pursuant to
Section 12 ("Reporting Person") that failed to file any reports required to be
furnished pursuant to Section 16 (a).
The following table sets forth as at December 31, 1999, the name and position of
each Reporting Person that failed to file on a timely basis any reports required
pursuant to Section 16 (a) during the most recent fiscal year.
Name Position Report to be Filed
- ------------------- -------------- ---------------------
N/A
ITEM 10. EXECUTIVE COMPENSATION
<PAGE>
None of the Company's officers and directors are currently compensated for their
services as the Company is only in the development stage and has not yet fully
commenced business operations. However, the officers and directors are
reimbursed for any expenses they incur on behalf of the Company.
Employment Agreements
None of the Company's officers or directors are currently party to employment
agreements with the Company. The Company presently has no pension, health,
annuity, insurance, stock options, profit sharing or similar benefit plans;
however, the Company may adopt such plans in the future. There are presently no
personal benefits available for directors, officers or employees of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Shareholders
- -----------------------
The following table sets forth certain information regarding the Company's
Common Stock, par value $.001 ("Common Stock") beneficially owned as of January
31, 1999 for (i) each stockholder known by the Company to be the beneficial
owner of five (5%) percent or more of the Company's outstanding Common Stock;
(ii) each of the Company's directors; (iii) each named executive officer (as
defined in Item 402(a)(2) of Regulation S-B); and (iv) all executive officers
and directors as a group. At January 31, 1999, there were 13,054,200 shares of
Common Stock outstanding.
<TABLE>
<CAPTION>
Amount and
Name and Nature of
Title of Address of Beneficial Percent
Class Beneficial Owner(1) Ownership(2) Class
- ------- ------------------- ----------- -------
<S> <C> <C> <C>
Common Stock Frank W. Donis 7,005,000(i)(ii) 53.7 %
413 Tsawwassen
Beach Road
Delta, B.C.,
Canada, V4M 2J2
Common Stock Marilyn J. Rafter 255,000 (i)(ii) 2%
5268 IA Avenue
Delta, B.C.,
Canada, V4M 1 C 1
<PAGE>
Common Stock Gene Wilson 500,000 (i) 3.8 %
811 Four Hills Rd. S.E.
Albuquerque, N.M.
87123
Common Stock Bond Mercantile Ltd. 1,000,000 8%
Principal-Juan Mashburn
Akara Building. 24
De Castro St. Road Town
Tortola, British Virgin
Islands
Common Stock Commodore Management Corp. 1,000,000 8%
Principal-Antoinette Stubbs
Saffrey Square, Suite 205
Nassau, Bahamas
Common Stock Douglas inc. 1,000,000 8%
Principal-Tim O"Sullivan
Box 260 Butterfield Sq.
Providenciales
Turks and Caicos Islands
Common Stock Peregrine Corporation 1,000,000 8%
Principal-Frances Perez
No. 2. Commecial Centre Sq.
Alofi, Niue
All Officers and
Directors as a Group 7,750,000 59.5%
<FN>
(i) Each person named above may be deemed to be a "parent" and "promoter"
of the Company,
within the meaning of such terms under the Securities Act of 1933, as
amended, by virtue of
his/her direct and indirect holdings in the Company. These persons are the only
"promoters"of the Company.
(ii) Frank Donis and Marilyn Rafter's spouses each own 5,000 shares of the
Company's
Common Stock included in these shares.
</TABLE>
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
On January 5, 1998 , Frank Donis and Marilyn Rafter, officers and director of
the Company, purchased a total of 7,250,000 shares of Common Stock, at a price
of $.001 per share, for a total consideration of $7,250.
On February 23, 1998, the Company sold 500,000 shares of Common Stock to Gene
Wilson, a director of the Company, at a price of $.01 per share for a total
consideration of $5,000.
On August 1, 1998, the Company entered into an Option Agreement to acquire an
interest in an oil and gas property in Alberta, Canada from Donn Capital Corp.,
a privately-held company wholly owned by Frank W. Donis, President of the
company. On June 15, 1999, the Agreement was terminated and the Company has no
further right, title or obligations due to Donn Capital.
Certain officers, directors and related parties have engaged in business
transactions with the Company which were not the result of arms' length
negotiations between independent parties. Management believes that the terms of
these transactions were as favorable to the Company as those that could have
been obtained from unaffiliated parties under similar circumstances. All future
transactions between the Company and its affiliates will be on terms no less
favorable than could be obtained from unaffiliated third parties and will be
approved by a majority of the disinterested members of the Board of Directors of
the Company.
INDEBTEDNESS OF MANAGEMENT
None
TRANSACTIONS WITH PROMOTERS
None
<PAGE>
PART IV
ITEM 13. EXHIBITS AND REPORTS
(a) (1) Financial Statements
The following financial statements are included in this report:
Title of Document
Report of Andersen, Andersen & Strong, Certified Public Accounts
Balance Sheet as at December 31, 1999
Statement of Operations for the Period from December 3, 1997 (Date of
inception) to December 31, 1999
Statement in Changes in Stockholders' Equity for the period from December 3,
1997 (Date of inception) to December 31, 1999.
Statement of Cash Flows for the period from December 3, 1997 (Date of inception)
to December 31, 1999.
Notes to the Financial statements
(a) (2) Financial Statement Schedules
The Following financial statement schedules are included as part of this report
None
(a) (3) Exhibits
The following exhibits are included as part of this report by reference:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
Company and in its capacities and on the date indicated:
HADRO RESOURCES, INC.
Date: 3-21-00 By: "Frank Donis"
--------------
Frank W. Donis
President & Director
Date: 3-21-00 By: "Marilyn Rafter"
-----------------
Marilyn Rafter
Corporate Secretary
<PAGE>
[LETTERHEAD ANDERSEN ANDERSEN & STRONG]
Board of Directors
Hadro Resources, Inc.
Point Roberts, Washington
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Hadro Resources, Inc. (
development stage company) at December 31, 1999 and the statements of
operations, stockholders' equity, and cash flows for the years ended December
31, 1999 and 1998 and the period from December 3, 1997 (date of inception) to
December 31, 1999. 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 audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management as well
as evaluating the overall balance sheet presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hadro Resources, Inc. at
December 31, 1999 and the results of operations, and cash flows for the years
ended December 31, 1999 and 1998 and the period from December 3, 1997 (date of
inception) to December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has sustained continuing
losses since inception and will need additional working capital for its planned
activity, which raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are described in
Note 4 . These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ ANDERSEN ANDERSEN & STRONG
Salt Lake City, Utah
March 18
HADRO RESOURCES, INC.
( DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
CURRENT ASSETS
<S> <C>
Cash $9,197
------
Total Current Assets $9,197
======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related parties $1,651
Accounts payable 4,097
-----
Total Current Liabilities 5,748
-----
STOCKHOLDERS' EQUITY
Common stock
100,000,000 shares authorized, at
$0.001 par value;13,054,200 shares
issued and outstanding 13,054
Capital in excess of par value 126,795
Deficit accumulated during the
development stage (136,400)
--------
Total Stockholders' Equity 3,449
------
$ 9,197
=======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
( DEVELOPMENT STAGE COMPANY)
HADRO RESOURCES, INC.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND THE
PERIOD DECEMBER 3, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 1999
DEC 31 DEC 31 DEC 3, 1997
1999 1998 TO DEC 31, 1999
-------------------------------------------
<S> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . . . . $ - $ - $ -
EXPENSES . . . . . . . . . . . . . . . . . . 105,362 31,038 136,400
-------------------------------------------
NET LOSS . . . . . . . . . . . . . . . . . . (105,362) $ (31,038) $(136,400)
===========================================
NET LOSS PER COMMON SHARE
Basic. . . . . . . . . . . . . . . . . . . . $ - $ -
---------------------------
AVERAGE OUTSTANDING SHARES
Basic 13,054,200 12,300,000
----------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HADRO RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 3, 1997 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
COMMON STOCK CAPITAL In
-------------------- 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 15,069 -
Net operating loss for the year ended
December 31, 1998 . . . . . . . . . . . . . . - - - (31,038)
-------------- -------- ---------- ----------
BALANCE DECEMBER 31, 1998. . . . . . . . . . 13,054,200 13,054 76,995 (31,038)
Contributions to capital by related
parties - expenses . . . . . . . . . . . . - - 49,800 -
Net operating loss for the year
ended December 31, 1999 . . . . . . . . . . . - - - (105,362)
-------------- -------- ---------- ----------
BALANCE DECEMBER 31, 1999 . . . . . . . . . . 13,054,200 $ 13,054 $ 126,795 $(136,400)
============== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HADRO RESOURCES, INC.
( DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1998 AND THE
PERIOD DECEMBER 3, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEC 31 DEC 31 DEC 3, 1997
1999 1998 TO DEC 31, 1999
-------------- ------------ -----------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss (105,362) (31,038) $(136,400)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Contribution to capital - expenses 49,800 49,800
Changes in accounts payable. . . . 5,620 127 5,747
-------------- ------------ -------------
Net (decrease) in Cash From Operations. . . (49,942) (30,911) (80,853)
-------------- ------------ -------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of mineral lease. . . . . . . . . - - -
-------------- ------------ -----------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common stock - 90,050 90,050
-------------- ------------ -----------------
Net Increase (Decrease) in Cash . . . . . . (49,942) 59,139 9,197
Cash at Beginning of Period . . . . . . . . 59,139 - -
-------------- ------------ -----------------
Cash at End of Period . . . . . . . . . . . $ 9,197 $ 59,139 $ 9,197
============== ============ =================
NON CASH FLOWS FROM OPERATING ACTIVITIES
Contributions to capital by officers - 1999 $ 49,800
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HADRO RESOURCES, INC.
( DEVELOPMENT 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 a business opportunity
which management believes can be profitable.
The Company is in the development 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
- -------------
At December 31, 1999, the Company had a net operating loss carry forward of
$136,400. 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 on which to project future net profits.
The loss carryover will expire starting in 2014 through 2020.
Earnings (Loss) Per Share
- ----------------------------
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding.
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.
<PAGE>
HADRO RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
Comprehensive Income
- ---------------------
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity on
December 31, 1999.
Recent Accounting Pronouncements
- ----------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will
have a material impact on its financial statements.
3. RELATED PARTY TRANSACTIONS
Related parties have acquired 58% of the common stock issued.
4. GOING CONCERN
Management is currently seeking a business opportunity which it believes can
be profitable. To be successful in this effort the Company will need 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.
Management recognizes that, if it is unable to raise additional capital, the
Company cannot be successful in its efforts.
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