<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ---------------
Commission File No. 333-75297
R & R RANCHING, INC.
--------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0616524
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
899 South Artistic Circle
Springville, Utah 84663
-----------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 489-3238
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes X No
--- --- --- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
January 31, 2000
1,006,000
---------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
January 31,
2000
----
<S> <C>
CURRENT ASSETS:
Cash in bank $ 7,296
___________
Total Current Assets 7,296
PROPERTY BISON, net 86,177
DEFERRED STOCK OFFERING COSTS 12,330
___________
$ 105,803
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 10,777
Accounts payable - related party 3,625
Interest payable - related party 7,730
Notes payable - related party 70,000
___________
Total Current Liabilities 92,132
___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,006,000 shares issued and
outstanding 1,006
Capital in excess of par value 31,494
Deficit accumulated during the
development stage (18,829)
___________
Total Stockholders' Equity 13,671
___________
$ 105,803
___________
</TABLE>
The accompanying notes are an integral part of this unaudited financial
statement.
R & R RANCHING, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three
Months Ended From Inception
January 31, on August 3,
----------- 1998 Through
2000 1999 January 31, 2000
<S> <C> <C> <C>
REVENUE $ - $ - $ -
__________ __________ ______________
EXPENSES:
Bison Operating Expenses 272 335 1,947
General & Administrative 3,284 45 9,152
__________ __________ ______________
LOSS BEFORE OTHER EXPENSE: 3,556 380 11,099
OTHER EXPENSE:
Interest Expense 2,188 250 7,730
__________ __________ ______________
LOSS BEFORE INCOME TAXES (5,744) (630) (18,829)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ __________ ______________
NET LOSS $ (5,744) $ (630) $
(18,829)
______________________ ________________
LOSS PER COMMON SHARE $ (.01) $ (.00) $
(.02)
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM INCEPTION ON AUGUST 3, 1998
THROUGH JANUARY 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
Preferred Stock Common Stock Capital in During
the
Excess of
Development
Shares Amount Shares Amount Par Value Stage
__________ _________ ___________
__________ _________ ___________
<S> <C> <C> <C>
<C> <C>
BALANCE, August 3, 1998 - $- - $ -
$ - $ -
Issuance of 1,000,000 shares
of common stock at $.025
per share - - 1,000,000 1,000 24,000 -
Net loss for the period
ended October 31, 1998 - - - - - (1,002)
__________ _________ ___________
__________ _________ ___________
BALANCE, October 31, 1998 - - 1,000,000 1,000 24,000 (1,002)
Net loss for the period
ended October 31, 1999 - - - - - (12,083)
__________ _________ ___________
__________ _________ ___________
BALANCE, October 31, 1999 - - 1,000,000 1,000 24,000 (13,085)
Issuance of 6,000 shares of
common stock at $1.25
per share - - 6,000 6 7,494 -
Net loss for the period ended
January 31, 2000 - - - - - (5,744)
__________ _________ ___________
__________ _________ ___________
BALANCE, January 31, 2000 - $ - 1,006,000 $ 1,006 $31,494 $(18,829)
</TABLE>
The accompanying notes are an integral part of this unaudited financial
statement.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
For the Three
Months Ended From Inception
January 31, on August 3,
_______________________ 1998 Through
2000 1999 January 31, 2000
__________ __________
______________
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (5,744) $
(630) $ (18,829)
Adjustments to reconcile net loss to
net cash
used in operating activities:
Write-off of organization costs - - 475
Depreciation and amortization 25 25
Changes in assets and liabilities:
(Increase) in bison calves (502) (84,000) (2,177)
Increase in accounts payable (930) - 10,777
Increase in accounts payable -
related party 774 336 3,125
Increase in interest payable -
related party 2,188 250 7,730
__________ __________
______________
Net Cash (Used) by Operating
Activities (4,214) (84,019) 1,126
__________ __________
______________
Cash Flows from Investing Activities:
Payment of organization costs - - 84,000
__________ __________
______________
Net Cash (Used) in Investing
Activities - - (84,000)
__________ __________
______________
Cash Flows from Financing Activities:
Proceeds from issuance of note payable
- related party - 70,000 70,000
Proceeds from common stock issuance 7,500 4,196 32,500
Payment of stock offering costs - - (12,330)
__________ __________
______________
Net Cash Provided by Financing
Activities 7,500 74,196 90,170
__________ __________
______________
Net Increase in Cash and Cash Equivalents 3,286 (9,823) 7,296
Cash at Beginning of Period 4,010 20,782 -
__________ __________
______________
Cash at End of Period $ 7,296 $10,959 $ 7,296
__________ __________
______________
Supplemental Disclosures of Cash
Flow information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental schedule of Noncash Investing and Financing Activities:
For the period ended January 31, 2000:
Costs of $502 and depreciation of $1,400 have been capitalized as Property
Bison.
</TABLE?
The accompanying notes are an integral part of these financial statements.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - R & R Ranching, Inc. (the Company) was organized under the laws
of the
State of Nevada on August 3, 1998. The Company is considered a development
stage
company as defined in Statement of Financial Accounting Standards (SFAS) No.
7. The
Company is engaged in the business of breeding and raising bison. The Company
at the
present time, has not paid any dividends and any dividends that may be paid in
the
future will depend upon the financial requirements of the Company and other
relevant
factors.
Property - Bison - Inventory consists of bison which are being held for
breeding
purposes. The bison are recorded at the lower of cost or market value [See
Note 2].
Organization Costs - Organization costs of $500, which reflect amounts
expended to
organize the Company, were expensed during 1999 in accordance with Statement
of
Position 98-5.
Loss Per Share - The Company accounts for loss per share in accordance with
Statement
of Financial Accounting Standards (SFAS) No. 128 "Earnings Per Share". This
statement
requires the Company to present basic earnings per share and dilutive earnings
per
share when the effect is dilutive [See Note 6].
Income Taxes - The Company accounts for income taxes in accordance with
Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". This
statement
requires an asset and liability approach for accounting for income taxes [See
Note 7].
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards
(SFAS) No. 132, "Employer's Disclosure about Pensions and Other Postretirement
Benefits@", SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities@", SFAS No. 134, "Accounting for Mortgage-Backed Securities..." and
SFAS No.
135, "Rescission of FASB Statement No. 75 and Technical Corrections" were
recently
issued. SFAS No. 132, 133, 134 and 135 have no current applicability to the
Company or
their effect on the financial statements would not have been significant.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
Company
considers all highly liquid debt investments purchased with a maturity of
three months
or less to be cash equivalents.
Accounting Estimates - The preparation of financial statements in conformity
with
generally accepted accounting principles requires management to make estimates
and
assumptions that effect the reported amounts of assets and liabilities, the
disclosures
of contingent assets and liabilities at the date of the financial statements,
and the
reported amounts of revenues and expenses during the reporting period. Actual
results
could differ from those estimated by management.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - BISON
Bison that are purchased for breeding are recorded at cost and depreciated
over their useful lives (15 years), using the straight-line method. If a
bison dies or is sold the full remaining amount is expensed.
Bison that are internally developed are recorded by capitalizing one year's
depreciation of the mother and all direct development costs until the bison
have reached maturity and have been selected for breeding or other
productive
purposes. At the point of maturity, the bison are depreciated over their
estimated useful lives of 15 years. If the bison are sold, the costs are
charged to costs of goods sold.
During the three months ended January 2000, operating costs related to the
bison calves in the amount of $505 and $1,400 in depreciation was
capitalized.
The following is a summary of bison as of January 31, 2000:
Accumulated
Amount Cost Additions Depreciation Net
------ ---- --------- ------------ ---
Breeding Stock 20 $ 84,000 - $ (7,000) $ 77,000
Calves 20 7,275 1,903 - 9,178
----- ----- ---- -----
Total Bison 40 $ 91,275 1,903 $ (7,000) $ 86,178
NOTE 3 - RELATED PARTY TRANSACTIONS
Bison Care and Management Agreement - During December, 1998 the Company
entered into
an agreement with Blue Sky Bison Ranch, Ltd., of Carvel, Alberta, Canada
("Blue
Sky") under which Blue Sky would house, feed, manage and market the Company's
bison
for a period of one year commencing January 1, 1999. The agreement provides
for the
Company to pay a monthly management fee of $500 (Canadian) which is
approximately
$335 US. The agreement has been amended such that Blue Sky can received some
of the
calves in lieu of the monthly management fee, the number of calves is to be
determined by the Company's management. Blue Sky's president, director and
controlling shareholder is the father of the Company's President and
controlling
shareholder.
Convertible Notes Payable - During January, 1999, the Company borrowed $70,000
from
Libco Equities, Inc., a corporation organized under the laws of the Province
of
Alberta, Canada ("Libco"). The loan is due on demand and provides for
interest at
10% per annum. The President and sole shareholder of the Company is also the
President, director and controlling shareholder of Libco. Accrued interest
amounted
to $7,730 at January 31, 2000. The note payable and related accrued interest
is
convertible into common shares of the Company at the lesser of $1.00 per share
or
the average market price of the Company's stock for the 30 days immediately
proceeding the date the holder exercises the conversion right.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY TRANSACTIONS [CONTINUE]
Management Compensation - The Company has not paid any compensation to its
officers and directors.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his office
as a mailing address, as needed, at no expense to the Company.
NOTE 4 - CAPITAL STOCK
Preferred Stock - The Company has authorized 10,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to
be issued in such series as determined by the Board of Directors. No shares
are issued and outstanding at October 31, 1999.
Common Stock - During the period ended October 31, 1998, the Company issued
1,000,000 shares of its previously authorized, but unissued common stock for
cash of $20,804 and a stock subscription receivable of $4,196. The stock
subscription receivable was paid in full during November, 1998. The Company
is proposing to issue up to 100,000 additional shares of common stock and
related warrants in a public offering [See Note 8].
Stock Option Plan - On August 10, 1998, the Board of Directors of the
Company
adopted and the stockholders at that time approved, the 1998 Stock Option
Plan. The plan provides for the granting of awards of up to 1,000,000
shares
of common stock to sales representatives, officers, directors, consultants
and
employees. The awards can consist of stock options, restricted stock
awards,
deferred stock awards, stock appreciation rights and other stock-based
awards
as described in the plan. Awards under the plan will be granted as
determined
by the board of directors. As of January 31, 2000, no awards have been
granted under the plan.
Common Stock Split - During March, 1999 the Company effected a forward split
of its issued and outstanding common stock on the basis of two shares issued
for each one share previously issued. There were 500,000 shares of common
stock issued and outstanding immediately prior to the split and 1,000,000
shares of common stock issued and outstanding immediately after the split.
There was no change in the number of authorized common shares or the par
value
of common shares. The financial statements for all periods presented have
been restated to reflect the stock split.
Public Offering of Stock - As of January 31, 2000, the Company has issued
6,000 shares of its 100,000 shares of common stock it had proposed to make
public; this is 6% of the total proposed. The offering still remains open.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - CAPITAL STOCK [Continued]
Public Offering of Common Stock - The Company has made a public offering of
100,000
units consisting of a total of 100,000 shares of common stock, 100,000 A
warrants
and 100,000 B warrants. Each A warrant allows the holder to purchase one
share of
common stock at a price of $2.50. Each B warrant allows the holder to purchase
one
share of common stock at a price of $5.00. The warrants are subject to
adjustment
in certain events and are exercisable for a period of five years from the date
of
the offering. The Company may call the warrants at their exercise price on 30
days
notice at any time after issuance and prior to the expiration date of the
warrants.
The warrants may only be exercised or redeemed if a current prospectus is in
effect.
The Company has filed a registration statement with the United States
Securities and
Exchange Commission on Form SB-2 under the Securities Act of 1933. An
offering
price of $1.25 per unit has arbitrarily been determined by the Company. The
offering will be managed by the Company without any underwriter. The units
will be
offered and sold by the directors and officers of the Company, who will
receive no
sales commissions or other compensation in connection with the offering,
except for
reimbursement of expenses actually incurred on behalf of the Company in
connection
with the offering. The Company estimates it will incur stock offering costs
of
approximately $15,000, but any such costs will be deferred and netted against
the
proceeds of the proposed public stock offering.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of
the
Company as a going concern. However, the Company was only recently formed,
has not yet been successful in establishing profitable operations and has
current liabilities in excess of current assets. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise additional funds
through sales of its common stock, which funds will be used to assist in
establishing on-going operations. There is no assurance that the Company
will
be successful in raising this additional capital or achieving profitable
operations. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per share and the
effect on income and the weighted average number of shares for the periods
ended
For the Three
Months Ended From Inception
January 31, on August 3,
_______________________ 1998 Through
2000 1999 January 31, 2000
__________ __________
______________
(Loss) from continuing operations
applicable to common stock (numerator) $ (5,744) $ (630) $ (18,829)
__________ __________
______________
Weighted average number of
common shares outstanding
used in (loss) per share during
the period (denominator) 1,000,696 1,000,000 729,154
NOTE 7 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting
differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards. At January 31, 2000, the Company has available
unused operating loss carryforwards of approximately $18,829, which may be
applied against future taxable income and which expire in various years
through 2019.
The amount of and ultimate realization of the benefits from the operating
loss
carryforwards for income tax purposes is dependent, in part, upon the tax
laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty
surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the tax effect of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax assets are approximately $6,402 as of
January 31, 2000, with an offsetting valuation allowance of the same amount
resulting in a change in the valuation allowance of approximately $1,982
during the year ended January 31, 2000.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------
Plan of Operation.
- ------------------
R & R Ranching's plan of operation for the next 12 months is to
continue
operating under its management agreement with Blue Sky Bison. Each of the 20
cows
purchased in 1999 have been retained and bred and should deliver a calf during
the
2000 calving season. It appears that all 20 cows have been bred; however, R &
R
Ranching will not be able to know precisely the number of cows that will calve
until
after the 2000 season.
R & R Ranching's 1999 calf crop is in the process of being exchanged
for
mature bred cows as of the date of this filing. The details of the
transaction will
not be complete until the end of March, 2000, but will be disclosed in R & R
Ranching's next Quarterly Report on Form 10-QSB.
Because all of R & R Ranching's cows are young (about three to five
years
old), management hopes that it will not have to use many of its heifer calves
to
replace cows. This would allow R & R Ranching to sell almost all of its
heifer
calves while its cows are in their breeding prime. However, many factors,
including
illness and death of its existing cows, could force R & R Ranching to keep
some of
its annual heifer calf crop; this would have a negative effect on revenues
because
the replacement heifers would not be made available for sale.
Most bison operations breed bulls at the rate of about one bull to
10
cows. Because the cows that it received under the Purchase Agreement were
already
pregnant, breeding bulls will not be used until the 1999 fall breeding season.
The
management agreement provides for Blue Sky to supply bulls for breeding, so R
& R
Ranching will not require breeding bulls of its own until it moves its
operations
to its own location as discussed below. Once this occurs, R & R Ranching will
keep
about one bull for every 10 cows, to be bred for two years. R & R Ranching
will
have to keep replacement bulls from its own herd (or purchase them, on a
regular
basis) in order to ensure genetic diversity and avoid inbreeding.
Bison ranchers commonly keep bulls and cows together and let
nature
dictate the breeding season. Most breeding occurs in July and August, with a
275
day gestation period. R & R Ranching will breed its 20 cows during each cow's
normal cycle during the months of July and August.
R & R Ranching will pay Blue Sky $500 (Canadian) (approximately $US
335)
per month under the management agreement, and will pay to Blue Sky one-fourth
(1/4)
of the proceeds from the sales of its bulls and heifers during 1999. In
exchange,
Blue Sky will provide grazing of the herd, winter feeding, veterinary care,
handling, identification tagging and records maintenance, and provision of
breeding
bulls (at the rate of one bull per 20 cows). With additional feed expenses
and
reimbursement of out-of-pocket expenses of its directors and officers, R & R
Ranching expects annual costs of operation in 2000 to equal approximately
$6,500.
Management estimates that it will cost approximately $500 to raise a
calf to the point where it is weaned and ready for sale. This figure includes
the
payment of one-fourth of sales proceeds to Blue Sky as discussed above. The
price
range for weaned heifer calves is about $2,000 to $3,000; for weaned bulls it
is
$1,000 to $1,500. Therefore, R & R Ranching expects to make a profit of
$1,500 to
$2,500 per heifer calf and $500 to $1,000 per bull calf. These figures depend
on
many factors, including for example:
a calf crop of 90%;
lack of factors that would complicate pregnancy and birth
(e.g.,
unusually harsh weather, brucellosis and other diseases,
inferior
genetic stock); and
stability of feed and bison prices.
If any one of these factors changes, R & R Ranching's profitability
could decrease significantly.
R & R Ranching has allocated approximately $9,800 of the net
proceeds
of its offering to the leasing and fencing of a suitable bison property for R
& R
Ranching's own use. See "Public Offering."
During the next 12 months, management plans to begin searching for a
suitable 1/4 section (160 acres) property to lease for its operations.
Management
intends to limit its search to the Province of Alberta, Canada, and will try
to
locate a full section (640 acres), with W. Malcolm C. Davidson, William R.
Davidson's father, to lease three quarters and R & R Ranching to lease one
quarter.
If R & R Ranching is successful in its property search, it will have
to
transport the herd to the new facility, hire herd management personnel and
begin
paying directly for all costs that are currently covered by the management
agreement. R & R Ranching would also be responsible for the purchase or lease
of its
own handling facilities (pens and chutes for restraining animals during
breeding,
veterinary treatment and transportation). Management believes that by
locating R
& R Ranching's herd next to W. Malcolm C. Davidson's herd, both parties will
be able
to share handling facilities and reduce expenses. However, there is no formal
agreement between the parties in this regard and it is possible that R & R
Ranching
may have to purchase handling facilities of its own. These facilities
typically
cost from $2,000 to $2,500. R & R Ranching has not allocated any of the
proceeds
from its offering to the acquisition of handling facilities. R & R Ranching
will
have to obtain them with operating revenues or through additional debt or
equity
funding if handling facilities become necessary in the next 12 months. R & R
Ranching can provide no assurance that it will have enough money to acquire
these
facilities.
Management expects that it will hire one person to operate its ranch
once it has located a suitable property. The standard rate for ranch workers
in
Alberta is approximately $10 to $12 (Canadian) (approximately US$ 6.70 to US$
8.04)
per hour. R & R Ranching believes that the labor pool in Alberta is large
enough
that it will not have difficulty finding a suitable worker.
During the next 12 months, R & R Ranching will be able to meet its
current operating expenses from anticipated bison sales. However, management
expects that the net proceeds from its offering will be necessary in order to
lease
and fence its ranch and repay the Libco Equities loan. See the caption "Other
Information," below.
Results of Operations.
- ----------------------
During the quarterly period ended January 31, 2000, the Registrant
received total revenues of $0 and sustained a net loss of ($5,744).
Liquidity.
- ----------
During the quarterly period ended January 31, 2000, the Registrant
had total expenses of $5,744, while receiving $0 in revenues. At January 31,
2000, the Registrant had total assets of $105,803, of which $7,296 consisted
of
cash.
During the next 12 months, the Registrant will be able to meet its
current operating expenses from anticipated bison sales. However, management
expects that the net proceeds from its offering will be necessary in order to
lease and fence its ranch and repay the Libco Equities loan.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
- ----------------------------
None; not applicable.
Item 2. Changes in Securities.
- --------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
- ------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
- --------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
- ----------------------------
Public Offering.
---------------
R & R Ranching commenced a public offering of Units consisting of
common stock and warrants in late 1999. This offering was not completed as of
January 31, 2000, the end of the period covered by this Report. The offering
was
completed on February 11, 2000, which is subsequent to the period coveredy by
this
Report, with all 100,000 Units being sold for gross proceeds of $125,000.
Use of Proceeds
---------------
R & R Ranching estimates that its net proceeds from its recently
completed offering will be $110,000, after deducting estimated offering
expenses of
$15,000. R & R Ranching plans to use these net proceeds as follows:
Item Cost(1)
---- ----
Secure lease on 1/4 Section of
land in Alberta, Canada for one year $ 2,800
Fence leased land 7,000
Repay loan from Libco(2) 77,440
Feed, including hay, grain,
water, minerals and salt for
one year (3) 2,600
Management fees to Blue Sky
Bison Ranch, Ltd., for one year(4) 4,000
Membership fees for bison
associations in U.S. and
Canada for one year 80
Accounting, attorney's and
incorporation fees 10,000
Travel 1,500
Office expenses (telephone, 1,200
photocopies, postage)
Working capital (5) 3,380
Total $110,000
(1) These expenditures are estimates based on R & R Ranching's present
intentions. None of these items is a firm commitment by R & R Ranching.
All figures are in U.S. dollars.
(2) On October 5, 1998, R & R Ranching entered into a Buffalo Sale and
Purchase Agreement with Diving Buffalo, under which R & R Ranching agreed to
buy
20 mature cow bison for $84,000 ($4,200 per head). This purchase was
completed,
and the buffalo were delivered to R & R Ranching on January 19, 1999. In
order
to close the purchase and begin operations without having to wait for the
receipt
of proceeds under its offering, R & R Ranching borrowed $70,000 from Libco,
which
is controlled by R & R Ranching's President, William R. Davidson. The loan
was
paid in full on February 14, 2000, through a payment of $77,440.
(3) This amount has been allocated for R & R Ranching's second year of
operations. The management agreement with Blue Sky provides for Blue Sky to
feed
R & R Ranching's herd during the one year term of that agreement. See
footnote
4, below.
(4) On December 1, 1998, R & R Ranching and Blue Sky Bison Ranch Ltd.,
of
Carvel, Alberta, Canada entered into an agreement under which Blue Sky
agreed to
house, feed, manage and market R & R Ranching's bison for a period of one
year,
commencing January 1, 1999. R & R Ranching is responsible for a monthly
management fee of $500 (Canadian), together with one-fourth (1/4) of the
sales
proceeds from bison from its herd in 1999. At the current exchange rate of
approximately US$ 0.67 per Canadian dollar, the monthly and annual
management
fees are approximately US$ 335 and US$ 4,000, respectively. W. Malcolm C.
Davidson, Blue Sky's President, director and controlling stockholder, is the
father of William R. Davidson, R & R Ranching's President.
(5) Working capital has been reserved for payment of variable expenses
such
as feed, fencing and lease payments in case costs of these items exceed the
amounts that have been allocated.
The net proceeds from its offering will fund R & R Ranching's
operations
for one year without the receipt of any operating revenues. R & R Ranching
will
need to be operating profitably within one year from the completion of its
offering
in order to fund its operations from cash flow. Otherwise, it will have to
seek
additional debt or equity funding (including the exercise of the warrants
being sold
as part of the units). R & R Ranching can give no assurance that its stock
price
will become high enough to induce warrant holders to exercise their warrants,
or
that it will be able to obtain additional financing from other sources.
By this reference, the Company's Registration Statement on Form SB-2
of
the Securities and Exchange Commission is incorporated herein by reference.
See
Item 6.
Item 6. Exhibits and Reports on Form 8-K.
- -------------------------------------------
(a) Exhibits.
Registration Statement on Form SB-2 (Amendment No. 2)*
(b) Reports on Form 8-K.
None.
* Incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
R & R RANCHING, INC.
Date: 3/20/00 By: /s/ William R. Davidson
-------------- -------------------------------------
William R. Davidson, President and
Director
Date: 3/20/00 By: /s/ Allyson R. N. Davidson
-------------- -------------------------------------
Allyson R. N. Davidson, Secretary/
Treasurer
</TABLE>
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<NAME> R & R RANCHING, INC.
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<PERIOD-END> JAN-31-2000
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