<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 April 30, 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:
April 30, 2000
1,100,000
---------
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]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
APRIL 30, 2000
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
CONTENTS
PAGE
Accountants' Review Report 1
Unaudited Condensed Balance Sheets,
April 30, 2000 and October 31, 1999 2
Unaudited Condensed Statements of
Operations, for the three months
and six months ended April 30, 2000
and 1999 and from inception on
August 3, 1998 through April 30, 2000 3
Unaudited Condensed Statements of Cash
Flows, for the six months ended April 30,
2000 and from inception on August 3, 1998
through April 30, 2000 4 - 5
Notes to Unaudited Condensed Financial
Statements 6 - 10
<PAGE>
ACCOUNTANTS' REVIEW REPORT
Board of Directors
R & R RANCHING, INC.
Springville, Utah
We have reviewed the accompanying condensed balance sheet of R &
R Ranching, Inc. (A Development Stage Company) as of April 30,
2000, and the related condensed statements of operations and cash
flows for the six months ended April 30, 2000, and for the period
from August 3, 1998 through April 30, 2000. All information
included in these financial statements is the representation of
the management of R & R Ranching, Inc.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
/S/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
June 19, 2000
Salt Lake City, Utah
1
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<TABLE>
R & R RANCHING, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
<CAPTION>
[Unaudited - See Accountants' Review Report]
ASSETS
April 30, October 31,
2000 1999
_________ _________
<S> <C> <C>
CURRENT ASSETS:
Cash in bank $ 28,244 $ 4,010
_________ _________
Total Current Assets 28,244 4,010
PROPERTY - BISON, net 88,308 85,675
DEFERRED STOCK OFFERING COSTS - 12,330
_________ _________
$ 116,552 $ 102,015
_________ _________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,127 $ 11,707
Accounts payable - related party 1,120 2,851
Interest payable - related party - 5,542
Notes payable - related party - 70,000
_________ _________
Total Current Liabilities 2,247 90,100
_________ _________
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,
1,100,000 and 1,000,000 shares
issued and outstanding, respectively 1,100 1,000
Capital in excess of par value 136,570 24,000
Deficit accumulated during the
development stage (23,365) (13,085)
_________ _________
Total Stockholders' Equity 114,305 11,915
_________ _________
$ 116,552 $ 102,015
_________ _________
Note: The balance sheet at October 31, 1999 was taken from the
audited financial statements at the date and condensed.
The accompanying notes are an integral part of this unaudited
financial statement.
</TABLE>
2
<PAGE>
<TABLE>
R & R RANCHING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
[Unaudited - See Accountants' Review Report]
For the Three For the Six From Inception
Months Ended Months Ended on August 3,
April 30, April 30, 1998 Through
_________________ _______________ April 30,
2000 1999 2000 1999 2000
_______ _______ _______ _______ __________
<S> <C> <C> <C> <C> <C>
REVENUE $14,450 $ - $14,450 $ - $ 14,450
_______ _______ _______ _______ __________
EXPENSES:
Bison Operating
Expenses 12,657 782 12,929 1,117 14,604
General &
Administrative 6,329 2,423 9,613 2,443 15,481
_______ _______ _______ _______ __________
Total Expenses 18,986 3,205 22,542 3,560 30,085
_______ _______ _______ _______ __________
LOSS BEFORE OTHER
EXPENSE: (4,536) (3,205) (8,092) (3,560) (15,635)
OTHER EXPENSE:
Interest Expense - 1,733 2,188 1,983 7,730
_______ _______ _______ _______ __________
LOSS BEFORE INCOME
TAXES (4,536) (4,938) (10,280) (5,543) (23,365)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
_______ _______ _______ _______ __________
NET LOSS $(4,536)$(4,938)$(10,280)$(5,543) $ (23,365)
_______ _______ _______ _______ __________
LOSS PER COMMON
SHARE $ (.00) $ (.01) $ (.01) $ (.01) $ (.03)
_______ _______ _______ _______ __________
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed financial statements.
3
<PAGE>
<TABLE>
R & R RANCHING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<CAPTION>
[Unaudited - See Accountants' Review Report]
For the Six From Inception
Months Ended on August 3,
April 30, 1998 Through
_________________ April 30,
2000 1999 2000
________ _______ ________
<S> <C> <C> <C>
Cash Flows from Operating
Activities:
Net loss $(10,280) $(5,543) $(23,365)
Adjustments to reconcile
net loss to net cash used
in operating activities:
Write-off of organization costs - 475 475
Depreciation and amortization - - 25
Changes in assets and liabilities:
(Increase) in bison calves (2,633) (233) (4,308)
Increase (decrease) in
accounts payable (10,580) 8,239 1,127
Increase (decrease) in accounts
payable - related party (1,731) 1,341 1,120
Increase (decrease) in interest
payable - related party (5,542) 1,983 -
________ _______ ________
Net Cash (Used) by Operating
Activities (30,766) 6,272 1,126
________ _______ ________
Cash Flows from Investing Activities:
Payment of organization costs - - (500)
Purchase of bison - (84,000) (84,000)
________ _______ ________
Net Cash (Used) in Investing
Activities - (84,000) (83,500)
________ _______ ________
Cash Flows from Financing Activities:
Proceeds from of note payable -
related party - 70,000 70,000
Payment on note payable (70,000) - (70,000)
Proceeds from common stock
issuance 125,000 4,196 150,000
Payment of stock offering costs - (6,291) (12,330)
________ _______ ________
Net Cash Provided by Financing
Activities 55,000 67,905 137,670
________ _______ ________
Net Increase in Cash and Cash
Equivalents 24,234 (9,823) 28,244
Cash at Beginning of Period 4,010 20,782 -
________ _______ ________
Cash at End of Period $ 28,244 $10,959 $ 28,244
________ _______ ________
</TABLE>
4
<PAGE>
<TABLE>
[Continued]
R & R RANCHING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
Increase (Decrease) in Cash and Cash Equivalents
[Unaudited - See Accountants' Review Report]
For the Six From Inception
Months Ended on August 3,
April 30, 1998 Through
_________________ April 30,
2000 1999 2000
________ _______ ________
<S> <C> <C> <C>
Supplemental Disclosures of Cash Flow
information:
Cash paid during the period for:
Interest $ 7,730 $ - $ 7,730
Income taxes $ - $ - $ -
Supplemental schedule of Noncash Investing and Financing Activities:
For the period ended April 30, 2000:
None
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
5
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED 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.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 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.
6
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at April
30, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's October 31, 1999 audited financial
statements. The results of operations for the periods ended
April 30, 2000 are not necessarily indicative of the operating
results for the full year.
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 six months ended April 2000, operating costs related
to the bison calves in the amount of $1,010 and $2,981 in
depreciation was capitalized. The Company also sold 20 calves
for $14,450 and purchased 5 additional cows for $10,838.
The following is a summary of bison as of April 30, 2000:
Accumulated
Quantity Cost Additions Depreciation Net
_________ ________ _________ ____________ _______
Breeding Stock 25 $84,000 10,838 $ (8,581) $86,257
Calves 22 - 2,051 - 2,051
_________ ________ _________ ____________ _______
Total Bison 47 $84,000 12,889 $ (8,581) $88,308
_________ ________ _________ ____________ _______
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 and 25%
of the proceed from the sale of calves The agreement has been
amended such that Blue Sky can receive 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.
7
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY TRANSACTIONS [CONTINUE]
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 with its related accrued
interest was paid in February 2000.
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 April 30, 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.
8
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R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED 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. During the six months ended April
30, 2000, the Company completed the offering and issued 100,000
shares of its previously authorized, but unissued common stock
and related A and B warrants for cash of $125,000, net of
$12,330 in deferred offering costs.
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 For the Six From Inception
Months Ended Months Ended on August 3,
April 30, April 30, 1998 Through
_______________ _______________ April 30,
2000 1999 2000 1999 2000
_______ _______ _______ _______ _______
(Loss) from
continuing
operations
applicable to
common stock
(numerator) $(4,536) $(4,938) $(10,280) $(5,543) $(23,365)
_______ _______ _______ _______ _______
Weighted average
number of
common shares
outstanding
used in (loss)
per share during
the period
(denominator) 1,088,511 1,000,000 1,045,516 1,000,000 751,704
_______ _______ _______ _______ _______
9
<PAGE>
R & R RANCHING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 April 30, 2000, the
Company has available unused operating loss carryforwards of
approximately $23,000, 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 $8,000 as of April
30, 2000, with an offsetting valuation allowance of the same
amount resulting in a change in the valuation allowance of
approximately $3,600 during the year ended April 30, 2000.
10
<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 has 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.
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 ranches 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 continue to 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 for each year that a management agreement is in force. 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 current price range for weaned heifer calves is about $600 to
$1,000; for weaned bulls it is $600 to $800. Therefore, R & R Ranching
expects to make a profit of $100 to $500 per heifer calf and $100 to $300 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.
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. R & R Ranching is still in the process of reviewing
potential sites that would permit a joint operation with Blue Sky. We are
currently considering several options that would permit movement of the bison
cows after the 2000 weaning season.
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 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 recently completed public offering will
be necessary in order to lease and fence its ranch.
Results of Operations.
----------------------
During the quarterly period ended April 30, 2000, the Registrant
received total revenues of $14,450 and sustained a net loss of ($4,536).
R & R Ranching's 1999 calf crop was sold in February, 2000, for a
total sum of $14,450. Each heifer calf was sold for $800, and each bull calf
was sold for $645. After paying Blue Sky its management fee of 25% of the
proceeds from the calf crop, the remaining moneys purchased five bred cows.
The cows are three to five years old and were expected to deliver calves
during the spring of 2000. It appears that 22 of R & R Ranching's 25 cows
have calved as of April 30, 2000. However, an accurate inventory can not be
made until all of the calves are weaned in the fall of 2000. It is expected
that the remaining three cows will calve in the near future.
Liquidity.
----------
During the quarterly period ended April 30, 2000, the Registrant
had total expenses of $18,986, while receiving $14,450 in revenues. At April
30, 2000, the Registrant had total assets of $116,552, of which $28,244
consisted of cash.
During the next 12 months, the Registrant will be able to meet its
current operating expenses from anticipated bison sales.
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.
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None; not applicable.
Item 5. Other Information.
----------------------------
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
-------------------------------------------
(a) Exhibits.
27 - Financial Data Schedule.
(b) Reports on Form 8-K.
None.
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: 6/20/2000 By:/S/William R. Davidson
-------------- -------------------------------------
William R. Davidson, President and
Director
Date: 6/20/2000 By:/s/Allyson R. N. Davidson
-------------- -------------------------------------
Allyson R. N. Davidson, Secretary/
Treasurer
