UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended June 30, 2000
----------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission File number 0-11695
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AMBRA RESOURCES GROUP, INC,
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(Exact name of registrant as specified in charter)
Utah 87-0403828
------------------------------ ------------------------------
State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization
610 - 800 West Pender Street, Vancouver, Canada V6C 2V6
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 1-604-669-2723
---------------------------------
Securities registered pursuant to section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
None None
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Securities registered pursuant to section 12 (g ) of the Act:
None
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(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 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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant'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: $ 16,449
----------------
State the aggregate market value of the voting stock held by non affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days.
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<PAGE>
At June 30, 2000, the aggregate market value of the voting stock held by non
affiliates is undeterminable and is considered to be 0. During the past five
years there has been no trading on an exchange however there has been
over-counter-trading in small quantities and therefore the Registrant has
arbitrarily valued these shares with no value.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of June 30, 2000, the registrant had 137,448,322 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the part
of the form 10- KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) any proxy or other
information statement; and (3) Any prospectus filed pursuant to rule 424 (b) or
(c) under the Securities Act of 1933: None
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<PAGE>
TABLE OF CONTENTS
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PART I
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Page
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ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2. DESCRIPTION OF PROPERTIES 4
ITEM 3. LEGAL PROCEEDINGS 4
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 4
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 5
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 5
ITEM 7. FINANCIAL STATEMENTS 7
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 7
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT 7
ITEM 10. EXECUTIVE COMPENSATION 9
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 10
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 11
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 12
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ITEM 1. DESCRIPTION OF BUSINESS
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History and Organization
Ambra Royalty, Inc. (the "Registrant" or "Company") was incorporated under the
laws of the State of Utah on January 27, 1984. The Registrant was initially
organized primarily to hold overriding royalties of both producing and
non-producing oil and gas properties. However, the Company's articles of
incorporation authorize it to engage in all aspects of the oil and gas business
and for any other lawful purpose.
In connection with its corporate purpose, the Registrant was formed as a
wholly-owned subsidiary of Ambra Oil and Gas Company ("Ambra Oil") for the
specific purpose of holding the overriding royalty interests which were
previously owned by Ambra Oil.
In 1989, the Company transferred its remaining assets in exchange for
cancellation of the Company's debt and ceased operations. After 1989 the
Registrant has been engaged in the business of acquiring , exploring, and
developing mineral properties and intends to take advantage of any other
reasonable business proposal presented which management believes will provide
the Company and its stockholders with a viable business opportunity. The board
of directors will make the final approval in determining whether to complete any
acquisition, and unless required by applicable law, the articles of
incorporation or bylaws or by contract, stockholders' approval will not be
sought. See "ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION"
for recent acquisitions.
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ITEM 2. DESCRIPTION OF PROPERTIES
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The Company's administrative offices are located at 610-800 West Pender Street,
Vancouver, Canada, V6C 2V6. The offices are rented from 800 West Pender LTD. See
Item 6 for a description of properties being acquired for further development
and or sale.
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ITEM 3. LEGAL PROCEEDINGS
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None
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
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By a vote of the stockholders on March 3, 2000 the authorized common stock was
increased from 100,000,000 to 400,000,000 shares with the same par value.
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<PAGE>
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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During the past five years through June 30, 2000 there has been no established
trading market for the shares of the Registrant's common stock over an exchange
however the stock has been trading over-the-counter in small quantities. The
trading amounts for a share of stock for the last two years are listed below by
quarter:
2000 1999 1998
Low High Low High Low High
---------- ---------- ----------
First .03 .50 .03 .08 .04 .07
Second .07 .20 .08 .10 .05 .18
Third .03 .06
Fourth .02 .06
The above market quotes were provided by NASDAQ OTC Trading and Market Service.
There have been no interdealer sales. During the last fiscal year the Registrant
issued 66,355,610 common shares of its capital stock at $.02 to $.10 per share
under the Regulation S exemption for cash, other assets and expenses. 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. At June 30, 2000 the Company had approximately 1,551 shareholders.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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Overview
Ambra Royalty, Inc. (the "Registrant" or "Company") was incorporated under the
laws of the State of Utah on January 27, 1984. The registrant was initially
organized primarily to hold overriding royalties of both producing and
non-producing oil and gas properties. However, the Company's articles of
incorporation authorize it to engage in all aspects of the oil and gas business
and for any other lawful purpose.
In connection with its corporate purpose, the Registrant was formed as a
wholly-owned subsidiary of Ambra Oil and Gas Company ("Ambra Oil") for the
specific purpose of holding the overriding royalty interests which were
previously owned by Ambra Oil.
In 1989, the Company transferred its remaining assets in exchange for
cancellation of the Company's debt and ceased operations. After 1989 the
Registrant has been engaged in the business of acquiring , exploring, and
developing mineral properties and the Registrant intends to take advantage of
any reasonable business proposal presented which management believes will
provide the Company and its stockholders with a viable business opportunity. The
board of directors will make the final approval in determining whether to
complete any acquisition, and unless required by applicable law, the articles of
incorporation or bylaws or by contract, stockholders' approval will not be
sought.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention and will
require the Company to incur substantial costs for payment of accountants,
attorneys, and others. If a decision is made not to participate in or complete
the acquisition of a specific business opportunity, the costs incurred in a
related investigation will not be recoverable. Further, even if an agreement is
reached for the participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular transaction
may result in the loss to the Company of all related costs incurred. In the past
the board of directors has approved a resolution authorizing the Registrant to
issue shares of its common stock as consideration for monies advanced or
services rendered on behalf of the Company.
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<PAGE>
Currently, management is not able to determine the time or resources that will
be necessary to complete the participation in or acquisition of any future
business prospect.
Acquisition of Property - Mining Claims - Province of British Columbia, Canada
On June 20, 1994, the Registrant purchased three mineral claims, from a related
party, by the issuance of 200,000 common shares of its stock, and are identified
as Marathon, Marathon 1 and Marathon 2, containing a total of 32 units, with an
expiration date of February 24, 2006, which are located near Cowichan Lake in
the Province of British Columbia, Canada. The claims are located within the
Sicker Volcanic Belt on Vancouver Island in an active gold mining area.
The claims have not been proven to have a commercially minable ore reserve and
therefore all costs for acquisition exploration and retaining the properties
have been expensed.
Acquisition of property - Oil Leases - Beaufort Sea Project
On June 9, 1997 the Company purchased a 3.745% working interest in the Beaufort
Sea well Esso Pex Home et al Itiyok I-27 consisting of 640 acres and is located
at Latitude 70-00', Longitude 134-00', Sections 7, 8, 17, 18, 27, 28, and 37,
License No. 55, dated April 22, 1987. During 1982 and 1983 a consortium of
companies participated in the drilling, casing, and testing the area to a depth
of 12,980 feet. A review of the well data and geological prognosis indicates
that the area would contain proven recoverable gas reserves of 108 Bscf and
proven recoverable oil reserves of 8,976 MSTB.
The other partners in the project are controlled by Exxon Oil Corporation,
however there is no immediate plans to develop the area.
Acquisition of Property - Cessford - Alberta, Canada
On July 17, 1997 the Company purchased a 20% interest in an oil lease in the
Cessford Area, Alberta, Canada by payment of $ 36,627 and 1,230,000 shares of
the Company. The Company has participated in the initial test well costs which
were expensed. On June 3, 1998 the parties mutually agreed to reduced the 20%
interest to 5% resulting in a credit of $96,995cn, to the Company, which was
used in the drilling programs. Six of the seven wells drilled proved worthy of
building a pipeline to a central gathering system. During March 2000 the
registrant completed an agreement with Bigstone Energy to provide the funds
necessary for the construction of the pipe line in exchange for a one third
interest. The registrant issued 4,500,000 shares of its common capital stock as
payment for its share which is shown in the balance sheet under gas lines.
During September 2000 the completed gas line was sold for cash of $211,000cn and
$500,000cn towards one half interest in a gas plant to be constructed.
Other Activities
During the last fiscal year the registrant entered a partnership arrangement to
develop and sell web sites. On the date of this report the activity was in the
development stage and all costs have been expensed.
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<PAGE>
Liquidity and Capital Resources
The Registrant has plans to further develop its properties which may require a
substantial part of its current working capital.
Results of Operations
Since the Company ceased operations in 1989, its only activity, to date has
involved the investigation and purchase of potential business opportunities.
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ITEM 7. FINANCIAL STATEMENTS
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The financial statements of the Company are included immediately following the
signature page to this form 10-KSB.
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
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The Company has had no disagreements with its certified public accountants with
respect to accounting practices or procedures of financial disclosure.
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ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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The following table as of June 30, 2000, includes the name, age, and position of
each executive officer and director and the term of office of each director of
the Company.
Director and/or
Name Age Position Officer Since
---- --- -------- ---------------
John M. Hickey 58 President and Director October 1996
John R. Rask 48 Secretary and Director August 1996
Charles Yourshaw Director August 1996
Dr. Kelly Bowman Director August 1996
Each director of the Company serves for a term of one year and until his
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the Company's shareholders. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until his successor is elected at the annual meeting of the board of directors
and is qualified.
Included below is certain biographical information regarding each of the
Company's executive officers and directors.
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<PAGE>
John M. Hickey Mr. Hickey has had 25 years experience in marketing and
advertising with national public companies and resides in
Vancouver, British Columbia, Canada. He offers expertise in
his negotiations skills and business knowledge, as well as
strong leadership.
John R. Rask Mr. Rask has had 20 years experience in the income tax
service field and resides in Butte, Montana
Charles Yourshaw Mr. Yourshaw has been a professional engineer for 25 years
and owns his own engineering business with experience in
real estate. He resides in Pottsvelle, Pa
Dr. Kelly Bowman Dr. Bowman is as experienced investor with a good knowledge
of public companies.
Except as indicated below, 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:
(1) filed a petition under the federal bankruptcy laws or any state insolvency
law, nor had a receiver, fiscal agent or similar officer appointed by a 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 filing;
(2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) 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:
(i) 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;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity 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;
(4) was the subject of any order, judgment, 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 activity;
(5) 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 judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacated.
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<PAGE>
(6) 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 has not been subsequently reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
Since the Company ceased operations in 1989, the Company knows of no person, who
at any time during the subsequent fiscal years, was a director, officer,
beneficial owner of more than ten percent of any class of equity securities of
the registrant registered pursuant to Section 12 ("Reporting Person"), that
failed to file on a timely basis any reports required to be furnished pursuant
to Section 16 (a). Based upon a review of Forms 3 and 4 furnished to the
registrant under Rule 16a-3(d) during its most recent fiscal year, other than
disclosed below, the registrant knows of no Reporting Person that failed to file
the required reports during the most recent fiscal year or prior years.
The following table as of June 30, 2000, includes 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 or prior years.
Name Position Report to be Filed
---- -------- ------------------
John M. Hickey President and Director Form 3
John R. Rask Secretary and Director Form 3
Charles Yourshaw Director Form 3
Dr. Kelly Bowman Director Form 3
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ITEM 10. EXECUTIVE COMPENSATION
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Cash Compensation
There was no cash compensation paid to any director or executive officer of the
Company during the fiscal years ended June 30, 2000, 1999, and 1998.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
None.
Pension Table
None.
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<PAGE>
Other Compensation
In May 1985, the board of director's authorized the issuance of common stock to
officers, directors, and affiliates of the Company for services rendered and
expenses paid by such individuals.
Pursuant to a resolution of the board of director's dated November 2, 1995, the
board authorized the issuance of 1,183,952 shares of common stock to Gary Worley
(former officer and director) and/or his assigns as full consideration for
services, and the use of an office, furniture, and other expenses. Subsequent to
the issuance of the stock and because of a dispute over the transaction Mr.
Worley has agreed to return the stock which has not been done. The Company will
continue to show the stock as outstanding until it is returned for cancellation.
Pursuant to resolutions of the board of director's 2,595,250 shares of common
stock was issued to related parties for services, use of office and eqiupment
and other expenses during the last fiscal year.
(See "ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.")
Compensation of Directors
None.
Termination of Employment and Change of Control Arrangement
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash Compensation
set out above which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of such person's
employment with the Company or its subsidiaries, or any change in control of the
Company, or a change in the person's responsibilities following a changing in
control of the Company.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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The following table as of June 30, 2000, includes the name and address and the
number of shares of the Company's Common Stock, par value $0.001 per share, held
of record or beneficially by each person who held of record, or was known by the
Company to own beneficially, more than 5% of the 135,448,322 issued and
outstanding shares of the Company's Common Stock, and the name and share
holdings of each director and of all officers and directors as a group.
Nature of Number of
Name of Person or Group Ownership (1) Shares Owned Percent
----------------------- -------------- ------------ ----------
Officers and Directors and
Principal Shareholders:
John M. Hickey Direct - -
John R. Rask Direct - -
Charles Yourshaw Direct - -
Dr. Kelly Bowman Direct - -
All Officers and Directors
as a Group (4 persons) Direct 1,395,250 1
(1) All shares owned directly are owned beneficially and of record, and
such shareholder has sole voting, investment, and dispositive power,
unless otherwise noted.
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<PAGE>
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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Transactions with Management and Others
Except as indicated below, and for the periods indicated, there were no material
transactions, or series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed transactions, or series of
similar transactions, to which the Company was or is to be party, in which the
amount involved exceeds $60,000, and in which any director or executive officer,
or any security holder who is known by the Company to own of record or
beneficially more than 5% of any class of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, has an interest.
Certain Business Relationships
The transactions described below were not the result of arm's length
negotiations, but in the opinion of management, the terms of such transactions
were fair to the Company and no less favorable than could have been obtained
from unrelated parties.
At a special meeting of the board of directors held on May 15, 1985, the board
approved a resolution authorizing the Company to issued shares of common stock
of the Company as consideration to officers, directors, and affiliates to
services rendered and reimbursement of expenses incurred on behalf of the
Company due to the Company's reduced operational status and lack of funds to
cover such expenses.
See item 10 for issuance of common capital stock for services, use of office,
and expenses to related parties in accordance with the above approved
resolution.
Indebtedness of Management
There were no material transactions, or series of similar transactions, since
the beginning of the Company's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which the Company was or is
to be a party, in which the amount involved exceeds $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than 5% of any class of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
Transactions with Promoters
The Company was organized more than five years ago therefore transactions
between the Company and its promoters or founders are not deemed to be material.
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<PAGE>
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
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(a) (1) Financial Statements. The following financial statements are included in
this report:
Title of Document Page
----------------- ----
Report of Andersen, Andersen & Strong, Certified Public Accountants 15
Balance Sheet as of June 30, 2000 16
Statements of Operations for years ended June 30, 2000 and 1999 17
and from inception
Statements of Stockholders' Equity for the years ended June 30, 2000 and
1999 and from inception 18
Statements of Cash Flows for the years ended June 30, 1999 and 1998 24
and from inception
Notes to Financial Statements 26
(a)(2) Financial Statement Schedules. The following financial statement
schedules are included as part of this report: None
(a)(3) Exhibits.
None
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<PAGE>
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
AMBRA RESOURCES GROUP, INC.
Date:Sept. 21, 2000
By /s/ John M. Hickey
--------------------------------------
John M. Hickey, President and Director
Date:Sept. 21, 2000
By /s/ John R. Rask
--------------------------------------
John R. Rask, Secretary and Director
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<PAGE>
ANDERSEN ANDERSEN & STRONG, L.C.
Certified Public Accountants and Business Consultants
Member SEC Practice Section of the AICPA
A member of ACF International with affiliated offices worldwide.
941 East 3300 South, Suite 202
Salt Lake City, utah 84106
Telephone 801-486-0096
Fax 801-486-0098
Email KAndersen @msn.com
Board of Directors
Ambra Resources Group, Inc.
Vancouver, B.C. Canada
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Ambra Resources Group, Inc. (
development stage company), at June 30, 2000 and the statements of operations,
changes in stockholders' equity, and cash flows for the years ended June 30,
2000 and 1999 and the period January 27, 1984 (date of inception) to June 30,
2000. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 Ambra Resources Group, Inc. as of
June 30, 2000, and the results of operations and cash flows for the years ended
June 30, 2000, and 1999 and the period January 27, 1984 (date of inception) to
June 30, 2000, in conformity with generally accepted accounting principles.
Andersen Andersen & Strong
September 25, 2000
Salt Lake City, Utah
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<PAGE>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
BALANCE SHEET
June 30, 2000
--------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 1,086,224
------------
Total Current Assets 1,086,224
------------
PROPERTY AND EQUIPMENT - net of accumulated
depreciation - Note 2 144,330
------------
OTHER ASSETS
Accounts receivable - related party 15,116
Mining claims - Note 3 -
Oil leases - Note 4 419,519
Equitable securities - Note 5 235,000
Gas lines - Note 4 290,000
------------
959,635
$ 2,190,189
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 86,763
------------
Total Current Liabilities 86,763
------------
STOCKHOLDERS' EQUITY
Common stock
400,000,000 shares authorized, at $.001 par value;
137,448,322 issued and outstanding 137,448
Capital in excess of par value 6,283,112
Deficit accumulated during the development stage (4,317,134)
------------
Total Stockholders' Equity 2,103,426
------------
$ 2, 190,189
============
The accompanying notes are an integral part of these
financial statements.
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<PAGE>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENTS OF OPERATIONS
For the Years Ended June 30, 2000 and 1999 and
the Period From January 27, 1984 (date of inception) to June 30, 2000
--------------------------------------------------------------------------------
January 27, 1984
June June (Date of Inception)
2000 1999 to June 30, 2000
------------ ------------ ------------------
REVENUES $ 16,449 $ 7,285 $ 255,127
------------ ------------ -----------
EXPENSES
Exploration, development, 1,036,944 1,611,702 4,555,239
and promotion
Depreciation 8,744 3,100 17,022
1,045,688 1,614,802 4,572,261
------------ ------------ -----------
NET LOSS $ (1,029,239) $ (1,607,517) $(4,317,134)
============ ============ ===========
LOSS PER COMMON SHARE
Basic $ (.01) $ (.03)
------------ ------------
AVERAGE OUTSTANDING
SHARES
Basic 98,962,064 46,557,712
------------ ------------
The accompanying notes are an integral part of these
financial statements.
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<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period from January 27, 1984 (Date of Inception) to June 30, 2000
----------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Balance January 27, 1984
(Date of Inception) - $ - $ - $ -
Issuance of common stock for
oil and gas leases 122,086 122 19,438 -
Net income from operations
for the period ended June 30, 1984 - - - 3,048
Net loss from operations
for the year ended June 30, 1985 - - - (44,556)
Issuance of common stock
for cash 501 1 38 -
Net income from operations
for the year ended June 30, 1986 - - - 18,018
Issuance of common stock
for cash 7,774 7 19,298 -
Net loss from operations
for the year ended June 30, 1987 - - - (9,248)
Issuance of common stock
for cash 6,000 6 - -
Net income from operations
for the year ended June 30, 1988 - - - 15,828
Net loss from operations
for the year ended June 30, 1989 - - - (22,000)
Capital contribution - expenses - - 752 -
Issuance of common stock
for services - related party 900,000 900 8,100 -
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-17-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
-------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
--------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Net loss from operations
for the year ended June 30, 1993 - - - (9,752)
Issuance of common stock
for land 200,000 200 (200) -
Issuance of common stock
for services - related party 300,000 300 2,700 -
Issuance of common stock
for mining claims - related party 50,000 50 450 -
Issuance of common stock
for stock dividends 16 - - -
Issuance of common stock
for cash 22,500 23 44,977 -
Net loss from operations
for the year ended June 30, 1994 - - - (82,277)
Issuance of common stock
for option on property 50,000 50 450
Issuance of common stock
for mining claims - related party 150,000 150 1,350
Issuance of common stock
for expenses 22,000 22 198
Issuance of common stock for cash 255,000 255 179,745
Net loss from operations
for the year ended June 30, 1995 - - - (115,762)
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-18-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Issuance of common stock for
expenses - September 22, 1995 -
related party 137,979 138 68,850 -
Issuance of common stock for
cash - November 2, 1995 10,000 10 4,990 -
Issuance of common stock for
equipment and expenses -
November 2, 1995 - (Note 8) 1,173,897 1,174 (1,174) -
Issuance of common stock for
cash - December 15, 1995 10,000 10 4,990 -
Issuance of common stock for
cash - February 20, 1996 40,000 40 19,960 -
Issuance of common stock for
expenses - April 30, 1996 20,000 20 3,980 -
Issuance of common stock for
cash and expenses - May 8, 1996 153,000 153 30,447 -
Issuance of common stock for
expenses - May 20, 1996 62,500 62 12,438 -
Issuance of common stock for
cash - May 20, 1996 25,000 25 12,475 -
Issuance of common stock for
oil leases - June 18, 1996 -
related party 200,000 200 1,800 -
Issuance of common stock for
expenses - June 18, 1996 -
related party 300,000 300 59,700 -
</TABLE>
The accompanying notes are an
integral part of these financial statements.
-19-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
--------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- --------- -------------
<S> <C> <C> <C> <C>
Net loss from operations for
the year ended June 30, 1996 - - - (269,717)
Issuance of additional shares resulting
from reverse stock split - October 1996 4,540,007 4,540 (4,540) -
Issuance of common stock for accts pay and,
commissions at $.05 - Sept & Oct 1996 1,028,600 1,029 48,730 -
Issuance of common stock for mining
claims at $.05 - Nov 1996 100,000 100 4,900 -
Issuance of common stock for services and
expenses at $.05- related parties-Nov 96 2,425,200 2,425 123,065 -
Issuance of common stock for services -
at $.05 - Jan 1997 425,000 425 20,825 -
Issuance of common stock for services and
expenses at $.05 - related parties-Apr 97 1,774,506 1,775 86,952 -
Issuance of common stock for oil leases
at $.05 - May 1997 600,000 600 29,400 -
Issuance of common stock for services and
expenses at $.05 - related parties-May 97 2,550,000 2,550 124,950 -
Issuance of common stock for cash at $.10 -
May & June 1997- private placement 1,359,000 1,359 134,541 -
Issuance of common stock for oil leases
at $.05 - June 1997 1,240,000 1,240 60,760 -
Issuance of common stock for cash at $.10 -
June 1997 - private placement 1,008,000 1,008 99,800 -
Issuance of common stock for services
at $.05 - June 1997 640,000 640 30,860 -
Issuance of common stock for mining
claims at $.05 - June 1997 100,000 100 4,900 -
</TABLE>
The accompanying notes are an integral part of these financial statements.
-20-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
----------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Net loss from operations for the
year ended June 31, 1997 - - - (515,238)
Issuance of common stock for oil
leases at $.10 - July 1997 930,000 930 92,070 -
Issuance of common stock for payment
of debt at $.10 - July 1997 - related party 1,134,480 1,134 112,314 -
Issuance of common stock for two
residential lots at $.10 - Sept 1997 700,000 700 69,300 -
Issuance of common stock and payment
of stock issuance expense - Sept 1997 250,000 250 (9,250) -
Issuance of common stock for cash at $.10 - 1,221,000 1,221 120,879 -
July and Sept 1997 - private placement
Issuance of common stock for services and
payment of debt at $ .10 - related parties 1,199,710 1,200 118,771 -
Dec 1997
Issuance of common stock for costs
of stock issuance - Dec 1997 250,000 250 (250) -
Issuance of common stock for installment
payment on mining claims at $.10 - 100,000 100 9,900 -
Dec 1997
Issuance of common stock for expenses 549,000 549 54,351 -
at $.10 related parties - Dec 1997
Issuance of common stock for expenses 2,274,000 2,274 111,426 -
at $.05 - related parties - May 1998
Issuance of common stock for expenses
at $.06 - related parties - June 1998 1,500,000 1,500 140,500 -
</TABLE>
The accompanying notes are an integral
part of these financial statements.
-21-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
----------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Issuance of common stock for installment
payment on mining claims - June 1998 100,000 100 9,900 -
Net loss from operations for the year
ended June 30, 1998 - - - (648,722)
---------- --------- ---------- ------------
Balance June 30, 1998 32,216,756 $ 32,217 $ 2,090,806 $ (1,680,378)
Issuance of common stock for stock
issue expense - at $.04 - July 1998 320,000 320 (320) -
Issuance of common stock for cash
at $.08 - Jul 1998 450,000 450 35,550 -
Issuance of common stock for expenses
at $.04 - Jul 1998 295,000 295 11,505 -
Issuance of common stock for services
at $.04 - Jul 1998 457,500 458 17,842 -
Issuance of common stock for cash
at $.05 - Jul 1998 268,456 268 13,155 -
Issuance of common stock for services
and expenses at $.025 - Jan 1999 5,520,000 5,520 132,480 -
Issuance of common stock for services
at $.04 - Jan 1999 500,000 500 19,500 -
Issuance of common stock for services
at $.04 - Feb 1999 700,000 700 27,300 -
Issuance of common stock for stock
issue expenses at $.04 - Feb 1999 1,500,000 1,500 (1,500) -
Issuance of common stock for purchase
of mineral property at $.04 - Feb 1999 1,000,000 1,000 39,000 -
Issuance of common stock for purchase
of mineral property at $.04 - Feb 1999 1,200,000 1,200 46,800 -
</TABLE>
The accompanying notes are an integral part of these financial statements.
-22-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
----------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Issuance of common stock for stock
issue expenses at $.04 - Feb 1999 450,000 450 (450) -
Issuance of common stock for services
at $.04 - March 22, 1999 2,000,000 2,000 78,000 -
Issuance of common stock for
equitable securities at $.04-May ,99 1,250,000 1,250 48,750 -
Issuance of common stock for stock
issue expense at $.04 - May 5, 1999 1,700,000 1,700 (1,700) -
Issuance of common stock for cash
at $.04 - May 26, 1999 2,000,000 2,000 78,000 -
Issuance of common stock for services
at $.04 - May 26, 1999 5,200,000 5,200 202,800 -
Issuance of common stock for services
at $.04 - May 27, 1999 5,000,000 5,000 195,000 -
Issuance of common stock for cash
at $.04 - May 27, 1999 1,000,000 1,000 49,000 -
Issuance of common stock for cash
at $.04 - June 1, 1999 190,000 190 9,310 -
Issuance of common stock for services
at $.04 - June 1, 1999 7,875,000 7,875 307,125 -
Net loss from operations for the year
ended June 30, 1999 - - - (1,607,517)
---------- -------- --------- -----------
Balance June 30, 1999 71,092,712 71,093 3,397,953 (3,287,895)
</TABLE>
The accompanying notes are an integral
part of these financial statements.
-23-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
----------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Issuance of common stock for payment
of debt at $.055 - Sept 10, 1999 4,965,360 4,965 266,303 -
Issuance of common stock for services
at $.05 - Sept 10, 1999 460,000 460 22,540 -
Issuance of common stock for cash
at $.02 - Dec 14, 1999 1,500,000 1,500 28,500 -
Issuance of common stock for payment
of debt at $.02 - Jan 18, 2000 1,615,000 1,615 30,685 -
Issuance of common stock for cash
at $.074 - Jan 27, 2000 16,000,000 16,000 1,165,421 -
Issuance of common stock for services
at $.05 - Jan 27, 2000 3,010,000 3,010 147,490 -
Issuance of common stock for purchase
of gas line at $.02 - Mar 9, 2000 2,000,000 2,000 38,000 -
Issuance of common stock for purchase
of web sites at $.04 - Mar 14, 2000 4,000,000 4,000 76,000 -
Issuance of common stock for purchase
of gas lines at $.10 - Apr 4, 2000 2,500,000 2,500 247,500 -
Issuance of common stock for cash
at $.10 - Apr 4, 2000 2,000,000 2,000 198,000 -
Issuance of common stock for stock
issue expense - Apr 4, 2000 5,000,000 5,000 (5,000) -
Issuance of common stock for cash
at $.10 - Apr 6, 2000 3,000,000 3,000 297,000 -
Issuance of common stock for equitable
securities at $.045 - Apr 6, 2000 1,000,000 1,000 44,000 -
</TABLE>
-24-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Period from January 27, 1984 (Date of Inception) to June 30, 2000
----------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Issuance of common stock for stock
issue expense - Apr 6, 2000 5,000,000 5,000 (5,000) -
Issuance of common stock for expenses
at $.05 - Apr 6, 2000 2,610,000 2,610 127,890 -
Issuance of common stock for payment
of debt at $.10 - May 10, 2000 1,395,250 1,395 138,130 -
Issuance of common stock for expenses
at $.06 - Jun 22, 2000 1,300,000 1,300 76,700 -
Issuance of common stock for stock
issue expense - Jun 22, 2000 9,000,000 9,000 (9,000) -
Net loss from operations for the year
ended June 30, 2000 - - - (1,029,239)
Balance June 30, 2000 137,448,322 $ 137,448 $ 6,283,112 $(4,317,134)
=========== ========= =========== ===========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
-25-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Years Ended June 30, 2000 and 1999 and the
Period January 27, 1984 (Date of Inception) to June 30, 2000
-------------------------------------------------------------------------------------------------------------------
January 27, 1984
June June (Date of Inception)
2000 1999 to June 30, 2000
------------ ----------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (1,029,239) $ (1,607,517) $ (4,317,134)
Adjustments to reconcile net loss
to net cash provided by operating
activities
Depreciation 8,744 3,311 41,494
Common capital stock issued
for services & expenses 1,240,093 1,084,100 3,567,764
Loss on mineral leases and real estate - 78,018 89,018
(Increase) decrease in accounts receivable (15,116) - (35,187)
(Increase) decrease in security deposits 3,333 - 3,333
Increase (decrease) in liabilities (352,261) 291,540 (40,958)
---------- --------- ----------
Net Cash Used By Operations (144,446) (150,548) (691,670)
---------- --------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of equitable securities (185,000) - (185,000)
Purchase of property & equipment (42,254) (9,419) (166,063)
Purchase of oil & gas leases and mining claims (103,979) - (201,927)
Purchase of gas lines (290,000) - (290,000)
Proceeds from sale of real estate - 51,492 51,492
---------- --------- ----------
(621,233) 42,073 (791,498)
---------- --------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from sale of capital stock 1,711,421 188,923 2,569,392
---------- --------- ----------
Net increase (decrease) in cash 945,742 80,448 1,086,224
Cash at beginning of year 140,482 60,034 -
---------- --------- ----------
Cash at end of year $ 1,086,224 $ 140,482 $ 1,086,224
============= ============ ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-26-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
For the Period January 27, 1984 (Date of Inception) to June 30, 2000
---------------------------------------------------------------------------------------------------
<S> <C>
SCHEDULE OF NONCASH OPERATING, INVESTING, AND FINANCING ACTIVITIES
Issuance of 122,086 shares in exchange for royalty
interests in oil and gas leases - 1984 $ 19,560
----------
Issuance of 900,000 shares for services - 1993 9,000
----------
Issuance of 200,000 shares for land - 1993 - (Note 1) -
----------
Issuance of 50,000 shares for mining claims - 1994 500
----------
Issuance of 300,000 shares for services - 1994 3,000
----------
Issuance of 50,000 shares for option on property - 1994 500
----------
Issuance of 150,000 shares for mining claims - 1995 1,500
----------
Issuance of 22,000 shares for expenses - 1995 220
----------
Issuance of 137,979 shares for expenses - 1995 68,988
----------
Issuance of 1,173,897 shares for equipment and expenses - 1995 - Note 1 -
----------
Issuance of 20,000 shares for expenses - 1996 4,000
----------
Issuance of 118,115 shares for expenses - 1996 23,623
----------
Issuance of 62,500 shares for expenses - 1996 12,500
----------
Issuance of 200,000 shares for oil leases - 1996 2,000
----------
Issuance of 300,000 shares for expenses - 1996 60,000
----------
Issuance of 1,028,600 shares for accounts payable and commissions - 1996 49,759
----------
Issuance of 100,000 shares for mining claims - 1996 5,000
----------
Issuance of 2,425,200 shares for services and expenses - 1996 125,490
----------
Issuance of 425,000 shares for services -1997 21,250
----------
Issuance of 1,774,506 shares for services and expenses - 1997 88,727
----------
Issuance of 600,000 shares for oil leases - 1997 30,000
----------
Issuance of 2,550,000 shares for services and expenses - 1997 127,500
----------
Issuance of 1,240,000 shares for oil leases - 1997 62,000
----------
Issuance of 640,000 shares for services - 1997 31,500
----------
Issuance of 100,000 shares for mining claims - 1997 5,000
----------
Issuance of 930,000 shares for oil leases - 1997 93,000
----------
Issuance of 1,134,480 shares for payment of debt - 1997 113,448
----------
Issuance of 700,000 shares for two residential lots - 1997 70,000
----------
Issuance of 1,199,710 shares for services and payment of debt - 1997 119,971
----------
Issuance of 100,000 shares for installment payment on mining claims - 1997 10,000
----------
Issuance of 549,000 shares for expenses - 1998 54,900
----------
Issuance of 2,274,000 shares for expenses - 1998 113,700
----------
Issuance of 1,500,000 shares for expenses - 1998 142,000
----------
Issuance of 100,000 shares for installment payment on mining claims - 1998 10,000
----------
Issuance of 29,247,500 shares for services and expenses - 1998 and 1999 1,042,100
----------
Issuance of 1,250,000 shares for 50% of outstanding stock of Oil Ventures Inc. - 1999 50,000
----------
Issuance of 2,200,000 shares for purchase of mineral claims - 1999 88,000
----------
</TABLE>
-27-
<PAGE>
<TABLE>
<CAPTION>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
STATEMENTS OF CASH FLOWS
(Continued) For the Period January 27, 1984 (Date of Inception) to June 30, 2000
---------------------------------------------------------------------------------------------------
SCHEDULE OF NONCASH OPERATING, INVESTING, AND FINANCING ACTIVITIES
<S> <C>
Issuance of 4,965,360 shares in payment of debt - 1999 $ 271,268
----------
Issuance of 460,000 shares for services - 1999 23,000
----------
Issuance of 1,615,000 shares for payment of debt - 2000 32,300
----------
Issuance of 3,010,000 shares for services - 2000 150,500
----------
Issuance of 2,000,000 shares for purchase of gas lines - 2000 40,000
----------
Issuance of 4,000,000 shares for purchase of web sites - 2000 80,000
----------
Issuance of 2,500,000 shares for purchase of gas lines - 2000 250,000
----------
Issuance of 1,000,000 shares for purchase of equitable securities - 2000 45,000
----------
Issuance of 2,610,000 shares for expenses - 2000 130,500
----------
Issuance of 1,395,250 shares for payment of debt - 2000 139,525
----------
Issuance of 1,300,000 shares for expenses - 2000 78,000
----------
Issuance of 19,000,000 shares for stock issue expenses - 2000 -
----------
</TABLE>
-28-
<PAGE>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. ORGANIZATION
The Company was incorporated under the laws of the State of Utah on January 27,
1984 with authorized capital stock of 50,000,000 shares at a par value of $0.001
and on May 17, 1999 the authorized was increased to 100,000,000 shares and on
March 3, 2000 the authorized was increased to 400,000,000 shares with the same
par value.
The company has been in the exploratory and development stage since inception
and has been primarily engaged in the business of the acquisition and
development of mining and oil properties.
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 any policy regarding payment of dividends.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid instruments purchased with a maturity,
at the time of purchase, of less than three months, to be cash equivalents.
Property and Equipment
----------------------
The Company's property and equipment consists of the following:
Office equipment 28,686
Residential rentals 132,877
Less accumulated depreciation (17,233)
---------
144,330
---------
Office equipment is depreciated on the straight line method over five years and
the residential rentals are depreciated on the straight line method over forty
years.
Earnings Per Share
------------------
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding.
-29-
<PAGE>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Capitalization of Mining Claim Costs
-------------------------------------
Costs of acquisition, exploration, carrying, and retaining unproven properties
are expensed as incurred. Costs incurred in proving and developing a property
ready for production are capitalized and amortized over the life of the mineral
deposit or over a shorter period if the property is shown to have an impairment
in value. Expenditures for mine equipment are capitalized and depreciated over
their useful lives.
Capitalization of Oil Leases Costs
-------------------------------------
The Company uses the successful efforts cost method for recording its oil lease
interests, which provides for capitalizing the purchase price of the project and
the additional costs directly related to proving the properties and amortizing
these amounts over the life of the reserve when operations begin or a shorter
period if the property is shown to have an impairment in value or expensing the
remaining balance if proven of no value. Expenditures for oil well equipment are
capitalized and depreciated over their useful lives.
Environmental Requirements
--------------------------
At the report date environmental requirements related to the mineral claims
acquired are unknown and therefore an estimate of any future cost cannot be
made.
Income Taxes
------------
At June 30, 2000, the Company had a net operating loss carry forward of
$4,317,134. 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. The
Company is unable to establish a predictable projection of operating profits for
future years.
The net operating loss carryovers will expire beginning in the years 2000
through 2021.
Foreign Currency Translation
----------------------------
Part of the transactions of the Company were completed in Canadian dollars and
have been translated to US dollars as incurred, at the exchange rate in effect
at the time, and therefore, no gain or loss from the translations is recognized.
US dollars are considered to be the functional currency.
Financial Instruments
---------------------
The carrying amounts of financial instruments, including cash, investments in
mining claims and oil leases, and accounts payable, are considered by management
to be their estimated fair values.
-30-
<PAGE>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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.
Concentration of Credit Risk
----------------------------
Financial instruments that potentially subject the Company to significant
concentration of credit risk consists primarily of cash and account receivables.
Cash balances are maintained in accounts that are not federally insured for
amounts over $100,000 but are other wise in financial institutions of high
credit quality. Accounts receivable are unsecured however management considers
them to be currently collectable.
Comprehensive Income
--------------------
The Company has adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity.
Other Recent Accounting Pronouncements
--------------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements to have any material impact on its financial statements.
3. MINING CLAIMS
On June 20, 1994 the Company purchased three unproven mineral claims, from a
related party, and are identified as Marathon, Marathon 1 and Marathon 2,
containing a total of 32 units, with expiration dates during 2006, which are
located near Cowichan Lake in the Province of British Columbia, Canada. The
claims are located within the Sicker Volcanic Belt on Vancouver Island in an
active gold mining area.
The claims have not been proven to have a commercially minable ore reserve and
therefore all costs for acquisition exploration and retaining the properties
have been expensed.
-31-
<PAGE>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
4. OIL LEASES
BEAUFORT SEA PROJECT COST
-------------------- ----
On June 9, 1997 the Company purchased a 3.745% working interest
in the Beaufort Sea well Esso Pex Home et al Itiyok I-27
consisting of 640 acres and is located at Latitude 70-00',
Longitude 134-00', Sections 7, 8, 17, 18, 27, 28, and 37, License
No. 55, dated April 22, 1987. During 1982 and 1983 a consortium
of companies participated in the drilling, casing, and testing
the area to a depth of 12,980 feet. A review of the well data and
geological prognosis indicates that the area would contain proven
recoverable gas reserves of 108 Bscf and proven recoverable oil
reserves of 8,976 MSTB.
The other partners in the project are controlled by Exxon Oil
Corporation, however there is no immediate plans to develop the
area. $ 67,913
CESSFORD - ALBERTA, CANADA
--------------------------
On July 17, 1997 the Company purchased a 20% interest in a proven
oil lease in the Cessford Area, Alberta, Canada by payment of $
36,627 and 1,230,000 shares of the Company. The Company has
participated in the initial test well costs which were expensed.
On June 3, 1998 the parties mutually agreed to reduce the 20%
interest to 5% resulting in a credit of $96,995cn, to the Company
which was used in the drilling programs . Six of the seven wells
drilled proved worthy of building a pipeline to a central
gathering system. During March 2000 the Company completed an
agreement with Bigstone Energy to provide the funds necessary for
the construction of the pipe line in exchange for a one third
interest. The Company has issued 4,500,000 shares of its common
capital stock as payment for its share which is shown in the
balance sheet under gas lines. During September 2000 the
completed gas line was sold for cash of $211,000cn and $500,000cn
towards one half interest in a gas plant to be constructed.
351,606
---------
$ 419,519
=========
5. EQUITABLE SECURITIES
The Company purchased 75% of the outstanding stock of Venture Oil and Gas Inc.
by the issuance of 2,250,000 common shares of the Company, cash of $75,000, and
a note payable of $65,000 due in late 2000. Venture Oil and Gas Inc. has
interests in various proven and unproven oil properties, some of which have the
well equipment installed. Some of the wells are near the production stage,
however, additional costs will be required to bring them into production.
On the date of this report financial statements of Venture Oil and Gas were not
available for inclusion in this report and therefore consolidated financial
statements have not been prepared.
-32-
<PAGE>
AMBRA RESOURCES GROUP, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
6. DEVELOPMENT AND SALE OF WEB SITES
During the last fiscal year the Company entered a partnership arrangement to
develop and sell web sites. On the date of this report the activity was in the
development stage and all costs have been expensed.
7. ISSUANCE OF COMMON CAPITAL STOCK
During the last fiscal year the Company issued 66,355,610 common shares of its
capital stock at $.02 to $.10 per share under the Regulation S exemption for
cash, other assets, and expenses and are shown in the statement of changes in
stockholders' equity..
8. RELATED PARTY TRANSACTIONS
Officers and directors have received 2,595,250 common shares of the Company for
payment of debt and expenses.
9. RETURN OF CAPITAL STOCK ISSUED
Pursuant to a resolution of the board of director's dated November 2, 1995, the
board authorized the issuance of 1,183,952 shares of common stock to Gary Worley
(former officer and director) and/or his assigns as full consideration for
services, the use of an office, furniture, and other expenses. Subsequent to the
issuance of the stock and because of a dispute over the transaction Mr. Worley
has agreed to return the stock which has not been done. The Company will
continue to show the stock as outstanding until it is returned for cancellation.
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