UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(x ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File number O-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
incorporation or organization) Identification No.)
610-800 West Pender Street, Vancouver., Canada, V6C 2V6
------------------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
1- 604- 669-2723
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Registrant's telephone number, including area code
(Former name, former address, and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), Yes [x ] No [ ] and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
Class Outstanding as of September 30, 2000
----------------------------- --------------------------------------
Common Stock, $0.001 137,448,322
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<CAPTION>
INDEX
Page
Number
PART I.
<S> <C> <C>
ITEM 1. Financial Statements (unaudited).................................................3
Balance Sheets...................................................................4
September 30, 2000 and June 30, 2000
Statements of Operations
Three months ended September 30, 2000 and 1999...............................5
and the period January 27, 1984 to September 30, 2000
Statements of Cash Flows
Three months ended September 30, 2000 and 1999................................6
and the period January 27, 1984 to September 30, 2000
Notes to Financial Statements....................................................7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................................12
PART II. Other Information...............................................................14
Signatures......................................................................15
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PART I - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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The accompanying balance sheets of Ambra Resources Group, Inc. (a development
stage company) at September 30, 2000 and June 30, 2000, and the statements of
operations and cash flows for the three months ended September 30, 2000 and 1999
and the period January 27, 1984 to September 30, 2000, have been prepared by the
Company's management and they do not include all information and notes to the
financial statements necessary for a complete presentation of the financial
position, results of operations, cash flows, and stockholders' equity in
conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature.
Operating results for the quarter ended September 31, 2000, are not necessarily
indicative of the results that can be expected for the year ending June 30,
2001.
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<CAPTION>
AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
BALANCE SHEETS
September 30, 2000 and June 30, 2000
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ASSETS
Sept 2000 June 2000
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<S> <C> <C>
CURRENT ASSETS
Cash $ 757,545 $ 1,086,224
Accounts receivable 340,140 --
----------- -----------
Total Current Assets 1,097,685 1,086,224
----------- -----------
PROPERTY AND EQUIPMENT - net of accumulated
depreciation - Note 2 146,768 144,330
----------- -----------
OTHER ASSETS
Advance deposits 135,502 --
Account receivable - related party 5,704 15,116
Mining claims - Note 3 -- --
Oil leases - Note 4 570,533 419,519
Equitable securities - Note 5 235,000 235,000
Gas lines - Note 4 -- 290,000
----------- -----------
Total Other Assets 946,739 959,635
----------- -----------
$ 2,191,192 $ 2,190,189
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 26,174 $ 86,763
----------- -----------
Total Current Liabilities 26,174 86,763
----------- -----------
STOCKHOLDERS' EQUITY
Common stock
400,000,000 shares authorized, at $.001 par value;
137,448,322 shares issued and outstanding 137,448 137,448
Capital in excess of par value 6,283,112 6,283,112
Deficit accumulated during the development stage (4,255,542) (4,317,134)
----------- -----------
Total Stockholders' Equity 2,165,018 2,103,426
----------- -----------
$ 2,191,192 $ 2,190,189
=========== ===========
The accompanying notes are an integral part of these
financial statements.
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2000 and 1999
and the Period January 27, 1984 (date of inception) to September 30, 2000
--------------------------------------------------------------------------------
January 27, 1984
Sept 30, Sept 30, (Date of Inception)
2000 1999 to Sept 30, 2000
---- ---- ------------------
REVENUES
Rents and interest $ 12,826 $ 1,367 $ 267,953
Sale of gas line - net 193,860 193,860
------------ ------------ ------------
206,686 1,367 461,813
------------ ------------ ------------
EXPENSES
Exploration, development, 142,908 129,338 4,698,147
and promotion
Depreciation 2,186 850 19,208
145,094 130,188 4,717,355
------------ ------------ ------------
NET PROFIT (LOSS) $ 61,592 $ (128,821) $ (4,255,542)
============ ============ ============
LOSS PER COMMON SHARE
Basic $ -- $ --
------------ ------------
AVERAGE OUTSTANDING
SHARES
Basic 137,448,322 72,892,000
------------ ------------
The accompanying notes are an integral part of these
financial statements.
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Three Months Ended September 30,
2000 and 1999 and January 27, 1984 (Date of Inception) to September 30, 2000
----------------------------------------------------------------------------------------------------------
January 27, 1984
Sept Sept (Date of Inception)
2000 1999 to Sept 30, 2000
---- ---- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net profit (loss) $ 61,592 $ (128,821) $(4,255,542)
Adjustments to reconcile net loss
to net cash provided by operating
activities
Depreciation 2,186 850 43,680
Common capital stock issued
for services & expenses -- 23,000 3,567,764
Loss on mineral leases and real estate -- -- 89,018
(Increase) decrease in accounts receivable (330,728) -- (365,915)
(Increase) decrease in security deposits -- -- 3,333
Increase (decrease) in liabilities (60,589) (11,944) (101,547)
----------- ----------- -----------
Net Cash Used By Operations (327,539) (116,915) (1,019,209)
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Advance deposits (135,502) -- (135,502)
Purchase of equitable securities -- -- (185,000)
Purchase of property & equipment -- (1,569) (166,063)
Purchase of oil & gas leases and mining claims (151,014) -- (352,941)
Sale of gas lines - cost 290,000 -- --
Improvements and net sale of real estate (4,624) -- 46,868
----------- ----------- -----------
(1,140) (1,569) (792,638)
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from sale of capital stock -- -- 2,569,392
----------- ----------- -----------
Net increase (decrease) in cash (328,679) (118,484) 757,545
Cash at beginning of year 1,086,224 140,482 --
----------- ----------- -----------
Cash at end of year $ 757,545 $ 21,998 $ 757,545
=========== =========== ===========
The accompanying notes are an integral part of these
financial statements.
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
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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 137,500
Less accumulated depreciation (19,418)
---------
146,768
---------
Office equipment and computers are 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.
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
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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 and
the oil leases acquired are unknown and therefore an estimate of any future cost
cannot be made.
Income Taxes
------------
At September 30, 2000, the Company had a net operating loss carry forward of
$4,255,542. The tax benefit from the loss carry forward has been fully offset by
a valuation reserve because the use of the future tax benefit is doubtful since
the Company 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.
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
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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 construct a pipe line to
service the wells. The Company 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 $711,000cn.
502,620
-----------
$ 570,533
===========
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AMBRA RESOURCES GROUP, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
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 and cash of $140,000.
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.
6. DEVELOPMENT AND SALE OF WEB SITES
During the prior 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.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
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Overview
Ambra Resources Group, 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.
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
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<PAGE>
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 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 construct a pipe line to service
the wells. The Company 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 $711,000cn.
Acquisition of 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 and cash of $140,000.
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.
Acquisition of web sites
During the prior 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.
Liquidity and Capital Resources
The Registrant has plans to further develop its properties which will require a
substantial part of its current working capital.
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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.
PART II - OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
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None.
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ITEM 2. CHANGES IN SECURITIES
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None
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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None.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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None
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ITEM 5. OTHER INFORMATION
--------------------------------------------------------------------------------
None.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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None.
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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
AMBRA RESOURCES GROUP, INC.
(Registrant)
Dated: November 3, 2000 By /s/ John M. Hickey
--------------------------------
John M. Hickey, President
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