SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
Of the Securities Exchange Act of 1934
For the Quarter Ended Commission File No.
--------------------- -------------------
September 30, 2000 0-13597
ASDAR INC.
----------
(Exact Name of Registrant)
NEVADA 88-0195105
------------------------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1239 West Georgia Street, Suite 3004
Vancouver, B.C. V6E 4R8
------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number including area code: 888-488-6882
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Former Address (8632 South Highway 287, Corsicana, Texas 75110) N/A
-----
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 proceeding 12 months (or for such shorter period
that the registrant was required to file such report), and (2) has been
subject to such filing requirements in the past 90 days:
YES X NO
--------- ---------
Indicate the number of shares outstanding for each of the issuer's
classes of Stock as of the last practical date:
At September 30, 2000, there were 10,256,999 shares of common stock
at $0.001 par value issued and outstanding.
<PAGE> 2
ASDAR INC.
TABLE OF CONTENTS
PART I FINANCIAL STATEMENTS
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Significant Non Cash Transactions 6
Notes to Financial Statements 7
ITEM 2 MANAGEMENT'S DISCUSSION AND FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity & Capital Resources 8
Results of Operations 8
PART II OTHER INFORMATION
ITEM 1 LAK RANCH 9
ITEM 2 DIRECTORS, EXECUTIVE OFFICERS AND CONSULTANTS 9,10
ITEM 3 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS 11
ITEM 4 SECURITY OWNERSHIP OF MANAGEMENT 11
ITEM 5 DESCRIPTION OF SECURITIES 11
ITEM 6 RECENT SALES OF UNREGISTERED SECURITIES 11
ITEM 7 CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 11
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANT 12
ITEM 9 LEGAL PROCEEDINGS 12
SIGNATURES 12
<PAGE> 3
ASDAR INC.
(A Development Stage Company)
BALANCE SHEETS
September 30, 2000 (Unaudited) & December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
September December
30, 2000 31, 1999
--------- --------
ASSETS
Current Assets
-------------------
Cash $ 2,145 $ 708
Oil and Gas Properties (Note 3) 1,595,000 0
---------- ----------
Total Assets $ 1,597,145 $ 708
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
----------------------
Accounts Payable $ 26,236 $ 35,765
Due to related parties (Note 5) 103,700 0
---------- ----------
Total Current Liabilities 129,936 35,765
Stockholders' Equity
--------------------
Common Stock (Note 4)
50,000,000 Shares Authorized, at $0.001 Par Value
10,256,999 Issued and Outstanding Sep 30, 2000
1,894,499 Issued and Outstanding Dec 31, 1999 10,257 1,894
Additional Paid in Capital 10,021,375 7,514,888
Treasury Stock (199,167) (199,167)
Accumulated Deficit (8,365,256) (7,352,672)
----------- ----------
Total Stockholders' Equity (Deficiency) 1,467,209 (35,057)
----------- ----------
Total Liabilities & Stockholders' Equity $ 1,597,145 $ 708
=========== ==========
</TABLE>
See Accompanying Notes
<PAGE> 4
ASDAR INC.
(A Development Stage Company)
Statements of Operations (Unaudited)
For the Three Month Period Ended September 30, 2000 & 1999
And the Nine Month Period Ended September 30, 2000 & 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Cumulative
For the Three Month Period For the Nine Month Period from
July 1 to July 1 to Jan 1 to Jan 1 to Jan 1, 1996
Sept 30, Sept 30, Sept 30, Sept 30, to Sept. 30,
2000 1999 2000 1999 2000
---------- ---------- --------- ---------- ------------
Revenue
--------------
Interest Income $ - $ - $ - $ - $ 1,834
-------------- ---------- ---------- --------- ---------- ------------
Expenses
------------
Interest Expense - - - - 4,000
Legal Fees - - - 565 278,940
Consulting Fees 11,121 6,000 7,340 18,000 265,840
General &
Administrative
Expenses 83,545 1,632 318,644 1,624 380,006
Software Development
Costs (Note 2) 86,600 - 686,600 - 686,600
Litigation Settlement - - - - 2,291,070
---------- ---------- --------- ---------- ------------
Total Expenses 181,266 7,632 1,012,584 20,189 3,906,456
---------- ---------- --------- ---------- ------------
Net Loss $ (181,266) $ (7,632) $ (1,012,584) $ (20,189) $ (3,904,622)
========== ========== ========= ========== ============
Basic Loss per Share ($0.04) ($0.01) ($0.24) ($0.01)
========== ========== ========= ==========
Weighted Average
Shares Outstanding 4,579,933 1,817,002 4,217,696 1,817,002
========== ========== ========= ==========
</TABLE>
See Accompanying Notes
<PAGE> 5
ASDAR INC.
(A Development Stage Company)
Statements of Cash Flows (Unaudited)
For the Three Month Period Ended September 30, 2000, & 1999
And the Nine Month Period Ended September 30, 2000 & 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cumulative
For the Nine Month Period from
Jan 1 to Jan 1 to Jan 1, 1996
Sept 30, Sept 30, to
2000 1999 Sept. 30, 2000
----------- ----------- --------------
Cash Flows from Operating Activities
------------------------------------
Net Loss $ (1,012,584) $ (20,189) $ (3,904,622)
Adjustments to Reconcile Net Loss to
Net Cash used by Operating Activities
Non-Cash Expenses 892,550 500 3,394,931
Increase in Accounts Payable 19,871 18,000 (64,764)
---------- ---------- ------------
Net Cash Used by Operating Activities (100,163) (1,689) (574,455)
----------- ---------- ------------
Cash Flows from Investing Activities 0 0 0
------------------------------------ ----------- ---------- ------------
Cash Flows from Financing Activities
------------------------------------
Increase in notes payable 0 0 475,000
Advances from related parties 101,600 0 101,600
----------- ---------- ------------
101,600 0 576,600
----------- ---------- ------------
Increase (decrease) in Cash 1,437 (1,689) 2,145
Cash at Beginning of Period 708 2,427 0
----------- ---------- ------------
Cash at End of Period $ 2,145 $ 738 $ 2,145
=========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Significant Non-Cash Transactions
------------------------------------
On March 23, 2000, 2,000,000 shares were issued for software development $ 600,000
On March 30, 2000, 110,000 shares were issued for services $ 11,000
On September 18, 2000, 730,000 shares were issued for services and cash advances $ 306,600
On September 22, 2000, 22,500 shares were issued for interest charges $ 2,500
On September 22, 2000, 5,500,000 shares were issued for LAK Ranch property $ 1,595,000
</TABLE>
See Accompanying Notes
<PAGE> 6
ASDAR INC.
(A Development Stage Company)
Notes to the Financial Statements (Unaudited)
For the Three Month Period Ended September 30, 2000, & 1999
And the Nine Month Period Ended September 30, 2000 & 1999
Note 1 - Basis of Presentation
---------------------------------------
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
finanial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of manage-
ment, adjustments (consisting of normal recurring accruals) considered
necessary for a fair representation have been included. Operating
results for the nine month period ending September 30, 2000, are not
necessarily indicative of the results that may be expected for the year
ended December 31, 2000. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report
on Form 10-K for the year ended December 31, 1999.
The company was incorporated as Venture Investments Inc. under the Law
s ofthe State of Nevada on November 29, 1983. The company underwent
a name change to ASDAR Inc. on December 10, 1997. The company was dormant
from 1991 to 1996 and currently has no revenue generating operations.
In accordance with SFAS #7, the company is considered a development stage
company since January 1, 1996. At September 30, 2000, the Company had a
working capital deficiency of $127,791 and has been dependent on directors
and certain shareholders for financing. The ability of the Company to
continue operations as a going concern is dependent on raising additional
capital by sale of shares and upon generating future profitable operations.
Note 2 - Tek Master Project
-------------------------------------
The Technology Development Agreement for the development of the scalable
server platform software was signed on March 8, 2000 between Tek Master
Ltd., a British Columbia corporation, and Xntrik Enterprises Ltd., a
British Columbia corporation, and the company.
The agreement calls for the company to provide the following:
1. The issuance of two million (2,000,000) restricted shares of the
company's $.001 par value common stock, and
2. Funding of two hundred thousand $200,000 dollars Canadian for
ongoing development costs.
To date, the two million (2,000,000) shares have been issued at a value of
$0.30 per share and $86,600 (C$130,000) has been expended.
The agreement calls for Xntrik Enterprises Ltd. to design and develop the
software and for Tek Master Ltd. to design an interface for an administra-
tive toolkit to manage clients.
All costs to date have been expenses as incurred as they do not meet the
general criteria for capitalization.
<PAGE> 7
Note 3 - Oil and Gas Properties
------------------------------------------
LAK Ranch Oil Project:
On September 20, 2000, the company signed an agreement with 2U Online.
com,Inc. ("2U"), a Delaware public corporation under common management,
to acquire all of 2U's interest in the oil and natural gas rights on 6,360
acres located in the Powder River Basin of eastern Wyoming (the "LAK Ranch")
in consideration for the issuance of 5,000,000 restricted common shares and
a finders' fee of 500,000 restricted common shares. The cost of acquisition
of the LAK Ranch Oil Project has been recorded at the historical cost of
2U's purchase price of 3,800,000 shares of 2U's common stock plus $75,000
cash paid by 2U which totalled $1,595,000. Refer to Note 5.
Note 4 - Common Stock
--------------------------------
During the nine month period ended September 30, 2000 the Company issued a
total of 862,500 shares to settle debt totalling $319,850, 2,000,000 shares
for the Tek Master Project, and 5,500,000 shares on the LAK Ranch Oil
Project. See also Notes 2 and 3.
Note 5 - Related Party Transactions
-----------------------------------------------
During the nine month period ended September 30, 2000 the Company issued
500,000 common shares to a former director and a significant shareholder as
a finders' fee on the LAK Ranch Oil Project, and 840,000 common shares to
directors, a former director and a significant shareholder in payment of
cash advances, salaries and expenses incurred on behalf of the Company
totalling $317,600.
During the nine month period ended September 30, 2000 the Company incurred
salaries of $156,000 to directors and former directors of the Company.
At September 30, 2000 $29,400 is owing to these parties.
During the nine month period ended September 30, 2000 the Company received
cash advances of $101,600 from directors and a significant shareholder.
At September 30, 2000 $74,300 is owing to these parties.
<PAGE> 8
Management's Discussion and Analysis of Financial Condition and Results
of Operation.
------------------------------------------------------------------------
Liquidity & Capital Resources.
------------------------------
The company has been inactive for the current year, except for the
development of certain proprietary technology and the acquisition of the
rights to the LAK Ranch Oil Project.
The development of certain proprietary technology, if successful, will
provide a scalable server platform to build server applications on top of.
However, the development is expected to take several months and no revenues
will be forthcoming in the current year.
On September 20, 2000, the company signed an agreement with 2U Online.com,
Inc. ("2U"), a Delaware corporation, to acquire all of 2U's interest in the
oil and natural gas rights on 6,360 acres located in the Powder River Basin
of eastern Wyoming (the "LAK Ranch"). However, the development is expected
to take several months and no revenues will be forthcoming in the current
year. Please refer to LAK Ranch Oil Project described in Part II, Item 1.
The Company is dependent upon its officers, directors and shareholders for
cash for any purpose, including the development of the scalable server and
the LAK Ranch Oil Project.
Results of Operations.
------------------------------
The company had no operations other than the development of a scalable
server platform and the acquisition of 2U's interest to the LAK Ranch
Project.
On September 15, 2000, the company issued seven hundred thirty thousand
(730,000) shares of restricted common stock for accrued expenses of $306,600
pursuant to the Registration Statement Form S-8 filed August 28, 2000.
On September 20, 2000, the company issued five million (5,000,000) shares
of the company's restricted common stock to acquire 2U's interest in the
LAK Ranch Oil Project.
On September 20, 2000, the company issued five hundred thousand (500,000)
shares of the company's restricted common stock as a finder's fee for the
acquisition of 2U's interest in the LAK Ranch Oil Project.
<PAGE> 9
PART II - OTHER INFORMATION
ITEM I. LAK Ranch Oil Project.
---------------------------------------------------
The company acquired 2U's interest in the LAK Ranch Oil Project. 2U's
interest was acquired from Rising Phoenix Development Group Ltd. ("Rising
Phoenix"), a Canadian corporation. There is a Joint Venture Contract
between Rising Phoenix and Derek Resources Corporation ("Derek Resources"),
also a Canadian corporation.
The joint venture agreement calls for Derek Resources to earn a 75% working
interest in the LAK Ranch Property by spending the initial $3,500,000 to
build a Steam Assisted Gravity Drainage (SAGD) pilot plant proving the
feasibility of the project. Derek Resources will have until December 31,
2000 to meet its financial obligations. Rising Phoenix retains a 25%
working interest.
Research work and exploration activities conducted by Texaco, Conoco,
Parent Oil, Mapco and Suretek, Inc. (formerly Exoil Services) have proven
that oil reserves exist on the LAK Ranch Property. Based on field mapping
studies, drilling and coring of several wells, Surtek estimated that the
LAK Ranch Property contained a reserve of over 100 million barrels of oil.
On November 15, 1999, 2U and Rising Phoenix entered into a definitive
Asset Purchase and Sale Agreement with 2U whereby 2U acquired, for cash and
2U stock, Rising Phoenix's 25% working interest in the LAK Ranch Project.
On September 20, 2000, the company and 2U entered into an Asset Purchase
and Sale Agreement whereby the company acquired 2U's interest in the LAK
Property for five million (5,000,000) shares of the company's restricted
common stock. Also, the company issued five hundred thousand (500,000)
shares of the company's restricted common stock for a finder's fee.
<PAGE> 10
ITEM 2. Directors, Executive Officers and Consultants.
---------------------------------------------------------------------------
Robert Waters MBA (Director & President) Mr. Waters has been in the
investment banking, brokerage industry for over 15 years. In that capacity,
he has been directly involved with the financing and development of oil and
gas projects and understands the fundamentals of running a successful
producing petroleum company. He also has an association with George S.
May International, one of the largest management consultants in the world.
Jack Sha (Director & Secretary) Jack Sha has held directorships in
various public companies both in the U.S and Canada.
Robert Klein B.Math (Hons App) FCSI (Director) Mr. Klein has served
on the Board of numerous oil and gas companies both in the public and
private sector. His experience includes directorships in three Canadian
brokerage firms, where he took on both management roles and
institutional trading duties.
Larry Sostad (Director) Mr. Sostad has held management
positions in both mining and oil and gas companies over a period of 20 years.
Richard Luhning P.Eng (Consultant) Richard Luhning is a chemical
engieer with over 20 years experience in heavy oil, oil sands and enhanced
oil recovery. He has been involved in commercial oil sands mining (with
Suncor), refinery operations and upgrading research with (AOSTRA) Alberta
Oil Sands Technology and Research Authority including the development of
(SAGD) Steam Assisted Gravity Drainage at the (UTF) Underground Test
Facility pilot. He has served on the board of AOSTRA as Vice-Chairman,
Chair and CEO. He has been Secretary of the Alberta Energy Research
Council, which advises the Minister of Energy on rsearch priorities, and
Executive Director of the Hydrogen Industry Council. He was a member of
the Board of Directors of the Petroleum Recovery Institute for 8 years and
was a founding signatory for the (CONRAD) Canadian Oil Sands Network for
Research and Development organization. He is currently the Chair for the
(COURSE) Co-ordination of University Research for Synergy and Effectiveness
Leadership Board, which coordinates funding of research for the energy
resources industry at Alberta universities. He is also Director of the
Petroleum Industry Technology Institute and serves on the Board of the CMG
Reservoir Simulation Foundation.
<PAGE> 11
ITEM 3. Security Ownership of Certain Beneficial Owners.
-------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Amount and Nature
Title of Class Name of Beneficial Owner of Beneficial Owner Percent of Class
-------------- ------------------------ ------------------- ----------------
Common Stock 2U Online.com, Inc. 5,000,000 (1) 48.75%
1288 Alberni Street
Suite 806
Vancouver, BC V6E 4N5
Common Stock Tek Master Ltd. 2,000,000 (2) 19.50%
1239 West Georgia Street
Suite 3004
Vancouver BC V6E 4R8
Common Stock May Joan Liu 755,000 (3) 7.36%
1066 Groveland Road
West Vancouver, BC V7S 1Z4
</TABLE>
(1) The shares issued to 2U Online.com, Inc. was for the acquisition
of the LAK Ranch Oil Project. 2U Online.com, Inc. is a public company
whose shares are traded on NASDAQ OTC Pink Sheets.
(2) The shares issued to Tek Master Ltd. was for the development of the
scalable server platform.
(3) Includes 280,000 shares issued as debt settlement and 475,000 shares
issued as a finder's fee.
<PAGE> 12
ITEM 4. Security Ownership of Management.
------------------------------------------------------------------------
As of September 30, 2000, the directors and principal executive officers
of the company beneficially owned, in the aggregate, 475,000 shares of
the company's common stock, or approximately 4.63% of the issued and
outstanding shares, as set forth below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Amount and Nature
Title of Class Name of Beneficial Owner of Beneficial Owner Percent of Class
-------------- ------------------------ ------------------- ----------------
Common Stock Jack Sha 257,143 (1) 2.51%
5550 Cambie Street
Suite 306
Vancouver, BC V5Z 3A2
Common Stock Larry Sostad 142,857 (2) 1.39%
470 Granville Street
Suite 818
Vancouver, BC V6C 1V5
</TABLE>
(1) Shares issued for debt settlement.
(2) Shares issued for debt settlement.
ITEM 5. Description of Securities.
----------------------------------------------------
The company is authorized to issue 50,000,000 shares of common stock,
$0.01 par value, each share of common stock having equal rights and
preferences, including voting privileges. As of September 30,
2000, there were 10,256,031 shares of common stock at $0.001 par
value issued and outstanding.
<PAGE> 13
ITEM 6. Recent Sales of Unregistered Securities.
-----------------------------------------------------------------------
There have been no sales of unregistered securities within the last
three (3) years which would be required to disclosed pursuant to Item
701 of Regulation S-B.
On September 15, 2000, the company issued seven hundred thirty thousand
(730,000) shares for accrued expenses of $306,600 incurred by the
company's directors, officers and shareholders. For further details,
refer to the Registration Statement S-8 filed on August 28, 2000.
ITEM 7. Certain Relationships and Related Transactions.
-----------------------------------------------------------------------
The decision to purchase and the purchase of the LAK Ranch Oil Project
from 2U Online.com, Inc. was an arms-length transaction. Jack Sha,
the president of 2U Online.com, Inc., did not participate in the voting
by the company's Board of Directors to accept or reject the acquisition.
ITEM 8. Changes in and Disagreements with Accountants.
-----------------------------------------------------------------------
There have been no disagreements with the company's accountants since
the formation of company required to be disclosed pursuant to Item 304
of Regulation S-B.
There has been a change in the company's accountant. The company's
former accountant passed away in September of 2000. LaBonte & Co.
Chartered Accountants, have been retained to be the company's
accountant.
ITEM 9. Legal Proceedings . . . . . . . . . . . . . . . NONE
=======================================================================
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
ASDAR INC.
Date: 13 NOV 2000 By: /s/ Jack Sha
----------------------
Jack Sha
Secretary and Director
