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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
FOR THE SIX MONTHS ENDED MARCH 31, 2000
COMMISSION FILE NUMBER: 0-19061
SANTA MARIA RESOURCES, INC.
(Name Of Small Business Issuer In Its Charter)
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<S> <C>
Nevada 87-0403330
(State Or Other Jurisdiction Of Incorporation (IRS Employer Ident. No.)
or Organization)
5015 Sahara Avenue, Suite 125-209, Las Vegas, Nevada 76022
(Address Of Principal Executive Offices) (Zip Code)
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Issuer's Telephone Number: (702) 877-5804
Check whether the issuer (1) 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 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. Yes _X_ No___
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE. AS OF MAY 12, 2000, THERE WERE
OUTSTANDING 6,000,583 SHARES OF COMMON STOCK.
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INDEX
PART I. FINANCIAL INFORMATION
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Item 1. Condensed consolidated financial statements:
Balance sheet as of June 30, 1999 and
March 31, 2000 3
Consolidated Statement of Operations for the six
months ended March 31, 2000 and 1999 4
Consolidated Statement of cash flows for the six months
ended March 31, 2000 and 1999 5
Statements Of Cash Flows 6
Notes to consolidated condensed financial statements 7
Item 2. Management's discussion and analysis of financial
Condition 9
PART II. OTHER INFORMATION
Signatures 12
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SANTA MARIA RESOURCES, INC.
(FORMERLY PROGRAM ENTERTAINMENT GROUP, INC.)
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED BALANCE SHEET
AS OF MARCH 31, 2000 AND SEPTEMBER 30, 1999
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<CAPTION>
3/31/00 9/30/99
<S> <C> <C>
ASSETS
Current assets:
Cash $ 44,346 $ 43,186
----------- -----------
Total Current Assets 44,346 43,186
Other asset:
Mining claims 600,000 600,000
----------- -----------
Total Assets $ 644,346 $ 643,186
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Payable to shareholder $ 41,237 $ 41,237
Accrued interest payable 1,238 0
----------- -----------
Total Current Liabilities 42,475 41,237
Shareholders' Equity:
Common stock, $.01 par value; authorized
100,000,000 shares, issued, and outstanding
6,000,583 at March 31, 2000 and September 30, 1999 6,001 6,001
Additional paid in capital 2,012,618 1,989,868
Retained deficit (1,416,748) (1,393,920)
----------- -----------
Total shareholders' equity 601,871 601,949
----------- -----------
Total Liabilities & Shareholders' Equity $ 644,346 $ 643,186
=========== ===========
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The accompanying notes are an integral part of these financial statements.
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SANTA MARIA RESOURCES, INC.
(FORMERLY PROGRAM ENTERTAINMENT GROUP, INC.)
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDING
MARCH 31, 2000 AND MARCH 31, 1999
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<CAPTION>
6 MOS. 6 MOS. 3 MOS. 3 MOS.
3/31/00 3/31/99 3/31/00 3/31/99
<S> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0
Less cost of sales 0 0 0 0
----------- ----------- ----------- -----------
Gross profit 0 0 0 0
Administrative expenses:
Consulting 12,766 4,211 6,725 879
Geology 0 875 0 0
Rent 4,111 6,800 2,145 3,700
Communications 3,133 0 1,616 0
Other 2,740 2,511 2,324 910
----------- ----------- ----------- -----------
Total administrative expenses 22,750 14,397 12,810 5,489
Loss from Operations (22,750) (14,397) (12,810) (5,489)
Other Income (expenses):
Interest income 1,160 0 580 0
Interest expense (1,238) 0 (619) 0
----------- ----------- ----------- -----------
Net Loss before income tax provision (22,828) (14,397) (12,849) (5,489)
Income tax expense 0 0 0 0
----------- ----------- ----------- -----------
Net Loss ($22,828) ($14,397) ($12,849) ($5,489)
=========== =========== =========== ===========
Earnings per common share:
Basic ($0.00) ($0.00) ($0.00) ($0.00)
Weighted average of common shares:
Basic 6,000,583 6,000,583 6,000,583 6,000,583
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The accompanying notes are an integral part of these financial statements.
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SANTA MARIA RESOURCES, INC.
(FORMERLY PROGRAM ENTERTAINMENT GROUP, INC.)
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDING
MARCH 31, 2000 AND MARCH 31, 1999
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<CAPTION>
3/31/00 3/31/99
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Operating Activities:
Net Loss ($22,828) ($14,397)
Changes in other operating assets and liabilities:
Accrued expenses 1,238 1,587
-------- --------
Net cash provided by (used by) operations (21,590) (12,810)
Financing Activities:
Contributed capital by shareholder 22,750 0
-------- --------
Net cash provided by financing activities 22,750 0
-------- --------
Net increase (decrease) in cash during fiscal year 1,160 (12,810)
Cash balance at beginning of fiscal year 43,186 45,675
-------- --------
Cash balance at end of period $ 44,346 $ 32,865
======== ========
Supplemental disclosures of cash flow information:
Interest paid during the fiscal year $0 $0
Income taxes paid during the fiscal year $0 $0
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The accompanying notes are an integral part of these financial statements.
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SANTA MARIA RESOURCES, INC.
(FORMERLY PROGRAM ENTERTAINMENT GROUP, INC.)
(A DEVELOPMENT STAGE COMPANY)
UANAUDTED STATEMENT OF CHANGES IN SHAREHOLDER EQUITY
FOR THE PERIOD OCTOBER 1, 1999 TO MARCH 31, 2000
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<CAPTION>
Common Stock Paid in Retained
Shares Amount Capital Deficit Total
<S> <C> <C> <C> <C> <C>
Balance at October 1, 1999 6,000,583 $6,001 $1,989,868 ($1,393,920) $601,949
Capital contributed 22,750 22,750
Net loss for the period (22,828) (22,828)
----------- --------- ------------ --------------- ----------
Balance at March 31, 2000 6,000,583 $6,001 $2,012,618 ($1,416,748) $601,871
=========== ========= ============ =============== ==========
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The accompanying notes are an integral part of these financial statements.
6
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SANTA MARIA RESOURCES, INC.
(FORMERLY PROGRAM ENTERTAINMENT GROUP, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included. The
results of operations for the six months ending March 31, 2000 are not
necessarily indicative of the results to be expected for the full year. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Annual Report of Santa Maria Resources, Inc.
(the "Company") Form 10-KSB for the year ending September 30, 1999.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make reasonable estimates
and assumptions that affect the reported amounts of the assets and liabilities
and disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses at the date of the financial statements and for the period
they include. Actual results may differ from these estimates.
NOTE 2 - EARNINGS PER SHARE
The Company apples SFAS No. 128, Earnings Per Share. In accordance with SFAS No.
128, basic net income per share has been computed based on the weighted average
of common shares outstanding during the period. The Company has no other
securities outstanding which are convertible into common shares.
NOTE 3 - INCOME TAXES
At March 31, 2000, the Company has a federal operating tax loss carry-forward of
$1,416,748 for federal income tax purposes. Utilization of the net operating
loss in any taxable year during the carry-forward period may be subject to an
annual limitation due to the ownership change limitations imposed by tax law.
The carry-forward period expires at various dates commencing in year 2003
through 2014. It is management's policy to reserve for 100% valuation against
any deferred tax asset that arises from the carry-forwards due to the
unpredictability of futures profits that may be offset against deferred tax
assets.
The following is a summary of deferred taxes at March 31, 2000:
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Deferred tax asset $497,558
Less valuation allowance (497,558)
---------
Net tax asset -0-
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NOTE 4 - CAPITAL STRUCTURE:
The Company's original Articles of Incorporation provided for capital stock
authorized of 100,000,000 shares of $.001 par value common stock. In an
amendment filed with the Secretary of State of Nevada, effective October 8, 1997
the Company maintained its total capitalization at 100,000,000 authorized common
shares and changed the par value to $.01. In fiscal 1997 the Company's Board of
Directors approved a 1 for 10 reverse stock split.
In 1997 cash advances were made on behalf of the Company by certain
shareholders. In consideration of those advances the Company issued 1,000,000
shares of restricted Rule 144 stock to these shareholders in exchange for those
advances.
NOTE 5- RELATED PARTY TRANSACTIONS
During the six-month period ending March 31, 2000, a shareholder contributed
$22,750 to the Company to pay for operating expenses.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
GENERAL STATEMENT- FACTORS THAT MAY AFFECT FUTURE RESULTS
With the exception of historical information, the matters discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward looking statements under the 1995 Private Securities
Litigation Reform Act that involve various risks and uncertainties. Typically,
these statements are indicated by words such as "anticipates", "expects",
"believes", "plans", "could", and similar words and phrases. Factors that could
cause the company's actual results to differ materially from management's
projections, forecasts, estimates and expectations include but are not limited
to the following:
Inability of the company to secure additional financing
Unexpected economic changes in the United States
The imposition of new restrictions or regulations by government
agencies that affect the Company's mining claims.
- -GENERAL REPORTING DISCLOSURES
The Company is a "development stage" company and to date the Company's
operations have been centered on the acquisition and maintenance of mining
leases designated as the Santa Maria Mine. The Company has not yet commenced
commercial mining operations. The operating costs incurred to date have been
primarily for the maintenance of the leases and the accumulation of data in
anticipation of mining activity. Although the Company's management has
experience in mining as well as oil and gas production, there is no guarantee or
assurance that this management team will be capable of duplicating any prior
success or that the Company will ever achieve commercially viable mining
operations. The ability to commence operations is contingent upon the Company's
securing adequate funding to meet the costs of such operations.
The Company expects to incur normal operating expenses during the next year. The
amount of net losses and the time required for the Company to reach
profitability, if at all, are uncertain at this time. The likelihood of the
Company's success must be considered in light of the problems, expenses,
difficulties, and delays frequently encountered in connection with a new
business, including, but not limited to uncertainty as to development and the
time required for the Company's plans to be fully implemented, governmental
regulatory responses to the Company's plans as well as the price of gold and
other mineral commodities. There can be no assurance that the Company will ever
generate mining revenue or achieve profitability at all or on any substantial
basis.
The Company will need substantial funds to support its long-term mining
development and marketing programs. The Company has no established bank
financing arrangement and no assurance that any such bank financing arrangement
will ever be established. The Company believes that it has adequate funds on
hand to meet the routine maintenance requirements for its mining properties at
least for the foreseeable future, provided that no unexpected costs arise.
However, such funds were derived from a loan made to the Company from one of its
9
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shareholders. There can be no assurance that such funds will be adequate absent
substantial additional funding. Further, there can be no assurance that that
shareholder, or any other shareholder, will be willing to extend any further
loans to the Company.
To the extent that the Company's capital resources, are insufficient to meet
current or planned operating requirements, the Company will seek additional
funds through equity or debt financing, collaborative or other arrangements with
corporate partners, licensees or others, and from other sources, which may have
the effect of diluting the holdings of existing shareholders. The Company has no
current arrangements with respect to, or sources of, such additional financing.
No assurance can be given that additional financing will be available when
needed or that such financing will be available on terms acceptable to the
Company. If adequate funds are not available, the Company may be required to
delay or terminate expenditures for certain of its programs that the Company
would otherwise seek to develop and commercialize. This would have a material
adverse effect on the Company in that it could result in the loss of certain, or
all, of the Company's mining properties.
The results of operations outlined in the discussion below are a result of
normal operating Costs incurred in maintaining business operations and mining
leases.
I. RESULTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 2000 COMPARED TO SIX MONTHS ENDED MARCH 31, 1999:
Administrative expenses:
Total operating expenses for the six months ending March 31, 2000 were $22,750
as compared to $14,397 for the similar period in fiscal year 1999, an increase
of 58%. Most of the increase was due to higher legal and accounting costs
associated with the Company's public filing requirements. For the six-month
period ending March 31, 2000, consulting costs increased $8,555, or 203% from
the consulting costs incurred at March 31, 1999.
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO SIX MONTHS ENDED MARCH 31, 1999:
Administrative expenses:
Total operating expenses for the three months ending March 31, 2000 were $12,810
as compared to $5,489 for the similar period in fiscal year 1999, an increase of
133%. As with the six-month period, most of the increase was attributable to
higher legal and accounting costs associated with the Company's filing
requirements. For the three-month period ending March 31, 2000, consulting costs
increased $5,486 from the consulting costs incurred for the three months ending
March 31, 1999.
10
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II. DISCUSSION OF FINANCIAL CONDITION- LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, the company had a working capital of $1,871 as compared to a
working capital of $1,949 at September 30, 1999. At March 31, 2000, cash on hand
was $44,346 as compared to $43,186 at September 30, 1999. The slight increase in
cash balances resulted from the utilization of cash for operating expenses and
capital contributed from a shareholder to pay for operating expenses during the
period. During the six months ended March 31, 2000 a shareholder contributed
$22,750 to the Company to pay for operating expenses.
Total assets, which primarily consists of the Company's mining claims asset of
$600,000, increased from $643,186 at September 30, 1999 to $644,346 at March 31,
2000.
Total current liabilities at March 31, 2000 increased to $42,475 from $41,237 at
September 30, 1999. The increase of current liabilities is attributed to the
accrual of interest on a shareholder's loan balance.
The Company's total shareholders' equity decreased from $601,949 at September
30, 1999 to $601,871 at March 31, 2000. This slight decrease is a result of a
combination of the operating expenses incurred and capital contributed by a
shareholder during the six months ending March 31, 2000.
INFLATION.
During the past few years inflation worldwide has been relatively stable which,
coupled with the relative strength of the economic conditions in the United
States and abroad, is expected to have a beneficial effect upon the Company's
planned operations. In management's opinion, these conditions are expected to
continue for the foreseeable future and management does not anticipate that
inflation will have an adverse impact upon its operations in the foreseeable
future. However, even if inflation were to resume an upward trend, as has been
the result I the past, it is likely that the price of gold and related precious
metals would rise - a situation that would increase revenues and profits from
the Company's planned mining operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
None during this period.
11
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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.
Dated: May 12, 2000
SANTA MARIA RESOURCES, INC.
BY: /s/Hubert Stroud
-----------------------------
President
12
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<ARTICLE> 5
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-1-1999
<PERIOD-END> MAR-31-2000
<CASH> 44,346
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 44,346
<PP&E> 600,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 644,346
<CURRENT-LIABILITIES> 42,475
<BONDS> 0
<COMMON> 6,001
0
0
<OTHER-SE> 595,870
<TOTAL-LIABILITY-AND-EQUITY> 644,346
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 22,750
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,238
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<NET-INCOME> (22,828)
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