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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 NINE MONTHS ENDED JUNE 30, 2000
COMMISSION FILE NUMBER: 0-19061
SANTA MARIA RESOURCES, INC.
(Name Of Small Business Issuer In Its Charter)
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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 AUGUST 11, 2000, THERE
WERE OUTSTANDING 6,000,583 SHARES OF COMMON STOCK.
1
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INDEX
PART I. FINANCIAL INFORMATION
Item 1. Condensed consolidated financial statements:
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Balance sheet as of September 30, 1999 and
June 30, 2000 3
Consolidated Statement of Operations for the nine
months ended June 30, 2000 and 1999 4
Consolidated Statement of cash flows for the nine months
ended June 30, 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 JUNE 30,2000 AND SEPTEMBER 30, 1999
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<CAPTION>
6/30/00 9/30/99
(Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $30,387 $43,186
-------- --------
Total Current Assets 30,387 43,186
Other asset:
Mining claims 600,000 600,000
-------- --------
Total Assets $630,387 $643,186
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Payable to shareholder $ 41,237 $ 41,237
Accrued interest payable 2,607 0
-------- --------
Total Current Liabilities 43,844 41,237
Shareholders' Equity:
Common stock, $.01 par value; authorized
100,000,000 shares, issued, and outstanding
6,000,583 at June 30, 2000 and September 30, 1999 6,001 6,001
Additional paid in capital 2,012,618 1,989,868
Retained deficit (1,432,076) (1,393,920)
----------- -----------
Total shareholders' equity 586,543 601,949
----------- ------------
Total Liabilities & Shareholders' Equity $630,387 $643,186
=========== ============
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PLEASE SEE THE NOTES TO THE 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 NINE MONTHS ENDING
JUNE 30, 2000 AND JUNE 30, 1999
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<CAPTION>
9 MOS. 9 MOS. 3 MOS. 3 MOS.
6/30/00 6/30/99 6/30/00 6/30/99
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Net sales $0 $0 $0 $0
Less cost of sales 0 0 0 0
--------- -------- -------- --------
Gross profit 0 0 0 0
Administrative expenses:
Consulting 24,514 5,404 11,748 1,193
Geology 0 1,267 0 392
Rent 4,111 10,967 0 4,167
Communications 3,133 0 0 0
Other 6,281 3,524 3,541 1,013
--------- -------- -------- --------
Total administrative expenses 38,039 21,162 15,289 6,765
Loss from Operations (38,039) (21,162) (15,289) (6,765)
Other Income (expenses):
Interest income 1,740 0 580 0
Interest expense (1,857) 0 (619) 0
--------- -------- -------- --------
Net Loss before income tax provision (38,156) (21,162) (15,328) (6,765)
Income tax expense 0 0 0 0
--------- -------- -------- --------
Net Loss ($38,156) ($21,162) ($15,328) ($6,765)
========= ======== ======== ========
Earnings per common share:
Basic ($0.01) ($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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PLEASE SEE THE NOTES TO THE 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 THREE & SIX MONTHS ENDING
JUNE 30, 2000 AND JUNE 30, 1999
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<CAPTION>
9 MOS. 9 MOS. 3 MOS. 3 MOS.
6/30/00 6/30/99 6/30/00 6/30/99
<S> <C> <C> <C> <C>
Operating Activities:
Net Loss ($38,156) ($21,162) ($15,328) ($6,765)
Changes in other operating assets and
liabilities:
Accrued expenses 2,607 2,402 1,369 815
------- ------- ------- ------
Net cash provided by (used by) operations (35,549) (18,760) (13,959) (5,950)
Financing Activities:
Contributed capital by shareholder 22,750 0 0 0
------- ------- ------- ------
Net cash provided by financing activities 22,750 0 0 0
------- ------- ------- ------
Net increase (decrease) in cash during the period (12,799) (18,760) (13,959) (5,950)
Cash balance at beginning of period 43,186 27,256 44,346 14,446
Cash balance at end of period $30,387 $8,496 $30,387 $8,496
======= ====== ======= ======
Supplemental disclosures of cash flow information:
Interest paid during the fiscal year $0 $0 $0 $0
Income taxes paid during the fiscal year $0 $0 $0 $0
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PLEASE SEE THE NOTES TO THE FINANCIAL STATEMENTS.
5
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SANTA MARIA RESOURCES, INC.
(FORMERLY PROGRAM ENTERTAINMENT GROUP, INC.)
(A DEVELOPMENT STAGE COMPANY)
UNAUDTED STATEMENT OF CHANGES IN SHAREHOLDER EQUITY
FOR THE PERIOD OCTOBER 1, 1999 TO JUNE 30, 2000
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<CAPTION>
Common Stock Paid in Retained
Shares Amount Capital Deficit Total
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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 (38,156) (38,156)
--------- ------ ---------- ---------- --------
Balance at June 30, 2000 6,000,583 $6,001 $2,012,618 ($1,432,076) $586,543
========= ====== ========== ========== ========
</TABLE>
PLEASE SEE THE NOTES TO THE FINANCIAL STATEMENTS.
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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 nine months ending June 30, 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 applies 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 June 30, 2000, the Company has a federal operating tax loss carry-forward of
$1,432,076 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.
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The following is a summary of deferred taxes at June 30, 2000:
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Deferred tax asset $486,880
Less valuation allowance (486,880)
--------
Net tax asset -0-
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NOTE 4- RELATED PARTY TRANSACTIONS
During the nine-month period ending June 30, 2000, a shareholder contributed
$22,750 to the Company to pay for operating expenses.
NOTE 5 - SUBSEQUENT EVENTS.
Following the end of the third quarter, the Company received notice from its
shareholder who had advanced the Company money that he did not intend to renew
the existing promissory note when it becomes due on September 30, 2000.
Consequently, the Company will be required to make payment of said note on or
before September 30, 2000. As of the date hereof, there was due and owing on
this note the amount of $43,844, inclusive of accrued interest. The Company will
require an immediate infusion of approximately $13,000 in order to meet the
principal and accrued interest that will be due on the note by September 30,
2000. As of the date hereof, management has not been able to locate any
alternate source of funds with which to pay its obligations on either the note
or the mining properties as they become due. Unless such a source of funds is
secured by the end of the present fiscal year, it is likely that the Company
will be in default under the note and will lose its mining leases.
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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. To date,
management has been unable to secure any commitment for the required funding to
commence mining operations and no assurance can be given that such commitments
will be forthcoming in the foreseeable future.
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 immediate funds in order to meet its minimum
operating expenses and commitments for its mining properties and 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.
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As indicated in the Company's financial statements "NOTE 5 - SUBSEQUENT
EVENTS" management was notified that the present outstanding note due to a
shareholder will not be renewed when it becomes due and payable on September 30,
2000. At present, in addition to the amount of cash on hand, the Company will
need an immediate infusion of approximately $13,000 in order to make payment of
the amount due on the note. Consequently, the Company effectively has no
available cash with which to pay its expenses and meet its leasehold obligations
as they become due including, among other things, the routine minimum
maintenance requirements for its mining properties. If it is unable to secure a
source of funding therefore, the Company will lose these leases prior to the
fiscal year-end. There can be no assurance that such funds will become available
when needed by the Company. As mentioned, management has been unable to secure
any commitments for such funding.
The Company's plans to seek out additional funds through equity or debt
financing, collaborative or other arrangements with corporate partners,
licensees or others, and from other sources, which, if available, will have the
effect of diluting the holdings of existing shareholders. The Company has no
current arrangements with respect to, or sources of, such financing. If the
Company is not able to secure such financing arrangements in the very near
future, management may lose its mining leases which would have a materially
adverse impact upon the Company's future prospects in that it could result in
the loss of certain, or all, of the Company's mining properties.
Further, if additional financing is not available when needed, or if such
financing is not available on terms acceptable to the Company, 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 also
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.
In light of its inability to secure financing commitments, management has begun
to consider alternative plans for development of viable business operations.
However, as of the date of this report, no such alternative plans have been
formulated and management can make no projection as to the future prospects of
the Company.
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
NINE MONTHS ENDED JUNE 30, 2000 COMPARED TO NINE MONTHS ENDED JUNE 30, 1999:
ADMINISTRATIVE EXPENSES:
Total operating expenses for the nine months ending June 30, 2000 were $38,039
as compared to $21,162 for the similar period in fiscal year 1999, an increase
of 80%. Most of the increase was due to higher legal and accounting costs
associated with the Company's public filing requirements. For the nine-month
period ending June 30, 2000, consulting costs increased $19,110, or 354% from
the consulting costs incurred for the nine months ending June 30, 1999.
10
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THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999:
ADMINISTRATIVE EXPENSES:
Total operating expenses for the three months ending June 30, 2000 were $15,289
as compared to $6,765 for the similar period in fiscal year 1999, an increase of
126%. As with the nine-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 June 30, 2000, consulting costs
increased $10,555 from the consulting costs incurred for the three-months ending
June 30, 1999.
II. DISCUSSION OF FINANCIAL CONDITION- LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2000, the Company had a working capital deficit of $13,457 as
compared to a working capital of $1,949 at September 30, 1999. This resulted
from the ongoing utilization of available cash on hand to meeting the
maintenance requirements of the Company's mining properties without any revenues
during this period. At June 30, 2000, cash on hand was $30,387 as compared to
$43,186 at September 30, 1999. The slight decrease 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. Total assets,
which primarily consists of the Company's mining claims asset of $600,000,
decreased from $643,186 at September 30, 1999 to $630,387 at June 30, 2000.
Total current liabilities at June 30, 2000 increased to $43,844 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 $586,543 at June 30, 2000. This decrease is a result of a
combination of the operating expenses incurred and capital contributed by a
shareholder during the nine months ending June 30, 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.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
None during this period.
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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: August 14, 2000
SANTA MARIA RESOURCES, INC.
BY:__/s/Hubert Stroud_________
President
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