U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ------------ TO
------------.
COMMISSION FILE NUMBER 000-32919
NORTHERN OSTRICH CORP
(EXACT NAME OF SMALL BUSINESS ISSUER AS
SPECIFIED IN ITS CHARTER)
NEVADA 86-0947048
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
102 DONAGHY AVENUE, NORTH VANCOUVER, B.C., CANADA V7P 2L5
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(604) 922-8470
ISSUER'S TELEPHONE NUMBER
3756 WEST 2ND AVENUE, VANCOUVER, B.C., CANADA V6R 1J9
(FORMER NAME, ADDRESS, IF CHANGED FROM LAST REPORT)
INDICATE BY CHECKMARK 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), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
THE NUMBER OF SHARES OUTSTANDING OF REGISTRANTS COMMON STOCK AS OF
JANUARY 6, 2003 WAS 2,004,000.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE). YES ; NO X
PART I
ITEM 1. FINANCIAL STATEMENTS
INDEPENDENT ACCOUNTANT'S REPORT
Northern Ostrich Corp.
(A Development Stage Company)
We have reviewed the accompanying balance sheets of Northern Ostrich
Corp. (a development stage company) as of November 30, 2002 and May 31, 2002,
and the related statements of operations for the three and six months ended
November 30, 2002 and 2001 and statement of cash flows for the six months ended
November 30, 2002 and 2001. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
Respectfully Submitted
\s\ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
January 6, 2003
NORTHERN OSTRICH CORP.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
November 30, May 31,
2002 2002
------------------ ------------------
Current Assets - Cash & Cash Equivalents $ - $ -
------------------ ------------------
Total Assets: $ - $ -
================== ==================
Liabilities - Accounts Payable $ 6,741 $ 6,816
------------------ ------------------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 2,004,000 shares at
November 30, 2002 and May 31, 2002 2,004 2,004
Paid-In Capital 57,034 55,064
Currency Translation Adjustment (3,431) (16,361)
Development Stage Deficit (21,266) (6,441)
Retained Deficit (41,082) (41,082)
------------------ ------------------
Total Stockholders' Equity (6,741) (6,816)
------------------ ------------------
Total Liabilities and
Stockholders' Equity $ - $ -
================== ==================
The accompanying notes are an integral part of these financial
statements.
NORTHERN OSTRICH CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
Since
For the Three Months For the Six Months June 1, 2000
Ended Ended Inception of
November 30, November 30, Development
------------------------------ -----------------------------
2002 2001 2002 2001 Stage
--------------- -------------- -------------- ------------- ------------------
Revenues $ - $ - $ - $ - $ -
Cost of Revenues - - - - -
--------------- -------------- -------------- ------------- ------------------
Gross Margin - - - - -
Expenses:
General & Administrative 13,625 300 14,825 1,780 21,266
--------------- -------------- -------------- ------------- ------------------
Net Loss from Operations (13,625) (300) (14,825) (1,780) (21,266)
Other Income (Expense)
Interest, Net - - - - -
--------------- -------------- -------------- ------------- ------------------
Net Loss $ (13,625)$ (300)$ (14,825) $ (1,780) $ (21,266)
=============== ============== ============== ============= ==================
Basic & Diluted loss per
Share $ (0.01)$ - $ (0.01) $ -
=============== ============== ============== =============
The accompanying notes are an integral part of these financial
statements.
NORTHERN OSTRICH CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
Since
June 1, 2000
For the Six Months Ended Inception of
November 30, Development
-------------------------------------
2002 2001 Stage
----------------- ------------------ ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (14,825) $ (1,780) $ (21,266)
Adjustments to reconcile net loss to net
cash used in operating activities:
Currency translation adjustment 12,930 128 13,077
Increase (Decrease) in accounts payable (75) (48) 351
Issuance of common stock for expenses - - -
----------------- ------------------ ------------------
Net Cash Used in operating activities (1,970) (1,700) (7,838)
----------------- ------------------ ------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash used in investing activities - - -
----------------- ------------------ ------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from contributed capital 1,970 1,700 7,838
----------------- ------------------ ------------------
Net Cash Provided by Financing Activities 1,970 1,700 7,838
----------------- ------------------ ------------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
----------------- ------------------ ------------------
Cash and Cash Equivalents
at End of Period $ - $ - $ -
================= ================== ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
The accompanying notes are an integral part of these financial
statements.
NORTHERN OSTRICH CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2002 AND 2001
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Northern Ostrich Corp. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Interim Reporting
The unaudited financial statements as of November 30, 2002 and for the
three and six month periods then ended reflect, in the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
November 30, 1998.
Nature of Business
The Company has no products or services as of November 30, 2002. The
Company operated from November 30, 1998 through approximately May 31, 2000 in
the production of ostrich meat. Since June 1, 2000, the Company has ceased
operations and is in the development stage.
The Company has recently decided to become a natural resource
exploration company and will seek opportunities in this field. The Company
anticipates engaging in the acquisition, exploration, and if warranted and
feasible, development of natural resource properties.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
NORTHERN OSTRICH CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2002 AND 2001
(Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Foreign Currency Translation
The Company's primary functional currency is the Canadian dollar.
Monetary assets and liabilities resulting from transactions with foreign
suppliers and customers are translated at year-end exchange rates while income
and expense accounts are translated at average rates in effect during the year.
Gains and losses on translation are included in income.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.
Loss per Share
The reconciliations of the numerators and denominators of the basic
loss per share computations are as follows:
Per-Share
Income Shares Amount
(Numerator) (Denominator)
For the Three Months Ended November 30, 2002
BASIC LOSS PER SHARE
Loss to common shareholders $ (13,625) 2,004,000 $ (0.01)
================== =================== ==================
NORTHERN OSTRICH CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2002 AND 2001
(Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Loss per Share (Continued)
For the Three Months Ended November 30, 2001
BASIC LOSS PER SHARE
Loss to common shareholders $ (300) 2,004,000 $ -
================== =================== ==================
For the Six Months Ended November 30, 2002
BASIC LOSS PER SHARE
Loss to common shareholders $ (14,825) 2,004,000 $ (0.01)
================== =================== ==================
For the Six Months Ended November 30, 2001
BASIC LOSS PER SHARE
Loss to common shareholders $ (1,780) 2,004,000 $ -
================== =================== ==================
There are no dilutive potential common stock equivalents as of May 31,
2002 and 2001. The effect of any outstanding common stock equivalents would be
anti-dilutive for November 30, 2002 and 2001 and are thus not considered.
NOTE 2 - INCOME TAXES
As of November 30, 2002, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately $62,300 that may
be offset against future taxable income through 2022. Current tax laws limit the
amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. Continuation of the Company as a going concern is dependent
upon obtaining the additional working capital necessary to be successful in its
planned activity, and the management of the Company has developed a strategy,
which it believes will accomplish this objective through additional equity
funding and long term financing, which will enable the Company to operate for
the coming year.
NORTHERN OSTRICH CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2002 AND 2001
(Continued)
(Unaudited)
NOTE 4 - COMMITMENTS
As of November 30, 2002 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
There are no commitments for future use of the facilities.
NOTE 5 - COMMON STOCK TRANSACTIONS
The Company was incorporated to allow for the issuance of up to
100,000,000 shares of $.001 par value common stock (as amended).
At inception, the Company issued 1,000,000 shares of common stock to
its officers and directors for services performed and payments made on the
Company's behalf during its formation. This transaction was valued at
approximately $.001 per share or an aggregate approximate $1,000.
On February 8, 1999, to provide initial working capital, the Company
authorized a private placement sale of an aggregate of 1,000,000 shares of
common stock at approximately $.05 per share. The private placement was
completed April 1, 1999 and 1,004,000 shares were issued for approximately
$50,200 in proceeds to the Company which were primarily used to pay operating
expenses.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's annual report on Form 10-KSB for the year ended May 31, 2002.
Plan of Operation
Since we were not successful in finding the right operating business to
acquire or merge, we have determined to try to become a natural resource
exploration company and will seek opportunities in this field. We anticipate
acquiring, exploring, and if warranted and feasible, developing natural resource
properties. Natural resource exploration and development requires significant
capital and our assets and resources are extremely limited. Therefore, we
anticipate participating in the natural resource industry through the purchase
of small interests in either producing properties or natural resource
exploration and development projects. To date we have not commenced any
operations.
We will have to retain experts to assist in locating appropriate
projects, as we currently have no employees and our sole officer does not have
any experience in the natural resource industry. In order to assist in deciding
if we should invest in a particular project, we will first need to be provided
with at least the following:
o A description of the project and the location of the property;
o The lands that will be subject to the exploration project;
o The royalties, net profit interest or other charges applicable
to the subject lands;
o The estimated cost of any geophysical work contemplated; and
o The estimated acquisition costs, exploration costs and
development costs of the property.
Based on such information, we can then decide whether it is economially feasible
and beneficial to participate in the project.
Natural resource exploration and development requires significant
capital and our assets and resources are extremely limited. Therefore, we hope
to participate in the natural resource industry by obtaining small interests in
either producing properties or natural resource exploration and development
projects. To date we have not commenced any operations.
As of the date hereof, we have not made any arrangements or definitive
agreements to use outside advisors or consultants to raise any capital. In the
event we need to raise capital, most likely the only method available to us
would be through the private sale of our securities. Because of our nature as a
development-stage company, it is unlikely we could make a public sale of
securities or be able to borrow any significant sum, from either a commercial or
private lender. There can be no assurance that we will be able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to us.
We do not intend to use any employees, with the exception of part-time
clerical assistance on an as-needed basis. Outside advisors, attorneys or
consultants will only be used if they can be
obtained for a minimal cost or for a deferred payment basis. Management is
confident that it will be able to operate in this manner and continue during the
next twelve months.
Results of Operations
The Company had $13,625 and $14,825 in expenses for the three and six
month periods ended November 30, 2002 and $300 and $1,780 for the three and six
months ended November 30, 2001. For the quarter ended November 30, 2002, the
Company had no revenues. Losses on operations will continue until sufficient
revenues can be achieved from the various business units of the Company.
Liquidity and Capital Resources
At November 30, 2002 and 2001, the Company had no assets. The Company
had a net working deficit of $6,741 and $6,816 at November 30, 2002 and May 31,
2002.
Net stockholders' deficit in the Company was $6,741 as of November 30,
2002 and $6,816 as of May 31, 2002.
The accompanying quarterly financial statements have been prepared
assuming the Company will continue as a going concern. The Company's ability to
continue as a going concern, however, is dependent upon its ability to obtain
additional funding which will enable the Company to implement its business
objectives in order to generate cash flow.
ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Bruce
Johnstone, our chief executive officer and chief financial
officer, after evaluating the effectiveness if the Company's
"disclosure controls and procedures" (as defined in the
Securities Exchange Act of 1934 Rules 13a-14(c) and
15-d-14(c)) as of a date (the "Evaluation Date") within 90
days before the filing date of this quarterly and procedures
were adequate and designed to ensure that material information
relating to us would be made known to him by others within the
Company.
(b) Changes in internal controls. There were no significant
changes in our internal controls or to our knowledge, in other
factors that could significantly affect our disclosure
controls and procedures subsequent to the Evaluation Date.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company has recently decided to become a natural resource
exploration company and will seek opportunities in this field. The Company
anticipates engaging in the acquisition, exploration, and if warranted and
feasible, development of natural resource properties.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
THE FOLLOWING EXHIBITS ARE INCLUDED AS PART OF THIS REPORT:
EXHIBIT
NUMBER TITLE OF DOCUMENT
99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
REPORTS
The Company filed a Current Report on November 1, 2002 for Item 5 to
provide information regarding the resignation and appointment of board of
directors and officers.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this January 9, 2003
NORTHERN OSTRICH CORP.
(Registrant)
DATE: January 9, 2003 By: /s/ Bruce Johnstone
Bruce Johnstone
President, Chief Executive Officer, Chief Financial
Officer and Director
(Principal Executive and Financial Officer)
I, Bruce Johnstone, certify that:
1. I have reviewed this quarterly report on form 10-QSB of
Northern Ostrich Corp.
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report.
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
quarterly report.
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d- 14) for the registrant and have:
A) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
B) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "evaluation
date"); and
C) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the evaluation date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
A) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
B) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls.
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Date: January 9, 2003
/S/ Bruce Johnstone
Bruce Johnstone
President, Chief Executive Officer, Chief Financial
Officer and Director
(Principal Executive and Financial Officer)