UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended November 30, 2001
[ ] Transition report under Section 13 or 15(d) of the
Exchange Act For the transition period from ---- to ----
0-32919
---------------------
Commission File Number
Northern Ostrich Corp.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 86-0947048
--------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
3756 West 2nd Avenue
Vancouver, B.C., Canada V6R 1J9
(Address of principal executive offices)(Zip Code
- ------------------------------------------------------------------
Registrant's telephone number, including area code (604) 222-7879
None
- -----------------------------------------------------------------
Former Name, Address or Fiscal Year (If changed since last report)
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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 of Registrant's common stock outstanding as
of November 30, 2001 was 2,004,000.
Transitional Small Business Disclosure Format: Yes X No
1
PART I
ITEM 1. FINANCIAL STATEMENTS.
Following are the Financial Statements of Registrant for the
quarter ended November 30, 2001 and for the fiscal years ended
May 31, 2001 and 2000, reviewed and audited, respectively, by
Robson, Hill & Co., independent Certified Public Accountants.
2
NORTHERN OSTRICH CORP.
(A Development Stage Company)
- : -
INDEPENDENT AUDITOR'S REPORT
MAY 31, 2001 AND 2000
and
NOVEMBER 30, 2001 (UNAUDITED)
3
CONTENTS
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<s> <c>
Page
-----
Independent Auditor's Report F - 1
Balance Sheets
May 31, 2001 and 2000
and November 30, 20001 (Unaudited) F - 2
Statements of Operations for the
Year Ended May 31, 2001 and 2000
and the Six Months Ended
November 30, 2001 (Unaudited) F - 3
Statement of Stockholders' Equity for the
Since November 30, 1998 (Inception) to
May 31, 2001 and the Six Months Ended
November 30, 2001 (Unaudited) F - 4
Statements of Cash Flows for the
Year Ended May 31, 2001 and 2000
and the Six Months Ended
November 30, 2001 (Unaudited) F - 5
Notes to Financial Statements F - 7
4
ROBISON, HILL & CO.
Certified Public Accountants
A Professional Corporation
Brent M. Davies, CPA
David O. Seal, CPA
W. Dale Westenskow, CPA
Barry D. Loveless, CPA
-----------------------------
W. LaMonte Robison, CPA
E. Morton Hill, CPA
INDEPENDENT AUDITOR'S REPORT
Northern Ostrich Corp.
(A Development Stage Company)
We have audited the accompanying balance sheet of Northern
Ostrich Corp. (a development stage company) as of May 31, 2001
and 2000, and the related statements of operations and cash flows
for the two years ended May 31, 2001 and 2000, and the statements
of stockholders' equity since November 30, 1998 (inception) to
May 31, 2001. These financial statements are the responsibility
of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Northern Ostrich Corp. (a development stage company) as of May
31, 2001 and 2000, and the results of its operations and its cash
flows for the years ended May 31, 2001 and 2000, in conformity
with accounting principles generally accepted in the United States
of America.
Respectfully submitted,
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
June 11, 2001
F-1
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NORTHERN OSTRICH CORP.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
November 30, May 31,
2001 2001 2000
-------------------------------
Current Assets -
Cash & Cash Equivalents $ - $ - $ 23
-------- -------- -------
Total Assets: $ - $ - $ 23
======== ======== =======
Liabilities - Accounts
Payable $ 6,170 $ 6,218 $ 6,390
-------- ------- -------
Stockholders' Equity:
Common Stock, Par value
$.001
Authorized 100,000,000
shares, Issued 2,004,000
shares at May 31, 2001
and 2000 2,004 2,004 2,004
Paid-In Capital 54,684 52,984 49,196
Currency Translation
Adjustment (16,185) (16,313) (16,485)
Development Stage Deficit (5,591) (3,811) -
Retained Deficit (41,082) (41,082) (41,082)
-------- -------- -------
Total Stockholders' Equity (6,170) (6,218) (6,367)
-------- -------- -------
Total Liabilities and
Stockholders' Equity $ - $ - $ 23
======== ======== =======
The accompanying notes are an integral part of these
financial statements.
F-2
6
NORTHERN OSTRICH CORP.
(A Development Stage Company
STATEMENTS OF OPERATIONS
(Unaudited) Cumulative
For the Since
Six Months June 1, 2000
Ended For the year ended Inception of
November 30, May 31, Development
2001 2001 2000 Stage
----------- ------------------- -----------
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Revenues $ - $ - $14,587 $ -
Cost of Revenues - - 13,032 -
--------- ------- ------- ---------
Gross Margin - - 1,555 -
Expenses:
General &
Administrative 1,780 3,811 4,387 5,591
---------- ------- ------- ---------
Net Loss from
Operations (1,780) (3,811) (2,832) (5,591)
Other Income (Expense)
Interest, Net - - 55 -
---------- ------- -------- ---------
Net Loss $ (1,780) $ (3,811) $ (2,777) $(5,591)
========= ======== ======== ========
Basic & Diluted
loss per share $ 0.00 $ 0.00 $ 0.00 $ 0.00
========== ======== ======== =======
The accompanying notes are an integral part of these
financial statements.
F-3
7
NORTHERN OSTRICH CORP.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Cumulative Accumulated
Currency During
Common Stock Paid-In Translation Retained Development
Shares Par Value Capital Adjustment Deficit Stage
-------- --------- -------- ---------- -------- ----------
<s> <c> <c> <c> <c> <c> <c>
Balance at November
30, 1998 (inception) - $ - $ - $ - $ - $ -
November 30, 1998
Issuance of Stock
for services and
payment of
accounts payable 1,000,000 1,000 - - - -
April 1, 1999
Issuance of Stock
for cash pursuant
to private
placement 1,004,000 1,004 49,196 - - -
Net Loss - - - (15,996) (38,305) -
--------- ------ ------- -------- -------- -------
Balance at
May 31, 1999 2,004,000 2,004 49,196 (15,996) (38,305) -
Net Loss - - - (489) (2,777) -
--------- ------ ------- -------- -------- -------
Balance at
May 31, 2000 2,004,000 2,004 49,196 (16,485) (41,082) -
Contributed Capital - - 3,788 - - -
Net Loss - - - (172) - (3,811)
--------- ------ ------- -------- -------- --------
Balance at
May 31, 2001 2,004,000 2,004 52,984 (16,313) (41,082) (3,811)
Contributed Capital - - 1,700 - - -
Net Loss - - - 128 (1,780)
--------- ------ ------- -------- -------- ---------
Balance at
November 30, 2001
(Unaudited) 2,004,000 $2,004 $54,684 $(16,185)$(41,082) $(5,591)
F-4
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NORTHERN OSTRICH CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Unaudited Cumulative
For the Since
Six Months Inception
Ended For the year ended Of
November 30, May 31, Development
2001 2001 2000 Stage
----------- ------------------ -----------
CASH FLOWS FROM OPERATING
ACTIVITIES:
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Net Loss $ (1,780) $ (3,811) $(2,777) $ (5,591)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Currency translation adjustment 128 172 (489) 300
Increase (Decrease) in accounts
payable (48) (172) (3,011) (220)
Issuance of common stock for
expenses - - - -
--------- --------- -------- --------
Net Cash Used in operating
activities (1,700) (3,811) (6,277) (5,511)
--------- --------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing
activities - - - -
--------- --------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from contributed
capital 1,700 3,788 - 5,488
--------- --------- -------- --------
Net Cash Provided by Financing
Activities 1,700 3,788 - 5,488
--------- --------- -------- -------
Net (Decrease) Increase in
Cash and Cash Equivalents - (23) (6,277) (23)
Cash and Cash Equivalents
at Beginning of Period - 23 6,300 23
--------- --------- -------- -------
Cash and Cash Equivalents
at End of Period $ - $ - $ 23 $ -
========== ========= ======== =======
F-5
9
NORTHERN OSTRICH CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Unaudited Cumulative
For the Since
Six Months Inception
Ended For the year ended Of
November 30, May 31, Development
2001 2001 2000 Stage
------------ ------------------ -----------
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.
F-6
10
NORTHERN OSTRICH CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MAY 31, 2001 AND 2000
REFERENCES TO NOVEMBER 30, 2001 ARE 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, 2001 and for
the six month period 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 May 31, 2001.
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 intends to acquire interests in various
business opportunities, which in the opinion of management will
provide a profit to the Company.
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.
Concentration of Credit Risk
- ----------------------------
The Company has no significant off-balance-sheet
concentrations of credit risk such as foreign exchange contracts,
opinions 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.
F-7
11
NORTHERN OSTRICH CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MAY 31, 2001 AND 2000
REFERENCES TO NOVEMBER 30, 2001 ARE UNAUDITED (Continued)
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.
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)
--------- ----------- --------
<s> <c> <c> <c>
For the year ended May 31, 2001
-------------------------------
Basic Loss per Share
Loss to common shareholders $ (3,811) 2,004,000 $ 0.00
========= ========= ========
For the year ended May 31, 2000
-------------------------------
Basic Loss per Share
Loss to common shareholders $ (2,777) 2,004,000 $ 0.00
========= ========= ========
There are no dilutive potential common stock equivalents As
of May 31, 2001 and 2001. The effect of any outstanding common
stock equivalents would be anti-dilutive for May 31, 2001 and
2000 and are thus not considered.
F-8
12
NOTE 2 - INCOME TAXES
As of May 31, 2001, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately
$41,000 that may be offset against future taxable income through
2021. 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.
NOTE 4 - COMMITMENTS
As of May 31, 2001 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.
F-9
13
Item 2. Management's Discussion and Analysis or Plan of Operation
Plan of Operation
- -----------------
During the next twelve months, Registrant will actively seek
out and investigate possible opportunities with the intent to
acquire and merge with one or more business ventures. In its
search for business opportunities, management will follow the
procedures outlined in Item 1 above. Because Registrant lacks
funds, it may be necessary for the officers and directors to
either advance funds to Registrant or to accrue expenses until
such time as a successful business consolidation can be made.
Management intends to hold expenses to a minimum and to obtain
services on a contingency basis when possible.
Management's discretion is unrestricted, and Registrant may
participate in any business whatsoever that may, in the opinion
of management, meet the business objectives discussed herein.
Indeed, Registrant may effectuate a business combination with
another business outside the United States. Registrant has not
limited the scope of its search to a particular region.
Registrant does not intend to utilize any notices or
advertisements in its search for business opportunities.
Registrant's officers and directors will be primarily
responsible for searching for an appropriate merger or
acquisition candidate. However, to the extent that the existing
stockholders are aware of any potential business acquisition
candidates, they will also refer these to Registrant. Registrant
recognizes that as a result of its limited financial, managerial
or other resources, the number of suitable potential businesses
that may be available to it will be extremely limited.
Registrant's principal business objective will be to seek long-
term growth potential in the business in which it participates
rather than immediate, short-term earnings. In seeking to attain
its business objectives Registrant will not restrict its search
to any particular industry. Rather, Registrant may investigate
businesses of essentially any kind or nature, including but not
limited to finance, high technology, manufacturing, service,
research and development, communications, insurance, brokerage,
transportation and others. Management may also seek to become
involved with other development-stage companies or companies that
could be categorized as "financially troubled." At the present
time, Registrant has not chosen the particular area of business
in which it proposes to engage and has not conducted any market
studies with respect to business property or industry.
As of the date hereof, Registrant has not made any
arrangements or definitive agreements to use outside advisors or
consultants to raise any capital. In the event Registrant does
need to raise capital, most likely the only method available to
Registrant would be through the private sale of its securities.
Because of the nature of Registrant as a development-stage
company, it is unlikely it could make a public sale of securities
or be able to borrow any significant sum, from either a
14
commercial or private lender. There can be no assurance that
Registrant will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on
terms acceptable to Registrant.
Registrant does 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 its search for business opportunities
during the next twelve months.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Registrant's Form 10SB12G and all exhibits thereto, filed in
June, 2001, under SEC File Number 0-32919, are incorporated herein by
reference.
(b) No reports on Form 8-K were filed during the period.
SIGNATURES
----------
In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NORTHERN OSTRICH CORP.,
a Nevada corporation
Dated: January 12, 2002 By:/s/ Manfred Schultz
President and Director
Dated: January 12, 2002 By:/s/ Gerald Hinkley
Vice President, Secretary,
Treasurer and Director
15