UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
March 31, 2006 333-51180
OMEGA VENTURES GROUP, INC.
---------------------------
(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation or organization)
87-0661638
--------------
(I.R.S. Employer Identification No.)
299 South Main, Suite 1300, Salt Lake City, Utah 84111
----------------------------------------------------------
(Address of principal executive offices)
(801) 534-4450
-----------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
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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 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.
X Yes No
------- ------
Check if the Issuer is a shell company. [X]
As of May 11, 2006, the Company had 92,625,212 shares of its $0.001 par
value common stock outstanding.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
CONSOLIDATED BALANCE SHEETS - unaudited
March 31, 2006 and December 31, 2005
===========================================================================
<Table>
<Caption>
Mar 31, Dec 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 253,272 $ 25,615
------------ ------------
Total Current Assets 253,272 25,615
FURNITURE AND EQUIPMENT -
net of accumulated depreciation 3,458 4,308
------------ ------------
$ 256,730 $ 29,923
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable - affiliates 121,203 121,203
Accounts payable - related parties 22,800 22,800
Accounts payable 104,409 97,454
------------ ------------
Total Current Liabilities 248,412 241,457
------------ ------------
STOCKHOLDERS' DEFICIENCY
Preferred stock
100,000,000 shares authorized, at $.001
par value - none issued - -
Common stock
400,000,000 shares authorized, at $.001
par value; 49,339,597 shares issued and
outstanding 49,340 49,340
Capital in excess of par value 962,944 962,944
Stock subscriptions receivable (250,000) (250,000)
Stock subscriptions received 227,641 -
Deficit accumulated during the development stage (981,607) (973,818)
------------ ------------
Total Stockholders' Deficit 8,318 (211,534)
------------ ------------
$ 256,730 $ 29,923
============ ============
</Table>
The accompanying notes are an integral part of these financial statements.
2
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS - unaudited
For the Three Months Ended March 31, 2006 and 2005 and the period
September 19, 2000 (Date of Inception) to March 31, 2006
===========================================================================
<Table>
<Caption>
Sept 19, 2000
Mar 31, Mar 31, to
2006 2005 Mar 31, 2006
------------ ------------ ------------
REVENUES $ - $ - $ 823
------------ ------------ ------------
EXPENSES
Market development - - 387,988
Exploration - - 41,584
Development of web site -
preliminary project stage - - 25,000
Depreciation & amortization 850 1,100 16,653
Administrative 6,955 9,079 471,228
------------ ------------ ------------
7,805 10,179 942,453
------------ ------------ ------------
NET LOSS FROM OPERATIONS (7,805) (10,179) (941,630)
OTHER INCOME AND EXPENSES
Interest income 16 - 89
Interest expense - (3,164) (18,242)
Loss of assets - - (21,824)
------------ ------------ ------------
NET LOSS $ (7,789) $ (13,343) $ (981,607)
============ ============ ============
NET LOSS PER COMMON SHARE
Basic and dilutive $ - $ -
AVERAGE OUTSTANDING SHARES -
(stated in 1,000's)
Basic 49,340 44,989
Diluted 54,439 50,088
</Table>
The accompanying notes are an integral part of these financial statements
3
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited
For the Three Months Ended March 31, 2006 and 2005 and the Period
September 19, 2000 (Date of Inception) to March 31, 2006
<Table>
<Caption>
=====================================================================================
Sept 19, 2000
Mar 31, Mar 31, to
2006 2005 Mar 31, 2006
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,789) $ (13,343) $ (981,607)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Depreciation & amortization 850 1,100 16,653
Change in accounts payable 6,955 23,330 243,016
Issuance of capital stock for web site - - 25,000
Issuance of capital stock for services - 5,000 155,000
------------ ------------ ------------
Net Change in Cash From Operations 16 16,087 (541,938)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of web site - - (5,027)
Purchase land and deposit - (15,000) (109,676)
Purchase of equipment - - (15,084)
------------ ------------ ------------
- (15,000) (129,787)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Changes in a note payable - - 115,072
Stock subscriptions received 227,641 - 227,641
Net proceeds from issuance of
common stock - - 582,284
------------ ------------ ------------
227,641 - 924,997
------------ ------------ ------------
Net change in Cash 227,657 1,087 253,272
Cash at Beginning of Period 25,615 608 -
------------ ------------ ------------
Cash at End of Period $ 253,272 $ 1,695 $ 253,272
============ ============ ============
NON CASH FLOWS FROM OPERATING ACTIVITIES
Issuance of 6,000,000 common shares for web site - 2000 $ 25,000
------------
Issuance of 2,175,000 common shares for services - 2003 75,500
------------
Issuance of 3,016,097 common shares for services and expenses - 2004 74,500
------------
Issuance of 250,000 common shares for expenses - 2005 5,000
------------
</Table>
The accompanying notes are an integral part of these financial statements
4
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2006
===========================================================================
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
September 19, 2000 with the name "Office Managers, Inc" with authorized
common stock of 50,000,000 shares at $0.001 par value. On November 13, 2003
the name was changed to "Omega Ventures Group, Inc." in connection with an
increase in the authorized common stock to 400,000,000 shares, with the
same par value, and the addition of authorized preferred shares of
100,000,000 shares with a par value of $.001. No terms have been determined
for the preferred stock and no shares have been issued.
The Company was organized for the purpose of acquiring and developing a
web site on the World Wide Web devoted exclusively to office managers for
the purpose of delivering office products and related professional services
over the internet.
On February 13, 2003 the Company organized "Vogue Environmental Solutions,
Inc". a wholly owned subsidiary. Vogue has no assets or liabilities and
no operations. On August 20, 2003 the Company organized "Western Gas
Corporation" , a wholly owned subsidiary for the purpose of the
acquisition and exploration of oil and gas leases. On November 24, 2003
the Company organized "Arizona Land Corporation" , a wholly owned
subsidiary, for the purpose of engaging in land investment and
development.
The Company is in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- ------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ---------------
The Company has not adopted a policy regarding payment of dividends.
Basic and Dilutive Net Income (Loss) Per Share
- ----------------------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted net income
(loss) per share amounts are computed using the weighted average number of
common shares and common equivalent shares outstanding as if shares had
been issued on the exercise of any common share rights unless the exercise
becomes antidilutive and then only the basic per share amounts are shown in
the report.
The dilutive common shares includes 5,098,500 shares that may be issued in
the future.
5
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2006
===========================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Income Taxes
- ------------
The Company utilizes the liability method of accounting for income taxes.
Under the liability method deferred tax assets and liabilities are
determined based on the differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax
rates and laws that will be in effect, when the differences are expected to
reverse. An allowance against deferred tax assets is recorded, when it is
more likely than not, that such tax benefits will not be realized.
On March 31, 2006, the Company and its subsidiaries had a net operating
loss available for carry forward of $ 981,607. The income tax benefit of
approximately $ 294,000 from the loss carry forward has been fully offset
by a valuation reserve because the use of the future tax benefit is
doubtful since the Company has no operations. The net operating loss will
expire starting in 2021 through 2027.
Financial Instruments
- ---------------------
The carrying amounts of financial instruments are considered by management
to be their estimated fair values due to their short term maturities.
Recent Accounting Pronouncements
- --------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will
have a material impact on its financial statements.
Financial and Concentrations Risk
- ---------------------------------
The Company does not have any concentration or related financial credit
risk.
Revenue Recognition
- -------------------
Revenue will be recognized on the sale and delivery of a product or the
completion of a service provided.
Advertising and Market Development
- ----------------------------------
The company expenses advertising and market development costs as incurred.
Principles of Consolidation
- ---------------------------
The consolidated financial statements include the assets, liabilities, and
operations of the Company and its wholly owned subsidiaries. All
intercompany transactions have been eliminated
6
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2006
===========================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
Office equipment
- ----------------
Office equipment is depreciated over 3 and 7 years using the straight line
method.
Cost $ 15,084
Less accumulated depreciation 11,626
---------
Net $ 3,458
=========
3. OIL AND GAS LEASES
During August 2003 Western Gas Corporation (subsidiary) acquired an
undivided 2.5% working interest, with a 1.875% net revenue in a 75%
interest, in an oil and gas lease known as "Mana Huilla Creek Prospect"
located in Goliad County , Texas.
The lease has not been proven and therefore all costs for acquisition and
exploration have been expensed.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors, and Apex Resources, Inc. (an affiliate by common
officers) have acquired 26% of the common stock issued.
Officer-directors have made no interest, demand loans to the Company of
$22,800.
A Company affiliate has made no interest, demand loans to the Company of
$121,203.
7
OMEGA VENTURES GROUP, INC. AND SUBSIDIARIES
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2006
===========================================================================
5. CAPITAL STOCK
During July 2002 the Company completed the sale of an offering of
5,098,500 units at $.10 per unit. Each unit consists of one share of common
stock, one redeemable A warrant to purchase an additional common share
at $.50 by July 10, 2003 (expired), and one redeemable B warrant to
purchase an additional common share at $1.20 by July 10, 2007 which would
amount to the issuance of 5,098,500 additional shares. On the report date
no warrants had been exercised.
During 2005 the Company issued 250,000 restricted common shares for
services of $5,000 and 6,100,000 restricted common shares for stock
subscriptions receivable of $250,000.
During the quarter ended March 31, 2006 the Company received $ 227,641 as
payment for a private placement sale of common shares. As of the quarter
end, the share price and number of shares to be issued in connection with
this private placement had not determined. Subsequent to the quarter end,
the Company and the investor agreed upon a purchase price of $0.01 per
share. This will result in the Company issuing 22,764,100 shares to the
investor. The Company anticipates these shares will be issued some time
during the second quarter of 2006.
6. GOING CONCERN
The Company intends to continue the development of its business
interests, however, there is insufficient working capital necessary to be
successful in this effort and to service its debt.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed
a strategy, which it believes will accomplish this objective, through short
term related party loans, long term financing, and additional equity
funding, which will enable the Company to operate for the coming year.
8
Item 2. Plan of Operations
This Form 10-QSB contains certain forward-looking statements. For
this purpose any statements contained in this Form 10-QSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties.
Actual results may differ materially depending on a variety of factors.
For a complete understanding, this Plan of Operations should be read in
conjunction with Part I- Item 1. Financial Statements to this Form 10-QSB.
General
- -------
From inception through the fourth quarter of 2003, the Company sought
to establish an online credit and collections professional referral
service. The Company encountered numerous difficulties in implementing its
referral service. These difficulties, coupled with a lack of funds and
limited prospects for generating revenue, prompted the Company in the
fourth quarter of 2003, to discontinue its efforts to pursue the
development of its online credit and collections referral service.
During 2004 and 2005, the Company has primarily focused its efforts
into the acquisition of interests in oil and gas projects and real estate.
Because of limited funds, however, the Company has been unsuccessful in its
efforts. As a result of its limited funds, the Company engaged in very
little operating activity during 2006.
The Company has three wholly-owned subsidiaries: Western Gas
Corporation; Arizona Land Corporation and Vogue Environmental Solutions,
Inc.
Western Gas Corporation
-----------------------
Due to a lack of funds, Western Gas did not engage in any exploration
activities during the quarter ended March 31, 2006.
Arizona Land Corporation
------------------------
Due to a lack of funds, Arizona Land did not engage in any exploration
activities during the quarter ended March 31, 2006.
Vogue Environmental Solutions, Inc.
-----------------------------------
Due to a lack of funds, Vogue Environmental Solutions did not engage
in active operations during the quarter ended March 31, 2006.
9
Source of Funds
- ---------------
Because the Company is not currently generating revenue, it is
dependent upon loans from related parties and private sales of its
securities to fund its operations.
NOTE 6 OF THE NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
states that the Company will need additional capital to service its debt
and funds it planned activities, which raises substantial doubt about the
Company's ability to continue as a going concern. The Company has never
generated revenue and it is unlikely the Company will generate revenue
during 2006, which raises substantial doubt about the Company's ability to
continue as a going concern. To continue operations, the Company will need
to obtain funding from third parties. This funding may be sought by means
of private equity or debt financing by the Company. The Company currently
has no commitments from any party to provide funding and there is no way to
predict when, or if, any such funding could materialize. There is no
assurance that the Company will be successful in obtaining additional
funding on attractive terms or at all. If the Company is unsuccessful in
obtaining additional funding, the Company may be unable to continue
operations as it has insufficient working capital necessary to meet its
expenses and service its debt.
During the quarter the Company engaged in a private placement of its
common stock and received proceeds of $227,641. Subsequent to the quarter
end, the Company and the investor agreed upon a purchase price of $0.01 per
share. This will result in the Company issuing 22,764,100 shares to the
investor. The Company anticipates these shares will be issued some time
during the second quarter of 2006.
Results of Operations
- ---------------------
During the period from inception, September 19, 2000, to March 31,
2006, the Company has generated no income from active operations. Since
inception, the Company has earned $823 in interest income, including $0
during the year ended March 31, 2006. The Company does not expect to
generate any material revenues during the remainder of the 2006 fiscal
year.
As of March 31, 2006, the Company had an accumulated deficit of
$981,607 funded by paid-in capital. At March 31, 2006, the Company had
total current assets of $253,272 and total current liabilities of $248,412
compared to total current assets of $25,615 and total current liabilities
of $241,457 on December 31, 2005. The private placement conducted during
the quarter is the primary factor contributing to the increase in total
assets. The primary contributing factors to the increase in accumulated
deficit and total current liabilities is increased accounts payable during
the quarter ended March 31, 2006.
Comparison of the three months ended March 31, 2006 and 2005
------------------------------------------------------------
During the three months ended March 31, 2006, the Company incurred
operating expenses of $7,805 compared to $10,179 during the three months
ended March 31, 2005. This decrease in operating expenses was primarily
attributable to the fact that the Company had limited funds with which to
operate during much of the first quarter 2006 and therefore limited its
activities as much as possible.
During the three months ended March 31, 2006 and March 31, 2005, the
Company incurred no expenses for market development, exploration or website
development. During the first quarter 2006, the Company incurred $6,955
in administrative expenses, compared to $9,079 in the first quarter 2006.
Also during the first quarter 2006, the Company incurred $850 in
depreciation and amortization compared to $1,100 during the first quarter
2005.
10
The Company incurred no interest expense during the first quarter 2006
compared to interest expense of $3,164 during the first quarter of fiscal
2005. This reduction in interest expense was the result of a reduction of
interest bearing debt obligations. These overall reductions in expenses
resulted in a net loss during the three months ended March 31, 2006 of
$7,789, compared to a net loss in the three months ended March 31, 2005 of
$13,343. The Company anticipates its expenses and losses will continue at
a rate consistent with those experienced during the first quarter 2006
until such time as the Company undertakes active operations.
Liquidity and Capital Resources
- -------------------------------
The Company has financed its operations mainly through the sale of its
common stock and through loans from related parties. Since inception, the
Company has been entirely dependent upon outside sources of financing for
continuation of operations. As stated previously, there is no assurance
that the Company will be successful in obtaining additional funding on
acceptable terms or at all. As discussed above, during the quarter the
Company engaged in a private placement of its common stock to an investor.
As of March 31, 2006, the Company had received $227,641. Subsequent to the
quarter end, the Company and the investor agreed upon a purchase price of
$0.01 per share.
As a result of the private placement, as March 31, 2006, the Company
had cash on hand of $253,272. During the first quarter 2005, the Company
issued 5,000,000 shares for stock subscriptions receivable of $250,000. As
of March 31, 2006, the Company has not received any of the funds for the
stock subscriptions. The 5,000,000 shares are being held in escrow to be
released as funds are received. It is unclear at this time when or if the
Company will receive these funds.
It is unlikely the Company will realize revenue from the operations of
any of its subsidiaries in through the remainder of 2006. While the
Company raised $227,641 in the private offering, unless the Company can
undertake a business opportunity that will allow it to generate revenue, it
is unclear how long the Company may be able to continue operations.
Off Balance Sheet Financing Arrangements
- ----------------------------------------
As of March 31, 2006 the Company had no off-balance sheet financing
arrangements
Item 3. Controls and Procedures
The Company's principal executive officers and our principal financial
officer (the "Certifying Officers") are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e). Such officers have concluded (based upon
their evaluations of these controls and procedures as of the end of the
period covered by this report) that the Company's disclosure controls and
procedures are effective to ensure that information required to be
disclosed by it in this report is accumulated and communicated to
management, including the Certifying Officers as appropriate, to allow
timely decisions regarding required disclosure.
The Certifying Officers have also indicated that there were no
significant changes in the Company's internal controls over financial
reporting or other factors that could significantly affect such controls
subsequent to the date of their evaluation, and there were no significant
deficiencies and material weaknesses.
11
Management, including the Certifying Officers, does not expect that
the Company's disclosure controls or its internal controls will prevent all
error and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. In addition, the design of a
control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within a company have been detected. These
inherent limitations include the realities that judgments in decision-
making can be faulty, and that breakdowns can occur because of simple error
or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management
override of the control. The design of any systems of controls is also
based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Because
of these inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and may not be detected.
PART II - OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities
No instruments defining the rights of the holders of any class of
registered securities were materially modified, limited or qualified during
the quarter ended March 31, 2006.
During the quarter the Company engaged in a private placement of its
common stock to Chintech Consultants, an investor from Hong Kong. The
Company received proceeds of $227,641. Subsequent to the quarter end, the
Company and the investor agreed upon a purchase price of $0.01 per share.
This will result in the Company issuing 22,764,100 shares to the investor.
The Company anticipates these shares will be issued some time during the
second quarter of 2006. These shares were issued without registration
under the Securities Act of 1933 in reliance upon an exemption from
registration pursuant to Regulations S of the Securities Act Rules.
Item 6. Exhibits
Exhibits. The following exhibits are included as part of this report:
Exhibit No. Exhibit
----------- -------
31.1 Certification of Principal Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Principal Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Principal Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Principal Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this quarterly report to be signed on its
behalf by the undersigned thereunto duly authorized.
OMEGA VENTURES GROUP, INC.
May 12, 2006 /S/ John M. Hickey
---------------------------------------
John M. Hickey, Principal Executive Officer
May 12, 2006 /S/ John Ray Rask
---------------------------------------
John Ray Rask, Principal Financial Officer
13