UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
Form 10 QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 000-31945
For the quarter ended March 31, 2004
POWDER RIVER BASIN GAS CORP.
(Exact name of small business issuer as specified in its charter)
Colorado
(State of Incorporation)
84-1521645
(IRS Employer Identification #)
104, 3208 8th Ave NE
Calgary, AB T2A 7V8
(403) 263-5010
(Address and telephone number of principal executive office)
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
---- ----
As of March 31, 2004, 86, 108, 261 shares of common stock, $0.001 par
value, were outstanding.
Transitional Small Business Disclosure Format (check one): [X] Yes [ ] No
Powder River Gas Corp
Consolidated Financial Statements
March 31, 2004
Powder River Gas Corp
Notes to the Consolidated Financial Statements
March 31, 2004
GENERAL
Powder River Gas Corp (the Company) has elected to omit substantially all
footnotes to the financial statements for the three months ended March 31,
2004 since there have been no material changes (other than indicated in other
footnotes) to the information previously reported by the Company in their
Annual Report filed on the Form 10-KSB for the twelve months ended December
31, 2003.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments
which are, in the opinion of management, necessary to properly reflect the
results of the interim period presented. The information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.
Powder River Basin Gas Corp.
Consolidated Balance Sheet
March 31, 2004
Unaudited
ASSETS
CURRENT ASSETS
Cash $ -
Prepaid expenses 2,000
------------
Total current assets 2,000
OIL AND GAS PROPERTIES USING FULL COST ACCOUNTING (NOTE 1)
Properties not subject to amortization 1,456,265
Properties subject to amortization 891,660
Accumulated amortization (18,150)
Net oil and gas properties 2,329,775
------------
Total assets $ 2,331,775
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 12,397
Accrued expenses 61,003
Notes payable 531,400
------------
Total current liabilities 604,800
------------
Total liabilities 604,800
STOCKHOLDERS' EQUITY
Common stock, par value $.001 per share; 50,000,000 shares
authorized; 87,828,689 shares issued and outstanding 87,828
Capital in excess of par value 5,393,083
Retained earnings (3,753,936)
------------
Total stockholders' equity 1,726,975
------------
Total liabilities and shareholders' equity $ 2,331,775
============
Powder River Basin Gas Corp.
Consolidated Statement of Operations
For the Three Months Ended March 31,
2004 2003
------------ ------------
REVENUE
Oil and gas sales $ 39,063 $ -
------------ ------------
Total revenue 39,063 -
EXPENSES
Depletion 18,150 -
General and administrative 2,073 4,205
Lease operating costs 6,220 26
Legal and professional 11,120 -
Travel 3,610 -
------------ ------------
Total expenses 41,173 4,231
------------ ------------
NET OPERATING LOSS (2,110) (4,231)
OTHER INCOME (EXPENSE)
Interest expense (12,810) -
------------ ------------
NET INCOME / (LOSS) $ (14,920) $ (4,231)
============ ============
BASIC INCOME / (LOSS) PER COMMON SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 86,108,261 20,437,833
============ ============
Powder River Basin Gas Corp.
Consolidated Statement of Cash Flows
For the Period Ended March 31,
2004 2003
------------ ------------
Cash flows from operating activities
Net income $ (14,920) $ (4,205)
Adjustments to net income provided by
operating activities:
Common stock issued for services rendered - -
Common stock issued for retirement of payables (130,000) -
Depletion 18,150 -
Changes in assets and liabilities:
Increase in prepaid expenses (2,000) -
Decrease (increase) in accounts receivable - -
(Decrease) increase in accounts payable &
accrued expenses 16,430 -
------------ ------------
Net cash used in operating activities 17,660 (134,205)
------------ ------------
Cash flows from investing activities
Expenditures for oil and gas property development (17,660) -
------------ ------------
Net cash used in investing activities (17,660) -
------------ ------------
Cash flows from financing activities
Proceeds from notes payable and long-term liabilities - (1,282)
Proceeds from issuance of common stock - 130,000
------------ ------------
Net cash provided by financing activities - 128,718
------------ ------------
Net decrease in cash and cash equivalents - (5,487)
Cash at beginning of year - 18,938
------------ ------------
Cash at end of year $ - $ 13,451
============ ============
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
The Company is including the following cautionary statement to make
applicable and take advantage of the safe harbor provision of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements
made by, or on behalf of, the Company. This quarterly report on form 10QSB
contains forward-looking statements. Forward-looking statements include
statements concerning plans, objectives, goals, strategies, expectations,
future events or performance and underlying assumptions and other statements
which are other than statements of historical facts. Certain statements
contained herein are forward-looking statements and, accordingly, involve
risks and uncertainties which could cause actual results or outcomes to
differ materially from third parties, but there can be no assurance that
management's expectations, beliefs or projections will result of be achieved
or accomplished. In addition to other factors and matters discussed
elsewhere herein, the following are important factors that, in the view of
the Company, could cause actual results to differ materially from those
discussed in the forward-looking statements: the ability of the Company to
respond to changes in the information system environment, competition, the
availability of financing, and, if available, on terms and conditions
acceptable to the Company, and the availability of personnel in the future.
PLAN OF OPERATION
The Company's business strategy for the next twelve months includes focused
acquisitions and drilling operations which may be curtailed, delayed or
cancelled as a result of a variety of factors, including unexpected drilling
conditions, pressure or irregularities in formations, equipment failures or
accidents, weather conditions and shortages or delays in equipment delivery.
The Company has drilled two gas wells that will produce commercially viable
gas resources once the appropriate infrastructure (i.e., pipeline) is in
place. The Company plans on implementing its drilling plan and being
recognizing revenues during the fiscal year 2004. The Company also plans to
continue to increase production on the Louisiana project in the second
quarter.
LIQUIDITY AND CAPITAL RESOURCES
The Company realized its first ever revenue during the first quarter ended
March 31, 2004 in the amount of $39, 063 from oil and gas sales. The Company
is currently working to raise development capital to increase production and
anticipates it will be successful in raising the funds necessary to complete
work in progress.
CURRENT LIABILITIES
On March 31, 2004 the Company had approximately $604, 800 in current
liabilities. Of this amount approximately $531, 400 is related to the
purchase of leasehold interests and related expenses incurred by the
Company. The current accounts payable include payments to auditors,
accounting and legal as well as start up costs. The accrued expenses
include accumulated interest on the outstanding notes owed by the Company.
NEED FOR ADDITIONAL FINANCING FOR GROWTH
The growth of the Company's business will require substantial capital on a
continuing basis, and there is no assurance that any such required
additional capital will be available on satisfactory terms and conditions,
if at all. The Company may pursue, from time to time, opportunities to
acquire oil and natural gas properties and businesses that may utilize the
capital currently expected to be available for its present operations. The
amount and timing of the Company's future capital requirements, if any, may
depend upon a number of factors, including drilling, transportation, and
equipment costs, marketing expenses, staffing levels, competitive
conditions, and purchases or dispositions of assets, many of which are not
in the Company's control. Failure to obtain any required additional
financing could materially adversely affect the growth, cash flow and
earnings of the Company. In addition, the Company's pursuit of additional
capital could result in the incurrence of additional debt or potentially
dilutive issuances of equity securities.
The Company's ability to meet any future debt service will be dependant
upon the Company's future performance, which will be subject to oil and
natural gas prices, the Company's level of production, general economic
conditions and financial, business and other factors affecting the
operations of the Company, many of which are beyond its control. There can
be no assurance that the Company's future performance will not be adversely
affected by such changes in oil and natural gas prices and / or production
nor by such economic conditions and / or financial, business and other
factors. In addition, there can be no assurance that the Company's
business will generate sufficient cash flow from operations or that future
bank credit will be available in an amount to enable the Company to service
its indebtedness or make necessary expenditures. In such event, the
Company would be required to obtain such financing from the sale of equity
securities or other debt financing. There can be no assurance that any
such financing will be available on terms acceptable to the Company.
Should sufficient capital not be available, the Company may not be able to
continue to implement its business strategy.
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company has an outstanding judgment of which the management was unaware
was outstanding on take-over of the Company. The judgment is approximately
$100, 000 and a settlement agreement is currently trying to be negotiated
by the Company.
ITEM 2: CHANGES IN SECURITIES
The Company effected the following transactions in reliance upon exemptions
from registration under the Securities Act of 1933 as amended (the "Act")
as provided in Section 4(2) thereof. Each certificate issued for
unregistered securities contained a legend stating that the securities have
not yet been registered under the Act and setting forth the restrictions on
the transferability and the sale of the securities. No underwriter
participated in, nor were any commissions or fees paid to any underwriter
in connection with any of these transactions. None of the transactions
involved a public offering. The Company believes that each person had
knowledge and experience in financial and business matters which allowed
them to evaluate the merits and risks of its securities; and that each
person was knowledgeable about its operations and financial condition.
In February 2004 the Company issued 3,640,856 shares of its common stock to
satisfy a previously negotiated convertible debenture.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5: OTHER INFORMATION
NONE
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
31.1 Certification of Chief Financial Officer
32.1 Certification Pursuant to Sarbanes-Oxley Act of 2002
b) Reports
Report on Form 8-K, as amended, Celebrity Sports Network, Inc.,
filed January 24, 2003; Change in Registrants Certifying
Accountant
Signatures
Pursuant to the requirements of Section 13 or 15(d) the Securities and
Exchange Act of 1934 the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Powder River Basin Gas Corporation
Registrant
By: /S/ Brian Fox, President
Brian For, President and Chief Financial Officer
Date: May 14, 2004