siberian10q033109.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
   
[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

[   ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ____________ to ______________

Commission file number: 333-118902

SIBERIAN ENERGY GROUP INC.
(Exact name of registrant as specified in its charter)

NEVADA
52-2207080 
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)

275 Madison Ave, 6th Floor, New York, NY 10016
(Address of principal executive offices)

(212) 828-3011
(Registrant's telephone number)

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.     Yes  x    No  [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  [  ] No  [  ]

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer  [  ]
Accelerated filer   [  ]
 
Non-accelerated filer  [  ]
Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes   [ ] No   x 

The number of shares outstanding of each of the issuer’s classes of equity as of May 12, 2009, was  18,645,585 shares of common stock, par value $0.001, and no shares of preferred stock, par value $0.001. 
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Siberian Energy Group Inc.
 
We have reviewed the accompanying condensed consolidated balance sheet of Siberian Energy Group Inc. (a development stage company) as of March 31, 2009, and the related condensed consolidated statements of operations, stockholders' equity, and cash flows for the three months ended March 31, 2009 and 2008, and the cumulative period of development stage activity (January 1, 2003 through March 31, 2009).   These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards of the Public Company Accounting Oversight Board (United States).  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 the auditing standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements 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 interim financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards of the Public Company Accounting Oversight Board, the consolidated balance sheet as of December 31, 2008, and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended (not presented herein); and in our report dated March 31, 2009, we included an explanatory paragraph describing conditions that raised substantial doubt about the Company’s ability to continue as a going concern.  In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2008 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.


Lumsden & McCormick, LLP
Buffalo, New York
May 12, 2009
F-1
SIBERIAN ENERGY GROUP INC. (A Development Stage Company)
            
             
Condensed Consolidated Balance Sheets
  
(Unaudited)
        
   
March 31,
    
December 31,
  
   
2008
    
2008
  
             
Assets
            
Current assets:
            
Cash
   $ 1,322     $ 739  
Prepaid expenses and other
     516       521  
      1,838       1,260  
                 
Investment in joint venture, at equity
     -       -  
                 
Investment in KNG, at equity
     -       -  
                 
Loan receivable - affiliate
     29,500       29,500  
                 
Property and equipment, net
     1,623       1,783  
                 
    $ 32,961     $ 32,543  
                 
Liabilities and Stockholders' Equity
                
Current liabilities:
                
Accounts payable:
                
Related party - stockholders
   $ 467,726     $ 447,663  
Related party - Baltic Petroleum, interest at 14%
     64,286       62,771  
 Others
     450,865       410,039  
Accrued payroll
     904,496       824,744  
      1,887,373       1,745,217  
                 
Stockholders' equity:
                
Common stock - authorized 100,000,000 shares, $.001 par value,
                
  18,645,550 issued and outstanding
     18,646       18,646  
Additional paid-in capital
     13,112,299       13,112,299  
Accumulated deficit
                
Pre-development stage
     (449,785 )     (449,785 )
Development stage
     (14,550,255 )     (14,406,604 )
Accumulated other comprehensive income
     14,683       12,770  
      (1,854,412 )     (1,712,674 )
                 
    $ 32,961     $ 32,543  
See accompanying notes.                
F-2
SIBERIAN ENERGY GROUP INC. (A Development Stage Company)
              
               
For the
  
Condensed Consolidated Statements of Operations
              
cumulative
  
               
period of
  
               
Development
  
               
Stage Activity-
  
               
January 1, 2003
  
               
through
  
               
March 31,
  
For the three months ended March 31,
  
2009
    
2008
    
2009
  
                   
Revenues and other income:
                  
  Management fees   $ -     $ -     $ 1,135,000  
  Gain from entrance into joint venture     -       -       364,479  
  Other     -       -       6,382  
Total revenues and other income
     -       -       1,505,861  
                         
Expenses:
                        
  Salaries     80,600       80,410       3,518,205  
  Professional and consulting fees     53,351       75,425       4,916,160  
  Rent and occupancy     -       9,716       237,226  
  Depreciation and amortization     147       231       104,384  
  Finance charges and interest     1,998       2,038       114,061  
  Other     7,555       18,335       2,042,563  
Total expenses
     143,651       186,155       10,932,599  
                         
Loss from sale of investment
     -       -       669,570  
                         
Loss on deemed disposition of oil and
                        
  gas properties, unproved     -       -       3,928,000  
                         
Impairment charge on investment
     -       -       525,947  
                         
  Loss before income taxes     143,651       186,155       14,550,255  
                         
Provision for income taxes (benefit)
     -       -       -  
                         
Net loss (development stage)
   $ 143,651     $ 186,155     $ 14,550,255  
                         
                         
Basic and diluted loss per common share
   $ (0.01 )   $ (0.01 )   $ (1.23 )
                         
Weighted average number of basic and diluted
                        
  common shares outstanding     18,645,550       18,383,030       11,793,960  
                         
See accompanying notes.                        
                         
F-3
SIBERIAN ENERGY GROUP INC. (A Development Stage Company)
                  
                                           
Condensed Consolidated Statements of Stockholders' Equity
                      
                                           
For the cumulative period of Development Stage Activity - January 1, 2003 through March 31, 2009
              
                                           
                           
Accumulated
              
   
Common Stock
    
Additional
          
Other
              
   
Number of
          
Paid-In
    
Accumulated
    
Comprehensive
          
Comprehensive
  
   
Shares
    
Par Value
    
Capital
    
Deficit
    
Income (Loss)
    
Total
    
Loss
  
                                           
Balance, January 1, 2003 (pre-development stage)
     4,902,886     $ 4,903     $ 430,195     $ (449,785 )   $ -     $ (14,687 )      
                                                       
Loss for the year - 2003
     -       -       -       (422,516 )     -       (422,516 )   $ (422,516 )
                                                         
Shares issued in acquisition (ZNG)
     1,000,000       1,000       (1,000 )     -       -       -          
                                                         
Balance, December 31, 2003
     5,902,886     $ 5,903     $ 429,195     $ (872,301 )     -     $ (437,203 )        
                                                         
Loss for the year - 2004
     -       -       -       (833,567 )     -       (833,567 )        
                                                         
Foreign currency translation adjustment
     -       -       -       -       (53,120 )     (53,120 )   $ (886,687 )
                                                         
Shares issued in acquisition (ZNG)
     3,450,000       3,450       746,550       -       -       750,000          
                                                         
Shares issued for professional services
     50,000       50       9,950       -       -       10,000          
                                                         
Other
     -       -       34,426       -       -       34,426          
                                                         
                                           
Balance, December 31, 2004
     9,402,886     $ 9,403     $ 1,220,121     $ (1,705,868 )   $ (53,120 )   $ (529,464 )      
                                                       
Loss for the year - 2005
     -       -       -       (1,153,686 )     -       (1,153,686 )      
                                                       
Foreign currency translation adjustment
     -       -       -       -       50,614       50,614     $ (1,103,072 )
                                                         
Shares issued for professional services
     385,000       385       197,829       -       -       198,214          
                                                         
Shares issued for accrued salaries
     1,700,000       1,700       301,871       -       -       303,571          
                                                         
Warrants granted for professional services
     -       -       310,000       -       -       310,000          
                                                         
Balance, December 31, 2005
     11,487,886     $ 11,488     $ 2,029,821     $ (2,859,554 )   $ (2,506 )   $ (820,751 )        
                                                         
Loss for the year - 2006
     -       -       -       (4,072,788 )     -       (4,072,788 )        
                                                         
Foreign currency translation adjustment
     -       -       -       -       (1,939 )     (1,939 )   $ (4,074,727 )
                                                         
Shares issued for employee stock option plan and warrants
     195,000       195       45,305       -       -       45,500          
                                                         
Shares issued for geological data
     1,900,000       1,900       3,323,100       -       -       3,325,000          
                                                         
Shares issued for professional services
     1,139,499       1,140       2,120,320       -       -       2,121,460          
                                                         
Warrants granted for professional services
     -       -       1,201,960       -       -       1,201,960          
                                                         
Shares cancelled
     (609,424 )     (610 )     610       -       -       -          
                                                         
Balance, December 31, 2006
     14,112,961     $ 14,113     $ 8,721,116     $ (6,932,342 )   $ (4,445 )   $ 1,798,442          
                                                         
See accompanying notes.                                                        
                                                         
F-4
SIBERIAN ENERGY GROUP INC. (A Development Stage Company)
                            
                                           
Condensed Consolidated Statements of Stockholders' Equity (continued)
                    
                                           
For the cumulative period of Development Stage Activity - January 1, 2003 through March 31, 2009
            
                                           
                           
Accumulated
              
   
Common Stock
    
Additional
          
Other
              
   
Number of
          
Paid-In
    
Accumulated
    
Comprehensive
          
Comprehensive
  
   
Shares
    
Par Value
    
Capital
    
Deficit
    
Income (Loss)
    
Total
    
Loss
  
                                           
                                           
Balance, December 31, 2006
     14,112,961     $ 14,113     $ 8,721,116     $ (6,932,342 )   $ (4,445 )   $ 1,798,442        
                                                       
Loss for the year - 2007
     -       -       -       (2,060,487 )     -       (2,060,487 )      
                                                       
Foreign currency translation adjustment
     -       -       -       -       (9,804 )     (9,804 )   $ (2,070,291 )
                                                         
Shares issued for employee stock option plan and warrants
     566,935       567       (567 )     -       -       -          
                                                         
Shares issued for geological data
     200,000       200       349,800       -       -       350,000          
                                                         
Shares issued for accrued salaries
     788,000       788       1,444,618       -       -       1,445,406          
                                                         
Shares issued for licenses
     2,000,000       2,000       1,318,000       -       -       1,320,000          
                                                         
Shares issued for professional services
     715,134       715       1,070,395       -       -       1,071,110          
                                                         
See accompanying notes.                                                        
                                                         
Warrants granted for professional services
     -       -       150,394       -       -       150,394        
                                                       
Balance, December 31, 2007
     18,383,030     $ 18,383     $ 13,053,756     $ (8,992,829 )   $ (14,249 )   $ 4,065,061        
                                                       
Loss for the year - 2008
     -       -       -       (5,863,560 )     -       (5,863,560 )      
                                                       
Foreign currency translation adjustment
     -       -       -       -       27,019       27,019     $ (5,836,541 )
                                                         
Shares issued for professional services and accrued salaries
     155,000       155       41,595       -       -       41,750          
                                                         
Warrants granted for professional services
     -       -       6,303       -       -       6,303          
                                                         
Shares issued for loan repayment and related interest
     107,520       108       10,645       -       -       10,753          
                                                         
Balance, December 31, 2008
     18,645,550     $ 18,646     $ 13,112,299     $ (14,856,389 )   $ 12,770     $ (1,712,674 )        
                                                         
Loss for three months - 2009
     -       -       -       (143,651 )     -       (143,651 )        
                                                         
Foreign currency translation adjustment
     -       -       -       -       1,913       1,913     $ (141,738 )
                                                         
Balance, March 31, 2009
     18,645,550     $ 18,646     $ 13,112,299     $ (15,000,040 )   $ 14,683     $ (1,854,412 )        
                                                         
See accompanying notes.                                                        
F-5