Big Cat Energy (BCTE) 10-Q Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

PQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  October 31, 2010

£TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

Commission file number: 000-49870

Big Cat Energy Corporation

(Exact name of small business issuer as specified in its charter)

Nevada	61-1500382
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

121 W. Merino St

PO Box 500

Upton WY 82730

(Address of principal executive offices)

(307) 468-9369

(Issuer’s telephone number)

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 PNo £

Indicate by check mark whether the registrant is a large accelerated filer, an 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	P Smaller reporting company

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 43,844,334 shares of common stock, $.0001 par value as of December 10, 2010

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BIG CAT ENERGY CORPORATION

INDEX

			Page
PART 1.	FINANCIAL INFORMATION
	ITEM 1.	FINANCIAL STATEMENTS
		Condensed Balance Sheets as of October 31, 2010 (Unaudited) and April 30, 2010	3
		Condensed Statements of Operations for the three months ended October 31, 2010 and 2009,  for the six months ended  October 31, 2010 and 2009 and for the cumulative period from June 19, 1997 (inception) through October 31, 2010 (Unaudited)	4
		Condensed Statements of Cash Flows for the six months ended October 31, 2010 and 2009, and for the cumulative period from June 19, 1997 (inception) through October 31, 2010 (Unaudited)	5
		Condensed Statement of Shareholders’ Equity for the six months ended October 31, 2010 and the cumulative period from June 19, 1997 (inception) to October 31, 2010 (Unaudited)	6
		Notes to Unaudited Condensed Financial Statements	7
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
	ITEM 4T.	CONTROLS AND PROCEDURES	18
PART II.	OTHER INFORMATION		18
	ITEM 1.	Legal Proceedings	18
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
	ITEM 3.	Default Upon Senior Securities	18
	ITEM 4.	Submission of Matters to a Vote of Security Holders	18
	ITEM 5.	Other Information	18
	ITEM 6.	EXHIBITS	18
	SIGNATURES		18

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PART I.

ITEM 1.     FINANCIAL STATEMENTS.

BIG CAT ENERGY CORPORATION
(A Development Stage Company)
Condensed Balance Sheets
	October 31, 2010 (unaudited)			April 30, 2010
Assets
Current assets:
Cash and cash equivalents	$	14,746		$	192,312
Prepaid expenses and other current assets		5,687			8,878
Total current assets		20,433			201,190
Property, plant and equipment, at cost:
Equipment held  for sale		19,615			20,118
Equipment installed		8,047			7,544
Furniture and equipment, net of accumulated depreciation		8,135			9,983
Total		35,797			37,645
Intangible assets, net		105,942			99,465
Total assets	$	162,172		$	338,300
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	137,601		$	16,104
Deferred salary		156,250			96,250
Deferred revenue		31,875			59,375
Total current liabilities		325,726			171,729
Shareholders’ equity (deficit):
Common stock, $.0001 par value; 100,000,000 shares authorized,
43,844,334 and 43,481,000 shares issued and outstanding
at July 31, 2010 and April 30, 2010 respectively		4,384			4,348
Additional paid-in capital		11,218,768			11,171,937
Deficit accumulated during development stage		(11,386,706	)		(11,009,714	)
Total shareholders’ equity (deficit)		(163,554	)		166,571
Total liabilities and shareholders’ equity (deficit)	$	162,172		$	338,300

See accompanying notes to condensed financial statements.

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BIG CAT ENERGY CORPORATION
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
													June 19, 1997
	For the Three Months						For the Six Months						(Inception)
	Ended						Ended						Through
	October 31,						October 31,						October 31,
	2010			2009			2010			2009			2010
Revenues	$	28,579		$	24,543		$	52,954		$	45,168		$	271,235
Costs and expenses:
Personnel costs		105,085			139,470			217,773			299,675			8,380,353
Professional fees		37,081			70,594			92,061			123,068			815,709
Research and development		--			1,497			--			1,991			14,010
Selling expense		54,960			64,789			112,791			134,040			960,559
Depreciation and amortization		2,383			2,066			4,797			4,014			26,825
Other operating supplies		--			294			--			1,673			4,665
General and administrative		17,622			27,426			33,014			60,668			659,896
Total Expenses		217,131			306,136			460,436			625,129			10,862,017
LOSS BEFORE OTHER INCOME		(188,552	)		(281,593	)		(407,482	)		(579,961	)		(10,590,782	)
OTHER INCOME (EXPENSE)
Interest income		9			3,483			490			5,050			124,257
Litigation proceeds		30,000			--			30,000			--			30,000
(Loss) on valuation from private placement		--			--			--			--			(433,000	)
Loss before discontinued operations		(158,543	)		(278,110	)		(376,992	)		(574,911	)		(10,869,525	)
Loss on discontinued operations		--			--			--			--			(517,181	)
Net (Loss)	$	(158,543	)	$	(278,110	)	$	(376,992	)	$	(574,911	)	$	(11,386,706	)
Net loss per share from continuing operations	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Net loss per share-discontinued operations					--			--			--
Net loss per share, basic and dilutive	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average number of common shares outstanding-basic and diluted		43,844,334			42,041,000			43,751,055			37,204,043

See accompanying notes to condensed financial statements.

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BIG CAT ENERGY CORPORATION
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
	For the Six Months Ended October 31,						June 19, 1997 (Inception) Through October 31,
	2010			2009			2010
Cash Flows From Operating Activities:
Net Loss	$	(376,992	)	$	(574,911	)	$	(11,386,706	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		4,797			4,014			26,825
Stock based compensation		28,700			81,074			5,893,890
Stock in lieu of payment		18,167			--			30,167
Contributed services and other		--			--			10,425
Cash flow from discontinued operations		--			--			833,369
Changes in operating assets and liabilities:
Accounts receivable		--			(5,453	)		--
Trading securities		--			356,487			--
Prepaid and other		3,191			9,809			(5,687	)
Deferred revenue		(27,500	)		(29,375	)		31,875
Deferred salaries		60,000			36,250			156,250
Accounts payable and accrued liabilities		121,497			(18,110	)		137,601
Net cash (used in) operating activities		(168,140	)		(140,215	)		(4,271,991	)
Cash flows from investing activities:
Purchase of unproven oil and gas properties		--			--			(1,794,231	)
Purchase inventory		--			--			(27,662	)
Equipment purchases		--			(995	)		(18,941	)
Other assets		(9,426	)		(10,657	)		(97,972	)
Cash used in discontinued operations		--			--			(133,757	)
Net cash (used in) investing activities		(9,426	)		(11,652	)		(2,072,563	)
Cash flows from financing activities:
Proceeds from related party advances		8,000			--			59,618
Repayment of related party advances		(8,000	)		--			(37,036	)
Proceeds from the sale of common stock		--			500,000			6,107,901
Payments for offering costs		--			--			(21,752	)
Cash flow provided by discontinued operations		--			--			250,569
Net cash provided by financing activities		--			500,000			6,359,300
Net Increase in cash and cash equivalents		(177,566	)		348,133			14,746
Cash and cash equivalents:
Beginning of period		192,312			117,245			--
End of period	$	14,746		$	465,378		$	14,746
Noncash investing and financing transactions:
Forgiveness of debt by related party, accounted for as  Capital contributed	$	--		$	--		$	22,582
Stock issued to related party for ARID  technology	$	--		$	--		$	23,990
Spin off of Sterling Oil & Gas	$	--		$	--		$	1,794,231

See accompanying notes to condensed financial statements.

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BIG CAT ENERGY CORPORATION

(A Development Stage Company)

CONDENSED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED OCTOBER 31, 2010

AND THE CUMULATIVE PERIOD FROM JUNE 19, 1997 (INCEPTION) TO OCTOBER 31, 2010 (UNAUDITED)

	Common Stock
	Shares			Par value $.0001			Additional Paid-in Capital			Deficit Incurred During Development Stage			Total
Balance, at Inception (June 19, 1997)
Stock issued for services upon inception at June 19, 1997 issued at par		500,000		$	50		$	–		$	–		$	50
Common stock cancelled March 2002		(500,000	)		(50	)		–			–			(50	)
Sale of common stock at $0.10 per share, April  2002		1,114,000			111			111,289			–			111,400
Contributed services (January  2000 through April  2003)		–			–			10,425			–			10,425
Cumulative net loss		–			–			–			(132,543	)		(132,543	)
Balance, April 30, 2005		1,114,000			111			121,714			(132,543	)		(10,718	)
Sale of common stock (March through April  2006) at $0.05 per share		7,400,000			740			369,260			–			370,000
Sale of common stock (March 2006 at $0.01 per share		2,500,000			250			24,750			--			25,000
Common stock issued in exchange for assets		12,450,000			1,245			22,745			--			23,990
Net loss		–			–			–			(145,182	)		(145,182	)
Balance, April 30, 2006		23,464,000			2,346			538,469			(277,725	)		263,090
Sale of common stock (May through June 2006) at $0.50 per share		4,065,000			407			2,032,093			–			2,032,500
Sale of common stock (January 2007) at $0.75 per share		2,012,000			201			1,508,799			–			1,509,000
Offering costs		–			–			(21,752	)		–			(21,752	)
Contributed capital		–			–			22,582			–			22,582
Stock-based compensation		–			–			1,840,000			–			1,840,000
Net loss		–			–			–			(2,639,221	)		(2,639,221	)
Balance, April 30, 2007		29,541,000			2,954			5,920,191			(2,916,946	)		3,006,199
Sale of common stock (October 2007) at $1.00 per share		500,000			50			499,950			–			500,000
Sale of units (April 2008) at $0.50 per unit		1,000,000			100			499,900			–			500,000
Spin off Sterling subsidiary		–			–			(844,050	)		–			(844,050	)
Stock-based compensation		–			–			2,360,000			–			2,360,000
Net loss		–			–			–			(4,378,294	)		(4,378,294	)
Balance, April 30, 2008		31,041,000			3,104			8,435,991			(7,295,240	)		1,143,855
Sale of units (May 2008) at $0.50 per unit		1,000,000			100			499,900			--			500,000
Stock based compensation		--			--			1,543,625			--			1,543,625
Net loss		--			--			--			(2,664,180	)		(2,664,180	)
Balance, April 30, 2009		32,041,000			3,204			10,479,516			(9,959,420	)		523,300
Sale of units (July 2009) at $0.05 per unit		10,000,000			1000			499,000			--			500,000
Sale of units (April 2010) at $0.05 per unit		1,200,000			120			59,880			--			60,000
Stock in lieu of payment at $0.05 per share		240 000			24			11,976			--			12,000
Stock based compensation		--			--			121,565			--			121,565
Net loss		--			--			--			(1,050,294	)		(1,050,294	)
Balance, April 30, 2010		43,481,000			4,348			11,171,937			(11,009,714	)		166,571
Stock in lieu of payroll at $0.05 per   share		363,334			36			18,131			--			18,167
Stock based compensation		--			--			28,700			--			28,700
Net loss		--			--			--			(376,992	)		(376,992	)
Balance, October 31, 2010		43,844,334		$	4,384		$	11,218,768		$	(11,386,706	)	$	(163,554	)

See accompanying notes to condensed financial statements.

6

BIG CAT ENERGY CORPORATION

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Note1:  Presentation, Organization and Nature of Operations

Presentation

The accompanying unaudited financial statements of Big Cat Energy Corporation (the “Company”) at October 31, 2010 and 2009 have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements pursuant to, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended April 30, 2010. In management’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make the Company’s financial statements not misleading have been included. The results of operations for the periods ended October 31, 2010 and 2009 presented are not necessarily indicative of the results to be expected for the full year. The April 30, 2010 balance sheet has been derived from the Company’s audited financial statements included in the Company’s annual report on Form 10-K for the year ended April 30, 2010.

Description of Operations

Big Cat Energy Corporation (“Big Cat” or the “Company”), a Nevada corporation, owns the exclusive right to a patented technology known as Aquifer Recharge Injection Device (ARID) which allows Coal Bed Methane (CBM) operators to re-inject water produced from productive coal seams. The ARID tool uses the existing well bore to move water from the producing coal seam to depleted aquifers of similar water quality. With the ARID tool and process in use, the production well will not require the discharge of any produced water, or the use of a separate re-injection well for any of the produced water. The produced water never leaves the well bore as it is redirected into different aquifer zones. These aquifers are identified from the geophysical logs.  The Company is in the development stage in accordance with FASB Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company has been in the development stage since inception and has yet to generate any significant revenue-producing operations. Activities since its inception have primarily involved its organization, development of the Company and more recently, its ARID initiative.

Note 2:  Liquidity

Going Concern

As of October 31, 2010, the Company had working capital deficit of $305,293 and stockholders’ deficit of $163,554. The Company has realized minimal revenues and has incurred significant losses from operations and used significant cash flow to fund operations for the periods presented in this Quarterly Report. Historically, Big Cat has relied upon outside investor funds to maintain its operations and develop its business. Big Cat’s plan for continuation anticipates continued funding from investors. This funding would be used for operations, for working capital, as well as business expansion during the upcoming fiscal year. The Company can provide no assurance that additional investor funds will be available on terms acceptable to the Company. These conditions raise substantial doubt about Big Cat’s ability to continue operations as a going concern.

7

Big Cat’s ability to continue as a going concern is dependent upon raising capital through debt or equity financing and ultimately by increasing revenue and achieving profitable operations. The Company can offer no assurance that it will be successful in its efforts to raise additional proceeds or achieve profitable operations. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.

Note 3:  Significant Accounting Policies:

Use of Estimates – The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount 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 periods.  Actual results could differ from those estimates.

Cash and Cash Equivalents – Cash and cash equivalents include cash on hand, amounts held in banks and highly liquid investments purchased with an original maturity of three months or less.

Advertising-The Company expenses advertising costs as they are incurred.

Intangible Assets – The Company capitalized the costs to patent the ARID process and ARID trademark. These costs are being amortized over the life, twenty (20) years, of the patents on a straight line basis. The intangibles serve as collateral for the accrued deferred salaries.  The Company expects to record amortization expense for subsequent periods as follows:

FY 2011	$5,971
FY 2012	$6,046
FY 2013	$6,046
FY 2014	$6,046
FY 2015	$6,046
Thereafter	$75,787

Concentrations of Credit Risk – The Company’s cash equivalents are exposed to concentrations of credit risk.  The Company manages and controls this risk by investing the cash equivalents and short term investments with major financial institutions.

Furniture and Equipment– Furniture and equipment is stated at cost.  Depreciation is provided on furniture, fixtures and equipment using the straight-line method over an estimated service life of three to seven years.

The cost of normal maintenance and repairs is charged to operating expenses as incurred.  Material expenditures which increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset.

8

Concentration of Customer Base-The Company has three customers as of October 31, 2010 and 2009.

Income Taxes – Income taxes are accounted for by recognizing deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax basis of assets, liabilities and carryforwards. Deferred tax assets are recognized for the expected future effects of all deductible temporary differences, loss carryforwards and tax credit carryforwards. Deferred tax assets are then reduced, if deemed necessary, by a valuation allowance for the amount of any tax benefit which, more likely than not, are not expected to be realized.

We adopted ASC 740, Income Taxes as of April 1, 2008. This topic provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a "more-likely-than-not" recognition threshold at the effective date to be recognized upon the adoption of ASC 740 and in subsequent periods. We have identified no significant uncertain tax positions as of October 31, 2010 or 2009. The cumulative effect of adopting ASC 740 has not resulted in a liability on the balance sheet. The total amount of unrecognized tax benefits as of the date of adoption was zero.

We recognize interest and penalties related to uncertain tax positions in income tax expense. No interest and penalties related to uncertain tax positions were accrued as of October 31, 2010 or 2009.

Fair Value of Financial Instruments – The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and accounts payable. The fair market value of these financial instruments approximates or is equal to the book value due to the short term nature of these balances.

Fair Value Measurements are determined by the Company’s adoption of ASC 820 Fair Market Measurement and Disclosures as of May 1, 2008, including the application of the statement to non-recurring, non-financial assets and liabilities. The adoption of ASC 820 did not have a material impact on the Company’s fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal (or most advantageous market) for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1- Quoted prices in active markets for identical assets or liabilities.

Level 2- Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3- Unobservable inputs based on the Company’s assumptions,

ASC 820 requires the use of observable market data if such data is available without undue cost and effect.

9

Stock-Based Compensation– The Company accounts for stock-based compensation arrangements in accordance with ASC 718, Compensation-Stock Compensation, which permits entities to recognize as expense over the vesting period, the fair value of all stock-based awards on the date of grant. The Company recorded expense for stock-based compensation for the six months ended October 31, 2010 of $28,700 compared to $81,074 for the six months ended October 31, 2009.

Research and Development Expenditures – Costs related to the research, design, and development of products are charged to research and development expenses as incurred.  The Company did not incur any research and development costs for the six months ended October 31, 2010 or 2009.

Net Loss Per Share – Basic net loss per share is computed using the weighted average number of common shares outstanding during the period.  Contingently issuable shares are included in the computation of basic net income (loss) per share when the related conditions are satisfied.  Diluted net income per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period.  Potentially dilutive securities consist of contingently issuable shares, the incremental common shares issuable upon conversion of preferred stock or convertible debt (using the “if converted” method) and shares issuable upon the exercise of stock options and warrants (u sing the “treasury stock” method).  Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive.

As of October 31, 2010 the Company had 43,844,334 shares of common stock outstanding and options to purchase 12,235,000 shares issued that would be potentially dilutive. At October 31, 2009, the Company had 42,041,000 shares of common stock outstanding.  The Company has options outstanding to purchase 11,035,000 shares that would be potentially dilutive. The options outstanding were excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive.

Other Comprehensive Income – The Company does not have any items of other comprehensive income for the six months ended October 31, 2010 and 2009.  Therefore, total comprehensive income (loss) is the same as net income (loss) for these periods.

Revenue Recognition-The Company leases its ARID tool and process to its customers. Revenue is recognized equally over the term of lease. When the lease is executed the Company records deferred revenue as an Other Current Liability for those amounts paid for lease commitments for the next 12 months and a Long Term Obligation for those amounts in excess of 12 months. At October 31, 2010 the Company recorded $31,875 as Other Current Liabilities for deferred revenue.

In accordance with ASC 450, Contingencies, the Company has recorded litigation proceeds in the period in which the proceeds were received. During FY 2009 the Company paid a patent attorney for filings that were not done correctly. The Company then hired a new patent attorney and expensed the duplicate legal fees in FY 2009. ASC 450 requires that a contingency that might result in a gain to not be reflected in operations until resolution of the contingency

Reclassifications – Certain reclassifications have been made to prior years’ amounts to conform to the classifications used in the current year.  Such reclassifications had no effect on the Company’s net loss in any of the periods presented.

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Recent Pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

Note 4:   Shareholders’ Equity

Private Offerings

During the six months ended October 31, 2010, the Company issued 363,334 shares of restricted common stock to non-officer employees in lieu of payment of $18,167 in salary.

During the six months ended October 31, 2009 the Company completed a private placement  of 10,000,000 units for $500,000 ($.05 per unit), each unit consisting of one restricted share of its common stock and one warrant to purchase one half restricted share of its common stock.   Warrants are exercisable for $.075 and must be exercised on or before July 28, 2012.

In accordance with ASC 815, Derivatives and Hedging, and the terms of the warrants and the transaction documents, the warrants were determined to represent an equity transaction and, therefore, the fair value of the warrants are contained within the equity section and not separately recorded apart from the common shares issued as part of the private placement.

The above private offerings were made in reliance on an exemption from registration in the United States under Section 4(2) and/or Regulation D of the United States Securities Act of 1933, as amended.

Note 5:   Stock Option Plan

The Company has adopted the 2007 Nonqualified Stock Option Plan (the “Plan”), as amended. The Company has reserved 5,000,000 shares of common stock for the plan.  During Fiscal 2009the Board of Directors granted options to purchase 1,665,000 shares to directors, officers and key employees and consultants of the Company, effective December 31, 2008. The exercise price of the options was $0.12, the closing price of Company shares on December 31, 2008. The options grant on December 31, 2008 become exercisable on December 31, 2009 and expire on December 31, 2014. During Fiscal 2010 the Board of Directors granted options to purcha se 410,000 shares to outside directors and key employees of the Company, effective January 4, 2010. The exercise price of the options was $0.15, the closing price of Company shares on January 4, 2010. The options granted on January 4, 2010 become exercisable on January 4, 2011 and expire on January 4, 2015. Also during Fiscal 2010, Charles Peck and George Hampton, resigned as Directors of the Company and forfeited their stock options to purchase 600,000 shares each.

As of October 31, 2010, and 2009 the options are fully vested, however, the agreement only allows for a certain number of options to be exercised each year through December 31, 2014.  Due to the limitations on exercising the options, and the fact that they would expire if the employee resigns or is terminated for cause, the Company has treated the options as if they vest over a two-year period.   There have been no options exercised under the terms of the Plan.

The Company expects to recognize approximately $38,000 in stock compensation expense ratably through April 30, 2011.  There have been no options exercised under the terms of the Plan.

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Note 6:   Income Tax

The Federal net operating loss (NOL) carryforward of approximately $4,331,000 as of October 31, 2010 expires on various dates through 2030.  Internal Revenue Code Section 382 places a limitation on the amount of taxable income which can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership) of a loss corporation.  Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 limitation.  Due to these “change in ownership” provisions, utilization of NOL carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods.  We have not performed a Section 382 analysis.  However, if performed, Section 382 may be found to lim it potential future utilization of our NOL carryforwards.  We have established a full valuation allowance against the deferred tax assets because, based on the weight of available evidence including our continued operating losses, it is more likely than not that all of the deferred tax assets will not be realized.  Because of the full valuation allowance, no income tax expense or benefit is reflected on the statement of operations.

Note 7:   Related Party Transactions

For the six months ended October 31, 2010 and 2009, the officers of the company provided management services to its affiliated company, Sterling Oil & Gas Company. The Company did not record any income from Sterling for these services. The Company also retained Wharton Consulting to provide marketing service to the Company. Thomas E, Wharton, a Director for the Company, is the managing partner of Wharton Consulting. Mr. Wharton is also the step brother of Michael Schaefer, a major Big Cat shareholder who owns beneficially approximately 36.7% of the outstanding common stock of the Company. The Company recorded consulting fees to Mr. Wharton and Wharton Consulting of $36,000 for the six months ended October 31, 2010, compared to $50,544, which included non-cash expense of $17,000 related to warrants issued to Wharton Consulting, for the six months ended October 31, 2009. At October 31, 2010, the Company owed Wharton Consulting $12,000 and $6,000 at April 30, 2010, both of which have been included in accounts payable and accrued liabilities in the accompanying balance sheet.

During the three months ended October 31, 2010, the company borrowed $8,000 from Raymond Murphy, an officer and Director of the Company. The funds were used for operating expenses and were reimbursed to Mr. Murphy by the end of the period.

Note 8:   Subsequent Events

Management has evaluated all activity of the Company and concluded no subsequent events have occurred that would require disclosure except on November 23, 2010, Big Cat executed a non-binding letter of intent with High Plains Gas Inc. for a private placement of 20,000,000 restricted shares of Big Cat common stock at $0.03 per share and warrants to purchase an additional 10,000,000 restricted shares of Big Cat common stock at $0.15 per share. The warrants have a five year term from date of issue. The sales price of $600,000 is payable in cash of $200,000, $75,000 on November 24, 2010 and the balance by December 15, 2010 and $400,000 in High Plains Gas Inc. restricted common stock. The Definitive Agreement was executed on December 8, 2010 and is scheduled to close by December 15, 2010.

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ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report includes certain statements that may be deemed to be “forward-looking statements that reflect our current views with respect to future events and financial performance. All statements included in this Quarterly Report, other than statements of historical facts, address matters that we reasonably expect, believe or anticipate will or may occur in the future. Forward-looking statements may relate to, among other things:

§   our future financial position, including working capital and anticipated cash flow;

§   the risks of the oil and gas industry, as they relate to demand for leasing the ARID tool;

§   market demand;

§   risks and uncertainties involving geology of oil and gas deposits;

§   the uncertainty of estimates and projections relating to costs and expenses;

§   health, safety and environmental risks;

§   uncertainties as to the availability and cost of financing; and

§   the possibility that government policies or laws may change or governmental approvals may be delayed or withheld.

Other sections of this Quarterly Report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Forward looking statements in this Quarterly Report are made as of the respective dates set forth in this Quarterly Report. Such forward-looking statements are based on the beliefs, expectations and opinions of management as of the date the statements are made. We do not intend to update these forward-looking statements, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Plan of Operations

The plan of operations discussed below in this Quarterly Report, reflects the operations of our current business which is to lease or sell the ARID tool and process to oil and gas companies.

We are a development stage company and have realized minimal revenues from our current business operations.

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We are in the process of completing field tests of the ARID tool and process, and we are continuing to refine the ARID system to improve field use.  Currently, we have seven ARID tools operating in CBM (coal bed methane) gas well bores in the Powder River Basin of Wyoming and have leased another seven that have not been installed to date.

Big Cat has received requests for proposals from major coal bed methane operators (CBM/CSNG) in Wyoming and Montana.  Acceptance of any of Big Cat’s proposals would substantially increase the Company’s sales and cash flow.  Further, the ARID In-bore Aquifer Recharge Injection System has been selected as the water handling component for a proof of concept project to enhance the public water supply in the Southwestern United States. The project team includes, among others, a major university and a US Federal Agency. The project involves the collection and re-injection of a combined solution of treated brine water and drinking water into existing drinking water aquifers to enhance and preserve the public drinking water supply for future use. To date, none of these proposals have been accepted by the CBM op erators.

Big Cat is also in discussions with a service provider in Australia to evaluate the use of the ARID System for handling Coal Seam Natural Gas produced water in Australia prior to major CSNG development in that Country.  

If final contracts are achieved for one or more of these projects, fulfillment of the above proposals and new business opportunities may require additional working capital. The Company is currently exploring potential financing options, including private placement and debt opportunities, to provide for the Company’s potential future cash flow requirements.

Patents and Trademarks

Patent Status:

In the United States Big Cat has two pending regular patent applications before the United States Patent Office (“USPTO”).   The first application claims the use of a single device for water handling in a well bore and the second application claims the use of multiple devices for water handling in a well bore.  We have not yet received the first office action on the first application. We would expect to receive the first office action within the next couple of months.   In the second patent application, we have received a first office action and our response has overcome the initial concerns cited by the USPTO.  We have also received a second action on the merits and have submitted our response.

In Europe, Big Cat has one pending regular patent application.  We have received and responded to the first office action in that matter and are responding to the second action from the European Patent Office.

In Canada, Big Cat has one pending regular patent application.  We have received the first office action in that matter and have responded to that action.

In Australia, Big Cat has one pending regular patent application.  We have demanded normal examination of the application and should shortly receive a first action on the merits.

Trademark Status:

In the United States, the Certification of Registration for the ARID mark was issued on January 12, 2010 and will remain in effect for 10 years.

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Also, in the United States, the word mark BIG CAT and the BIG CAT ENERGY CORP design marks have been opposed by Caterpillar Inc. on grounds of likelihood of confusion with and dilution of Caterpillar’s CAT mark.  The opposition proceeding is in the discovery phase at present. Once sufficient discovery has taken place so that the parties can better assess the matter, we will determine whether settlement is an option.  The discovery period is currently set to close in January 2011.

Results of Operations

Three Months Ended October 31, 2010 Compared to Three Months Ended October 31, 2009

We reported a net loss for the three months ended October 31, 2010 of $158,543 compared with a net loss of $278,110 for the same period in 2009. The net loss for the three months ended October 31, 2010 included $14,350 attributable to non-cash consideration related to the issuance of stock options to management compared to $49,037 for the same period in 2009 which also included warrants to a consultant.

We recorded personnel costs of $105,085 during the three month period ended October 31, 2010, as compared to $139,470 during the same period in 2009. We recorded a stock based compensation charge for stock options issued to management of $14,350 for the three month period ended October 31, 2010, compared with $32,037 for the same period in 2009.

We incurred professional fees of $37,081 during the three month period ended October 31, 2010, as compared to $70,594 during the same period in 2009. Most of the professional fees related to the cost of SEC matters and filings and a non-cash charge for the three months ended October 31, 2009 of $17,000 for warrants issued to a consultant.

We incurred selling expense of $54,960 for the three month period ended October 31, 2010 compared to $64,789 for the same period in 2009.

Our general and administrative costs were $17,622 during the three month period ended October 31, 2010, as compared to $27,426 during the same period in 2009. The major component of other general and administrative costs is insurance.

We received litigation proceeds of $30,000 during the three month period ended October 31, 2010, that have been recorded in the current period per ASC 450.

Six Months Ended October 31, 2010 Compared to Six Months Ended October 31, 2009

We reported a net loss for the six months ended October 31, 2010 of $376,992 compared with a net loss of $574,911 for the same period in 2009.  The net loss for the six months ended October 31, 2010 included $28,700 attributable to non-cash consideration related to the issuance of stock options to management compared to $81,074, which also include warrants issued to a consultant.

We recorded personnel costs of $217,773 during the six month period ended October 31, 2010, as compared to $299,675 during the same period in 2009. We recorded a stock based compensation charge for options issued to management of $28,700 for the six month period ended October 31, 2010, compared to $64,074 for the same period in 2009.

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We incurred professional fees of $92,061 during the six month period ended October 31, 2010 as compared to $123,068 during the same period 2009. Most of the professional fees related to the cost of required SEC filings and a non-cash charge of $17,000, for the six months ended October 31, 2009, for warrants issued to a consultant.

We incurred selling expense of $112,791 for the six month period ended October 31, 2010 compared to $134,040 for the same period in 2009.

Our general and administrative costs were $33,014 during the six month period ended October 31, 2010, as compared to $60,668 during the same period in 2009. The major component of other general and administrative expense is insurance.

We received litigation proceeds of $30,000 during the six month period ended October 31, 2010, that have been recorded in the current period per ASC 450.

Liquidity and Capital Resources

As of October 31, 2010, we had a deficit working capital of $305,293, and it is uncertain whether we will be able to fund further operations. Therefore, we are seeking additional sources of capital for the coming year.

Cash used in operating activities was $168,140 for the six months ended October 31, 2010 compared to cash used in operating activities of $140,215 for the six months ended October 31, 2009. In the six month period ended October 31, 2010 cash used by operations was principally attributed to our net loss offset by our non-cash compensation expense of $28,700. In the six month period ended October 31, 2009 cash used by operations was principally attributed to our net loss offset by our non-cash compensation expense of $81,074 and the change in our trading securities of $356,487.

Cash flows used in investing activities were $9,426 for the six months ended October 31, 2010, and $11,652 for the six months ended October 31, 2009.

There were no financing activities for the six months ended October 31, 2010. Cash flows from financing activities were $500,000 for the six months ended October 31, 2009. For the six months ended October 31, 2009, cash from financing was from the private placements of our stock.

During the six months ended October 31, 2010, the Company issued 363,334 shares of restricted common stock to non-officer employees in lieu of payment of $18,167 in salary.

During the six months ended October 31, 2009, the Company completed a private placement of 10,000,000 units for $500,000 ($.05 per unit), each unit consisting of one restricted share of its common stock and one warrant to purchase one half restricted share of its common stock each exercisable for $.075. Following this sale the Company’s outstanding common stock increased to 42,041,000 shares.

In accordance with ASC 815, Derivatives and Hedging, and the terms of the warrants and the transaction documents, the warrants were determined to represent an equity transaction and, therefore, the fair value of the warrants are contained within the equity section and not separately recorded apart from the common shares issued as part of the private placement.

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Subsequent to the quarter end of October 31, 2010, Big Cat executed a non-binding letter of intent with High Plains Gas Inc. for a private placement of 20,000,000 restricted shares of Big Cat common stock at $0.03 per share and warrants to purchase an additional 10,000,000 restricted shares of Big Cat common stock at $0.15 per share. The warrants have a five year term from date of issue. The sales price of $600,000 is payable in cash of $200,000, $75,000 on November 24, 2010 and the balance by December 15, 2010 and $400,000 in High Plains Gas Inc. restricted common stock. The Definitive Agreement was executed on December 8, 2010 and is scheduled to close by December 15, 2010.

The above private offerings were made in reliance on an exemption from registration in the United States under Section 4(2) and/or Regulation D of the United States Securities Act of 1933, as amended.

Financial Instruments and Other Information

As of October 31, 2010 we had cash and cash equivalents, accounts payable and accrued liabilities, which are each carried at approximate fair value due to the short maturity date of those instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Critical Accounting Polices and Estimates

Use of Estimates in the Preparation of Financial Statements

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of any oil and gas reserves, 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. The Company bases its estimates on historical experience and on various assumptions it believes to be reasonable under the circumstances. Although actual results may differ from these estimates under different assumptions or conditions, the Company believes that its estimates are reasonable.

Equity Based Compensation

On January 1, 2006, we adopted ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options based on estimated fair value.

ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our statement of operations. Prior to the adoption of ASC 718, we had no stock-based compensation awarded to employees and directors.

Recent Pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

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Off-Balance Sheet Arrangements

From time-to-time, we may enter into off-balance sheet arrangements and transactionsthat can give rise to off-balance sheet obligations. As of October 31, 2010 and April 30, 2010, there were no off –balance sheet arrangements.

ITEM 4T.   CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and the Principal Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of October 31, 2010.     Based on this evaluation, the Chief Executive Officer and Principal Financial Officer concluded that, as of October 31, 2010 the Company’s disclosure controls and procedures are effective.

There were no changes in the Company’s internal control over financial reporting during the quarter ended October 31, 2010, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II.  OTHER INFORMATION

ITEM 1. Legal Proceedings None

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds   None

ITEM 3. Default Upon Senior Securities None

ITEM 4. Submission of Matters to a Vote of Security Holders None

ITEM 5. Other Information None

ITEM 6. EXHIBITS

Exhibits	Document Description
31.1	Section 302 Certification of Principal Executive Officer.
31.2	Section 302 Certification of Principal Financial Officer.
32.1	Section 906 Certification of Chief Executive Officer.
32.2	Section 906 Certification of Chief Financial Officer.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities and Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 10th day of December, 2010.

BIG CAT ENERGY CORPORATION
BY:	/s/ Timothy Barritt
	Timothy Barritt, President and Principal  Executive Officer
BY:	/s/ Richard G. Stifel
	Richard G. Stifel, Principal Accounting Officer and  Principal Financial Officer

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