Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Feb. 28, 2015 | Jun. 11, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 28-Feb-15 | |
Entity Registrant Name | HAWKER ENERGY, INC. | |
Entity Central Index Key | 1415286 | |
Current Fiscal Year End Date | -23 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 82,737,306 | |
Entity Current Reporting Status | Yes |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Current assets: | ||
Cash | $52,815 | $13,207 |
Accounts receivable | 15,855 | 42,815 |
Inventory | 6,092 | |
Prepaid expenses | 30,897 | 22,389 |
Secured subordinated loan receivable, short term | 1,298,322 | |
Total current assets | 99,567 | 1,382,825 |
Fixed assets: | ||
Fixed assets, net of accumulated depreciation of $31,863 and $19,605, respectively | 2,114,174 | 14,269 |
Other assets: | ||
Capitalized oil and gas properties, net of accumulated depletion of $114,323 and $86,193, respectively | 11,507,874 | 730,046 |
Intangible assets and other | 180,000 | 5,000 |
Total assets | 13,901,615 | 2,132,140 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,096,058 | 813,438 |
Accrued bonuses | 600,000 | 480,000 |
Bank loan payable | 4,022,704 | |
Loans payable to related parties, short term | 470,429 | 226,876 |
Convertible notes payable, short term | 54,784 | 862,450 |
Conversion option | 122,045 | |
Current portion of long term debt | 208,346 | 20,065 |
Total current liabilities | 7,452,321 | 2,524,874 |
Long term liabilities: | ||
Long term debt | 424,227 | 149,039 |
Conversion option | 547,886 | |
Retirement liability | 984,163 | |
Asset retirement obligations | 1,921,438 | 168,110 |
Deferred income taxes | 3,207,000 | |
Total long term liabilities | 7,084,714 | 317,149 |
Total liabilities | 14,537,035 | 2,842,023 |
Stockholders' equity (deficit): | ||
Preferred stock; $0.001 par value; 50,000,000 shares authorized, no shares issued and outstanding | ||
Common stock; $0.001 par value; 750,000,000 shares authorized, 80,130,403 and 41,174,703 shares issued and outstanding, respectively | 80,130 | 41,175 |
Common stock payable | 378,027 | 50,000 |
Additional paid in capital | 3,900,810 | 1,224,300 |
Accumulated deficit | -5,139,387 | -2,080,358 |
Total stockholders' equity (deficit) | -780,420 | -764,883 |
Non-controlling interest | 145,000 | 55,000 |
Total equity (deficit) | -635,420 | -709,883 |
Total liabilities and equity (deficit) | $13,901,615 | $2,132,140 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Accumulated depreciation of fixed assets | $31,863 | $19,605 |
Capitalized oil and gas properties accumulated depletion | $114,323 | $86,193 |
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 80,130,403 | 41,174,703 |
Common stock, shares outstanding | 80,130,403 | 41,174,703 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Revenue: | ||||
Oil revenues | $91,029 | $18,348 | $101,323 | $44,112 |
Expenses: | ||||
Direct operating costs | 90,448 | 8,020 | 106,444 | 20,992 |
Depletion, depreciation and amortization | 40,578 | 7,847 | 51,614 | 15,957 |
Professional fees | 181,621 | 121,972 | 612,184 | 193,043 |
Bonuses | 240,000 | 240,000 | ||
General and administrative expenses | 99,508 | 53,665 | 174,035 | 59,896 |
Equity compensation expense | 703,373 | 1,791,552 | ||
Total expenses | 1,355,528 | 191,504 | 2,975,829 | 289,888 |
Net operating (loss) | -1,264,499 | -173,156 | -2,874,506 | -245,776 |
Other (income) expense: | ||||
Interest (income) | -7,776 | -18,280 | ||
Interest expense | 136,710 | 3,335 | 229,663 | 6,748 |
Change in fair value of conversion option | 7,802 | -26,860 | ||
Total other expense | 136,736 | 3,335 | 184,523 | 6,748 |
Loss before income taxes | -1,401,235 | -176,491 | -3,059,029 | -252,524 |
Provision for income taxes | ||||
Net loss | -1,401,235 | -176,491 | -3,059,029 | -252,524 |
Net loss (income) attributable to non-controlling interest | -9,531 | |||
Net loss attributable to the Company | ($1,410,766) | ($176,491) | ($3,059,029) | ($252,524) |
Net loss per common share - basic and diluted | ($0.02) | ($0.01) | ($0.04) | ($0.01) |
Weighted average common shares outstanding - basic and diluted | 77,291,310 | 31,376,427 | 68,630,474 | 24,477,454 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Cash flows from operating activities: | ||
Net loss before loss attributable to non-controlling interest | ($3,059,029) | ($252,524) |
Depletion, depreciation and amortization | 41,844 | 11,342 |
Accretion of asset retirement obligation | 9,770 | 4,615 |
Accretion of net profits interest liability | 8,086 | 6,009 |
Accretion of discount | 119,899 | |
Equity compensation expense | 1,791,552 | |
Change in fair value of conversion option | -26,860 | |
Other | 11,472 | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Accounts receivable | 26,960 | 8,507 |
Inventory | 4,636 | 714 |
Prepaid expenses | 2,269 | 1,363 |
Accounts payable and accrued expenses | 440,691 | 16,134 |
Accrued bonuses | 240,000 | |
Net cash (used in) provided by operating activities | -388,710 | -203,840 |
Cash flows from investing activities: | ||
Cash acquired in Hawker acquisition | 6,004 | |
Cash acquired in HERLLC acquisition | 1,214 | |
Cash acquired in TEG acquisition | 23,344 | |
Acquisition of an additional working interest in DEEP Lease | -200,000 | |
Purchase of fixed assets | -9,253 | |
Secured subordinated loan receivable | -346,625 | |
Net cash (used in) provided by investing activities | -332,534 | -192,782 |
Cash flows from financing activities: | ||
Loans from related parties, short term | 233,800 | |
Repayment of loans from related parties, short term | -10,000 | |
Net proceeds from unit offering | 114,920 | 434,524 |
Proceeds from unit offering to be closed | 40,000 | |
Payments on net profits interest agreement | -17,868 | -11,913 |
Proceeds from convertible notes | 300,000 | |
Proceeds from long term note | 50,000 | |
Proceeds from sale of non-controlling interest | 90,000 | |
Net cash provided by (used in) financing activities | 760,852 | 462,611 |
Net change in cash | 39,608 | 65,989 |
Cash, beginning | 13,207 | 8,298 |
Cash, end | 52,815 | 74,287 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 25,229 | 6,009 |
Common stock payable for general and administrative services | 33,504 | |
Convertible notes payable and accrued interest converted to common stock payable | 324,766 | |
Units or stock issued to settle accounts payable | 130,569 | 22,500 |
TEG acquisition: | ||
Common stock and warrants issued | 531,027 | |
Secured subordinated loan receivable not settled prior to closing | 1,663,227 | |
Liabilities assumed | $10,886,864 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (USD $) | Total | Common Stock [Member] | Common Stock and Warrants Payable [Member] | Additional Paid-in Capital [Member] | Accumulated (Deficit) [Member] | Non-Controlling Interest [Member] |
Balance at Aug. 31, 2013 | ($1,226) | $350,000 | ($351,226) | |||
Balance, shares at Aug. 31, 2013 | ||||||
Recapitalization on completion of acquisition of SCNRG | 1,626 | 25,962 | 2,000 | -26,336 | ||
Recapitalization on completion of acquisition of SCNRG, shares | 25,961,983 | 2,000,000 | ||||
Issued to acquire Hawker Energy (Rincon), LLC | -135,199 | 3,000 | -138,199 | |||
Issued to acquire Hawker Energy (Rincon), LLC, shares | 3,000,000 | |||||
Issuance of common stock payable | 2,000 | -2,000 | ||||
Issuance of common stock payable, shares | 2,000,000 | -2,000,000 | ||||
Proceeds received for common stock payable | 50,000 | 50,000 | ||||
Proceeds received for common stock payable, shares | 500,000 | |||||
Stock option compensation | 68,760 | 68,760 | ||||
Net proceeds from unit offering | 980,288 | 10,213 | 970,075 | |||
Net proceeds from unit offering, shares | 10,212,720 | |||||
Sale of non-controlling interest | 55,000 | 55,000 | ||||
Net loss attributable to the Company | -1,729,132 | -1,729,132 | ||||
Balance at Aug. 31, 2014 | -709,883 | 41,175 | 50,000 | 1,224,300 | -2,080,358 | 55,000 |
Balance, shares at Aug. 31, 2014 | 41,174,703 | 41,174,703 | 500,000 | |||
Proceeds received for common stock payable | 500 | -50,000 | 49,500 | |||
Proceeds received for common stock payable, shares | 500,000 | -500,000 | ||||
Equity compensation pursuant to HERLLC Option Agreement | 1,700,590 | 33,000 | 1,667,590 | |||
Equity compensation pursuant to HERLLC Option Agreement, shares | 33,000,000 | |||||
Stock option compensation | 90,961 | 90,961 | ||||
Net proceeds from unit offering | 114,920 | 1,150 | 113,770 | |||
Net proceeds from unit offering, shares | 1,150,000 | |||||
Conversion of accounts and bonus payable into units | 130,569 | 1,305 | 129,264 | |||
Conversion of accounts and bonus payable into units, shares | 1,305,700 | |||||
Common stock payable for general and administrative services | 33,504 | 33,504 | ||||
Common stock payable for general and administrative services, shares | 500,000 | |||||
Issued to acquire TEG | 531,027 | 3,000 | 528,027 | |||
Issued to acquire TEG, shares | 3,000,000 | |||||
Conversion of notes payable | 324,766 | 324,766 | ||||
Conversion of notes payable, shares | 3,247,658 | |||||
Extinguishment of conversion option | 97,398 | 97,398 | ||||
Interest on note to be paid in shares and warrants | 19,757 | 19,757 | ||||
Sale of non-controlling interest | 90,000 | 90,000 | ||||
Net loss attributable to the Company | -3,059,029 | -3,059,029 | ||||
Balance at Feb. 28, 2015 | ($635,420) | $80,130 | $378,027 | $3,900,810 | ($5,139,387) | $145,000 |
Balance, shares at Feb. 28, 2015 | 80,130,403 | 80,130,403 | 3,747,658 |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Feb. 28, 2015 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS |
Hawker Energy, Inc. (“we”, “our”, “us”, “Hawker” or “the Company”) was incorporated under the laws of the State of Nevada on June 12, 2006, under the name of Uventus Technologies Corp. On September 23, 2009, we merged with our wholly-owned subsidiary and changed our name to Sara Creek Gold Corp. Subsequently, on September 11, 2014, we changed our name to Hawker Energy, Inc. | |
On October 25, 2013, we closed on the Agreement and Plan of Reorganization with SCNRG, LLC (“SCNRG”), a California limited liability company, whereby we acquired 100% of the membership interest in SCNRG, resulting in SCNRG becoming our wholly-owned subsidiary, in exchange for 14.0 million shares of our common stock issued to the members of SCNRG. For accounting purposes, our acquisition of SCNRG has been accounted for as a reverse acquisition whereby SCNRG is the accounting acquirer effectuating a recapitalization of Hawker. Accordingly, SCNRG is considered the acquirer for accounting purposes and, therefore, the historical financial statements of SCNRG are presented and consolidated with Hawker's beginning October 25, 2013. As a result of this transaction, Hawker changed its business direction and is now in the oil and gas industry. | |
We own interests in oil production properties located in California. Our goal is to acquire and develop mature leases, interests and other rights to oil and gas producing properties with proven undeveloped potential. The accompanying statements of operations and cash flows include the operations of our wholly-owned subsidiaries from the date of acquisition or formation. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Feb. 28, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis Of Presentation | |
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information and reporting. | |
The unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K, as amended, for the year ended August 31, 2014, which contains the consolidatated financial statements and notes thereto for Hawker. The Company's fiscal year-end is August 31st. | |
These consolidated financial statements are unaudited; however, in the opinion of management, they reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal recurring nature unless disclosed otherwise. These consolidated financial statements, including notes, have been condensed and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The interim results for the three and six months ended February 28, 2015, are not necessarily indicative of results for the full fiscal year. | |
There have been no significant changes in the Company's significant accounting policies for the six months ended February 28, 2015, as compared to the significant accounting policies described in the Annual Report on Form 10-K, as amended, for the year ended August 31, 2014 and in the Form 10-Q/A for the three months ended November 30, 2014, except for the addition of the following: | |
Overriding Royalty Interest Liability | |
Pursuant to an overriding royalty interest granted effective January 2015 to the Secured Convertible Note Payable holder, oil sales from the Tapia oil field are subject to an additional 2.5% or 3.5% overriding royalty interest, depending on the lease. Since this royalty interest was granted in connection with a loan, the loan proceeds were bifurcated and this royalty interest has been accounted for as a separate liability. Each reporting period, the liability's estimated fair value is remeasured, with the change in fair value being reported in the consolidated statement of operations. Fair value determinations require estimates of future oil prices, reserves, oil sales and appropriate discount rates. | |
Principles Of Consolidation | |
The acquisition of SCNRG by Hawker on October 25, 2013, has been accounted for as a reverse acquisition whereby SCNRG is the accounting acquirer effectuating a recapitalization of Hawker. Therefore, our condensed consolidated financial statements include the historic accounts of SCNRG, and consolidated with Hawker's beginning October 25, 2013. | |
On January 1, 2014, we acquired all of the membership interests of Hawker Energy, LLC, which has a wholly-owned subsidiary, Punta Gorda Resources, LLC. Hawker Energy, LLC changed its name to Hawker Energy (Rincon), LLC on October 22, 2014. Our condensed consolidated financial statements include the accounts of these entities beginning January 1, 2014. | |
On February 3, 2015, we acquired 100% of the stock of TEG Oil & Gas U.S.A., Inc., (“TEG”), and our condensed consolidated financial statements include the accounts of this entity from this date (see Note 4). | |
All significant intercompany balances and transactions have been eliminated. | |
Use Of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates included in the financial statements are: (1) purchase price allocations; (2) depreciation and depletion; (3) accrued assets and liabilities; (4) asset retirement obligations; (5) net profits interest payable; (6) conversion option values; (7) overriding royalty interest liability; and (8) stock-based compensation. Recorded amounts are based on estimates of asset values, oil reserves, asset retirement costs, asset lives and equity values. By their nature, these estimates including the estimates of future prices and costs, and the related future cash flows are subject to measurement uncertainty. The impact in the consolidated financial statements of future periods could be material. Although management believes these estimates are reasonable, changes in facts and circumstances or discovery of new information may result in revised estimates. Actual results could differ from those estimates. | |
New Accounting Pronouncements | |
We consider the applicability and impact of all accounting standard updates (ASUs). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. | |
In May 2014, the FASB issued ASU 2014-9, Revenue From Contracts With Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to receive in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The new guidance is effective for the interim and annual periods beginning after December 15, 2016; early adoption is not permitted. We are currently assessing the impact that this standard will have on our consolidated financial statements. | |
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which is intended to define management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. Under GAAP, financial statements are prepared based on the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, GAAP lacks guidance about management's responsibility to evaluate whether there is substantial doubt about the organization's ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an organization's management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The new guidance is effective for the interim and annual periods beginning after December 15, 2016; early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company has not conducted its analysis to determine whether it will adopt the new standard early or not. | |
GOING_CONCERN
GOING CONCERN | 6 Months Ended |
Feb. 28, 2015 | |
GOING CONCERN [Abstract] | |
GOING CONCERN | 3. GOING CONCERN |
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of February 28, 2015, we had cash and equivalents of $52,815 and total current assets of $99,567, but a working capital deficit in the amount of $7,352,754. The Company incurred a net loss of $1,410,766 and $3,059,029 for the three and six months ended February 28, 2015 and an accumulated net loss of $5,139,387 since inception. The Company has earned insufficient revenues since inception and its cash resources are insufficient to meet its planned business objectives. | |
These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock as may be required and ultimately to attain profitability. | |
Following the completion of the acquisition of TEG Oil & Gas U.S.A., Inc. on February 3, 2015 (see Note 4), management's plan is to raise capital through a combination of equity and debt financing sufficient to finance continuing operations for the next twelve months and to begin further development of the acquired Tapia Assets (defined below), and to refinance by December 2015 the bank debt assumed with the acquisition. However, there can be no assurance that the Company will be successful in completing such financing. | |
ACQUISITION_OF_TEG_OIL_GAS_USA
ACQUISITION OF TEG OIL & GAS U.S.A., INC. | 6 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
ACQUISITION OF TEG OIL & GAS U.S.A., INC. [Abstract] | |||||||||||||
ACQUISITION OF TEG OIL & GAS U.S.A., INC. | 4. ACQUISITION OF TEG OIL & GAS U.S.A., INC. | ||||||||||||
On February 3, 2015 (but effective as of February 1, 2015), we completed the acquisition of all of the outstanding common stock of TEG Oil & Gas U.S.A., Inc. (“TEG”) from Sefton Resources, Inc. (“Sefton”) (the “TEG Acquisition”). The purchase price was $1 plus the issuance of 3,000,000 shares of our common stock and a five-year warrant (“Warrant”) to purchase up to an additional 5,000,000 shares of our common stock for $0.25 per share. In addition, between April 2014 and January 2015, Hawker and its subsidiary Tapia Holdings, LLC made advances pursuant to a secured subordinated loan agreement to TEG totaling approximately $1.6 million, including accrued interest receivable (Note 5). This amount constitutes additional consideration for the TEG Acquisition, as this note receivable was not settled prior to the closing of the TEG Acquisition. As a result of this transaction, TEG became a wholly-owned subsidiary of Hawker. See also Note 18, Subsequent Events. | |||||||||||||
TEG is an energy company focused on exploitation and production of crude oil in Southern California. TEG's assets comprise four oil and gas leases encompassing the Tapia Canyon field (the “Tapia Assets”) and one lease west of the Tapia Canyon field (the “Eureka Assets”), and the accompanying production equipment. The Tapia Assets located 40 miles north of Los Angeles, California, consist of four oil leases covering 262 gross acres. The Eureka oil field covers an area of approximately 1,510 gross acres located 25 miles west of the Tapia Canyon oil field in Ventura County, California. The acquisition significantly expanded our presence in Southern California. | |||||||||||||
A table of adjustments reflecting the allocation of the fair values is provided below. These adjustments reflect the elimination of the components of TEG's historical stockholders' equity, the estimated value of consideration paid by us in the acquisition using the estimated fair value of common stock on February 3, 2015 and any adjustments to the historical book values of TEG's assets and liabilities to their estimated fair values, in accordance with acquisition accounting. Transaction costs relating to the TEG Acquisition were expensed as incurred. The initial accounting for the TEG Acquisition is preliminary, and adjustments to provisional amounts (such as fixed assets, oil properties, and certain liabilities), or recognition of additional assets acquired or liabilities assumed, may occur as additional information is obtained about facts and circumstances that existed as of the acquisition date. The evaluation of the assigned fair values is ongoing, as the transaction was recently completed. The Company expects the purchase price allocation will be finalized in the fourth fiscal quarter ended August 31, 2015. The Company believes these estimates are reasonable and the significant effects of the acquisition are properly reflected. | |||||||||||||
Purchase price: | |||||||||||||
Fair value of Hawker's common stock issued (1) | $ | 201,027 | |||||||||||
Fair value of common stock warrant issued by Hawker (2) | 330,000 | ||||||||||||
Loan made by Hawker group to TEG prior to closing | 1,663,227 | ||||||||||||
Total purchase price | 2,194,254 | ||||||||||||
Estimated fair value of liabilities assumed: | |||||||||||||
Loan payable to Bank of the West, plus accrued interest | 4,011,882 | ||||||||||||
Accounts payable | 842,890 | ||||||||||||
Accrued liabilities | 83,063 | ||||||||||||
Asset retirement obligation | 1,743,558 | ||||||||||||
Retirement liability | 998,471 | ||||||||||||
Deferred income taxes | 3,207,000 | ||||||||||||
Amount attributable to liabilities assumed | 10,886,864 | ||||||||||||
Total purchase price and assumed liabilities | $ | 13,081,118 | |||||||||||
Estimated fair value of assets acquired: | |||||||||||||
Cash | $ | 23,344 | |||||||||||
Other current assets | 7,025 | ||||||||||||
Fixed assets – operating machinery and equipment | 2,069,792 | ||||||||||||
Identifiable intangible asset | 175,000 | ||||||||||||
Oil properties - proven, full cost method | 10,805,957 | ||||||||||||
Amount attributable to assets acquired | $ | 13,081,118 | |||||||||||
-1 | 3,000,000 shares of Hawker common stock at $0.067 per share, being the estimated fair value implied by the sale of Units described in Note 16. Our common stock is considered “thinly-traded” due to the extremely low level of trading activity (many days have no volume or volume less than $1,000 in value), the estimated value of the common stock based on cash sales to third-parties is significantly more meaningful in regards to fair value. | ||||||||||||
-2 | 5 year warrant issued for 5 million shares of Hawker common stock at an exercise price of $0.25 per share, fair value based on using the Black-Scholes Option Pricing Model. | ||||||||||||
As of the closing of the TEG Acquisition, TEG was in default in its payment obligations to Bank of the West (“BOTW”), Sefton's senior lender, in the aggregate amount of $4,011,882. BOTW consented to our acquisition of TEG and has agreed to forbear taking enforcement action against TEG on the senior loan provided that (i) Hawker lend TEG not less than $350,000 within 90 days of the TEG Acquisition, (ii) interest on TEG's obligations to BOTW be increased to 9%, with a monthly pay rate of 5% and the remaining deferred 4% of unpaid interest compounded monthly, (iii) the proceeds of any sale, assignment, licensing or other transfer of any real or personal property rights which serve as collateral for TEG's obligations to BOTW be remitted directly to BOTW, and (iv) commencing no later than the first month after which the California Midway-Sunset First Purchase Price as published by the U.S. Energy Information Administration exceeds $60 per barrel, TEG will begin making outstanding property tax payments to the County of Los Angeles of at least $15,000 per month. See Note 6 for further description of the BOTW loan. | |||||||||||||
The results of operations of TEG from the February 1, 2015 effective closing date through February 28, 2015, have been included in Hawker's consolidated statements of operations for the three and six months ended February 28, 2015. | |||||||||||||
The following unaudited pro forma combined results of operations are provided for the six month periods ended February 28, 2015 and 2014 as though the acquisition had been completed as of the beginning of the earliest period presented, or September 1, 2013. These pro forma combined results of operations have been prepared by adjusting the historical results of Hawker to include the historical results of TEG. These supplemental pro forma results of operations are provided for illustrative purposes only, and do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. The pro forma results of operations do not include any cost savings or other synergies that resulted, or may result, from the acquisition or any estimated costs that will be incurred to integrate TEG. Future results may vary significantly from the results reflected in this pro forma financial information because of future events and transactions, as well as other factors. | |||||||||||||
Six Months Ended February 28, | |||||||||||||
2015 | 2014 | ||||||||||||
Revenues | $ | 1,002 | $ | 2,413 | |||||||||
Net (loss) income | $ | (3,024 | ) | $ | 20 | ||||||||
Net loss per share: | |||||||||||||
Basic and diluted | $ | (0.04 | ) | $ | - | ||||||||
For the three and six month periods ended February 28, 2015, the Company recognized $72,597 of sales of crude oil (net of royalties) less production costs, professional fees and general and administrative costs of $79,776, and depletion, depreciation, and amortization of $26,855 related to properties acquired in the TEG acquisition, being the results from operations beginning with the closing of the acquisition effective February 1, 2015. In addition, interest expense was $28,263 on the BOTW loan. Additionally, non-recurring transaction costs of $71,819 and $280,884 related to the acquisition for the three and six month periods ended February 28, 2015, respectively, are included in the Condensed Consolidated Statements of Operations as professional fees; however, these non-recurring transaction costs have been excluded from the pro forma results in the above table. | |||||||||||||
Historically, TEG's fiscal year end was December 31st and Hawker's fiscal year end is August 31st. For the six months ended February 28, 2015 and 2014, the operating results for TEG included in the pro forma financial information above are for the period from July 1 through December 31, 2014 and 2013. | |||||||||||||
SECURED_SUBORDINATED_LOAN_RECE
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM | 6 Months Ended |
Feb. 28, 2015 | |
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM [Abstract] | |
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM | 5. SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM |
Between April 18, 2014 and January 31, 2015, we and our wholly-owned subsidiary, Tapia Holdings, LLC (“Tapia Holdings”), made a number of advances to TEG, pursuant to several secured subordinated notes and related security agreements, all as amended and restated into a Secured Subordinated Note dated January 12, 2015 (the “Note”), and a Fourth Amended and Restated Security Agreement dated January 12, 2015, each executed by TEG, and a Limited Recourse Guarantee (“Guarantee”) and a Pledge Agreement, each executed by Sefton (collectively, the “Loan Receivable Agreements”). The Loan Receivable Agreements and an Intercreditor Agreement (defined below) were entered into in connection with what ultimately became an executed Share Purchase Agreement to acquire TEG, which acquisition closed on February 3, 2015 (Note 4). | |
Under the terms of the Loan Receivable Agreements, TEG agreed to pay us the principal sum of $2,100,000, or such lesser amount as may be outstanding from time to time, with interest on the unpaid principal amount at the rate of 3.0% per annum. We advanced $150,000 and $346,625 to TEG during the three and five months ended January 31, 2015, for a total at January 31, 2015 of $1,663,227, including accrued interest. The loan receivable was to have matured on December 31, 2015, at which time all outstanding principal and accrued interest would have been due and payable in full. The assets of TEG secured the Note, which was also guaranteed on a limited recourse basis by Sefton. Sefton's Guarantee was secured by a pledge of all of the outstanding shares of TEG. The Note and our security interest in the assets of TEG are subordinate to senior indebtedness of TEG, pursuant to an Amended and Restated Subordination and Intercreditor Agreement (“Intercreditor Agreement”) dated January 1, 2015, as amended, by and among Tapia Holdings, Hawker, TEG, Sefton, TEG's affiliate TEG MidContinent, Inc., ("TEGMC"), BOTW, and us. | |
The August 31, 2014 balance of the secured subordinated note receivable was comprised of $1,290,727 in principal and $7,595 in accrued interest receivable, for a total of $1,298,322. As noted above, the January 31, 2015 loan balance of $1,663,227 was not settled prior to the closing of the TEG Acquisition and this amount therefore constitutes additional consideration for the acquisition. | |
BANK_LOAN_PAYABLE
BANK LOAN PAYABLE | 6 Months Ended |
Feb. 28, 2015 | |
BANK LOAN PAYABLE [Abstract] | |
BANK LOAN PAYABLE | 6. BANK LOAN PAYABLE |
As discussed in Note 4, on February 3, 2015, TEG became our wholly-owned subsidiary. At the time of the acquisition, TEG, along with Sefton and its subsidiary TEGMC, were in default under the terms of an Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), dated October 1, 2008, among TEG, Sefton and TEGMC as “Borrowers”, and BOTW. Notwithstanding Borrowers' default, BOTW had previously agreed on numerous occasions to forbear in exercising certain rights available to it under the Credit Agreement, in each case, subject to various terms and conditions. BOTW's agreement to forbear was memorialized by a Forbearance Agreement among Borrowers and BOTW, which has been amended on several occasions. | |
On January 1, 2015, in anticipation of our acquisition of TEG, we entered into a Fifth Amendment to Forbearance Agreement (“Fifth Amendment”) among Sefton, TEG, TEGMC, Hawker and BOTW. Under or in connection with the Fifth Amendment, (i) Hawker agreed to lend TEG not less than $350,000, (ii) Tapia Holdings, a subsidiary of Hawker, assigned to Hawker all of Tapia Holdings' right, title and interest in outstanding loans made by Tapia Holdings to TEG evidenced by a Subordinated Note due December 29, 2014 in the original principal amount of $1,500,000, (iii) Hawker agreed not to contest or otherwise oppose an order appointing a receiver for the assets of TEG at the end of the period in which BOTW has agreed to forbear in exercising its rights under the Credit Agreement (the “Forbearance Period”), (iv) Tapia Holdings assigned to Hawker all of Tapia Holdings' right to acquire 100% of the stock of TEG from Sefton, (v) effective as of January 1, 2015, the interest rate accruing on the principal of the Loan was increased to 9% with a monthly pay rate of 5% and the remaining 4% of unpaid interest to be accrued and compounded monthly until termination of the Forbearance Period and full payment of the Loan, and the default rate was increased to 14%, (vi) Borrowers agreed that the proceeds from any sale, assignment, licensing or other transfer of real or personal property rights that serve as collateral for the Loan will be remitted directly to BOTW, and (vii) Borrowers agreed to pay at least $15,000 per month of outstanding property taxes, commencing with the first month in which the California Midway-Sunset First Purchase Price as published by the U.S. Energy Information Administration is greater than $60 per barrel. As and in consideration of the foregoing, under the Fifth Amendment, BOTW agreed to extend the Forbearance Period to December 31, 2015. | |
See Note 18 for a subsequent event concerning the loan payable to BOTW. | |
LOANS_PAYABLE_TO_RELATED_PARTI
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM [Abstract] | |||||||||
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM | 7. LOANS PAYABLE TO RELATED PARTIES, SHORT TERM | ||||||||
Loans payable to related parties, short term, consist of the following at February 28, 2015, and August 31, 2014: | |||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
Darren Katic | $ | 242,300 | $ | 161,000 | |||||
Manhattan Holdings, LLC | 90,000 | 60,000 | |||||||
Gerald Tywoniuk | 60,000 | - | |||||||
Kristian Andresen | 56,025 | - | |||||||
Total short-term loans | 448,325 | 221,000 | |||||||
Accrued interest payable | 22,104 | 5,876 | |||||||
Loans payable to related parties, short term | $ | 470,429 | $ | 226,876 | |||||
Loans payable to related parties are unsecured and bear interest at 10% per annum. Mr. Katic's loan is due on demand. Of the Manhattan Holdings, LLC loan balance, $60,000 was originally due on October 31, 2014, but the maturity date on that portion was extended to January 31, 2015, in combination with an additional $30,000 loan. Other loans were due January 31, 2015. No arrangements have been made to date to deal with these past due maturity dates. All loans from related parties above have been treated as short-term loans. Mr. Katic is an officer, director and significant shareholder. Manhattan Holdings, LLC and Gerald Tywoniuk are significant shareholders. Kristian Andresen is a director and significant shareholder. | |||||||||
CONVERTIBLE_NOTES_PAYABLE_SHOR
CONVERTIBLE NOTES PAYABLE, SHORT TERM | 6 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
CONVERTIBLE NOTES PAYABLE, SHORT TERM [Abstract] | |||||||||||||
CONVERTIBLE NOTES PAYABLE, SHORT TERM | 8. CONVERTIBLE NOTES PAYABLE, SHORT TERM | ||||||||||||
Between May 13, 2014, and February 28, 2015, we issued a number of convertible notes payable (“CNP”). All were issued in amounts equal to the cash we received, and bear simple interest on the unpaid principal balance at 12% per annum, which is payable on maturity. | |||||||||||||
Convertible notes payable, short term, consist of the following at February 28, 2015, and August 31, 2014; conversion features, security provisions and warrants to acquire common stock of Hawker are also set forth below: | |||||||||||||
Issue | Maturity | February 28, | August 31, | ||||||||||
Date | Date | 2015 | 2014 | ||||||||||
CNP 1 | $ | - | $ | 350,000 | |||||||||
(1) (2) (3)(7) | 25-Jun-14 | 30-Nov-14 | |||||||||||
CNP 2 | May 30, 2014 | November 30, 2014 | - | 250,000 | |||||||||
(1) (2) (3) | |||||||||||||
CNP 3 | July 17, 2014 | June 30, 2015 | - | 100,000 | |||||||||
(1) (3) (4) | |||||||||||||
CNP 4 | July 17, 2014 | July 10, 2015 | - | 100,000 | |||||||||
(1) (2) (3) (4) (5) | |||||||||||||
CNP 5 | May 13, 2014 | May 13, 2016 | 50,000 | 50,000 | |||||||||
-6 | |||||||||||||
CNP 6 | July 25, 2014 | July 25, 2015 | - | 50,000 | |||||||||
(1) (2) (3) (4) | |||||||||||||
CNP 7 | August 28, 2014 | July 25, 2015 | - | 30,000 | |||||||||
(1) (2) (3) (4) | |||||||||||||
CNP 8 | September 26, 2014 | September 26, 2015 | - | - | |||||||||
(1)(3)(4)(8) | |||||||||||||
CNP 9 | November 3, 2014 | May 3, 2015 | - | - | |||||||||
(1)(2)(3)(7)(8) | |||||||||||||
50,000 | 930,000 | ||||||||||||
Less unamortized discount (7) | - | (89,149 | ) | ||||||||||
Accrued interest payable | 4,784 | 21,599 | |||||||||||
Convertible notes payable, short term | $ | 54,784 | $ | 862,450 | |||||||||
-1 | Convertible at any time at the option of the investor into “Conversion Units.” Each Conversion Unit consists of one share of common stock of Hawker and one warrant to purchase one-half share of common stock of Hawker at an exercise price of $0.25 per share. The number of Conversion Units into which the note is convertible is computed by dividing all of the then outstanding principal and accrued interest under the note by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Each warrant has a five-year life from the date the convertible note payable was issued. In the event Hawker sells common stock for less than $0.10 per share, the conversion rate for CNP 1 and 9 shall be adjusted to that price. In the case of CNP 1 and 2, the notes were amended September 18, 2014, to limit the conversion of a part or the entire convertible note payable at any one time to a maximum beneficial ownership in Hawker of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion. CNP 9, with a face amount of $25,000 is similarly limited to a 4.99% maximum beneficial ownership. | ||||||||||||
-2 | Hawker granted a security interest to the investor in all of Hawker's assets. | ||||||||||||
-3 | The proceeds were required to be used solely for the purpose of allowing Tapia Holdings to make advances to TEG under the terms of the secured subordinated loan receivable described in Note 5. Any repayment of such advances by TEG to Tapia Holdings must be used by us to immediately first repay convertible notes payable to the holder of CNP 1, 2 and 3, and second to repay other convertible notes payable pro rata. | ||||||||||||
-4 | Conversion of unpaid principal into Conversion Units pursuant to the terms in (1) above was mandatory upon Hawker closing the TEG Acquisition in February 2015 as described in Note 4. Conversion of unpaid interest into Conversion Units was at the election of Hawker, which election Hawker made. | ||||||||||||
-5 | The holder is related to Darren Katic, who is an officer, director and significant shareholder. | ||||||||||||
-6 | Unpaid principal and accrued interest is convertible at any time at the option of the holder into common shares in an amount computed by dividing the amount converted by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Repayment of the convertible note payable is required on collection of the secured subordinated loan receivable described in Note 5 if earlier than the maturity date above. As Hawker expected to receive repayment on the secured subordinated loan receivable or close on the TEG acquisition within one year, this convertible note payable was classified as a short-term liability. | ||||||||||||
-7 | The unamortized discount relates to CNP 1 ($350,000) and CNP 9 ($25,000). This is described further immediately below. | ||||||||||||
(8) | Original principal amounts were $25,000 for CNP 8 and $25,000 for CNP 9. | ||||||||||||
CNP 1 (principal amount $350,000, CNP 2 (principal amount $250,000) and CNP 9 (principal amount $25,000) were considered extinguished for accounting purposes when they were rolled over into the long term Secured Convertible Note Payable described in Note 9. | |||||||||||||
LONG_TERM_DEBT
LONG TERM DEBT | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
LONG TERM DEBT [Abstract] | |||||||||
LONG TERM DEBT | 9. LONG TERM DEBT | ||||||||
Long term debt is comprised of the following at February 28, 2015, and August 31, 2014: | |||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
Convertible note payable, long term | $ | 134,127 | $ | - | |||||
Overriding royalty interest liability | 274,710 | - | |||||||
Net profits interest payable | 159,322 | 169,104 | |||||||
Note payable and other | 64,414 | - | |||||||
Total long term debt | 632,573 | 169,104 | |||||||
Less current portion | (208,346 | ) | (20,065 | ) | |||||
Long term debt, net of current portion | $ | 424,227 | $ | 149,039 | |||||
Convertible Note Payable, Long Term | |||||||||
On January 14, 2015, we executed a term sheet to provide for a Third Amended and Restated Secured Convertible Promissory Note to an outside investor (the “Secured Convertible Note Payable”), in the aggregate principal amount of $1,000,000, to mature in two years. Completion of definitive documentation occurred on May 27, 2015. | |||||||||
A Secured Convertible Note Payable was issued in consideration of additional proceeds to us in the amount of $250,000 (of which $200,000 was funded January 15, 2015, and $50,000 was funded February 26, 2015) and cancellation of previously issued notes to the investor in the amounts of $250,000, $350,000, and $25,000 (as well as accrued interest on each), the first two of which had maturity dates of November 30, 2014, and the latter of which had a maturity date of May 3, 2015. The holder has the option of advancing a further $125,000 by June 30, 2015. The maturity date of the note is December 31, 2016. The Secured Convertible Note Payable bears interest on the unpaid principal balance of the Secured Convertible Note Payable at the rate of 12% per annum. Interest payments become payable quarterly beginning July 31, 2015, accruing interest until then. The Secured Convertible Note Payable will be convertible at any time at the option of the investor into shares of Hawker common stock computed by dividing all of the then outstanding principal and accrued interest under the Secured Convertible Note Payable by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events) (the “Conversion Rate”). However, if we subsequently sell common stock or securities convertible into or exchangeable for common stock at a price lower than the Conversion Rate (subject to customary exclusions), then the Conversion Rate then in effect will be automatically reduced to the lower price. We will at all times reserve and keep available out of our authorized but unissued shares a sufficient number of shares of common stock to give effect to the conversion of the Secured Convertible Note Payable. Unless notified in advance by the investor, conversion of a part or the entire Secured Convertible Note Payable is limited at any one time to a maximum beneficial ownership interest in Hawker of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion. The proceeds from the Secured Convertible Note Payable are to be used for the purpose of allowing us to make advances to TEG, under the terms of a note receivable from TEG, and for general working capital. Any repayment by TEG of the advances under the terms of the note receivable must be used by us to immediately make repayment to the investor under the terms of the Secured Convertible Note Payable. To secure our obligations under the Secured Convertible Note Payable, we granted a security interest to the investor in all of our right, title and interest under the TEG note receivable, our second priority security interest in TEG's assets and in the interest of our subsidiary SCNRG, LLC in the oil-producing property known as the DEEP Lease. The Secured Convertible Note Payable also contains other terms and covenants that are customary for a promissory note of this type. In addition, we granted to the investor a 2.5% or 3.5% overriding royalty interest, depending on the lease, in oil sales from the TEG Assets. Such amount accrues until TEG's lender, BOTW, has been paid in full; however, payment of royalties shall begin by January 31, 2016 or an event of default under the Secured Convertible Note Payable will occur. While interest and royalties are being accrued, no cash payments can be made to repay loans made to Hawker by Mr. Katic, nor can Hawker repurchase any non-controlling interest owned by Mr. Moore nor pay any salaries to Messrs. Katic and Moore. | |||||||||
The Company identified an embedded derivative related to the Conversion Rate reset provision. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivative as of the date of each advance under the note and to adjust the fair value as of each subsequent balance sheet date. The Company determined a fair value of $540,084 of the embedded derivative, in aggregate, for the two advances made under the note since inception in January 2015. See Note 10 for further discussion of the assumptions in determining this fair value and subsequent adjustment of fair value at period end. The initial fair value of the embedded derivative creates a discount on the Secured Convertible Note Payable book balance. | |||||||||
In addition, the granting of the overriding royalty interest also requires the allocation of a portion of the proceeds received to a separate liability. This amount was estimated to be $263,759, see below for further discussion of the assumptions used. Such allocation also creates a discount on the Secured Convertible Note Payable book balance. | |||||||||
The total debt discount amounted to $803,843 and is being amortized using the effective interest method. We amortized $8,025 as interest expense due to the accretion of the discount between the dates of advances in January and February 2015 and February 28, 2015. The unamortized discount as of February 28, 2015 was $795,818 compared to none at August 31, 2014. The February 28, 2015 amount will be fully amortized by the December 31, 2016 maturity date of the Secured Convertible Note Payable. The effective rate of interest is 184% per annum, including the 12% cash coupon, the conversion option and the granting of the overriding royalty interest. | |||||||||
Six Months | Year | ||||||||
Ended | Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
Secured Convertible Note Payable, beginning of period | $ | - | $ | - | |||||
Roll over prior advances into new note | 625,000 | - | |||||||
Capitalization of interest at Jan. 1, 2015 | 39,896 | - | |||||||
Additional advances in January and February 2015 | 250,000 | - | |||||||
Total advances | 914,896 | - | |||||||
Discount created by embedded derivative (conversion option) | (540,084 | ) | - | ||||||
Discount created by granting of overriding royalty interest | (263,759 | ) | - | ||||||
Total discount | (803,843 | ) | - | ||||||
Amortization of discount | 8,025 | - | |||||||
Unamortized discount | (795,818 | ) | - | ||||||
Accrued interest payable | 15,049 | - | |||||||
Carrying value of Secured Convertible Note Payable, end of period | 134,127 | - | |||||||
Less current portion | (113,910 | ) | - | ||||||
Secured Convertible Note Payable, long term portion, end of period | $ | 20,217 | $ | - | |||||
Overriding Royalty Interest Liability (“ORRI Liability”) | |||||||||
Pursuant to an overriding royalty interest (“ORRI”) effective January 15, 2015 to the Secured Convertible Note Payable holder, as described immediately above, oil sales from the Tapia oil field are subject to an additional 2.5% or 3.5% overriding royalty interest, depending on the lease. Since this royalty interest was granted in connection with a loan, the loan proceeds were bifurcated and this royalty interest has been accounted for as a separate liability. | |||||||||
The ORRI remains unrecorded with Los Angeles County until the BOTW loan is repaid, and royalties accrue and are not paid during this period. Upon recordation, (1) accrued royalties shall be paid or added to the Secured Convertible Note Payable above at TEG's option and (2) current royalties are due and payable monthly in arrears. Failure to record the ORRI by January 14, 2016 will constitute an event of default under the Secured Convertible Note Payable. | |||||||||
The following assumptions were used by management to determine the fair value of the ORRI Liability: | |||||||||
Oil price | $65/barrel | ||||||||
Resulting reserves were included as follows: | |||||||||
Proved developed producing | 100% | ||||||||
Proved developed non-producing | 50% | ||||||||
Proved undeveloped | 0% | ||||||||
Discount rate | 35% | ||||||||
Six Months | Year | ||||||||
Ended | Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
ORRI Liability, beginning of period | $ | - | $ | - | |||||
ORRI granted to holder of long-term convertible note payable | 263,759 | - | |||||||
Current period accretion | 10,951 | - | |||||||
Change in estimated liability | - | - | |||||||
Payments made | - | - | |||||||
ORRI Liability, end of period | 274,710 | - | |||||||
Less: current portion | (54,542 | ) | $ | - | |||||
ORRI Liability, long-term portion | $ | 220,168 | $ | - | |||||
Net Profits Interest (“NPI”) Payable | |||||||||
In connection with SCNRG's December 1, 2009 Purchase and Sale Agreement for the DEEP Lease, and as part of the purchase price consideration, SCNRG entered into an Assignment of Net Profit Interest with Christian Hall Petroleum. Pursuant to the agreement, SCNRG is required to make monthly payments to the holder in an amount equal to 40% of SCNRG's share of net profit (as defined in the agreement) from production. | |||||||||
Until February 1, 2014, SCNRG's working interest in the DEEP property was 66.67%, and the NPI agreement called for a minimum monthly payment of $1,985 (SCNRG's 66.67% share). Beginning February 1, 2014, SCNRG's working interest in the DEEP Lease increased to 87.18%, and its share of the minimum monthly payment became $2,596. Beginning May 15, 2014, SCNRG's working interest in the DEEP Lease increased to 100.0%, and its share of the minimum monthly payment became $2,978. Payments are required until SCNRG and other working interest owners have made NPI payments in aggregate between $347,000 and $357,410 on or before December 31, 2022 (the actual maximum amount within this range is dependent on when SCNRG and other working interest owners satisfy their aggregate NPI payment obligations). As of February 28, 2015, SCNRG and other working interest owners have made NPI payments totaling $143,069. SCNRG has paid its 66.67% working interest share of this amount through February 1, 2014, its subsequent 87.18% share through May 15, 2014, and its subsequent 100.0% share through November 30, 2014. | |||||||||
Given its terminating nature, the discounted present value of the minimum monthly NPI payments was recorded as a liability at SCNRG's December 1, 2009, acquisition date of a 66.67% working interest in the DEEP Lease, and this liability was increased pro rata when its working interest increased to 87.18% on February 1, 2014, and again on May 14, 2014 when its working interest increased to 100.0%. The discount rate used in all cases was 10.0% per annum. | |||||||||
Changes in SCNRG's share of the NPI liability are as follows for the six months ended February 28, 2015 and the year ended August 31, 2014: | |||||||||
Six Months Ended | Year Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
NPI liability, beginning of period | $ | 169,104 | $ | 124,597 | |||||
Liabilities assumed in connection with | - | 58,847 | |||||||
acquisition of additional DEEP Lease | |||||||||
working interests | |||||||||
Current period accretion | 8,086 | 14,104 | |||||||
Payments made | (17,868 | ) | (28,444 | ) | |||||
NPI liability, end of period | 159,322 | 169,104 | |||||||
Less: current portion | (21,089 | ) | (20,065 | ) | |||||
NPI liability, long-term portion | $ | 138,233 | $ | 149,039 | |||||
Note Payable And Other | |||||||||
Note Payable | |||||||||
On January 16, 2015, a relative of Mr. Katic advanced $50,000 to Hawker, and made further advances of $20,000 on March 19, 2015, and $100,000 on March 25, 2015, all of which were documented in a note payable on the latter date. Principal is to be repaid at the rate of $7,083 per month beginning April 30, 2015 for 24 months. | |||||||||
Interest on the note payable is comprised of a March 25, 2015 issuance of 510,000 shares of common stock plus a 5-year warrant to purchase up to 500,000 shares of common stock for $0.25 per share. | |||||||||
A discount of $19,757 based on advances to February 28, 2015 was recorded to reflect the pro rated value of the stock and warrants to be issued as interest. This discount will be amortized to interest expense over the term of the loan, using the effective interest method. The amortization of discount recorded through February 28, 2015 was $1,053. The effective rate of interest is 46.6%. | |||||||||
Other | |||||||||
Other long term debt represents an installment sales contract for the February 2015 purchase of a field vehicle, with 48 payments of $795 per month beginning April 4, 2015. The interest rate is 6.99%. | |||||||||
Total Note Payable and Other | |||||||||
Six Months | Year | ||||||||
Ended | Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
Balance, beginning of period | $ | - | $ | - | |||||
Note payable advance | 50,000 | - | |||||||
Less unamortized discount | (18,704 | ) | - | ||||||
31,296 | - | ||||||||
Installment sales contract liability | 33,118 | - | |||||||
Total note payable and other | 64,414 | - | |||||||
Less current portion | (18,805 | ) | - | ||||||
Note payable and other, long term portion, end of period | $ | 45,609 | $ | - |
CONVERSION_OPTION
CONVERSION OPTION | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
CONVERSION OPTION [Abstract] | |||||||||
CONVERSION OPTION | 10. CONVERSION OPTION | ||||||||
Conversion Option, Short Term | |||||||||
As described in Note 8, the Company identified an embedded derivative related to the Conversion Rate reset provision in the Short Term Secured Convertible Notes Payable. The repayment is subject to the convertible features of each note. Each creditor has a conversion option allowing it to choose to receive repayment of the stated principal either in cash or, at each creditor's option the note is convertible into “Conversion Units.” Each Conversion Unit consists of one share of common stock of Hawker and one warrant to purchase one-half share of common stock of Hawker at an exercise price of $0.25 per share. The number of Conversion Units into which the note is convertible is computed by dividing all of the then outstanding principal and accrued interest under the note by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Each warrant has a five-year life from the date the convertible note payable was issued. Each note has an anti-dilution provision that allows for the automatic reset of the conversion price upon any future sale of common stock or instruments exchangeable for or convertible into common stock below the then current conversion price of the note. | |||||||||
The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivative as of the date of each note issuance and to adjust the fair value as of each subsequent balance sheet date. At the inception of the $350,000 and $25,000 notes, the Company determined a fair value of $139,051 and $7,418, respectively, of the embedded derivative. The fair value of the embedded derivative was determined using the Black-Scholes Pricing Model based on the following assumptions for each of the two notes: | |||||||||
Dividend yield: | 0 and 0 | % | |||||||
Volatility | 178 and 200 | % | |||||||
Risk free rate: | 0.05 and 0.02 | % | |||||||
As discussed in Note 8, the Short Term Secured Convertible Notes Payable were considered extinguished on January 14, 2015 when their balances were rolled into a new Secured Convertible Note Payable. Accordingly, the $97,398 fair value of the short term conversion option at November 30, 2014 was recorded as additional paid in capital on January 14, 2015. The fair value of the described embedded derivative at that date was determined using the Black-Scholes Pricing Model with the following assumptions: | |||||||||
Dividend yield: | 0 | % | |||||||
Volatility | 214 | % | |||||||
Risk free rate: | 0.025 | % | |||||||
The non-cash, non-operating gain resulting from the fair value accounting was $0 and $34,662 for the three and six months ended February 28, 2015. | |||||||||
The following table provides a summary of changes in fair value of the short term conversion option for the six months ended February 28, 2015 and the year ended August 31, 2014: | |||||||||
Six Months | Year | ||||||||
Ended | |||||||||
February 28, | Ended | ||||||||
2015 | August 31, | ||||||||
2014 | |||||||||
Balance, beginning of period | $ | 122,045 | $ | - | |||||
Initial fair value of debt derivatives at advance dates | 7,418 | 139,051 | |||||||
Initial fair value of debt derivative on accrual of interest | 2,597 | 2,630 | |||||||
Change in fair value of debt derivatives | (34,662 | ) | (19,636 | ) | |||||
Extingushment of conversion option | (97,398 | ) | - | ||||||
Balance, end of period | $ | - | $ | 122,045 | |||||
Conversion Option, Long Term | |||||||||
As described in Note 9, the Company identified an embedded derivative related to the Conversion Rate reset provision in the Secured Convertible Note Payable. The repayment is subject to the convertible features of the note. The Secured Convertible Note Payable can be convertible at any time at the option of the investor into shares of Hawker common stock computed by dividing all of the then outstanding principal and accrued interest under the Secured Convertible Note Payable by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events) (the “Conversion Rate”). However, if we subsequently sell common stock or securities convertible into or exchangable for common stock at a price lower than the Conversion Rate (subject to customary exclusions), then the Conversion Rate then in effect will be automatically reduced to the lower price. | |||||||||
The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivative as of the date of each advance under the note and to adjust the fair value as of each subsequent balance sheet date. The Company determined a fair value of $540,084 of the embedded derivative, in aggregate, for the two advances made under the note since inception in January 2015. The fair value of the embedded derivative was determined using the Black-Scholes Pricing Model based on the following assumptions for each of the two notes: | |||||||||
Dividend yield: | 0 and 0 | % | |||||||
Volatility | 236 and 252 | % | |||||||
Risk free rate: | 0.51 and 0.63 | % | |||||||
The long term conversion option, being the fair value of the described embedded derivative, of $547,886 at February 28, 2015 compares to none at August 31, 2014, and was determined using the Black-Scholes Pricing Model with the following assumptions: | |||||||||
Dividend yield: | 0 | % | |||||||
Volatility | 252 | % | |||||||
Risk free rate: | 0.63 | % | |||||||
At February 28, 2015, the Company adjusted the recorded fair value of the long term conversion option to market resulting in non-cash, non-operating loss of $7,802 for the quarter ended February 28, 2015. Together with the non-cash, non-operating gains on the short term conversion options described above, the total non-cash, non-operating gain (loss) was ($7,802) and $26,860 for the three and six months ended February 28, 2015. There were no such gains or losses in the three and six months ended February 28, 2014. | |||||||||
The following table provides a summary of changes in fair value of the long term conversion option for the six months ended February 28, 2015 and the year ended August 31, 2014: | |||||||||
Six Months | Year | ||||||||
Ended | |||||||||
February 28, | Ended | ||||||||
2015 | August 31, | ||||||||
2014 | |||||||||
Balance, beginning of period | $ | - | $ | - | |||||
Initial fair value of debt derivatives at advance dates | 540,084 | - | |||||||
Change in fair value of debt derivatives | 7,802 | - | |||||||
Balance, end of period | $ | 547,886 | $ | - | |||||
EMPLOYEE_RETIREMENT_LIABILITY
EMPLOYEE RETIREMENT LIABILITY | 6 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
EMPLOYEE RETIREMENT LIABILITY [Abstract] | ||||||||||
EMPLOYEE RETIREMENT LIABILITY | 11. EMPLOYEE RETIREMENT LIABILITY | |||||||||
A retirement benefit has been provided to two TEG employees with employment contracts. The retirement payment is based on the individual's ending monthly salary at the date of retirement times a multiple for years of service. This multiple ranges from one month of base salary for two years of service or less, to two and a half times monthly salary for ten or more years of service. The retirement dates under the agreements are 2020 and 2022. No employees had this arrangement at August 31, 2014. The assumed discount rates used to measure the postemployment benefit liability were 4.48% and 4.56% at February 3, 2015, the TEG acquisition date, and 4.54% and 4.63% at February 28, 2015. | ||||||||||
Six Months | Year | |||||||||
Ended | Ended | |||||||||
February 28, | August 31, | |||||||||
2015 | 2014 | |||||||||
Employee retirement obligations, beginning | $ | - | $ | - | ||||||
Liabilities acquired during the period | 998,471 | - | ||||||||
Liabilities settled during the period | - | - | ||||||||
Current period expense (benefit) | (14,308 | ) | - | |||||||
Employee retirement obligations, ending | $ | 984,163 | $ | - | ||||||
ASSET_RETIREMENT_OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
ASSET RETIREMENT OBLIGATIONS [Abstract] | ||||||||||
ASSET RETIREMENT OBLIGATIONS | 12. ASSET RETIREMENT OBLIGATIONS | |||||||||
Our asset retirement obligations relate to the abandonment of oil wells and related surface facilities. The amounts recognized are based on numerous estimates and assumptions, including future retirement costs, inflation rates and credit adjusted risk-free interest rates. | ||||||||||
The following shows the changes in asset retirement obligations for the six months ended February 28, 2015 and the year ended August 31, 2014: | ||||||||||
Six Months | Year | |||||||||
Ended | Ended | |||||||||
February 28, | August 31, | |||||||||
2015 | 2014 | |||||||||
Asset retirement obligations, beginning | $ | 168,110 | $ | 103,299 | ||||||
Liabilities acquired during the period | 1,743,558 | 53,963 | ||||||||
Liabilities settled during the period | - | - | ||||||||
Current period accretion | 9,770 | 10,848 | ||||||||
Asset retirement obligations, ending | $ | 1,921,438 | $ | 168,110 | ||||||
INCOME_TAXES
INCOME TAXES | 6 Months Ended |
Feb. 28, 2015 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 13. INCOME TAXES |
There was no current or deferred income tax expense (benefit) for the three and six months ended February 28, 2015 and 2014. A valuation allowance has been established against net operating losses where it is more likely than not that such losses will expire before they are utilized. Further, at the date of the TEG acquisition, TEG had a net operating loss carryover of approximately $16,905,000 available to offset future income for income tax reporting purposes, which will expire in various years through 2033, if not previously utilized. However, our ability to use the TEG carryover net operating loss may be substantially limited or eliminated pursuant to Internal Revenue Code Section 382, which is applicable when there is a change of control. | |
The deferred tax liability arose on acquisition of TEG, as book basis exceeds tax basis for the net assets acquired. As this difference reverses over time, the associated deferred tax benefit will be recorded in the income statement. | |
The Company knows of no uncertain tax positions and has no unrecognized tax benefits for the six months ended February 28, 2015 or 2014. | |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended | ||||||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | 14. FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. | |||||||||||||||||||||||||||||
The following tables set forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of February 28, 2015 and August 31, 2014. As required by ASC 820, a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between fair value hierarchy levels for the three or six months ended February 28, 2015 and 2014. | |||||||||||||||||||||||||||||
The carrying amounts reported in the balance sheets for cash, accounts receivable, loan receivable, accounts payable and accrued expenses, and loans and notes payable, approximate their fair market value based on the short-term maturity of these instruments. Non-financial assets and liabilities of the Company measured at fair value include long-lived assets (e.g., Oil and Gas properties) that are impaired in a currently reported period. | |||||||||||||||||||||||||||||
The following table presents assets and liabilities that are measured and recognized at fair value on a recurring basis, as of February 28, 2015 and August 31, 2014: | |||||||||||||||||||||||||||||
Assets and liabilities measured at fair | |||||||||||||||||||||||||||||
value on a recurring | Total | ||||||||||||||||||||||||||||
basis at February 28, 2015: | Carrying | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Value | ||||||||||||||||||||||||||
Total Assets | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Overriding royalty interest liability | $ | - | $ | - | $ | 274,710 | $ | 274,710 | |||||||||||||||||||||
Conversion option – long term | - | - | 547,886 | 547,886 | |||||||||||||||||||||||||
Total Liabilities | $ | - | $ | - | $ | 822,596 | $ | 822,596 | |||||||||||||||||||||
Assets and liabilities measured at fair | |||||||||||||||||||||||||||||
value on a recurring | Total | ||||||||||||||||||||||||||||
basis at August 31, 2014: | Carrying | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Value | ||||||||||||||||||||||||||
Total Assets | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Conversion option – short term | $ | - | $ | - | $ | 122,045 | $ | 122,045 | |||||||||||||||||||||
Total Liabilities | $ | - | $ | - | $ | 122,045 | $ | 122,045 | |||||||||||||||||||||
The following table provides a summary of changes in fair value of the Company's Level 3 financial liabilities for the year ended August 31, 2014: | |||||||||||||||||||||||||||||
Six Months | Year | ||||||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||||||
February 28, | August 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Balance, beginning of period | $ | 122,045 | $ | - | |||||||||||||||||||||||||
Initial fair value of debt derivatives at note issuances | 547,502 | 139,051 | |||||||||||||||||||||||||||
Initial fair value of additional derivative created through interest accrual | 2,597 | 2,630 | |||||||||||||||||||||||||||
Extinguished derivative liability | (97.398 | ) | - | ||||||||||||||||||||||||||
Initial fair value of overriding royalty interest liability | 263,759 | - | |||||||||||||||||||||||||||
Mark-to-market at end of period - embedded debt derivatives | (26,860 | ) | (19,636 | ) | |||||||||||||||||||||||||
Accretion of discount on overriding royalty interest liability, equivalent | 10,951 | - | |||||||||||||||||||||||||||
to estimated change in market value | |||||||||||||||||||||||||||||
Balance, end of period | $ | 822,596 | $ | 122,045 | |||||||||||||||||||||||||
Net gain for the period included in earnings as change in fair value | $ | 26,860 | $ | 19,636 | |||||||||||||||||||||||||
There was no gain or loss included in earnings for the six months ended February 28, 2013. | |||||||||||||||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | ||
Feb. 28, 2015 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES | ||
Commitments | |||
Royalties | |||
Oil production from the DEEP Lease is subject to a 1% overriding royalty. Additionally, production is also subject to an aggregate additional 19.92% royalty for total royalties of 20.92%. Revenues are shown net of these royalties. | |||
Oil production from the Tapia and Eureka Assets are subject to overriding royalties totaling approximately 6.14% (based on February 2015 revenue by lease) and 16.67%, respectively. Revenues are shown net of these royalties. | |||
Pursuant to an overriding royalty interest granted to the Secured Convertible Note Payable holder described in Note 9, oil sales from the Tapia oil field are subject to an additional 2.5% or 3.5% overriding royalty interest, depending on the lease. Since this royalty interest was granted in connection with a loan, this royalty interest has been accounted for as a liability (see Note 9). | |||
Operating Agreement | |||
Further, on December 1, 2009, SCNRG entered into an Operating Agreement with Caleco, LLC (“Caleco”) for a term equal to the life of the DEEP Lease wells. As the operator, Caleco incurs production and other costs, which are subsequently billed to SCNRG for its share through a joint interest billing process; and the operator distributes to SCNRG its share of revenue received from production, less royalties and NPI obligations. All expenses and revenue presented by the operator represent the pro rata share of the revenue earned and expenses incurred. In accordance with the terms of the agreement, the operator is entitled to a fee for services but has instead elected to bill SCNRG based on actual time and materials. SCNRG increased its working interest in the DEEP Lease from 66.67% to 100.0% during the year ended August 31, 2014; Caleco continues to operate the DEEP Lease on SCNRG's behalf during a transitional period until SCNRG qualifies with the regulatory agency as an operator. | |||
Common Shares | |||
On October 10, 2014, Hawker authorized an amendment (the “Amendment”) to the Option Agreement pursuant to which Hawker acquired Hawker Energy (Rincon), LLC (“HERLLC”) on January 1, 2014. Under the original terms of the Option Agreement, Messrs. Katic and Moore were entitled to, in the aggregate, up to 33,000,000 additional shares of our common stock upon the consummation of certain potential follow-on acquisition transactions. The Amendment waived all of the follow-on transaction requirements and authorized the immediate issuance to Messrs. Katic and Moore of the full 33,000,000 shares (16,500,000 each). Of those shares, we held 19,000,000 shares in escrow, to be released as follows: (i) 10,000,000 shares upon completion of the acquisition of the assets of TEG, which shares were released from escrow following completion of that acquisition in February 2015 (see Note 4) and (ii) 9,000,000 shares upon completion, on or before December 31, 2017, of any one of the transactions evaluated by HERLLC, our wholly-owned subsidiary, prior to its reorganization with Hawker, including a transaction resulting in Hawker ownership of oil and gas lease interests in any one of the following unique oil fields: | |||
(a) | Cat Canyon (leases Tognazzini, Wickenden, Los Alamos, GWP, and those immediately adjacent to, in each case, in Santa Barbara County); | ||
(b) | Santa Maria (T 11N, R 36W extending southeast through T9N R33W in Santa Barbara County); | ||
(c) | Casmalia (leases Tompkins, Peshine, and those immediately adjacent to, in each case, in Santa Barbara County); | ||
(d) | North Lost Hills (Sections 12 & 13, T25S, R19E, and Sections 7 & 18, T25S, R 20E, totaling 1,500 acres in Kern County CA); | ||
(e) | Maricopa (McFarland and Jameson leases totaling 40 acres in Kern County); | ||
(f) | Pine Meadows (Section 1 Township 31 South Range 22E in Kern County); or | ||
(g) | Torrance (Joughin and South Torrance Units totaling 900 acres in Los Angeles County). | ||
Waiver of the Potential Follow-On Transaction requirements and the immediate issuance of the remaining shares was done to simplify our common shareholding structure and share count and to assist in our capital raising efforts. | |||
With respect to 14,000,000 shares of our common stock that were issued as a result of the Amendment, an equity compensation expense of $1,011,500 recorded in the three months ended November 30, 2014, based on the fair value of the shares at the date of issuance. With respect to the 19,000,000 shares of our common stock that are in escrow, an equity compensation expense of $19,000 was initially recorded in October 2014 based on the par value of the shares at the date of issuance. Total expense of $1,030,500 was recorded in the three months ended November 30, 2014. On release of 10,000,000 shares of our common stock in February 2015 as described above, an additional expense of $670,090 was recorded, bringing the fiscal year-to-date expense to $1,700,590. As and when further shares are subsequently released from escrow, a further expense will be recorded based on the fair value of the 9,000,000 shares (less amounts previously expensed based on par value) concurrently with consummation of the applicable follow-on transaction. None of these amounts are considered for accounting purposes to be incremental consideration for our acquisition of HERLLC. | |||
Contingencies | |||
As of February 28, 2015 and August 31, 2014, there were no known environmental or other regulatory matters related to our operations that were reasonably expected to result in a material liability to us. We are subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the owners for the cost of pollution cleanup resulting from operations and subject the owners to liability for pollution damages. In some instances, the operator may be directed to suspend or cease operations in the affected area. | |||
EQUITY
EQUITY | 6 Months Ended | ||||||||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||||||||
EQUITY [Abstract] | |||||||||||||||||||||||||||||||
EQUITY | 16. EQUITY | ||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||
During the six months ended February 28, 2015: | |||||||||||||||||||||||||||||||
We issued an aggregate of 500,000 "Units" to three investors in consideration of an aggregate of $50,000 in cash received prior to August 31, 2014, and shown as common stock payable as of August 31, 2014. | |||||||||||||||||||||||||||||||
In addition, we issued an aggregate of 1,150,000 Units to two investors for $115,000. | |||||||||||||||||||||||||||||||
No commissions were paid or payable. Other transaction costs were $80. The price of each Unit was $0.10. Each Unit comprised one share of our common stock, together with a warrant to acquire an additional one-half share of our common stock on payment of $0.20 per share. The warrants expire five years from each closing date. | |||||||||||||||||||||||||||||||
In addition, during the six months ended February 28, 2015, we issued: | |||||||||||||||||||||||||||||||
1,305,700 shares on conversion of $130,569 in accounts and bonus payable into common stock. | |||||||||||||||||||||||||||||||
33,000,000 shares pursuant to the HERLLC Amendment described in Note 15. | |||||||||||||||||||||||||||||||
Shares and warrants issued in the TEG Acquisition are set out in Note 4. See also Note 18, Subsequent Events. | |||||||||||||||||||||||||||||||
Related party transactions are set forth in Note 17. | |||||||||||||||||||||||||||||||
Shares Of Common Stock Potentially Issuable Pursuant To Warrants, Convertible Notes Payable And Options | |||||||||||||||||||||||||||||||
Pursuant to warrants issued in our private placements of securities from January 10, 2014 through February 28, 2015, up to 6,584,210 shares of our common stock would be issuable upon payment to us of $0.20 per share. The warrants expire five years from the date of each private placement. | |||||||||||||||||||||||||||||||
Pursuant to warrants issued in February 2015 on conversion of notes payable into units of common stock and warrants on closing of the TEG acquisition, up to 1,623,829 shares of our common stock would be issuable upon payment to us of $0.25 per share. The warrants expire February 3, 2020. | |||||||||||||||||||||||||||||||
Up to 9,847,290 shares of common stock could be issued pursuant to the convertible notes payable described in Notes 8 and 9, if investors elect to convert some or all of their principal and interest, with the number of shares issuable on conversion computed at a rate of $0.10 per share. | |||||||||||||||||||||||||||||||
On May 14, 2014, 5,950,000 common stock options were issued to our officers and other key consultants. | |||||||||||||||||||||||||||||||
Each option has a life of 10 years and a strike price of $0.10 per share. One million stock options vested on December 15, 2014, with the balance of 4,950,000 stock options vesting one-third on each of May 13, 2015, 2016 and 2017. There are no other options outstanding. | |||||||||||||||||||||||||||||||
All options other than a one million share option grant were granted pursuant to the 2014 Stock Plan approved by written consent of a majority of our stockholders on March 18, 2014, which authorized 15% of our outstanding shares of common stock to be available for grant in the form of options or stock purchase rights. At February 28, 2015, 15% of our outstanding common stock is 12,019,560 shares, of which we have granted 4,950,000 stock options as stated above. One million stock options were granted outside of the 2014 Stock Plan. | |||||||||||||||||||||||||||||||
The fair value of each stock option award was estimated on the date of grant using the Black-Scholes option pricing method. Compensation costs related to the options granted are recognized on a straight-line basis over the vesting period. The expected life assumption was 10 years, the same as the contract life, as we do not have historical data upon which to base an expected term assumption. No forfeitures were assumed, as we have no historical data. Expected volatility was based on historical volatility of our common stock. The risk-free interest rate was derived from the U.S. Treasury yields in effect at the time of grant and the dividend yield was zero, based on historical experience and expected future changes. | |||||||||||||||||||||||||||||||
Equity compensation expense relating to stock options was $33,283 and $90,962 for the three and six months ended February 28, 2015. There was no equity compensation expense for the three and six months ended February 28, 2014. | |||||||||||||||||||||||||||||||
The following is a summary of the Company's stock option activity. | |||||||||||||||||||||||||||||||
Weighted- | |||||||||||||||||||||||||||||||
Weighted- | Average | ||||||||||||||||||||||||||||||
Average | Remaining | Aggregate | |||||||||||||||||||||||||||||
Exercise | Contractual | Intrinsic | |||||||||||||||||||||||||||||
Options | Price | Life (Years) | Value | ||||||||||||||||||||||||||||
Outstanding at August 31, 2014 | 5,950,000 | $ | 0.1 | 9.7 | $ | 410,632 | |||||||||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||||||||
Forfeited | - | - | - | - | |||||||||||||||||||||||||||
Outstanding at February 28, 2015 | 5,950,000 | $ | 0.1 | 9.1 | $ | 410,632 | |||||||||||||||||||||||||
Vested and exercisable at February 28, 2015 | 1,000,000 | $ | 0.1 | 9.1 | $ | 69,014 | |||||||||||||||||||||||||
As of February 28, 2015, there were 4,950,000 unvested stock options and unrecognized stock option expense of $251,000, which is expected to be recognized over 2.2 years. The following table summarizes the information about stock options outstanding and exercisable at February 28, 2015. | |||||||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||||||
Weighted- | Weighted | Weighted | |||||||||||||||||||||||||||||
Average | Average | Average | |||||||||||||||||||||||||||||
Number of | Remaining | Exercise | Number of | Exercise | |||||||||||||||||||||||||||
Shares | Life (Years) | Price | Shares | Price | |||||||||||||||||||||||||||
5,950,000 | 9.1 | $ | 0.1 | 1,000,000 | $ | 0.1 | |||||||||||||||||||||||||
Non-Controlling Interest | |||||||||||||||||||||||||||||||
We report in these unaudited interim financial statements non-controlling interest in Tapia Holdings pursuant to paragraph ASC No. 810-10-65-1. The non-controlling interest of $145,000 reported on the balance sheet as of February 28, 2015, represents the non-controlling interest holders' proportionate share of the equity of the Tapia Holdings. | |||||||||||||||||||||||||||||||
The final form of acquisition of TEG was Hawker acquiring 100% of the stock of TEG, rather than an earlier proposed structure of Tapia Holdings acquiring an 80% membership interest in a newly-formed LLC which would hold the TEG Assets. As a result of the transaction structure changing, Tapia Holdings no longer holds any assets and it is expected that the non-controlling interest in Tapia Holdings will be restructured in the near term, the form of which has not yet been agreed. | |||||||||||||||||||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Feb. 28, 2015 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS |
The following information sets forth related party transactions, being transactions with: | |
Mr. Kristian Andresen is a director of Hawker and a significant shareholder. Until October 25, 2013, he was also our CEO, and from October 25, 2013, until July 17, 2014, he was Secretary of Hawker. Mr. Andresen has been actively providing services to Hawker since October 25, 2013. | |
Mr. Darren Katic is a director and Chief Executive Officer and Chief Financial Officer of Hawker. He was a member of SCNRG, which we acquired on October 25, 2013, and at which point Mr. Katic became a director, officer and a significant shareholder of Hawker. | |
Manhattan Holdings, LLC (“Manhattan”) was a member of SCNRG, which Hawker acquired on October 25, 2013, at which point Manhattan became a significant shareholder of Hawker. | |
Mr. Charles Moore was a managing member of HERLLC until Hawker acquired his interest on January 1, 2014, at which point he became a significant shareholder of Hawker. Mr. Moore has been actively providing services to Hawker since that date. | |
Mr. Gerald Tywoniuk was a member of SCNRG, which Hawker acquired on October 25, 2013, at which point he became a significant shareholder of Hawker. Mr. Tywoniuk has been actively providing services to Hawker since that date. | |
HERLLC | |
On January 1, 2014, Hawker exercised its option to acquire all of the membership interests in HERLLC from Mr. Katic and Mr. Moore (collectively the “HERLLC Sellers”), as described in Note 15. Hawker issued 3,000,000 shares of our common to the HERLLC Sellers as consideration for the acquisition, 1,500,000 shares to each HERLLC Seller. Hawker also assumed net liabilities of $135,199, including $29,625 owing to Mr. Katic. | |
The HERLLC option was originally entered into with Hawker on October 15, 2013 and amended on November 20, 2013 to (a) extend the term of the option, (b) revise the option consideration payable upon consummation of certain transactions described in the Agreement and (c) provide for additional option consideration in the event of the consummation of certain transactions not previously contemplated by the parties. On October 10, 2014, the Board of Hawker waived all of the follow-on transaction requirements and authorized the immediate issuance to Messrs. Katic and Moore of 33,000,000 shares (16,500,000 each). Of those shares, as of February 28, 2015, we hold 9,000,000 shares in escrow, to be released in accordance with the provisions described in Note 15. | |
Loan Payable To Related Parties, Short Term | |
The components of $470,429 of loans payable to related parties, short term, are disclosed in Note 7. Interest expense on such loans was $9,447 and $16,227, respectively, for the three and six months ended February 28, 2015 and $0 for the same period in 2014. | |
Loans Payable To Related Parties, Long Term | |
SCNRG received various loans from its former members from its inception totaling $89,833 as of August 31, 2013: Mr. Katic ($38,500), Manhattan ($38,500) and Mr. Tywoniuk ($12,833). Each loan was originally unsecured, non-interest bearing and due on demand. On September 18, 2013, each loan was formalized through the issuance of an amended and restated promissory note to each former member. The amended and restated promissory notes were unsecured, bore interest at a rate of 1.66% per annum and matured no later than September 18, 2018. The unpaid principal and interest were payable upon the earlier of their maturity or upon the issuance of new debt or equity securities in a transaction or series of transactions resulting in aggregate gross proceeds to Hawker of a minimum of $5 million. Hawker assumed these loans payable upon its acquisition of SCNRG on October 25, 2013. On April 9, 2014, the related parties agreed to convert the short- and long-term loans payable to related parties into common stock and warrants on the same terms as the unit offering described in Note 16. | |
Interest expense on such loans was $0 for the three and six months ended February 28, 2015 and $368 and $739 for the three and six months ended February 28, 2014 respectively. | |
Convertible Notes Payable | |
From July 17, 2015 until February 3, 2015, pursuant to a convertible note payable, we owed a relative of Mr. Darren Katic, $100,000 plus accrued interest, all as described in Note 8. As a result of the TEG Acquisition, this convertible note payable converted into Conversion Units. | |
Interest expense on this convertible note payable was $2,104 and $5,096, respectively, for the three and six months ended February 28, 2015. | |
Note Payable | |
See Note 9 for a description of a note payable to a relative of Mr. Katic. | |
Unit Issuances | |
As part of the common stock payable amounts outstanding on August 31, 2014 as described in Note 15, $20,000 was received from each of Messrs. Katic and Tywoniuk, for which 200,000 Units were issued to each during the six months ended February 28, 2015. The price of each Unit was $0.10. Each Unit was comprised of one share of our common stock, together with a warrant to acquire an additional one-half share of our common stock on payment of $0.20 per share. The warrants expire five years from the closing date. | |
Other | |
A portion of the non-controlling interest in Tapia Holdings is held by Mr. Moore, being $45,000 out of the $145,000 of capital received. See Note 16. | |
On behalf of a company controlled by Mr. Katic, the Company has been paying rent to a third party for its office space, beginning January 1, 2014. No formal assumption agreement has been completed to assign the leases with the landlord from Mr. Katic's company to Hawker. Mr. Katic provided a personal guarantee to the landlord. For the three and six months ended February 28, 2015, these payments totaled $9,617 and $19,233 respectively. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Feb. 28, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS |
As a result of our acquisition of TEG, TEG is no longer affiliated with Sefton or TEGMC and, accordingly, Sefton and TEGMC requested that BOTW release them from any further liability under the Credit Agreement as Borrowers. On March 18, 2015, we entered into a Sixth Amendment to Forbearance Agreement (“Sixth Amendment”) among Sefton, TEG, TEGMC, Hawker and BOTW. Under the Sixth Amendment, BOTW released Sefton and TEGMC from all of their respective obligations under the Credit Agreement (other than any surviving obligations in respect of indemnification) and removed Sefton and TEGMC as Borrowers under the Credit Agreement. As and in consideration of that release, BOTW (i) was paid $400,000 by Sefton, which was applied against the amount outstanding under the loan from BOTW to TEG, and (ii) received a Collateral Assignment of Note, executed by Sefton in favor of BOTW and acknowledged and agreed to by Hawker, collaterally assigning to BOTW a Promissory Note dated March 18, 2015 in the principal amount of $400,000, issued by Hawker in favor of Sefton (the “Hawker Note”). In addition, under the terms of the Sixth Amendment, Sefton agreed to return to Hawker for cancellation (a) its Warrant to purchase up to an additional 5,000,000 shares of our common stock for $0.25 per share (which was issued as part of our acquisition of TEG), and (b) 1,500,000 shares of our common stock. The Hawker Note bears simple interest at the rate of 6% per annum and is due on the earlier to occur of (i) March 18, 2018, or (ii) expiration of certain of BOTW's covenants to forbear in exercising its rights under the Credit Agreement. Upon payment in full of the loan obligations to BOTW, the Hawker Note will be returned to Hawker for cancellation. | |
On January 16, 2015, a relative of Mr. Katic advanced $50,000 to Hawker, and made further advances of $20,000 on March 19, 2015, and $100,000 on March 25, 2015, all of which were documented in a note payable on the latter date. See Note 9 for a complete description. | |
On June 10, 2015, TEG sold an easement underlying a third-party owned cell tower on its Tapia Canyon oil field property, and assigned the associated rental contract. Gross proceeds were $175,000. After deducting property tax payments and prorated rent, net proceeds of $157,792 were used to pay down the loan to BOTW. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Feb. 28, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | Basis Of Presentation |
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information and reporting. | |
The unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K, as amended, for the year ended August 31, 2014, which contains the consolidatated financial statements and notes thereto for Hawker. The Company's fiscal year-end is August 31st. | |
These consolidated financial statements are unaudited; however, in the opinion of management, they reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal recurring nature unless disclosed otherwise. These consolidated financial statements, including notes, have been condensed and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The interim results for the three and six months ended February 28, 2015, are not necessarily indicative of results for the full fiscal year. | |
There have been no significant changes in the Company's significant accounting policies for the six months ended February 28, 2015, as compared to the significant accounting policies described in the Annual Report on Form 10-K, as amended, for the year ended August 31, 2014 and in the Form 10-Q/A for the three months ended November 30, 2014, except for the addition of the following: | |
Overriding Royalty Interest Liability | |
Pursuant to an overriding royalty interest granted effective January 2015 to the Secured Convertible Note Payable holder, oil sales from the Tapia oil field are subject to an additional 2.5% or 3.5% overriding royalty interest, depending on the lease. Since this royalty interest was granted in connection with a loan, the loan proceeds were bifurcated and this royalty interest has been accounted for as a separate liability. Each reporting period, the liability's estimated fair value is remeasured, with the change in fair value being reported in the consolidated statement of operations. Fair value determinations require estimates of future oil prices, reserves, oil sales and appropriate discount rates. | |
Principles of Consolidation | Principles Of Consolidation |
The acquisition of SCNRG by Hawker on October 25, 2013, has been accounted for as a reverse acquisition whereby SCNRG is the accounting acquirer effectuating a recapitalization of Hawker. Therefore, our condensed consolidated financial statements include the historic accounts of SCNRG, and consolidated with Hawker's beginning October 25, 2013. | |
On January 1, 2014, we acquired all of the membership interests of Hawker Energy, LLC, which has a wholly-owned subsidiary, Punta Gorda Resources, LLC. Hawker Energy, LLC changed its name to Hawker Energy (Rincon), LLC on October 22, 2014. Our condensed consolidated financial statements include the accounts of these entities beginning January 1, 2014. | |
On February 3, 2015, we acquired 100% of the stock of TEG Oil & Gas U.S.A., Inc., (“TEG”), and our condensed consolidated financial statements include the accounts of this entity from this date (see Note 4). | |
All significant intercompany balances and transactions have been eliminated. | |
Use of Estimates | Use Of Estimates |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates included in the financial statements are: (1) purchase price allocations; (2) depreciation and depletion; (3) accrued assets and liabilities; (4) asset retirement obligations; (5) net profits interest payable; (6) conversion option values; (7) overriding royalty interest liability; and (8) stock-based compensation. Recorded amounts are based on estimates of asset values, oil reserves, asset retirement costs, asset lives and equity values. By their nature, these estimates including the estimates of future prices and costs, and the related future cash flows are subject to measurement uncertainty. The impact in the consolidated financial statements of future periods could be material. Although management believes these estimates are reasonable, changes in facts and circumstances or discovery of new information may result in revised estimates. Actual results could differ from those estimates. | |
New Accounting Pronouncements | New Accounting Pronouncements |
We consider the applicability and impact of all accounting standard updates (ASUs). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. | |
In May 2014, the FASB issued ASU 2014-9, Revenue From Contracts With Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to receive in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The new guidance is effective for the interim and annual periods beginning after December 15, 2016; early adoption is not permitted. We are currently assessing the impact that this standard will have on our consolidated financial statements. | |
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which is intended to define management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. Under GAAP, financial statements are prepared based on the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, GAAP lacks guidance about management's responsibility to evaluate whether there is substantial doubt about the organization's ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an organization's management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The new guidance is effective for the interim and annual periods beginning after December 15, 2016; early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company has not conducted its analysis to determine whether it will adopt the new standard early or not. | |
ACQUISITION_OF_TEG_OIL_GAS_USA1
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Tables) (TEG Oil & Gas, Inc. [Member]) | 6 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
TEG Oil & Gas, Inc. [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Schedule of Consideration Transferred and Liabilities Assumed, and the Fair Value of Assets Acquired | Purchase price: | ||||||||||||
Fair value of Hawker's common stock issued (1) | $ | 201,027 | |||||||||||
Fair value of common stock warrant issued by Hawker (2) | 330,000 | ||||||||||||
Loan made by Hawker group to TEG prior to closing | 1,663,227 | ||||||||||||
Total purchase price | 2,194,254 | ||||||||||||
Estimated fair value of liabilities assumed: | |||||||||||||
Loan payable to Bank of the West, plus accrued interest | 4,011,882 | ||||||||||||
Accounts payable | 842,890 | ||||||||||||
Accrued liabilities | 83,063 | ||||||||||||
Asset retirement obligation | 1,743,558 | ||||||||||||
Retirement liability | 998,471 | ||||||||||||
Deferred income taxes | 3,207,000 | ||||||||||||
Amount attributable to liabilities assumed | 10,886,864 | ||||||||||||
Total purchase price and assumed liabilities | $ | 13,081,118 | |||||||||||
Estimated fair value of assets acquired: | |||||||||||||
Cash | $ | 23,344 | |||||||||||
Other current assets | 7,025 | ||||||||||||
Fixed assets – operating machinery and equipment | 2,069,792 | ||||||||||||
Identifiable intangible asset | 175,000 | ||||||||||||
Oil properties - proven, full cost method | 10,805,957 | ||||||||||||
Amount attributable to assets acquired | $ | 13,081,118 | |||||||||||
-1 | 3,000,000 shares of Hawker common stock at $0.067 per share, being the estimated fair value implied by the sale of Units described in Note 16. Our common stock is considered “thinly-traded” due to the extremely low level of trading activity (many days have no volume or volume less than $1,000 in value), the estimated value of the common stock based on cash sales to third-parties is significantly more meaningful in regards to fair value. | ||||||||||||
-2 | 5 year warrant issued for 5 million shares of Hawker common stock at an exercise price of $0.25 per share, fair value based on using the Black-Scholes Option Pricing Model. | ||||||||||||
Schedule of unaudited pro forma combined results of operations | |||||||||||||
Six Months Ended February 28, | |||||||||||||
2015 | 2014 | ||||||||||||
Revenues | $ | 1,002 | $ | 2,413 | |||||||||
Net (loss) income | $ | (3,024 | ) | $ | 20 | ||||||||
Net loss per share: | |||||||||||||
Basic and diluted | $ | (0.04 | ) | $ | - |
LOANS_PAYABLE_TO_RELATED_PARTI1
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM [Abstract] | |||||||||
Schedule of loans payable to related parties, short term | February 28, | August 31, | |||||||
2015 | 2014 | ||||||||
Darren Katic | $ | 242,300 | $ | 161,000 | |||||
Manhattan Holdings, LLC | 90,000 | 60,000 | |||||||
Gerald Tywoniuk | 60,000 | - | |||||||
Kristian Andresen | 56,025 | - | |||||||
Total short-term loans | 448,325 | 221,000 | |||||||
Accrued interest payable | 22,104 | 5,876 | |||||||
Loans payable to related parties, short term | $ | 470,429 | $ | 226,876 |
CONVERTIBLE_NOTES_PAYABLE_SHOR1
CONVERTIBLE NOTES PAYABLE, SHORT TERM (Tables) | 6 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
CONVERTIBLE NOTES PAYABLE, SHORT TERM [Abstract] | |||||||||||||
Summary of convertible notes payable, short term | Issue | Maturity | February 28, | August 31, | |||||||||
Date | Date | 2015 | 2014 | ||||||||||
CNP 1 | $ | - | $ | 350,000 | |||||||||
(1) (2) (3)(7) | 25-Jun-14 | 30-Nov-14 | |||||||||||
CNP 2 | May 30, 2014 | November 30, 2014 | - | 250,000 | |||||||||
(1) (2) (3) | |||||||||||||
CNP 3 | July 17, 2014 | June 30, 2015 | - | 100,000 | |||||||||
(1) (3) (4) | |||||||||||||
CNP 4 | July 17, 2014 | July 10, 2015 | - | 100,000 | |||||||||
(1) (2) (3) (4) (5) | |||||||||||||
CNP 5 | May 13, 2014 | May 13, 2016 | 50,000 | 50,000 | |||||||||
-6 | |||||||||||||
CNP 6 | July 25, 2014 | July 25, 2015 | - | 50,000 | |||||||||
(1) (2) (3) (4) | |||||||||||||
CNP 7 | August 28, 2014 | July 25, 2015 | - | 30,000 | |||||||||
(1) (2) (3) (4) | |||||||||||||
CNP 8 | September 26, 2014 | September 26, 2015 | - | - | |||||||||
(1)(3)(4)(8) | |||||||||||||
CNP 9 | November 3, 2014 | May 3, 2015 | - | - | |||||||||
(1)(2)(3)(7)(8) | |||||||||||||
50,000 | 930,000 | ||||||||||||
Less unamortized discount (7) | - | (89,149 | ) | ||||||||||
Accrued interest payable | 4,784 | 21,599 | |||||||||||
Convertible notes payable, short term | $ | 54,784 | $ | 862,450 | |||||||||
-1 | Convertible at any time at the option of the investor into “Conversion Units.” Each Conversion Unit consists of one share of common stock of Hawker and one warrant to purchase one-half share of common stock of Hawker at an exercise price of $0.25 per share. The number of Conversion Units into which the note is convertible is computed by dividing all of the then outstanding principal and accrued interest under the note by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Each warrant has a five-year life from the date the convertible note payable was issued. In the event Hawker sells common stock for less than $0.10 per share, the conversion rate for CNP 1 and 9 shall be adjusted to that price. In the case of CNP 1 and 2, the notes were amended September 18, 2014, to limit the conversion of a part or the entire convertible note payable at any one time to a maximum beneficial ownership in Hawker of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion. CNP 9, with a face amount of $25,000 is similarly limited to a 4.99% maximum beneficial ownership. | ||||||||||||
-2 | Hawker granted a security interest to the investor in all of Hawker's assets. | ||||||||||||
-3 | The proceeds were required to be used solely for the purpose of allowing Tapia Holdings to make advances to TEG under the terms of the secured subordinated loan receivable described in Note 5. Any repayment of such advances by TEG to Tapia Holdings must be used by us to immediately first repay convertible notes payable to the holder of CNP 1, 2 and 3, and second to repay other convertible notes payable pro rata. | ||||||||||||
-4 | Conversion of unpaid principal into Conversion Units pursuant to the terms in (1) above was mandatory upon Hawker closing the TEG Acquisition in February 2015 as described in Note 4. Conversion of unpaid interest into Conversion Units was at the election of Hawker, which election Hawker made. | ||||||||||||
-5 | The holder is related to Darren Katic, who is an officer, director and significant shareholder. | ||||||||||||
-6 | Unpaid principal and accrued interest is convertible at any time at the option of the holder into common shares in an amount computed by dividing the amount converted by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Repayment of the convertible note payable is required on collection of the secured subordinated loan receivable described in Note 5 if earlier than the maturity date above. As Hawker expected to receive repayment on the secured subordinated loan receivable or close on the TEG acquisition within one year, this convertible note payable was classified as a short-term liability. | ||||||||||||
-7 | The unamortized discount relates to CNP 1 ($350,000) and CNP 9 ($25,000). This is described further immediately below. | ||||||||||||
(8) | Original principal amounts were $25,000 for CNP 8 and $25,000 for CNP 9. |
LONG_TERM_DEBT_Tables
LONG TERM DEBT (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
LONG TERM DEBT [Abstract] | |||||||||
Schedule of long term debt | February 28, | August 31, | |||||||
2015 | 2014 | ||||||||
Convertible note payable, long term | $ | 134,127 | $ | - | |||||
Overriding royalty interest liability | 274,710 | - | |||||||
Net profits interest payable | 159,322 | 169,104 | |||||||
Note payable and other | 64,414 | - | |||||||
Total long term debt | 632,573 | 169,104 | |||||||
Less current portion | (208,346 | ) | (20,065 | ) | |||||
Long term debt, net of current portion | $ | 424,227 | $ | 149,039 | |||||
Schedule of secured convertible note payable | Six Months | Year | |||||||
Ended | Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
Secured Convertible Note Payable, beginning of period | $ | - | $ | - | |||||
Roll over prior advances into new note | 625,000 | - | |||||||
Capitalization of interest at Jan. 1, 2015 | 39,896 | - | |||||||
Additional advances in January and February 2015 | 250,000 | - | |||||||
Total advances | 914,896 | - | |||||||
Discount created by embedded derivative (conversion option) | (540,084 | ) | - | ||||||
Discount created by granting of overriding royalty interest | (263,759 | ) | - | ||||||
Total discount | (803,843 | ) | - | ||||||
Amortization of discount | 8,025 | - | |||||||
Unamortized discount | (795,818 | ) | - | ||||||
Accrued interest payable | 15,049 | - | |||||||
Carrying value of Secured Convertible Note Payable, end of period | 134,127 | - | |||||||
Less current portion | (113,910 | ) | - | ||||||
Secured Convertible Note Payable, long term portion, end of period | $ | 20,217 | $ | - | |||||
Schedule of assumptions used by management to determine the fair value of the ORRI Liability | |||||||||
Oil price | $65/barrel | ||||||||
Resulting reserves were included as follows: | |||||||||
Proved developed producing | 100% | ||||||||
Proved developed non-producing | 50% | ||||||||
Proved undeveloped | 0% | ||||||||
Discount rate | 35% | ||||||||
Schedule of ORRI Liability | Six Months | Year | |||||||
Ended | Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
ORRI Liability, beginning of period | $ | - | $ | - | |||||
ORRI granted to holder of long-term convertible note payable | 263,759 | - | |||||||
Current period accretion | 10,951 | - | |||||||
Change in estimated liability | - | - | |||||||
Payments made | - | - | |||||||
ORRI Liability, end of period | 274,710 | - | |||||||
Less: current portion | (54,542 | ) | $ | - | |||||
ORRI Liability, long-term portion | $ | 220,168 | $ | - | |||||
Schedule of Changes in NPI Liability | Six Months Ended | Year Ended | |||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
NPI liability, beginning of period | $ | 169,104 | $ | 124,597 | |||||
Liabilities assumed in connection with | - | 58,847 | |||||||
acquisition of additional DEEP Lease | |||||||||
working interests | |||||||||
Current period accretion | 8,086 | 14,104 | |||||||
Payments made | (17,868 | ) | (28,444 | ) | |||||
NPI liability, end of period | 159,322 | 169,104 | |||||||
Less: current portion | (21,089 | ) | (20,065 | ) | |||||
NPI liability, long-term portion | $ | 138,233 | $ | 149,039 | |||||
Schedule of Total Note Payable and Other | Six Months | Year | |||||||
Ended | Ended | ||||||||
February 28, | August 31, | ||||||||
2015 | 2014 | ||||||||
Balance, beginning of period | $ | - | $ | - | |||||
Note payable advance | 50,000 | - | |||||||
Less unamortized discount | (18,704 | ) | - | ||||||
31,296 | - | ||||||||
Installment sales contract liability | 33,118 | - | |||||||
Total note payable and other | 64,414 | - | |||||||
Less current portion | (18,805 | ) | - | ||||||
Note payable and other, long term portion, end of period | $ | 45,609 | $ | - |
CONVERSION_OPTION_Tables
CONVERSION OPTION (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Long Term Secured Convertible Note Payable [Member] | |||||||||
Conversion options [Line Items] | |||||||||
Summary of changes in fair value of the conversion option | Six Months | Year | |||||||
Ended | |||||||||
February 28, | Ended | ||||||||
2015 | August 31, | ||||||||
2014 | |||||||||
Balance, beginning of period | $ | - | $ | - | |||||
Initial fair value of debt derivatives at advance dates | 540,084 | - | |||||||
Change in fair value of debt derivatives | 7,802 | - | |||||||
Balance, end of period | $ | 547,886 | $ | - | |||||
Two advances made under the note [Member] | |||||||||
Conversion options [Line Items] | |||||||||
Schedule of assumptions used in determining fair value of the embedded derivative using the Black-Scholes Pricing Model | Dividend yield: | 0 and 0 | % | ||||||
Volatility | 236 and 252 | % | |||||||
Risk free rate: | 0.51 and 0.63 | % | |||||||
New Long-term Secured Convertible Note Payable [Member] | |||||||||
Conversion options [Line Items] | |||||||||
Schedule of assumptions used in determining fair value of the embedded derivative using the Black-Scholes Pricing Model | Dividend yield: | 0 | % | ||||||
Volatility | 252 | % | |||||||
Risk free rate: | 0.63 | % | |||||||
Short Term Secured Convertible Notes Payable [Member] | |||||||||
Conversion options [Line Items] | |||||||||
Summary of changes in fair value of the conversion option | Six Months | Year | |||||||
Ended | |||||||||
February 28, | Ended | ||||||||
2015 | August 31, | ||||||||
2014 | |||||||||
Balance, beginning of period | $ | 122,045 | $ | - | |||||
Initial fair value of debt derivatives at advance dates | 7,418 | 139,051 | |||||||
Initial fair value of debt derivative on accrual of interest | 2,597 | 2,630 | |||||||
Change in fair value of debt derivatives | (34,662 | ) | (19,636 | ) | |||||
Extingushment of conversion option | (97,398 | ) | - | ||||||
Balance, end of period | $ | - | $ | 122,045 | |||||
Short Term Secured Convertible Notes Payable 1 and 2 [Member] | |||||||||
Conversion options [Line Items] | |||||||||
Schedule of assumptions used in determining fair value of the embedded derivative using the Black-Scholes Pricing Model | Dividend yield: | 0 and 0 | % | ||||||
Volatility | 178 and 200 | % | |||||||
Risk free rate: | 0.05 and 0.02 | % | |||||||
New Short-term Secured Convertible Note Payable [Member] | |||||||||
Conversion options [Line Items] | |||||||||
Schedule of assumptions used in determining fair value of the embedded derivative using the Black-Scholes Pricing Model | Dividend yield: | 0 | % | ||||||
Volatility | 214 | % | |||||||
Risk free rate: | 0.025 | % |
EMPLOYEE_RETIREMENT_LIABILITY_
EMPLOYEE RETIREMENT LIABILITY (Tables) | 6 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
EMPLOYEE RETIREMENT LIABILITY [Abstract] | ||||||||||
Schedule of employee retirement obligations | Six Months | Year | ||||||||
Ended | Ended | |||||||||
February 28, | August 31, | |||||||||
2015 | 2014 | |||||||||
Employee retirement obligations, beginning | $ | - | $ | - | ||||||
Liabilities acquired during the period | 998,471 | - | ||||||||
Liabilities settled during the period | - | - | ||||||||
Current period expense (benefit) | (14,308 | ) | - | |||||||
Employee retirement obligations, ending | $ | 984,163 | $ | - |
ASSET_RETIREMENT_OBLIGATIONS_T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
ASSET RETIREMENT OBLIGATIONS [Abstract] | ||||||||||
Schedule of Changes in Asset Retirement Obligation | Six Months | Year | ||||||||
Ended | Ended | |||||||||
February 28, | August 31, | |||||||||
2015 | 2014 | |||||||||
Asset retirement obligations, beginning | $ | 168,110 | $ | 103,299 | ||||||
Liabilities acquired during the period | 1,743,558 | 53,963 | ||||||||
Liabilities settled during the period | - | - | ||||||||
Current period accretion | 9,770 | 10,848 | ||||||||
Asset retirement obligations, ending | $ | 1,921,438 | $ | 168,110 |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair | ||||||||||||||||||||||||||||
value on a recurring | Total | ||||||||||||||||||||||||||||
basis at February 28, 2015: | Carrying | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Value | ||||||||||||||||||||||||||
Total Assets | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Overriding royalty interest liability | $ | - | $ | - | $ | 274,710 | $ | 274,710 | |||||||||||||||||||||
Conversion option – long term | - | - | 547,886 | 547,886 | |||||||||||||||||||||||||
Total Liabilities | $ | - | $ | - | $ | 822,596 | $ | 822,596 | |||||||||||||||||||||
Assets and liabilities measured at fair | |||||||||||||||||||||||||||||
value on a recurring | Total | ||||||||||||||||||||||||||||
basis at August 31, 2014: | Carrying | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Value | ||||||||||||||||||||||||||
Total Assets | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Conversion option – short term | $ | - | $ | - | $ | 122,045 | $ | 122,045 | |||||||||||||||||||||
Total Liabilities | $ | - | $ | - | $ | 122,045 | $ | 122,045 | |||||||||||||||||||||
Summary of changes in fair value of the Company's Level 3 financial liabilities | Six Months | Year | |||||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||||||
February 28, | August 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Balance, beginning of period | $ | 122,045 | $ | - | |||||||||||||||||||||||||
Initial fair value of debt derivatives at note issuances | 547,502 | 139,051 | |||||||||||||||||||||||||||
Initial fair value of additional derivative created through interest accrual | 2,597 | 2,630 | |||||||||||||||||||||||||||
Extinguished derivative liability | (97.398 | ) | - | ||||||||||||||||||||||||||
Initial fair value of overriding royalty interest liability | 263,759 | - | |||||||||||||||||||||||||||
Mark-to-market at end of period - embedded debt derivatives | (26,860 | ) | (19,636 | ) | |||||||||||||||||||||||||
Accretion of discount on overriding royalty interest liability, equivalent | 10,951 | - | |||||||||||||||||||||||||||
to estimated change in market value | |||||||||||||||||||||||||||||
Balance, end of period | $ | 822,596 | $ | 122,045 | |||||||||||||||||||||||||
Net gain for the period included in earnings as change in fair value | $ | 26,860 | $ | 19,636 |
EQUITY_Tables
EQUITY (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||||||||
EQUITY [Abstract] | |||||||||||||||||||||||||||||||
Summary of the Company's stock option activity | Weighted- | ||||||||||||||||||||||||||||||
Weighted- | Average | ||||||||||||||||||||||||||||||
Average | Remaining | Aggregate | |||||||||||||||||||||||||||||
Exercise | Contractual | Intrinsic | |||||||||||||||||||||||||||||
Options | Price | Life (Years) | Value | ||||||||||||||||||||||||||||
Outstanding at August 31, 2014 | 5,950,000 | $ | 0.1 | 9.7 | $ | 410,632 | |||||||||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||||||||
Forfeited | - | - | - | - | |||||||||||||||||||||||||||
Outstanding at February 28, 2015 | 5,950,000 | $ | 0.1 | 9.1 | $ | 410,632 | |||||||||||||||||||||||||
Vested and exercisable at February 28, 2015 | 1,000,000 | $ | 0.1 | 9.1 | $ | 69,014 | |||||||||||||||||||||||||
Summary of information about stock options outstanding and exercisable | Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||
Weighted- | Weighted | Weighted | |||||||||||||||||||||||||||||
Average | Average | Average | |||||||||||||||||||||||||||||
Number of | Remaining | Exercise | Number of | Exercise | |||||||||||||||||||||||||||
Shares | Life (Years) | Price | Shares | Price | |||||||||||||||||||||||||||
5,950,000 | 9.1 | $ | 0.1 | 1,000,000 | $ | 0.1 |
DESCRIPTION_OF_BUSINESS_Detail
DESCRIPTION OF BUSINESS (Details) (SCNRG [Member]) | 1 Months Ended |
Oct. 25, 2013 | |
SCNRG [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Acquisition of share interest | 100.00% |
Number of shares issued for acquisition | 14,000,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (TEG Oil & Gas, Inc. [Member]) | Feb. 03, 2015 |
TEG Oil & Gas, Inc. [Member] | |
Business Acquisition [Line Items] | |
Percentage of ownership acquired | 100.00% |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | Aug. 31, 2013 | |
GOING CONCERN [Abstract] | ||||||
Cash and equivalents | $52,815 | $74,287 | $52,815 | $74,287 | $13,207 | $8,298 |
Total current assets | 99,567 | 99,567 | 1,382,825 | |||
Working capital deficit | 7,352,754 | 7,352,754 | ||||
Net loss attributable to the Company | -1,410,766 | -176,491 | -3,059,029 | -252,524 | -1,729,132 | |
Accumulated net loss | ($5,139,387) | ($5,139,387) | ($2,080,358) |
ACQUISITION_OF_TEG_OIL_GAS_USA2
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | ||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 03, 2015 | Aug. 31, 2014 | Sep. 18, 2013 | |
Business Acquisition [Line Items] | |||||||
Advances | $1,298,322 | ||||||
Interest rate | 1.66% | ||||||
Sales of crude oil (net of royalties) | 91,029 | 18,348 | 101,323 | 44,112 | |||
Production costs, professional fees and general and administrative costs | 1,355,528 | 191,504 | 2,975,829 | 289,888 | |||
Depletion, depreciation and amortization | 41,844 | 11,342 | |||||
Interest expense | 136,710 | 3,335 | 229,663 | 6,748 | |||
Secured Subordinated Loan Receivable, Short Term [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Advances | 1,298,322 | ||||||
TEG Oil & Gas, Inc. [Member] | Share Purchase Agreement with Sefton [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid to purchase all of the shares of acquiree | 1 | ||||||
Shares of common stock issued | 3,000,000 | ||||||
Warrant term | 5 years | ||||||
Shares of common stock that can be purchased from warrants | 5,000,000 | ||||||
Exercise price of warrants (in dollars per share) | $0.25 | ||||||
Payment obligations to Bank of the West | 4,011,882 | ||||||
Sales of crude oil (net of royalties) | 72,597 | 72,597 | |||||
Production costs, professional fees and general and administrative costs | 79,776 | 79,776 | |||||
Depletion, depreciation and amortization | 26,855 | 26,855 | |||||
Interest expense | 28,263 | 28,263 | |||||
Non-recurring transaction costs | 71,819 | 280,884 | |||||
TEG Oil & Gas, Inc. [Member] | Share Purchase Agreement with Sefton [Member] | Secured Subordinated Loan Receivable, Short Term [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Advances | 1,600,000 | ||||||
TEG Oil & Gas, Inc. [Member] | Bank of the West [Member] | Share Purchase Agreement with Sefton [Member] | Secured Subordinated Loan Receivable, Short Term [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amount to be lent to acquiree | 350,000 | ||||||
Maximum period within which remaining amount to be lent to acquiree | 90 days | ||||||
Interest rate | 9.00% | ||||||
Monthly pay rate | 5.00% | ||||||
Deferred interest rate, unpaid interest compounded monthly | 4.00% | ||||||
Per barrel price used in condition to take forebear enforcement action against the acquiree | 60 | ||||||
Minimum monthly outstanding property tax payments which will be paid by acquiree | $15,000 | ||||||
TEG Oil & Gas, Inc. [Member] | Tapia Assets [Member] | Tapia Holdings, LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of oil and gas leases contributed | 4 | ||||||
Area of land | 262 | ||||||
TEG Oil & Gas, Inc. [Member] | Eureka Assets [Member] | Tapia Holdings, LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of oil and gas leases contributed | 1 | ||||||
Area of land | 1,510 |
ACQUISITION_OF_TEG_OIL_GAS_USA3
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Schedule of Consideration Transferred and Liabilities Assumed, and Fair Value of Assets Acquired) (Details) (USD $) | 0 Months Ended | ||
Feb. 03, 2015 | Feb. 28, 2015 | ||
Estimated fair value of assets acquired: | |||
Share price (in dollars per share) | $0.10 | ||
TEG Oil & Gas, Inc. [Member] | Share Purchase Agreement with Sefton [Member] | |||
Business Acquisition [Line Items] | |||
Fair value of Hawker's common stock issued | $201,027 | [1] | |
Fair value of common stock warrant issued by Hawker | 330,000 | [2] | |
Loan made by Hawker group to TEG prior to closing | 1,663,227 | ||
Total purchase price | 2,194,254 | ||
Estimated fair value of liabilities assumed: | |||
Loan payable to Bank of the West, plus accrued interest | 4,011,882 | ||
Accounts payable | 842,890 | ||
Accrued liabilities | 83,063 | ||
Asset retirement obligation | 1,743,558 | ||
Retirement liability | 998,471 | ||
Deferred income taxes | 3,207,000 | ||
Amount attributable to liabilities assumed | 10,886,864 | ||
Total purchase price and assumed liabilities | 13,081,118 | ||
Estimated fair value of assets acquired: | |||
Cash | 23,344 | ||
Other current assets | 7,025 | ||
Fixed assets - operating machinery and equipment | 2,069,792 | ||
Identifiable intangible asset | 175,000 | ||
Oil properties - proven, full cost method | 10,805,957 | ||
Amount attributable to assets acquired | $13,081,118 | ||
Shares of common stock issued | 3,000,000 | ||
Share price (in dollars per share) | $0.07 | ||
Warrant term | 5 years | ||
Shares of common stock that can be purchased from warrants | 5,000,000 | ||
Exercise price of warrants (in dollars per share) | $0.25 | ||
[1] | 3,000,000 shares of Hawker common stock at $0.067 per share, being the estimated fair value implied by the sale of Units described in Note 16. Our common stock is considered bthinly-tradedb due to the extremely low level of trading activity (many days have no volume or volume less than $1,000 in value), the estimated value of the common stock based on cash sales to third-parties is significantly more meaningful in regards to fair value. | ||
[2] | 5 year warrant issued for 5 million shares of Hawker common stock at an exercise price of $0.25 per share, fair value based on using the Black-Scholes Option Pricing Model. |
ACQUISITION_OF_TEG_OIL_GAS_USA4
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Schedule of Unaudited Pro forma Combined Results of Operations) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Business Acquisition [Line Items] | ||||
Net loss per share: Basic and diluted | ($0.02) | ($0.01) | ($0.04) | ($0.01) |
TEG Oil & Gas, Inc. [Member] | Share Purchase Agreement with Sefton [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | $1,002 | $2,413 | ||
Net (loss)income | ($3,024) | $20 | ||
Net loss per share: Basic and diluted | ($0.04) |
SECURED_SUBORDINATED_LOAN_RECE1
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM (Narrative) (Details) (USD $) | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Jan. 31, 2015 | Jan. 31, 2015 | Feb. 28, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Promissory note receivable | $2,100,000 | |||
Advances | 1,298,322 | |||
TEG [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding advances | 150,000 | 346,625 | ||
Secured Subordinated Loan Receivable, Short Term [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.00% | |||
Advances | 1,298,322 | |||
Principal | 1,290,727 | |||
Accrued interest | 7,595 | |||
Share Purchase Agreement with Sefton [Member] | TEG [Member] | ||||
Debt Instrument [Line Items] | ||||
Advances | $1,663,227 | $1,663,227 |
BANK_LOAN_PAYABLE_Narrative_De
BANK LOAN PAYABLE (Narrative) (Details) (USD $) | 6 Months Ended | 0 Months Ended | |||
Feb. 28, 2015 | Jan. 01, 2015 | Aug. 31, 2014 | Sep. 18, 2013 | Jan. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Interest rate | 1.66% | ||||
Release of amount outstanding under the Loan | $1,298,322 | ||||
Promissory note receivable | 2,100,000 | ||||
Tapia Holdings, LLC [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of stock purchased | 80.00% | ||||
Secured Subordinated Loan Receivable, Short Term [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.00% | ||||
Release of amount outstanding under the Loan | 1,298,322 | ||||
Share Purchase Agreement with Sefton [Member] | TEG [Member] | |||||
Debt Instrument [Line Items] | |||||
Release of amount outstanding under the Loan | 1,663,227 | ||||
Share Purchase Agreement with Sefton [Member] | Bank of the West [Member] | TEG [Member] | Secured Subordinated Loan Receivable, Short Term [Member] | |||||
Debt Instrument [Line Items] | |||||
Amount to be lent to acquiree | 350,000 | ||||
Interest rate | 9.00% | ||||
Monthly pay rate | 5.00% | ||||
Accrued interest rate, unpaid interest compounded monthly | 4.00% | ||||
Interest rate | 14.00% | ||||
Minimum monthly outstanding property tax payments which will be paid by acquiree | 15,000 | ||||
Per barrel price used in condition to take forebear enforcement action against the acquiree | 60 | ||||
Share Purchase Agreement with Sefton [Member] | Bank of the West [Member] | TEG [Member] | Secured Subordinated Loan Receivable, Short Term [Member] | Tapia Holdings, LLC [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $1,500,000 | ||||
Percentage of stock purchased | 100.00% |
LOANS_PAYABLE_TO_RELATED_PARTI2
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM (Narrative) (Details) (USD $) | 0 Months Ended | 6 Months Ended | |
Jan. 16, 2015 | Feb. 28, 2015 | Sep. 18, 2013 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Interest rate | 1.66% | ||
Additional loans | $50,000 | ||
Darren Katic [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Interest rate | 10.00% | ||
Manhattan Holdings Llc [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Amount of loans to related party whose maturity date was extended to January 31, 2015 | 60,000 | ||
Additional loans | $30,000 |
LOANS_PAYABLE_TO_RELATED_PARTI3
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM (Schedule of Loans from Related Parties) (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Loans payable to related parties, short term | ||
Total short-term loans | $448,325 | $221,000 |
Accrued interest payable | 22,104 | 5,876 |
Loans payable to related parties, short term | 470,429 | 226,876 |
Darren Katic [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | 242,300 | 161,000 |
Manhattan Holdings, LLC [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | 90,000 | 60,000 |
Gerald Tywoniuk [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | 60,000 | |
Kristian Andresen [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | $56,025 |
CONVERTIBLE_NOTES_PAYABLE_SHOR2
CONVERTIBLE NOTES PAYABLE, SHORT TERM (Narrative) (Details) (USD $) | 0 Months Ended | 6 Months Ended | ||||
Sep. 18, 2014 | Feb. 28, 2015 | Sep. 18, 2013 | Aug. 31, 2014 | |||
Debt Instrument [Line Items] | ||||||
Interest rate | 1.66% | |||||
Price per unit | $0.10 | |||||
Convertible Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 12.00% | |||||
Warrant exercise price | $0.25 | |||||
Price per unit | $0.10 | |||||
Term of warrants | 5 years | |||||
Maximum beneficial ownership interest after conversion of debt (as a percent) | 4.99% | |||||
Amount divided by outstanding principal and accrued interest to calculate shares to be issued | $0.10 | |||||
Unamortized discount | [1] | $89,149 | [1] | |||
CNP 9 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum beneficial ownership interest after conversion of debt (as a percent) | 4.99% | |||||
Aggregate principal amount | 25,000 | |||||
Unamortized discount | 25,000 | |||||
CNP 1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | 350,000 | |||||
Unamortized discount | 350,000 | |||||
CNP 2 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | 25,000 | |||||
Debt extinguished | $250,000 | |||||
[1] | The unamortized discount relates to CNP 1 ($350,000) and CNP 9 ($25,000). This is described further immediately below. |
CONVERTIBLE_NOTES_PAYABLE_SHOR3
CONVERTIBLE NOTES PAYABLE, SHORT TERM (Summary of Changes in Convertible Notes Payable) (Details) (USD $) | 6 Months Ended | |||
Feb. 28, 2015 | Aug. 31, 2014 | |||
Debt Instrument [Line Items] | ||||
Convertible notes payable | $448,325 | $221,000 | ||
Accrued interest payable | 22,104 | 5,876 | ||
Convertible notes payable, short term | 54,784 | 862,450 | ||
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible notes payable | 50,000 | 930,000 | ||
Less unamortized discount | [1] | -89,149 | [1] | |
Accrued interest payable | 4,784 | 21,599 | ||
Convertible notes payable, short term | 54,784 | 862,450 | ||
CNP 1 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 30-Nov-14 | |||
Convertible notes payable | [1],[2],[3],[4] | 350,000 | [1],[2],[3],[4] | |
Less unamortized discount | -350,000 | |||
CNP 2 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 30-Nov-14 | |||
Convertible notes payable | [2],[3],[4] | 250,000 | [2],[3],[4] | |
CNP 3 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 30-Jun-15 | |||
Convertible notes payable | [2],[3],[5] | 100,000 | [2],[3],[5] | |
CNP 4 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 10-Jul-15 | |||
Convertible notes payable | [2],[3],[4],[5],[6] | 100,000 | [2],[3],[4],[5],[6] | |
CNP 5 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 13-May-16 | |||
Convertible notes payable | 50,000 | [7] | 50,000 | [7] |
CNP 6 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 25-Jul-15 | |||
Convertible notes payable | [2],[3],[4],[5] | 50,000 | [2],[3],[4],[5] | |
CNP 7 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 25-Jul-15 | |||
Convertible notes payable | [2],[3],[4],[5] | 30,000 | [2],[3],[4],[5] | |
CNP 8 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 26-Sep-15 | |||
Convertible notes payable | [2],[3],[5],[8] | [2],[3],[5],[8] | ||
CNP 9 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 3-May-15 | |||
Convertible notes payable | [1],[2],[3],[4],[8] | [1],[2],[3],[4],[8] | ||
Less unamortized discount | ($25,000) | |||
[1] | The unamortized discount relates to CNP 1 ($350,000) and CNP 9 ($25,000). This is described further immediately below. | |||
[2] | Convertible at any time at the option of the investor into bConversion Units.b Each Conversion Unit consists of one share of common stock of Hawker and one warrant to purchase one-half share of common stock of Hawker at an exercise price of $0.25 per share. The number of Conversion Units into which the note is convertible is computed by dividing all of the then outstanding principal and accrued interest under the note by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Each warrant has a five-year life from the date the convertible note payable was issued. In the event Hawker sells common stock for less than $0.10 per share, the conversion rate for CNP 1 and 9 shall be adjusted to that price. In the case of CNP 1 and 2, the notes were amended September 18, 2014, to limit the conversion of a part or the entire convertible note payable at any one time to a maximum beneficial ownership in Hawker of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion. CNP 9, with a face amount of $25,000 is similarly limited to a 4.99% maximum beneficial ownership. | |||
[3] | The proceeds were required to be used solely for the purpose of allowing Tapia Holdings to make advances to TEG under the terms of the secured subordinated loan receivable described in Note 5. Any repayment of such advances by TEG to Tapia Holdings must be used by us to immediately first repay convertible notes payable to the holder of CNP 1, 2 and 3, and second to repay other convertible notes payable pro rata. | |||
[4] | Hawker granted a security interest to the investor in all of Hawker's assets. | |||
[5] | Conversion of unpaid principal into Conversion Units pursuant to the terms in (1) above was mandatory upon Hawker closing the TEG Acquisition in February 2015 as described in Note 4. Conversion of unpaid interest into Conversion Units was at the election of Hawker, which election Hawker made. | |||
[6] | The holder is related to Darren Katic, who is an officer, director and significant shareholder. | |||
[7] | Unpaid principal and accrued interest is convertible at any time at the option of the holder into common shares in an amount computed by dividing the amount converted by $0.10 (as appropriately adjusted for any stock splits, stock combinations or similar events). Repayment of the convertible note payable is required on collection of the secured subordinated loan receivable described in Note 5 if earlier than the maturity date above. As Hawker expected to receive repayment on the secured subordinated loan receivable or close on the TEG acquisition within one year, this convertible note payable was classified as a short-term liability. | |||
[8] | Original principal amounts were $25,000 for CNP 8 and $25,000 for CNP 9. |
LONG_TERM_DEBT_Schedule_of_Lon
LONG TERM DEBT (Schedule of Long Term Debt) (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 | Aug. 31, 2013 |
LONG TERM DEBT [Abstract] | |||
Convertible note payable, long term | $134,127 | ||
Overriding royalty interest liability | 274,710 | ||
Net profits interest payable | 159,322 | 169,104 | 124,597 |
Note payable and other | 64,414 | ||
Total long term debt | 632,573 | 169,104 | |
Less current portion | -208,346 | -20,065 | |
Long term debt, net of current portion | $424,227 | $149,039 |
LONG_TERM_DEBT_Convertible_Not
LONG TERM DEBT (Convertible Note Payable, Long Term) (Narrative) (Details) (USD $) | 6 Months Ended | 0 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Jan. 14, 2015 | Aug. 31, 2014 | Sep. 18, 2013 | |
Debt Instrument [Line Items] | |||||
Gross proceeds from issuance of debt | $300,000 | ||||
Interest rate | 1.66% | ||||
Effective rate of interest | 10.00% | ||||
TEG [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum beneficial ownership interest which can be acquired upon conversion | 4.99% | ||||
Minimum [Member] | TEG [Member] | |||||
Debt Instrument [Line Items] | |||||
Overriding royalty interest | 2.50% | ||||
Maximum [Member] | TEG [Member] | |||||
Debt Instrument [Line Items] | |||||
Overriding royalty interest | 3.50% | ||||
Secured Convertible Note Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | 1,000,000 | ||||
Payment period | 2 years | ||||
Interest rate | 12.00% | ||||
Amount divided by outstanding principal and accrued interest to calculate shares to be issued | $0.10 | $0.10 | |||
Fair value of the embedded derivative | 540,084 | ||||
Number of advances made | 2 | ||||
Discount created by granting of overriding royalty interest | 263,759 | ||||
Total debt discount | 803,843 | ||||
Amortization of interest expense due to the accretion of the discount | 8,025 | ||||
Unamortized discount | 795,818 | ||||
Effective rate of interest | 184.00% | ||||
Cash coupon percentage | 12.00% | ||||
Secured Convertible Note Payable [Member] | Note issued to Oceanside Strategies maturing on November 30, 2014, one | |||||
Debt Instrument [Line Items] | |||||
Debt cancelled | 250,000 | ||||
Secured Convertible Note Payable [Member] | Note issued to Oceanside Strategies maturing on November 30, 2014, two | |||||
Debt Instrument [Line Items] | |||||
Debt cancelled | 350,000 | ||||
Secured Convertible Note Payable [Member] | Note issued to Oceanside Strategies maturing on May 3, 2015 | |||||
Debt Instrument [Line Items] | |||||
Debt cancelled | 25,000 | ||||
Secured Convertible Note Payable [Member] | Note issued to Oceanside Strategies maturing on June 30, 2015 | |||||
Debt Instrument [Line Items] | |||||
Debt cancelled | 125,000 | ||||
Secured Convertible Note Payable [Member] | Funded January 15, 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from issuance of debt | 200,000 | ||||
Secured Convertible Note Payable [Member] | Funded February 26, 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from issuance of debt | 50,000 | ||||
Secured Convertible Note Payable [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from issuance of debt | $250,000 |
LONG_TERM_DEBT_Schedule_of_Sec
LONG TERM DEBT (Schedule of Secured Convertible Note Payable) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
Carrying value of Secured Convertible Note Payable, end of period | $134,127 | |
Less current portion | -54,784 | -862,450 |
Secured Convertible Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Secured Convertible Note Payable, beginning of period | ||
Roll over prior advances into new note | 625,000 | |
Capitalization of interest at Jan. 1, 2015 | 39,896 | |
Additional advances in January and February 2015 | 250,000 | |
Total advances | 914,896 | |
Discount created by embedded derivative (conversion option) | -540,084 | |
Discount created by granting of overriding royalty interest | -263,759 | |
Total discount | -803,843 | |
Amortization of discount | 8,025 | |
Unamortized discount | -795,818 | |
Accrued interest payable | 15,049 | |
Carrying value of Secured Convertible Note Payable, end of period | 134,127 | |
Less current portion | -113,910 | |
Secured Convertible Note Payable, long term portion, end of period | $20,217 |
LONG_TERM_DEBT_Overriding_Roya
LONG TERM DEBT (Overriding Royalty Interest Liability) (Narrative) (Details) (Overriding Royalty Interest Liability [Member]) | Jan. 15, 2015 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Overriding royalty interest | 2.50% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Overriding royalty interest | 3.50% |
LONG_TERM_DEBT_Schedule_of_Ass
LONG TERM DEBT (Schedule of Assumptions Used to Determine Fair Value of ORRI Liability) (Details) (Overriding Royalty Interest Liability [Member]) | 1 Months Ended |
Jan. 31, 2015 | |
Overriding Royalty Interest Liability [Member] | |
Debt Instrument [Line Items] | |
Oil price | 65 |
Resulting reserves were included as follows: | |
Proved developed producing | 100.00% |
Proved developed non-producing | 50.00% |
Proved undeveloped | 0.00% |
Discount rate | 35.00% |
LONG_TERM_DEBT_Schedule_of_ORR
LONG TERM DEBT (Schedule of ORRI Liability) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
ORRI liability, end of period | $274,710 | |
Overriding Royalty Interest Liability [Member] | ||
Debt Instrument [Line Items] | ||
ORRI liability, beginning of period | ||
ORRI granted to holder of long-term convertible note payable | 263,759 | |
Current period accretion | 10,951 | |
Change in estimated liability | ||
Payments made | ||
ORRI liability, end of period | 274,710 | |
Less: current portion | -54,542 | |
ORRI liability, long-term portion | $220,168 |
LONG_TERM_DEBT_Net_Profits_Int
LONG TERM DEBT (Net Profits Interest Payable) (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 01, 2009 | 14-May-14 | Feb. 28, 2015 | 15-May-14 | Feb. 01, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Percentage of monthly payments equal to net profit | 40.00% | ||||
Maturity date | 31-Dec-22 | ||||
Interest rate utilizing a discount rate | 10.00% | ||||
NPI payments | $143,069 | ||||
Minimum NPI payment requirement | 347,000 | ||||
Maximum NPI payment requirement | 357,410 | ||||
SCNRG [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Stated minimum monthly payment | $1,985 | $2,596 | $2,978 | ||
Ownership interest | 66.67% | 100.00% | 87.18% |
LONG_TERM_DEBT_Schedule_of_Cha
LONG TERM DEBT (Schedule of Changes in NPI Liability) (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | |
LONG TERM DEBT [Abstract] | |||
NPI liability, beginning of period | $169,104 | $124,597 | $124,597 |
Liabilities assumed in connection with acquisition of additional DEEP lease working interests | 58,847 | ||
Current period accretion | 8,086 | 6,009 | 14,104 |
Payments made | -17,868 | -11,913 | -28,444 |
NPI liability, end of period | 159,322 | 169,104 | |
Less: current portion | -21,089 | -20,065 | |
NPI liability: long-term portion | $138,233 | $149,039 |
LONG_TERM_DEBT_Note_Payable_An
LONG TERM DEBT (Note Payable And Other) (Narrative) (Details) (USD $) | 0 Months Ended | 6 Months Ended | |||
Jan. 16, 2015 | Mar. 25, 2015 | Mar. 19, 2015 | Feb. 28, 2015 | Sep. 18, 2013 | |
Debt Instrument [Line Items] | |||||
Advances from relative of Mr. Katic | $50,000 | ||||
Effective rate of interest | 10.00% | ||||
Interest rate | 1.66% | ||||
Note Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Advances from relative of Mr. Katic | 50,000 | 100,000 | 20,000 | ||
Principal to be repaid per month beginning April 30, 2015 | 7,083 | ||||
Number of periodic payments | 24 months | ||||
Number of common stock for interest comprised | 510,000 | ||||
Warrant term | 5 years | ||||
Shares of common stock that can be purchased from warrants | 500,000 | ||||
Exercise price of warrants (in dollars per share) | $0.25 | ||||
Debt discount | 19,757 | ||||
Amortization of discount | 1,053 | ||||
Effective rate of interest | 46.60% | ||||
Other Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Number of periodic payments | 48 months | ||||
Payment per month beginning April 4, 2015 | $795 | ||||
Interest rate | 6.99% |
LONG_TERM_DEBT_Schedule_of_Tot
LONG TERM DEBT (Schedule of Total Note Payable and Other) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
Total note payable and other | $64,414 | |
Less current portion | -18,805 | |
Note payable and other, long term portion, end of period | 45,609 | |
Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Balance, beginning of period | ||
Note payable advance | 50,000 | |
Less unamortized discount | -18,704 | |
Total | 31,296 | |
Total note payable and other | ||
Other Debt [Member] | ||
Debt Instrument [Line Items] | ||
Installment sales contract liability | $33,118 |
CONVERSION_OPTION_Conversion_O
CONVERSION OPTION (Conversion Option, Short Term) (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Feb. 28, 2015 | Aug. 31, 2014 | |
Conversion options [Line Items] | |||
Fair value of the short term conversion option, recorded as additional paid in capital | $97,398 | ||
Short Term Secured Convertible Notes Payable [Member] | |||
Conversion options [Line Items] | |||
Number of common stock in each conversion unit | 1 | ||
Number of warrants in each conversion unit | 1 | ||
Number of shares of common stock that can be purchased with each conversion unit | 0.5 | ||
Warrant exercise price | $0.25 | $0.25 | |
Amount divided by outstanding principal and accrued interest to calculate shares to be issued | $0.10 | $0.10 | |
Term of warrants | 5 years | ||
Fair value of the short term conversion option, recorded as additional paid in capital | -97,398 | ||
Non-cash, non-operating gain resulting from the fair value accounting | 0 | 34,662 | |
Short Term Secured Convertible Notes Payable 1 and 2 [Member] | |||
Conversion options [Line Items] | |||
Number of notes | 2 | ||
Short Term Secured Convertible Notes Payable 1 [Member] | |||
Conversion options [Line Items] | |||
Note | 350,000 | 350,000 | |
Fair value of the embedded derivative | 139,051 | 139,051 | |
Short Term Secured Convertible Notes Payable 2 [Member] | |||
Conversion options [Line Items] | |||
Note | 25,000 | 25,000 | |
Fair value of the embedded derivative | $7,418 | $7,418 |
CONVERSION_OPTION_Schedule_of_
CONVERSION OPTION (Schedule of Assumptions Used in Determining Fair Value of Embedded Derivative, Conversion Option, Short Term) (Details) | 6 Months Ended |
Feb. 28, 2015 | |
Short Term Secured Convertible Notes Payable 1 and 2 [Member] | Minimum [Member] | |
Conversion options [Line Items] | |
Dividend yield: | 0.00% |
Volatility | 178.00% |
Risk free rate: | 0.05% |
Short Term Secured Convertible Notes Payable 1 and 2 [Member] | Maximum [Member] | |
Conversion options [Line Items] | |
Dividend yield: | 0.00% |
Volatility | 200.00% |
Risk free rate: | 0.02% |
New Short-term Secured Convertible Note Payable [Member] | |
Conversion options [Line Items] | |
Dividend yield: | 0.00% |
Volatility | 214.00% |
Risk free rate: | 0.03% |
CONVERSION_OPTION_Summary_of_C
CONVERSION OPTION (Summary of Changes in Fair Value of Short Term Conversion Option) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | |
Conversion options [Line Items] | |||||
Balance, beginning of period | $122,045 | ||||
Initial fair value of debt derivative on accrual of interest | 2,597 | 2,630 | |||
Change in fair value of debt derivatives | -7,802 | 26,860 | |||
Extinguishment of conversion option | 97,398 | ||||
Balance, end of period | 122,045 | ||||
Short Term Secured Convertible Notes Payable [Member] | |||||
Conversion options [Line Items] | |||||
Balance, beginning of period | 122,045 | ||||
Initial fair value of debt derivatives at advance dates | 7,418 | 139,051 | |||
Initial fair value of debt derivative on accrual of interest | 2,597 | 2,630 | |||
Change in fair value of debt derivatives | -34,662 | -19,636 | |||
Extinguishment of conversion option | -97,398 | ||||
Balance, end of period | $122,045 |
CONVERSION_OPTION_Conversion_O1
CONVERSION OPTION (Conversion Option, Long Term) (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | Jan. 14, 2015 | |
Conversion options [Line Items] | ||||||
Total non-cash, non-operating gain (loss) | ($7,802) | $26,860 | ||||
Secured Convertible Note Payable [Member] | ||||||
Conversion options [Line Items] | ||||||
Amount divided by outstanding principal and accrued interest to calculate shares to be issued | $0.10 | $0.10 | $0.10 | |||
Fair value of the embedded derivative | 540,084 | 540,084 | ||||
Non-cash, non-operating loss resulting from the fair value accounting | 7,802 | |||||
Total non-cash, non-operating gain (loss) | 7,802 | |||||
Two advances made under the note [Member] | ||||||
Conversion options [Line Items] | ||||||
Fair value of the embedded derivative | 540,084 | 540,084 | ||||
Number of notes | 2 | |||||
New Long-term Secured Convertible Note Payable [Member] | ||||||
Conversion options [Line Items] | ||||||
Fair value of the embedded derivative | $547,886 | $547,886 |
CONVERSION_OPTION_Schedule_of_1
CONVERSION OPTION (Schedule of Assumptions Used in Determining Fair Value of Embedded Derivative, Conversion Option, Long Term) (Details) | 6 Months Ended |
Feb. 28, 2015 | |
Two advances made under the note [Member] | Minimum [Member] | |
Conversion options [Line Items] | |
Dividend yield: | 0.00% |
Volatility | 236.00% |
Risk free rate: | 0.51% |
Two advances made under the note [Member] | Maximum [Member] | |
Conversion options [Line Items] | |
Dividend yield: | 0.00% |
Volatility | 252.00% |
Risk free rate: | 0.63% |
New Long-term Secured Convertible Note Payable [Member] | |
Conversion options [Line Items] | |
Dividend yield: | 0.00% |
Volatility | 252.00% |
Risk free rate: | 0.63% |
CONVERSION_OPTION_Summary_of_C1
CONVERSION OPTION (Summary of Changes in Fair Value of Long Term Conversion Option) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | |
Conversion options [Line Items] | |||||
Balance, beginning of period | |||||
Change in fair value of debt derivatives | -7,802 | 26,860 | |||
Balance, end of period | 547,886 | 547,886 | |||
Secured Convertible Note Payable [Member] | |||||
Conversion options [Line Items] | |||||
Balance, beginning of period | |||||
Initial fair value of debt derivatives at advance dates | 540,084 | ||||
Change in fair value of debt derivatives | 7,802 | ||||
Balance, end of period | $547,886 | $547,886 |
EMPLOYEE_RETIREMENT_LIABILITY_1
EMPLOYEE RETIREMENT LIABILITY (Narrative) (Details) | 6 Months Ended | |
Feb. 28, 2015 | Feb. 03, 2015 | |
item | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Retirement obligation | The retirement payment is based on the individual's ending monthly salary at the date of retirement times a multiple for years of service. This multiple ranges from one month of base salary for two years of service or less, to two and a half times monthly salary for ten or more years of service. | |
Number of employees are covered under retirement obligation | 2 | |
Minimum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rates used to measure the post employment benefit liability (as a percent) | 4.54% | 4.48% |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rates used to measure the post employment benefit liability (as a percent) | 4.63% | 4.56% |
EMPLOYEE_RETIREMENT_LIABILITY_2
EMPLOYEE RETIREMENT LIABILITY (Schedule of Employee Retirement Obligations) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Aug. 31, 2014 | |
EMPLOYEE RETIREMENT LIABILITY [Abstract] | ||
Employee retirement obligations, beginning | ||
Liabilities acquired during the period | 998,471 | |
Liabilities settled during the period | ||
Current period expense (benefit) | -14,308 | |
Employee retirement obligations, ending | $984,163 |
ASSET_RETIREMENT_OBLIGATIONS_D
ASSET RETIREMENT OBLIGATIONS (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | |
ASSET RETIREMENT OBLIGATIONS [Abstract] | |||
Asset retirement obligations, beginning | $168,110 | $103,299 | $103,299 |
Liabilities acquired during the period | 1,743,558 | 53,963 | |
Liabilities settled during the period | |||
Current period accretion | 9,770 | 4,615 | 10,848 |
Asset retirement obligations, ending | $1,921,438 | $168,110 |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 6 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $0 | $0 |
TEG [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forward | $16,905,000 | |
Net operating loss carry forward, expire year | 31-Dec-33 |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Liabilities | ||
Overriding Royalty Interest Liability | $274,710 | |
Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | 274,710 | |
Conversion option - long term | 547,886 | 122,045 |
Total Liabilities | 822,596 | 122,045 |
Level 1 [Member] | Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | ||
Conversion option - long term | ||
Total Liabilities | ||
Level 2 [Member] | Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | ||
Conversion option - long term | ||
Total Liabilities | ||
Level 3 [Member] | Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | 274,710 | |
Conversion option - long term | 547,886 | 122,045 |
Total Liabilities | $822,596 | $122,045 |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Summary of Changes in Fair Value of Level 3 Financial Liabilities) (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2013 | Aug. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, beginning of period | $122,045 | ||
Initial fair value of debt derivatives at note issuances | 547,502 | 139,051 | |
Initial fair value of additional derivative created through interest accrual | 2,597 | 2,630 | |
Extinguished derivative liability | -97.398 | ||
Initial fair value of overriding royalty interest liability | 263,759 | ||
Mark-to-market at end of period - embedded debt derivatives | -26,860 | -19,636 | |
Accretion of discount on overriding royalty interest liability, equivalent to estimated change in market value | 10,951 | ||
Balance, end of period | 822,596 | 122,045 | |
Net gain for the period included in earnings as change in fair value | $26,860 | $0 | $19,636 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) (USD $) | 6 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | |||
Feb. 28, 2015 | Feb. 28, 2014 | Oct. 10, 2014 | Nov. 30, 2014 | Feb. 28, 2015 | Jan. 01, 2014 | Aug. 31, 2014 | Dec. 01, 2009 | |
Long-term Purchase Commitment [Line Items] | ||||||||
Overriding royalty percentage | 1.00% | |||||||
Aggregate additional royalty percentage subject to production | 19.92% | |||||||
Total royalties | 20.92% | |||||||
Equity compensation expense recorded based on the fair value of the shares at the date of issuance | $1,791,552 | |||||||
Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Shares to be held in escrow till on or before December 31, 2017 | 9,000,000 | |||||||
Hawker Energy (Rincon), LLC [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Stock issued (in shares) | 14,000,000 | |||||||
Equity compensation expense recorded based on the fair value of the shares at the date of issuance | 1,030,500 | |||||||
Hawker Energy (Rincon), LLC [Member] | Shares of common stock that were issued as a result of the Amendment [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Equity compensation expense recorded based on the fair value of the shares at the date of issuance | 1,011,500 | |||||||
Hawker Energy (Rincon), LLC [Member] | Shares of common stock that are in escrow [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Equity compensation expense recorded based on the fair value of the shares at the date of issuance | 19,000 | |||||||
TEG Oil & Gas, Inc. [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Shares to be held in escrow till acquisition | 10,000,000 | |||||||
TEG Oil & Gas, Inc. [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 10,000,000 | |||||||
Equity compensation expense recorded based on the fair value of the shares at the date of issuance | $1,700,590 | $670,090 | ||||||
Darren Katic [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 1,500,000 | |||||||
Darren Katic [Member] | Hawker Energy (Rincon), LLC [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 16,500,000 | |||||||
Sellers [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 3,000,000 | |||||||
Possible additional shares required to issue | 33,000,000 | |||||||
Charles Moore [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 1,500,000 | |||||||
Charles Moore [Member] | Hawker Energy (Rincon), LLC [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 16,500,000 | |||||||
Messrs. Katic and Moore [Member] | Hawker Energy (Rincon), LLC [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Number of shares issued for acquisition | 33,000,000 | |||||||
Shares to be held in escrow | 9,000,000 | 19,000,000 | 9,000,000 | |||||
Tapia Assets [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Total royalties | 6.14% | |||||||
Tapia Assets [Member] | Minimum [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Aggregate additional royalty percentage subject to sales | 2.50% | |||||||
Tapia Assets [Member] | Maximum [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Aggregate additional royalty percentage subject to sales | 3.50% | |||||||
Eureka Assets [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Total royalties | 16.67% | |||||||
Kern County CA [Member] | Hawker Energy (Rincon), LLC [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Area of land | 1,500 | |||||||
Kern County [Member] | Hawker Energy (Rincon), LLC [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Area of land | 40 | |||||||
Los Angeles County [Member] | Hawker Energy (Rincon), LLC [Member] | Option Agreement [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Area of land | 900 | |||||||
DEEP Property [Member] | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Working interest | 100.00% | 66.67% |
EQUITY_Narrative_Details
EQUITY (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
14-May-14 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 14-May-15 | Aug. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Cash received from units issued | $114,920 | $980,288 | |||||
Proceeds received for common stock payable | 50,000 | ||||||
Conversion of accounts and bonus payable into common stock | 130,569 | ||||||
Price per unit | $0.10 | $0.10 | |||||
Common stock issuable | 6,584,210 | 6,584,210 | |||||
Stock option compensation | 1,791,552 | ||||||
Option life | 10 years | 10 years | |||||
Unvested stock options | 5,950,000 | ||||||
Options outstanding | 5,950,000 | 5,950,000 | 5,950,000 | ||||
Stock options vesting first | 1,000,000 | ||||||
Maximum option available for issuance | 12,019,560 | 12,019,560 | |||||
Stock options vesting in subsequent periods | 4,950,000 | ||||||
Non-controlling interest | 145,000 | 145,000 | 55,000 | ||||
Non-controlling interest share of losses | 9,531 | ||||||
Stock option | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Stock option compensation | 33,283 | 90,962 | |||||
Unvested stock options | 4,950,000 | ||||||
Unrecognized stock option expense | 251,000 | 251,000 | |||||
Unrecognized stock option expense, period for recognition | 2 years 2 months 12 days | ||||||
Tapia Holdings, LLC [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Percentage of ownership acquired | 80.00% | 80.00% | |||||
Convertible Note [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Shares of stock issued for the conversion of debt | 9,847,290 | ||||||
Conversion price | $0.10 | $0.10 | |||||
Common Stock [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Units issued (in shares) | 1,150,000 | 10,212,720 | |||||
Number of investors whose units are issued | 2 | ||||||
Cash received from units issued | 1,150 | 10,213 | |||||
Proceeds received for common stock payable | 500 | ||||||
Proceeds received for common stock payable, shares | 500,000 | ||||||
Warrant exercise price | $0.20 | $0.20 | |||||
Conversion of accounts and bonus payable into common stock, shares | 1,305,700 | ||||||
Conversion of accounts and bonus payable into common stock | 1,305 | ||||||
Number of shares issued pursuant to HERLLC Option Agreement | 33,000,000 | ||||||
Shares of stock issued for the conversion of debt | |||||||
Common Stock Payable [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Number of investors whose units are issued | 3 | ||||||
Proceeds received for common stock payable | 50,000 | ||||||
Proceeds received for common stock payable, shares | 500,000 | ||||||
Other transaction costs | $80 | ||||||
Price per unit | $0.10 | $0.10 | |||||
TEG [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Percentage of ownership acquired | 100.00% | 100.00% | |||||
TEG [Member] | Common Stock [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Warrant exercise price | $0.25 | $0.25 | |||||
Common stock issuable | 1,623,829 | 1,623,829 |
EQUITY_Summary_of_Companys_Sto
EQUITY (Summary of Company's Stock Option Activity) (Details) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended |
14-May-14 | Feb. 28, 2015 | Aug. 31, 2014 | |
Options | |||
Outstanding at beginning of period | 5,950,000 | ||
Granted (in shares) | 5,950,000 | ||
Exercised (in shares) | |||
Forfeited (in shares) | |||
Outstanding at end of period | 5,950,000 | 5,950,000 | |
Vested and exercisable (in shares) | 1,000,000 | ||
Weighted- Average Exercise Price | |||
Outstanding at beginning of period | $0.10 | ||
Granted (in dollars per share) | |||
Exercised (in dollars per share) | |||
Forfeited (in dollars per share) | |||
Outstanding at end of period | $0.10 | $0.10 | |
Vested and exercisable (in dollars per share) | $0.10 | ||
Weighted- Average Remaining Contractual Life (Years) | |||
Outstanding at beginning of period | 9 years 1 month 6 days | 9 years 8 months 12 days | |
Outstanding at end of period | 9 years 1 month 6 days | 9 years 8 months 12 days | |
Vested and exercisable | 9 years 1 month 6 days | ||
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | $410,632 | ||
Outstanding at end of period | 410,632 | 410,632 | |
Vested and exercisable | $69,014 |
EQUITY_Summary_of_Information_
EQUITY (Summary of Information About Stock Options Outstanding and Exercisable ) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Aug. 31, 2014 | |
Options Outstanding | ||
Number of Shares | 5,950,000 | |
Weighted- Average Remaining Life (Years) | 9 years 1 month 6 days | 9 years 8 months 12 days |
Weighted Average Exercise Price | $0.10 | $0.10 |
Options Exercisable | ||
Number of Shares | 1,000,000 | |
Weighted Average Exercise Price | $0.10 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | |||||
Sep. 18, 2013 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | Jan. 01, 2014 | Oct. 10, 2014 | Aug. 31, 2013 | Feb. 03, 2015 | |
Related Party Transaction [Line Items] | ||||||||||
Loans payable to related parties, short term | $470,429 | $470,429 | $226,876 | |||||||
Interest expense | 136,710 | 3,335 | 229,663 | 6,748 | ||||||
Price per unit | $0.10 | $0.10 | ||||||||
Loans payable | 89,833 | |||||||||
Interest rate | 1.66% | |||||||||
Gross proceeds received to trigger repayment of loans to related party | 5,000,000 | |||||||||
Amount owed to related party | 448,325 | 448,325 | 221,000 | |||||||
Net proceeds from unit offering | 114,920 | 980,288 | ||||||||
Non-controlling interest | 145,000 | 145,000 | 55,000 | |||||||
Proceeds from sale of non-controlling interest | 90,000 | |||||||||
Option exercise price | ||||||||||
Common Stock Payable [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Price per unit | $0.10 | $0.10 | ||||||||
Share price to acquire warrant (in dollars per share) | $0.20 | |||||||||
Warrants expire term | 5 years | |||||||||
Loan From Related Parties, Short Term [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Interest expense | 9,447 | 16,227 | 0 | |||||||
Loans From Related Parties, Long Term [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Interest expense | 0 | 368 | 0 | 739 | ||||||
Convertible notes payable | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Interest expense | 2,104 | 5,096 | ||||||||
Price per unit | $0.10 | $0.10 | ||||||||
Interest rate | 12.00% | 12.00% | ||||||||
Amount owed to related party | 50,000 | 50,000 | 930,000 | |||||||
Relative Of Darren Katic [Member] | Convertible notes payable | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amount owed to related party | 100,000 | |||||||||
Tapia Holdings, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Proceeds from sale of non-controlling interest | 145,000 | |||||||||
Hawker Energy (Rincon), LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Liabilities assumed | -135,199 | |||||||||
Darren Katic [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for acquisition | 1,500,000 | |||||||||
Due to related party | 29,625 | |||||||||
Loans payable | -38,500 | |||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Amount owed to related party | 242,300 | 242,300 | 161,000 | |||||||
Payments for Rent | 9,617 | 19,233 | ||||||||
Darren Katic [Member] | Hawker Energy (Rincon), LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for acquisition | 16,500,000 | |||||||||
Manhattan Holdings, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Loans payable | -38,500 | |||||||||
Amount owed to related party | 90,000 | 90,000 | 60,000 | |||||||
Sellers [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for acquisition | 3,000,000 | |||||||||
Gerald Tywoniuk [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Loans payable | -12,833 | |||||||||
Amount owed to related party | 60,000 | 60,000 | ||||||||
Gerald Tywoniuk [Member] | Common Stock Payable [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Net proceeds from unit offering | 20,000 | |||||||||
Net proceeds from unit offering, shares | 200,000 | |||||||||
Charles Moore [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for acquisition | 1,500,000 | |||||||||
Charles Moore [Member] | Tapia Holdings, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Non-controlling interest | 45,000 | 45,000 | ||||||||
Charles Moore [Member] | Hawker Energy (Rincon), LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for acquisition | 16,500,000 | |||||||||
Messrs. Katic and Moore [Member] | Hawker Energy (Rincon), LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for acquisition | 33,000,000 | |||||||||
Shares to be held in escrow | 9,000,000 | 9,000,000 | 19,000,000 | |||||||
Messrs. Katic [Member] | Common Stock Payable [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Net proceeds from unit offering | $20,000 | |||||||||
Net proceeds from unit offering, shares | 200,000 |
SUBSEQUENT_EVENTS_Narrative_De
SUBSEQUENT EVENTS (Narrative) (Details) (USD $) | 0 Months Ended | |||||||||
Jan. 16, 2015 | Mar. 25, 2015 | Mar. 19, 2015 | Jun. 10, 2015 | Mar. 17, 2015 | Feb. 28, 2015 | Aug. 31, 2014 | Sep. 18, 2013 | Jan. 14, 2015 | Mar. 18, 2015 | |
Subsequent Event [Line Items] | ||||||||||
Release of amount outstanding under the Loan | $1,298,322 | |||||||||
Promissory note receivable | 2,100,000 | |||||||||
Interest rate | 1.66% | |||||||||
Advances from relative of Mr. Katic | 50,000 | |||||||||
Secured Subordinated Loan Receivable, Short Term [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Release of amount outstanding under the Loan | 1,298,322 | |||||||||
Secured Convertible Note Payable [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Interest rate | 12.00% | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Advances from relative of Mr. Katic | 100,000 | 20,000 | ||||||||
Subsequent Event [Member] | TEG [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Release of amount outstanding under the Loan | 400,000 | |||||||||
Gross proceeds from sale of property | 175,000 | |||||||||
Net proceeds from sale of property | 157,792 | |||||||||
Consideration return to Hawker by Sefton for cancellation [Member] | Subsequent Event [Member] | Promissory Note [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Promissory note receivable | $400,000 | |||||||||
Consideration return to Hawker by Sefton for cancellation [Member] | Subsequent Event [Member] | TEG [Member] | Secured Subordinated Loan Receivable, Short Term [Member] | Bank of the West [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Shares of common stock that can be purchased from warrants | 5,000,000 | |||||||||
Exercise price of warrants (in dollars per share) | $0.25 | |||||||||
Shares of common stock issued | 1,500,000 | |||||||||
Consideration return to Hawker by Sefton for cancellation [Member] | Subsequent Event [Member] | TEG [Member] | Promissory Note [Member] | Bank of the West [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Interest rate | 6.00% |