Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May. 31, 2015 | Jul. 09, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2015 | |
Entity Registrant Name | HAWKER ENERGY, INC. | |
Entity Central Index Key | 1,415,286 | |
Current Fiscal Year End Date | --08-31 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 83,247,306 | |
Entity Current Reporting Status | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | May. 31, 2015 | Aug. 31, 2014 |
Current assets: | ||
Cash | $ 19,391 | $ 13,207 |
Accounts receivable | $ 12,279 | 42,815 |
Inventory | 6,092 | |
Prepaid expenses | $ 55,793 | 22,389 |
Secured subordinated loan receivable, short term | 1,298,322 | |
Total current assets | $ 87,463 | 1,382,825 |
Fixed assets: | ||
Fixed assets, net of accumulated depreciation of $61,194 and $19,605, respectively | 2,084,843 | 14,269 |
Other assets: | ||
Capitalized oil and gas properties, net of accumulated depletion of $164,061 and $86,193, respectively | 10,805,646 | 730,046 |
Intangible assets and other | 175,000 | 5,000 |
Total assets | 13,152,952 | 2,132,140 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,418,198 | 813,438 |
Accrued bonuses | 600,000 | $ 480,000 |
Bank loan payable | 3,661,191 | |
Loans payable to related parties, short term | 598,956 | $ 226,876 |
Short term debt | $ 516,162 | 862,450 |
Conversion option | 122,045 | |
Current portion of long term debt | $ 326,214 | 20,065 |
Total current liabilities | 8,120,721 | 2,524,874 |
Long term liabilities: | ||
Long term debt | 450,817 | $ 149,039 |
Conversion option | 404,568 | |
Retirement liability | 1,021,515 | |
Asset retirement obligations | 1,932,888 | $ 168,110 |
Deferred income taxes | 2,914,254 | |
Total long term liabilities | 6,724,042 | $ 317,149 |
Total liabilities | $ 14,844,763 | $ 2,842,023 |
Stockholders' (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, 82,737,306 and 41,174,703 shares issued and outstanding, respectively | $ 82,737 | $ 41,175 |
Common stock payable | 67,174 | 50,000 |
Additional paid in capital | 3,879,294 | 1,224,300 |
Accumulated deficit | (5,866,016) | (2,080,358) |
Total stockholders' (deficit) | (1,836,811) | (764,883) |
Non-controlling interest | 145,000 | 55,000 |
Total (deficit) | (1,691,811) | (709,883) |
Total liabilities and (deficit) | $ 13,152,952 | $ 2,132,140 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | May. 31, 2015 | Aug. 31, 2014 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Accumulated depreciation of fixed assets | $ 61,194 | $ 19,605 |
Capitalized oil and gas properties accumulated depletion | $ 164,061 | $ 86,193 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 82,737,306 | 41,174,703 |
Common stock, shares outstanding | 82,737,306 | 41,174,703 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Scenario, Unspecified [Domain] - USD ($) | 3 Months Ended | 9 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Revenue: | ||||
Oil revenues | $ 279,174 | $ 35,755 | $ 380,497 | $ 79,867 |
Expenses: | ||||
Direct operating costs | 283,992 | 19,224 | 390,436 | 40,216 |
Depletion, depreciation and amortization | 90,519 | 12,249 | 142,133 | 28,206 |
Professional fees | $ 287,635 | $ 320,019 | 899,819 | $ 513,062 |
Bonuses | 240,000 | |||
General and administrative | $ 294,183 | $ 66,251 | 468,218 | $ 126,147 |
Equity compensation | 28,468 | 14,999 | 1,820,020 | 14,999 |
Total expenses | 984,797 | 432,742 | 3,960,626 | 722,630 |
Net operating (loss) | (705,623) | (396,987) | (3,580,129) | (642,763) |
Other (income) expense: | ||||
Interest and other (income) | (11,559) | (827) | (29,839) | (827) |
Interest expense | 240,303 | $ 4,367 | 469,966 | $ 11,115 |
Change in fair value of conversion option | (162,992) | (189,852) | ||
Total other expense | 65,752 | $ 3,540 | 250,275 | $ 10,288 |
Loss before income taxes | (771,375) | $ (400,527) | (3,830,404) | $ (653,051) |
Income tax benefit | 44,746 | 44,746 | ||
Net loss | $ (726,629) | $ (400,527) | $ (3,785,658) | $ (653,051) |
Net loss attributable to non-controlling interest | ||||
Net loss attributable to the Company | $ (726,629) | $ (400,527) | $ (3,785,658) | $ (653,051) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.05) | $ (0.02) |
Weighted average common shares outstanding - basic and diluted | 82,512,718 | 37,874,868 | 73,308,739 | 28,967,059 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss before loss attributable to non-controlling interest | $ (3,785,658) | $ (653,051) |
Depletion, depreciation and amortization | 142,133 | 28,206 |
Equity compensation | 1,820,020 | $ 14,999 |
Other non-cash expenses | 47,151 | |
Non-cash interest expense | 184,601 | $ 9,883 |
Change in fair value of conversion option | (189,852) | |
Deferred income tax benefit | (44,746) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Accounts receivable | 30,536 | $ (3,611) |
Inventory | 4,636 | 3,033 |
Prepaid expenses | (34,379) | 10,713 |
Accounts payable and accrued expenses | 695,861 | $ 329,205 |
Accrued bonuses | 240,000 | |
Accrued interest payable | 200,950 | $ 378 |
Net cash (used in) operating activities | $ (688,747) | (260,245) |
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 | $ (325,000) | |
Purchase of fixed assets | $ (42,371) | |
Secured subordinated loan receivable | (346,625) | $ (302,306) |
Net cash (used in) investing activities | (365,652) | (620,088) |
Cash flows from financing activities: | ||
Loans from related parties | 390,300 | $ 180,000 |
Repayment of loans from related parties, short term | (50,000) | |
Proceeds from convertible notes | 300,000 | $ 300,000 |
Note issuance to Sefton | 400,000 | |
Bank loan repayment | (400,000) | |
Proceeds from other debt | 258,118 | |
Repayment of other debt | (42,755) | $ (19,702) |
Net proceeds from unit offering | 114,920 | $ 669,901 |
Proceeds from sale of non-controlling interest | 90,000 | |
Net cash provided by financing activities | 1,060,583 | $ 1,130,199 |
Net change in cash | 6,184 | 249,866 |
Cash, beginning | 13,207 | 8,298 |
Cash, end | 19,391 | 258,164 |
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 77,866 | $ 9,883 |
Income taxes paid | ||
Convertible notes payable and accrued interest extinguished through rollover into new convertible note payable | $ 864,896 | |
Convertible notes payable and accrued interest converted to common stock and warrants | $ 324,766 | |
Units issued to settle loans from related parties, long term | $ 135,312 | |
Units or stock issued to settle accounts payable | $ 136,494 | $ 31,560 |
Common stock and warrants issued to pay interest on long term note | 67,174 | |
Common stock issued for general and administrative services | 52,431 | |
TEG acquisition: | ||
Common stock and warrants issued | 531,027 | |
Common stock and warrants subsequently cancelled | (430,500) | |
Secured subordinated loan receivable not settled prior to closing | 1,663,227 | |
Liabilities assumed | $ 10,664,874 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF DEFICIT - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
May. 31, 2015 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | |
Balance | $ (709,883) | $ (1,226) | $ (1,226) | |
Balance, shares | 41,174,703 | |||
Recapitalization on completion of acquisition of SCNRG | 1,626 | |||
Issued to acquire Hawker Energy (Rincon), LLC | $ (135,199) | |||
Issuance of common stock payable | ||||
Proceeds received for common stock payable | $ 50,000 | |||
Equity compensation pursuant to HERLLC Option Agreement | $ 1,700,590 | |||
Stock option compensation | 119,430 | 68,760 | ||
Net proceeds from unit offering | 114,920 | 980,288 | ||
Conversion of accounts and bonus payable into units | 136,494 | |||
Common stock issued for general and adminstrative services | 52,431 | |||
Issuance of shares and warrants to acquire TEG | 531,027 | |||
Cancellation of shares and warrants issued to acquire TEG | (430,500) | |||
Issuance of shares and warrants on conversion of notes payable | 324,766 | |||
Extinguishment of conversion option | 97,398 | |||
Interest on note to be paid in shares and warrants | 67,174 | |||
Sale of non-controlling interest | 90,000 | 55,000 | ||
Net loss attributable to the Company | $ (726,629) | (3,785,658) | $ (653,051) | (1,729,132) |
Balance | $ (1,691,811) | $ (1,691,811) | $ (709,883) | |
Balance, shares | 82,737,306 | 82,737,306 | 41,174,703 | |
Common Stock [Member] | ||||
Balance | $ 41,175 | |||
Balance, shares | 41,174,703 | |||
Recapitalization on completion of acquisition of SCNRG | $ 25,962 | |||
Recapitalization on completion of acquisition of SCNRG, shares | 25,961,983 | |||
Issued to acquire Hawker Energy (Rincon), LLC | $ 3,000 | |||
Issued to acquire Hawker Energy (Rincon), LLC, shares | 3,000,000 | |||
Issuance of common stock payable | $ 500 | $ 2,000 | ||
Issuance of common stock payable, shares | 500,000 | 2,000,000 | ||
Proceeds received for common stock payable | ||||
Proceeds received for common stock payable, shares | ||||
Equity compensation pursuant to HERLLC Option Agreement | $ 33,000 | |||
Equity compensation pursuant to HERLLC Option Agreement, shares | 33,000,000 | |||
Stock option compensation | ||||
Net proceeds from unit offering | $ 1,150 | $ 10,213 | ||
Net proceeds from unit offering, shares | 1,150,000 | 10,212,720 | ||
Conversion of accounts and bonus payable into units | $ 1,364 | |||
Conversion of accounts and bonus payable into units, shares | 1,364,945 | |||
Common stock issued for general and adminstrative services | $ 800 | |||
Common stock issued for general and adminstrative services, shares | 800,000 | |||
Issuance of shares and warrants to acquire TEG | $ 3,000 | |||
Issuance of shares and warrants to acquire TEG, shares | 3,000,000 | |||
Cancellation of shares and warrants issued to acquire TEG | $ (1,500) | |||
Cancellation of shares and warrants issued to acquire TEG, shares | (1,500,000) | |||
Issuance of shares and warrants on conversion of notes payable | $ 3,248 | |||
Issuance of shares and warrants on conversion of notes payable, shares | 3,247,658 | |||
Extinguishment of conversion option | ||||
Interest on note to be paid in shares and warrants | ||||
Interest on note to be paid in shares and warrants,shares | ||||
Sale of non-controlling interest | ||||
Net loss attributable to the Company | ||||
Balance | $ 82,737 | $ 82,737 | $ 41,175 | |
Balance, shares | 82,737,306 | 82,737,306 | 41,174,703 | |
Common Stock and Warrants Payable [Member] | ||||
Balance | $ 50,000 | |||
Balance, shares | 500,000 | |||
Recapitalization on completion of acquisition of SCNRG | $ 2,000 | |||
Recapitalization on completion of acquisition of SCNRG, shares | 2,000,000 | |||
Issued to acquire Hawker Energy (Rincon), LLC | ||||
Issued to acquire Hawker Energy (Rincon), LLC, shares | ||||
Issuance of common stock payable | $ (50,000) | $ (2,000) | ||
Issuance of common stock payable, shares | (500,000) | (2,000,000) | ||
Proceeds received for common stock payable | $ 50,000 | |||
Proceeds received for common stock payable, shares | 500,000 | |||
Equity compensation pursuant to HERLLC Option Agreement | ||||
Equity compensation pursuant to HERLLC Option Agreement, shares | ||||
Stock option compensation | ||||
Net proceeds from unit offering | ||||
Net proceeds from unit offering, shares | ||||
Conversion of accounts and bonus payable into units | ||||
Conversion of accounts and bonus payable into units, shares | ||||
Common stock issued for general and adminstrative services | ||||
Common stock issued for general and adminstrative services, shares | ||||
Issuance of shares and warrants to acquire TEG | ||||
Issuance of shares and warrants to acquire TEG, shares | ||||
Cancellation of shares and warrants issued to acquire TEG | ||||
Cancellation of shares and warrants issued to acquire TEG, shares | ||||
Issuance of shares and warrants on conversion of notes payable | ||||
Issuance of shares and warrants on conversion of notes payable, shares | ||||
Extinguishment of conversion option | ||||
Interest on note to be paid in shares and warrants | $ 67,174 | |||
Interest on note to be paid in shares and warrants,shares | 510,000 | |||
Sale of non-controlling interest | ||||
Net loss attributable to the Company | ||||
Balance | $ 67,174 | $ 67,174 | $ 50,000 | |
Balance, shares | 510,000 | 510,000 | 500,000 | |
Additional Paid-in Capital [Member] | ||||
Balance | $ 1,224,300 | $ 350,000 | $ 350,000 | |
Recapitalization on completion of acquisition of SCNRG | (26,336) | |||
Issued to acquire Hawker Energy (Rincon), LLC | $ (138,199) | |||
Issuance of common stock payable | 49,500 | |||
Proceeds received for common stock payable | ||||
Equity compensation pursuant to HERLLC Option Agreement | 1,667,590 | |||
Stock option compensation | 119,430 | $ 68,760 | ||
Net proceeds from unit offering | 113,770 | $ 970,075 | ||
Conversion of accounts and bonus payable into units | 135,130 | |||
Common stock issued for general and adminstrative services | 51,631 | |||
Issuance of shares and warrants to acquire TEG | 528,027 | |||
Cancellation of shares and warrants issued to acquire TEG | (429,000) | |||
Issuance of shares and warrants on conversion of notes payable | 321,518 | |||
Extinguishment of conversion option | $ 97,398 | |||
Interest on note to be paid in shares and warrants | ||||
Sale of non-controlling interest | ||||
Net loss attributable to the Company | ||||
Balance | $ 3,879,294 | $ 3,879,294 | $ 1,224,300 | |
Accumulated (Deficit) [Member] | ||||
Balance | $ (2,080,358) | $ (351,226) | $ (351,226) | |
Recapitalization on completion of acquisition of SCNRG | ||||
Issued to acquire Hawker Energy (Rincon), LLC | ||||
Issuance of common stock payable | ||||
Proceeds received for common stock payable | ||||
Equity compensation pursuant to HERLLC Option Agreement | ||||
Stock option compensation | ||||
Net proceeds from unit offering | ||||
Conversion of accounts and bonus payable into units | ||||
Common stock issued for general and adminstrative services | ||||
Issuance of shares and warrants to acquire TEG | ||||
Cancellation of shares and warrants issued to acquire TEG | ||||
Issuance of shares and warrants on conversion of notes payable | ||||
Extinguishment of conversion option | ||||
Interest on note to be paid in shares and warrants | ||||
Sale of non-controlling interest | ||||
Net loss attributable to the Company | $ (3,785,658) | $ (1,729,132) | ||
Balance | (5,866,016) | (5,866,016) | $ (2,080,358) | |
Non-Controlling Interest [Member] | ||||
Balance | $ 55,000 | |||
Recapitalization on completion of acquisition of SCNRG | ||||
Issued to acquire Hawker Energy (Rincon), LLC | ||||
Issuance of common stock payable | ||||
Proceeds received for common stock payable | ||||
Equity compensation pursuant to HERLLC Option Agreement | ||||
Stock option compensation | ||||
Net proceeds from unit offering | ||||
Conversion of accounts and bonus payable into units | ||||
Common stock issued for general and adminstrative services | ||||
Issuance of shares and warrants to acquire TEG | ||||
Cancellation of shares and warrants issued to acquire TEG | ||||
Issuance of shares and warrants on conversion of notes payable | ||||
Extinguishment of conversion option | ||||
Interest on note to be paid in shares and warrants | ||||
Sale of non-controlling interest | $ 90,000 | $ 55,000 | ||
Net loss attributable to the Company | ||||
Balance | $ 145,000 | $ 145,000 | $ 55,000 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
May. 31, 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 14.0 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 ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
May. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis O f 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 our Annual Report on Form 10-K, as amended, for the year ended August 31, 2014, which contains our consolidated financial statements and notes thereto. Our 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 nine months ended May 31, 2015, are not necessarily indicative of results for the full fiscal year. There have been no significant changes in our significant accounting policies for the nine months ended May 31, 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 Quarterly Report on Form 10-Q/A for the three months ended November 30, 2014, and the Quarterly Report on Form 10-Q for the three months ended February 28, 2015. Principles O f C onsolidation Our acquisition of SCNRG 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 ours 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 All significant intercompany balances and transactions have been eliminated. Use O f E stimates 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. We have not conducted an analysis to determine whether we will adopt the new standard early or not. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
May. 31, 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 May 31, 2015, the Company had cash of $ 19,391 87,463 8,120,721 8,033,258 726,629 3,785,658 5,866,016 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. effective February 1, 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, to do high rate of return maintenance projects and continue with cost cutting initiatives at the Tapia oil field, 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 U.
ACQUISITION OF TEG OIL & GAS U.S.A., INC. | 9 Months Ended |
May. 31, 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), the Company completed the acquisition of all of the outstanding common stock of TEG from Sefton Resources, Inc. (Sefton) (the TEG Acquisition). The purchase price was $ 1 3,000,000 five 5,000,000 0.25 1.6 the Company See Note 6 for a March 18, 2015 transaction that resulted in cancellation of 1,500,000 430,500 TEG is an energy company focused on exploitation and production of crude oil in Southern California. TEG's assets comprise four one 262 1,510 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 shareholder's 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 p rice : Fair value of Hawker's common stock issued (1) $ 100,527 Loan made by Hawker group to TEG prior to closing 1,663,227 Total purchase price 1,763,754 Estimated f air value of liabilities assumed: Loan payable to Bank of the West ("BOTW"), plus accrued interest (Note 6) 4,011,882 Accounts payable 842,890 Accrued liabilities 109,073 Asset retirement obligation 1,743,558 Retirement liability 998,471 Deferred income taxes 2,959,000 Amount attributable to liabilities assumed 10,664,874 Total purchase price and assumed liabilities $ 12,428,628 Estimated f air 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 10,153,467 Amount attributable to assets acquired $ 12,428,628 (1) 1,500,000 0.067 The results of operations of TEG from the February 1, 2015 effective closing date through May 31, 2015, have been included in the Company The following unaudited pro forma combined results of operations are provided for the nine month periods ended May 31, 2015 and 2014 as though the TEG 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 the Company (in thousands, except per share amounts) Nine Months Ended May 31, 2015 2014 Revenues $ 1,281 $ 2,482 Net (loss) $ (3,750 ) $ (962 ) Net (loss) per share: Basic and diluted $ (0.05 ) $ (0.03 ) For the nine month period ended May 31, 2015, the Company recognized $ 332,571 585,330 103,351 131,936 44,746 276,012 Historically, TEG's fiscal year end was December 31st and the Company's fiscal year end is August 31st. For the nine months ended May 31, 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 from October 1, 2013 through June 30, 2014, respectively. |
SECURED SUBORDINATED LOAN RECEI
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM | 9 Months Ended |
May. 31, 2015 | |
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM [Abstract] | |
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM | 5 . SECURED S UBORDINATED 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 (Pledge), 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 a Share Purchase Agreement to acquire TEG, which acquisition closed on February 3, 2015 (Note 4). The Guarantee and Pledge were terminated on closing of the TEG Acquisition. Under the terms of the Loan Receivable Agreements, TEG agreed to pay us the principal sum of $ 2,100,000 3.0 346,625 1,663,227 The August 31, 2014 balance of the secured subordinated note receivable comprised $ 1,290,727 7,595 1,298,322 |
BANK LOAN PAYABLE
BANK LOAN PAYABLE | 9 Months Ended |
May. 31, 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 TEG 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 the TEG Acquisition, we entered into a Fifth Amendment to Forbearance Agreement (Fifth Amendment) among Sefton, TEG, TEGMC, BOTW 350,000 1,500,000 100 9 5 4 14 15,000 60 As a result of the TEG Acquisition, TEG was no longer affiliated with Sefton or TEGMC and, accordingly, Sefton and TEGMC subsequently 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, BOTW and us. 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 $ 400,000 400,000 1,500,000 6 |
LOANS PAYABLE TO RELATED PARTIE
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM | 9 Months Ended |
May. 31, 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 May 31, 2015, and August 31, 2014: May 31, August 31, 2015 2014 Darren Katic $ 378,800 $ 161,000 Manhattan Holdings, LLC 90,000 60,000 Gerald Tywoniuk 35,000 - Kristian Andresen 41,026 - Charles Moore 20,000 - Total short-term loans 564,826 221,000 Accrued interest payable 34,130 5,876 Loans payable to related parties, short term $ 598,956 $ 226,876 Loans payable to related parties are unsecured and bear interest at 10 |
SHORT TERM DEBT
SHORT TERM DEBT | 9 Months Ended |
May. 31, 2015 | |
SHORT TERM DEBT [Abstract] | |
SHORT TERM DEBT | 8. SHORT TERM DEBT Short term debt comprises the following at May 31, 2015, and August 31, 2014: May 31, August 31, Hawker Note payable to Sefton $ 404,866 $ - Convertible note payable, short term 56,296 862,450 Short term loan 55,000 - Short term debt $ 516,162 $ 862,450 Note Payable to Sefton As described in Note 6, the $ 400,000 6 4,866 Convertible Notes Payable, Short Term Between May 13, 2014, and May 31, 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 Convertible notes payable, short term, consist of the following at May 31, 2015, and August 31, 2014; conversion features, security provisions and warrants to acquire our common stock are also set forth below: Issue Maturity May 31, August 31, Date Date 2015 2014 CNP 1 June 25, 2014 November 30, $ - $ 350,000 CNP 2 May 30, 2014 November 30, - 250,000 CNP 3 July 17, 2014 June 30, 2015 - 100,000 CNP 4 July 17, 2014 July 10, 2015 - 100,000 CNP 5 May 13, 2014 May 13, 2016 50,000 50,000 CNP 6 July 25, 2014 July 25, 2015 - 50,000 CNP 7 August 28, 2014 July 25, 2015 - 30,000 CNP 8 September 26, 2014 September 26, - - CNP 9 November 3, 2014 May 3, 2015 - - 50,000 930,000 Less unamortized discount (7) - (89,149 ) Accrued interest payable 6,296 21,599 Convertible notes payable, short term $ 56,296 $ 862,450 (1) Convertible at any time at the option of the investor into Conversion Units. Each Conversion Unit consists of one share of our common stock and one warrant to purchase one-half share of our common stock at an exercise price of $ 0.25 0.10 five 0.10 4.99 25,000 4.99 (2) Hawker granted a security interest to the investor in all of our 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 our closing the TEG Acquisition in February 2015 as described in Note 4. Conversion of unpaid interest into Conversion Units was at our election, which election we 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 we 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). (8) Original principal amounts were $ 25,000 25,000 CNP 1 (principal amount $ 350,000 250,000 Short term loan On May 8, 2015, a third party advanced $ 55,000 |
LONG TERM DEBT
LONG TERM DEBT | 9 Months Ended |
May. 31, 2015 | |
LONG TERM DEBT [Abstract] | |
LONG TERM DEBT | 9 . LONG TERM DEBT Long term debt is comprised of the following at May 31, 2015, and August 31, 2014: May 31, August 31, Convertible note payable, long term $ 192,632 $ - Overriding royalty interest liability 297,705 - Net profits interest payable 154,245 169,104 Note payable and other 132,449 - Total long term debt 777,031 169,104 Less current portion (326,214 ) (20,065 ) Long term debt, net of current portion $ 450,817 $ 149,039 Convert i ble 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 two The Secured Convertible Note Payable was issued in consideration of additional proceeds to us in the amount of $ 250,000 200,000 50,000 250,000 350,000 25,000 Secured Convertible Note Payable The Secured Convertible Note Payable bears interest on the unpaid principal balance of the Secured Convertible Note Payable at the rate of 12 The Secured Convertible Note Payable is convertible at any time at the option of the investor into shares of our common stock, computed by dividing all of the then outstanding principal and accrued interest under the Secured Convertible Note Payable by $ 0.10 4.99 The proceeds from the Secured Convertible Note Payable were used 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 3.5 We identified an embedded derivative related to the Conversion Rate reset provision. The accounting treatment of derivative financial instruments required that we 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. We determined a fair value of $ 540,084 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 The total debt discount amounted to $ 803,843 41,363 762,480 184 12 Nine Months Year 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 41,363 - Unamortized discount (762,480 ) - Accrued interest payable 40,216 - Carrying value of Secured Convertible Note Payable, end of period 192,632 - Less current portion (140,981 ) - Secured Convertible Note Payable, long term portion, end of period $ 51,651 $ - Overriding Royalty Interest Liability (ORRI Liability) Pursuant to an overriding royalty interest (ORRI) granted effective January 15, 2015 to the Secured Convertible Note Payable holder, as described immediately above, oil sales from the Tapia Canyon field are subject to an additional 2.5 3.5 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. 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. There was no change in fair value during the period from grant date to May 31, 2015. The following assumptions were used by management to determine the fair value of the ORRI Liability as of January 15, 2015, and which assumptions remain unchanged at May 31, 2015: Oil price $ 65 Resulting reserves were included as follows: Proved developed producing 100 % Proved developed non-producing 50 % Proved undeveloped 0 % Discount rate 35 % Nine Months Year May 31, August 31, 2015 2014 ORRI Liability, beginning of period $ - $ - ORRI granted to holder of long-term convertible note payable 263,759 - Interest accrued 33,946 - Change in estimated liability - - Payments made - - ORRI Liability, end of period 297,705 - Less: current portion (111,999 ) - ORRI Liability, long-term portion $ 185,706 $ - 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 Until February 1, 2014, SCNRG's working interest in the DEEP property was 66.67 1,985 87.18 2,596 100.0 2,978 347,000 357,410 December 31, 2022 152,003 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 15, 2014 when its working interest increased to 100.0%. The discount rate used in all cases was 10.0 Changes in SCNRG's share of the NPI liability are as follows for the nine months ended May 31, 2015 and the year ended August 31, 2014: Nine Months Year May 31, August 31, 2015 2014 NPI liability, beginning of period $ 169,104 $ 124,597 Liabilities assumed in connection with - 58,847 Current period accretion 11,943 14,104 Payments made (26,802 ) (28,444 ) NPI liability, end of period 154,245 169,104 Less: current portion (21,621 ) (20,065 ) NPI liability, long-term portion $ 132,624 $ 149,039 Note Payable And Other Note Payable On January 16, 2015, a relative of Mr. Katic advanced $ 50,000 20,000 100,000 7,083 24 Interest on the note payable is comprised of an up front issuance of 510,000 500,000 0.25 A discount of $ 67,174 46.6 Other Other long term debt represents an installment sales contract for the February 2015 purchase of a field vehicle, with 48 795 6.99 Total Note Payable and Other Nine Months Year Balance, beginning of period $ - $ - Note payable advances 170,000 - Repayments (14,166 ) - Principal outstanding 155,834 - Initial discount (67,174 ) - Amortization of discount 12,458 - Unamortized discount (54,716 ) - Carrying value of note payable 101,118 - Installment sales contract liability 31,331 - Total note payable and other 132,449 - Less current portion (51,613 ) - Note payable and other, long term portion, end of period $ 80,836 $ - |
CONVERSION OPTION
CONVERSION OPTION | 9 Months Ended |
May. 31, 2015 | |
CONVERSION OPTION [Abstract] | |
CONVERSION OPTION | 10 . CONVERSION OPTION Conversion Option, Short Term As described in Note 8 , we 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 ca sh or, at each creditor's option the note is convertible into Conversion Units. Each Conversion Unit consists of one one 0.25 0.10 Each warrant has a five 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 we record t he 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 25,000 , we determined a fair value of $ 139,051 and $ 7,418 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 : Dividend yield: 0 0 % Volatility 178 200 % Risk free rate: 0.05 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 34,662 for the three and nine months ended May 31 , 2015 . The following table provides a summary of changes in fair value of the short term conversion option for the nine months ended May 31 , 2015 and the year ended August 31, 2014 : Nine Months Year Ended 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, Long Term As described in Note 9 , we identified an embedded derivative related to the Conversion Rate reset provision in the Long Term 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 our common stock, computed by dividing all of the then outstanding principal and accrued interest under the Secured Convertible Note Payable by $ 0.10 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. The accounting treatment of derivative financial instruments requires that we record t he 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. We determined a n initial fair value of $ 540,084 of the embedded derivative , in aggregate, for the 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 : Dividend yield: 0 0 % Volatility 236 252 % Risk free rate: 0.51 0.63 % The long term conversion option, being t he fair value of the described embedded derivative , of $ 404,568 at May 31 , 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 177 % Risk free rate: 0.44 % At May 31 , 2015 , we adjusted the recorded fair value of the long term conversion option to market resulting in non-cash, non-operating gain of $ 162,992 $ 155,190 for the three and nine months ended May 31 , 2015 , respectively . Together with the non-cash, non-operating gain s on the short term conversion options described above, the total non-cash, non-operating gain (loss) was $ 162,992 189,852 for the three and nine months ended May 31 , 2015. There were no such gains or losses in the three and nine months ended May 31 , 2014. The following table provides a summary of changes in fair value of the long term conversion option for the nine months ended May 31 , 2015 and the year ended August 31, 2014 : Nine Months Year Balance, beginning of period $ - $ - Initial fair value of debt derivatives at advance dates 540,084 - Initial fair value of debt derivatives on accrual of interest 19,674 Change in fair value of debt derivatives (155,190 ) - Balance, end of period $ 404,568 $ - |
EMPLOYEE RETIREMENT LIABILITY
EMPLOYEE RETIREMENT LIABILITY | 9 Months Ended |
May. 31, 2015 | |
EMPLOYEE RETIREMENT LIABILITY [Abstract] | |
EMPLOYEE RETIREMENT LIABILITY | 1 1 . 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 und er the agreements are 2020 and 2022 . N o employees had this arrangement at August 31, 2014 because at that date we had not yet acquired TEG . The assumed discount rate s used to measure the postemployment benefit liability were 4.48 4.56 % at February 3, 2015 , the TEG acquisition date, and 5 . 0 4 % and 5 . 15 % at May 31 , 2015 . Nine Months Ended Year Ended May 31, August 31, 2015 2014 Employee retirement obligations, beginning $ - $ - Liabilities acquired during the period 998,471 - Liabilities settled during the period - - Current period expense 23,044 - Employee retirement obligations, ending $ 1,021,515 $ - |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
May. 31, 2015 | |
ASSET RETIREMENT OBLIGATIONS [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | 1 2 . ASSET RETIREMENT OBLIGATION S 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 nine months ended May 31 , 2015 and the year ended August 31 , 2014 : NIne Months Year Ended May 31, 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 21,220 10,848 Asset retirement obligations, ending $ 1,932,888 $ 168,110 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
May. 31, 2015 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 1 3 . INCOME TAXES There was no current income tax expense or benefit for the three and nine months ended May 31 , 2015 and 201 4 , and there was a deferred tax benefit of $ 44,746 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 is recorded in the income statement. Otherwise, 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. At February 1, 2015, the effective date of the TEG A cquisition, 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 . |
FAIR VALUE OF MEASUREMENTS
FAIR VALUE OF MEASUREMENTS | 9 Months Ended |
May. 31, 2015 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | 1 4 . FAIR VALUE MEASUREMENTS ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize 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. we classify fair value balances based on the observability of those inputs. Fair Value Of Financial Instruments The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value as of May 31 , 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. Our 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 nine months ended May 31 , 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. The Hawker Note payable to Sefton (see Note 8) is however subject to a potential change in fair value if we estimate in a future reporting period that some or all of it will be cancelled. The following table presents assets and liabilities that are measured and recognized at fair value on a recurring basis, as of May 31 , 2015 and August 31, 2014: Assets and liabilities measured at fair value on a recurring Total basis at May 31 , 2015 : Carrying Level 1 Level 2 Level 3 Value Total Assets $ - $ - $ - $ - Liabilities Note payable to Sefton $ - $ - $ 400,000 $ 400,000 Overriding royalty interest liability - - 297,705 297,705 Conversion option long term - - 404,568 404,568 Total Liabilities $ - $ - $ 1,102,273 $ 1,102,273 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 our Level 3 financial liabilities for the nine month period ended May 31, 2015 and the year ended August 31, 2014: Nine Months Ended Year May 31, 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 22,271 2,630 Extinguished derivative liability (97,398 ) - Initial fair value of overriding royalty interest liability 263,759 - Issuance of note payable to Sefton 400,000 - Mark-to-market at end of period - embedded debt derivatives (189,852 ) (19,636 ) Accrual of interest on overriding royalty interest liability, equivalent to 33,946 - Balance, end of period $ 1,102,273 $ 122,045 Net gain for the period included in earnings as change in fair value $ 189,852 $ 19,636 The re was no gain or loss included in earnings for the nine months ended May 31, 2014 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
May. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 1 5 . COMMITMENTS AND CONTINGENCIES Commitment s Royalties Oil production from the DEEP Lease is subject to a 1 19.92 20.92 Oil production from the Tapia and Eureka Assets are subject to overriding royalties totaling approximately 6 7 16.67 Pursuant to an overriding royalty interest granted to the Secured Convertible Note Payable holder described in Note 9, oil sales from the Tapia Canyon field are subject to an additional 2.5 3.5 Operating Agreement 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 66.67 100.0 Common Shares On October 10, 2014, we authorized an amendment (the Amendment) to the Option Agreement pursuant to which we 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 33,000,000 16,500,000 19,000,000 10,000,000 9,000,000 (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 (e) Maricopa (McFarland and Jameson leases totaling 40 (f) Pine Meadows (Section 1 Township 31 South Range 22E in Kern County); or (g) Torrance (Joughin and South Torrance Units totaling 900 With respect to 14,000,000 1,011,500 19,000 1,030,500 10,000,000 670,090 1,700,590 No Contingencies As of May 31, 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 | 9 Months Ended |
May. 31, 2015 | |
EQUITY [Abstract] | |
EQUITY | 1 6 . EQUITY Co mmon S tock D uring the nine months ended May 31 , 2015: W e issued an aggregate of 500,000 Units to t hree investors in cons ideration of an aggregate of $ 50,000 August 31, 2014 . In addition, we issued an aggregate of 1,150,000 two 115,000 . No commissions were paid or payable. Other transaction costs were $ 80 The price of each Unit was $ 0.10 each closing date. In addition, during the nine months ended May 31 , 2015, we issued: 1,364,945 shares on conversion of $ 136,494 in accounts and bonus payable into common stock. 33,000,000 Amendment described in Note 15 . 3,247, 658 shares on conversion of $ 324,766 A net 1,500,000 800,000 relations services. In addition, 510,000 Related party transactions are set forth in Note 1 7 . Shares O f C ommon S tock P otentially I ssuable P ursuant T o W arrants , C onvertible N otes P ayable A nd O ptions Pursuant to warrants issued in our private placements of securities from January 10 , 201 4 through May 31 , 2015 , up to 6,584,210 shares of our common stock would be issuable upon payment to us of $ 0.20 . 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 0.25 Up to 9,711,919 shares of common stock could be issued p ursuant to the convertible no tes payable described in Note s 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 . Pursuant to the March 25, 2015 note payable, up to 500,000 five 0.25 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 ike price of $ 0.10 1,000,000 options vest ed on December 15, 2014, wit h the balance of 4,950,000 options vesting one-third on each of May 13, 2015, 2016 and 2017. There a re no other options outstanding. All options other than a 1,000,000 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 fo r grant in the form of options or stock purchase rights. At May 31 , 2015 , 15% of our outstanding common stock is 12,019,560 shares , of which we have granted 4,950,000 1,000,000 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 , 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 $ 28,468 and $ 119,430 for the three and nine months ended May 31 , 2015 . There was $ 14,999 and nine months ended May 31 , 2014 . The following is a summary of our 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 $ 0.10 9.7 $ 410,632 Granted - - - - Exercised - - - - Forfeited - - - - Outstanding at May 31, 2015 5,950,000 $ 0.10 9.0 $ 410,632 Vested and exercisable at May 31, 2015 1,000,000 $ 0.10 9.0 $ 69,014 As of May 31 , 2015, there were 4,950,000 unvested stock options and unrecognized stock option expense of $ 222,442 , which is expected to be recognized over 2.0 years . The following table summarizes the information about stock options outstand ing and exercisable at May 31 , 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 9.0 $ 0.10 1,000,000 $ 0.10 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 i nterest of $ 145,000 reported on t he balance sheet as of May 31 , 2015 , represents the non-controlling interest holders' proportionate share of the equity of the Tapia Holdings. The final form of acquisition of TEG was our acquiring 100 80 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
May. 31, 2015 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 1 7 . RELAT ED PARTY TRANSACTIONS The following information sets forth related party transactions, being transactions with: Mr. Kristian Andresen is a director and a significant shareholder. Until October 25, 2013, he was also our CEO, and from October 25, 2013, until July 17, 2014, he was our Secretary. Mr. Andresen has been actively providing services to us since October 25, 2013. Mr. Darren Katic is a director and our Chief Executive Officer and Chief Financial Officer. 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 we 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 we acquired his interest on January 1, 2014, at which point he became a significant shareholder. Mr. Moore has been actively providing services to us since that date. Mr. Gerald Tywoniuk was a member of SCNRG, which we acquired on October 25, 2013, at which point he became a significant shareholder. Mr. Tywoniuk has been actively providing services to us since that date. H ERLLC On January 1, 2014, we exercised our 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. We issued 3,000,000 1,500,000 135,199 29,625 The HERLLC option was originally entered into 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, our Board waived all of the follow-on transaction requirements and authorized the immediate issuance to Messrs. Katic and Moore of 33,000,000 16,500,000 9,000,000 Loan Payable To R elated P art ies , S hort T erm The components of $ 598,956 12,734 28,254 0 During the three and nine months ended May 31, 2015, $ 156,500 390,300 40,000 50,000 Loans Payable To Related Parties, Long T erm SCNRG received various loans from its former members from its inception totaling $ 89,833 ($38,500 ($38,500 ($12,833 1.66 5 Interest expense on such loans was $ 0 115 854 Convertible Notes P ayable From July 17, 2015 until February 3, 2015, pursuant to a convertible note payable, we owed a relative of Mr. Darren Katic $ 100,000 Interest expense on this convertible note payable was $ 0 5,096 Note Payable See Note 9 for a description of a note payable to a relative of Mr. Katic, including payment of interest in shares and a warrant. Unit Issuances As part of the common stock payable amounts outstanding on August 31, 2014 as described in Note 15, $ 20,000 200,000 0.10 0.20 five Other A portion of the non-controlling interest in Tapia Holdings is held by Mr. Moore, being $ 45,000 145,000 On behalf of a company controlled by Mr. Katic, we have been paying rent to a third party for its office space, beginning January 1, 2014. No formal assumption agreement had been completed to assign the leases with the landlord from Mr. Katic's company to us. Mr. Katic had provided a personal guarantee to the landlord. For the three month period and nine month period ended May 31, 2015, these payments totaled $ 9,798 29,031 On March 1, 2015, Mr. Tywoniuk began charging us $ 15,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
May. 31, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 1 8 . SUBSEQUENT EVENT S 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 erty tax payments and prorated rent , net proceeds of $ 157,792 pay down TEG's loan to BOTW. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
May. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | Basis O f 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 our Annual Report on Form 10-K, as amended, for the year ended August 31, 2014, which contains our consolidated financial statements and notes thereto. Our 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 nine months ended May 31, 2015, are not necessarily indicative of results for the full fiscal year. There have been no significant changes in our significant accounting policies for the nine months ended May 31, 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 Quarterly Report on Form 10-Q/A for the three months ended November 30, 2014, and the Quarterly Report on Form 10-Q for the three months ended February 28, 2015. |
Principles of Consolidation | Principles O f C onsolidation Our acquisition of SCNRG 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 ours 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 All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use O f E stimates 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. We have not conducted an analysis to determine whether we will adopt the new standard early or not. |
ACQUISITION OF TEG OIL & GAS 26
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Tables) - TEG Oil & Gas, Inc. [Member] | 9 Months Ended |
May. 31, 2015 | |
Business Acquisition [Line Items] | |
Schedule of Consideration Transferred and Liabilities Assumed, and the Fair Value of Assets Acquired | Purchase p rice : Fair value of Hawker's common stock issued (1) $ 100,527 Loan made by Hawker group to TEG prior to closing 1,663,227 Total purchase price 1,763,754 Estimated f air value of liabilities assumed: Loan payable to Bank of the West ("BOTW"), plus accrued interest (Note 6) 4,011,882 Accounts payable 842,890 Accrued liabilities 109,073 Asset retirement obligation 1,743,558 Retirement liability 998,471 Deferred income taxes 2,959,000 Amount attributable to liabilities assumed 10,664,874 Total purchase price and assumed liabilities $ 12,428,628 Estimated f air 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 10,153,467 Amount attributable to assets acquired $ 12,428,628 (1) 1,500,000 0.067 |
Schedule of unaudited pro forma combined results of operations | (in thousands, except per share amounts) Nine Months Ended May 31, 2015 2014 Revenues $ 1,281 $ 2,482 Net (loss) $ (3,750 ) $ (962 ) Net (loss) per share: Basic and diluted $ (0.05 ) $ (0.03 ) |
LOANS PAYABLE TO RELATED PART27
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM (Tables) | 9 Months Ended |
May. 31, 2015 | |
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM [Abstract] | |
Schedule of loans payable to related parties, short term | May 31, August 31, 2015 2014 Darren Katic $ 378,800 $ 161,000 Manhattan Holdings, LLC 90,000 60,000 Gerald Tywoniuk 35,000 - Kristian Andresen 41,026 - Charles Moore 20,000 - Total short-term loans 564,826 221,000 Accrued interest payable 34,130 5,876 Loans payable to related parties, short term $ 598,956 $ 226,876 |
SHORT TERM DEBT (Tables)
SHORT TERM DEBT (Tables) | 9 Months Ended |
May. 31, 2015 | |
SHORT TERM DEBT [Abstract] | |
Schedule of Short term debt | May 31, August 31, Hawker Note payable to Sefton $ 404,866 $ - Convertible note payable, short term 56,296 862,450 Short term loan 55,000 - Short term debt $ 516,162 $ 862,450 |
Summary of convertible notes payable, short term | Issue Maturity May 31, August 31, Date Date 2015 2014 CNP 1 June 25, 2014 November 30, $ - $ 350,000 CNP 2 May 30, 2014 November 30, - 250,000 CNP 3 July 17, 2014 June 30, 2015 - 100,000 CNP 4 July 17, 2014 July 10, 2015 - 100,000 CNP 5 May 13, 2014 May 13, 2016 50,000 50,000 CNP 6 July 25, 2014 July 25, 2015 - 50,000 CNP 7 August 28, 2014 July 25, 2015 - 30,000 CNP 8 September 26, 2014 September 26, - - CNP 9 November 3, 2014 May 3, 2015 - - 50,000 930,000 Less unamortized discount (7) - (89,149 ) Accrued interest payable 6,296 21,599 Convertible notes payable, short term $ 56,296 $ 862,450 (1) Convertible at any time at the option of the investor into Conversion Units. Each Conversion Unit consists of one share of our common stock and one warrant to purchase one-half share of our common stock at an exercise price of $ 0.25 0.10 five 0.10 4.99 25,000 4.99 (2) Hawker granted a security interest to the investor in all of our 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 our closing the TEG Acquisition in February 2015 as described in Note 4. Conversion of unpaid interest into Conversion Units was at our election, which election we 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 we 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). (8) Original principal amounts were $ 25,000 25,000 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 9 Months Ended |
May. 31, 2015 | |
LONG TERM DEBT [Abstract] | |
Schedule of long term debt | May 31, August 31, Convertible note payable, long term $ 192,632 $ - Overriding royalty interest liability 297,705 - Net profits interest payable 154,245 169,104 Note payable and other 132,449 - Total long term debt 777,031 169,104 Less current portion (326,214 ) (20,065 ) Long term debt, net of current portion $ 450,817 $ 149,039 |
Schedule of secured convertible note payable | Nine Months Year 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 41,363 - Unamortized discount (762,480 ) - Accrued interest payable 40,216 - Carrying value of Secured Convertible Note Payable, end of period 192,632 - Less current portion (140,981 ) - Secured Convertible Note Payable, long term portion, end of period $ 51,651 $ - |
Schedule of assumptions used by management to determine the fair value of the ORRI Liability | Oil price $ 65 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 | Nine Months Year May 31, August 31, 2015 2014 ORRI Liability, beginning of period $ - $ - ORRI granted to holder of long-term convertible note payable 263,759 - Interest accrued 33,946 - Change in estimated liability - - Payments made - - ORRI Liability, end of period 297,705 - Less: current portion (111,999 ) - ORRI Liability, long-term portion $ 185,706 $ - |
Schedule of Changes in NPI Liability | Nine Months Year May 31, August 31, 2015 2014 NPI liability, beginning of period $ 169,104 $ 124,597 Liabilities assumed in connection with - 58,847 Current period accretion 11,943 14,104 Payments made (26,802 ) (28,444 ) NPI liability, end of period 154,245 169,104 Less: current portion (21,621 ) (20,065 ) NPI liability, long-term portion $ 132,624 $ 149,039 |
Schedule of Total Note Payable and Other | Nine Months Year Balance, beginning of period $ - $ - Note payable advances 170,000 - Repayments (14,166 ) - Principal outstanding 155,834 - Initial discount (67,174 ) - Amortization of discount 12,458 - Unamortized discount (54,716 ) - Carrying value of note payable 101,118 - Installment sales contract liability 31,331 - Total note payable and other 132,449 - Less current portion (51,613 ) - Note payable and other, long term portion, end of period $ 80,836 $ - |
CONVERSION OPTION (Tables)
CONVERSION OPTION (Tables) | 9 Months Ended |
May. 31, 2015 | |
Long Term Secured Convertible Note Payable [Member] | |
Conversion options [Line Items] | |
Summary of changes in fair value of the conversion option | Nine Months Year Balance, beginning of period $ - $ - Initial fair value of debt derivatives at advance dates 540,084 - Initial fair value of debt derivatives on accrual of interest 19,674 Change in fair value of debt derivatives (155,190 ) - Balance, end of period $ 404,568 $ - |
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 0 % Volatility 236 252 % Risk free rate: 0.51 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 177 % Risk free rate: 0.44 % |
Short Term Secured Convertible Notes Payable [Member] | |
Conversion options [Line Items] | |
Summary of changes in fair value of the conversion option | Nine Months Year Ended 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 |
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 0 % Volatility 178 200 % Risk free rate: 0.05 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) | 9 Months Ended |
May. 31, 2015 | |
EMPLOYEE RETIREMENT LIABILITY [Abstract] | |
Schedule of employee retirement obligations | Nine Months Ended Year Ended May 31, August 31, 2015 2014 Employee retirement obligations, beginning $ - $ - Liabilities acquired during the period 998,471 - Liabilities settled during the period - - Current period expense 23,044 - Employee retirement obligations, ending $ 1,021,515 $ - |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
May. 31, 2015 | |
ASSET RETIREMENT OBLIGATIONS [Abstract] | |
Schedule of Changes in Asset Retirement Obligation | NIne Months Year Ended May 31, 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 21,220 10,848 Asset retirement obligations, ending $ 1,932,888 $ 168,110 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
May. 31, 2015 | |
FAIR VALUE MEASUREMENTS [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 May 31 , 2015 : Carrying Level 1 Level 2 Level 3 Value Total Assets $ - $ - $ - $ - Liabilities Note payable to Sefton $ - $ - $ 400,000 $ 400,000 Overriding royalty interest liability - - 297,705 297,705 Conversion option long term - - 404,568 404,568 Total Liabilities $ - $ - $ 1,102,273 $ 1,102,273 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 | Nine Months Ended Year May 31, 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 22,271 2,630 Extinguished derivative liability (97,398 ) - Initial fair value of overriding royalty interest liability 263,759 - Issuance of note payable to Sefton 400,000 - Mark-to-market at end of period - embedded debt derivatives (189,852 ) (19,636 ) Accrual of interest on overriding royalty interest liability, equivalent to 33,946 - Balance, end of period $ 1,102,273 $ 122,045 Net gain for the period included in earnings as change in fair value $ 189,852 $ 19,636 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
May. 31, 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 $ 0.10 9.7 $ 410,632 Granted - - - - Exercised - - - - Forfeited - - - - Outstanding at May 31, 2015 5,950,000 $ 0.10 9.0 $ 410,632 Vested and exercisable at May 31, 2015 1,000,000 $ 0.10 9.0 $ 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 9.0 $ 0.10 1,000,000 $ 0.10 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) - Oct. 25, 2013 - SCNRG [Member] - shares shares in Millions | Total |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Acquisition of share interest | 100.00% |
Number of shares issued for acquisition | 14 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 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 | 9 Months Ended | 12 Months Ended | |||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | Aug. 31, 2013 | |
GOING CONCERN [Abstract] | ||||||
Cash and equivalents | $ 19,391 | $ 258,164 | $ 19,391 | $ 258,164 | $ 13,207 | $ 8,298 |
Total current assets | 87,463 | 87,463 | 1,382,825 | |||
Total current liabilities | 8,120,721 | 8,120,721 | 2,524,874 | |||
Working capital deficit | 8,033,258 | 8,033,258 | ||||
Net losses | (726,629) | $ (400,527) | (3,785,658) | $ (653,051) | (1,729,132) | |
Accumulated net loss | $ (5,866,016) | $ (5,866,016) | $ (2,080,358) |
ACQUISITION OF TEG OIL & GAS 38
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Narrative) (Details) - Line of Credit Facility, Lender [Domain] | Mar. 18, 2015USD ($)shares | Feb. 03, 2015USD ($)aitem$ / sharesshares | May. 31, 2015USD ($) | May. 31, 2014USD ($) | May. 31, 2015USD ($) | May. 31, 2014USD ($) | Aug. 31, 2014USD ($) | Sep. 18, 2013 |
Business Acquisition [Line Items] | ||||||||
Advances | $ 1,298,322 | |||||||
Cancellation of stock and warrant | $ (430,500) | |||||||
Interest rate | 1.66% | |||||||
Sales of crude oil (net of royalties) | $ 279,174 | $ 35,755 | 380,497 | $ 79,867 | ||||
Production costs, professional fees and general and administrative costs | 984,797 | 432,742 | 3,960,626 | 722,630 | ||||
Depletion, depreciation and amortization | 142,133 | 28,206 | ||||||
Interest expense | $ 240,303 | $ 4,367 | 469,966 | $ 11,115 | ||||
Secured Subordinated Loan Receivable, Short Term [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Advances | $ 1,298,322 | |||||||
Consideration return to Hawker by Sefton for cancellation [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Cancellation of stock and warrant, shares | shares | 1,500,000 | |||||||
Cancellation of stock and warrant | $ 430,500 | |||||||
TEG Oil & Gas, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Other obligations and deferred tax recovery | 44,746 | |||||||
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 | shares | 3,000,000 | |||||||
Warrant term | 5 years | |||||||
Shares of common stock that can be purchased from warrants | shares | 5,000,000 | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.25 | |||||||
Payment obligations to Bank of the West | $ 4,011,882 | |||||||
Sales of crude oil (net of royalties) | 332,571 | |||||||
Production costs, professional fees and general and administrative costs | 585,330 | |||||||
Depletion, depreciation and amortization | 103,351 | |||||||
Interest expense | 131,936 | |||||||
Non-recurring transaction costs | $ 276,012 | |||||||
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] | Tapia Assets [Member] | Tapia Holdings, LLC [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of oil and gas leases contributed | item | 4 | |||||||
Area of land | a | 262 | |||||||
TEG Oil & Gas, Inc. [Member] | Eureka Assets [Member] | Tapia Holdings, LLC [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of oil and gas leases contributed | item | 1 | |||||||
Area of land | a | 1,510 |
ACQUISITION OF TEG OIL & GAS 39
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Schedule of Consideration Transferred and Liabilities Assumed, and Fair Value of Assets Acquired) (Details) - USD ($) | Feb. 03, 2015 | May. 31, 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 | [1] | $ 100,527 | |
Loan made by Hawker group to TEG prior to closing | 1,663,227 | ||
Total purchase price | 1,763,754 | ||
Estimated fair value of liabilities assumed: | |||
Loan payable to Bank of the West ("BOTW"), plus accrued interest | 4,011,882 | ||
Accounts payable | 842,890 | ||
Accrued liabilities | 109,073 | ||
Asset retirement obligation | 1,743,558 | ||
Retirement liability | 998,471 | ||
Deferred income taxes | 2,959,000 | ||
Amount attributable to liabilities assumed | 10,664,874 | ||
Total purchase price and assumed liabilities | 12,428,628 | ||
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 | 10,153,467 | ||
Amount attributable to assets acquired | $ 12,428,628 | ||
Shares of common stock issued | 1,500,000 | ||
Share price (in dollars per share) | $ 0.067 | ||
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] | 1,500,000 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 $1,000 in value), the estimated value of the common stock based on cash sales to third-parties is significantly more meaningful in regards to fair value. The 1,500,000 share amount reflects 3,000,000 Hawker shares and a Warrant initially issued on the February 3, 2015, closing, less the cancellation of 1,500,000 shares and the Warrant on March 18, 2015. |
ACQUISITION OF TEG OIL & GAS 40
ACQUISITION OF TEG OIL & GAS U.S.A., INC. (Schedule of Unaudited Pro forma Combined Results of Operations) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Business Acquisition [Line Items] | ||||
Net (loss) per share: Basic and diluted | $ (0.01) | $ (0.01) | $ (0.05) | $ (0.02) |
TEG Oil & Gas, Inc. [Member] | Share Purchase Agreement with Sefton [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | $ 1,281 | $ 2,482 | ||
Net (loss) | $ (3,750) | $ (962) | ||
Net (loss) per share: Basic and diluted | $ (0.05) | $ (0.03) |
SECURED SUBORDINATED LOAN REC41
SECURED SUBORDINATED LOAN RECEIVABLE, SHORT TERM (Narrative) (Details) - Entity [Domain] - Geographical [Domain] - USD ($) | 5 Months Ended | 9 Months Ended | ||
Jan. 31, 2015 | May. 31, 2015 | Mar. 18, 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 | $ 346,625 | |||
Advances | $ 400,000 | |||
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 |
BANK LOAN PAYABLE (Narrative) (
BANK LOAN PAYABLE (Narrative) (Details) | Mar. 17, 2015shares | Jan. 01, 2015USD ($)$ / bbl | May. 31, 2015USD ($) | Mar. 18, 2015USD ($) | Jan. 31, 2015USD ($) | Aug. 31, 2014USD ($) | Sep. 18, 2013 |
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 | ||||||
TEG [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Release of amount outstanding under the Loan | $ 400,000 | ||||||
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 | $ / bbl | 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% | ||||||
Consideration return to Hawker by Sefton for cancellation [Member] | Hawker Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Promissory note receivable | $ 400,000 | ||||||
Consideration return to Hawker by Sefton for cancellation [Member] | Bank of the West [Member] | TEG [Member] | Secured Subordinated Loan Receivable, Short Term [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Shares of common stock issued | shares | 1,500,000 | ||||||
Consideration return to Hawker by Sefton for cancellation [Member] | Bank of the West [Member] | TEG [Member] | Hawker Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 6.00% |
LOANS PAYABLE TO RELATED PART43
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM (Narrative) (Details) - Arrangements and Non-arrangement Transactions [Domain] - USD ($) | 3 Months Ended | 9 Months Ended | ||
May. 31, 2015 | May. 31, 2015 | May. 31, 2014 | Sep. 18, 2013 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Interest rate | 1.66% | |||
Additional loans | $ 156,500 | $ 390,300 | $ 180,000 | |
Darren Katic [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Interest rate | 10.00% | 10.00% |
LOANS PAYABLE TO RELATED PART44
LOANS PAYABLE TO RELATED PARTIES, SHORT TERM (Schedule of Loans from Related Parties) (Details) - USD ($) | May. 31, 2015 | Aug. 31, 2014 |
Loans payable to related parties, short term | ||
Total short-term loans | $ 564,826 | $ 221,000 |
Accrued interest payable | 34,130 | 5,876 |
Loans payable to related parties, short term | 598,956 | 226,876 |
Darren Katic [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | 378,800 | 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 | 35,000 | |
Kristian Andresen [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | 41,026 | |
Charles Moore [Member] | ||
Loans payable to related parties, short term | ||
Total short-term loans | $ 20,000 |
SHORT TERM DEBT (Schedule of Sh
SHORT TERM DEBT (Schedule of Short Term Debt) (Details) - USD ($) | May. 31, 2015 | Aug. 31, 2014 |
Short term debt | ||
Short term debt | $ 516,162 | $ 862,450 |
Hawker Note payable to Sefton [Member] | ||
Short term debt | ||
Short term debt | 404,866 | |
Convertible note payable, short term [Member] | ||
Short term debt | ||
Short term debt | 56,296 | $ 862,450 |
Short term loan [Member] | ||
Short term debt | ||
Short term debt | $ 55,000 |
SHORT TERM DEBT (Narrative) (De
SHORT TERM DEBT (Narrative) (Details) - Debt Instrument, Redemption, Period [Domain] - Range [Domain] - USD ($) | Sep. 18, 2014 | May. 31, 2015 | May. 08, 2015 | Aug. 31, 2014 | Sep. 18, 2013 | |
Debt Instrument [Line Items] | ||||||
Interest rate | 1.66% | |||||
Accrued interest payable | $ 34,130 | $ 5,876 | ||||
Price per unit | $ 0.10 | |||||
Short term loan, advances | $ 564,826 | 221,000 | ||||
Convertible Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 12.00% | |||||
Accrued interest payable | $ 6,296 | 21,599 | ||||
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 | ||||
Short term loan, advances | $ 50,000 | $ 930,000 | ||||
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 | |||||
Short term loan, advances | [1],[2],[3],[4],[5] | |||||
CNP 1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 350,000 | |||||
Short term loan, advances | [1],[2],[3],[5] | $ 350,000 | ||||
CNP 2 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 25,000 | |||||
Debt extinguished | $ 250,000 | |||||
Short term loan, advances | [2],[3],[5] | $ 250,000 | ||||
Short term loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short term loan, advances | $ 55,000 | |||||
Sefton [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 6.00% | |||||
Accrued interest payable | $ 4,866 | |||||
Sefton [Member] | Hawker Note payable to Sefton [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Note payable | $ 400,000 | |||||
[1] | The unamortized discount relates to CNP 1 ($350,000) and CNP 9 ($25,000). | |||||
[2] | Convertible at any time at the option of the investor into “Conversion Units.” Each Conversion Unit consists of one share of our common stock and one warrant to purchase one-half share of our common stock 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. If we sell 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 us 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] | Hawker granted a security interest to the investor in all of our assets. | |||||
[4] | Original principal amounts were $25,000 for CNP 8 and $25,000 for CNP 9. | |||||
[5] | The proceeds were required to be used solely for the purpose of allowing Tapia Holdings to make advances to TEG under the terms of the secured subordinated loan receivable described in Note 5. Any repayment of such advances by TEG to Tapia Holdings must be used by us to immediately first repay convertible notes payable to the holder of CNP 1, 2 and 3, and second to repay other convertible notes payable pro rata. |
SHORT TERM DEBT (Summary of Cha
SHORT TERM DEBT (Summary of Changes in Convertible Notes Payable) (Details) - Counterparty Name [Domain] - USD ($) | 9 Months Ended | ||
May. 31, 2015 | Aug. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Convertible notes payable | $ 564,826 | $ 221,000 | |
Accrued interest payable | 34,130 | 5,876 | |
Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes payable | $ 50,000 | 930,000 | |
Less unamortized discount | [1] | (89,149) | |
Accrued interest payable | $ 6,296 | 21,599 | |
Convertible notes payable, short term | $ 56,296 | 862,450 | |
CNP 1 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [1],[2],[3],[4] | Nov. 30, 2014 | |
Convertible notes payable | [1],[2],[3],[4] | 350,000 | |
CNP 2 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2],[3],[4] | Nov. 30, 2014 | |
Convertible notes payable | [2],[3],[4] | 250,000 | |
CNP 3 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2],[4],[5] | Jun. 30, 2015 | |
Convertible notes payable | [2],[4],[5] | 100,000 | |
CNP 4 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2],[3],[4],[5],[6] | Jul. 10, 2015 | |
Convertible notes payable | [2],[3],[4],[5],[6] | 100,000 | |
CNP 5 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [7] | May 13, 2016 | |
Convertible notes payable | [7] | $ 50,000 | 50,000 |
CNP 6 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2],[3],[4],[5] | Jul. 25, 2015 | |
Convertible notes payable | [2],[3],[4],[5] | 50,000 | |
CNP 7 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2],[3],[4],[5] | Jul. 25, 2015 | |
Convertible notes payable | [2],[3],[4],[5] | $ 30,000 | |
CNP 8 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2],[4],[5],[8] | Sep. 26, 2015 | |
Convertible notes payable | [2],[4],[5],[8] | ||
CNP 9 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [1],[2],[3],[4],[8] | May 3, 2015 | |
Convertible notes payable | [1],[2],[3],[4],[8] | ||
[1] | The unamortized discount relates to CNP 1 ($350,000) and CNP 9 ($25,000). | ||
[2] | Convertible at any time at the option of the investor into “Conversion Units.” Each Conversion Unit consists of one share of our common stock and one warrant to purchase one-half share of our common stock 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. If we sell 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 us 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] | Hawker granted a security interest to the investor in all of our assets. | ||
[4] | 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. | ||
[5] | Conversion of unpaid principal into Conversion Units pursuant to the terms in (1) above was mandatory upon our closing the TEG Acquisition in February 2015 as described in Note 4. Conversion of unpaid interest into Conversion Units was at our election, which election we 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 we 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 $25,000 for CNP 9. |
LONG TERM DEBT (Schedule of Lon
LONG TERM DEBT (Schedule of Long Term Debt) (Details) - USD ($) | May. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2013 |
LONG TERM DEBT [Abstract] | |||
Convertible note payable, long term | $ 192,632 | ||
Overriding royalty interest liability | 297,705 | ||
Net profits interest payable | 154,245 | $ 169,104 | $ 124,597 |
Note payable and other | 132,449 | ||
Total long term debt | 777,031 | $ 169,104 | |
Less current portion | (326,214) | (20,065) | |
Long term debt, net of current portion | $ 450,817 | $ 149,039 |
LONG TERM DEBT (Convertible Not
LONG TERM DEBT (Convertible Note Payable, Long Term) (Narrative) (Details) - USD ($) | Jan. 14, 2015 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | Sep. 18, 2013 |
Debt Instrument [Line Items] | |||||
Gross proceeds from issuance of debt | $ 300,000 | $ 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 | ||||
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 | 41,363 | ||||
Unamortized discount | $ 762,480 | ||||
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] | 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 ($) | 9 Months Ended | 12 Months Ended |
May. 31, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
Secured Convertible Note Payable, beginning of period | ||
Carrying value of Secured Convertible Note Payable, end of period | $ 192,632 | |
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 | 41,363 | |
Unamortized discount | (762,480) | |
Accrued interest payable | 40,216 | |
Carrying value of Secured Convertible Note Payable, end of period | 192,632 | |
Less current portion | (140,981) | |
Secured Convertible Note Payable, long term portion, end of period | $ 51,651 |
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) - 9 months ended May. 31, 2015 - Overriding Royalty Interest Liability [Member] - $ / bbl | Total |
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 ($) | 9 Months Ended | 12 Months Ended |
May. 31, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
ORRI liability, beginning of period | ||
ORRI liability, end of period | $ 297,705 | |
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 | |
Interest accrued | $ 33,946 | |
Change in estimated liability | ||
Payments made | ||
ORRI liability, end of period | $ 297,705 | |
Less: current portion | (111,999) | |
ORRI liability, long-term portion | $ 185,706 |
LONG TERM DEBT (Net Profits Int
LONG TERM DEBT (Net Profits Interest Payable) (Narrative) (Details) - USD ($) | Dec. 01, 2009 | May. 14, 2014 | May. 31, 2015 | May. 15, 2014 | Feb. 01, 2014 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Percentage of monthly payments equal to net profit | 40.00% | ||||
Maturity date | Dec. 31, 2022 | ||||
Interest rate utilizing a discount rate | 10.00% | ||||
NPI payments | $ 152,003 | ||||
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 ($) | 9 Months Ended | 12 Months Ended |
May. 31, 2015 | Aug. 31, 2014 | |
LONG TERM DEBT [Abstract] | ||
NPI liability, beginning of period | $ 169,104 | $ 124,597 |
Liabilities assumed in connection with acquisition of additional DEEP lease working interests | 58,847 | |
Current period accretion | $ 11,943 | 14,104 |
Payments made | (26,802) | (28,444) |
NPI liability, end of period | 154,245 | 169,104 |
Less: current portion | (21,621) | (20,065) |
NPI liability: long-term portion | $ 132,624 | $ 149,039 |
LONG TERM DEBT (Note Payable An
LONG TERM DEBT (Note Payable And Other) (Narrative) (Details) - USD ($) | Mar. 25, 2015 | Mar. 19, 2015 | Jan. 16, 2015 | May. 31, 2015 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | Sep. 18, 2013 |
Debt Instrument [Line Items] | ||||||||
Advances from relative of Mr. Katic | $ 156,500 | $ 390,300 | $ 180,000 | |||||
Effective rate of interest | 10.00% | 10.00% | ||||||
Interest rate | 1.66% | |||||||
Note Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Advances from relative of Mr. Katic | $ 100,000 | $ 20,000 | $ 50,000 | |||||
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 | |||||||
Exercise price of warrants (in dollars per share) | $ 0.25 | $ 0.25 | ||||||
Debt discount | $ 67,174 | $ (67,174) | $ (67,174) | |||||
Amortization of discount | $ 12,458 | |||||||
Effective rate of interest | 46.60% | 46.60% | ||||||
Note Payable [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares of common stock that can be purchased from warrants | 500,000 | 500,000 | ||||||
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% | 6.99% |
LONG TERM DEBT (Schedule of Tot
LONG TERM DEBT (Schedule of Total Note Payable and Other) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
May. 31, 2015 | Aug. 31, 2014 | Jan. 16, 2015 | |
Debt Instrument [Line Items] | |||
Balance, beginning of period | |||
Total note payable and other | $ 132,449 | ||
Less current portion | (51,613) | ||
Note payable and other, long term portion, end of period | $ 80,836 | ||
Note Payable [Member] | |||
Debt Instrument [Line Items] | |||
Balance, beginning of period | |||
Note payable advance | $ 170,000 | ||
Repayments | (14,166) | ||
Principal outstanding | 155,834 | ||
Debt Instrument Discount | (67,174) | $ 67,174 | |
Amortization of discount | 12,458 | ||
Unamortized discount | (54,716) | ||
Carrying value of note payable | 101,118 | ||
Total note payable and other | |||
Other Debt [Member] | |||
Debt Instrument [Line Items] | |||
Installment sales contract liability | $ 31,331 |
CONVERSION OPTION (Conversion O
CONVERSION OPTION (Conversion Option, Short Term) (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
May. 31, 2015USD ($)$ / shares | May. 31, 2015USD ($)item$ / sharesshares | Aug. 31, 2014USD ($) | |
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 | shares | 1 | ||
Number of warrants in each conversion unit | shares | 1 | ||
Number of shares of common stock that can be purchased with each conversion unit | 0.50 | ||
Warrant exercise price | $ / shares | $ 0.25 | $ 0.25 | |
Amount divided by outstanding principal and accrued interest to calculate shares to be issued | $ / shares | $ 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 | item | 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) | 9 Months Ended |
May. 31, 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: | 0.025% |
CONVERSION OPTION (Summary of C
CONVERSION OPTION (Summary of Changes in Fair Value of Short Term Conversion Option) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | |
Conversion options [Line Items] | |||||
Balance, beginning of period | $ 122,045 | ||||
Initial fair value of debt derivative on accrual of interest | 22,271 | $ 2,630 | |||
Change in fair value of debt derivatives | $ 162,992 | 189,852 | |||
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 (Conversion61
CONVERSION OPTION (Conversion Option, Long Term) (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May. 31, 2015USD ($)$ / shares | May. 31, 2014USD ($) | May. 31, 2015USD ($)item$ / shares | May. 31, 2014USD ($) | Aug. 31, 2014USD ($) | Jan. 14, 2015$ / shares | |
Conversion options [Line Items] | ||||||
Total non-cash, non-operating gain (loss) | $ 162,992 | $ 189,852 | ||||
Secured Convertible Note Payable [Member] | ||||||
Conversion options [Line Items] | ||||||
Amount divided by outstanding principal and accrued interest to calculate shares to be issued | $ / shares | $ 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 | 162,992 | 155,190 | ||||
Total non-cash, non-operating gain (loss) | (155,190) | |||||
Two advances made under the note [Member] | ||||||
Conversion options [Line Items] | ||||||
Fair value of the embedded derivative | 540,084 | $ 540,084 | ||||
Number of notes | item | 2 | |||||
New Long-term Secured Convertible Note Payable [Member] | ||||||
Conversion options [Line Items] | ||||||
Fair value of the embedded derivative | $ 404,568 | $ 404,568 |
CONVERSION OPTION (Schedule o62
CONVERSION OPTION (Schedule of Assumptions Used in Determining Fair Value of Embedded Derivative, Conversion Option, Long Term) (Details) | 9 Months Ended |
May. 31, 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 | 177.00% |
Risk free rate: | 0.44% |
CONVERSION OPTION (Summary of63
CONVERSION OPTION (Summary of Changes in Fair Value of Long Term Conversion Option) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | |
Conversion options [Line Items] | |||||
Balance, beginning of period | |||||
Fair Value Measurement with Unobservable Inputs Reconciliations Recurring Basis Liability Initial Fair Value of Additional Derivative Created Through Interest Accrual | $ 22,271 | $ 2,630 | |||
Change in fair value of debt derivatives | $ 162,992 | 189,852 | |||
Balance, end of period | 404,568 | $ 404,568 | |||
Secured Convertible Note Payable [Member] | |||||
Conversion options [Line Items] | |||||
Balance, beginning of period | |||||
Initial fair value of debt derivatives on accrual of interest | $ 540,084 | ||||
Fair Value Measurement with Unobservable Inputs Reconciliations Recurring Basis Liability Initial Fair Value of Additional Derivative Created Through Interest Accrual | 19,674 | ||||
Change in fair value of debt derivatives | (155,190) | ||||
Balance, end of period | $ 404,568 | $ 404,568 |
EMPLOYEE RETIREMENT LIABILITY64
EMPLOYEE RETIREMENT LIABILITY (Narrative) (Details) - item | 9 Months Ended | |
May. 31, 2015 | Feb. 03, 2015 | |
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) | 5.04% | 4.48% |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rates used to measure the post employment benefit liability (as a percent) | 5.15% | 4.56% |
EMPLOYEE RETIREMENT LIABILITY65
EMPLOYEE RETIREMENT LIABILITY (Schedule of Employee Retirement Obligations) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
May. 31, 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 | $ 23,044 | |
Employee retirement obligations, ending | $ 1,021,515 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
May. 31, 2015 | Aug. 31, 2014 | |
ASSET RETIREMENT OBLIGATIONS [Abstract] | ||
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 | $ 21,220 | $ 10,848 |
Asset retirement obligations, ending | $ 1,932,888 | $ 168,110 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||
Current income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred tax benefit | 44,746 | 44,746 | ||
TEG [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carry forward | $ 16,905,000 | $ 16,905,000 | ||
Net operating loss carry forward, expire year | Dec. 31, 2033 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | May. 31, 2015 | Aug. 31, 2014 |
Liabilities | ||
Overriding Royalty Interest Liability | $ 297,705 | |
Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | $ 297,705 | |
Conversion option - long term | 404,568 | $ 122,045 |
Total Liabilities | 1,102,273 | $ 122,045 |
Recurring [Member] | Sefton [Member] | ||
Liabilities | ||
Note payable to Sefton | $ 400,000 | |
Level 1 [Member] | Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | ||
Conversion option - long term | ||
Total Liabilities | ||
Level 1 [Member] | Recurring [Member] | Sefton [Member] | ||
Liabilities | ||
Note payable to Sefton | ||
Level 2 [Member] | Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | ||
Conversion option - long term | ||
Total Liabilities | ||
Level 2 [Member] | Recurring [Member] | Sefton [Member] | ||
Liabilities | ||
Note payable to Sefton | ||
Level 3 [Member] | Recurring [Member] | ||
Assets | ||
Total Assets | ||
Liabilities | ||
Overriding Royalty Interest Liability | $ 297,705 | |
Conversion option - long term | 404,568 | $ 122,045 |
Total Liabilities | 1,102,273 | $ 122,045 |
Level 3 [Member] | Recurring [Member] | Sefton [Member] | ||
Liabilities | ||
Note payable to Sefton | $ 400,000 |
FAIR VALUE MEASUREMENTS (Summar
FAIR VALUE MEASUREMENTS (Summary of Changes in Fair Value of Level 3 Financial Liabilities) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
May. 31, 2015 | 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 | 22,271 | $ 2,630 |
Extinguished derivative liability | (97,398) | |
Initial fair value of overriding royalty interest liability | 263,759 | |
Issuance of note payable to Sefton | 400,000 | |
Mark-to-market at end of period - embedded debt derivatives | (189,852) | $ (19,636) |
Accrual of interest on overriding royalty interest liability, equivalent to estimated change in market value | 33,946 | |
Balance, end of period | 1,102,273 | $ 122,045 |
Net gain for the period included in earnings as change in fair value | $ 189,852 | $ 19,636 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) | Oct. 10, 2014USD ($)ashares | Jan. 01, 2014shares | Feb. 28, 2015USD ($) | May. 31, 2015USD ($)shares | Nov. 30, 2014USD ($)shares | May. 31, 2014USD ($) | May. 31, 2015USD ($)shares | May. 31, 2014USD ($) | 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 | $ | $ 28,468 | $ 14,999 | $ 1,820,020 | $ 14,999 | ||||||
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 | $ | $ 670,090 | $ 1,700,590 | ||||||||
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 | 19,000,000 | 9,000,000 | 9,000,000 | |||||||
Tapia Assets [Member] | Minimum [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Aggregate additional royalty percentage subject to sales | 2.50% | |||||||||
Total royalties | 6.00% | |||||||||
Tapia Assets [Member] | Maximum [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Aggregate additional royalty percentage subject to sales | 3.50% | |||||||||
Total royalties | 7.00% | |||||||||
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 | a | 1,500 | |||||||||
Kern County [Member] | Hawker Energy (Rincon), LLC [Member] | Option Agreement [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Area of land | a | 40 | |||||||||
Los Angeles County [Member] | Hawker Energy (Rincon), LLC [Member] | Option Agreement [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Area of land | a | 900 | |||||||||
DEEP Property [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Working interest | 100.00% | 66.67% |
EQUITY (Narrative) (Details)
EQUITY (Narrative) (Details) | Mar. 25, 2015$ / sharesshares | Mar. 18, 2015shares | May. 14, 2014shares | May. 31, 2015USD ($)$ / sharesshares | May. 31, 2014USD ($) | May. 31, 2015USD ($)item$ / sharesshares | May. 31, 2014USD ($) | May. 14, 2015 | Aug. 31, 2014USD ($)itemshares | Jan. 16, 2015$ / sharesshares |
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 | $ | $ 136,494 | |||||||||
Price per unit | $ / shares | $ 0.10 | $ 0.10 | ||||||||
Common stock issuable | 6,584,210 | 6,584,210 | ||||||||
Stock option compensation | $ | $ 28,468 | $ 14,999 | $ 1,820,020 | $ 14,999 | ||||||
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 | $ | ||||||||||
Stock option | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Stock option compensation | $ | $ 28,468 | $ 14,999 | $ 119,430 | $ 14,999 | ||||||
Unvested stock options | 4,950,000 | |||||||||
Unrecognized stock option expense | $ | $ 222,442 | $ 222,442 | ||||||||
Unrecognized stock option expense, period for recognition | 2 years | |||||||||
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 | 9,711,919 | |||||||||
Conversion price | $ / shares | $ 0.10 | $ 0.10 | ||||||||
Note Payable [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Warrant exercise price | $ / shares | $ 0.25 | $ 0.25 | ||||||||
Warrant term | 5 years | |||||||||
Note Payable [Member] | Maximum [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Shares of common stock that can be purchased from warrants | 500,000 | 500,000 | ||||||||
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 | item | 2 | |||||||||
Cash received from units issued | $ | $ 1,150 | $ 10,213 | ||||||||
Proceeds received for common stock payable | $ | ||||||||||
Proceeds received for common stock payable, shares | ||||||||||
Warrant exercise price | $ / shares | 0.20 | $ 0.20 | ||||||||
Conversion of accounts and bonus payable into common stock, shares | 1,364,945 | |||||||||
Conversion of accounts and bonus payable into common stock | $ | $ 1,364 | |||||||||
Number of shares issued pursuant to HERLLC Option Agreement | 33,000,000 | |||||||||
Value of convertible notes payable | $ | ||||||||||
Shares cancellation for acquisition | (1,500,000) | |||||||||
Shares issued for investor relations services | 800,000 | |||||||||
Shares issued on interest on note payable | ||||||||||
Shares of stock issued for the conversion of debt | 3,247,658 | |||||||||
Common Stock Payable [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Number of investors whose units are issued | item | 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 | $ / shares | $ 0.10 | $ 0.10 | ||||||||
Common Stock and Warrants Payable [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Units issued (in shares) | ||||||||||
Cash received from units issued | $ | ||||||||||
Proceeds received for common stock payable | $ | $ 50,000 | |||||||||
Proceeds received for common stock payable, shares | 500,000 | |||||||||
Conversion of accounts and bonus payable into common stock, shares | ||||||||||
Conversion of accounts and bonus payable into common stock | $ | ||||||||||
Number of shares issued pursuant to HERLLC Option Agreement | ||||||||||
Value of convertible notes payable | $ | $ 324,766 | |||||||||
Shares cancellation for acquisition | ||||||||||
Shares issued on interest on note payable | 510,000 | |||||||||
Shares of stock issued for the conversion of debt | ||||||||||
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 | $ / shares | $ 0.25 | $ 0.25 | ||||||||
Common stock issuable | 1,623,829 | 1,623,829 | ||||||||
Consideration return to Hawker by Sefton for cancellation [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Shares cancellation for acquisition | 1,500,000 | |||||||||
Consideration return to Hawker by Sefton for cancellation [Member] | TEG [Member] | Common Stock [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Shares cancellation for acquisition | 1,500,000 |
EQUITY (Summary of Company's St
EQUITY (Summary of Company's Stock Option Activity) (Details) - USD ($) | May. 14, 2014 | May. 31, 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) | |||
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 9 years | 9 years 8 months 12 days | |
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 9 years | 9 years 8 months 12 days | |
Vested and exercisable | 9 years | ||
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) - $ / shares | 9 Months Ended | 12 Months Ended |
May. 31, 2015 | Aug. 31, 2014 | |
Options Outstanding | ||
Number of Shares | 5,950,000 | |
Weighted- Average Remaining Life (Years) | 9 years | 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 ($) | Mar. 02, 2015 | Oct. 10, 2014 | Jan. 01, 2014 | Sep. 18, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2014 | Feb. 03, 2015 | Aug. 31, 2013 |
Related Party Transaction [Line Items] | |||||||||||
Loans payable to related parties, short term | $ 598,956 | $ 598,956 | $ 226,876 | ||||||||
Interest expense | 240,303 | $ 4,367 | 469,966 | $ 11,115 | |||||||
Additional loans from related parties | 156,500 | 390,300 | $ 180,000 | ||||||||
Loans repaid to related party | $ 40,000 | $ 50,000 | |||||||||
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 | $ 564,826 | $ 564,826 | 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 | $ 12,734 | 0 | $ 28,254 | $ 0 | |||||||
Loans From Related Parties, Long Term [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Interest expense | 0 | $ 115 | 0 | $ 854 | |||||||
Convertible note payable, short term [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Interest expense | $ 0 | $ 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 note payable, short term [Member] | |||||||||||
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 | $ 378,800 | $ 378,800 | 161,000 | ||||||||
Payments for Rent | 9,798 | 29,031 | |||||||||
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 | 35,000 | 35,000 | |||||||||
Consultancy charges | $ 15,000 | ||||||||||
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 | ||||||||||
Amount owed to related party | 20,000 | $ 20,000 | |||||||||
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 | 19,000,000 | 9,000,000 | 9,000,000 | ||||||||
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) (
SUBSEQUENT EVENTS (Narrative) (Details) - Long-term Debt, Type [Domain] - USD ($) | Jun. 10, 2015 | May. 31, 2015 | May. 31, 2015 | May. 31, 2014 |
Subsequent Event [Line Items] | ||||
Advances from relative of Mr. Katic | $ 156,500 | $ 390,300 | $ 180,000 | |
Subsequent Event [Member] | TEG [Member] | ||||
Subsequent Event [Line Items] | ||||
Gross proceeds from sale of property | $ 175,000 | |||
Net proceeds from sale of property | $ 157,792 |