UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| [X] | QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2013 |
| OR | |
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DYM ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
90-0768498
(IRS Employer Identification No.)
2591 Dallas Parkway, Suite 102., Frisco, Texas 75034
(Address of principal executive offices, including zip code.)
(972) 963-0001
(Registrant’s telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | [ ] | Accelerated filer | [ ] |
| Non-accelerated filer | [ ] | Smaller reporting company | [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES [ ] NO [ X ]
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 55,500,030 as of April 8, 2013.
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PART I – FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
DYM ENERGY CORPORATION
(An Exploration Stage Company)
(Unaudited)
February 28, 2013
| Balance Sheets | 3 |
| Statements of Operations | 4 |
| Statements of Cash Flows | 5 |
| Notes to the Financial Statements | 6 |
2
DYM Energy Corporation
(An Exploration Stage Company)
Balance Sheets
February 28, 2013 $ | August 31, 2012 $ | |||||||
(Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 3,953 | 10,437 | ||||||
| Prepaid expenses | – | 825 | ||||||
| Accounts receivable, net | 1,069 | 1,097 | ||||||
| Total current assets | 5,022 | 12,359 | ||||||
| Oil and gas properties, full cost method | 403,829 | 407,041 | ||||||
| Total Assets | 408,851 | 419,400 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accrued interest – related parties | 5,307 | 2,707 | ||||||
| Accounts payable – related parties | 3,638 | 3,488 | ||||||
| Due to former officer | 9,047 | 9,047 | ||||||
| Promissory notes – related parties | 60,000 | 60,000 | ||||||
| Total Current Liabilities | 77,992 | 75,242 | ||||||
| Asset retirement obligation | 3,282 | 3,282 | ||||||
| Total Liabilities | 81,274 | 78,524 | ||||||
| Commitments | ||||||||
| Stockholders’ Equity | ||||||||
Preferred stock, 100,000,000 shares authorized, $0.00001 par value; None issued and outstanding | – | – | ||||||
Common stock, 516,666,666 shares authorized, $0.001 par value; 55,500,030 shares issued and outstanding | 55,500 | 55,500 | ||||||
| Additional paid-in capital | 672,293 | 672,293 | ||||||
| Deficit accumulated during the exploration stage | (400,216) | (386,917) | ||||||
| Total Stockholders’ Equity | 327,577 | 340,876 | ||||||
| Total Liabilities and Stockholders’ Equity | 408,851 | 419,400 | ||||||
The accompanying notes are an integral part of these financial statements.
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DYM ENERGY CORPORATION
(An Exploration Stage Company)
Statements of Operations
(Unaudited)
| Three Months | Three Months | Six Months | Six Months | June 27, 2006 | ||||||||||||||||
| Ended | Ended | Ended | Ended | (Inception) | ||||||||||||||||
| February 28, | February 29, | February 28, | February 29, | to February 28, | ||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Revenues | 7,358 | – | 20,233 | – | 27,503 | |||||||||||||||
| Cost of revenues | 1,900 | – | 5,290 | – | 6,962 | |||||||||||||||
| Gross Profit | 5,458 | – | 14,943 | – | 20,541 | |||||||||||||||
| Expenses | ||||||||||||||||||||
| General and administrative | – | 16,744 | 1,035 | 45,997 | 97,084 | |||||||||||||||
| Professional and consulting fees | 8,027 | 15,171 | 24,607 | 66,821 | 325,896 | |||||||||||||||
| Total Expenses | 8,027 | 31,915 | 25,642 | 112,818 | 422,980 | |||||||||||||||
| Net loss from operations | (2,569 | ) | (31,915 | ) | (10,699 | ) | (112,818 | ) | (402,439 | ) | ||||||||||
Other income (expense) | ||||||||||||||||||||
| Gain on transfer of equipment | – | – | – | – | 7,530 | |||||||||||||||
| Interest expense | (1,300 | ) | (600 | ) | (2,600 | ) | (1,200 | ) | (5,307 | ) | ||||||||||
| Net Loss | (3,869 | ) | (32,515 | ) | (13,299 | ) | (114,018 | ) | (400,216 | ) | ||||||||||
| Net Loss Per Share – Basic and Diluted | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||||||||
| Weighted Average Shares Outstanding – Basic and Diluted | 55,500,030 | 55,500,030 | 55,500,030 | 46,723,734 | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
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DYM Energy Corporation
(An Exploration Stage Company)
Statements of Cash Flows
(Unaudited)
| Six Months | Six Months | June 27, 2006 | ||||||||||
| Ended | Ended | (Inception) | ||||||||||
| February 28, | February 29, | to February 28, | ||||||||||
| 2013 | 2012 | 2013 | ||||||||||
| $ | $ | $ | ||||||||||
| Operating Activities | ||||||||||||
| Net loss | (13,299 | ) | (114,018 | ) | (400,216 | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||||||
| Donated services | – | – | 12,800 | |||||||||
| Gain on transfer of equipment | – | – | (7,530 | ) | ||||||||
| Change in operating assets and liabilities: | ||||||||||||
| Prepaid expenses | 825 | (2,475 | ) | – | ||||||||
| Accounts receivable | 28 | – | (1,069 | ) | ||||||||
| Accounts payable – related parties | 150 | (18,360 | ) | 3,638 | ||||||||
| Accrued interest – related parties | 2,600 | (3,775 | ) | 5,307 | ||||||||
| Net Cash Used In Operating Activities | (9,696 | ) | (138,628 | ) | (387,070 | ) | ||||||
| Investing Activities | ||||||||||||
| Acquisition of equipment | – | (17,000 | ) | (17,000 | ) | |||||||
| Acquisition of oil and gas properties | – | (195,376 | ) | (196,776 | ) | |||||||
| (Development) recovery of oil and gas properties | 3,212 | (9,778 | ) | (179,241 | ) | |||||||
| Net Cash Provided by (Used in) Investing Activities | 3,212 | (222,154 | ) | (393,017 | ) | |||||||
| Financing Activities | ||||||||||||
| Promissory notes – related parties | – | 20,000 | 60,000 | |||||||||
| Advance from related party | – | – | 28,040 | |||||||||
| Common share redemption | – | (1,000 | ) | (1,000 | ) | |||||||
| Proceeds from issuance of common stock | – | 500,000 | 697,000 | |||||||||
| Net Cash Provided by Financing Activities | – | 519,000 | 784,040 | |||||||||
| Change in Cash and Cash Equivalents | (6,484 | ) | 158,218 | 3,953 | ||||||||
| Cash and Cash Equivalents - Beginning of Period | 10,437 | 1,680 | – | |||||||||
| Cash and Cash Equivalents - End of Period | 3,953 | 159,898 | 3,953 | |||||||||
| Supplemental Disclosures | ||||||||||||
| Interest paid | – | – | – | |||||||||
| Income taxes paid | – | – | – | |||||||||
| Non-cash Transaction | ||||||||||||
| Transfer of equipment to oil and gas properties | – | – | 24,530 | |||||||||
| Contributed capital – debt forgiveness | – | – | 18,993 | |||||||||
The accompanying notes are an integral part of these financial statements.
5
DYM Energy Corporation
(An Exploration Stage Company)
Notes to the Financial Statements
February 28, 2013
(Unaudited)
1. Basis of Presentation
The accompanying unaudited interim financial statements of DYM Energy Corporation (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31, 2012 as reported in Form 10-K, have been omitted.
Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. However, the Company has an accumulated deficit of $400,216 as of February 28, 2013. The Company currently has limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
2. Oil and Gas Properties
During the year ended August 31, 2012, the Company acquired three contiguous oil and gas leases located in Clay County, Texas (the “Clay County Property”), containing total area of approximately 3,017 acres for cash payment of $172,026. The three leases are as follows:
- The Meyers Ranch Lease Block is comprised of the following:
The Meyers Ranch Lease Block contains approximately 1,840 acres, which is broken into a north lease of approximately 1,057 acres and a south lease of 783 acres. There are three different mineral owners in this entire lease block. One mineral owner owns an interest in both the north and south leases, with one mineral owner having an interest in each of the leases.
The first lease was acquired on January 27, 2012. This lease has a three year term and carries a 21% landowner’s royalty. This lease contains acreage in both the north and south leases. The second lease was acquired on February 2, 2012, for the remaining acreage in the north lease. This lease has a three year term and carries a 25% landowner’s royalty. There is approximately 66% of the south acreage that is still not leased.
During the six months ended February 28, 2013 the first well on the Meyers Ranch Lease commenced production. The Company owns 19.2211% of the 75% net revenue interest of this well, and a private partnership partially owned by the sole director and officer of the Company owns 20% of the 75% working interest.
- The Belcher Lease was acquired on January 27, 2012, covering approximately 120 acres. This lease has a one year term and for so long thereafter as oil and/or gas is produced therefrom. This lease carries a 12.5% landowner’s royalty.
The Company owns 16.9997% of the 75% net revenue interest in the first well on the Belcher Lease, which has been in production since July, 2012. A private partnership partially owned by the sole director and officer of the Company owns 19.9869% of the 75% working interest. The well carries 12.5% overriding interest. A private partnership partially owned by the sole director and officer of the Company owns 3.8333% overriding interest.
As of February 28, 2013, all of the Company’s oil and gas properties were unproven and excluded from depletion.
3. Related Party Transactions
During the six months ended February 28, 2013, the Company incurred filing fees of $150 to a company of which the sole director and officer of the Company is the president. As of February 28, 2013 the Company had a balance of $3,638 owed to this related party, which is non-interest bearing, unsecured and payable on demand.
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4. Promissory Notes - Related Parties
Effective September 9, 2011 the Company issued a promissory note of $20,000 to the former director of the Company at annual interest rate of 12%. The promissory note is unsecured and payable upon demand. As of February 28, 2013, accrued interest on the promissory note was $3,600.
During the year ended August 31, 2012 the Company issued two promissory notes for a total of $40,000 to a shareholder who is also the director of the Company at annual interest rate of 7%. The promissory notes are unsecured and payable upon demand. As of February 28, 2013, the Company recorded accrued interest of $1,707 on the promissory notes.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This section of the report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
We are an exploration stage corporation and have not started operations or generated or realized any revenues from our business operations.
Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.
Business History
DYM Energy Corporation (“DYM”, or the “Company”) was incorporated on June 27, 2006, under its former name “Park and Sell Corp.” to engage in the business of offering vehicles for sale privately at a fixed fee. Upon realizing that this industry did not present the best opportunity for our company, the management started to search for alternative business opportunities to substantiate shareholder value.
Effective September 15, 2009, we completed a merger with our wholly-owned subsidiary, Bidfish.com, Inc., a Nevada corporation, for the purpose of effecting a change in our name from “Park and Sell Corp.” to “Bidfish.com, Inc.” In conjunction with this transaction, our business plan changed to operating a website, Bidfish.com, that offered online entertainment shopping, specifically online auctions of consumer goods.
Also effective September 15, 2009, we effected a 31-for-1 forward stock split of our authorized and issued and outstanding common stock. As a result, our authorized capital increased from 100,000,000 shares of common stock at $0.00001 par value to 3,100,000,000 shares of common stock at $0.00001 par value. Our issued and outstanding increased from 6,920,000 shares of common stock to 214,520,000 shares of common stock. Our preferred stock remained unchanged at 100,000,000 shares of preferred stock at $0.00001 par value.
Effective November 7, 2011, our board of directors approved a 1-for-6 reverse stock split of authorized, issued and outstanding shares of common stock. We amended our Articles of Incorporation by the filing of a Certificate of Change with the Nevada Secretary of State wherein we issued one share for every six shares of common stock issued and outstanding immediately prior to the effective date of the reverse stock split. As a result, our authorized capital decreased from 3,100,000,000 shares of common stock with a par value of $0.00001 to 516,666,666 shares of common stock with a par value of $0.001. Our authorized preferred stock remained unchanged at 100,000,000 shares of preferred stock with a $0.00001 par value.
Effective November 7, 2011, the Company and Halter Energy Capital Corporation (“Halter”) completed a Stock Purchase Agreement, pursuant to which Halter was entitled to receive a total of 44,500,000 post-reverse split shares of common stock of the Company for gross proceeds of $500,000, and warrants to purchase 20,000,000 shares for $0.20 per share within two years (the “Sale”).
Effective November 7, 2011, the Company and Juan Carlos Espinosa, the previous controlling stockholder, completed a Redemption Agreement pursuant to which the Company redeemed 24,753,333 post-reverse split shares of common stock for $1,000 (the “Redemption”).
As a result of the Sale and Redemption, Halter owned approximately 80.18% of the then outstanding Common Stock of the Company. Upon the completion of the Sale on November 7, 2011, Juan Carlos Espinosa resigned as the director of the Company and Kevin B. Halter, Jr. was appointed the new director of the Company.
With the change in control of our company on November 7, 2011, we began to seek oil and gas properties to acquire. With the acquisition of the oil and gas leases located in Clay County, Texas on January 27, 2012, we became engaged in the oil and gas industry, and our company, Bidfish.com, Inc., exited “shell company” status.
On March 15, 2012, we filed a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of the State of Nevada. The Amendment amended the Company’s Articles of Incorporation to change the name of the Company from “Bidfish.com, Inc.” to “DYM Energy Corporation” (the “Name Change”). Approval of the Amendment by the Financial Industry Regulatory Authority was received on April 23, 2012.
8
Our common stock is quoted on the NASD Over-the-Counter Bulletin Board under the symbol "BDFH".
Current Business Operations
Our intention is to become a significant producer of oil and natural gas.
On January 27, 2012, we acquired an oil and gas lease located in Clay County, Texas, which contains approximately 1,840 acres, from a third party, Glynda Gentry. This lease has a three year term and for so long thereafter as oil and/or gas is produced therefrom. This lease is burdened with a 21% landowner’s royalty. Also on January 27, 2012, we acquired a second oil and gas lease located in Clay County, Texas, which contains approximately 120 acres, from a third party, J.H. Belcher. This lease has a three year term and for so long thereafter as oil and/or gas is produced therefrom. This lease is burdened with a 12.5% landowner’s royalty. On February 2, 2012, we acquired an oil and gas lease located in Clay County, Texas, which contains approximately 1,057 acres, from a third party, Royalty Clearinghouse, Ltd. This lease has a three year term and for so long thereafter as oil and/or gas is produced therefrom. This lease is burdened with a 25% landowner’s royalty. None of the persons from whom we acquired a lease is an affiliate of our company.
On May12, 2012, the first well on our Belcher Lease, Clay County, Texas, was completed. The well showed initial potential of 40 barrels of oil per day, with 38 barrels of water, on its initial test. The well was completed in the Upper Strawn formation and hydraulically fractured. It was placed into production on May 12, 2012. Our company owns 16.9997% of the 75% net revenue interest in the well, which started to generate revenue for our company from June, 2012.
On August 15, 2012, the first well the Meyers Halter #1 (the “Well”) on our Myers Lease, Clay County, Texas, was completed. The Well showed initial potential of 20 barrels of oil per day, with 60 barrels of water, on its initial test. The Well was completed in the Upper and Middle Strawn formation and hydraulically fractured. Our company owns 19.2211% of the 75% net revenue interest in the well, which started to generate revenue for our company from October, 2012.
We intend to acquire additional oil and gas properties, including properties adjacent to our current leases, for development, which may involve farm-outs and/or joint ventures with industry partners.
We must obtain additional capital, whether directly or through our arrangement with Halter Oil and Gas, L.P., or similar entity, in order to develop our leases. And we may develop other strategies for attaining our goal of becoming an oil and gas producing company. There is no assurance that we will possess sufficient capital with which to develop our leases.
The report of our auditors on our audited financial statements for the fiscal year ended August 31, 2012 contains a going concern explanatory paragraph as we have suffered losses since our inception. We have limited assets and have achieved limited operative revenues since our inception. We have depended on loans and sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations. We will be required to raise additional capital and/or debt over the next twelve months to meet our ongoing expenditures.
We must obtain additional capital in order to develop our leases. There is no assurance that we will ever possess sufficient capital with which to develop our leases.
Government Regulation
The oil and gas industry is the subject of extensive regulation at the federal and state levels, including, among others, regulation by the Environmental Protection Agency. We intend to take all measures necessary in our attempts to comply with all applicable regulations effecting the drilling and completing of one or more well. If we are unable to comply with such regulations, it could have a material adverse effect on our company.
Governmental authorities have the power to enforce compliance with their regulations, and violations are subject to fines, injunctions or both. It is possible that increasingly strict requirements will be imposed by environmental laws and enforcement policies thereunder. Drilling and production operations are also subject to laws and regulations concerning occupational safety and health. It is not anticipated that we will be required, in the near future, to expend material amounts in complying with environmental or occupational safety and health laws and regulations. However, inasmuch as such laws and regulations are frequently changed, it is impossible to predict the ultimate cost of compliance.
Insurance
We do not maintain any insurance relating to our business or operations.
Employees
We are an exploration stage company and currently have no employees, other than our sole officer.
9
Properties
Oil and Gas Leases.
We own three contiguous oil and gas leases located in Clay County, Texas, which contains a total of approximately 3,017 acres.
| - | The Meyers Ranch Lease Block is comprised of the following: |
The Meyers Ranch Lease Block contains approximately 1,840 acres, which is broken into a north lease of approximately 1,057 acres and a south lease of 783 acres. There are three different mineral owners in this entire lease block. One mineral owner owns an interest in both the north and south leases, with one mineral owner having an interest in each of the leases.
Acquired on January 27, 2012, the first lease has a three year term and carries a 21% landowner’s royalty and contains acreage in both the north and south leases. Acquired on February 2, 2012, the second lease contains the remaining acreage in the north lease and has a three year term and carries a 25% landowner’s royalty.
- | The Belcher Lease was acquired on January 27, 2012, covering approximately 120 acres. This lease has a one year term and for so long thereafter as oil and/or gas is produced therefrom. This lease carries a 12.5% landowner’s royalty. |
Our leases are contiguous. We expect to acquire additional adjacent acreage in the near future, although there is no assurance that it will take place.
As of the date of this report we have two producing wells on our oil and gas properties.
Executive Office
Our office is located at 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034. An affiliate of our company provides this office space at no charge.
Plan of Operation
Cash Requirements
Over the next twelve months we intend to develop our oil and gas lease property and complete and operate wells that prove to be economically viable.
Estimated Funding Required During the Next Twelve Months
| General and Administrative | $ | 150,000 | ||
| Develop the leases and complete the wells | $ | 1,600,000 | ||
| Total | $ | 1,750,000 |
As at February 28, 2013, we had cash of $3,953 and working capital deficit of $72,970. We will require additional financing to complete our lease development and wells, as well as potentially acquire more oil and gas properties before we generate significant revenues. We intend to raise the capital required to meet any additional needs through sales of our securities in secondary offerings or private placements.
Limited operating history; need for additional capital
There is limited historical financial information about us upon which to base an evaluation of our performance. We are in exploration stage and have not generated significant revenues. For our business plan to succeed, we will develop our oil and gas properties to a stage at which oil and gas are being produced profitably in commercial quantities. There can be no assurance that exploration and production activities will produce oil and gas in commercial quantities. There can be no assurance that sales of oil and gas production will generate significant revenues for a sustained period or that we will be able to achieve or sustain profitability in any future period.
There are no assurances that we will be able to obtain additional funds required for our planned operations. In such event that we do not raise sufficient additional funds by secondary offering or private placement, we will consider alternative financing options. There is no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
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Results of operations
Six months ended February 28, 2013 and February 29, 2012
For the six months ended February 28, 2013, we posted net loss of $13,299. We generated revenue of $20,233 at cost of sales of $5,290 and incurred general and administrative expenses of $1,035, professional and consulting fees of $24,607 and interest expense of $2,600.
For the six months ended February 29, 2012, we posted net loss of $114,018, had no revenue, incurred general and administrative expenses of $45,997, professional and consulting fees of $66,821 and interest expense of $1,200.
The decrease in expenses from the first six months of fiscal 2012 to the first six months of fiscal 2013 is because during the former period we incurred significant expenses related to our change of business and management, amendment to our article of incorporation, agreements on share issuances and redemption, as well as travel expenses and professional and consulting fees incurred for identifying our oil and gas properties.
Three months ended February 28, 2013 and February 29, 2012
For the three months ended February 28, 2013, we posted net loss of $3,869. We generated revenue of $7,358 at cost of sales of $1,900 and incurred general and administrative expenses of $nil, professional and consulting fees of $8,027 and interest expense of $1,300.
For the three months ended February 29, 2012, we posted net loss of $32,515, had no revenue, incurred general and administrative expenses of $16,744, professional and consulting fees of $15,171 and interest expense of $600.
The decrease in expenses from the three months ended February 28, 2012 to the three months ended February 29, 2013 is because during the former period we incurred significant expenses relating to our change of business and management, amendment to our article of incorporation, agreements on share issuances and redemption, as well as travel expenses and professional and consulting fees incurred for identifying our oil and gas properties
Liquidity and capital resources
At February 28, 2013, we had a working capital deficit of $72,970.
At February 28, 2013, our total assets of $408,851 consisted of cash of $3,953, accounts receivable of $1,069, and oil and gas property of $403,829.
At February 28, 2013, our total liabilities were $81,274, including current liabilities of $77,992 and asset retirement obligation of $3,282.
Our principal capital resources have been acquired through the issuance of common stock.
During the six months ended February 28, 2013 we used $9,696 in our operating activities and received $3,212 from recovery of funds we had spent on developing our properties.
Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. However, the Company has an accumulated deficit of $400,216 as of February 28, 2013. The Company currently has limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital, primarily from its shareholders, to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), we are not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer who is also our principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared. However, because we have limited transactions which are all approved, carried out and reviewed by our director and officer, the impact of the limitations are not material.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting since our last fiscal year end that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
Currently we are not involved in any pending litigation or legal proceeding.
| ITEM 1A. | RISK FACTORS |
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934 and are not required to provide the information required under this item.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES |
None.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5. | OTHER INFORMATION. |
None.
| ITEM 6. | EXHIBITS. |
The following documents are included herein:
| Exhibit No. | Document Description |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive Officer and Chief Financial Officer. |
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on April 8, 2013.
| DYM ENERGY CORPORATION | ||
| (Registrant) | ||
| BY: | /S/ Kevin B. Halter, Jr. | |
| Kevin B. Halter, Jr. | ||
President, Principal Accounting Officer, Principal Executive Officer, Principal Financial Officer, and Treasurer. | ||
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