Cherubim Interests (CHIT) 10-Q 20 Jan 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Nov. 30, 2014	Jan. 19, 2015
Document and Entity Information:
Entity Registrant Name	Falcon Crest Energy Inc.
Entity Trading Symbol	FALC
Document Type	10-Q
Document Period End Date	30-Nov-14
Amendment Flag	FALSE
Entity Central Index Key	1421865
Current Fiscal Year End Date	-23
Entity Common Stock, Shares Outstanding		67,100,000
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

Condensed_Balance_Sheets

Condensed Balance Sheets (USD $)	Nov. 30, 2014	Aug. 31, 2014
Current assets
Cash	$0	$11,489
Notes receivable, net of allowance of $878,354	0	0
Total current assets	0	11,489
Oil and Natural Gas Property, Unproved (successful efforts method)	25,010	25,000
Total assets	25,010	36,489
Current liabilities
Bank indebtedness	150	0
Accounts payable	106,770	123,770
Notes payable	386,087	353,586
Related party payables	1,324,848	1,324,848
Accrued interest	416,328	383,450
Derivative liability	118,782	106,785
Accrued expenses and other liabilities	277,305	196,051
Total current liabilities	2,630,270	2,488,490
Notes payable (non-current portion)	0	0
Total liabilities	2,630,270	2,488,490
Stockholders' Deficit
Common stock, $0.001 par value; 200,000,000 shares authorized; 67,100,000 and 63,100,000 issued and outstanding at November 30, 2014 and August 31, 2014, respectively	67,100	63,100
Shares held in escrow	-10,000	-10,000
Additional paid in capital	876,770	794,770
Accumulated deficit	-3,539,130	-3,299,871
Total stockholders' deficit	-2,605,260	-2,452,001
Total liabilities and stockholders' deficit	$25,010	$36,489

Balance_Sheets_Parentheticals

Balance Sheets Parentheticals (USD $)	Nov. 30, 2014	Aug. 31, 2014
Parentheticals
Notes receivable, net of allowance	$0	$878,354
Common Stock, par value	$0.00	$0.00
Common Stock, shares authorized	75,000,000	75,000,000
Common Stock, shares issued	63,100,000	20,000,000
Common Stock, shares outstanding	63,100,000	20,000,000

Condensed_Statements_of_Operat

Condensed Statements of Operations (USD $)	3 Months Ended
	Nov. 30, 2014	Nov. 30, 2013
Revenues:
Revenues	$0	$0
Operating expenses
Exploration expenses	0	273,500
Professional fees	160,714	262,549
Travel and promotion	18,725	7,920
Bad debt	0	0
Other general and administrative	8,945	3,952
Total operating expenses	188,384	547,921
Loss from operations	-188,384	-547,921
Other income (expense)
Other income	0	0
Interest expense	-32,878	-27,147
Debt discount	-32,500	0
Derivative recovery (expense)	20,503	0
Impairment of assets	0	0
Loss on extinguishment of debt	-6,000	-44,000
Total other income (expense)	-50,875	-71,147
Loss before provision for income taxes	-239,259	-619,068
Provision for Income taxes	0	0
Net loss	($239,259)	($619,068)
Basic and diluted loss per common share	$0	($0.02)
Weighted average shares outstanding	64,594,505	21,489,011

Condensed_Statements_of_Cash_F

Condensed Statements of Cash Flows (USD $)	3 Months Ended
	Nov. 30, 2014	Nov. 30, 2013
Cash flows from operating activities
Net loss	($239,259)	($619,068)
Adjustments to reconcile net loss to net cash used in operating activities
Change in derivative	-20,503	0
Debt discount	32,500	0
Common stock issued for services	80,000	250,000
Impairment loss	0	0
Stock issued to convert debt	0	0
Extinguishment of debt	6,000	44,000
Bad debt expense	0	0
Changes in operating assets and liabilities:
Accounts payable	-16,999	0
Interest payable	32,878	27,147
Accrued expenses and other liabilities	81,254	9,500
Cash provided by (used in) operating activities	-44,129	-288,421
Cash flows from investing activities
Investment in oil and natural gas property	-10	0
Note receivable	0	0
Cash flows used in investing activities	-10	0
Cash flows from financing activities
Proceeds from related party loan	0	273,500
Repayments of related party loan	0	0
Increase in bank indebtedness	150	0
Proceeds from notes payable	32,500	12,091
Proceeds from sale of stock	0	0
Cash provided by financing activities	32,650	285,591
Net change in cash	-11,489	-2,830
Cash at beginning of period	11,489	11,667
Cash at end of period	0	8,837
Supplemental cash flow Information:
Cash paid for interest	0	0
Cash paid for income taxes	$0	$0

CONDENSED_FINANCIAL_STATEMENTS

CONDENSED FINANCIAL STATEMENTS	3 Months Ended
	Nov. 30, 2014
CONDENSED FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS	NOTE 1 – CONDENSED FINANCIAL STATEMENTS
	The accompanying financial statements have been prepared by Falcon Crest Energy Inc. (the "Company") without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at November 30, 2014 and for all periods presented herein, have been made.
	Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s August 31, 2014 and 2013 audited financial statements. The results of operations for the period ended November 30, 2014 are not necessarily indicative of the operating results for the full year.

NATURE_OF_BUSINESS

NATURE OF BUSINESS	3 Months Ended
	Nov. 30, 2014
NATURE OF BUSINESS
NATURE OF BUSINESS	NOTE 2 – NATURE OF BUSINESS
	The Company was incorporated in the State of Nevada, United States of America on September 27, 2006 and its fiscal year end is August 31. The Company was engaged in sales of new food products produced or developed by North American companies to foreign markets and discontinued that business in August 2009. The Company currently operates in the oil and gas industry, focused on the exploration for and development of oil and gas properties

GOING_CONCERN

GOING CONCERN	3 Months Ended
	Nov. 30, 2014
GOING CONCERN
GOING CONCERN	NOTE 3 – GOING CONCERN
	The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. The Company has accumulated deficit since inception of $3,539,130 and a negative working capital of $2,630,270 as of November 30, 2014. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has minimal cash and no material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The officers and directors have committed to advancing certain operating costs of the Company.

OIL_AND_NATURAL_GAS_PROPERTY

OIL AND NATURAL GAS PROPERTY	3 Months Ended
	Nov. 30, 2014
OIL AND NATURAL GAS PROPERTY
OIL AND NATURAL GAS PROPERTY	NOTE 4 – OIL AND GAS PROPERTY
	On October 20, 2014 The company, through its agents Pacer Energy Acquisitions LLC and Pahasapa Petroleum LLC received assignment of a 75% Working Interest Position in approximately 585 Acres in Crook County, Wyoming from the United States Bureau of Land Management (BLM).

CONVERTIBLE_NOTES_PAYABLE

CONVERTIBLE NOTES PAYABLE	3 Months Ended
	Nov. 30, 2014
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE	NOTE 5 – CONVERTIBLE NOTES PAYABLE
	On August 5th, 2014, the Company issued a convertible promissory note in the amount of $32,500. The note is due on May 7th, 2015 and bears interest at 8% per annum. The loan becomes convertible 180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 58% multiplied by the market price, which is the average of the lowest two (2) trading prices for the common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date.
	On August 5th, 2014, the Company issued a convertible promissory note in the amount of $36,750. The note is due on August 5th, 2015 and bears interest at 8% per annum. The loan becomes convertible 180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 55% multiplied by the market price, which is the average of the lowest two (2) trading prices for the common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date.
	On August 12th, 2014, the Company issued a convertible promissory note in the amount of $25,000. The note is due on August 12th, 2015 and bears interest at 8% per annum. The loan becomes convertible 180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the average of the lowest two (2) trading prices for the common stock during the fifteen (14) trading day period ending on the latest complete trading day prior to the conversion date.
	On September 8th, 2014, the Company issued a convertible promissory note in the amount of $32,500. The note is due on June 10th, 2015 and bears interest at 8% per annum. The loan becomes convertible 180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 58% multiplied by the market price, which is the average of the lowest two (2) trading prices for the common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date.

DERIVATIVE_LIABILITIES

DERIVATIVE LIABILITIES	3 Months Ended
	Nov. 30, 2014
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES	NOTE 6 – DERIVATIVE LIABILITIES
	In accordance with AC 815, the Company has bifurcated the conversion feature of their convertible notes and recorded a derivative liability on the date each note became convertible. The derivative liability was then revalued on each reporting date. The Company uses the Black-Scholes option pricing model to value the derivative liability. Included in the model to value the derivative liabilities of the above loans are the following assumptions: stock price at valuation date of $0.021 - $0.036, exercise price of $0.010 - $0.023, dividend yield of zero, years to maturity of 0.225 – .493, a risk free rate of 0.02% - 0.05%, and annualized volatility of 261% - 347%. The above loans were all discounted in full based on the valuations and the Company recognized an additional derivative expense of $35,474 upon recording of the current period’s derivative liabilities. Once the loans are fully converted, the remaining derivative liability is reclassified to equity as additional paid-in capital. As of November 30, 2014, unamortized debt discount totaling $126,750 remained.
	ASC 815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value as another income or expense item. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with the above convertible debt. During the period ended November 30, 2014, the Company recorded a total change in the value of the derivative liabilities of $(23,477).
	From inception to November 30, 2014 the Company has not granted any stock options.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Nov. 30, 2014
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 7 – STOCKHOLDERS' EQUITY
	The total number of common shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.001 per share and no other class of shares is authorized.
	On October 21, 2014 1,000,000 Shares were issued to Cloud Solutions LLC for services.
	On October 29, 2014 3,000,000 Shares were issued to Corporate Ads LLC for services.

RELATED_PARTY_TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Nov. 30, 2014
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 8 – RELATED PARTY TRANSACTIONS
	The Company has current loans totaling $1,324,848 to fund operations which carry varying interest rates. As of November 30, 2014 (August 31, 2014), the Company owed $1,324,848 ($1,324,848) of principal plus accrued interest of $416,328 ($383,450). The loans are unsecured and due on demand and as such are included in current liabilities. A portion of the related party transactions were reclassified in 2014 to properly reflect the relationship with the company.

NOTE_RECEIVABLE

NOTE RECEIVABLE	3 Months Ended
	Nov. 30, 2014
NOTE RECEIVABLE
NOTE RECEIVABLE	NOTE 9 – NOTE RECEIVABLE
	The Company has advanced funds totaling $540,010 to Steele Resources with the intention of establishing a joint venture. The venture did not materialize and Steele Resources has agreed to return the funds to the Company. We have not received repayment as of November 30, 2014 and have established a full reserve against the balance as a result.
	The Company has advanced funds totaling $338,344 to Global Finishing with the intention of establishing a joint venture. The venture did not materialize. We have not received repayment as of November 30, 2014 and have established a full reserve against the balance as a result.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Nov. 30, 2014
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 10 – SUBSEQUENT EVENTS
	On December 19th, 2014, the Company issued a convertible promissory note in the amount of $33,000. The note is due on September 26th, 2015 and bears interest at 8% per annum. The loan becomes convertible 180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 58% multiplied by the market price, which is the average of the lowest two (2) trading prices for the common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date.

GOING_CONCERN_Details

GOING CONCERN (Details) (USD $)	Nov. 30, 2014
GOING CONCERN DETAILS
Accumulated deficit	($3,539,130)
Negative working capital	$2,630,270

CONVERTIBLE_NOTES_PAYABLE_Deta

CONVERTIBLE NOTES PAYABLE (Details) (USD $)	Sep. 08, 2014	Aug. 05, 2014	Aug. 02, 2014
CONVERTIBLE NOTES PAYABLE DETAILS
Issued a convertible promissory note		$32,500
Issued a convertible promissory note in the amount	$32,500	$36,750	$25,000
Note bears interest	8.00%	8.00%	8.00%

DERIVATIVE_LIABILITIES_Details

DERIVATIVE LIABILITIES (Details) (USD $)	3 Months Ended
	Nov. 30, 2014
Pricing model with the assumptions Details
Stock price at valuation minimum	$0.02
Stock price at valuation maximum	$0.04
Exercise price	$0.02
Expected dividend yield	0.00%
Risk-free interest rate	0.05%
Expected volatility minimum	261.00%
Expected volatility maximum	347.00%
Expected term years	years to maturity of 0.225 – .493
Recognized an additional derivative expense	$35,474
Unamortized debt discount	126,750
Total change in the value of the derivative liabilities	($23,477)

EQUITY_Details

EQUITY (Details) (USD $)	Nov. 30, 2014	Oct. 29, 2014	Oct. 21, 2014
Capital stock transactions:
Authorized the issuance of shares	200,000,000
Authorized the issuance of shares, Par value	$0.00
Shares issued for services		3,000,000	1,000,000

RELATED_PARTY_TRANSACTIONS_Det

RELATED PARTY TRANSACTIONS (Details) (USD $)	Nov. 30, 2014	Aug. 31, 2014
RELATED PARTY TRANSACTIONS DETAILS:
Current loans	$1,324,848	$1,324,848
Related party payables	1,324,848	1,324,848
Accrued interest	$416,328	$383,450

NOTE_RECEIVABLE_Details

NOTE RECEIVABLE (Details) (USD $)	Nov. 30, 2014
NOTE RECEIVABLE DETAILS:
Advanced funds to Steele Resources	$540,010
Advanced funds to Global Finishing	$338,344

SUBSEQUENT_EVENTS_Details

SUBSEQUENT EVENTS (Details) (USD $)	Dec. 19, 2014
SUBSEQUENT EVENTS DETAILS:
Issued a convertible promissory note	$32,500
Interest on note in percent	8.00%