FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended October 31, 2008.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________.
Commission file number None
PINNACLE ENERGY CORP.
(Exact name of registrant as specified in its charter)
Nevada 36-4613360
- --------------------------------- -----------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Suite 153, 333 River Front Ave., S.E.
Calgary, Alberta, Canada T2G 5R1
--------------------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (866) 822-0325
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ]
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act): [ ] Yes [X] No
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of the common stock on April 30,
2008, was $ -0- .
As of January 20, 2009, the Registrant had 15,840,000 issued and outstanding
shares of common stock.
Documents Incorporated by Reference: None
PART I
ITEM 1. BUSINESS
Pinnacle was incorporated in Nevada on June 5, 2007 and plans to be
involved in the exploration and development of oil and gas.
Pinnacle plans to evaluate undeveloped oil and gas prospects and
participate in drilling activities on those prospects which in the opinion of
management are favorable for the production of oil or gas. If, through its
review, a geographical area indicates geological and economic potential,
Pinnacle will attempt to acquire leases or other interests in the area. Pinnacle
will then attempt to sell portions of its leasehold interests in a prospect to
unrelated third parties, thus sharing risks and rewards of the exploration and
development of the prospect with the joint owners pursuant to an operating
agreement. One or more exploratory wells may be drilled on a prospect, and if
the results indicate the presence of sufficient oil and gas reserves, additional
wells may be drilled on the prospect.
Pinnacle may also:
o acquire a working interest in one or more prospects from others and
participate with the other working interest owners in drilling, and if
warranted, completing oil or gas wells on a prospect, and
o purchase producing oil or gas properties.
Pinnacle's activities will primarily be dependent upon available
financing.
In September 2007 Pinnacle acquired a 44.5% working interest (35.6% net
revenue interest) in an oil and gas lease covering 40 acres in Lincoln County,
Oklahoma. In November 2007 the gas well drilled on the lease was placed into
production. As of January 20, 2009 the well was shut in and awaiting repairs.
At the time it acquired its interest in the oil and gas lease, Pinnacle
also acquired, for $100,000, a 50% interest in a portable nitrogen rejection
unit. The unit removes excessive nitrogen and oxygen from the gas produced from
the well and allows the gas to be sold to buyers who will not always purchase
gas with a high level of contaminants.
On August 27, 2008 Pinnacle acquired working interests in six oil and gas
wells located in Pawnee County, Oklahoma. Pinnacle has a 25.5% working interest
(20.4% net revenue interest) in two wells, a 20% working interest (16% net
revenue interest) in three wells , and a 17% working interest (13.6% net revenue
interest) in the remaining well.
As of January 20, 2009 five wells were producing ten barrels of oil and
eight MCF of gas per day, net to Pinnacle's interest. The sixth well is being
used as a salt water disposal well.
2
The price for Pinnacle's interest in the six wells was $1,000,000. The
purchase price requires monthly interest payments at 8% per year until September
1, 2013, at which time the entire $1,000,000 is due.
The following table shows, as of January 20, 2009, by state or region,
Pinnacle's producing wells, Developed Acreage and Undeveloped Acreage, excluding
service (injection and disposal) wells:
Region Productive Wells (1) Developed Acreage Undeveloped Acreage (1)
- ------ -------------------- ----------------- -----------------------
Gross Net Gross Net Gross Net
----- --- ----- --- ----- ---
Lincoln County,
Oklahoma 1 44.5 40 17.8 -- --
Pawnee County,
Oklahoma 5 1.47 200 46 1,520 347
(1) "Undeveloped Acreage" includes leasehold interests on which wells have not
been drilled or completed to the point that would permit the production of
commercial quantities of natural gas and oil regardless of whether the
leasehold interest is classified as containing proved undeveloped reserves.
The following table shows, as of January 20, 2009 the status of Pinnacle's
gross developed and undeveloped acreage.
Held by Not Held by
Region Gross Acreage Production Production
- ------ ------------- ---------- --------------
Lincoln County, Oklahoma 40 40 --
Pawnee County, Oklahoma 1,720 1,720 --
Acres Held By Production remain in force so long as oil or gas is produced
from the well on the particular lease. Leased acres which are not Held By
Production require annual rental payments to maintain the lease until the first
to occur of the following: the expiration of the lease or the time oil or gas is
produced from one or more wells drilled on the lease acreage. At the time oil or
gas is produced from wells drilled on the leased acreage the lease is considered
to be Held By Production.
Pinnacle has not drilled, or participated in the drilling of, any oil or
gas wells.
Pinnacle does not own any Overriding Royalty Interests.
Title to properties is subject to royalty, overriding royalty, carried,
net profits, working and other similar interests and contractual arrangements
customary in the oil and gas industry, to liens for current taxes not yet due
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and to other encumbrances. As is customary in the industry in the case of
undeveloped properties, little investigation of record title is made at the time
of acquisition (other than a preliminary review of local records). However,
drilling title opinions are normally prepared before commencement of drilling
operations.
GOVERNMENT REGULATION
Various state and federal agencies regulate the production and sale of oil
and natural gas. All states in which Pinnacle plans to operate impose
restrictions on the drilling, production, transportation and sale of oil and
natural gas.
The Federal Energy Regulatory Commission (the "FERC") regulates the
interstate transportation and the sale in interstate commerce for resale of
natural gas. The FERC's jurisdiction over interstate natural gas sales has been
substantially modified by the Natural Gas Policy Act under which the FERC
continued to regulate the maximum selling prices of certain categories of gas
sold in "first sales" in interstate and intrastate commerce.
FERC has pursued policy initiatives that have affected natural gas
marketing. Most notable are (1) the large-scale divestiture of interstate
pipeline-owned gas gathering facilities to affiliated or non-affiliated
companies; (2) further development of rules governing the relationship of the
pipelines with their marketing affiliates; (3) the publication of standards
relating to the use of electronic bulletin boards and electronic data exchange
by the pipelines to make available transportation information on a timely basis
and to enable transactions to occur on a purely electronic basis; (4) further
review of the role of the secondary market for released pipeline capacity and
its relationship to open access service in the primary market; and (5)
development of policy and promulgation of orders pertaining to its authorization
of market-based rates (rather than traditional cost-of-service based rates) for
transportation or transportation-related services upon the pipeline's
demonstration of lack of market control in the relevant service market. Pinnacle
does not know what effect the FERC's other activities will have on the access to
markets, the fostering of competition and the cost of doing business.
Pinnacle's sales of oil and natural gas liquids will not be regulated and
will be at market prices. The price received from the sale of these products
will be affected by the cost of transporting the products to market. Much of
that transportation is through interstate common carrier pipelines.
Federal, state, and local agencies have promulgated extensive rules and
regulations applicable to Pinnacle's oil and natural gas exploration, production
and related operations. Most states require permits for drilling operations,
drilling bonds and the filing of reports concerning operations and impose other
requirements relating to the exploration of oil and natural gas. Many states
also have statutes or regulations addressing conservation matters including
provisions for the unitization or pooling of oil and natural gas properties, the
establishment of maximum rates of production from oil and natural gas wells and
the regulation of spacing, plugging and abandonment of such wells. The statutes
and regulations of some states limit the rate at which oil and natural gas is
produced from Pinnacle's properties. The federal and state regulatory burden on
the oil and natural gas industry increases Pinnacle's cost of doing business and
4
affects its profitability. Because these rules and regulations are amended or
reinterpreted frequently, Pinnacle is unable to predict the future cost or
impact of complying with those laws.
COMPETITION AND MARKETING
Pinnacle will be faced with strong competition from many other companies
and individuals engaged in the oil and gas business, many are very large, well
established energy companies with substantial capabilities and established
earnings records. Pinnacle may be at a competitive disadvantage in acquiring oil
and gas prospects since it must compete with these individuals and companies,
many of which have greater financial resources and larger technical staffs. It
is nearly impossible to estimate the number of competitors; however, it is known
that there are a large number of companies and individuals in the oil and gas
business.
Exploration for and production of oil and gas are affected by the
availability of pipe, casing and other tubular goods and certain other oil field
equipment including drilling rigs and tools. Pinnacle depends upon independent
drilling contractors to furnish rigs, equipment and tools to drill its wells.
Higher prices for oil and gas may result in competition among operators for
drilling equipment, tubular goods and drilling crews which may affect Pinnacle's
ability expeditiously to drill, complete, recomplete and work-over its wells.
However, Pinnacle has not experienced and does not anticipate difficulty in
obtaining supplies, materials, drilling rigs, equipment or tools.
Pinnacle does not refine or otherwise process crude oil and condensate
production. Substantially all of the crude oil and condensate production from
Pinnacle's well is sold at posted prices under short-term contracts, which is
customary in the industry.
The market for oil and gas is dependent upon a number of factors beyond
Pinnacle's control, which at times cannot be accurately predicted. These factors
include the proximity of wells to, and the capacity of, natural gas pipelines,
the extent of competitive domestic production and imports of oil and gas, the
availability of other sources of energy, fluctuations in seasonal supply and
demand, and governmental regulation. In addition, there is always the
possibility that new legislation may be enacted which would impose price
controls or additional excise taxes upon crude oil or natural gas, or both.
Oversupplies of natural gas can be expected to recur from time to time and may
result in the gas producing wells being shut-in. Increased imports of natural
gas, primarily from Canada, have occurred and are expected to continue. Such
imports may adversely affect the market for domestic natural gas.
The market price for crude oil is significantly affected by policies
adopted by the member nations of Organization of Petroleum Exporting Countries
("OPEC"). Members of OPEC establish prices and production quotas among
themselves for petroleum products from time to time with the intent of
controlling the current global supply and consequently price levels. Pinnacle is
unable to predict the effect, if any, that OPEC or other countries will have on
the amount of, or the prices received for, crude oil and natural gas produced
and sold from Pinnacle's wells.
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Gas prices, which were once effectively determined by government
regulations, are now largely influenced by competition. Competitors in this
market include producers, gas pipelines and their affiliated marketing
companies, independent marketers, and providers of alternate energy supplies,
such as residual fuel oil. Changes in government regulations relating to the
production, transportation and marketing of natural gas have also resulted in
significant changes in the historical marketing patterns of the industry.
Generally, these changes have resulted in the abandonment by many pipelines of
long-term contracts for the purchase of natural gas, the development by gas
producers of their own marketing programs to take advantage of new regulations
requiring pipelines to transport gas for regulated fees, and an increasing
tendency to rely on short-term contracts priced at spot market prices.
GENERAL
Pinnacle has never been a party to any bankruptcy, receivership,
reorganization, readjustment or similar proceedings. Since Pinnacle is engaged
in the oil and gas business, it does not allocate funds to product research and
development in the conventional sense. Pinnacle does not have any patents,
trade-marks, or labor contracts. With the exception of Pinnacle's oil and gas
leases, Pinnacle does not have any licenses, franchises, concessions or royalty
agreements. Backlog is not material to an understanding of Pinnacle's business.
Pinnacle's business is not subject to renegotiation of profits or termination of
contracts or subcontracts at the election of federal government.
As of January 20, 2009 Pinnacle did not have any full time employees.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 1B. UNRESOLVED SEC COMMENTS
Not applicable.
ITEM 2. PROPERTIES
See Item 1 of this report for information concerning Pinnacle's oil and
gas properties.
Pinnacle's offices are located at Suite 153, 333 River Front Ave., S.E.,
Calgary, Alberta, Canada T2G 5R1. The 500 square feet of office space is
occupied under a lease requiring rental payments of $500 per month until July 1,
2009.
ITEM 3. LEGAL PROCEEDINGS
Pinnacle is not involved in any legal proceedings and Pinnacle does not
know of any legal proceedings which are threatened or contemplated.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY
On August 28, 2008, Pinnacle's common stock began trading on the OTC
Bulletin Board under the symbol "GSVG." Prior to that date, there was no
established trading market for Pinnacle's common stock.
In July 2008 the shareholders of Pinnacle approved a 3-for-1 forward split
of Pinnacle's common stock and approved changing the corporate name to Pinnacle
Energy Corp.
On August 14, 2008 the forward split and name change became effective on
the OTC Bulletin Board and Pinnacle's trading symbol was changed to "PENC."
Shown below are the range of high and low closing prices for Pinnacle's
common stock for the periods indicated as reported by the NASD. The market
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not necessarily represent actual transactions.
Month Ended High Low
----------- ---- ---
August 2008 $1.29 $0.70
September 2008 $1.40 $0.94
October 2008 $1.20 $1.01
As of January 20, 2009, Pinnacle had 15,840,000 outstanding shares of
common stock and 63 shareholders. Pinnacle does not have any outstanding
options, warrants or other arrangements providing for the issuance of additional
shares of its capital stock.
All of Pinnacle's outstanding shares are restricted securities and may be
sold in accordance with Rule 144 of the Securities and Exchange Commission.
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. Pinnacle's Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.
Pinnacle's Articles of Incorporation authorize its Board of Directors to
issue up to 5,000,000 shares of preferred stock. The provisions in the Articles
of Incorporation relating to the preferred stock allow Pinnacle's directors to
issue preferred stock with multiple votes per share and dividend rights which
would have priority over any dividends paid with respect to the holders of
Pinnacle's common stock. The issuance of preferred stock with these rights may
make the removal of management difficult even if the removal would be considered
7
beneficial to shareholders generally, and will have the effect of limiting
shareholder participation in certain transactions such as mergers or tender
offers if these transactions are not favored by Pinnacle's management.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion of financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
notes to the consolidated financial statements, which are included elsewhere in
this report.
Pinnacle was incorporated on June 5, 2007. In September 2007 Pinnacle
acquired a 44.5% working interest (35.6% net revenue interest) in a gas well
located in Lincoln County, Oklahoma for $100,000 in cash and 900,000 shares of
its restricted common stock. At the time it acquired its interest in the gas
well, Pinnacle also acquired, for $100,000, a 50% interest in a portable unit
which reduces the amount of nitrogen and oxygen from the gas produced by the
well. The gas well was put into production in November 2007. As of January 20,
2009 the well was shut in and awaiting repairs.
On August 27, 2008 Pinnacle acquired working interests in six oil and gas
wells located in Pawnee County, Oklahoma. Pinnacle has a 25.5% working interest
(20.4% net revenue interest) in two wells, a 20% working interest (16% net
revenue interest) in three wells , and a 17% working interest (13.6% net revenue
interest) in the remaining well.
As of January 20, 2009 five wells were producing ten barrels of oil and
eight MCF of gas per day, net to Pinnacle's interest. The sixth well is being
used as a salt water disposal well.
The price for Pinnacle's interest in the six wells was $1,000,000. The
purchase price requires monthly interest payments at 8% per year until September
1, 2013, at which time the entire $1,000,000 is due.
RESULTS OF OPERATIONS
The factors that most significantly affect Pinnacle's results of operations
will be (i) the sale prices of crude oil and natural gas, (ii) the amount of
production from oil or gas wells in which Pinnacle has an interest, and (iii)
and lease operating expenses. Pinnacle's revenues will also be significantly
impacted by its ability to maintain or increase oil or gas production through
exploration and development activities.
Prices received by Pinnacle for sales of crude oil and natural gas may
fluctuate significantly from period to period. The fluctuations in oil prices
during these periods reflect market uncertainty regarding the inability of the
Organization of Petroleum Exporting Countries ("OPEC") to control the production
8
of its member countries, as well as concerns related to the global supply and
demand for crude oil. Gas prices received by Pinnacle will fluctuate with
changes in the spot market price for gas.
Changes in natural gas and crude oil prices will significantly affect the
revenues and cash flow of the wells and the value of the oil and gas properties.
Declines in the prices of crude oil and natural gas could have a material
adverse effect on the success of Pinnacle's operations and activities,
recoupment of the costs of acquiring, developing and producing its wells and
profitability. Pinnacle is unable to predict whether the prices of crude oil and
natural gas will rise, stabilize or decline in the future.
Other than the foregoing, Pinnacle does not know of any trends, events or
uncertainties that have had or are reasonably expected to have a material impact
on Pinnacle's net sales, revenues or expenses.
LIQUIDITY AND CAPITAL RESOURCES
It is expected that Pinnacle's principal source of cash flow will be from
the production and sale of crude oil and natural gas reserves which are
depleting assets. Cash flow from the sale of oil and gas production depends upon
the quantity of production and the price obtained for the production. An
increase in prices will permit Pinnacle to finance its operations to a greater
extent with internally generated funds, may allow Pinnacle to obtain equity
financing more easily or on better terms, and lessens the difficulty of
obtaining financing. However, price increases heighten the competition for oil
and gas prospects, increase the costs of exploration and development, and,
because of potential price declines, increase the risks associated with the
purchase of producing properties during times that prices are at higher levels.
A decline in oil and gas prices (i) will reduce the cash flow internally
generated by Pinnacle which in turn will reduce the funds available for
exploring for and replacing oil and gas reserves, (ii) will increase the
difficulty of obtaining equity and debt financing and worsen the terms on which
such financing may be obtained, (iii) will reduce the number of oil and gas
prospects which have reasonable economic terms, (iv) may cause Pinnacle to
permit leases to expire based upon the value of potential oil and gas reserves
in relation to the costs of exploration, (v) may result in marginally productive
oil and gas wells being abandoned as non-commercial, and (vi) may increase the
difficulty of obtaining financing. However, price declines reduce the
competition for oil and gas properties and correspondingly reduce the prices
paid for leases and prospects.
Between June and September 2007 Pinnacle sold 2,580,000 shares of its
common stock at a price of $0.10 CDN per share to a group of private investors.
Pinnacle's material sources and (uses) of cash during the year ended
October 30, 2008, and the period from its inception (June 5, 2007) to October
31, 2007 were:
9
2008 2007
---- ----
Cash used in operations $(44,803) $(12,132)
Sale of common stock -- 284,301
Purchase of oil and gas property -- (190,000)
Purchase of equipment -- (100,000)
Cash on hand at beginning of period 26,803 --
As of January 20, 2009 Pinnacle had cash on hand of approximately $11,500.
Pinnacle's plan of operation is described in more detail in Item 1 of this
report.
Pinnacle does not anticipate that it will need to hire any employees
during the twelve month period ending January 31, 2010.
Pinnacle's future plans will be dependent upon the amount of capital
Pinnacle is able to raise. Pinnacle may attempt to raise additional capital
through the private sale of its equity securities or borrowings from third party
lenders. Pinnacle does not have any commitments or arrangements from any person
to provide Pinnacle with any additional capital. If additional financing is not
available when needed, Pinnacle may continue to operate in its present mode or
Pinnacle may need to cease operations. Pinnacle does not have any plans,
arrangements or agreements to sell its assets or to merge with another entity.
Pinnacle plans to generate profits by drilling productive oil or gas
wells. However, Pinnacle will need to raise the funds required to drill new
wells from third parties willing to pay Pinnacle's share of drilling and
completing the wells. Pinnacle may also attempt to raise needed capital through
the private sale of its securities or by borrowing from third parties. Pinnacle
may not be successful in raising the capital needed to drill oil or gas wells.
In addition, any future wells which may be drilled by Pinnacle may not be
productive of oil or gas. The inability of Pinnacle to generate profits may
force Pinnacle to curtail or cease operations.
Contractual Obligations
As of January 20, 2009 Pinnacle did not have any material capital
commitments, other than funding its operating losses. It is anticipated that any
capital commitments that may occur will be financed principally through the sale
of shares of Pinnacle's common stock or other equity securities. However, there
can be no assurance that additional capital resources and financings will be
available to Pinnacle on a timely basis, or if available, on acceptable terms.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Not applicable.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the financial statements included with this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable
ITEM 9A and 9A(T). CONTROLS AND PROCEDURES
Nolan Weir, Pinnacle's President and Principal Financial Officer, has
evaluated the effectiveness of Pinnacle's disclosure controls and procedures as
of October 31, 2008 and in his opinion Pinnacle's disclosure controls and
procedures ensure that material information is made known to him by others,
particularly during the period in which this report is being prepared, so as to
allow timely decisions regarding required disclosure. Mr. Weir has determined
that these controls and procedures are effective as of October 31, 2008. To the
knowledge of Mr. Weir there have been no significant changes in Pinnacle's
internal controls or in other factors that could significantly affect Pinnacle's
internal controls during the year ended October 31, 2008, and as a result, no
corrective actions with regard to significant deficiencies or material weakness
in Pinnacle's internal controls were required.
ITEM 9B. OTHER INFORMATION
Not applicable.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pinnacle's officers and directors are listed below. Pinnacle's directors
are generally elected at the annual shareholders' meeting and hold office until
the next annual shareholders' meeting or until their successors are elected and
qualified. Pinnacle's executive officers are elected by its board of directors
and serve at its discretion.
Name Age Position
- ---- --- ---------
Nolan Weir 35 President, Chief Executive Officer, Secretary
and a Director
The following is a brief description of Mr. Weir's business background:
Nolan Weir. Mr. Weir has been an officer and director of Pinnacle since
June 2007. Since December 2002 Mr. Weir has been the President of Makin Rain
Irrigation Corp., a Company involved with residential landscaping and irrigation
in the Alberta area.
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Pinnacle does not have a compensation committee. Pinnacle's Directors serve
as its Audit Committee. Pinnacle does not have a financial expert. Mr. Weir is
not independent as that term is defined in Section 803 of the NYSE Alternext
U.S. Company Guide.
ITEM 11. EXECUTIVE COMPENSATION
The following table shows the compensation paid or accrued to Pinnacle's
officer during the year ended October 31, 2008 and for the period from
Pinnacle's inception (June 5, 2007) to October 31, 2007:
All
Other
Annual
Stock Option Compen-
Name and Principal Fiscal Salary Bonus Awards Awards sation
Position Year (1) (2) (3) (4) (5) Total
- ------------------ ------ ------ ----- ------ ------ ------- -----
Nolan Weir, 2008 $30,000 -- -- -- -- $30,000
President, Chief 2007 -- -- -- -- -- --
Executive Officer
and Secretary
(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) During the periods covered by the table, the value of Pinnacle's shares
issued as compensation for services to the persons listed in the table.
(4) The value of all stock options granted during the periods covered by the
table.
(5) All other compensation received that Pinnacle could not properly report in
any other column of the table.
Stock Options. Pinnacle has not granted any stock options and does not
have any stock option plans in effect as of January 20, 2009. In the future,
Pinnacle may grant stock options to its officers, directors, employees or
consultants.
Long-Term Incentive Plans. Pinnacle does not provide its officers or
employees with pension, stock appreciation rights, long-term incentive or other
plans and has no intention of implementing any of these plans for the
foreseeable future.
Employee Pension, Profit Sharing or other Retirement Plans. Pinnacle does
not have a defined benefit, pension plan, profit sharing or other retirement
plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. Pinnacle's directors do not receive any
compensation pursuant to any standard arrangement for their services as
directors.
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Mr. Weir plans to spend approximately 50% of his time on the business of
Pinnacle. During the year ending October 31, 2009 Pinnacle plans to pay
approximately $30,000 to Mr. Weir for his services.
Pinnacle does not have any employment agreements with its officers or
employees. Pinnacle does not maintain any keyman insurance on the life or in the
event of disability of any of its officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table shows the ownership of Pinnacle's common stock as of
January 20, 2009 by each shareholder known by Pinnacle to be the beneficial
owner of more than 5% of Pinnacle's outstanding shares, each director and
executive officer and all directors and executive officers as a group. Except as
otherwise indicated, each shareholder has sole voting and investment power with
respect to the shares they beneficially own.
Name and Address Number of Shares Percent of Class
- ---------------- ---------------- ----------------
Nolan Weir 1,800,000 34%
Suite 153
333 River Front Ave., S.E.
Calgary, Alberta
Canada T2G 5R1
Futures Investment Corp. 900,000 17%
31 Tusslewood View, N.W.
Calgary, Alberta
Canada T3L 2Y3
All officers and directors 1,800,000 34%
as a group (one person)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
The following lists all shares of Pinnacle's common stock since its
incorporation:
Consideration
Shareholder Date of Sale Shares Issued Paid for Shares
----------- ------------ ------------- ---------------
Nolan Weir 6-06-07 1,800,000 $18,000
Futures Investment Corp. 9-01-07 900,000 Assignment of
interest in oil
and gas prospect
Private Investors 6/07 - 9/07 2,580,000 CDN$0.10 per share
----------
5,280,000
==========
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
--------------------------------------
John Kinross-Kennedy served as Pinnacle's auditor for the year ended
October 31, 2008 and the period from Pinnacle's inception (June 5, 2007) to
October 31, 2007. The following table shows the aggregate fees billed to
Pinnacle for these periods by Mr. Kinross-Kennedy:
2008 2007
---- ----
Audit Fees $5,000 $4,800
Audit-Related Fees -- --
Tax Fees -- --
All Other Fees -- --
Audit fees represent amounts billed for professional services rendered for
the audit of Pinnacle's annual financial statements included as part of this
report, as well as the audit of Pinnacle's financial statements and the review
of its interim financial statements which were included as part of Pinnacle's
registration statement on Form S-1. Before Mr. Kinross-Kennedy was engaged to
render audit or non-audit services, the engagement was approved by Pinnacle's
director. Pinnacle's director is of the opinion that the audit related fees
charged by Mr. Kinross-Kennedy are consistent with Mr. Kinross-Kennedy
maintaining his independence.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed with this Registration Statement:
Exhibit
Number Exhibit Name
- ------- ------------
3.1 Articles of Incorporation, as amended
3.2 Bylaws *
10.1 Agreement pertaining to acquisition of interest in oil
and gas lease in Lincoln County, Oklahoma. *
10.2 Agreement pertaining to acquisition of interest in oil
and gas property in Pawnee County, Oklahoma
* Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form SB-2 (SEC File #333-148447).
14
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: The Board of Directors and Shareholders
Pinnacle Energy Corp.
333 Riverfront Avenue S.E., Suite 153
Calgary, Alberta
CANADA
I have audited the accompanying balance sheet of Pinnacle Energy Corp. as of
October 31, 2008 and the related statements of operations and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of October 31, 2008,
and the results of its operations and its cash flows for year then ended, in
conformity with United States generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered a loss of $61,262 since inception
June 5, 2007 and has not yet commenced operations. This raises substantive doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
The Company has determined that it is not required to have, nor was I engaged to
perform, an audit of the effectiveness of its documented internal controls over
financial reporting.
John Kinross-Kennedy
Certified Public Accountant
Irvine, California
January 21, 2008
PINNACLE ENERGY CORP.
(A Development Stage Company)
Balance Sheet
October 31, October 31,
2008 2007
------------ ------------
ASSETS (Restated)
Current Assets
Cash at bank $ 9,366 $ 36,169
Accounts Receivable 19,006 -
Subscriptions Receivable 18,000
------------ ------------
Total Current Assets 28,372 54,169
------------ ------------
Property and Equipment
Equipment 100,000 100,000
Accumulated Depreciation 10,000 -
------------ ------------
90,000 100,000
------------ ------------
Other Assets
Oil & Gas Leasehold Interest 1,190,000 1,190,000
------------ ------------
TOTAL ASSETS $ 1,308,372 $ 1,344,169
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current Liabilities
Accounts Payable $ - $ 1,231
Accrued Interest Payable 13,333 $ -
------------ ------------
13,333 1,231
------------ ------------
Notes Payable 1,000,000 -
------------ ------------
TOTAL LIABILITIES 1,013,333 2,462
------------ ------------
Shareholders' Equity (Deficit)
Common Stock, par value $0.001,
authorized 150,000,000 shares;
issued and outstanding:
15,840,000 shares as at October 31, 2007
15,840,000 shares ast at October 31, 2008 15,840 15,840
Additional Paid-In Capital 340,461 340,461
Deficit accumulated during the
development stage (61,262) (13,363)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 295,039 342,938
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,308,372 $ 345,400
============ ============
The accompanying Notes are an integral part of these financial statements
1
PINNACLE ENERGY CORP.
(A Development Stage Company)
Statement of Operations
For the Period
For the three For the three For the For the five of Inception
months ended months ended year ended months ended from June 5,
October 31, October 31, 2007, through
------------------------------- -------------------------- October 31,
2008 2007 2008 2007 2008
---- ---- ---- ---- --------------
(Restated) (Restated)
Revenue
Natural Gas Production $ 29,993 $ - $ 50,651 $ - $ 50,651
Cost of Sales - - - - -
Operating Income 29,993 - 50,651 - 50,651
General and Administrative
Expenses
Professional Fees 1,165 11,500 17,965 11,500 29,465
Consulting Fees 21,470 - 36,334 - 36,334
Occupancy Costs 476 - 9,905 - 9,905
Repairs & Maintenance - 1,231 - 1,231 1,231
Depreciation 7,500 10,000 - 10,000
Interest 13,333 13,333 13,333
Other General and
Administrative Expenses 176 632 11,013 632 11,645
------------ ------------ ------------ ------------ ------------
Total General and
Administrative
Expenses 44,120 13,363 98,550 13,363 111,913
------------ ------------ ------------ ------------ ------------
Net Loss $ (14,127) $ (13,363) $ (47,899) $ (13,363) $ (61,262)
============ ============ ============ ============ ============
Loss Per Common Share:
Basic and Diluted $ (0.001) $ (0.002) $ (0.003) $ (0.002)
============ ============ ============ ============
Weighted Average Shares,
Outstanding, Basic and
Diluted: 15,840,000 9,641,739 15,840,000 7,653,649
============ ============ ============ ============
The accompanying Notes are an integral part of these financial statements
2
PINNACLE ENERGY CORP.
(A Development Stage Company)
Statement of Cash Flows
- --------------------------------------------------------------------------------
For the Period
of Inception
For the three For the three For the For the five from June 5,
months ended months ended year ended mo. ended 2007, through
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2008 2007 2008 2007 2008
------------- ------------- ---------- ------------- --------------
Cash flows from operating
activities:
Net (Loss) $ (14,127) $ (13,363) $ (47,899) $ (13,363) $ (61,262)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Non-cash depreciation 7,500 - 10,000 - 10,000
Change in operating assets and
liabilities:
(Increase) Decrease in
Accts Receivable (5,014) - (19,006) - (19,006)
Increase (Decrease) in
Accounts Payable (1,231) 1,231 (1,231) 1,231 -
Increase (Decrease) in
Accrued Interest 13,333 - 13,333 - 13,333
------------- ------------- ------------- ------------- -------------
Net cash (used by) operating
activities 461 (12,132) (44,803) (12,132) (56,935)
------------- ------------- ------------- ------------- -------------
Cash flows from investing
activities
Acquisition of equipment - (100,000) - (100,000) (100,000)
Acquisition of oil & gas
working interest (1,000,000) (190,000) (1,000,000) (190,000) (1,190,000)
------------- ------------- ------------- ------------- -------------
Net cash (used by) investing
activities (1,000,000) (290,000) (1,000,000) (290,000) (1,290,000)
------------- ------------- ------------- ------------- -------------
Cash flows from financing activities:
Decrease Subscriptions Receivable - (18,000) 18,000 (18,000) -
Proceeds of Note Payable 1,000,000 - 1,000,000 - 1,000,000
Common stock issued for assets - 90,000 - 90,000 90,000
Common stock issued for cash - 266,301 - 266,301 266,301
------------- ------------- ------------- ------------- -------------
Net cash (used) provided by
financing activities 1,000,000 338,301 1,018,000 338,301 1,356,301
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in cash 461 36,169 (26,803) 36,169 9,366
Cash, beginning of the period 8,905 - 36,169 - -
------------- ------------- ------------- ------------- -------------
Cash, end of the period $ 9,366 $ 36,169 $ 9,366 $ 36,169 $ 9,366
============= ============= ============= ============= =============
Supplemental cash flow disclosure:
Interest paid $ - $ - $ - $ - $ -
============= ============= ============= ============= =============
Taxes Paid $ - $ - $ - $ - $ -
============= ============= ============= ============= =============
The accompanying Notes are an integral part of these financial statements
3
PINNACLE ENERGY CORP.
(A Development Stage Company)
Statement of Shareholders' Equity
(Unaudited)
- --------------------------------------------------------------------------------
Deficit
Common Stock Accumulated Total
------------------- Additional during the Shareholders'
Number of Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
--------- ------ ----------- ----------- -------------
Inception, June 5, 2007 - $ - $ - $ - $ -
Common stock issued for cash
at $0.096 per share September
5, 2007 2,580,000 2,580 245,721 248,301
Common stock issued for cash
at $0.01 per share September
5, 2007 1,800,000 1,800 16,200 18,000
Common stock issued for oil
and gas working interest at
$0.10 per share September
5, 2007 900,000 900 89,100 90,000
Net loss for the period ended
Oct. 31, 2007 (13,363) (13,363)
----------- --------- ----------- ---------- ----------
Balances, October 31, 2007 5,280,000 $ 5,280 $ 351,021 $ (13,363) $ 342,938
Forward stock split 3 for 1
July 27, 2008 10,560,000 10,560 (10,560) -
Net loss for the year ended
October 31, 2008 (47,899) (47,899)
----------- --------- ----------- ---------- ----------
Balances, October 31, 2008 15,840,000 $ 15,840 $ 340,461 $ (61,262) $ 295,039
=========== ========= =========== ========== ==========
The accompanying Notes are an integral part of these financial statements
4
Pinnacle Energy Corp.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2008
1. Organization
Gas Salvage Inc. (the "Company") was incorporated under the laws of the
State of Nevada June 5, 2007. The Company was organized for the purpose of
engaging in any activity or business not in conflict with the laws of the
State of Nevada or of the United States of America. The Company became
engaged in the oil and gas industry. In July, 2008 the Company changed its
name from Gas Salvage Corporation to Pinnacle Energy Corp.
Current Business of the Company
The Company purchased a 44.5% working interest (35.6% net revenue
interest) in a producing gas well on 40 acres in Lincoln County, Oklahoma,
known as Holmes #1. The well was initially shut in awaiting repairs to its
Nitrogen Rejection Unit. The well was put into production in November,
2007. A geologist's report on December 18, 2007 indicated that the lease
is selling between 85 and 100 MCF per day, however volumetric calculations
of the Holmes Lease reservoir have not yet been performed. An examination
as to whether the well warrants impairment based on expected revenue was
not done at October 31, 20008 pending volumetric calculations.
On September 1, 2008 the Company acquired working interests in six oil and
gas wells located in Pawnee County, Oklahoma for $1,000,000, payable
September 1, 2013. Interest at an annual rate of 8% is due monthly. The
Company has a 25.5% working interest (20.4% net revenue interest) in two
wells, a 20% working interest (16% net revenue interest) in three wells
and a 17% working interest (13.6% net revenue interest) in the remaining
well.
Property Acquisition Costs: Unproved
Holmes Lease $ 190,000
Pawnee County Lease $ 1,000,000
---------
$ 1,190,000
=========
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Company have been prepared using the accrual
basis of accounting in accordance with generally accepted accounting
principles in the United States.
5
Pinnacle Energy Corp.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2008
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements, and reported amounts of revenue and expenses during the
reporting period. Actual results could differ materially from those
estimates. Significant estimates made by management are, among others,
realizability of long-lived assets, deferred taxes and stock option
valuation.
The financial statements presented include all adjustments which are, in the
opinion of management, necessary to present fairly the financial position,
results of operations and cash flows for the period presented in accordance
with the accounting principles generally accepted in the United States of
America. All adjustments are of a normal recurring nature.
Cash and equivalents
Cash and equivalents include investments with initial maturities of three
months or less.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 107, "Disclosures About Fair Value of
Financial Instruments." SFAS No. 107 requires disclosure of fair value
information about financial instruments when it is practicable to estimate
that value. The carrying amounts of the Company's financial instruments as
of July 31, 2008 approximate their respective fair values because of the
short-term nature of these instruments. Such instruments consist of cash,
accounts payable and accrued expenses. The fair value of related party
payables is not determinable.
Income Taxes
The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which
requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax assets
and liabilities are determined based on the difference between the tax basis
of assets and liabilities and their financial reporting amounts based on
enacted tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. The Company generated a deferred tax credit through
net operating loss carryforward. However, a valuation allowance of 100% has
been established, as the realization of the deferred tax credits is not
reasonably certain, based on going concern considerations outlined as
follows.
6
Pinnacle Energy Corp.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2008
Going Concern
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. The company
experienced a loss of $47,899 and a negative cash flow of $26,803 from
operations in the year ended October 31, 2008. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company
is unable to obtain adequate capital, it could be forced to cease
development of operations.
The ability of the Company to continue as a going concern is dependent upon
its ability to successfully accomplish its plans to generate revenue from
well head machinery and oil and gas leases. The accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amount and classifications
or liabilities or other adjustments that might be necessary should the
Company be unable to continue as a going concern.
Development-Stage Company
The Company is considered a development-stage company, with limited
operating revenues during the periods presented, as defined by Statement of
Financial Accounting Standards ("SFAS") No. 7. SFAS. No. 7 requires
companies to report their operations, shareholders deficit and cash flows
since inception through the date that revenues are generated from
management's intended operations, among other things. Management has defined
inception as June 5, 2007. Since inception, the Company has incurred an
operating loss of $64,262. The Company's working capital has been generated
through the sales of common stock. Management has provided financial data
since June 5, 2007, "Inception", in the financial statements, as a means to
provide readers of the Company's financial information to make informed
investment decisions.
Basic and Diluted Net Loss Per Share
Net loss per share is calculated in accordance with SFAS 128, Earnings Per
Share for the period presented. Basic net loss per share is based upon the
weighted average number of common shares outstanding. Diluted net loss per
share is based on the assumption that all dilative convertible shares and
stock options were converted or exercised. Dilution is computed by applying
the treasury stock method. Under this method, options and warrants are
assumed exercised at the beginning of the period (or at the time of
issuance, if later), and as if funds obtained thereby we used to purchase
common stock at the average market price during the period.
7
Pinnacle Energy Corp.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2008
The Company has no potentially dilutive securities outstanding as of April
30, 2008.
The following is a reconciliation of the numerator and denominator of the
basic and diluted earnings per share computations for the year ended October
31, 2008 and 2007. 2007 has been restated to reflect the 3 for 1 forward
stock split of July, 2008
2008 2007
---- ----
Numerator:
Basic and diluted net loss per share:
Net Loss $ (47,899) $ (13,363)
Denominator
Basic and diluted weighted average
number of shares outstanding 15,840,000 7,653,649
Basic and Diluted Net Loss Per Share $ (0.003) $ (0.002)
-------------------------------------
Accounting for Oil and Gas Producing Activities
-----------------------------------------------
The company uses the successful efforts method of accounting for oil and
gas producing activities. Under this method, acquisition costs for proved
and unproved properties are capitalized when incurred.
Acquisition costs are capitalized when incurred pending the determination
of whether a well has found proved reserves. A determination of whether a
well has found proved reserves is made within a year of acquisition.
If after that year has passed, a determination that proved reserves exist
cannot be made, the well is assumed to be impaired, and its costs are
charged to expense. It's costs can however, continue to be capitalized if
a sufficient quantity of reserves are discovered in the well to justify
its completion as a producing well and sufficient progress is made
assessing the reserves and the well's economic and operating feasibility.
The impairment of unamortized capital costs is measured at a lease level
and is reduced to fair value if it is determined that the sum of expected
future net cash flows is less than the net book value.
8
Pinnacle Energy Corp.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2008
The company determines if impairment has occurred through either adverse
changes or as a result of the annual review of all fields. During the
fiscal year ended October 31, 2008 the company did not record any
impairment. Development costs of proved oil and gas properties, including
estimated dismantlement, restoration and abandonment costs and acquisition
costs, are depreciated and depleted on a field basis by the
units-of-production method using proved reserves, respectively.
The Costs of unproved oil and gas properties are generally combined and
impaired over a period that is based on the average holding period for
such properties and the company's experience of successful operations.
Oil and Gas Revenue Recognition
-------------------------------
The company applies the sales method of accounting for natural gas
revenue. Under thus method, revenues are recognized based on the actual
volume of natural gas sold to purchasers. Revenue from the sale of gas is
reported by the gas gathering company monthly and paid two months in
arrears.
3. Property and Equipment
Equipment $100,000
The Company purchased a 50% interest in a skid mounted Nitrogen Rejection
unit in October, 2005. The unit strips out excessive nitrogen and oxygen
from gas wells to an acceptable level of contaminants in the gas stream. The
unit is intended for use on the Company's gas wells. The unit commenced
operations in November, 2007 under the control of the gas collection
operator.
4. Note Payable
The Company issued a promissory note to Futures Investment Corporation on
September 1, 2008 for $1,000,000 in payment for an oil and gas working
interest in Pawnee County, Oklahoma. The note is payable on September 1,
2013. Interest is payable monthly at the rate of 8% simple interest.
5. Commitments and Contingencies
The company is committed to the following financial commitment over the
next five years:
Repayment of Note Payable September 1, 2013: $1,000,000.
9
Pinnacle Energy Corp.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2008
6. Capital Structure
During the period from inception through July 31, the Company entered into
the following equity transactions:
September 5, 2007: Sold 2,580,000 shares of common stock at $.096
per share realizing $248,301.
September 5, 2007: Sold 1,800,000 shares of common stock at $.01
per share realizing $18,000.
September 5, 2007: Issued 900,000 shares of common stock at $.10
per share in payment of $90,000 toward 44.5% working
interest in an oil and gas lease.
In July, 2008 a three-for-one forward split of the company's common stock
was executed. Par Value of common stock was elected to remain unchanged at
$0.001. At the same time authorized capital was increased to 150,000,000
common shares.
As at October 31, 2008, the Company was authorized to issue 150,000,000
shares of $0.001 par common stock, of which 15,840,000 shares were issued
and outstanding.
The Company was also authorized to issue 5,000,000 shares of preferred
stock, of which nil shares were issued and outstanding at October 31, 2008.
7. Restated Financial Statements
The Balance Sheet and Income Statement for the year ended October 31, 2007
were restated to reflect a retroactive change to issued and outstanding
stock as a result of the 3 for 1 forward stock split of July, 2008. There
was no affect on stockholders' equity.
8. Legal Proceedings
There were no legal proceedings against the Company with respect to matters
arising in the ordinary course of business. Neither the Company nor any of
its officers or directors is involved in any other litigation either as
plaintiffs or defendants, and have no knowledge of any threatened or pending
litigation against them or any of the officers or directors.
10
SIGNATURES
In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the 26th day of January 2009.
PINNACLE ENERGY CORP.
By: /s/ Nolan Weir
-------------------------------------------
Nolan Weir, President, Principal Financial
Officer and Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of l934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Nolan Weir Director January 26, 2009
- ------------------------
Nolan Weir
PINNACLE ENERGY CORP.
FORM 10-K
EXHIBITS