UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 2011
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 000-54323
Independence Energy Corp.
(Exact name of registrant as specified in its charter)
Nevada 20-3866475
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
445, 708 - 11th Avenue SW, Calgary, AB T2R 0E4
(Address of principal executive offices) (Zip Code)
(403) 266-4141
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
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. [X] YES [ ] NO
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). [X] YES [ ] NO
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small 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 Exchange Act [X] YES [ ] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
24,000,000 common shares issued and outstanding as of September 8, 2011
ITEM 1. FINANCIAL STATEMENTS
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
As of As of
July 31, January 31,
2011 2011
-------- --------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 1,016 $ 1,311
-------- --------
TOTAL CURRENT ASSETS 1,016 1,311
-------- --------
TOTAL ASSETS $ 1,016 $ 1,311
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ 7,965 $ 5,320
Due to Related Party 425 425
Loan Payable to Director 23,000 18,000
-------- --------
TOTAL CURRENT LIABILITIES 31,390 23,745
-------- --------
TOTAL LIABILITIES 31,390 23,745
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, ($0.001 par value, 75,000,000 shares
authorized; 24,000,000 shares issued and outstanding
as of July 31, 2011 and January 31, 2011) 24,000 24,000
Additional paid-in capital 36,000 36,000
Deficit accumulated during exploration stage (90,374) (82,434)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (30,374) (22,434)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 1,016 $ 1,311
======== ========
See Notes to Financial Statements
2
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Statements of Operations (Unaudited)
--------------------------------------------------------------------------------
November 30, 2005
Three Months Three Months Six Months Six Months (inception)
Ended Ended Ended Ended through
July 31, July 31, July 31, July 31, July 31,
2011 2010 2011 2010 2011
----------- ----------- ----------- ----------- -----------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
TOTAL REVENUES -- -- -- -- --
OPERATING COSTS
Administrative Expenses 1,340 797 1,940 1,792 34,147
Professional fees 2,000 2,000 6,000 6,000 56,324
----------- ----------- ----------- ----------- -----------
TOTAL OPERATING COSTS 3,340 2,797 7,940 7,792 90,471
OTHER INCOME (EXPENSES)
Gain from currency exchange -- -- -- -- 97
----------- ----------- ----------- ----------- -----------
Total Other Income -- -- -- -- 97
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (3,340) $ (2,797) $ (7,940) $ (7,792) $ (90,374)
=========== =========== =========== =========== ===========
BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE $ (0.00) $ (0.00) (0.00) $ (0.00)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 24,000,000 24,000,000 24,000,000 24,000,000
=========== =========== =========== ===========
See Notes to Financial Statements
3
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Statements of Cash Flows (Unaudited)
--------------------------------------------------------------------------------
November 30, 2005
Six Months Six Months (inception)
Ended Ended through
July 31, July 31, July 31,
2011 2010 2011
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (7,940) $ (7,792) $(90,374)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Increase (decrease) in Accounts Payable 2,645 4,320 7,965
Increase (decrease) in Due to Related Party -- 425 425
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (5,295) (3,047) (81,984)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in Loan Payable to Director 5,000 -- 23,000
Issuance of common stock -- -- 60,000
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 5,000 -- 83,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (295) (3,047) 1,016
CASH AT BEGINNING OF PERIOD 1,311 3,081 --
-------- -------- --------
CASH AT END OF PERIOD $ 1,016 $ 34 $ 1,016
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
4
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Notes to Financial Statements (Unaudited)
July 31, 2011
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Independence Energy Corp. (formerly Oliver Creek Resources Inc., the "Company")
was incorporated under the laws of the State of Nevada on November 30, 2005. The
Company was formed to engage in the acquisition, exploration and development of
natural resource properties.
The Company is in the exploration stage. Its activities to date have been
limited to capital formation, organization and development of its business plan.
The Company has completed the initial phase of its exploration program.
BASIS OF PRESENTATION
INTERIM FINANCIAL STATEMENTS
The accompanying interim unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In our opinion, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months period ended July 31, 2011 is not
necessarily indicative of the results that may be expected for the year ending
January 31, 2012. For further information, refer to the financial statements and
footnotes thereto included in our Form 10-K Report for the fiscal year ended
January 31, 2011.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF ACCOUNTING
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a January 31, year-end.
B. BASIC NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share. Diluted earnings (loss) per share
are the same as basic earnings (loss) per share due to the lack of dilutive
items in the Company.
5
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Notes to Financial Statements (Unaudited)
July 31, 2011
--------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
D. USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
E. INCOME TAXES
Income taxes are provided in accordance with ASC 740, INCOME TAXES. A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting and net operating loss carry forwards. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
F. REVENUE
The Company records revenue on the accrual basis when all goods and services
have been performed and delivered, the amounts are readily determinable, and
collection is reasonably assured. The Company has not generated any revenue
since its inception.
G. ADVERTISING
The Company will expense its advertising when incurred. There has been no
advertising since inception.
6
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Notes to Financial Statements (Unaudited)
July 31, 2011
--------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Company has evaluated all the recent accounting pronouncements through the
date the financial statements were issued and filed with the Securities and
Exchange Commission and believe that none of them will have a material effect on
the company's financial statements.
NOTE 3. GOING CONCERN
The accompanying financial statements are presented on a going concern basis.
The Company had no operations during the period from November 30, 2005
(inception) to July 31, 2011 and generated a net loss of $90,374. This condition
raises substantial doubt about the Company's ability to continue as a going
concern. The Company is currently in the exploration stage and has minimal
expenses. It currently has a cash balance of $1,016 which is insufficient to
cover the expenses they will incur during the next twelve months.
NOTE 4. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. From February
1, 2010 onwards has paid $125 per month for use of office space and services. As
of July 31, 2011, unpaid rental is $425. Bruce Thomson, sole officer and
director of the Company is involved in other business activities and may, in the
future, become involved in other business opportunities as they become
available, he may face a conflict in selecting between the Company and his other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
As of July 31, 2011, there is a loan payable due to Bruce Thomson for $23,000,
with no specific repayment terms.
NOTE 5. INCOME TAXES
As of July 31, 2011
-------------------
Deferred tax assets:
Net operating tax carryforwards $ 30,727
Other 0
--------
Gross deferred tax assets 30,727
Valuation allowance (30,727)
--------
Net deferred tax assets $ 0
========
7
INDEPENDENCE ENERGY CORP.
(An Exploration Stage Company)
Notes to Financial Statements (Unaudited)
July 31, 2011
--------------------------------------------------------------------------------
NOTE 5. INCOME TAXES (CONTINUED)
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.
NOTE 6. NET OPERATING LOSSES
As of July 31, 2011, the Company has net operating loss carryforwards of
approximately $90,374. Net operating loss carryforwards expire twenty years from
the date the loss was incurred.
NOTE 7. STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with
paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair
value of the consideration received. Transactions with employees' stock issuance
are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
On November 30, 2005 the Company issued a total of 12,000,000 shares of common
stock to one director for cash in the amount of $10,000.
On June 12, 2006 the Company issued 12,000,000 units from the Company's
registered SB-2 offering reflecting 12,000,000 shares of common stock.
On August 12, 2008 the Company effected a 12 for 1 forward split of its issued
and outstanding share capital such that every one share of common stock issued
and outstanding prior to the split was exchanged for twelve post-split shares of
common stock. The number of shares referred to in the previous paragraphs is
post-split number of shares. The Company's post-split authorized capital remains
unchanged at 75,000,000 shares of common stock with a par value of $0.001 per
share. All share amounts have been retroactively adjusted for all periods
presented.
As of July 31, 2011 the Company had 24,000,000 shares of common stock issued and
outstanding.
NOTE 8. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following class of
capital stock as of July 31, 2011:
Common stock, $ 0.001 par value: 75,000,000 shares authorized; 24,000,000 shares
issued and outstanding.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "common shares" refer to
the common shares in our capital stock. As used in this quarterly report, the
terms "we", "us", "our", "our company" and "Independence Energy" mean
Independence Energy Corp., unless otherwise stated.
GENERAL OVERVIEW
We were incorporated in the State of Nevada on November 30, 2005 under the name
"Oliver Creek Resources Inc.". At inception, we were an exploration stage
company engaged in the acquisition, exploration and development of natural
resource properties.
We have had one resource property to date known as the Thistle Claim located in
British Columbia, Canada. During the quarter ended October 31, 2008, we
completed our Phase I exploration program on our Thistle Claim which consisted
of conducting detailed geological mapping of all roads within and buttressing
the claims and silt sampling of every drainage or draw. Based on the information
available to us from our Phase I exploration program, we determined that the
Thistle Claim did not, in all likelihood, contain a commercially viable mineral
deposit, and we therefore abandoned any further exploration on the property.
As a result, we are investigating several other business opportunities to
enhance shareholder value, and are focused on the oil and gas industry with the
acquisition of oil and natural gas assets both in Canada and the United States.
These consist of natural gas production and oils sands exploration in Canada and
off-shore exploration in the Texas Gulf area of the Unites States. Subject to
completing due diligence and funding sources being available we intend to pursue
business opportunities in the oil and gas business.
We will require additional funding to proceed. We cannot provide investors with
any assurance that we will be able to raise sufficient funds to fund any work in
the oil and gas business.
Effective August 12, 2008, we affected a 12 for one forward stock split of our
issued and outstanding common stock. As a result, our authorized capital remains
at 75,000,000 shares of common stock with a par value of $0.001 and our issued
9
and outstanding shares increased from 2,000,000 shares of common stock to
24,000,000 shares of common stock.
RESULTS OF OPERATIONS
THREE MONTH SUMMARY ENDING JULY 31, 2011 AND 2010
Three Months Ended
July 31,
2011 2010
-------- --------
Revenue $ Nil $ Nil
Operating Expenses $ 3,340 $ 2,797
Net Loss $ 3,340 $ 2,797
EXPENSES
Our operating expenses for the three month periods ended July 31, 2011 and 2010
are outlined in the table below:
Three Months Ended
July 31,
2011 2010
-------- --------
General and administrative $ 1,340 $ 797
Professional fees $ 2,000 $ 2,000
SIX MONTH SUMMARY ENDING JULY 31, 2011 AND 2010
Six Months Ended
July 31,
2011 2010
-------- --------
Revenue $ Nil $ Nil
Operating Expenses $ 7,940 $ 7,792
Net Loss $ 7,940 $ 7,792
EXPENSES
Our operating expenses for the six month periods ended July 31, 2011 and 2010
are outlined in the table below:
Six Months Ended
July 31,
2011 2010
-------- --------
General and administrative $ 1,940 $ 1,792
Professional fees $ 6,000 $ 6,000
REVENUE
We have not earned any revenues since our inception and we do not anticipate
earning revenues in the upcoming quarter.
EQUITY COMPENSATION
We currently do not have any stock option or equity compensation plans or
arrangements.
10
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
At At Percentage
July 31, January 31, Increase/
2011 2011 Decrease
-------- -------- --------
Current Assets $ 1,016 $ 1,311 -31%
Current Liabilities $ 31,390 $ 23,745 +28%
Working Capital (deficit) $(30,374) $(22,434) +35%
CASH FLOWS
Six Months Six Months
Ended Ended
July 31, July 31,
2011 2010
-------- --------
Net Cash Used in Operating Activities $ (5,295) $ (3,047)
Net Cash Provided by Investing Activities $ 0 $ 0
Net Cash Provided by Financing Activities $ 5,000 $ 0
DECREASE IN CASH DURING THE PERIOD $ (295) $ (3,047)
We have generated no revenue since inception and have incurred $90,374 in
expenses through July 31, 2011. We had a net loss of $3,340 and $2,797 for the
three months ended July 31, 2011 and 2010, respectively. These expenses
consisted of professional fees and administrative expenses.
Our cash in the bank at July 31, 2011 was $1,016. At the same time our
outstanding liabilities were $31,390. Cash provided by financing activities
since inception is as follows:
1. On November 30, 2005, a total of 1,000,000 shares of Common Stock were
issued to Mr. Thomson, a director, in exchange for cash in the amount
of $10,000, or $.01 per share.
2. During the months of April - June, 2006 1,000,000 units from the
Company's registered SB-2 offering were sold reflecting 1,000,000
units of common stock at issued price $0.05 per unit for a total of
$50,000. Each unit consisted of one share and one share purchase
warrant. Each share purchase warrant was valid for a period of two
years from the date of the prospectus, expiring on March 22, 2008.
None of the warrants were exercised prior to expiration.
3. Effective August 12, 2008, we affected a 12 for one forward stock
split of our issued and outstanding common stock. As a result, our
authorized capital remains at 75,000,000 shares of common stock with a
par value of $0.001 and our issued and outstanding shares increased
from 2,000,000 shares of common stock to 24,000,000 shares of common
stock.
GOING CONCERN
We are an exploration stage company and currently have no operations. Our
independent auditor has issued an audit opinion for the company which includes a
statement expressing substantial doubt as to our ability to continue as a going
concern.
11
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.
ITEM 4T. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the SECURITIES
EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our principal executive officer and
principal accounting and financial officer (our president) to allow for timely
decisions regarding required disclosure. In designing and evaluating our
disclosure controls and procedures, our management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
Under the supervision and with the participation of our management, including
our principal executive officer and 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 and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were 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.
Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have not identified any significant deficiencies or material
weaknesses in our internal controls, and therefore there were no corrective
actions taken.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder, is an
adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
Much of the information included in this quarterly report includes or is based
upon estimates, projections or other forward looking statements. Such forward
looking statements include any projections and estimates made by us and our
management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other forward looking statements involve various
risks and uncertainties as outlined below. We caution the reader that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any such estimates, projections or other forward looking
statements.
12
WE HAVE HAD NEGATIVE CASH FLOWS FROM OPERATIONS AND IF WE ARE NOT ABLE TO OBTAIN
FURTHER FINANCING, OUR BUSINESS OPERATIONS MAY FAIL.
We had cash in the amount of $1,016 as of July 31, 2011. We do not have
sufficient funds to independently finance the acquisition and development of
prospective oil and gas properties, nor do we have the funds to independently
finance our daily operating costs. We do not expect to generate any revenues for
the foreseeable future. Accordingly, we will require additional funds, either
from equity or debt financing, to maintain our daily operations and to locate,
acquire and develop a prospective property. Obtaining additional financing is
subject to a number of factors, including market prices for oil and gas,
investor acceptance of any property we may acquire in the future, and investor
sentiment. Financing, therefore, may not be available on acceptable terms, if at
all. The most likely source of future funds presently available to us is through
the sale of equity capital. Any sale of share capital, however, will result in
dilution to existing shareholders. If we are unable to raise additional funds
when required, we may be forced to delay our plan of operation and our entire
business may fail.
WE CURRENTLY DO NOT GENERATE REVENUES, AND AS A RESULT, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We do not hold an interest in any business or revenue generating property. We
are currently focusing on the location and acquisition of oil and gas
properties. We have not generated any revenues to date. In order to generate
revenues, we will incur substantial expenses in the location, acquisition and
development of a prospective property. We therefore expect to incur significant
losses into the foreseeable future. We recognize that if we are unable to
generate significant revenues from our activities, our entire business may fail.
There is no history upon which to base any assumption as to the likelihood that
we will be successful in our plan of operation, and we can provide no assurance
to investors that we will generate any operating revenues or achieve profitable
operations.
DUE TO THE SPECULATIVE NATURE OF THE EXPLORATION OF OIL AND GAS PROPERTIES,
THERE IS SUBSTANTIAL RISK THAT OUR BUSINESS WILL FAIL.
The business of oil and gas exploration and development is highly speculative
involving substantial risk. There is generally no way to recover any funds
expended on a particular property unless reserves are established and unless we
can exploit such reserves in an economic manner. We can provide investors with
no assurance that any property interest that we may acquire will provide
commercially exploitable reserves. Any expenditure by our company in connection
with locating, acquiring and developing an interest in an oil and gas property
may not provide or contain commercial quantities of reserves.
EVEN IF WE DISCOVER COMMERCIAL RESERVES, WE MAY NOT BE ABLE TO SUCCESSFULLY
OBTAIN COMMERCIAL PRODUCTION.
Even if we are successful in acquiring an interest in a property that has proven
commercial reserves of oil and gas, we will require significant additional funds
in order to place the property into commercial production. We can provide no
assurance to investors that we will be able to obtain the financing necessary to
extract such reserves.
IF WE ARE UNABLE TO HIRE AND RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE TO
IMPLEMENT OUR PLAN OF OPERATION AND OUR BUSINESS MAY FAIL.
Our success will be largely dependent on our ability to hire and retain highly
qualified personnel. This is particularly true in the highly technical
businesses of oil and gas exploration. These individuals may be in high demand
and we may not be able to attract the staff we need. In addition, we may not be
able to afford the high salaries and fees demanded by qualified personnel, or we
may fail to retain such employees after they are hired. At present, we have not
hired any key personnel. Our failure to hire key personnel when needed will have
a significant negative effect on our business.
OUR COMMON STOCK IS ILLIQUID AND SHAREHOLDERS MAY BE UNABLE TO SELL THEIR
SHARES.
There is currently a limited market for our common stock and we can provide no
assurance to investors that a market will develop. If a market for our common
stock does not develop, our shareholders may not be able to re-sell the shares
13
of our common stock that they have purchased and they may lose all of their
investment. Public announcements regarding our company, changes in government
regulations, conditions in our market segment or changes in earnings estimates
by analysts may cause the price of our common shares to fluctuate substantially.
In addition, stock prices for junior oil and gas companies fluctuate widely for
reasons that may be unrelated to their operating results. These fluctuations may
adversely affect the trading price of our common shares.
PENNY STOCK RULES WILL LIMIT THE ABILITY OF OUR STOCKHOLDERS TO SELL THEIR
STOCK.
The Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, OR FINRA, HAS ADOPTED SALES
PRACTICE REQUIREMENTS WHICH MAY ALSO LIMIT A SHAREHOLDER'S ABILITY TO BUY AND
SELL OUR STOCK.
In addition to the "penny stock" rules described above, FINRA has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for its shares.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
14
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing.
Exhibit
Number Description
------ -----------
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Articles of Incorporation (incorporated by reference to our
registration statement on form SB-2 filed on March 7, 2006).
3.2 Bylaws (incorporated by reference to our registration statement on form
SB-2 filed on March 7, 2006).
3.3 Certificate of Change filed with the Secretary of State of Nevada
(incorporated by reference from our Current Report on Form 8-K filed on
August 14, 2008).
3.4 Certificate of Amendment filed with the Secretary of State of Nevada
(incorporated by reference from our Current Report on Form 8-K filed on
August 14, 2008).
(31) SECTION 302 CERTIFICATIONS
31.1* Section 302 Certification of Principal Executive Officer and Principal
Financial Officer.
(32) SECTION 906 CERTIFICATION
32.1* Section 906 Certification of Principal Executive Officer and Principal
Financial Officer.
101* Interactive Data Files pursuant to Rule 405 of Regulation S-T.
----------
* filed herewith
SIGNATURES
Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
September 8, 2011 Independence Energy Corp., Registrant
By: /s/ Bruce Thomson
--------------------------------------------------
Bruce Thomson, President, Chief Executive Officer,
Principal Accounting Officer, and
Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
September 8, 2011 Independence Energy Corp., Registrant
By: /s/ Bruce Thomson
--------------------------------------------------
Bruce Thomson, President, Chief Executive Officer,
Principal Accounting Officer, and
Chief Financial Officer
15