As Filed With the Securities and Exchange Commission on May 31, 2013
Registration No. 333-186286
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
AMENDMENT NO. 3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PERKINS OIL & GAS INC
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
1382
(Primary Standard Industrial Classification Code Number)
45-5361669
(IRS Employer Identification No.)
1445 Marpole Avenue #409
Vancouver, BC V6H 1S5
Telephone (604)733-5055
(Address and telephone number of registrant's principal executive offices)
Sage International
1135 Terminal Way, Suite 209
Reno, NV 89502
Telephone (775)786-5515 Facsimile (775)786-2013
(Name, address and telephone number of agent for service)
With copies to:
Kevin M. Murphy, Attorney at Law
6402 Scott Lane, Pearland, TX 77581
info@kevinmurphylaw.com
Telephone (281)804-1174
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (2) Price (3) Fee (1)
--------------------------------------------------------------------------------
Common Stock 5,000,000 $.01 $50,000 $6.82
================================================================================
(1) Registration Fee has been paid via Fedwire.
(2) This is the initial offering and no current trading market exists for our
common stock. The price paid for the currently issued and outstanding
common stock was valued at $0.001 per share.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
PROSPECTUS
PERKINS OIL & GAS INC
5,000,000 SHARES OF COMMON STOCK AT $.01 PER SHARE
Prior to this registration, there has been no public trading market for the
common stock of Perkins Oil & Gas Inc ("Perkins", the "Company", "us", "we",
"our") and it is not presently traded on any market or securities exchange. We
are offering up to 5,000,000 shares of common stock for sale by us to the
public.
We are offering for sale a minimum of 2,000,000 and a maximum of 5,000,000
shares of common stock at a price of $0.01 per share (the "Offering"). The
Offering is being conducted on a self-underwritten, best effort basis, which
means our officer and director will attempt to sell the shares and we will not
be able to spend any of the proceeds unless a minimum of 2,000,000 shares are
sold. This Offering will continue for the earlier of: (i) 180 days after this
registration statement becomes effective with the Securities and Exchange
Commission, or (ii) the date on which all 5,000,000 shares registered hereunder
have been sold. We may at our discretion extend the Offering for an additional
90 days. Proceeds from the sale of the shares will be used to fund the initial
stages of our business development. There have been no arrangements to place the
Offering funds in escrow. We intend to open a standard, non-interest bearing,
bank account to be used only for the deposit of funds received from the sale of
the shares in this Offering. When at least 2,000,000 shares of the Offering are
sold and the Offering has expired the funds will be transferred to our business
account for use in the implementation of our business plan. If the minimum
number of shares are not sold by the expiration date of the Offering, the funds
will be promptly returned to the investors (within 3 business days), without
interest or deduction. However; since the funds will not be placed into an
escrow account, any third party creditor who may obtain a judgment or lien
against us could satisfy the judgment or lien by executing on the bank account
where the Offering proceeds are being held, resulting in a loss of any
investment you make in our securities.
There can be no assurance that all or any shares being offered in this
Prospectus are going to be sold and that we will be able to raise any funds from
this Offering.
Shares Offered Price to Selling Agent Proceeds to
by Company Public Commissions the Company
---------- ------ ----------- -----------
Per Share $ 0.01 Not applicable $ 0.01
Minimum (2,000,000 shares) $20,000 Not applicable $20,000
Maximum (5,000,000 shares) $50,000 Not applicable $50,000
Neither the Securities and Exchange Commission nor any state regulatory
authority has approved or disapproved of these securities, endorsed the merits
of this Offering, or determined that this Prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
We are an Emerging Growth Company as defined in the Jumpstart Our Business
Startups Act.
AN INVESTMENT IN OUR SECURITIES IS SPECULATIVE. INVESTORS SHOULD BE ABLE TO
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE THE SECTION ENTITLED "RISK
FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
This prospectus shall not constitute an offer to sell or the solicitation of an
offer to buy these securities and we shall not sell any of these securities in
any state where such an offer or solicitation would be unlawful before
registration or qualification under such state's securities laws.
You should rely only on the information contained in this Prospectus. We have
not authorized anyone to provide you with information different from that
contained in this Prospectus.
THE DATE OF THIS PROSPECTUS IS ______________, 2013
TABLE OF CONTENTS
Page No.
--------
SUMMARY 3
RISK FACTORS 7
RISKS ASSOCIATED WITH OUR COMPANY 7
RISKS RELATING TO THE OIL AND NATURAL GAS INDUSTRY 9
RISKS ASSOCIATED WITH THIS OFFERING 12
USE OF PROCEEDS 15
DETERMINATION OF OFFERING PRICE 16
DILUTION 16
PLAN OF DISTRIBUTION 18
Deposit of Offering Proceeds 19
Procedures for and Requirements for Subscribing 19
DESCRIPTION OF SECURITIES 19
INTEREST OF NAMED EXPERTS AND COUNSEL 20
DESCRIPTION OF BUSINESS 20
General Information 21
Acquisition of the Lease 21
Location, Access, Climate, Local Resources and Infrastructure 21
Markets 23
Competition 24
Distribution Methods 24
Bankruptcy or Similar Proceedings 25
Reorganizations, Purchase or Sale of Assets 25
Source and Availability of Raw Materials 25
Major Customers 25
Patents, Trademarks, Franchises, Royalty Agreements, Labor Contracts 25
Compliance with Government and Environmental Regulation 25
Research and Development 27
Employees and Employment Agreements 27
Reports to Security Holders 27
DESCRIPTION OF PROPERTY 27
LEGAL PROCEEDINGS 27
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 28
WHERE YOU CAN FIND MORE INFORMATION 28
FINANCIAL STATEMENTS 29
PLAN OF OPERATION 29
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON 33
EXECUTIVE COMPENSATION 34
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT 35
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 36
INDEMNIFICATION 36
STOCK TRANSFER AGENT 36
2
SUMMARY
This Prospectus, and any supplement to this Prospectus include "forward-looking
statements". To the extent that the information presented in this Prospectus
discusses financial projections, information or expectations about our business
plans, results of operations, products or markets, or otherwise makes statements
about future events, such statements are forward-looking. Such forward-looking
statements can be identified by the use of words such as "intends",
"anticipates", "believes", "estimates", "projects", "forecasts", "expects",
"plans" and "proposes". Although we believe that the expectations reflected in
these forward-looking statements are based on reasonable assumptions, there are
a number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These include, among others,
the cautionary statements in the "Risk Factors" section beginning on Page 7 of
this Prospectus and the "Management's Discussion and Analysis of Financial
Position and Results of Operations" section elsewhere in this Prospectus.
This summary only highlights selected information contained in greater detail
elsewhere in this Prospectus. This summary may not contain all of the
information that you should consider before investing in our common stock. You
should carefully read the entire Prospectus, including "Risk Factors" beginning
on Page 7, and the financial statements, before making an investment decision.
All dollar amounts refer to US dollars unless otherwise indicated.
Unless otherwise noted, All references to "us", "we", "our" relate to Perkins
Oil & Gas Inc, a Nevada corporation.
BUSINESS
We are an exploration stage company, incorporated in the State of Nevada on May
25, 2012, as a for-profit company, and electing a fiscal year end of June 30.
We intend to use the net proceeds from this Offering to further develop our
business operations. (See "Business of the Company" and "Use of Proceeds".) We
are an exploration stage company with limited revenues and operating history.
The principal executive offices are located at 1445 Marpole Avenue #409,
Vancouver, B.C. V6H 1S5, Canada. The telephone number is (604)733-5055.
We were incorporated to engage in the exploration and development of oil and gas
properties. Our first lease is a 25% percent working interest and an 18.75% net
revenue interest in 3 acres located in the Perkins Lease in Caddo Pine Island
Field that lies in the northern part of Webster Parrish, Louisiana. There is
currently one operating oil well on the property. This property is described in
"Description of Property" further in this Prospectus.
We received our initial funding of $20,001 through the sale of common stock to
our officer, J. Michael Page, who purchased 4,000,000 shares of our common stock
at $0.005 per share on June 15, 2012. On February 1, 2013 the Company issued a
total of 750,000 shares of common stock to one director for cash in the amount
of $0.01 per share for a total of $7,500. From inception until the date of this
filing we have had limited operating activities. Our financial statements from
inception (May 25, 2012) through March 31, 2013 report $3,115 in revenue and a
net loss of $27,672. Our independent auditor has issued an audit opinion for
Perkins Oil & Gas Inc. which includes a statement expressing substantial doubt
as to our ability to continue as a going concern.
There is no current public market for our securities. As our stock is not
publicly traded, investors should be aware they probably will be unable to sell
their shares and their investment in our securities is not liquid.
3
OFFERING
We have 4,750,000 shares of common stock issued and outstanding. Through this
offering we will register 5,000,000 shares of common stock for offering to the
public. These shares represent additional common stock to be issued by us. We
will endeavor to sell all 5,000,000 shares of common stock after this
registration becomes effective. The price at which we offer these shares is
fixed at $0.01 per share for the duration of the offering. We will receive all
proceeds from the sale of the common stock unless we are unable to sell the
minimum of 2,000,000 shares.
Securities Being Offered A minimum of 2,000,000 and a maximum of 5,000,000
shares of common stock.
Price per Share $0.01
Offering Period The shares are offered for a period not to exceed
180 days, unless extended by our board of
directors for an additional 90 days.
Net Proceeds $20,000 to $50,000
Securities Issued
and Outstanding 4,750,000 shares of common stock were issued and
outstanding as of the date of this prospectus.
Registration costs We estimate our total Offering registration costs
to be $6,506
You should rely only upon the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that which
is contained in this prospectus. We are offering to sell shares of common stock
and seeking offers to buy shares of common stock only in jurisdictions where
offers and sales are permitted.
SUMMARY OF OUR FINANCIAL INFORMATION
The following table sets forth selected financial information, which should be
read in conjunction with the information set forth in the "Management's
Discussion and Analysis of Financial Position and Results of Operations" section
and the accompanying financial statements and related notes included elsewhere
in this Prospectus.
STATEMENT OF EXPENSES DATA
Period from
May 25, 2012
(inception) to
March 31, 2013
---------------
Revenues $ 3,115
Total Expenses $37,912
Net Loss $27,672
Net Loss per share $ 0.00
4
BALANCE SHEET DATA
As at
March 31, 2013
---------------
Total Assets $ 8,217
Total Liabilities $ 8,388
Stockholders' Equity $ (171)
EMERGING GROWTH COMPANY
We are an Emerging Growth Company as defined in the Jumpstart Our Business
Startups Act.
We shall continue to be deemed an emerging growth company until the earliest of:
a. the last day of the fiscal year of the issuer during which it had
total annual gross revenues of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by the Commission to reflect the
change in the Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics, setting the threshold to the
nearest 1,000,000) or more;
b. the last day of the fiscal year of the issuer following the fifth
anniversary of the date of the first sale of common equity securities
of the issuer pursuant to an effective registration statement under
this title;
c. the date on which such issuer has, during the previous 3-year period,
issued more than $1,000,000,000 in non-convertible debt; or
d. the date on which such issuer is deemed to be a `large accelerated
filer', as defined in section 240.12b-2 of title 17, Code of Federal
Regulations, or any successor thereto.
As an emerging growth company we are exempt from Section 404(b) of Sarbanes
Oxley. Section 404(a) requires Issuers to publish information in their annual
reports concerning the scope and adequacy of the internal control structure and
procedures for financial reporting. This statement shall also assess the
effectiveness of such internal controls and procedures.
Section 404(b) requires that the registered accounting firm shall, in the same
report, attest to and report on the assessment on the effectiveness of the
internal control structure and procedures for financial reporting.
As an emerging growth company we are exempt from Section 14A and B of the
Securities Exchange Act of 1934 which require the shareholder approval of
executive compensation and golden parachutes.
We have irrevocably opted out of the extended transition period for complying
with new or revised accounting standards pursuant to Section 107(b) of the Act.
SMALLER REPORTING COMPANY
IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY - THE JOBS ACT
We qualify as an emerging growth company as that term is used in the JOBS Act.
An emerging growth company may take advantage of specified reduced reporting and
other burdens that are otherwise applicable generally to public companies. These
provisions include:
5
* A requirement to have only two years of audited financial statements
and only two years of related MD&A ;
* Exemption from the auditor attestation requirement in the assessment
of the emerging growth company's internal control over financial
reporting under Section 404 of the Sarbanes-Oxley Act of 2002;
* Reduced disclosure about the emerging growth company's executive
compensation arrangements; and
* No non-binding advisory votes on executive compensation or golden
parachute arrangements.
We may take advantage of the reduced reporting requirements applicable to
smaller reporting companies even if we no longer qualify as an "emerging growth
company."
In addition, Section 107 of the JOBS Act also provides that an emerging growth
company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for
complying with new or revised accounting standards. We have irrevocably opted
out of the extended transition period for complying with new or revised
accounting standards pursuant to Section 107(b) of the Act.
We could remain an emerging growth company for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our annual gross
revenues exceed $1 billion, (ii) the date that we become a "large accelerated
filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the
market value of our common stock that is held by non-affiliates exceeds $700
million as of the last business day of our most recently completed second fiscal
quarter, or (iii) the date on which we have issued more than $1 billion in
non-convertible debt during the preceding three year period.
6
RISK FACTORS
Please consider the following risk factors and other information in this
prospectus relating to our business and prospects before deciding to invest in
our common stock.
This Offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed. The trading price
of our common stock could decline due to any of these risks, and you may lose
all or part of your investment.
We consider the following to be the material risks for an investor regarding
this Offering. Our company should be viewed as a high-risk investment and
speculative in nature. An investment in our common stock may result in a
complete loss of the invested amount. Please consider the following risk factors
before deciding to invest in our common stock.
RISKS ASSOCIATED WITH OUR COMPANY
OUR AUDITORS' REPORTS CONTAIN A STATEMENT THAT OUR NET LOSS AND LIMITED WORKING
CAPITAL RAISE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
Our independent registered public accountants have stated in their report,
included in this Prospectus under the heading "Financial Statements" that our
significant operating losses and working capital deficiency raise substantial
doubt about our ability to continue as a going concern. We had a net loss of
$27,672 for the period ended March 31, 2013. We will be required to raise
substantial capital to fund our capital expenditures, working capital and other
cash requirements since our current cash assets are exhausted. As such we may
have to cease activities and you could lose your investment.
WE LACK AN EXTENSIVE OPERATING HISTORY AND HAVE LOSSES WHICH WE EXPECT TO
CONTINUE INTO THE FUTURE. AS A RESULT, WE MAY HAVE TO SUSPEND OR CEASE
ACTIVITIES.
We were incorporated in May 2012 and we have only recently started our business
activities and only realized limited revenues. We have a very limited operating
history upon which an evaluation of our future success or failure can be made.
Our net loss was $27,672 from inception to March 31, 2013. Our ability to
achieve and maintain profitability and positive cash flow is dependent upon:
* our ability to locate additional profitable oil & gas properties
* our ability to generate revenues
* our ability to reduce operating costs
Based upon current plans, we expect to incur operating losses in future periods
until revenues are sufficient to fund operations. Failure to generate enough
revenues for us to become profitable may cause us to suspend or cease
activities.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MAY HAVE TO LIMIT OUR
ACQUISITION ACTIVITY WHICH MAY RESULT IN A LOSS OF YOUR INVESTMENT.
Because we are small and do not have much capital, we must limit our acquisition
activity. As such we may not be able to lease as many properties as we would
7
like. In that event, a profitable oil or gas reserve may go undiscovered.
Without producing wells we cannot generate revenues and you will lose your
investment.
THE OIL AND NATURAL GAS INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE
THAT WE WILL BE SUCCESSFUL IN ACQUIRING LEASES.
The oil and natural gas industry is intensely competitive. Although we do not
compete with other oil and gas companies for the sale of any oil and gas that we
may produce, as there is sufficient demand in the world market for these
products, we compete with numerous individuals and companies, including many
major oil and natural gas companies which have substantially greater technical,
financial and operational resources and staff. Accordingly, there is a high
degree of competition for desirable oil and natural gas leases, suitable
properties for drilling operations and necessary drilling equipment, as well as
for access to funds. We cannot predict if the necessary funds can be raised or
that any projected work will be completed.
THERE CAN BE NO ASSURANCE THAT WE WILL DISCOVER OIL OR NATURAL GAS IN ANY
COMMERCIAL QUANTITY ON OUR PROPERTIES.
Exploration for economic reserves of oil and natural gas is subject to a number
of risks. There is competition for the acquisition of available oil and natural
gas properties. Few properties that are explored are ultimately developed into
producing oil and/or natural gas wells. If we cannot discover oil or natural gas
in any commercial quantity thereon, our business will fail.
WE WILL BE RELIANT UPON AN OUTSIDE OPERATOR TO MONITOR THE DAY TO DAY OPERATION
OF THE WELLS. IF THE OPERATOR FAILS TO CARRY OUT THE TERMS OF OUR AGREEMENT OR
WE LOSE THE SERVICES OF THE OPERATOR OUR BUSINESS MAY FAIL.
The re-working of our current well and monthly maintenance of the well once
production commences will be carried out by an independent operator. We have an
operating agreement in place, however; their failure to live up to the terms of
the agreement or a cancellation of the agreement could have an adverse effect on
production and future revenues, consequently our operations, earnings and
ultimate financial success may suffer irreparable harm as a result.
BECAUSE OUR SOLE OFFICER AND/OR DIRECTOR DOES NOT HAVE ANY FORMAL TRAINING
SPECIFIC TO THE OIL AND GAS INDUSTRY, THERE IS A HIGHER RISK OUR BUSINESS WILL
FAIL.
Our sole officer and director is J. Michael Page. Mr. Page has no formal
training in the oil and gas industry or in the technical aspects of management
of an oil and gas company. His prior business experience has primarily been in
the computer industry specializing in wireless electronic systems and smart card
readers. With no direct training or experience in the oil and gas industry, he
may not be fully aware of the specific requirements related to working within
this industry. His decisions and choices may not take into account standard
business or managerial approaches oil and gas companies commonly use.
Consequently, our operations, earnings, and ultimate financial success could
suffer irreparable harm due to his lack of experience in this industry.
BECAUSE OUR OFFICER AND DIRECTOR HAS OTHER OUTSIDE BUSINESS ACTIVITIES AND WILL
ONLY BE DEVOTING 5 TO 10% OF HIS TIME OR APPROXIMATELY TWO TO FOUR HOURS PER
WEEK TO OUR OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN
PERIODIC INTERRUPTIONS OR SUSPENSIONS OF EXPLORATION.
8
Because our officer and director has other outside business activities and will
only be devoting 5 to 10% of his time or two to four hours per week to our
operations, our operations may be sporadic and occur at times which are
convenient to our officer and director. As a result our business plan may be
periodically interrupted or suspended.
OUR DIRECTOR WILL CONTINUE TO EXERCISE SIGNIFICANT CONTROL OVER OUR OPERATIONS,
WHICH MEANS AS A MINORITY STOCKHOLDER, YOU WOULD HAVE NO CONTROL OVER CERTAIN
MATTERS REQUIRING STOCKHOLDER APPROVAL THAT COULD AFFECT YOUR ABILITY TO EVER
RESELL ANY SHARES YOU PURCHASE IN THIS OFFERING.
After the completion of this Offering, if all 5,000,000 shares are sold, Mr.
Page will own 49% of our common stock. He will have significant influence in
determining the outcome of all corporate transactions, including the election of
directors, approval of significant corporate transactions, changes in control of
the company or other matters that could affect your ability to ever resell your
shares. His interests may differ from the interests of the other stockholders
and thus result in corporate decisions that are disadvantageous to other
stockholders.
OUR SOLE OFFICER AND DIRECTOR LIVES OUTSIDE THE UNITED STATES, MAKING IT
DIFFICULT FOR AN INVESTOR TO ENFORCE LIABILITIES IN FOREIGN JURISDICTIONS.
We are a Nevada corporation and, as such, are subject to the jurisdiction of the
State of Nevada and the United States courts for purposes of any lawsuit, action
or proceeding by investors herein. An investor would have the ability to effect
service of process in any action on the company within the United States.
However, since our officer and director resides outside the United States,
substantially all or a portion of his assets are located outside the United
States. As a result, it may not be possible for investors to effect service of
process within the United States upon him or to enforce any judgments obtained
in United States courts predicated upon the civil liability provisions of the
federal securities laws of the United States or any state thereof.
Because our sole officer and director lives in Vancouver, Canada, and our
current well is in Webster Parish, Louisiana, there may be a higher risk that
our business may fail.
The distance from where our sole officer and director lives and where the well
operations are located, may create a detrimental situation due to lack of
oversight. Though we have an operating agreement with an independent operator to
monitor the well production, there is no assurance that it will be carried out
properly without direct oversight by our officer and director. This could have
an adverse effect on production and future revenues, consequently our
operations, earnings and ultimate financial success may suffer irreparable harm
as a result.
RISKS RELATING TO THE OIL AND NATURAL GAS INDUSTRY
THE MARKETABILITY OF NATURAL RESOURCES IS AFFECTED BY NUMEROUS FACTORS BEYOND
OUR CONTROL WHICH MAY RESULT IN US NOT RECEIVING AN ADEQUATE RETURN ON INVESTED
CAPITAL TO BE PROFITABLE OR VIABLE.
The marketability of natural resources which may be acquired or discovered by us
will be affected by numerous factors beyond our control. These factors include
market fluctuations in oil and natural gas pricing and demand, the proximity and
capacity of natural resource markets and processing equipment, governmental
regulations, land tenure, land use, regulation concerning the importing and
exporting of oil and natural gas and environmental protection regulations. The
9
exact effect of these factors cannot be accurately predicted, but the
combination of these factors may result in us not receiving an adequate return
on invested capital to be profitable or viable.
OIL AND NATURAL GAS OPERATIONS ARE SUBJECT TO COMPREHENSIVE REGULATION WHICH MAY
CAUSE SUBSTANTIAL DELAYS OR REQUIRE CAPITAL OUTLAYS IN EXCESS OF THOSE
ANTICIPATED CAUSING AN ADVERSE EFFECT ON OUR COMPANY.
Oil and natural gas operations are subject to federal, state, and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment. Oil and natural gas operations are also subject to federal, state,
and local laws and regulations which seek to maintain health and safety
standards by regulating the design and use of drilling methods and equipment.
Various permits from government bodies are required for drilling operations to
be conducted; no assurance can be given that standards imposed by federal,
provincial, or local authorities may be changed and any such changes may have
material adverse effects on our activities. Moreover, compliance with such laws
may cause substantial delays or require capital outlays in excess of those
anticipated, thus causing an adverse effect on us. Additionally, we may be
subject to liability for pollution or other environmental damages. To date, we
have not been required to spend any material amount on compliance with
environmental regulations. However, we may be required to do so in the future
and this may affect our ability to expand or maintain our operations.
EXPLORATION AND PRODUCTION ACTIVITIES ARE SUBJECT TO CERTAIN ENVIRONMENTAL
REGULATIONS WHICH MAY PREVENT OR DELAY THE COMMENCEMENT OR CONTINUATION OF OUR
OPERATIONS.
In general, our exploration and production activities are subject to certain
federal, state and local laws and regulations relating to environmental quality
and pollution control. Such laws and regulations increase the costs of these
activities and may prevent or delay the commencement or continuation of a given
operation. Specifically, we may be subject to legislation regarding emissions
into the environment, water discharges and storage and disposition of hazardous
wastes. In addition, legislation has been enacted which requires well and
facility sites to be abandoned and reclaimed to the satisfaction of state
authorities. However, such laws and regulations are frequently changed and we
are unable to predict the ultimate cost of compliance. Generally, environmental
requirements do not appear to affect us any differently or to any greater or
lesser extent than other companies in the industry.
ANY CHANGE TO GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A NEGATIVE
IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY.
The business of oil and natural gas exploration and development is subject to
substantial regulation under various countries laws relating to the exploration
for, and the development, upgrading, marketing, pricing, taxation, and
transportation of oil and natural gas and related products and other matters.
Amendments to current laws and regulations governing operations and activities
of oil and natural gas exploration and development operations could have a
material adverse impact on our business. In addition, there can be no assurance
that income tax laws, royalty regulations and government incentive programs
related to the properties subject to our farm-out agreements and the oil and
natural gas industry generally will not be changed in a manner which may
adversely affect our progress and cause delays, inability to explore and develop
or abandonment of these interests.
Permits, leases, licenses, and approvals are required from a variety of
regulatory authorities at various stages of exploration and development. There
can be no assurance that the various government permits, leases, licenses and
approvals sought will be granted in respect of our activities or, if granted,
10
will not be cancelled or will be renewed upon expiry. There is no assurance that
such permits, leases, licenses, and approvals will not contain terms and
provisions which may adversely affect our exploration and development
activities.
IF OUR ASSESSMENT OF OUR LEASED PROPERTY, OR ANY FUTURE LEASED PROPERTIES, IS
MATERIALLY INACCURATE, IT COULD HAVE SIGNIFICANT IMPACT ON FUTURE OPERATIONS AND
EARNINGS.
The successful acquisition of producing properties requires assessments of many
factors, which are inherently inexact and may be inaccurate, including the
following:
* the amount of recoverable reserves;
* future oil and natural gas prices;
* estimates of operating costs;
* estimates of future development costs;
* estimates of the costs and timing of plugging and abandonment; and
* potential environmental and other liabilities.
Our assessment will not reveal all existing or potential problems, nor will it
permit us to become familiar enough with the properties to assess fully their
capabilities and deficiencies.
IF OIL AND NATURAL GAS PRICES DECREASE, WE MAY BE REQUIRED TO TAKE WRITE-DOWNS
OF THE CARRYING VALUE OF OUR OIL AND NATURAL GAS PROPERTY, POTENTIALLY
NEGATIVELY IMPACTING THE TRADING VALUE OF OUR SECURITIES.
Accounting rules require that we review periodically the carrying value of our
oil and natural gas property for possible impairment. Based on specific market
factors and circumstances at the time of prospective impairment reviews, and the
continuing evaluation of development plans, production data, economics and other
factors, we may be required to write down the carrying value of our oil and
natural gas property. A write-down could constitute a non-cash charge to
earnings. It is likely the cumulative effect of a write-down could also
negatively impact the trading price of our securities.
WE MAY INCUR SUBSTANTIAL LOSSES AND BE SUBJECT TO SUBSTANTIAL LIABILITY CLAIMS
AS A RESULT OF OUR OIL AND NATURAL GAS OPERATIONS.
We do not currently have insurance for possible risks. Losses and liabilities
arising from uninsured events could materially and adversely affect our
business, financial condition or results of operations. The oil and natural gas
production activities will be subject to all of the operating risks associated
with the production of oil and natural gas, including the possibility of:
* environmental hazards, such as uncontrollable flows of oil, natural
gas, brine, well fluids, toxic gas or other pollution into the
environment, including groundwater and shoreline contamination;
* abnormally pressured formations;
* mechanical difficulties;
* fires and explosions;
* personal injuries and death; and
* natural disasters.
11
Any of these risks could adversely affect our ability to conduct operations or
result in substantial losses to our company. We may elect not to obtain
insurance if we believe that the cost of available insurance is excessive
relative to the risks presented. In addition, pollution and environmental risks
generally are not fully insurable. If a significant accident or other event
occurs and is not fully covered by insurance, then it could adversely affect us.
WE COULD NOT ACT AS THE "OPERATOR" ON OUR PROPERTY, AND SO WE ARE EXPOSED TO THE
RISKS OF OUR THIRD-PARTY OPERATORS.
We will be relying on the expertise of contracted third-party oil and gas
exploration and development operators and third-party consultants for their
judgment, experience and advice. We can give no assurance that these third party
operators or consultants will always act in our best interests, and we are
exposed as a third party to their operations and actions and advice in those
properties and activities in which we are contractually bound.
UNLESS WE REPLACE OUR OIL AND NATURAL GAS RESERVES, OUR RESERVES AND PRODUCTION
WILL DECLINE, WHICH WOULD ADVERSELY AFFECT OUR CASH FLOWS AND INCOME.
Unless we conduct successful development and exploitation activities or acquire
properties containing proved reserves, our proved reserves when we find them
will decline as those reserves are produced. We currently have no proved
reserves on our property. Producing oil and natural gas reservoirs generally are
characterized by declining production rates that vary depending upon reservoir
characteristics and other factors. Our future oil and natural gas reserves and
production, and, therefore our cash flow and income, are highly dependent on our
success in efficiently developing and exploiting our current reserves and
economically finding or acquiring additional recoverable reserves. If we are
unable to develop, exploit, find or acquire additional reserves to replace our
current and future production, our cash flow and income will decline as
production declines, until our existing property would be incapable of
sustaining commercial production.
IF ACCESS TO MARKETS IS RESTRICTED, IT COULD NEGATIVELY IMPACT OUR PRODUCTION,
OUR INCOME AND ULTIMATELY OUR ABILITY TO RETAIN OUR LEASE AND ANY FUTURE LEASES.
Market conditions or the unavailability of satisfactory oil and natural gas
gathering arrangements may hinder access to oil and natural gas markets or delay
production. The availability of a ready market for our oil and natural gas
production depends on a number of factors, including the demand for and supply
of oil and natural gas and the proximity of reserves to pipelines and terminal
facilities. The ability to market production depends in substantial part on the
availability and capacity of gathering systems, pipelines and processing
facilities owned and operated by third parties. Our failure to obtain such
services on acceptable terms could materially harm our business.
RISKS ASSOCIATED WITH THIS OFFERING
WE WILL INCUR INCREASED COSTS AS A RESULT OF BEING A PUBLICLY-TRADED COMPANY.
As a public company, we will incur significant legal, accounting and other
expenses that we did not incur as a private company. In addition, the
Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the
Securities and Exchange Commission, has required changes in corporate governance
practices of public companies. These new rules and regulations have increased
our legal and financial compliance costs and have made some activities more
time-consuming and costly. As a result of the new rules, it may become more
12
difficult for us to attract and retain qualified persons to serve on our board
of directors or as executive officers. We cannot predict or estimate the amount
of additional costs we may incur as a result of being a public company or the
timing of such costs and/or whether we will be able to raise the funds necessary
to meet the cash requirements for these costs.
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR U.S. SECURITIES AND EXCHANGE
COMMISSION REPORTING AND COMPLIANCE. WITHOUT REVENUE WE MAY NOT BE ABLE TO
REMAIN IN COMPLIANCE, MAKING IT DIFFICULT FOR INVESTORS TO SELL THEIR SHARES, IF
AT ALL.
Our business plan allows for the payment of the estimated costs of this
registration statement $6,506 to be paid from existing cash on hand. We plan to
contact a market maker immediately following the close of the Offering and apply
to have the shares quoted on the Financial Industry Regulatory Authority's
(FINRA) Over the Counter Bulletin Board ("OTCBB"). To be eligible for quotation,
issuers must remain current in their filings with the U.S. Securities and
Exchange Commission. In order for us to remain in compliance we will require
future revenues to cover the cost of these filings, which could comprise a
substantial portion of our available cash resources. If we are unable to
generate sufficient revenues to remain in compliance it may be difficult for you
to resell any shares you may purchase, if at all.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, STOCKHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES AND WILL INCUR LOSSES AS A RESULT.
There is currently no market for our common stock and no certainty that a market
will develop. We currently plan to apply for quotation of our common stock on
the OTCBB upon the effectiveness of our Registration Statement on Form S-1, of
which this prospectus forms a part. Our shares may never trade on the OTCBB. If
no market is ever developed for our shares, it will be difficult for
stockholders to sell their stock. In such a case, stockholders may find that
they are unable to achieve benefits from their investment.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE
SECURITIES AND EXCHANGE COMMISSION'S PENNY STOCK REGULATIONS WHICH MAY LIMIT A
STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
Our stock is a penny stock. The Securities and Exchange Commission has adopted
Rule 15g-9 which generally defines "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 SEC 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
13
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.
FINRA SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO BUY
AND SELL OUR STOCK.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, 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, the FINRA believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. The 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.
OUR SECURITY HOLDERS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF OUR
SECURITIES DUE TO STATE "BLUE SKY" LAWS.
Each state has its own securities laws, often called "blue sky" laws, which (i)
limit sales of securities to a state's residents unless the securities are
registered in that state or qualify for an exemption from registration, and (ii)
govern the reporting requirements for broker-dealers doing business directly or
indirectly in the state. Before a security is sold in a state, there must be a
registration in place to cover the transaction, or the transaction must be
exempt from registration. The applicable broker must be registered in that
state.
We do not know whether our securities will be registered or exempt from
registration under the laws of any state. A determination regarding registration
will be made by those broker-dealers, if any, who agree to serve as the
market-makers for our common stock. There may be significant state blue sky law
restrictions on the ability of investors to sell, and on purchasers to buy, our
securities. You should therefore consider the resale market for our common stock
to be limited, as you may be unable to resell your shares without the
significant expense of state registration or qualification.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
This Offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell them through
our officer and director, who will receive no commissions. He will offer the
shares to friends, relatives and business associates, however; there is no
guarantee that he will be able to sell any of the shares. Unless he is
successful in selling all of the shares and we receive the proceeds from this
Offering, we may have to seek alternative financing to implement our business
plans.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR YOUR
SHARES.
Our existing stockholder acquired his shares at a cost of $.005 per share, a
cost per share substantially less than that which you will pay for the shares
you purchase in this Offering. Upon completion of this Offering, if all
5,000,000 shares are sold, the net tangible book value of the shares held by our
existing stockholder (4,750,000 shares) will be increased by $.005 per share
14
without any additional investment on his part. The purchasers of shares in this
Offering will incur immediate dilution (a reduction in the net tangible book
value per share from the Offering price of $.01 per share) of $.005 per share.
As a result, after completion of the Offering, the net tangible book value of
the shares held by purchasers in this Offering would be $.005 per share,
reflecting an immediate reduction in the $.01 price per share they paid for
their shares.
WE WILL BE HOLDING ALL THE PROCEEDS FROM THE OFFERING IN A STANDARD BANK
CHECKING ACCOUNT UNTIL THE 5,000,000 SHARES ARE SOLD AND THE OFFERING IS CLOSED
OR THE MINIMUM OF 2,000,000 SHARES ARE SOLD AND THE OFFERING EXPIRES. BECAUSE
THE SHARES ARE NOT HELD IN AN ESCROW OR TRUST ACCOUNT THERE IS A RISK YOUR MONEY
WILL NOT BE RETURNED IF ALL THE SHARES ARE NOT SOLD.
All funds received from the sale of shares in this Offering will be deposited
into a standard bank checking account until all 5,000,000 shares are sold and
the Offering is closed or the minimum of 2,000,000 shares are sold and the
Offering expires. At that time, the proceeds will be transferred to our business
operating account. In the event the minimum of 2,000,000 shares are not sold and
the Offering expires we have committed to promptly return all funds to the
purchasers. However; since the funds will not be placed into an escrow, trust or
other similar account, any third party creditor who may obtain a judgment or
lien against us could satisfy the judgment or lien by executing on the bank
account where the Offering proceeds are being held, resulting in a loss of any
investment you make in our securities.
OUR SOLE OFFICER AND DIRECTOR, BENEFICIALLY OWNS 100% OF THE OUTSTANDING SHARES
OF OUR COMMON STOCK. AFTER THE COMPLETION OF THIS OFFERING HE WILL OWN 49% OF
THE OUTSTANDING SHARES. IF HE CHOOSES TO SELL HIS SHARES IN THE FUTURE, IT MIGHT
HAVE AN ADVERSE EFFECT ON THE PRICE OF OUR STOCK.
Due to the amount of Mr. Page's share ownership in our company, if he chooses to
sell his shares in the public market, the market price of our stock could
decrease and all stockholders suffer a dilution of the value of their stock.
STOCKHOLDERS MAY HAVE LIMITED ACCESS TO INFORMATION BECAUSE WE ARE NOT A
REPORTING ISSUER AND MAY NOT BECOME ONE. We are not currently a reporting issuer
and upon this registration statement becoming effective we will be required to
comply only with the limited reporting obligations required by Section 13(a) of
the Exchange Act. These reporting obligations may be automatically suspended
under Section 15(d) of the Exchange Act if on the first day of any fiscal year
other than the fiscal year in which our registration statement became effective,
there are fewer than 300 shareholders. If we do not become a reporting issuer
and instead make a decision to suspend our public reporting, we will no longer
be obligated to file periodic reports with SEC, and your access to our business
information will be restricted. In addition, if we do not become a reporting
issuer, we will not be required to furnish proxy statements to security holders,
and our directors, officers and principal beneficial owners will not be required
to report their beneficial ownership of securities to the SEC pursuant to
Section 16 of the Exchange Act.
USE OF PROCEEDS
Assuming sale of all of the shares offered herein, of which there is no
assurance, the net proceeds from this Offering will be $50,000. The proceeds are
expected to be disbursed, in the priority set forth below, during the first
twelve (12) months after the successful completion of the Offering:
15
100% 70% 40%
-------- -------- --------
Total Proceeds to the Company $ 50,000 $ 35,000 $ 20,000
Lease of additional Oil & Gas Property $ 17,500 $ 0 $ 0
Monthly maintenance (12 months @ $642 ea well) $ 15,408 $ 7,704 $ 7,704
Administration and General Expense $ 5,000 $ 5,000 $ 2,000
Legal and Accounting $ 10,000 $ 10,000 $ 10,000
Working Capital $ 2,092 $ 12,296 $ 296
-------- -------- --------
Total Use of Net Proceeds $ 50,000 $ 35,000 $ 20,000
======== ======== ========
We will establish a separate bank account and all proceeds will be deposited
into that account until the total amount of the Offering is received and all
shares are sold, or the minimum of 2,000,000 shares are sold and the Offering
expires, at which time the funds will be released to us for use in our
operations. In the event we do not sell the minimum number of shares before the
expiration date of the Offering, all funds will be returned promptly to the
subscribers, without interest or deduction. If it becomes necessary our director
has verbally agreed to loan the company funds to complete the registration
process, but we will require full funding to implement our business plan.
If we are only able to sell 40% of the securities we are offering, substantially
all of the funds raised by this Offering will be spent on the monthly
maintenance of the well and assuring that we meet our corporate and disclosure
obligations so that we remain in good standing with the State of Nevada and
maintain our status as a reporting issuer with the SEC.
DETERMINATION OF OFFERING PRICE
The offering price for the shares in this Offering was completely arbitrarily.
In determining the initial public offering price of the shares we considered
several factors including the following:
* our start up status;
* our new business structure and operations as well as lack of client
base;
* prevailing market conditions, including the history and prospects for
our industry;
* our future prospects and the experience of our management;
* our capital structure.
Therefore, the public offering price of the shares does not necessarily bear any
relationship to established valuation criteria and may not be indicative of
prices that may prevail at any time or from time to time in the public market
for the common stock. You cannot be sure that a public market for any of our
securities will develop and continue or that the securities will ever trade at a
price at or higher than the offering price in this Offering.
DILUTION
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders.
16
As of March 31, 2013, the net tangible book value of our shares was $(171) or
approximately $.00 per share, based upon 4,750,000 shares outstanding.
Upon 100% completion of this Offering, but without taking into account any
change in the net tangible book value after completion of this Offering other
than that resulting from the sale of all the shares and receipt of the total
proceeds of $50,000, the net tangible book value of the 9,750,000 shares to be
outstanding will be $49,829, or approximately $.005 per Share. Accordingly, the
net tangible book value of the shares held by our existing stockholder
(4,750,000 shares) will be increased by $.005 per share without any additional
investment on his part. The purchasers of shares in this Offering will incur
immediate dilution (a reduction in the net tangible book value per share from
the offering price of $.01 per Share) of $.005 per share. As a result, after
completion of the Offering, the net tangible book value of the shares held by
purchasers in this Offering would be $.005 per share, reflecting an immediate
reduction in the $.01 price per share they paid for their shares.
After 100% completion of the Offering, the existing stockholder will own 49% of
the total number of shares then outstanding, for which he will have made a cash
investment of $27,500, or an average of $.006 per Share. Upon completion of the
Offering, the purchasers of the shares offered hereby will own 51% of the total
number of shares then outstanding, for which they will have made a cash
investment of $50,000, or $.01 per share.
The following table illustrates the per share dilution to the new investors in
the event only a percentage of the shares are sold, and if all the shares are
sold, and does not give any effect to the results of any operations subsequent
to March 31, 2013:
Percentage of Offering 40% 70% 100%
---------------------- ----------- ----------- -----------
Proceeds to the Company $ 20,000 $ 35,000 $ 50,000
Number of Shares 2,000,000 3,500,000 5,000,000
Price Paid per Share by Existing Stockholder $ .006 $ .006 $ .006
Public Offering Price per Share $ .01 $ .01 $ .01
Net Tangible Book Value Prior to this Offering $ .00 $ .00 $ .00
Net Tangible Book Value After this Offering $ .0029 $ .0042 $ .0051
Increase in Net Tangible Book Value per Share
Attributable to cash payments from
purchasers of the shares offered $ .003 $ .004 $ .005
Immediate Dilution per Share to New Investors $ .007 $ .006 $ .005
The following table summarizes the number and percentage of shares purchased,
the amount and percentage of consideration paid and the average price per Share
paid by our existing stockholder and by new investors in this offering if all
5,000,000 shares are sold:
17
Total
Price Number of Percent of Consideration
Per Share Shares Held Ownership Paid
--------- ----------- --------- ----
Existing
Stockholder $ .005 4,750,000 49% $27,500
Investors in
This Offering $ .01 5,000,000 51% $50,000
PLAN OF DISTRIBUTION
We are offering the shares on a "self-underwritten" basis directly through J.
Michael Page, our officer. Mr. Page will not receive any commissions or other
remuneration of any kind in connection with his participation in this Offering
based either directly or indirectly on transactions in securities.
This Offering is a self-underwritten offering, which means that it does not
involve the participation of an underwriter to market, distribute or sell the
shares offered under this prospectus. This offering will terminate upon the
earlier to occur of (i) 180 days after this registration statement becomes
effective with the Securities and Exchange Commission, (ii) the date on which
all 5,000,000 shares registered hereunder have been sold. We may, at our
discretion, extend the offering for an additional 90 days.
When at least 2,000,000 shares of the Offering are sold and the Offering has
expired the funds will be transferred to our business account for use in the
implementation of our business plan. If the minimum number of shares are not
sold by the expiration date of the Offering, the funds will be promptly returned
to the investors (within 3 business days), without interest or deduction.
Mr. Page will not register as a broker-dealer pursuant to Section 15 of the
Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth
those conditions under which a person associated with an issuer may participate
in the offering of the issuer's securities and not be deemed to be a
broker-dealer.
1. Mr. Page is not subject to a statutory disqualification, as that term
is defined in Section 3(a)(39) of the Act, at the time of his
participation;
2. Mr. Page will not be compensated in connection with his participation
by the payment of commissions or other remuneration based either
directly or indirectly on transactions in securities;
3. Mr. Page is not, nor will he be at the time of participation in the
Offering, an associated person of a broker-dealer; and
4. Mr. Page meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of
the Exchange Act, in that he (A) primarily performs, or is intended
primarily to perform at the end of the Offering, substantial duties
for or on behalf of our company, other than in connection with
transactions in securities; and (B) is not a broker or dealer, or been
an associated person of a broker or dealer, within the preceding
twelve months; and (C) have not participated in selling and offering
securities for any issuer more than once every twelve months other
than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Mr. Page does not intend to purchase any shares in this Offering.
18
If applicable, the shares may not be offered or sold in certain jurisdictions
unless they are registered or otherwise comply with the applicable securities
laws of such jurisdictions by exemption, qualification or otherwise. We intend
to sell the shares only in the states in which this offering has been qualified
or an exemption from the registration requirements is available, and purchases
of shares may be made only in those states.
In addition and without limiting the foregoing, we will be subject to applicable
provisions, rules and regulations under the Exchange Act with regard to security
transactions during the period of time when this Registration Statement is
effective.
We will not use public solicitation or general advertising in connection with
the Offering. This Offering will continue for the longer of: (i) 180 days after
this registration statement becomes effective with the Securities and Exchange
Commission, or (ii) the date on which all 5,000,000 shares registered hereunder
have been sold. We may at our discretion extend the offering for an additional
90 days.
DEPOSIT OF OFFERING PROCEEDS
We are offering for sale a minimum of 2,000,000 and a maximum of 5,000,000
shares of common stock at a price of $0.01 per share. We will not be able to
spend any of the proceeds unless the minimum number of shares is sold and the
Offering expires. We intend to hold all funds collected in a standard bank
account until the total amount of $50,000 has been received and the Offering is
closed or the minimum shares are sold and the Offering expires. At that time,
the funds will be transferred to our business account for use in the
implementation of our business plan. In the event the minimum numbers of shares
are not sold out prior to the Expiration Date, all money will be promptly
returned to the investors, without interest or deduction within 3 business days.
We determined the use of the standard bank account was the most efficient use of
our current limited funds. Please see the risk factor section to read the
related risk to you as a purchaser of any shares.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this Offering, you will be required
to execute a Subscription Agreement and tender it, together with a check, bank
draft or cashier's check payable to the company. Subscriptions, once received by
the company, are irrevocable. All checks for subscriptions should be made
payable to Perkins Oil & Gas Inc.
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 75,000,000 shares of
Common Stock, par value $.001. The holders of common stock currently (i) have
equal ratable rights to dividends from funds legally available therefore, when,
as and if declared by the Board of Directors of the Company; (ii) are entitled
to share ratably in all of the assets of the Company available for distribution
to holders of common stock upon liquidation, dissolution or winding up of the
affairs of the Company; (iii) do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions or rights
applicable thereto; and (iv) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote. All shares of common stock now
outstanding are fully paid for and non-assessable and all shares of common stock
which are the subject of this Offering, when issued, will be fully paid for and
19
non-assessable. Please refer to the Company's Articles of Incorporation, Bylaws
and the applicable statutes of the State of Nevada for a more complete
description of the rights and liabilities of holders of the Company's
securities.
NON-CUMULATIVE VOTING
The holders of shares of common stock of the Company do not have cumulative
voting rights, which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose, and, in such event, the holders of the remaining
shares will not be able to elect any of the Company's directors. After this
Offering is completed, and all 5,000,000 shares are sold, the present
stockholder will own 49% of the outstanding shares. (See "Principal
Stockholders".)
CASH DIVIDENDS
As of the date of this prospectus, the Company has not declared or paid any cash
dividends to stockholders. The declaration or payment of any future cash
dividend will be at the discretion of the Board of Directors and will depend
upon the earnings, if any, capital requirements and financial position of the
Company, general economic conditions, and other pertinent factors. It is the
present intention of the Company not to declare or pay any cash dividends in the
foreseeable future, but rather to reinvest earnings, if any, in the Company's
business operations.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this Prospectus as having prepared or certified
any part thereof or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of our common stock was employed on a contingency basis or had or is
to receive, in connection with the offering, a substantial interest, directly or
indirectly, in us. Additionally, no such expert or counsel was connected with us
as a promoter, managing or principal underwriter, voting trustee, director,
officer or employee.
Kevin M. Murphy, Attorney at Law has passed upon certain legal matters in
connection with the validity of the issuance of the shares of our common stock.
PLS, CPA has audited our Financial Statements for the period from May 25, 2012
(date of inception) through June 30, 2012 and to the extent set forth in its
report, which are included herein in reliance upon the authority of said firm as
experts in accounting and auditing. There were no disagreements related to
accounting principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure from date of appointment as our
independent registered accountant through the period of audit (inception date
May 25, 2012 through June 30, 2012).
DESCRIPTION OF BUSINESS
We are an exploration stage company with limited revenues and operating history.
Our independent auditor has issued an audit opinion which includes a statement
expressing substantial doubt as to our ability to continue as a going concern.
20
We currently own a 25% working interest and an 18.75% net revenue interest in a
lease of three acres located in Webster Parrish, Louisiana, known as the Perkins
Lease. There is currently one producing oil well on the property.
Our focus for the current fiscal year will be on further developing our existing
property, while continuing to pursue acquisition of additional leases and/or
existing oil and gas wells which have potential for production, if revenues
warrant.
GENERAL INFORMATION ABOUT OUR CURRENT LEASE
ACQUISITION OF THE LEASE
On July 9, 2012 the Company signed an assignment agreement with Lanza Land
Management LLC which transferred a 25% working interest and a 18.75% net revenue
interest in three acres located in Webster Parrish, Louisiana, known as the
Perkins Lease, covering and affecting the property described as: Begin at the
point where the North line of the Porterville-Sikes Ferry Road intersects the
West line of the West Half of the Southeast Quarter of the Northeast Quarter
(W/2 of SE/4 of NE/4), Section 36, Township 23 North, Range 11 West, thence run
in an easterly direction along the North line of said road 190 feet, thence run
North 380 feet, thence run West 285 feet to the West line of said W/2 of SE/4,
thence run South 345 feet to the point of beginning, Webster Parish, Louisiana.
The well coordinates are 32(Degree) 56' 43.779 N, 93(Degree) 26' 58.969 W,
elevation 79 meters. The consideration for the assignment was $17,500. The well
on the property was functioning until a lightning strike in June 2012; the pump
has been repaired and is currently producing approximately 85 barrels of oil per
month.
From June 1, 2012 through December 31, 2012 total production from the well was
189 barrels. The average sales price was $94 per barrel with an average cost of
$67 per barrel. From January 1, 2013 through March 31, 2013 total production
from the well was 14 barrels. The average sales price was $82 per barrel with an
average cost of $265 per barrel. In February 2013 the well was hit by vandalism
causing production delays and repair costs of $3,000.
REQUIREMENTS OR CONDITIONS FOR RETENTION OF LEASE
The lease on the property is for a period of TWO (2) years (called "primary
term") and as long thereafter as (1) oil, gas, sulphur or other mineral is
produced or (2) is maintained in force in any other manner provided within the
lease. The lease is from October 20, 2011 until October 20, 2013 and is
effective May 31, 2012.
LOCATION, ACCESS, CLIMATE, LOCAL RESOURCES & INFRASTRUCTURE
General Area: Webster Parish is located in the northwest corner of the state of
Louisiana. The parish has a total area of 615 square miles (1,593 km(2)), of
which, 595 square miles (1,542 km(2)) of it is land and 20 square miles (51
km(2)) of it (3.23%) is water.
[MAP SHOWING WEBSTER PARIS IN LOUISIANA]
Property Location: The property is described as: Begin at the point where the
North line of the Porterville-Sikes Ferry Road intersects the West line of the
West Half of the Southeast Quarter of the Northeast Quarter (W/2 of SE/4 of
NE/4), Section 36, Township 23 North, Range 11 West, thence run in an easterly
direction along the North line of said road 190 feet, thence run North 380 feet,
thence run West 285 feet to the West line of said W/2 of SE/4, thence run South
345 feet to the point of beginning, Webster Parish, Louisiana. The well
coordinates are 32(Degree) 56' 43.779 N, 93(Degree) 26' 58.969 W, elevation 79
meters.
21
On the following map the location is noted as "Bronco Resources, Perkins No. 1".
[PLAT MAP SHOWING THE PROPERTY LOCATION]
Access: The property is easily accessible from Route 371 and Porterville-Sikes
Ferry Road.
Climate: The area has a humid subtropical climate. Rainfall is abundant, with
the normal annual precipitation averaging 52 inches, with monthly averages
ranging from less than 3 inches in August to more than 5 inches in May. Severe
thunderstorms with heavy rain, hail, damaging winds and tornadoes occur in the
area during the spring and summer months. The winter months are normally mild,
with an average low of 34 degrees. Summer months are hot and humid, with average
temperatures of 93 degrees with high to very high relative average humidity,
sometimes exceeding the 90 percent level. On average there are 217 sunny days
per year in Webster Parish.
22
Local Resources & Infrastructure: The Town of Minden, LA located 25 miles from
the property, offers some of the necessary infrastructure required for oil & gas
exploration and drilling, (limited accommodations, communications, some
equipment and supplies). The independent operator, Four Star Oil, who will carry
out monthly maintenance on the well, is located in Oil City. Larger or
specialized equipment can be acquired in the City of Shreveport, lying 60 miles
to the south.
History: In 1906, the Caddo-Pine Island Field in northern Caddo Parish,
Louisiana was discovered, and a rush of leasing and drilling activity ensued. In
1908, the first natural gas pipeline was constructed to transport gas from
Caddo-Pine Island to Shreveport, Louisiana. This was one of the earliest
commercial uses of natural gas, which was commonly viewed as an undesirable
by-product of oil production and often "flared" or burnt off at the well site.
Other innovations in the Caddo-Pine Island Field included the first over-water
oil platform, which was constructed in the field on Caddo Lake in 1910. In that
same year, a major oil pipeline was constructed from Caddo-Pine Island Field to
a refinery built and operated by Standard Oil Company of Louisiana in Baton
Rouge, Louisiana. The refinery continues to operate today.
The Caddo-Pine Island field is located approximately 15 miles north of the City
of Shreveport in Caddo Parish, La., and Marion County, Tex., which covers a
portion of the Ark-La-Tex Area. The discovery well in the Caddo-Pine Island
field was the Savage Bros. & Morrical No.1 Offenhauser, which was completed
March 28, 1905, in the Annona Chalk at a depth of 1,556 ft. The well was located
near Oil City, La. By the close of 1907 23 wells had been drilled -eight of
which produced oil, 11 produced gas, and four were abandoned. Development of the
field continued at a rapid pace during the following years, and by 1918 the
production reached a peak of 11 million bbl/year.
Geological Setting: The Caddo Pine Island Field sits on top of the Subine
uplift, which is the stratigraphic uplift in Northern Louisiana. Due to the
uplift many of the formations on the top of it became excellent reservoir rock
for hydrocarbons. Impervious formations lying just above these called caprock
cause traps that the oil and gas accumulate up against under pressure. When
these caprock formations are drilled through and into the reservoir rock the
pressure is then released and will flow to the surface carrying oil and gas with
it. Production has been obtained from several horizons, ranging in depth from
the Nacatoch sand at 800 ft to the Hosston or Travis Peak which is found at
2,500 ft near the crest of the dome of the Lower Cretaceous beds.
MARKETS
The availability of a ready market and the prices obtained for produced oil
depends on many factors, including the extent of domestic production and imports
of oil, the proximity and capacity of pipelines and other transportation
facilities, fluctuating demand, the marketing of competitive fuels, and the
effects of governmental regulation on production and sales. A ready domestic
market for oil exists because of the presence of pipelines for transport. The
existence of an international market exists depends upon the presence of
international delivery systems and political and pricing factors.
If we are successful in the continuing production of oil on our current property
and possible additional property, the target customers for our oil are expected
to be refiners, remarketers and third party intermediaries, who either have, or
have access to, consumer delivery systems. We intend to sell our oil under both
short-term (less than one year) and long-term (one year or more) agreements at
prices negotiated with third parties. Currently Spears Oil, a third party
operator, picks up the oil and sells it to Shell Oil Company. The price is based
upon a 20-day floating average. Typically either the entire contract (in the
23
case of short-term contracts) or the price provisions of the contract (in the
case of long-term contracts) are renegotiated at intervals ranging in frequency
from daily to annually.
We have not yet adopted any specific sales and marketing plans. However, as we
purchase future properties, the need to hire marketing personnel will be
addressed.
COMPETITION
We operate in a highly competitive environment for acquiring properties,
modernizing existing wells and marketing oil that is produced. The majority of
our competitors possess and employ financial, technical and personnel resources
substantially greater than ours, which can be particularly important in the
areas in which we plan to operate. Those companies may be able to pay more for
productive properties and exploratory prospects and to evaluate, bid for and
purchase a greater number of properties and prospects than our financial
resources permit. Our ability to acquire additional prospects and to find and
develop reserves in the future will depend on our ability to evaluate and select
suitable properties and to consummate transactions in a highly competitive
environment. Also, there is substantial competition for capital available for
investment in the oil and natural gas industry.
Current competitive factors in the domestic oil and gas industry are unique. The
actual price range of crude oil is largely established by major international
producers. Pricing for natural gas is more regional; however, more favorable
prices can usually be negotiated for larger quantities of oil and/or gas
product. In this respect, while we believe we have a price disadvantage when
compared to larger producers, we view our primary pricing risk to be related to
a potential decline in international prices to a level which could render our
production uneconomical.
We will be committed to use the services of the existing gathering companies in
our present area of production. This potentially gives such gathering companies
certain short-term relative monopolistic powers to set gathering and
transportation costs, because obtaining the services of an alternative gathering
company may require substantial additional costs.
General competitive conditions may be substantially affected by various forms of
energy legislation and/or regulation introduced from time to time by the
governments of the United States and other countries, as well as factors beyond
our control, including international political conditions, overall levels of
supply and demand for oil and gas, and the markets for synthetic fuels and
alternative energy sources.
In the face of competition, we may not be successful in acquiring, exploring or
developing profitable oil and gas properties or interests, and we cannot give
any assurance that suitable properties or interests will be available for our
acquisition, exploration or development. Despite this, we hope to compete
successfully in the industry by:
* keeping our costs low;
* relying on the strength of our management's contacts; and
* using our size and experience to our advantage by adapting quickly to
changing market conditions or responding swiftly to potential
opportunities.
DISTRIBUTION METHODS
The oil that we produce is distributed through oil gathering companies. The
contract operator, Four Star Oil, will make the arrangements with the gathering
companies.
24
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
SOURCE AND AVAILABILITY OF RAW MATERIALS
We have no significant raw materials. However, if we are successful in our plan
of operations we may make use of numerous oil field service companies. We
currently only have one well lease in Webster Parrish, Louisiana, where there
are numerous oil field service companies.
MAJOR CUSTOMERS
We will principally sell our oil through our operator to marketers and other
purchasers that have access to nearby pipeline facilities. Generally, in areas
where there is no practical access to pipelines, oil is trucked to storage
facilities. We believe that the loss of any of these oil purchasers would not
materially impact our business, because we could readily find other purchasers
for our oil as produced.
PATENTS, TRADEMARKS, FRANCHISES, ROYALTY AGREEMENTS OR LABOR CONTRACTS
We have no patents, trademarks, licenses, concessions, or labor contracts.
COMPLIANCE WITH GOVERNMENT AND ENVIRONMENTAL REGULATION
REGULATION OF TRANSPORTATION OF OIL
The sales of crude oil are not currently regulated and are made at negotiated
prices. Nevertheless, Congress could reenact price controls in the future.
Our sales of crude oil will be affected by the availability, terms and cost of
transportation. The transportation of oil in common carrier pipelines is also
subject to rate regulation. The Federal Energy Regulatory Commission, or the
FERC, regulates interstate oil pipeline transportation rates under the
Interstate Commerce Act. Intrastate oil pipeline transportation rates are
subject to regulation by state regulatory commissions. The basis for intrastate
oil pipeline regulation, and the degree of regulatory oversight and scrutiny
given to intrastate oil pipeline rates, varies from state to state.
Insofar as effective interstate and intrastate rates are equally applicable to
all comparable shippers, we believe that the regulation of oil transportation
rates will not affect our operations in any way that is of material difference
from those of our competitors. Further, interstate and intrastate common carrier
oil pipelines must provide service on a non-discriminatory basis. Under this
open access standard, common carriers must offer service to all shippers
requesting service on the same terms and under the same rates. When oil
pipelines operate at full capacity, access is governed by pro-rationing
provisions set forth in the pipelines' published tariffs. Accordingly, we
believe that access to oil pipeline transportation services generally will be
available to us to the same extent as to our competitors.
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REGULATION OF PRODUCTION
The production of oil is subject to regulation under a wide range of local,
state and federal statutes, rules, orders and regulations. Federal, state and
local statutes and regulations require permits for drilling operations, drilling
bonds and reports concerning operations. All states, in which we may operate in
the future, have regulations governing conservation matters, including
provisions for the unitization or pooling of oil properties, the establishment
of maximum allowable rates of production from oil wells, the regulation of well
spacing, and plugging and abandonment of wells. The effect of these regulations
is to limit the amount of oil that can be produced from wells and to limit the
number of wells or the locations, although companies can apply for exceptions to
such regulations or to have reductions in well spacing. Moreover, each state
generally imposes a production or severance tax with respect to the production
and sale of oil within its jurisdiction.
The failure to comply with these rules and regulations can result in substantial
penalties. Our competitors in the oil industry are subject to the same
regulatory requirements and restrictions that affect our operations.
ENVIRONMENTAL REGULATION
Oil exploration, development and production operations are subject to stringent
federal, state and local laws and regulations governing the discharge of
materials into the environment or otherwise relating to environmental
protection. Historically, most of the environmental regulation of oil production
has been left to state regulatory boards or agencies in those jurisdictions
where there is significant oil production, with limited direct regulation by
such federal agencies as the Environmental Protection Agency. However, while we
believe this generally to be the case for our production activities in
Louisiana, there are various regulations issued by the Environmental Protection
Agency ("EPA") and other governmental agencies that would govern significant
spills, blow-outs, or uncontrolled emissions.
In Louisiana, specific oil regulations apply to the drilling, completion and
operations of wells, and the disposal of waste oil and salt water. There are
also procedures incident to the plugging and abandonment of dry holes or other
non-operational wells, all as governed by the applicable governing state agency.
At the federal level, among the more significant laws and regulations that may
affect our business and the oil and gas industry are: The Comprehensive
Environmental Response, Compensation and Liability Act of 1980, also known as
"CERCLA" or Superfund; the Oil Pollution Act of 1990; the Resource Conservation
and Recovery Act, also known as "RCRA"; the Clean Air Act; Federal Water
Pollution Control Act of 1972, or the Clean Water Act; and the Safe Drinking
Water Act of 1974.
Compliance with these regulations may constitute a significant cost and effort
for us. No specific accounting for environmental compliance has been projected
by us at this time. We are not presently aware of any environmental demands,
claims, or adverse actions, litigation or administrative proceedings in which
our acquired property is involved or subject to, or arising out of any
predecessor operations.
In the event of a breach of environmental regulations, these environmental
regulatory agencies have a broad range of alternative or cumulative remedies
which include: ordering a clean-up of any spills or waste material and
restoration of the soil or water to conditions existing prior to the
environmental violation; fines; or enjoining further drilling, completion or
production activities. In certain egregious situations the agencies may also
pursue criminal remedies against us or our principal officers.
26
RESEARCH AND DEVELOPMENT
Since our inception to the date of this Prospectus, we have not spent any money
on research and development activities. We paid $17,500 for the lease on the
Perkins property.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
Our only employee is our sole officer, J Michael Page. Mr. Page currently
devotes 2-4 hours per week to company matters and after receiving funding he
plans to devote as much time as the board of directors determines is necessary
to manage the affairs of the company. There are no formal employment agreements
between the company and our current employee.
REPORTS TO SECURITY HOLDERS
Any member of the public may read and copy any materials filed by us with the
Securities and Exchange Commission at the Securities and Exchange Commission's
Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549. Information
on the operation of the Public Reference Room may be obtained by calling the
Securities and Exchange Commission at 1-800-732-0330. The Securities and
Exchange Commission maintains an internet website (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Securities and Exchange
Commission.
DESCRIPTION OF PROPERTY
We do not currently own any property. The Company utilizes space at the home of
our officer and director at 1445 Marpole Avenue #409, Vancouver, BC. The
telephone number is (604)733-5055. The office space is provided at no charge to
the Company. Management believes the current premises are sufficient for its
needs at this time.
We currently have no investment policies as they pertain to real estate, real
estate interests or real estate mortgages.
DESCRIPTION OF PERKINS LEASE
In June 2012 the company paid $17,500 for 25% working interest and an 18.75% net
revenue interest in the Perkins Lease in Caddo Pine Island Field that lies in
the northern part of Webster Parish, Louisiana. The lease shall be for a period
of TWO (2) years (called "primary term") and as long thereafter as (1) oil, gas,
sulphur or other mineral is produced or (2) is maintained in force in any other
manner provided within the lease. The lease is from October 20, 2011 until
October 20, 2013 and is effective May 31, 2012. The property is legally
described as: Begin at the point where the North line of the Porterville-Sikes
Ferry Road intersects the West line of the West Half of the Southeast Quarter of
the Northeast Quarter (W/2 of SE/4 of NE/4), Section 36, Township 23 North,
Range 11 West, thence run in an easterly direction along the North line of said
road 190 feet, thence run North 380 feet, thence run West 285 feet to the West
line of said W/2 of SE/4, thence run South 345 feet to the point of beginning,
Webster Parish, Louisiana.
LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are
we involved as a plaintiff in any material proceedings or pending litigation.
There are no proceedings in which our director, officer, or affiliate, or any
registered beneficial shareholder are an adverse party or has a material
interest adverse to us.
27
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Our common stock is not traded on any exchange. We intend to apply to have our
common stock quoted on the OTC Bulletin Board once this Prospectus has been
declared effective by the SEC; however, there is no guarantee that we will
obtain a listing.
There is currently no trading market for our common stock and there is no
assurance that a regular trading market will ever develop. OTC Bulletin Board
securities are not listed and traded on the floor of an organized national or
regional stock exchange. Instead, OTC Bulletin Board securities transactions are
conducted through a telephone and computer network connecting dealers. OTC
Bulletin Board issuers are traditionally smaller companies that do not meet the
financial and other listing requirements of a regional or national stock
exchange.
To have our common stock listed on any of the public trading markets, including
the OTC Bulletin Board, we will require a market maker to sponsor our
securities. We have not yet engaged any market maker to sponsor our securities,
and there is no guarantee that our securities will meet the requirements for
quotation or that our securities will be accepted for listing on the OTC
Bulletin Board. This could prevent us from developing a trading market for our
common stock.
HOLDERS
As of the date of this Prospectus there is one (1) holder of record of our
common stock.
DIVIDENDS
To date, we have not paid dividends on shares of our common stock and we do not
expect to declare or pay dividends on shares of our common stock in the
foreseeable future. The payment of any dividends will depend upon our future
earnings, if any, our financial condition, and other factors deemed relevant by
our Board of Directors.
EQUITY COMPENSATION PLANS
As of the date of this Prospectus we did not have any equity compensation plans.
REGULATION M
Our officer and director, who will offer and sell the shares, is aware that he
is required to comply with the provisions of Regulation M, promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation
M precludes the officer and director, sales agent, any broker-dealer or other
person who participate in the distribution of shares in this Offering from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security which is the subject of the distribution until the entire
distribution is complete.
WHERE YOU CAN FIND MORE INFORMATION
We intend to file annual, quarterly and special reports, and other information
with the SEC, as required. You may read or obtain a copy of the registration
statement to be filed or any other information we file with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information regarding the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public from the SEC web site at www.sec.gov, which contains our reports, and
other information we file electronically with the SEC.
28
FINANCIAL STATEMENTS
The audited financial statements of Perkins Oil & Gas Inc. for the year ended
June 30, 2012, and related notes, included in this prospectus have been audited
by PLS, CPA, and have been so included in reliance upon the opinion of such
accountants given upon their authority as an expert in auditing and accounting.
The unaudited financial statements of Perkins Oil & Gas Inc. for the three and
nine months ended March 31, 2013, and related notes, prepared by the company and
included in this prospectus have been reviewed by PLS, CPA.
PLAN OF OPERATION
THIS SECTION OF THE PROSPECTUS INCLUDES A NUMBER OF FORWARD-LOOKING STATEMENTS
THAT REFLECT OUR CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL
PERFORMANCE. FORWARD-LOOKING STATEMENTS ARE OFTEN IDENTIFIED BY WORDS LIKE:
BELIEVE, EXPECT, ESTIMATE, ANTICIPATE, INTEND, PROJECT AND SIMILAR EXPRESSIONS,
OR WORDS WHICH, BY THEIR NATURE, REFER TO FUTURE EVENTS. YOU SHOULD NOT PLACE
UNDUE CERTAINTY ON THESE FORWARD-LOOKING STATEMENTS, WHICH APPLY ONLY AS OF THE
DATE OF THIS PROSPECTUS. THESE FORWARD-LOOKING STATES ARE SUBJECT TO CERTAIN
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM HISTORICAL RESULTS OR OUT PREDICTIONS.
RESULTS OF OPERATIONS
We are an exploration stage company and have generated $3,115 in revenues since
inception (May 25, 2012) and have incurred $37,912 in expenses through March 31,
2013. We received our initial funding of $20,000 through the sale of common
stock to J Michael Page, our officer and director, who purchased 4,000,000
shares of our common stock at $0.005 per share in June, 2012. On February 1,
2013 and additional 750,000 shares were issued to Mr. Page for consideration of
$7,500 or $.01 per share.
For the three and nine months March 31, 2013, we had $213 and $3,115 in
revenues, respectively and incurred $6,605 and $11,113 in general and
administrative expenses, $3,170 and $9,508 in amortization expense and $3,710
and $8,420 in oil well operating and maintenance expense, respectively.
From June 1, 2012 through December 31, 2012 total production from the well was
189 barrels. The average sales price was $94 per barrel with an average cost of
$67 per barrel. From January 1, 2013 through March 31, 2013 total production
from the well was 14 barrels. The average sales price was $82 per barrel with an
average cost of $265 per barrel. In February 2013 the well was hit by vandalism
causing production delays and repair costs of $3,000.
The following table provides selected financial data about our company for the
year ended June 30, 2012 and the quarters ended September 30, 2012, December 31,
2012 and March 31, 2013.
Balance Sheet Data: 3/31/13 12/31/12 9/30/12 6/30/12
------------------- -------- -------- -------- --------
Cash $ 1,258 $ 1,399 $ 2,037 $ 2,406
Total assets $ 8,217 $ 11,527 $ 15,335 $ 18,873
Total liabilities $ 8,388 $ 13,051 $ 10,828 $ 7,743
Shareholders' equity (deficit) $ (171) $ (1,524) $ 4,507 $ 11,130
Our cash balance at March 31, 2013 was $1,258. Our cash balance and revenues
generated from the well lease may not be sufficient to cover the expenses we
will incur during the next twelve months in a limited operations scenario or
until we raise the funding from this Offering. If we experience a shortage of
funds prior to funding we may utilize funds from our director, who has
informally agreed to advance funds to allow us to pay for offering costs, filing
fees, and professional fees, however he has no formal commitment, arrangement or
legal obligation to advance or loan funds to the company. Since December 31,
2012 the Company's president, Mr. Page, has purchased additional stock for
$7,500 and made a loan to the Company of $4,500. In order to achieve our
business plan goals, we will need the funding from this Offering. We are an
exploration stage company and have generated $3,115 in revenue to date. We have
sold $27,500 in equity securities to pay for our minimum level of operations.
29
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have only generated limited revenues from our oil sales.
Our plan of operation for the twelve months following the date of this
prospectus is to continue the production program on the current lease, which is
continuing to pump oil from the well, while also searching for other appropriate
leases. We will be primarily seeking other leases with existing production
however we will not limit ourselves to only those wells if another oil or gas
opportunity presents itself that Management believes would be in the best
interests of the shareholders. If we are able to sell our entire Offering with
proceeds of $50,000 we plan to invest an additional $17,500 in a new lease. We
anticipate spending an additional $15,408 (approx. $642.00 per month for each
well) for monthly maintenance fees once the well is operational, $10,000 on
professional fees, including fees payable for complying with reporting
obligations, $5,000 in general administrative costs and $2,092 in working
capital. Total expenditures over the next 12 months are therefore expected to be
approximately $50,000. We will require the funds from this Offering to proceed.
If we are unable to raise the entire $50,000 from our Offering we would adjust
our spending based on the amount of funds available. We may forgo the purchase
of another lease until we are able to accumulate enough from revenue to allow us
to purchase an additional lease. If we are only able to sell 40% of the
securities we are offering ($20,000), substantially all of the funds raised by
this Offering will be spent on the monthly maintenance of the current well and
assuring that we meet our corporate and disclosure obligations so that we remain
in good standing with the State of Nevada and maintain our status as a reporting
issuer with the SEC.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are an exploration stage corporation and have
generated limited revenues from operations. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our properties, and possible
cost overruns due to price and cost increases in services.
To become profitable and competitive, we must continue to receive revenues from
our current lease and find other profitable properties in which we will invest.
We believe that our current cash balance and revenue will allow us to operate
for one year based on our current limited operations.
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this Offering.
We cannot guarantee that we will be able to sell all the shares required. If we
are successful any money raised will be applied to the items set forth in the
Use of Proceeds section of this prospectus. Our director has agreed to advance
funds as needed until the Offering is completed or failed. While he has agreed
to advance the funds, the agreement is verbal and is unenforceable as a matter
of law.
We received our initial funding of $20,001 through the sale of common stock to J
Michael Page, our officer and director, who purchased 4,000,000 shares of our
common stock at $0.005 per share in June, 2012. On February 1, 2013 and
additional 750,000 shares were issued to Mr. Page for consideration of $7,500 or
$.01 per share.
30
On July 9, 2012 the Company acquired the Perkins Lease in Webster Parish,
Louisiana for $17,500.
The Company, as of March 31, 2013, had a working capital deficit of $7,130.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any 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 investors.
SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied. The Company's fiscal year
end is June 30.
The accompanying financial statements have been prepared using the accrual basis
of accounting in accordance with accounting principles generally accepted in the
United States of America and are presented in U.S. dollars. The Company is
currently an exploration stage enterprise. An exploration stage enterprise is
one in which planned principal operations have not commenced or if its
operations have commenced, there has been no significant revenues there from.
All losses accumulated since the inception of the business have been considered
as part of its exploration stage activities.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses.
CASH AND CASH EQUIVALENTS
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition. The Company had $1,258 in
cash at March 31, 2013.
INVESTMENTS IN OIL AND GAS PROPERTY
The Company is an exploration stage oil and gas company and expects to receive
some revenue from its operations. In June 2012 the company paid $17,500 for 25%
working interest and an 18.75% net revenue interest in the Perkins Lease in
Caddo Pine Island Field that lies in the northern part of Webster Parish,
Louisiana. The lease shall be for a period of TWO (2) years (called "primary
term") and as long thereafter as (1) oil, gas, sulphur or other mineral is
produced or (2) is maintained in force in any other manner provided within the
lease. The lease is from October 20, 2011 until October 20, 2013 and is
effective May 31, 2012. Amortization of the lease will be calculated from May
31, 2012 through October 31, 2013. Amortization expenses for the year ending
June 30, 2012 were $1,033, and nine month period ending March 31, 2013 were
$9,508.
31
The Company follows the successful efforts method of accounting for its oil and
gas activities. Under the successful efforts method, lease acquisition costs and
all development costs are capitalized. Exploratory drilling costs are
capitalized until the results are determined. If proved reserves are not
discovered, the exploratory drilling costs are expensed. Other exploratory
costs, such as seismic costs and other geological and geophysical expenses, are
expensed as incurred. Depletion of capitalized oil and gas well costs is
provided using the units of production method based on estimated proved
developed oil and gas reserves of the respective oil and gas properties.
To date, exploration costs have been expensed as incurred. To date the Company
has not established any proven or probable reserves on its property.
REVENUE RECOGNITION
The Company is still in the exploration stage and has realized only limited
revenues. The Company recognizes revenue when delivery of goods or completion of
services has occurred provided there is persuasive evidence of an agreement,
acceptance has been approved by its customers, the fee is fixed or determinable
based on the completion of stated terms and conditions, and collection of any
related receivable is reasonably assured.
INCOME TAXES
The Company accounts for its income taxes in accordance with FASB Accounting
Standards Codification ("ASC") No.740, "Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances. Deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in the
years in which those differences are expected to be recovered or settled.
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. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
FINANCIAL INSTRUMENTS
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. ASC 820-10 establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. FASB ASC 820 establishes a
fair value hierarchy that prioritizes the use of inputs used in valuation
methodologies into the following three levels:
* Level 1: Quoted prices (unadjusted) for identical assets or
liabilities in active markets. A quoted price in an active market
provides the most reliable evidence of fair value and must be used to
measure fair value whenever available.
* Level 2: Significant other observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data.
* Level 3: Significant unobservable inputs that reflect a reporting
entity's own assumptions about the assumptions that market
participants would use in pricing an asset or liability. For example,
level 3 inputs would relate to forecasts of future earnings and cash
flows used in a discounted future cash flows method.
32
The recorded amounts of financial instruments, including cash equivalents and
accounts payable approximate their market values as of March 31, 2013.
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.
SHARE BASED EXPENSES
The Company records stock based compensation in accordance with the guidance in
ASC Topic 718 which requires the Company to recognize expenses related to the
fair value of its employee stock option awards. This eliminates accounting for
share-based compensation transactions using the intrinsic value and requires
instead that such transactions be accounted for using a fair-value-based method.
The Company recognizes the cost of all share-based awards on a graded vesting
basis over the vesting period of the award.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON
The officer and director of Perkins Oil & Gas, whose one year terms will expire
6/30/13, or at such a time as his successor(s) shall be elected and qualified is
as follows:
Name & Address Age Position Date First Elected Term Expires
-------------- --- -------- ------------------ ------------
J Michael Page 68 President, 5/25/12 6/30/13
1445 Marpole Avenue #409 Secretary,
Vancouver, BC V6H 1S5 Treasurer,
CFO, CEO &
Director
The foregoing person is a promoter of Perkins Oil & Gas, as that term is defined
in the rules and regulations promulgated under the Securities and Exchange Act
of 1933. Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and qualified.
Officers are appointed to serve until the meeting of the board of directors
following the next annual meeting of stockholders and until their successors
have been elected and qualified.
Mr. Page currently devotes 2-4 hours per week to company matters, in the future
he intends to devote as much time as the board of directors deems necessary to
manage the affairs of the company.
No executive officer or director of the corporation has been the subject of any
order, judgment, or decree of any court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring, suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.
33
No executive officer or director of the corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
BACKGROUND INFORMATION
J MICHAEL PAGE has been the President, CEO, Treasurer, CFO, Secretary, and
Director of the Company since inception. He attended the St. George School of
the University of British Columbia in Vancouver where between 1965 and 1969 he
studied Physiology and Economics. Mr. Page has been retired for the last five
years. Prior to that Mr. Page was employed primarily in management positions for
various technology companies specializing in wireless electronic systems and
smart card readers.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
J Michael Page, 2012 0 0 0 0 0 0 0 0
President,
CFO & CEO
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price Date Vested(#) Vested Vested Vested
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
J Michael 0 0 0 0 0 0 0 0 0
Page, CEO
& CFO
34
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
J Michael Page, 0 0 0 0 0 0 0
Director
There are no current employment agreements between the company and its executive
officer.
In June 2012 Mr. Page purchased 4,000,000 shares of our common stock at $0.005
per share. In February 2013 Mr. Page purchased 750,000 shares of our common
stock at $0.01 per share. The terms of these stock issuances were as fair to the
company, in the opinion of the board of directors, as could have been made with
an unaffiliated third party.
Mr. Page currently devotes approximately 2-4 hours per week to manage the
affairs of the company. He has agreed to work with no remuneration until such
time as the company receives sufficient revenues necessary to provide management
salaries. At this time, we cannot accurately estimate when sufficient revenues
will occur to implement this compensation, or what the amount of the
compensation will be.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
company or any of its subsidiaries, if any.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information on the ownership of Perkins Oil and
Gas' voting securities by officers, directors and major stockholders as well as
those who own beneficially more than five percent of our common stock as of the
date of this prospectus:
Name and No. of No. of
Address of Shares Shares Percentage of Ownership
Beneficial Before After Before After
Owner(1) Offering Offering Offering Offering
-------- -------- -------- -------- --------
J Michael Page 4,750,000 4,750,000 100% 49%*
All Officers and
Directors as a Group 4,750,000 4,750,000 100% 49%*
----------
* Assuming all 5,000,000 shares are sold.
(1) The person named may be deemed to be a "parent" and "promoter" of the
Company, within the meaning of such terms under the Securities Act of 1933,
as amended.
35
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 2012 Mr. Page purchased 4,000,000 shares of our common stock at $0.005
per share. In February 2013 Mr. Page purchased 750,000 shares of our common
stock at $0.01 per share. All of such shares are "restricted" securities, as
that term is defined by the Securities Act of 1933, as amended, and are held by
the officer and director of the Company. (See "Principal Stockholders".)
Mr. Page will not be paid for any underwriting services that he performs on our
behalf with respect to this Offering. He will also not receive any interest on
any funds that he may advance to us for expenses incurred prior to the Offering
being closed.
INDEMNIFICATION
Our Bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law.
The general effect of the foregoing is to indemnify a control person, officer or
director from liability, thereby making us responsible for any expenses or
damages incurred by such control person, officer or director in any action
brought against them based on their conduct in such capacity, provided they did
not engage in fraud or criminal activity.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers or control persons pursuant to the
foregoing provisions, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, we will act as our own transfer agent.
36
PLS CPA, A PROFESSIONAL CORP.
* 4725 MERCURY STREET #210 * SAN DIEGO * CALIFORNIA 92111 *
* TELEPHONE (858)722-5953 * FAX (858) 761-0341 * FAX (858) 433-2979
* E-MAIL changgpark@gmail.com *
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Perkins Oil & Gas Inc.
We have audited the accompanying balance sheet of Perkins Oil & Gas Inc. (An
Exploration Stage "Company") as of June 30, 2012 and the related statements of
operations, changes in shareholders' equity and cash flows for the period from
May 25, 2012 (inception) to June 30, 2012. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we 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 statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Perkins Oil & Gas Inc. as of
June 30, 2012, and the result of its operations and its cash flows for the
period from May 25, 2012 (inception) to June 30, 2012 in conformity with U.S.
generally accepted accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 6 to the financial statements,
the Company's losses from operations raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/PLS CPA
--------------------
PLS CPA, A Professional Corp.
October 31, 2012
San Diego, CA. 92111
Registered with the Public Company Accounting Oversight Board
F-1
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Balance Sheet
--------------------------------------------------------------------------------
As of
June 30,
2012
--------
ASSETS
CURRENT ASSETS
Cash $ 2,406
--------
TOTAL CURRENT ASSETS 2,406
OTHER ASSETS
Oil and Gas Property (Successful Efforts Method) 17,500
Less: Accumulated Amortization (1,033)
--------
TOTAL OTHER ASSETS 16,467
--------
TOTAL ASSETS $ 18,873
========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,743
Advances from Officers 0
--------
TOTAL CURRENT LIABILITIES 7,743
--------
TOTAL LIABILITIES 7,743
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 75,000,000 shares
authorized; 4,000,000 shares issued and outstanding
as of June 30, 2012 4,000
Additional paid-in capital 16,001
Deficit accumulated during exploration stage (8,871)
--------
TOTAL STOCKHOLDERS' EQUITY 11,130
--------
STOCKHOLDERS' EQUITY $ 18,873
========
See Notes to Financial Statements
F-2
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Statement of Operations
--------------------------------------------------------------------------------
May 25, 2012
(inception)
through
June 30,
2012
----------
REVENUES
Revenues $ --
----------
TOTAL REVENUES --
GENERAL & Administrative Expenses
Administrative Expenses 7,838
Amortization 1,033
Exploration costs --
----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 8,871
----------
LOSS FROM OPERATION (8,871)
----------
OTHER INCOME (EXPENSE) --
NET INCOME (LOSS) $ (8,871)
==========
BASIC EARNINGS PER SHARE $ (0.00)
==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,666,667
==========
See Notes to Financial Statements
F-3
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Statement of changes in Shareholders' Equity
From May 25, 2012 (inception) to June 30, 2012
--------------------------------------------------------------------------------
Deficit
Common Stock Additional During
---------------------- Paid-in Exploration
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, May 25, 2012 (Inception) -- $ -- $ -- $ -- $ --
Commn stock issued, May 28, 2012
at $.005 per share 4,000,000 4,000 16,001 -- 20,001
Loss for the period beginning
May 25, 2012 (inception) to
June 30, 2012 -- -- -- (8,871) (8,871)
---------- ------- -------- -------- --------
BALANCE, JUNE 30, 2012 4,000,000 $ 4,000 $ 16,001 $ (8,871) $ 11,130
========== ======= ======== ======== ========
See Notes to Financial Statements
F-4
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Statement of Cash Flows
--------------------------------------------------------------------------------
May 25, 2012
(inception)
through
June 30,
2012
--------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (8,871)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization 1,033
Changes in operating assets and liabilities:
Increase(Decrease) in Accounts payable and accrued liabilities 7,743
Increase(Decrease) in Advance from Officers --
--------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (95)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Oil and Gas Property (17,500)
--------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (17,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 20,001
--------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 20,001
--------
NET INCREASE (DECREASE) IN CASH 2,406
CASH AT BEGINNING OF PERIOD --
--------
CASH AT END OF PERIOD $ 2,406
========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ --
========
Income Taxes $ --
========
See Notes to Financial Statements
F-5
Perkins Oil & Gas, Inc.
(An Exploration Stage Company)
Notes To Financial Statements
June 30, 2012
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Perkins Oil & Gas, Inc. (the "Company") was incorporated on May 25, 2012 under
the laws of the State of Nevada. The Company is in the exploration stage as
defined under Accounting Standards Codification ("ASC 915") and it intends to
engage in the exploration and development of oil and gas properties. The
Company's activities to date have been limited to organization and capital.
The Company is primarily engaged in a lease assignment with Lanza Land
Management LLC and has been assigned a 25% working interest and an 18.75% net
revenue interest in the lease.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Basis
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied. The Company's fiscal year
end is June 30, 2012.
The accompanying financial statements have been prepared using the accrual basis
of accounting in accordance with accounting principles generally accepted in the
United States of America and are presented in U.S. dollars. The Company is
currently an exploration stage enterprise. An exploration stage enterprise is
one in which planned principal operations have not commenced or if its
operations have commenced, there has been no significant revenues there from.
All losses accumulated since the inception of the business have been considered
as part of its exploration stage activities.
Use of Estimates
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses.
Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition. The Company had $2,406 of
cash at June 30, 2012.
F-6
Perkins Oil & Gas, Inc.
(An Exploration Stage Company)
Notes To Financial Statements
June 30, 2012
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Investments in Oil and Gas Property
The Company is an exploration stage oil and gas company and has not yet realized
any revenue from its operations. In June 2012 the company paid $17,500 for 25%
working interest and an 18.75% net revenue interest in the Perkins Lease in
Caddo Pine Island Field that lies in the northern part of Caddo Parish,
Louisiana. The lease shall be for a period of TWO (2) years (called "primary
term") and as long thereafter as (1) oil, gas, sulphur or other mineral is
produced or (2) is maintained in force in any other manner provided within the
lease. The lease is from October 20, 2011 until October 20, 2013 and is
effective May 31, 2012. Amortization of the lease will be calculated from May
31, 2012 through October 31, 2013. Amortization expenses for the year ending
June 30, 2012 were $1,033.
The Company follows the successful efforts method of accounting for its oil and
gas activities. Under the successful efforts method, lease acquisition costs and
all development costs are capitalized. Exploratory drilling costs are
capitalized until the results are determined. If proved reserves are not
discovered, the exploratory drilling costs are expensed. Other exploratory
costs, such as seismic costs and other geological and geophysical expenses, are
expensed as incurred. Depletion of capitalized oil and gas well costs is
provided using the units of production method based on estimated proved
developed oil and gas reserves of the respective oil and gas properties.
To date, mineral property exploration costs have been expensed as incurred. To
date the Company has not established any proven or probable reserves on its
mineral properties.
Revenue Recognition
The Company has yet to realize revenues from operations and is still in the
exploration stage. The Company will recognize revenue when delivery of goods or
completion of services has occurred provided there is persuasive evidence of an
agreement, acceptance has been approved by its customers, the fee is fixed or
determinable based on the completion of stated terms and conditions, and
collection of any related receivable is reasonably assured.
Income Taxes
The Company accounts for its income taxes in accordance with FASB Accounting
Standards Codification ("ASC") No.740, "Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances.
F-7
Perkins Oil & Gas, Inc.
(An Exploration Stage Company)
Notes To Financial Statements
June 30, 2012
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Deferred tax assets and liabilities are measured using enacted or substantially
enacted tax rates expected to apply to the taxable income in the years in which
those differences are expected to be recovered or settled. 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. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the date of
enactment or substantive enactment.
Financial Instruments
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. ASC 820-10 establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. FASB ASC 820 establishes a
fair value hierarchy that prioritizes the use of inputs used in valuation
methodologies into the following three levels:
* Level 1: Quoted prices (unadjusted) for identical assets or liabilities in
active markets. A quoted price in an active market provides the most
reliable evidence of fair value and must be used to measure fair value
whenever available.
* Level 2: Significant other observable inputs other than Level 1 prices such
as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be
corroborated by observable market data.
* Level 3: Significant unobservable inputs that reflect a reporting entity's
own assumptions about the assumptions that market participants would use in
pricing an asset or liability. For example, level 3 inputs would relate to
forecasts of future earnings and cash flows used in a discounted future
cash flows method.
The recorded amounts of financial instruments, including cash equivalents
approximate their market values as of June 30, 2012.
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.
F-8
Perkins Oil & Gas, Inc.
(An Exploration Stage Company)
Notes To Financial Statements
June 30, 2012
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Share Based Expenses
The Company records stock based compensation in accordance with the guidance in
ASC Topic 718 which requires the Company to recognize expenses related to the
fair value of its employee stock option awards. This eliminates accounting for
share-based compensation transactions using the intrinsic value and requires
instead that such transactions be accounted for using a fair-value-based method.
The Company recognizes the cost of all share-based awards on a graded vesting
basis over the vesting period of the award.
NOTE 3 - PROVISION FOR INCOME TAXES
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and
carry-forwards 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.
June 30,
2012
--------
Net operating loss carryforward $ 3,016
Valuation allowance (3,016)
--------
Net deferred income tax asset $ --
========
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company is not presently involved in any litigation.
NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Company has implemented all new accounting pronouncements that are in effect
and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
F-9
Perkins Oil & Gas, Inc.
(An Exploration Stage Company)
Notes To Financial Statements
June 30, 2012
--------------------------------------------------------------------------------
NOTE 6 - GOING CONCERN
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses.
The financial statements of the Company have been prepared assuming that the
Company will continue as a going concern, which contemplates, among other
things, the realization of assets and the satisfaction of liabilities in the
normal course of business. The Company has incurred cumulative net losses of
$8,871 since its inception and requires capital for its contemplated operational
and exploration activities to take place. The Company's ability to raise
additional capital through the future issuances of common stock is unknown. The
obtainment of additional financing, the successful development of the Company's
contemplated plan of operations, and its transition, ultimately, to the
attainment of profitable operations are necessary for the Company to continue
operations. The ability to successfully resolve these factors raise substantial
doubt about the Company's ability to continue as a going concern. The financial
statements of the Company do not include any adjustments that may result from
the outcome of these aforementioned uncertainties.
NOTE 7 - RELATED PARTY TRANSACTIONS
J. Michael Page, the sole officer and director of the Company, may in the
future, become involved in other business opportunities as they become
available, thus he may face a conflict in selecting between the Company and his
other business opportunities. The Company has not formulated a policy for the
resolution of such conflicts.
J. Michael Page, the sole officer and director of the Company, will not be paid
for any underwriting services that he performs on behalf of the Company with
respect to the Company's S-1 offering. He will also not receive any interest on
any funds that he advances to the Company for offering expenses prior to the
offering being closed which will be repaid from the proceeds of the offering.
NOTE 9 - STOCK TRANSACTIONS
On May 28, 2012, the Company issued a total of 4,000,000 shares of common stock
to one director for cash in the amount of $0.005 per share for a total of
$20,001
As of June 30, 2012 the Company had 4,000,000 shares of common stock issued and
outstanding.
F-10
Perkins Oil & Gas, Inc.
(An Exploration Stage Company)
Notes To Financial Statements
June 30, 2012
--------------------------------------------------------------------------------
NOTE 10 - STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of June 30, 2012:
Common stock, $ 0.001 par value: 75,000,000 shares authorized; 4,000,000 shares
issued and outstanding.
NOTE 11 - SUBSEQUENT EVENTS
In accordance with ASC 855, SUBSEQUENT EVENTS, the Company has evaluated
subsequent events through October 31, 2012, the date of available issuance of
these audited financial statements. During this period, the Company did not have
any material recognizable subsequent events.
F-11
PLS CPA, A PROFESSIONAL CORP.
* 4725 MERCURY STREET #210 * SAN DIEGO * CALIFORNIA 92111 *
* TELEPHONE (858)722-5953 * FAX (858) 761-0341 * FAX (858) 433-2979
* E-MAIL changgpark@plscpasl.com *
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Perkins Oil & Gas Inc.
We have reviewed the accompanying balance sheets of Perkins Oil & Gas Inc. (An
Exploration Stage "Company") as of March 31, 2013, and the related statements of
operations, and cash flows for the three and nine months ended March 31, 2013,
and for the period from May 25, 2012 (inception) through March 31, 2013. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Because of the Company's current
status and limited operations there is substantial doubt about its ability to
continue as a going concern. Management's plans in regard to its current status
are also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ PLS CPA
-------------------------------
PLS CPA, A Professional Corp.
May 30, 2013
San Diego, CA 92111
Registered with the Public Company Accounting Oversight Board
F-12
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
As of As of
March 31, June 30,
2013 2012
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 1,258 $ 2,406
-------- --------
TOTAL CURRENT ASSETS 1,258 2,406
OTHER ASSETS
Oil and Gas Property (Successful Efforts Method) 17,500 17,500
Less: Accumulated Amortization (10,541) (1,033)
-------- --------
TOTAL OTHER ASSETS 6,959 16,467
-------- --------
TOTAL ASSETS $ 8,217 $ 18,873
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,388 $ 7,743
-------- --------
TOTAL CURRENT LIABILITIES 8,388 7,743
TOTAL LIABILITIES 8,388 7,743
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, ($0.001 par value, 75,000,000 shares authorized;
4,750,000 and 4,000,000 shares issued and outstanding
as of March 31, 2013 and June 30, 2012 4,750 4,000
Additional paid-in capital 22,751 16,001
Deficit accumulated during exploration stage (27,672) (8,871)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (171) 11,130
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT) $ 8,217 $ 18,873
======== ========
See Notes to Financial Statements
F-13
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Statement of Operations
(Unaudited)
--------------------------------------------------------------------------------
May 25, 2012
Three Months Nine Months (inception)
ended ended through
March 31, March 31, March 31,
2013 2013 2013
---------- ---------- ----------
REVENUES
Revenues $ 213 $ 3,115 $ 3,115
---------- ---------- ----------
TOTAL REVENUES 213 3,115 3,115
GENERAL & Administrative Expenses
Administrative Expenses 6,605 11,113 18,951
Amortization 3,170 9,508 10,541
Oil Well Operating and Maintenance Expenses 3,710 8,420 8,420
---------- ---------- ----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 13,485 29,041 37,912
---------- ---------- ----------
LOSS FROM OPERATION (13,272) (25,926) (34,797)
---------- ---------- ----------
OTHER INCOME (EXPENSE)
Forgiveness for Debt 7,125 7,125 7,125
---------- ---------- ----------
TOTAL OTHER INCOME (EXPENSE) 7,125 7,125 7,125
---------- ---------- ----------
NET INCOME (LOSS) $ (6,147) $ (18,801) $ (27,672)
========== ========== ==========
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,483,333 4,158,759
========== ==========
See Notes to Financial Statements
F-14
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Statement of changes in Shareholders' Equity
From May 25, 2012 (inception) to March 31, 2013
--------------------------------------------------------------------------------
Deficit
Common Stock Additional During
---------------------- Paid-in Exploration
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, May 25, 2012 (Inception) -- $ -- $ -- $ -- $ --
Commn stock issued, May 28, 2012
at $.005 per share 4,000,000 4,000 16,001 -- 20,001
Loss for the period beginning
May 25, 2012 (inception) to
June 30, 2012 -- -- -- (8,871) (8,871)
---------- ------- -------- -------- --------
BALANCE, JUNE 30, 2012 4,000,000 4,000 16,001 (8,871) 11,130
========== ======= ======== ======== ========
Commn stock issued, February 1, 2013
at $.01 per share 750,000 750 6,750 -- 7,500
Loss for the period ended March 31, 2013 (18,801) (18,801)
---------- ------- -------- -------- --------
BALANCE, MARCH 31, 2013 (UNAUDITED) 4,750,000 $ 4,750 $ 22,751 $(27,672) $ (171)
========== ======= ======== ======== ========
See Notes to Financial Statements
F-15
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Statement of Cash Flows
(Unaudited)
--------------------------------------------------------------------------------
May 25, 2012
Nine Months (inception)
ended through
March 31, March 31,
2013 2013
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(18,801) $(27,672)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization 9,508 10,541
Changes in operating assets and liabilities:
Increase(Decrease) in Accounts payable and accrued liabilities 645 8,388
Increase(Decrease) in Advance from Officers -- --
-------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (8,648) (8,743)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Oil and Gas Property -- (17,500)
-------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- (17,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 7,500 27,501
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 7,500 27,501
-------- --------
NET INCREASE (DECREASE) IN CASH (1,148) 1,258
CASH AT BEGINNING OF PERIOD 2,406 --
-------- --------
CASH AT END OF PERIOD $ 1,258 $ 1,258
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ --
======== ========
Income Taxes $ -- $ --
======== ========
See Notes to Financial Statements
F-16
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2013
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and cash flows at March 31, 2013, and
for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in the condensed
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's June 30,
2012 audited financial statements. The results of operations for the periods
ended March 31, 2013 and the same period last year are not necessarily
indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles 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 allow it to continue as a going concern. 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 operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
F-17
Perkins Oil & Gas Inc.
(An Exploration Stage Company)
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2013
NOTE 3 - CAPITAL STOCK
The Company's capitalization is 75,000,000 common shares with a par value of
$0.001 per share. No preferred shares have been authorized or issued.
On May 28, 2012, the Company issued a total of 4,000,000 shares of common stock
to one director for cash in the amount of $0.005 per share for a total of
$20,001
On February 1, 2013, the Company issued a total of 750,000 shares of common
stock to one director for cash in the amount of $0.01 per share for a total of
$7,500
As of March 31, 2013 the Company had 4,750,000 shares of common stock issued and
outstanding.
The stockholders' equity section of the Company contains the following classes
of capital stock as of March 31, 2013:
Common stock, $ 0.001 par value: 75,000,000 shares authorized; 4,750,000 shares
issued and outstanding.
NOTE 4 - SUBSEQUENT EVENT
In accordance with ASC 855, SUBSEQUENT EVENTS, the Company has evaluated
subsequent events through May 30, 2013, the date of available issuance of these
audited financial statements. During this period, except the disclosure in Note
4, the Company did not have any material recognizable subsequent events.
On April 30, 2013 the Company received a cash loan totaling $4,500 from Michael
Page in the form of a promissory note of $4,500. This loan is at 2% interest and
is due on May 1, 2015.
F-18
DEALER PROSPECTUS DELIVERY OBLIGATION
"UNTIL ______________, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS."
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the Offering are denoted below. Please note all amounts
are estimates other than the Commission's registration fee.
Securities and Exchange Commission registration fee $ 7
Accounting fees and expenses $ 3,500
Legal fees $ 200
Preparation and EDGAR conversion fees $ 2,100
Transfer Agent fees $ 500
Printing $ 200
--------
Total $ 6,507
========
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of Perkins Oil & Gas, Inc. allow for the indemnification of the
officers and directors in regard to their carrying out the duties of their
offices. The board of directors will make determination regarding the
indemnification of the director, officer or employee as is proper under the
circumstances if he/she has met the applicable standard of conduct set forth in
the Nevada General Corporation Law.
Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:
"1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of any fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had a reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
II-1
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals there from, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against expenses,
including attorneys fees, actually and reasonably incurred by him in connection
with the defense.
4. Any indemnification under sections 1 and 2, unless ordered by a court or
advanced pursuant to section 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
a. By the stockholders;
b. By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
c. If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
d. If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The certificate of articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this section do not affect any
rights to advancement of expenses to which corporate personnel other than
director or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:
a. Does not include any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate or articles of incorporation or any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to section 2 or for the advancement of expenses made
pursuant to section 5, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or
II-2
omission involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
b. Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
c. The Articles of Incorporation provides that "the Corporation shall
indemnify its officers, directors, employees and agents to the fullest
extent permitted by the General Corporation Law of Nevada, as amended
from time to time."
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling Perkins Oil & Gas, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities
without registration since inception. No such sales involved the use of an
underwriter; no advertising or public solicitation was involved; the securities
bear a restrictive legend; and no commissions were paid in connection with the
sale of any securities.
In June 2012, a total of 4,000,000 shares of common stock were issued in
exchange for $20,000 US, or $.005 per share. In February 2013, a total of
750,000 shares of common stock were issued in exchange for $7,500 US, or $0.01
per share. These securities were issued to J Michael Page, the officer and
director of the company.
EXHIBITS
Exhibit 3.1 Articles of Incorporation - filed previously
Exhibit 3.2 Bylaws - filed previously
Exhibit 5.1 Opinion re: Legality - filed previously
Exhibit 10.1 Perkins Lease Agreement - filed previously
Exhibit 10.2 Lease Assignment Agreement - filed previously
Exhibit 10.3 Operating Agreement - filed previously
Exhibit 23.1 Consent of counsel (see Exhibit 5) - filed previously
Exhibit 23.2 Consent of independent auditor for June 30, 2012 audited
financial statements
Exhibit 23.3 Consent of independent auditor for March 31, 2013 reviewed
financial statements
UNDERTAKINGS
a. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
II-3
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the Offering.
4. That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B (230.430B of this
chapter):
A. Each prospectus filed by the registrant pursuant to Rule
424(b)(3)shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
B. Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required by section
10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of
sale of securities in the Offering described in the
prospectus. As provided in Rule 430B, for liability purposes
of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the
securities in the registration statement to which that
prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made
in a registration statement or prospectus that is part of
the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration
statement or prospectus that was part of the registration
statement or made in any such document immediately prior to
such effective date; or
II-4
ii. If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such date of first use.
5. That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any
of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant
to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by
or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the Offering made by
the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities, arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-5
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form S-1 and authorized this registration statement
to be signed on its behalf by the undersigned, in the city of Vancouver, BC on
May 31, 2013.
Perkins Oil & Gas Inc.
/s/ J Michael Page
-------------------------------------
By: J Michael Page, Director
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
date stated.
/s/ J Michael Page May 31, 2013
--------------------------------------- ------------
J Michael Page, President & Director Date
(Principal Executive Officer, Principal
Financial Officer, Principal Accounting
Officer)
II-6