U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2011
AMERIGO ENERGY, INC.
(Exact name of small business issuer as
specified in its charter)
Delaware 20-3454263
------ ----------
(State State or other (I.R.S. Employer
jurisdiction of incorporation Identification No.)
or organization)
2580 Anthem Village Drive
Henderson, NV 89052
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(702) 399-9777
---------------------------
(Issuer's telephone number)
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. YES
[X] NO[ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T
({section}232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
YES [ ] NO[ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)
YES [ ] NO [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
29,024,824 shares of common stock, $0.001 par value, as of May 23, 2011
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION.................................................
ITEM 1. FINANCIAL STATEMENTS.................................................
CONSOLIDATED BALANCE SHEET.................................................
CONSOLIDATED STATEMENT OF OPERATIONS.......................................
STATEMENT OF STOCKHOLDER'S EQUITY..........................................
CONSOLIDATED STATEMENT OF CASH FLOWS.......................................
NOTES TO FINANCIAL STATEMENTS..............................................
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK............
ITEM 4. CONTROLS AND PROCEDURES..............................................
PART II - OTHER INFORMATION....................................................
ITEM 1. LEGAL PROCEEDINGS....................................................
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS............................
ITEM 3. DEFAULTS UPON SENIOR SECURITIES......................................
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................
ITEM 5. OTHER INFORMATION....................................................
ITEM 6. EXHIBITS.............................................................
SIGNATURES.....................................................................
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERIGO ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
RESTATED
As of As of
March 31, December 31,
2011 2010
--------- ------------
(unaudited) (audited)
ASSETS
Current assets
Cash $569 $ 372
Accounts receivable 7,359 12,416
Advances to related party 5,525 5,456
--------- ----------
Total other current assets 13,453 18,244
Property, plant and equipment
Development wells, net of depletion 2,188 151,749
Software, net 3,980 4,284
--------- ----------
Total property, plant and equipment 6,168 156,033
Other Assets
Deposits 950 950
--------- ----------
Total other assets 950 950
--------- ----------
Total assets $20,571 $ 175,227
========= ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $36,144 $ 139,935
Accounts payable - related party 152,494 201,250
Accrued payroll for related party 49,814 -
Advances from related parties 38,361 38,873
Payroll liabilities - 55,980
Judgement payable 120,000 120,000
--------- ----------
Total current liabilities 396,813 556,038
Long-term liabilities
Notes payable - related parties - 368,904
Accrued interest - related parties 38,036 38,036
--------- ----------
Total liabilities 434,849 962,978
Stockholders' (deficit)
Preferred stock (25,000,000 shares authorized
& 500,000 shares outstanding at March 31, 2011) 500 500
Common stock; $.001 par value; 100,000,000 shares authorized; 28,955,547 shares outstanding
at March 31, 2011 39,567 33,356
Additional paid-in capital 15,118,845 14,608,105
Accumulated deficit (15,573,190) (15,429,712)
--------- ----------
Total stockholders' (deficit) (414,278) (787,751)
--------- ----------
--------- ----------
Total liabilities and stockholders' (deficit) $20,571 $ 175,227
========= ==========
These condensed financial statements should be read along with the notes to
the financials which follow.
AMERIGO ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months
Ended RESTATED
March 31, 2011 March 31, 2010
-------------- --------------
Revenue
Oil revenues 18,772 37,336
Gas revenues 12,315 23,010
Rental income - 3,390
------- -------
Total Revenue 31,087 63,736
Gross Profit 31,087 63,736
Operating expenses
Lease operating expenses 19,205 33,883
Consulting expense - 10,500
Selling, general and administrative 8,197 8,139
Professional fees 147,500 117,772
Depreciation and amortization expense 305 8,099
Depletion expense 1,473 24,363
------- -------
Total operating expenses 176,680 202,756
------- -------
Loss from operations (145,593) (139,020)
Other income (expenses):
Interest expense - (6,732)
Loss on investment in GreenStart, Inc. - (42,236)
Interest income - 5,771
Other expense (157) (120,000)
Gain on extinguishment of debt 2,272 -
------- ---------
Total other income (expenses) 2,115 (163,197)
--------- ---------
Loss before provision for income taxes (143,478) (302,217)
Provision for income taxes - -
Net loss $(143,478) $(302,217)
========== ==========
Basic and diluted (loss) per common share (0.00) (0.01)
========== ==========
Basic and diluted weighted average common shares
outstanding 29,024,824 22,814,331
========== ==========
These condensed financial statements should be read along with the notes to
the financials which follow.
AMERIGO ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
3 MONTHS ENDED 3 MONTHS ENDED
3/31/11 3/31/10
------------ ----------
Cash flows from operating activities:
Net loss $(143,478) $(302,217)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock issued for services 70,000 -
Stock issued to settle debt 446,880 -
Stock issued for Oil Interest 69 -
Increase / (Decrease) in note payable settled with stock (368,904) -
Debts settled with oil interest (2,988) -
Stock issued to purchase assets 69 -
Depletion, depreciation and amortization 305 8,099
Impairment of assets - 42,236
Judgment payable - 120,000
Changes in operating assets and liabilities:
Increase in accounts receivable 5,058 (13,988)
Increase in note receivable and interest - (5,771)
Increase / (decrease) in accounts payable - 44,189
Increase / (decrease) in accounts payable - related party - (13,505)
Rounding error -
Increase / (decrease) in advances from related parties (70) 2,153
Increase / (decrease) in accrued payroll (6,678) 90,000
------------ ----------
Net cash used by operating activities $197 $ (28,804)
Cash flows from investing activities:
(Purchase) sale of oil and gas interests - 24,363
------------ ----------
Net cash used by investing activities $- $ 24,363
Cash flows from financing activities:
Loan to (from) related party - 5,179
------------ ----------
Net cash provided by financing activities $- $ 5,179
------------ ----------
Net increase in cash 197 738
Cash, beginning of period 372 570
------------ ----------
Cash, end of period 569 1,308
============ ==========
Supplementary cash flow information:
Cash payments for income taxes - -
Cash payments for interest - -
Supplementary cash flow information:
Stock issued for services 70,000 -
Oil interest used to settle debts 149,256 -
Stock issued to settle debts 446,880 -
These condensed financial statements should be read along with the notes to
the financials which follow.
AMERIGO ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
interim financial statements be read in conjunction with the financial
statements of the Company for the year ended December 31, 2010 and notes
thereto included in the Company's Form 10-K. The Company follows the same
accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
Recent pronouncements:
The Company's management has reviewed all of the FASB's Accounting Standard
Updates through March 31, 2011 and has concluded that none will have a material
impact on the Company's financial statements. Management does not believe that
any other recently issued but not yet effective accounting pronouncements, if
adopted, would have an effect on the accompanying consolidated financial
statements.
Going Concern
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has incurred
cumulative net losses of approximately $15,429,711 since its inception and
requires capital for its contemplated operational and marketing activities to
take place. The Company's ability to raise additional capital through the
future issuances of the 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 2 - RESTATEMENT OF FINANCIALS
In March 2011, the Company determined, as well as hindsight lends to confirm,
that the assets purchased during 2008 should have been impaired and/or recorded
in 2008 and then subsequently written down in 2009 and 2010. The assets were
originally recorded at the historical cost of the seller; however, the
production and collectability from the operator in Oklahoma have all proven to
be less than expected.
The following is a summary of the restatements for March 31, 2010
Increase (Decrease)
in Account/Amount
Total Assets (338,601)
Total Stockholders Equity (1,792,201)
Net Income (Loss) -
Net Income (Loss) per share -
The effect on the company's previously issued March 31, 2010 financial
statements is summarized as follows:
Balance Sheet as of March 31, 2010
Previously Increase
Reported (Decrease) Restated
Current Assets 113,912 (44,984) 68,928
Other Assets 1,874,311 (1,319,426) 554,885
--------- ----------- --------
Total Assets 2,419,514 (1,795,701) 623,813
Current Liabilities 647,202 (3,500) 643,702
Other Liabilities 385,742 - 385,742
--------- ----------- --------
Total Liabilities 1,032,944 (3,500) 1,029,444
Stockholders' Equity 1,386,570 (1,792,202) (405,632)
--------- ----------- --------
Total Liabilities and Stockholders' Deficit 2,419,514 (1,795,702) 623,812
Statement of Operations for quarter ended March 31, 2010
Previously Increase
Reported (Decrease) Restated
Net Sales 63,736 - 63,736
Operating Expenses 251,724 (48,968) 202,756
--------- --------- ---------
Income (Loss) from Operations (187,988) (48,968) (139,020)
Other income (expenses) (114,229) 48,968 (163,197)
--------- --------- ---------
Net Income (Loss) (302,217) - (302,217)
NOTE 3 - OIL AND GAS LEASES
DURING THE QUARTER ENDED MARCH 31, 2011:
On March 1, 2011 the company settled $150,361 in debt on the company books with
oil interest held by the company in leases operated by H Petro R.
For the quarter ended March 31, 2011, the Company generated royalties on
producing oil and gas properties in the amount of $31,086. For the quarter
ended March 31, 2010, the Company generated royalties on producing oil and gas
properties in the amount of $60,346.
The depletion expense for the quarter ended March 31, 2011 and 2010 was $1,473
and $24,363, respectively, was calculated based on an estimate using the
straight line method over the estimated lives of the proved interests until
production studies have been completed on the oil and gas properties.
NOTE 4 - NOTES PAYABLE
As of December 31, 2010, the Company had issued three notes payable for a total
of $373,365 as part of the purchase of certain lease oil, gas, and mineral
interests in the Justice Heirs A, B, and C leases operated by SWJN Oil Company.
The obligations were to be paid monthly for a period of five years with
interest of seven percent (7%) accruing on the outstanding balance. The monthly
payment amount is not to exceed seventy five percent (75%) of the minimum net
revenue interest (NRI) from the prior month's production.
As of March 31, 2011, the company settled all of the principle amounts on these
notes leaving only the accrued interest in the amount of $38,036.
NOTE 5 - STOCKHOLDERS' EQUITY
As of March 31, 2011, there were 29,024,824 shares of common stock outstanding
and 500,000 preferred shares outstanding.
DURING THE QUARTER ENDED MARCH 31, 2011, THE COMPANY ISSUED COMMON STOCK AS
FOLLOWS:
During the quarter ended March 31, 2011, the company issued 5,141,216 shares of
common stock to settle $446,880 in debts on the company books.
During the quarter ended March 31, 2011, the company issued 1,000,000 shares of
common stock to a consultant for services rendered and valued at $70,000.
During the quarter ended March 31, 2011, the company issued 69,277 shares of
common stock for oil interest previously purchased in 2009. These shares should
have been issued by our previous transfer agent but upon review the company
realized that they never were issued.
The debts and services above were settled at $0.07 per share which was the most
readily available and determinable stock price at the time the agreements were
reached with the parties at the beginning of the quarter.One of the settlements
of debt occured during the last week of the quarter and the most readily
available and determinable stock price at the time of this agreement was
approximately $0.32 per share.
NOTE 6 - RELATED PARTY TRANSACTIONS
As of March 31, 2011, the Company had $49,814 in accrued payroll payable to the
Company's current and former officers.
The Company has a consulting agreement with a firm controlled by the Company's
Chief Financial Officer for a fee of $3,500 per month. The consulting firm has
been engaged to assist in organizing and completing the process of filings with
the Securities and Exchange Commission and other tasks. The Company owed the
firm $152,495 as of March 31, 2011 which is included as part of Accounts
payable - related party in the accompanying financial statements.
As discussed in Note 4, the Company had issued three notes payable for a total
of $373,365 as part of the purchase of certain lease oil, gas, and mineral
interests in the Justice Heirs A, B, and C leases operated by SWJN Oil Company.
The obligations will be paid monthly for a period of five years with interest
of seven percent (7%) accruing on the outstanding balance. The monthly payment
amount is not to exceed seventy five percent (75%) of the minimum net revenue
interest (NRI) from the prior month's production. As of March 31, 2010, the
balance outstanding was $368,904 and interest had been accrued in the amount of
$38,036. A material relationship exists between Bullfrog Management, LLC and
the Company in that Bullfrog Management, LLC is managed by the wife of S.
Matthew Schultz, the former CEO of Amerigo Energy. A material relationship also
exists between Peachtree Consultants, LCC and the Company in that it is managed
by a firm owned by the CEO of Amerigo Energy, Jason F. Griffith. Jacque Lybbert
is the wife of Bruce Lybbert, a former Director of the Company. As of March 31,
2011, the company settled all of the principle amounts on these notes leaving
only the accrued interest in the amount of $38,036.
NOTE 7 - LETTER OF INTENT
On March 29, 2011, the company filed a form 8-K announcing a letter of intent
filed with the Securities and Exchange Commission related to the potential
acquisition of Grazy.com, Inc. The letter of intent indicated approximately 23
million shares of stock would be issued with (13 million at closing and 10
million based upon to be determined milestones). The Company is working through
due diligence, inclusive of the need to review audited financials statements of
Grazy.com, Inc. before a closing can take place.
NOTE 8 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through May 23, 2011, the date
which it has made its financial statements available, and has identified no
significant reportable events through that date.
NOTE 9 - COMMITMENTS
Amerigo has signed an agreement with the individual to acquire his interest in
certain oil and gas leases for $120,000, payable at $10,000 per month starting
April 1, 2010, with subsequent payments due on the 1st of each month. The term
of the note is One (1) year. The Company is offered a prepayment discount if
the Company pays $100,000 on or before Tuesday, June 1, 2010. Upon final
payment and settlement of the note, the individual will return all shares of
stock (with properly executed stock power) that he individual holds of Granite
Energy and / or Amerigo Energy, along with his entire interest in the Kunkel
lease, which is 3.20% working interest (2.54% net revenue interest), as well as
his ownership in what is know as the 4 Well Program (0.325% working interest,
0.2438% net revenue interest). As of the date of this filing, no payments have
been made on this note payable.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission this Form 10-Q,
including exhibits, under the Securities Act. You may read and copy all or any
portion of the registration statement or any reports, statements or other
information in the files at SEC's Public Reference Room located at 100 F
Street, NE., Washington, DC 20549, on official business days during the hours
of 10 a.m. to 3 p.m.
You can request copies of these documents upon payment of a duplicating fee by
writing to the Commission. You may call the Commission at 1-800-SEC-0330 for
further information on the operation of its public reference room. Our filings,
including the registration statement, will also be available to you on the
website maintained by the Commission at http://www.sec.gov.
We intend to furnish our stockholders with annual reports which will be filed
electronically with the SEC containing consolidated financial statements
audited by our independent auditors, and to make available to our stockholders
quarterly reports for the first three quarters of each year containing
unaudited interim consolidated financial statements.
The company's website address is http://www.amerigoenergy.com; however,the site
has recently come down and is being revamped to account for the updates to the
company's business plan. Our website and the information contained on that
site, or connected to that site, is not part of or incorporated by reference
into this filing.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This discussion contains forward-looking statements. The reader should
understand that several factors govern whether any forward-looking statement
contained herein will be or can be achieved. Any one of those factors could
cause actual results to differ materially from those projected herein. These
forward-looking statements include plans and objectives of management for
future operations, including plans and objectives relating to the products and
the future economic performance of the Company. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions, future business decisions, and the
time and money required to successfully complete development projects, all of
which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of those assumptions could prove inaccurate and, therefore,
there can be no assurance that the results contemplated in any of the forward-
looking statements contained herein will be realized. Based on actual
experience and business development, the Company may alter its marketing,
capital expenditure plans or other budgets, which may in turn affect the
Company's results of operations. In light of the significant uncertainties
inherent in the forward-looking statements included therein, the inclusion of
any such statement should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved.
A complete discussion of these risks and uncertainties are contained in our
Annual Financial Statements included in the Form 10-K for the fiscal year ended
December 31, 2010, as filed with the Securities and Exchange Commission on
March 31, 2011.
INTRODUCTION
The Company derives its revenues from its producing oil and gas
properties, of which the substantial majority are predominantly oil properties.
These properties consist of working interests in producing oil wells having
proved reserves. Our capital for investment in producing oil properties has
been provided by the sale of common stock to its shareholders.
The following is a discussion of the Company's financial condition, results of
operations, financial resources and working capital. This discussion and
analysis should be read in conjunction with the Company's financial statements
contained in this Form 10-Q.
OVERVIEW
RESULTS OF OPERATIONS
REVENUES
For the quarter ended March 31, 2011, the Company generated royalties on
producing oil and gas properties in the amount of $31,086. For the quarter
ended March 31, 2010, the Company generated $3,390 in revenues from the rental
income in addition to royalties on producing oil and gas properties in the
amount of $60,346.
OPERATING EXPENSES
Lease Operating - Lease operating expense for the quarter ended March 31, 2011
totaled $19,205 as compared to $33,883 for the quarter ended March 31, 2010.
The decrease is directly related to the sale of the Company's interest in some
of their leases.
Consulting- Consulting expenses were $0 for the quarter ended March 31, 2011 as
compared to $10,500 for the quarter ended March 31, 2010. The decrease was
related to the decrease in monthly fees for services performed by a company
controlled by our chief executive officer.
General and Administrative - General and administrative expenses were $8,197
for the quarter ended March 31, 2011, compared to $8,140 for the quarter ended
March 31, 2010.
Professional Fees - Professional fees for the quarter ended March 31, 2011 were
$147,500 as compared to $117,772 for the period ended March 31, 2010. The
increase was related to the increase in the use of consultants and an increase
in accounting fees.
Depreciation, Amortization, and Depletion - Depreciation and amortization
expenses were $305 for the quarter ended March 31, 2011 compared to $8,099 for
the quarter ended March 31, 2010. The decrease is directly related to the write
off of assets at year ended December 31, 2010. The depletion expense for the
quarter ended March 31, 2011 was $1,473 and was calculated based on an estimate
using the straight line method over the estimated lives of the proved interests
until production studies have been completed on the oil and gas properties.
There was $24,363 in depletion expenses for the quarter ended March 31, 2010.
The decrease is related to the sale of certain oil and gas interests during the
previous year.
OTHER INCOME AND EXPENSES
During the three months ended March 31, 2011, interest income was $0, compared
to $5,771 during three months ended March 31, 2010, representing a decrease of
$5,771. The decrease relates to the write off of the note receivable during
2010.
During the quarter ended March 31, 2011 the company realized a gain on the
extinguishment of debt in the amount of $2,272. This is related to the
settlement of debts for oil interest that took place during the quarter.
NET LOSS ATTRIBUTABLE TO COMMON STOCK
We realized a net loss of $143,478 for the quarter ended March 31, 2011,
compared to a net loss of $302,217 for the quarter ended March 31, 2010, a
decrease of $158,739. The decrease in net loss is partially attributable to a
decrease lease operating expense and depletion expense as compared to the three
months ended March 31, 2010.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2011, we had cash in the amount of $569 and a working capital
deficit of $388,885. In addition, our stockholders' deficit was $414,278 at
March 31, 2011.
Our accumulated deficit increased from $15,429,712 at December 31, 2010 to
$15,573,190 at March 31, 2011.
Our operations increased net cash of $197 during the quarter ended March 31,
2011, compared to $28,804 during the quarter ended March 31, 2010, an increase
of $29,001.
Net cash provided by investing activities was $0 for the quarter ended
March 31, 2011 and $24,363 for the quarter ended March 31, 2010.
Our financing activities provided net cash of $0 during the quarter ended March
31, 2011, compared to net cash of $5,179 during the quarter ended March 31,
2010.
INFLATION
The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a material impact on its
operations in the future.
OFF- BALANCE SHEET ARRANGEMENTS
The Company currently does not have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS
We evaluated the effectiveness of our disclosure controls and procedures as of
March 31, 2011, the end of the period covered by this Quarterly Report on Form
10-Q. This evaluation was undertaken by our Chief Executive Officer and Chief
Financial Officer, Jason F. Griffith.
Mr. Griffith serves as our principal executive officer and as our principal
accounting and financial officer.
We reviewed and evaluated the effectiveness of the design and operation of our
disclosure controls and procedures, as of the end of the fiscal quarter covered
by this report, as required by Securities Exchange Act Rule 13a-15, and
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed in our reports filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, is accumulated and communicated to management on a timely
basis, including our principal executive officer and principal financial and
accounting officer.
CONCLUSIONS
Based on this evaluation, our principal executive officer and principal
financial and accounting officer concluded that our disclosure controls and
procedures are ineffective to ensure that the information we are required to
disclose in reports that we file pursuant to the Exchange Act are recorded,
processed, summarized, and reported in such reports within the time periods
specified in the Securities and Exchange Commission's rules and forms. The
company currently working to improve all areas, inclusive of the effectiveness
of the controls.
CHANGES IN INTERNAL CONTROLS
There were no changes in our internal controls over financial reporting that
occurred during the last fiscal quarter, i.e., the three months ended March 31,
2011, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Amerigo has signed an agreement with the individual to acquire his interest in
certain oil and gas leases for $120,000, payable at $10,000 per month starting
April 1, 2010, with subsequent payments due on the 1st of each month. The term
of the note is One (1) year. The Company is offered a prepayment discount if
the Company pays $100,000 on or before Tuesday, June 1, 2010. Upon final
payment and settlement of the note, the individual will return all shares of
stock (with properly executed stock power) that he individual holds of Granite
Energy and / or Amerigo Energy, along with his entire interest in the Kunkel
lease, which is 3.20% working interest (2.54% net revenue interest), as well as
his ownership in what is know as the 4 Well Program (0.325% working interest,
0.2438% net revenue interest). As of the date of this filing, no payments have
been made on this note payable.
As of March 31, 2011, other than the lawsuit disclosed in the previous
paragraph, the Company is not a party to any pending material legal
proceeding. To the knowledge of management, no federal, state or local
governmental agency is presently contemplating any proceeding against the
Company. To the knowledge of management, no director, executive officer or
affiliate of the Company, any owner of record or beneficially of more than five
percent of the Company's Common Stock is a party adverse to the Company or has
a material interest adverse to the Company in any proceeding.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS
(a) Exhibits.
31.1 Certification of our Principal Executive Officer and Principal Financial
and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification of our Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
1350)
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 23, 2011
By: /s/ Jason F. Griffith
---------------------
Jason F. Griffith
Chief Executive Officer,
and Chief Financial Officer