Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Yes
[ ] No [x]
.
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Exchange Act. Yes [ ] No [x]
.
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Aggregate market value of
voting common equity held by non-affiliates as of March 31, 2013: $4,720,500
The number of shares outstanding
of the issuer’s common stock, $.001 par value, as of March 5, 2014 was 60,057,490 shares.
PART 1
ITEM 1. BUSINESS.
CORPORATE BACKGROUND
Pacific Oil Company is a junior energy company with established
production and assets within the center of Canada's highest reserve epicenters; the oil boom provinces of Alberta and now Saskatchewan
. Pacific Oil has recently entered into an agreement to purchase producing assets in the above listed areas of Alberta and Saskatchewan.
This purchase was facilitated using the Company’s common stock. These assets are oil-producing assets and are currently shut
in for financial reasons. Once a small financing is completed these assets can be turned back on and the Company believes that
revenues can be generated in short period of time.
Pacific Oil operates under the notion that phase changes in
commodity price cycles require different strategies and the Company will identify opportunities for growth regardless of phase.
By acquiring previously producing oil and gas properties that require only cash injection to initiate production, the Company believes
it will continue to unlock the upside potential of these acquired properties, leading to increased production and incremental reserves.
The experienced team at Pacific has the expertise and proven execution required for success in today's rapidly changing energy
sector.
Company History
The Company was originally incorporated in Nevada on December
5, 2005 as Kat Racing, Inc. On January 4, 2013, the Articles of Incorporation of the Company were amended to change the name of
the Company to Prairie West Oil & Gas, Ltd. On July 26, 2013, the Company’s Articles of Incorporation were amended to
change the name of the registrant to Pacific Oil Company.
Previous Business Model Under Kat Racing
From the Company’s
inception until the Company’s transition into the oil and natural gas business in early 2013, Kat Racing designed, manufactured,
marketed, sold and distributed custom off-road racing and recreational vehicles and provided marketing and lead services. Most
of the Company’s activity during 2012 had been in the marketing and lead generation areas due to the downturn in the economy
and the effect it has had on the market for high end off road racing vehicles.
Kat Racing’s goal was
to provide the Company’s customers with cost-efficient high quality custom-built, off-road racing and recreational vehicles.
These vehicles were assembled by an affiliate, Kat Metal Worx, Inc. Kat Metal Worx is 100% owned by Kenny Thatcher who was
previously the President of Kat Racing. The arrangement between Kat Metal Worx and Kat Racing was as follows. Kat Racing
paid for the parts and materials to build the car. Kat Metal Worx built all of the cars. There was no mark up on the materials
or parts. Kat Racing then marketed the products. The profits from the sales were to be split 50/50 between Kat
Racing and Kat Metal Worx. Kat Metal Worx, Inc. did not charge Kat Racing for any labor or overhead in building a car.
Kat Racing was engaged
in the businesses of:
(1)
|
|
Designing, manufacturing, marketing and selling custom fabricated off-road racing
and recreational vehicles to sports and recreational enthusiasts;
|
(2)
|
|
Providing a full-range of services that catered to the off-road automotive enthusiast,
including post-purchase add-on customization and the installation of additional accessories; and
|
(3)
|
|
The restoration, repair, servicing of these vehicles.
|
During its affiliation with
Kat Racing, Kat Metal built a total of 9 vehicles: 6 cars in '06, 1 in '07 and 2 cars were completed in '08.
Prairie West Oil and Gas Ltd. and the Company’s
Transition into Oil and Gas
As the market for high end off road vehicles suffered
due to the downturn in the economy, the Company’s management began to look for acquisitions and other opportunities outside
of its market. Through its contact with Anthony Sarvucci, an executive with substantial experience in the oil and natural gas sectors,
Kat Racing sought to arrange the purchase of certain oil and gas properties which were owned by Prairie West Oil and Gas Ltd.,
a Canadian company through a share exchange.
Pursuant to this transaction, the Company
changed its name from Kat Racing to Prairie West Oil and Gas Ltd. and Mr. Sarvucci was asked by the Company’s Board of
Directors to join the Company as President, in order to oversee its expansion into the oil and gas business. To secure Mr.
Sarvucci’s employment, the Company offered Mr. Sarvucci 38,100,000 on October 1, 2013 shares to help secure certain
assets the Company needed to launch its oil and gas operations.
On January 22, 2013, Prairie West Oil & Gas, Ltd. (Nevada) (“Prairie
Nevada”) entered into an exchange agreement to purchase 100% of the outstanding interests of Prairie West Oil & Gas,
Ltd. (Canada) (“Prairie Canada”) in exchange for 5,000,000 common shares of Prairie Nevada stock.
As reported in the Company’s 8-K dated July 9, 2013, due to
the Company’s inability to secure adequate financing the Exchange Agreement between the parties dated January 22, 2013 was
terminated in its entirety as the conditions for closing never occurred and the transaction was never closed. Both parties
were returned to their status before this agreement was signed. Even though the transaction did not close, Prairie Canada consented
to the Company’s continued use of the Prairie West name, and negotiations continued as both parties sought a way to make
the transaction work.
Continued Negotiations with Prairie Canada and the Emporium Group
Due to Mr. Sarvucci’s contacts in the industry,
the Company continued to pursue the acquisition of oil and gas assets. Prairie Canada owned certain assets which were mortgaged
to the Emporium Group, S.A., a Panamanian company which lent funds to purchase and drill the properties. Due to lack of additional
funding from the public markets and the closure of the Frankfurt Open Market, Prairie Canada was unable to raise the additional
funding they required to repay the Emporium loan and further develop these properties.
Therefore the Emporium Group repossessed the assets
that they had lent on and they were looking for some help in liquidating the assets they had seized. Mr. Sarvucci contacted Emporium
and was able to arrange the purchase of a minority interest in two former Prairie Canada assets.
The Company arranged the purchase of the Maidstone
heavy oil project (“Sundance Project”) and the Shackelton gas project(“Lacadena Project”) in an agreement
signed following the end of the Company’s fiscal year, on November 8, 2013,with an effective date of March 3, 2014 (the “Effective
Date”). On the Effective Date the Company will purchase the assets from Emporium using the Company’s common stock.
Sundance Project
Pacific Oil has arranged the purchase of 36% of the
Sundance Project with the November 8, 2013 agreement. Currently the Company is negotiating to acquire the other 64% of the project’s
ownership and operatorship from a bankruptcy trustee because the joint venture partner/operator on the project, Western Plains
Petroleum, Ltd., is currently in bankruptcy. Due to the bankruptcy, Western Plains’ assets are frozen, Western Plains is
not operating, and thus the project is not creating revenue. The Sundance Project’s oil wells are historically revenue generating
but currently production has ceased due to the bankruptcy of Western Plains.
Lacadena Project
With the November 8, 2013 agreement, Pacific Oil has
also arranged the purchase of 100% of the Lacadena Project. This project is a 9600 acre gas project that currently has 27 drilled
gas wells which have been temporarily taken offline, or “shut in” and money is needed to reactivate these gas wells.
As gas wells sit over time, the process to reactivate becomes more difficult as pressure testing and clean out of well bores is
important for the longevity of the wells. At this time Pacific Oil’s goal is to reactivate approximately 10 of the 27 wells
and to spend approximately $5,000 to $7,000 USD per well in that process. The Company believes this represents a small amount of
money to clean up the wells and bring them back on to production, and this is the reason the Company will continue negotiations
with the bankruptcy trustee to purchase Western Plains’ ownership and operatorship from the bankruptcy estate.
GrantThornton serves as Trustee in the bankruptcy
proceeding, which was commenced on or about August 26, 2013 in the Court of Queen’s Bench, Calgary, Canada under Case Number
25-1782064.
Operatorship of Oil and Gas Wells
Historically, Pacific
Oil has relied on other operators in the area of the wells to both generate production and to carry the required insurance necessary
to operate in this area. Most of the time, these arrangements are joint ventures in which the operators hold an ownership stake
in the property. Due to the situation with Western Plains, whose creditor issues have shut down production on two projects which
would otherwise be producing, the Board of Directors feels this presents an opportunity for Pacific Oil, and has made the decision
to apply for operatorship in Saskatchewan.
Pacific Oil Company’s Oil and Gas Business Model
1) Develop to full potential through lower risk 'developmental
drilling' the Company's current long term developmental projects.
2) Acquire oil and gas producing properties that have proven
reserves and established in-field drilling locations through a combination of cash, debt, and equity. Positive metrics and
the ability to enhance for maximum production efficiency is key. In addition, there must be the opportunity to streamline operational
costs, and overhead with the goal maximizing profits.
3) Add value and reserves through the identification of plays
and prospects which demonstrate attractive metrics and a high chance of success.
4) Focus operational efforts around today's technological
advancements so that the Company can effectively maximize return on capital invested by reducing drilling risk and enhancing ability
to cost effectively grow reserves and production volumes.
5) Keep operational costs to the lowest possible levels through
a streamlined operational and management process.
6) Continue to practice strict fiscal discipline, as the
Company’s management team is experienced enough to know that a large debt load can easily be the end of a junior energy corporation.
Pacific has been able to accomplish all it has done to date with no bank or institutional financing.
7) Continue to have strong due diligence control mechanisms
in place in regards to potential acquisitions.
8) Continue to mitigate risk through diversification and
expertise.
9) Successfully raise capital through the public markets
to further finance company goals and objectives.
10) Remain fully transparent to shareholders through open
communication, regular updates and filings.
Employees
At September 30, 2013, the Company had three full time employees
that have dedicated their time for no compensation to date. The Company’s officers and directors, had not taken any salary
as of September 30, 2013. None of its employees were represented by a collective bargaining arrangement.
The Company does not
carry key person life insurance on any of its Directorial personnel. The loss of the services of any of its executive officers
or other directors could have a material adverse effect on the business, results of operations and financial condition of the Company.
The Company's future success also depends on its ability to retain and attract highly qualified technical and managerial personnel.
There can be no assurance
that the Company will be able to retain its key managerial and technical personnel or that it will be able to attract and retain
additional highly qualified technical and managerial personnel in the future. The inability to attract and retain the technical
and managerial personnel necessary to support the growth of the Company's business, due to, among other things, a large increase
in the wages demanded by such personnel, could have a material adverse effect upon the Company's business, results of operations
and financial condition.
ITEM 1A. RISK
FACTORS.
THE OFFICERS OF THE COMPANY
ARE NOT CURRENTLY RECEIVING COMPENSATION AND MAY BE SUBJECT TO OTHER EMPLOYMENT OFFERS
The officers of the Company
are not currently receiving any compensation. Lack of compensation may make it more likely that they accept employment offers from
other firms therefore the Company will be forced to pay compensation to retain such employees. This will create additional
expenses not currently reflected in our financials.
PACIFIC OIL MANY NOT BE
ABLE TO ATTAIN PROFITABILITY WITHOUT ADDITIONAL FUNDING, WHICH MAY BE UNAVAILABLE.
The Company has limited capital
resources. Unless the Company begins to generate sufficient revenues to finance operations as a going concern, Pacific Oil
may experience liquidity and solvency problems. While the Company does not foresee such difficulties in the next 12 months,
liquidity and solvency problems may force Pacific Oil to go out of business if additional financing is not available.
COMPLIANCE WITH FEDERAL,
STATE AND LOCAL GOVERNMENT REGULATIONS EFFECTING PRODUCTION
Government Regulation
Our business is significantly affected
by foreign and domestic laws and regulations at the federal, provincial, state and local levels relating to the oil, natural gas
and mining industries, worker safety and environmental protection. Changes in these laws, including more stringent regulations
and increased levels of enforcement of these laws and regulations, could significantly affect our business. We cannot predict changes
in the level of enforcement of existing laws and regulations or how these laws and regulations may be interpreted or the effect
changes in these laws and regulations may have on us or our future operations or earnings. We also are not able to predict the
extent to which new laws and regulations will be adopted or whether such new laws and regulations may impose more stringent or
costly restrictions on our operations.
We depend on the demand for our oil
and natural gas products. This demand is affected by changing taxes, price controls and laws and regulations relating to the oil
and natural gas industry generally, including those specifically directed to oilfield operations. The adoption of laws and regulations
curtailing exploration and development drilling for oil and natural gas in areas where we operate could also adversely affect our
operations by limiting demand for our products and services. We cannot determine the extent to which our future operations and
earnings may be affected by new legislation, new regulations or changes in existing regulations or enforcement.
Our
operations are subject to numerous stringent and comprehensive foreign, federal, provincial, state and local environmental laws
and regulations governing the release or discharge of materials into the environment or otherwise relating to environmental protection.
Numerous governmental agencies issue regulations to implement and enforce these laws, for which compliance is often costly yet
critical. The violation of these laws and regulations may result in the denial or revocation of permits, issuance of corrective
action orders, modification or cessation of operations, assessment of administrative and civil penalties, and even criminal prosecution.
We believe that we are in substantial compliance with existing environmental laws and regulations and we do not anticipate that
future compliance with existing environmental laws and regulations will have a material effect on our operations. However,
there can be no assurance that substantial costs for compliance or penalties for non-compliance with these existing requirements
will not be incurred in the future. Moreover, it is possible that other developments, such as the adoption of stricter environmental
laws, regulations and enforcement policies or more stringent enforcement of existing environmental laws and regulations, could
result in additional costs or liabilities that we cannot currently quantify.
For example, in Canada, the Federal
Government in September 2010 appointed an Oil Sands Advisory Panel to review and comment upon existing scientific studies and literature
regarding water monitoring in the Lower Athabasca region and provide recommendations for improving such monitoring. The
Oil Sands Advisory Panel presented its final report to the Minister of the Environment in December 2010. In response
to this report, Environment Canada, with input from the government of Alberta through Alberta Environment, developed an environmental
monitoring plan specific to the oil sands with respect to water, air quality and biodiversity. Further, in January 2011,
the Province of Alberta established a Provincial Environmental Monitoring Panel with a mandate to recommend a world class environmental
evaluation, monitoring and reporting system, generally for the Province and specifically for the lower Athabasca Region where oil
sands are produced. This panel issued its recommendations to the Alberta Minister of the Environment in July 2011. In
2012, the governments of Canada and Alberta released the Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring that
will be phased in between 2012 and 2015. The costs of implementing this plan are to be funded by industry.
As
this new monitoring regime is implemented, the increased levels of monitoring and enforcement may increase costs for us and our
customers and reduce activity and demand for our services. Further, the Province of Alberta released its new Clean Air Strategy
in October 2012 which it proposes to implement beginning in 2013. The implementation of this strategy along with Alberta’s
continued implementation of its regulatory changes to oil and oil sands regulation may result in additional costs or liabilities
for our customers’ operations.
ENVIRONMENTAL RISK ASSOCIATED WITH PRODUCTION
LIABILITIES
Our
business operations are subject to a number of federal, state and local environmental laws and regulations. Although we believe
that our operations and facilities are in material compliance with such laws and regulations, the risk of environmental liabilities
cannot be completely eliminated. There can be no assurance that future changes in such laws, regulations or the nature of our operations
will not require us to make significant additional capital expenditures to ensure compliance in the future. Our failure to comply
with environmental laws could result in the termination of our operations, impositions of fines, or liabilities in excess of our
capital resources. We do not maintain environmental liability insurance, and if we are required to pay the expenses related to
any environmental liabilities, such expenses could have a material adverse effect on our operations.
We are subject to extensive
and costly environmental laws and regulations that may require us to take actions that will adversely affect our results of operations.
All of our operations are
significantly affected by stringent and complex foreign, federal, provincial, state and local laws and regulations governing the
discharge of substances into the environment or otherwise relating to environmental protection. We could be exposed to liabilities
for cleanup costs, natural resource damages and other damages as a result of our conduct that was lawful at the time it occurred
or the conduct of, or conditions caused by, prior operators or other third-parties. Environmental laws and regulations are subject
to change in the future, possibly resulting in more stringent requirements. If existing regulatory requirements or enforcement
policies change, we may be required to make significant unanticipated capital and operating expenditures.
Any failure by us to comply
with applicable environmental laws and regulations may result in governmental authorities taking actions against our business that
could adversely impact our operations and financial condition, including the issuance of administrative, civil and criminal penalties;
denial or revocation of permits or other authorizations; reduction or cessation in operations; and performance of site investigatory,
remedial or other corrective actions.
An accidental release
of pollutants into the environment may cause us to incur significant costs and liabilities.
There is inherent risk of
environmental costs and liabilities in our business as a result of our handling of petroleum hydrocarbons, because of air emissions
and waste water discharges related to our operations, and due to historical industry operations and waste disposal practices. Certain
environmental statutes impose joint and several, strict liability for these costs. For example, an accidental release by us in
the performance of well site services at one of our customers’ sites could subject us to substantial liabilities arising
from environmental cleanup, restoration costs and natural resource damages, claims made by neighboring landowners and other third
parties for personal injury and property damage and fines or penalties for related violations of environmental laws or regulations.
We may not be able to recover some or any of these costs from insurance.
We may be exposed to certain
regulatory and financial risks related to climate change.
Climate change is receiving
increasing attention from scientists and legislators alike. The debate is ongoing as to the extent to which our climate is changing,
the potential causes of any change and its potential impacts. Some attribute global warming to increased levels of greenhouse gases,
including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. Significant
focus is being made on companies that are active producers of depleting natural resources.
There are a number of legislative
and regulatory proposals to address greenhouse gas emissions, which are in various phases of discussion or implementation. The
outcome of foreign, U.S. federal, regional, provincial and state actions to address global climate change could result in a variety
of regulatory programs including potential new regulations, additional charges to fund energy efficiency activities, or other regulatory
actions. These actions could: result in increased costs associated with our operations;increase other costs to our business;adversely
impact overall drilling activity in the areas in which we operate;reduce the demand for carbon-based fuels; and reduce the demand
for our oil and gas.
Any adoption of these or
similar proposals by foreign, U.S. federal, regional or state governments mandating a substantial reduction in greenhouse gas emissions
could have far-reaching and significant impacts on the energy industry. Although it is not possible at this time to predict how
legislation or new regulations that may be adopted to address greenhouse gas emissions would impact our business, any such future
laws and regulations could result in increased compliance costs or additional operating restrictions, and could have a material
adverse effect on our business or demand for our services.
Currently proposed legislative
changes, including changes to tax laws and regulations, could materially, negatively impact the Company by increasing the costs
of doing business and decreasing the demand for our products.
RISKS ASSOCIATED WITH
OIL AND GAS OPERATIONS
We are susceptible to
seasonal earnings volatility due to adverse weather conditions in our region of operations.
Our operations are directly
affected by seasonal differences in weather in the areas in which we operate. A portion of our Canadian operations is conducted
during the winter months when the winter freeze in remote regions is required for exploration and production activity to occur.
The spring thaw in these frontier regions restricts operations in the spring months and, as a result, adversely affects our operations
and our ability to provide services in the second and, to a lesser extent, third quarters. As a result of these seasonal differences,
full year results are not likely to be a direct multiple of any particular quarter or combination of quarters.
We are exposed to risks
relating to subcontractors’ or joint venture partner's performance in some of our projects.
In many cases, we may joint
venture with an operator or otherwise subcontract the operations of our properties. While we seek to obtain appropriate indemnities
and guarantees from these operators or subcontractors, we remain ultimately responsible for the performance of our subcontractors.
Industrial disputes, natural disasters, financial failure or default or inadequate performance in the provision of services, or
the inability to provide services by such operators or subcontractors has the potential to materially adversely affect us.
Our inability to control
the inherent risks of identifying, acquiring and integrating additional oil and gas properties could adversely affect our operations.
Acquisitions have been, and
our management believes acquisitions will continue to be, a key element of our growth strategy. We may not be able to identify
and acquire acceptable acquisition candidates on favorable terms in the future. We may be required to incur substantial indebtedness
to finance future acquisitions and also may issue equity securities in connection with such acquisitions. Such additional debt
service requirements could impose a significant burden on our results of operations and financial condition. The issuance of additional
equity securities could result in significant dilution to stockholders.
We may not have adequate
insurance for potential liabilities.
Our operations are subject
to many hazards. We face the following risks under our insurance coverage: we may not be able to continue to obtain insurance on
commercially reasonable terms;we may be faced with types of liabilities that will not be covered by our insurance, such as damages
from environmental contamination or terrorist attacks;the dollar amounts of any liabilities may exceed our policy limits;the counterparties
to our insurance contracts may pose credit risks; and
We may incur losses from
interruption of our business that exceed our insurance coverage.
Even a partially uninsured
or underinsured claim, if successful and of significant size, could have a material adverse effect on our results of operations
or consolidated financial position.
We are subject to litigation
risks that may not be covered by insurance.
In the ordinary course of
business, we may become the subject of various claims, lawsuits and administrative proceedings seeking damages or other remedies
concerning our commercial operations, employees and other matters, including occasional claims by individuals alleging exposure
to hazardous materials as a result of our operations. We maintain insurance to cover many of our potential losses, and we are subject
to various self-retentions and deductibles under our insurance policies. It is possible, however, that a judgment could be rendered
against us in cases in which we could be uninsured and beyond the amounts that we currently have reserved or anticipate incurring
for such matters.
Our oilfield operations
involve a variety of operating hazards and risks that could cause losses.
Our
operations are subject to the hazards inherent in the oilfield business. These include, but are not limited to, equipment defects,
blowouts, explosions, fires, collisions, capsizing and severe weather conditions. These hazards could result in personal injury
and loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage and suspension
of operations. We may incur substantial liabilities or losses as a result of these hazards as part of our ongoing business operations.
The occurrence of a significant event not fully insured or indemnified against or the failure of a joint venture partner or operator
to meet its indemnification obligations to us could materially and adversely affect our results of operations and financial condition.
RELIANCE UPON KEY PERSONNEL AND NECESSITY
OF ADDITIONAL PERSONNEL
The Company will be substantially dependent upon the individuals
who comprise current management and other key personnel of the Company, including the expertise and abilities of Anthony Sarvucci
and Edward Loven As compared to many other companies, the Company does not have a depth of managerial and technical personnel.
Accordingly, there is a greater likelihood that loss of the services of any of these persons would also have a material adverse
impact upon the Company. The Company believes that its future success will also depend in large part on its ability to attract
and retain highly skilled management. Competition for such personnel is intense, and there can be no assurance that the Company
will be successful in attracting or retaining such personnel. Failure to attract and retain such personnel could have a material
adverse effect on the Company’s operations and its financial condition.
ITEM
1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM
2. PROPERTIES
The Company has ownership stakes in two properties (as discussed
above) which are oil and gas mineral leases. Our executive offices are located at 9500 W. Flamingo Rd. Suite 205, Las Vegas, NV
89147. (The space is approximately 150 square feet total) and is provided by a shareholder at no cost. We believe that this space
is adequate for our needs at this time, and we believe that we will be able to locate additional space in the future, if needed,
on commercially reasonable terms.
ITEM
3. LEGAL PROCEEDINGS
None.
ITEM
4. MINE SAFETY DISCLOSURES
None.
PART
III
ITEM
10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following table sets
forth information concerning our officers and directors as of September 30, 2013:
Name
|
|
Age
|
|
Position
|
|
Period of Service(1)
|
Anthony Sarvucci
|
|
|
43
|
|
|
President, Director
|
|
|
Since January 2013
|
|
Ed Loven
|
|
|
58
|
|
|
Secretary, Treasurer, Director
|
|
|
Since October 2013*
|
|
Notes:
(1)
|
|
A Director will hold office until the next annual meeting of the stockholders, which
shall be held in January of 2014. At the present time, Officers are appointed by the Board of Directors and will hold office until
he or she resigns or is removed from office. The maximum number of directors we are authorized to have is at the discretion
of the Board of Directors. However, in no event may we have less than one director. Although we anticipate appointing additional
directors, we have not identified any such person(s).
|
|
|
|
(2)
|
|
Former officers and directors, Kenny Thatcher and Julie
Bauman, held their respective offices/positions from December 2005 until January 2013, when they resigned. Anthony Sarvucci has
held his respective officer/director positions since January 2013. Ed Loven has held his respective officer/director positions
since October 2013 when he replaced Paula Pearce. Ms. Pearce served as a director from January 2013 until October 2013. The current
officers and directors and are expected to continue to hold their offices/positions until the next annual meeting of our stockholders.
At the date of this prospectus, we are not engaged in any transactions, either directly or indirectly, with any persons or organizations
considered promoters.
|
Background
of Directors, Executive Officers, Promoters and Control Persons
Anthony Sarvucci
–Director and President
A results driven professional with vast industry experience
in both the energy and investment banking sector Mr. Sarvucci has a proven track record of success. Mr. Sarvucci brings to Pacific
Oil a wealth of worldwide contacts and relationships established over years as the CEO of a public energy service company and more
recently as a highly sought after consultant. Mr. Sarvucci works every day towards making sure the goals of Pacific Oil are achieved
both on time and on budget.
Previous Experience:
2013 -Present
Anthony co-founded Pacific Oil and Gas Ltd. He currently
serves as the company's president and is a member of the board of directors. Pacific Oil is a producing Alberta based oil and gas
company that is well diversified in Heavy Oil, Light Oil and Natural gas. Moving forward, Anthony is focused on continually increasing
operational efficiency in regards to the company's current assets. With an eye to the future and a strong desire to lower overall
risk, Anthony is looking to expand Pacific Oil into the US oil and gas sector as soon as a deal can be found that is favorable
to both the company and its shareholders.
2004-2013
During this period Anthony acted as a highly sought after
freelance consultant. Working hand in hand with several Public companies, Anthony was successful in providing strategic financing
options through the global market place. With a focus on Europe and South America, Anthony broadened the financial possibilities
for these North American based companies and in each case was able to increase their access to capital with the goal of securing
the necessary funds for growth.
2001-2004
In 2001 Anthony founded Prelude Ventures. Prelude was an
oil and gas service company that was publicly traded on a US exchange. From 2001 to 2004 Anthony guided Prelude Ventures in the
purchase several Canadian and US based Petroleum Service and Petroleum product related companies. In 2004 Anthony stepped down
from the position of President and CEO and handed the company off to Alliance Petroleum, based out of Chicago Illinois.
1996-2001
Acted as a consultant to private companies wanting to raise
money and go public on the various US exchanges. During this time Anthony worked with numerous companies that spanned all sectors
of the market. These sectors include; entertainment, mining, petroleum, textile and numerous others. Near the end of this period
is when Anthony developed a passion for energy service and production companies.
1993-1996
Anthony worked with a private equity group based group out
of the Newport Beach California. At his time with the group his primarily duties revolved around the investment of capital in commodities
and currencies on the CME (Chicago Mercantile Exchange) on a daily basis.
1991-1993
Anthony started work as a broker’s assistant with Brentwood
National and the Camden Group. Located in Newport Beach California, Anthony sold Investments in RTC (Resolution Trust Corporation
Properties).
Ed Loven
--Director, Secretary and Treasurer
Mr. Loven has 30 years of experience in the
oil & gas industry with focus on seismic assets related to exploration and commercial exploitation. Mr. Loven was a partner
at The Sandex Group since 1985 and was directly responsible for the company’s success related to the structuring, negotiating
and completion of large seismic purchase transactions and oil and gas exploration successes. Mr. Loven has extensive industry experience
throughout the Western Canadian Basin and Territories.
Mr. Loven is presently an active member of
Discovery Drilling Funds, focusing on E & P opportunities in North America and internationally.
Mr. Loven has become an industry
leader in developing corporate relations and has worked on development teams implementing corporate structure, policy, and exploration
strategies. Mr. Loven is currently working to design in cooperation with the company a long term strategy for the further acquisition
of land and exploitation of resources.
Garry Pearce
– Advisor
A seasoned business veteran Mr. Pearce brings to Pacific
Oil over 35 years of experience in the areas of both asset and operations management.
A former Vice President of Business Development for Investicare
Group and a former Executive Director of the United Way he is fully in his comfort zone being at the helm of large scale companies
and capital intense projects.
Garry has been involved in several Junior Oil & Gas companies
in the role of a venture capitalist and adviser over the past 10 years.
Always looking to give back to the community in his free
time Garry continues to provide consultation for the Salvation Army, the United Way, and the Baptist Church with the goal of streamlining
their Social and Development programs.
Previous Experience:
2008- 2012
Garry is the co-founder and current chairman of Pacific Oil
and Gas. As the former President of the company, Mr. Pearce guided the company since its inception and helped to grow the company's
asset base to over $22,957,000 (Undiscounted) in just three short years. Still an active member of Team Pacific Oil Garry will
continue to advise and provide his expertise in the years moving forward.
2000-2008
Realtor –An active member of the Calgary Real Estate
Board
•
|
|
Worked as an associate with Premiere Realty
|
•
|
|
Specialized in Condo and single family residential in North West Calgary
|
2002 – 2005
Connecting Care – Partner and V. P. Business development
•
|
|
Established the strategic plan and direction for growth of the company
|
•
|
|
Worked with owners/developers to negotiate management contracts both for existing
facilities and proposed senior assisted living facilities
|
•
|
|
Assisted with design and set-up of operations
|
1998 – 2001
Regional Manager – Origin Adult Communities, Calgary
Responsible for three senior retirement living communities
in Calgary – Trinity Lodge, The Lodge at Valley Ridge, and Lake Bonavista Village.
This role encompassed:
•
|
|
Management and direction of the activities of the Regional Office staff
|
•
|
|
Responsibility for the day to day operations of the Calgary Origin Adult Communities
through the Lodge managers
|
•
|
|
Responsibility for all senior level Human Resource functions
|
•
|
|
Oversaw accounting functions including operating and capital budgets, inventory, accounts
receivable and accounts payable
|
•
|
|
Ensured that Origin policies were implemented on a consistent basis throughout the
region
|
1996 – 2000
General Manager – Trinity Lodge, Calgary
Provided leadership, direction and guidance based on the
organization's strategic plan and philosphy.
Duties Included
•
|
|
Budgeting, revenue and expenditures;
|
•
|
|
Provision of high quality housing services and long term operational planning to ensure
the viability of the organization;
|
•
|
|
Provides visible leadership in the daily operation of the lodge;
|
•
|
|
An effective team player, motivating the senior management group;
|
•
|
|
External representation, communication, and liaison for the organization’s goals,
and objectives.
|
1990 – 1996
Director of Development - The Baptist Union of Western Canada,
Calgary
•
|
|
Served as field staff for the Baptist Union Foundation Fund
|
•
|
|
Staff member of the Finance Committee of The Baptist Union of Western Canada
|
•
|
|
Established the denominational Development Office
|
•
|
|
Provided support services to The Baptist Leadership School Development Committees
|
•
|
|
Established the major gift and planned giving program
|
•
|
|
Co-ordinated capital funding campaigns for BUWC churches
|
•
|
|
Provided leadership in the area of stewardship education
|
•
|
|
Lead money management seminars
|
•
|
|
Lead and coordinated planned giving seminars
|
1987 -1990
Executive Director – The United Way of Regina
•
|
|
Implemented policies established by The Board of Directors
|
•
|
|
Assisted in establishing goals, objectives and program development of The United Way
|
•
|
|
Provided leadership in the areas of fund-raising, agency relations, public relations,
and community planning
|
•
|
|
Managed, staffed and administered the organization in accordance with accepted practices
|
Compensation and Audit
Committees
As we only have two board
members and given our limited operations, we do not have separate or independent audit or compensation committees. Our Board of
Directors has determined that it does not have an “audit committee financial expert,” as that term is defined in Item
407(d)(5) of Regulation S-K. In addition, we have not adopted any procedures by which our shareholders may recommend nominees to
our Board of Directors.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent
of our Common Stock (collectively, the “Reporting Persons”) to report their ownership of and transactions in our Common
Stock to the SEC. Copies of these reports are also required to be supplied to us. To our knowledge, during the fiscal year ended
September 30, 2013 the Reporting Persons complied with all applicable Section 16(a) reporting requirements.
Code
of Ethics
We have not adopted a Code
of Ethics given our limited operations. We expect that our Board of Directors following a merger or other acquisition transaction
will adopt a Code of Ethics.
ITEM
11.
EXECUTIVE COMPENSATION.
Anthony Sarvucci and Edward
Loven are our only officers and directors. They do not receive any regular compensation for their services rendered on our
behalf. They did not receive any compensation during the year ended September 30, 2013. No officer or director is required to make
any specific amount or percentage of his business time available to us.
Director Compensation
We do not currently pay any cash fees to our directors,
nor do we pay director’s expenses in attending board meetings.
Employment Agreements
We
are not a party to any employment agreements.
ITEM
12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets
forth certain information as of September 30, 2013 regarding the number and percentage of our Common Stock (being our only voting
securities) beneficially owned by each officer, director, each person (including any “group” as that term is used in
Section 13(d)(3) of the Exchange Act) known by us to own 5% or more of our Common Stock, and all officers and directors as a group.
Class
|
|
Name & Address of Certain
Beneficial Owners
|
|
Amount of Beneficial
Ownership
|
|
Percent of Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Anthony Sarvucci,
224-24881 Alicia Parkway
Laguna Hills, CA 92653
|
|
|
23,000
|
|
|
|
40
|
%
|
|
Common
|
|
|
Julie Bauman
10120 W. Flamingo Rd. Suite 205
Las Vegas, Nevada
89147
|
|
|
4,000
|
|
|
|
6.9
|
%
|
|
Common
|
|
|
Kristine Bauman
8220 Omni Court
Las Vegas, NV 89149
|
|
|
20,000
|
|
|
|
34.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Officers and Directors as a Group
|
|
|
|
|
|
|
87.1
|
%
|
*The Company’s common
stock underwent a 100 for 1 reverse split which was effective on September 16, 2013.
Unless
otherwise indicated, we have been advised that all individuals or entities listed have the sole power to vote and dispose of the
number of shares set forth opposite their names. For purposes of computing the number and percentage of shares beneficially owned
by a security holder, any shares which such person has the right to acquire within 60 days of September 30, 2013 are deemed to
be outstanding, but those shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any
other security holder. We currently do not maintain any equity compensation plans.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Our Board of Directors consists
solely of Anthony Sarvucci and Edward Loven. They are not independent as such term is defined by a national securities exchange
or an inter-dealer quotation system.
Various related party transactions
are reported throughout the notes to our financial statements and should be considered incorporated by reference herein.
ITEM
14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
M&K CPAS, PLLC is our independent registered
public accounting firm.
Audit Fees
The aggregate fees billed
by M&K CPAS, PLLC for professional services rendered for the audit of our annual financial statements and review of financial
statements included in our quarterly reports on Form 10-Q or services that are normally provided in connection with statutory and
regulatory filings were $5,250 for the fiscal years ended September 30, 2013 and 2012.
Pre-Approval Policy
We
do not currently have a standing audit committee. The above services were approved by our Board of Directors.
The accompanying notes are
an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Pacific Oil Company (the
Company) was incorporated in the State of Nevada on December 5, 2005 as Kat Racing, Inc. The Company is engaged in the principal
business activity of the identifying, acquiring, owning and operating oil and gas properties in western Canada. The Company has
not realized significant revenues to date and therefore is classified as a development stage company.
Basis of Presentation
The Company follows accounting
principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented
have been reflected herein.
The Company has adopted
a September 30 fiscal year end.
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Basic (Loss) per Common Share
Basic (loss) per share
is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common
shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number
of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no
such common stock equivalents outstanding as of September 30, 2013 and 2012.
|
|
Loss
|
|
|
|
Basic (Loss) Per Share
|
|
|
(Numerator)(Denominator)
|
|
Shares
|
|
Amount
|
For the Year Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2013
|
|
|
(31,029
|
)
|
|
|
57,490
|
|
|
$
|
(0.01
|
)
|
September 30, 2012
|
|
|
(34,453
|
)
|
|
|
5,749,000
|
|
|
$
|
(0.01
|
)
|
Revenue Recognition
The Company will recognize revenue IN ACCORDANCE
WITH Accounting Standards Codification No. 605, REVENUE RECOGNITION (“ASC-605”), ASC-605 requires that four basic
criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred;
(3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and
(4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the
collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the
product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that
the product has been delivered or no refund will be required.
PACIFIC OIL COMPANY
(formerly Kat Racing,
Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Fair Value of Financial
Instruments
The carrying amounts
of the Company’s financial instruments as of September 30, 2013 and 2012 approximate their respective fair values because
of the short-term nature of these instruments. Such instruments consist of cash, accounts payable, and related party payables.
We have adopted the FASB’s
standard concerning fair value measurement. This standard defines fair value, establishes a framework for measuring fair value
and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit
fair value measurements and accordingly, does not require any new fair value measurements. The standard clarifies that fair value
is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions
that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard
established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows.
Level 1. Observable inputs such as quoted
prices in active markets;
Level 2. Inputs, other than the quoted prices
in active markets, that are observable either directly or indirectly, and
Level 3. Unobservable inputs in which there
is little or no market data, which require the reporting entity to develop its own assumptions
The following table presents
assets that are measured and recognized at fair values as of September 30, 2013 and 2012 on a non-recurring basis:
Level 1: None
Level 2: None
Level 3: None
Total Gains (Losses):
None
Income Taxes
The Company provides
for income taxes in accordance with FASB standards, which requires the use of an asset and liability approach in accounting for
income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax
bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
FASB standards require
the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely
than not that some or all of the deferred tax assets wil not be realized.
The provision for income taxes differes from
the amounts which would be provided by applying the statutory federal income tax rate of 39% to the net loss before provision
for income taxes for the following reasons:
PACIFIC OIL COMPANY
(formerly Kat Racing,
Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
September 30, 2013
$
|
|
September 30, 2012
$
|
Income tax expense at statutory rate
|
|
|
12,101
|
|
|
|
13, 437
|
|
Common stock issued for services
|
|
|
-0-
|
|
|
|
-0-
|
|
Valuation allowance
|
|
|
(12,101
|
)
|
|
|
(13,437
|
)
|
|
|
|
|
|
|
|
|
|
Income tax expense per books
|
|
|
-0-
|
|
|
|
-0-
|
|
Net deferred tax asserts
consist of the following components as of:
|
|
|
September 30, 2013
$
|
|
|
|
September 30, 2012
$
|
|
Deferred tax asset
|
|
|
98,207
|
|
|
|
86,106
|
|
Valuation allowance
|
|
|
(98,207
|
)
|
|
|
(86,106
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset
|
|
|
-0-
|
|
|
|
-0-
|
|
Income Taxes (Continued)
Due to the change in
ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards begin to expire in 2025. The Company has
no uncertain tax provisions.
Comprehensive Income
The Company has no component
of other comprehensive income. Accordingly, net income equals comprehensive income for the period ended September 30, 2013 and
2012.
Advertising Costs
The Company’s policy
regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of September
30, 2013 and 2012.
Cash and Cash Equivalents
For purposes of the Statement
of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment purposes. There were no cash equivalents as of September
30, 2013 or 2012.
Impairment of Long-Lived Assets
The Company continually
monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable.
When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining
whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the
future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess
of the carrying amount over the fair value of the assets.
Assets to be disposed
of are reported at the lower of the carrying amount or the fair value less costs to sell.
PACIFIC OIL COMPANY
(formerly Kat Racing,
Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Concentration of Credit
Risk
Financial instruments and related items,
which potentially subject the Company to concentrations of credit risk are cash and cash equivalents. The Company places
its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of
FDIC insurance limits. As of September 30, 2013 and 2012, there were no deposits in excess of federally insured limits.
Stock-based compensation.
Stock-based awards to non-employees
are accounted for using the fair value method.
The
Company adopted provisions which require that we measure and recognize compensation expense at an amount equal to the fair value
of share-based payments granted under compensation arrangements.
The Company has adopted the
“modified prospective” method, which results in no restatement of prior period amounts. This method would apply to
all awards granted or modified after the date of adoption. In addition, compensation expense must be recognized for any unvested
stock option awards outstanding as of the date of adoption on a straight-line basis over the remaining vesting period. The Company
will calculate the fair value of options using a Black-Scholes option pricing model. The Company does not currently have any outstanding
options subject to future vesting therefore no charge is required for the periods presented. Our method also requires the benefits
of tax deductions in excess of recognized compensation expense to be reported in the Statement of Cash Flows as a financing cash
inflow rather than an operating cash inflow. In addition, our method required a modification to the Company’s calculation
of the dilutive effect of stock option awards on earnings per share. For companies that are using the “modified prospective”
method, disclosure of pro forma information for periods prior to adoption must continue to be made.
Development Stage
Company
The Company is considered
a development stage company, having limited operating revenues during the period presented, as defined by FASB standards. The
standard requires companies to report their operations, shareholders equity and cash flows since inception through the date that
revenues are generated from management’s intended operations, among other things. Management has defined inception
as December 5, 2005. Since inception, the Company has incurred a net loss of $251,813. Management has provided financial
data since December 5, 2005, “Inception”, in the financial statements.
Recent
Account Pronouncements
In July 2013, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11:
Presentation of an Unrecognized Tax
Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.
The new guidance requires
that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carryforwards. This new guidance
is effective for fiscal years and interim periods within those years beginning after December 15, 2013. We do not expect the adoption
of the new provisions to have a material impact on our financial condition or results of operations.
In February 2013, FASB issued
ASU No. 2013-02,
Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive
Income
, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses
that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated
other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net
income or other comprehensive income in financial statements. All of the information that this ASU requires already is required
to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:
PACIFIC OIL COMPANY
(formerly Kat Racing,
Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
-
|
|
Present (either on the face of the statement where net
income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated
other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in
its entirety in the same reporting period; and
|
-
|
|
Cross-reference to other disclosures currently required
under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income
in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated
other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead
of directly to income or expense.
|
The amendments apply to all
public and private companies that report items of other comprehensive income. Public companies are required to comply with these
amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December
15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material
impact on our financial position or results of operations.
In January 2013, the FASB
issued ASU No. 2013-01,
Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities
,
which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established
by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly
broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing
to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective
for preparers while still giving financial statement users sufficient information to analyze the most significant presentation
differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11,
the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU
2013-01 is not expected to have a material impact on our financial position or results of operations.
In October 2012, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements”
in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards
Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming
amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after
December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of
operations.
In August 2012, the FASB
issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff
Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting
Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs
pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial
position or results of operations.
In July 2012, the FASB issued ASU 2012-02,
“Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting
Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived
Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely
than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the
quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other
than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after
September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before
July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been
issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected
to have a material impact on our financial position or results of operations
PACIFIC OIL COMPANY
(formerly Kat Racing,
Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
2.
COMMON STOCK
On December 5, 2005,
the Company received $15,000 from its founders for 4,000,000 shares of its common stock in order to establish the Company.
On December 27, 2005,
the Company issued 300,000 shares of its common stock for services. The stock was valued at $0.001 per share, which represented
management’s best estimate of the market value of the stock. On the same date, the Company also issued 400,000 shares
of its common stock in exchange for contributed capital valued at $35,500.
On August 13, 2006, the
Company completed an unregistered private offering under the Securities Act of 1933, as amended, relying upon the exemption from
registration afforded by Rule 504 of Regulation D promulgated there under. The Company sold 1,049,000 shares of its $0.001
par value common stock at a price of $0.05 per share for $52,450 in cash. There were no common stock sales or other transactions
that took place between September 30, 2006 and September 30, 2013.
On April 25, 2013 the
board of director authorized a reverse stock split of 1 for 100. All shares amount have been adjusted for retroactively.
3.
RELATED PARTY TRANSACTIONS
The Company recognized related party income
in the amounts of $0 and $5,999 for the fiscal years ended September 30, 2013 and 2012, respectively. In 2012, this income was
from marketing services and lead generation provided to entities controlled by Mike Zulliani who was a shareholder of Kat Racing,
prior to its transition into Pacific Oil Company This was classified as other income in the income statement since the services
performed are not a part of the Company’s regular operations.
As of September 30, 2013,
the Company had received $121,079 and $100,467 as of September 30, 2013 and 2012, respectively as advances from related parties
to fund ongoing operations. The related party payable is non-interest bearing, unsecured and due upon demand. During the
fiscal year ended September 30, 2013 the company received related party borrowing of $21,790 and repayment of $1,178. The Company
has recorded imputed interest expense of $8,910 and $6,894 for the fiscal years ending September 30, 2013 and 2012, respectively,
as additional paid in capital.
4.
GOING CONCERN
The accompanying financial
statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has accumulated deficit of $251,813 as of September 30, 2013. The
Company currently has limited liquidity, and has not completed its efforts to establish a stabilized source of revenues sufficient
to cover operating costs over an extended period of time. The preceding raises substantial doubt about the Company’s
ability to continue as a going concern.
Management anticipates
that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company
intends to position itself so that it may be able to raise additional funds through the capital markets. These funds would be used
to market the Company’s products. In light of management’s efforts, there are no assurances that the Company
will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
5.
SUBSEQUENT EVENTS
Following the date of
this Report, the Company’s total issued and outstanding shares of common stock increased from a post-reverse-split total
of 57,490 as of September 30, 2013 to 60,057,490.
Of this total, 38,100,000
shares of restricted common stock was issuedto Anthony Sarvucci for services in connection with the acquisition of the Company’s
oil and gas properties, was issued to him on October 8, 2013.
Additionally, a total of 21,900,000 shares
of common stock was converted from a Promissory Note the Company issued to Julie Bauman, who served as an officer and director
of the Company from its inception in 2005 until her resignation in January of 2013.
PACIFIC OIL COMPANY
(formerly Kat Racing,
Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
5.
SUBSEQUENT EVENTS
(Continued)
The Promissory Note was issued
by the Company on July 1, 2013 for a debt which was past due as of January 1, 2013. The debt owed to Ms. Bauman was for
the reimbursement of monies she contributed to the Company from 2005 through January 1, 2013 for general and administrative
expenses, including costs for legal, accounting, and audit fees. Such monies were recorded by the Company to its auditors on
an annual basis during that time period and are shown in the Company’s prior filings. On October 9, 2013, the
Company’s Board of Directors approved the assignment of portions of the Note to other parties, and the Company entered
into Conversion Agreements with Ms. Bauman and six other parties, which resulted in conversion of such debt, and the issuance
of 21,900,000 shares of common stock.
As shown above in Item 1, Business, the agreement(s)
in which Pacific Oil negotiated the purchase of the Sundance Project and the Lacadena Project were signed on November 8, 2013,
following the end of the Company’s September 30, 2013 fiscal year.