NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Effective June 15, 2012, Morgan Creek Energy Corp. effected a name change on the OTC Bulletin Board to TagLikeMe Corp. (the “Company”). The Company is a development stage company that was organized to enter into the oil and gas industry. The Company intended to locate, explore, acquire and develop oil and gas properties in the United States and within North America. In May 2012, the Company changed its business focus and plan to developing online and mobile content using search and sharing technology.
Effective June 29, 2012, the Company completed and consummated a share exchange agreement dated May 14, 2012, as fully executed on May 24, 2012 (the "Share Exchange Agreement") with Glob Media Works Inc., a company incorporated under the laws of the State of Washington ("Glob Media"), and each of the shareholders of Glob Media (collectively the "Glob Media Shareholders"), whereby the Corporation has acquired all of the issued and outstanding shares of Glob Media in exchange for the issuance of 45,378,670 shares of its restricted common stock to the Glob Media Shareholders on a pro rata basis in accordance with each Glob Media Shareholder's respective percentage equity ownership in Glob Media (Note 3). Glob Media owns intellectual property rights to its internet cloud based software application related to online search and social media developed by Glob Media. As a result of the closing of the Share Exchange Agreement, Glob Media has become the Company's direct wholly-owned subsidiary.
Effective July 18, 2012, the Company completed a forward stock split by the issuance of 5 new shares for each 1 outstanding share of the Company’s common stock (Note 8). Unless otherwise noted, all references herein to number of shares, price per share or weighted average shares outstanding have been adjusted to reflect this stock split on a retroactive basis.
On January 7, 2014, the Board of Directors authorized an increase in the Company's shares of common stock to 4,000,000,000 shares, par value $0.001, and to create 20,000,000 shares of blank check preferred stock, par value $0.001 (Referenced in Note 15).
Effective February 10, 2014, our Board of Directors approved the designation of 2,000,000 shares of Series A preferred stock (the "Series A Preferred Stock"). The Designation of Series A Preferred Stock was filed with the Nevada Secretary of State on February 14, 2014 (Referenced in Note 15).
On February 27, 2014, the Board of Directors authorized the execution of that certain securities exchange agreement dated February 27, 2014 (the "Securities Exchange Agreement") among the Company, Nola Energy Inc., a private Nevada corporation (the “Nola”), and the shareholders of Nola who hold of record the total issued and outstanding shares of common stock of Nola. In accordance with the terms and provisions of the Securities Exchange Agreement, the Corporation shall acquire all of the issued and outstanding shares of stock of Nola from its sole shareholder, Gerard Danos, thus making Nola its wholly-owned subsidiary, in exchange for the issuance to Gerard Danos of an aggregate 10,000 shares of its Series A preferred stock of the Corporation. The shares of Series A Preferred Stock have voting rights. Gerard Danos as holder of the Series A preferred stock shall have the right to vote on any matter to be voted on by the stockholders of the Corporation (including any election or removal of the directors of the Corporation) and including to the extent specifically required by Nevada law. The voting rights of all then issued and outstanding shares of Series A preferred stock shall equal two times the voting rights of the then total issued and outstanding shares of common stock.
In further accordance with the terms and provisions of the Securities Exchange Agreement: (i) Gerard Danos shall be appointed as the President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and a member of the Board of Directors; (ii) Richard Elliot-Square shall resign from all officer positions held and retain his position as a member of the Board of Directors until both parties agree as to his resignation; (iii) execution of an executive service agreement between the Corporation and Richard Elliot-Square; and (iv) execution of a settlement agreement between the Corporation and Richard Elliot-Square regarding the settlement of $225,000 in debt due and owing to Richard Elliot Square.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
Thus, this represents a change in control of the Corporation and a change in business operations. Therefore, based on the change in control of the Corporation, the business operations of the Corporation will change to that involving oil and gas exploration and production. Nola has purchased leases to multiple oilfield properties primarily in southwest Texas.
On March 13, 2014, the Board of Directors authorized an increase in the Company's shares of common stock to 7,000,000,000 shares, par value $0.001. On March 13, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to 7,000,000,000 shares of common stock, par value $0.001 (referenced in Note 15).
Going concern
The Company commenced operations on October 19, 2004 and has not realized any revenues since inception. As of December 31, 2013, the Company has an accumulated deficit of $19,000,123. The ability of the Company to continue as a going concern is dependent on raising capital to fund ongoing operations and carry out its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. To date the Company has funded its initial operations by way of private placements of common stock and advances from related parties.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on October 19, 2004 in the State of Nevada. The Company’s fiscal year end is December 31.
Basis of presentation
These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Glob Media Works Inc., from the date of acquisition on June 29, 2012. All significant inter-company transactions and account balances have been eliminated upon consolidation.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Equipment
Equipment is recorded at cost and is depreciated over their estimated useful lives using the declining balance method at the following annual rates:
Goodwill
Costs of investments in purchased companies in excess of the underlying fair value of net assets at dates of acquisition are recorded as goodwill and assessed annually for impairment. If considered impaired, goodwill will be written down to fair value and a corresponding impairment loss recognized.
Impairment of long-lived assets
The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant areas requiring management’s estimates and assumptions are the determination of the fair value of transactions involving common stock and financial instruments. Other areas requiring estimates include deferred tax balances and asset impairment tests.
Cash and cash equivalents
For the statements of cash flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2013 and December 31, 2012 that exceeded federally insured limits.
Financial instruments
The fair value of the Company’s financial assets and financial liabilities approximate their carrying values due to the immediate or short-term maturity of these financial instruments.
Earnings (loss) per common share
Basic earnings (loss) per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings (loss) per share reflects the potential dilution of securities that could share in the earnings of the Company. Dilutive earnings (loss) per share is equal to that of basic earnings (loss) per share as the effects of stock options and warrants have been excluded as they are anti-dilutive.
As of December 31, 2013, the Company has 547,009,956 potentially if-converted dilutive shares of common stock that are derived from the outstanding convertible notes payable.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in
which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. As at December 31, 2013, the Company had net operating loss carryforwards, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for the deferred tax assets resulting from these loss carryforwards.
Stock-based compensation
On June 1, 2006, the Company adopted FASB ASC 718-10, “Compensation-Stock Compensation,” under this method, compensation cost recognized for the year ended May 31, 2007 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of May 31, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to May 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of FASB ASC 718-10. In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of FASB ASC 718-10. The results for the prior periods were not restated.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.
Recently issued accounting pronouncements
In July 2012, FASB issued ASU No. 2012-02, “Intangibles – Goodwill and Other”. This update presents an entity with the option to 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 more-likely-than-not threshold is defined as having a likelihood of more than fifty percent. ASU No. 2012-02 will be effective for annual and impairment tests performed for fiscal years beginning after 15 September 2012, with early adoption permitted. The Company does not expect the adoption of this update will have a material effect on its consolidated financial statements.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 3 – BUSINESS ACQUISITION
In accordance with ASC 805, “Business Combinations,” and in particular ASC 805-50-25, the acquisition of Glob Media ("Glob") is accounted for as an asset purchase without goodwill as Glob did not meet the definition of a business per ASC 805 at the time of the acquisition. Assets and liabilities assumed are recorded at their estimated fair values with no goodwill recorded.
Effective June 29, 2012, the Company completed and consummated a share exchange agreement dated May 14, 2012, as fully executed on May 24, 2012 (the "Share Exchange Agreement") with Glob Media, a company incorporated under the laws of the State of Washington, and each of the shareholders of Glob Media (collectively the "Glob Media Shareholders"), whereby the Company has acquired all of the issued and outstanding shares of Glob Media in exchange for the issuance of 45,378,670 shares of its restricted common stock to the Glob Media Shareholders valued at $272,272 (Note 9) on a pro rata basis in accordance with each Glob Media Shareholder's respective percentage equity ownership in Glob Media (Note 1). Glob Media owns intellectual property rights to its internet cloud based software application related to online search and social media developed by Glob Media.
The purchase price allocation has been determined as follows:
Assets acquired:
|
|
|
|
Cash and cash equivalents
|
|
$
|
187
|
|
Prepaid expenses and other
|
|
|
6,237
|
|
Equipment
|
|
|
3,143
|
|
Goodwill
|
|
|
344,461
|
|
|
|
|
|
|
Total assets acquired
|
|
$
|
354,028
|
|
|
|
|
|
|
Liabilities assumed:
|
|
|
|
|
Accounts payable
|
|
$
|
69,756
|
|
Loan payable – Due to related party
|
|
|
12,000
|
|
|
|
|
|
|
Total liabilities assumed
|
|
|
81,756
|
|
|
|
|
|
|
Net assets acquired
|
|
|
272,272
|
|
|
|
|
|
|
Purchase price
|
|
$
|
272,272
|
|
Goodwill of $344,461 was valued based on the allocation of the deemed purchase price of the shares of Glob Media over the assets acquired and liabilities assumed (Note 6). At December 31, 2013, management of the Company performed an impairment analysis on the goodwill asset. They determined that goodwill was fully impaired as the Company is currently in the process of changing its business operations from software applications to oil and gas production and therefore recognized an impairment loss of $347,302.
Unaudited Pro Forma Condensed Consolidated Financial Statements
The following unaudited pro forma condensed consolidated financial statements were prepared by management and filed in Form 8-K on June 29, 2012 as exhibit 99.2.
TagLikeMe Corp.
(A Development Stage Company)
|
Pro Forma Condensed Consolidated Balance Sheet
|
As at June 30, 2012
|
Expressed in U.S. Dollars
|
Unaudited - Prepared by Management
|
|
|
TagLikeMe
Corp.
|
|
|
Glob Media
Works Inc.
|
|
|
Pro Forma
Adjustments
and
Eliminating
Entries
(Note 3)
|
|
|
Pro Forma
Condensed Consolidated
TagLikeMe
Corp.
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
8,426
|
|
|
$
|
187
|
|
|
$
|
-
|
|
|
$
|
8,613
|
|
Prepaid expenses and other
|
|
|
974
|
|
|
|
6,237
|
|
|
|
-
|
|
|
|
7,211
|
|
TOTAL CURRENT ASSETS
|
|
|
9,400
|
|
|
|
6,424
|
|
|
|
-
|
|
|
|
15,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
-
|
|
|
|
3,143
|
|
|
|
-
|
|
|
|
3,143
|
|
Investment in subsidiary
|
|
|
272,272
|
|
|
|
-
|
|
|
|
(272,272
|
)
|
|
|
-
|
|
Goodwill
|
|
|
-
|
|
|
|
-
|
|
|
|
344,461
|
|
|
|
344,461
|
|
TOTAL ASSETS
|
|
$
|
281,672
|
|
|
$
|
9,567
|
|
|
$
|
-
|
|
|
$
|
363,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
209,674
|
|
|
$
|
69,756
|
|
|
$
|
-
|
|
|
$
|
279,430
|
|
Due to related parties
|
|
|
351,243
|
|
|
|
-
|
|
|
|
-
|
|
|
|
351,243
|
|
Loan payable
|
|
|
200,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
200,000
|
|
Loan payable – Due to related party
|
|
|
114,500
|
|
|
|
12,000
|
|
|
|
-
|
|
|
|
126,500
|
|
TOTAL CURRENT LIABILITIES
|
|
|
875,417
|
|
|
|
81,756
|
|
|
|
-
|
|
|
|
957,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
330,940
|
|
|
|
789,184
|
|
|
|
(789,184
|
)
|
|
|
330,940
|
|
Additional paid-in capital
|
|
|
13,940,520
|
|
|
|
109,083
|
|
|
|
(109,083
|
)
|
|
|
13,940,520
|
|
Accumulated deficit during the development stage
|
|
|
(14,865,205
|
)
|
|
|
(970,456
|
|
|
|
970,456
|
|
|
|
(14,865,205
|
)
|
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
(593,745
|
)
|
|
|
72,189
|
|
|
|
-
|
|
|
|
(593,745
|
)
|
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
$
|
281,672
|
|
|
$
|
9,567
|
|
|
$
|
-
|
|
|
$
|
363,428
|
|
See Accompanying Notes
(A Development Stage Company)
|
Pro Forma Condensed Consolidated Statement of Operations
|
For the Six Months Ended June 30, 2012
|
Expressed in U.S. Dollars
|
Unaudited - Prepared by Management
|
|
|
TagLikeMe
Corp.
|
|
|
Glob Media
Works Inc.
|
|
|
Pro Forma
Adjustments
and
Eliminating
Entries
(Note 3)
|
|
|
Pro Forma
Consolidated
TagLikeMe Corp.
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
$
|
-
|
|
|
$
|
629
|
|
|
$
|
-
|
|
|
$
|
629
|
|
Professional fees
|
|
|
25,173
|
|
|
|
14,753
|
|
|
|
-
|
|
|
|
39,926
|
|
Other operating expenses
|
|
|
128,193
|
|
|
|
40,424
|
|
|
|
-
|
|
|
|
168,617
|
|
Net loss from operations before other expenses
|
|
|
(153,366
|
)
|
|
|
(55,806
|
)
|
|
|
-
|
|
|
|
(209,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Abandonment expense
|
|
|
(50,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,000
|
)
|
Impairment of software development
|
|
|
-
|
|
|
|
(635,481
|
)
|
|
|
-
|
|
|
|
(635,481
|
)
|
Interest expense
|
|
|
(9,302
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,302
|
)
|
Net loss for the period
|
|
$
|
(212,668
|
)
|
|
$
|
(691,287
|
)
|
|
$
|
-
|
|
|
$
|
(903,955
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share – basic and diluted
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
$
|
-
|
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
264,916,356
|
|
|
|
|
|
|
(i)
|
|
|
|
|
310,295,026
|
|
_______________
(i.)
|
To reflect issuance of 45,378,670 shares of restricted common stock of TagLikeMe Corp. for the acquisition of all of the issued and outstanding shares of Glob Media Works Inc. (Note B).
|
See Accompanying Notes
TagLikeMe Corp.
(A Development Stage Company)
|
Notes to Pro Forma Condensed Consolidated Financial Statements
|
Expressed in U.S. Dollars
|
Unaudited - Prepared by Management
|
Note A.
Basis of Presentation
The accompanying unaudited pro forma condensed consolidated financial statements of TagLikeMe Corp. (the “Company”) as at June 30, 2012, for the year ended December 31, 2011 and for the six months ended June 30, 2012 have been compiled for illustrative purposes only for inclusion in the Form 8-K and to give effect to the share exchange between the Company and Glob Media Works Inc. (“Glob Media”), as described in Note 2.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of each entity.
These unaudited pro forma condensed consolidated financial statements include:
a)
|
An unaudited pro forma condensed consolidated balance sheet as at June 30, 2012 combining:
|
i.
|
The unaudited balance sheet of the Company as at June 30, 2012; and
|
ii.
|
The unaudited balance sheet of Glob Media as at June 30, 2012.
|
b)
|
An unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2011 combining:
|
i.
|
The audited statement of operations of the Company for the year ended December 31, 2011; and
|
ii.
|
The audited statement of operations of Glob Media for the year ended December 31, 2011.
|
c)
|
An unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2012 combining:
|
i.
|
The unaudited statement of operations of the Company for the six months ended June 30, 2012; and
|
ii.
|
The unaudited statement of operations of Glob Media for the six months ended June 30, 2012.
|
It is management’s opinion that the unaudited pro forma condensed consolidated financial statements present fairly in all material respects, the transaction described in Note 2 in accordance with accounting principles generally accepted in the United States of America. The accounting policies used in the preparation of the unaudited pro forma condensed consolidated financial statements are consistent with the accounting policies of the Company and Glob Media for the year ended December 31, 2011 and for the six months ended June 30, 2012. The pro forma adjustments, as described in Note 3, are based on available information and certain estimates and assumptions. The unaudited pro forma condensed consolidated financial statements are not intended to reflect the financial position of the Company which would have actually resulted had the proposed transactions been effected on the dates indicated. Further, the unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the results of operations that may be obtained in the future.
Certain elements of the Company and Glob Media’s statements of operations have been reclassified to provide a consistent classification format.
TagLikeMe Corp.
(A Development Stage Company)
|
Notes to Pro Forma Condensed Consolidated Financial Statements
|
Expressed in U.S. Dollars
|
Unaudited - Prepared by Management
|
Note B.
Pro-Forma Transaction
Effective June 29, 2012, the Company completed and consummated a share exchange agreement dated May 14, 2012, as fully executed on May 24, 2012 (the "Share Exchange Agreement") with Glob Media, a company incorporated under the laws of the State of Washington, and each of the shareholders of Glob Media (collectively the "Glob Media Shareholders"), whereby the Company has acquired all of the issued and outstanding shares of Glob Media in exchange for the issuance of 45,378,670 shares of its restricted common stock to the Glob Media Shareholders valued at $272,272 on a pro rata basis in accordance with each Glob Media Shareholder's respective percentage equity ownership in Glob Media (the “Acquisition”). Glob Media owns intellectual property rights to its internet cloud based software application related to online search and social media developed by Glob Media. As a result of the closing of the Share Exchange Agreement, Glob Media has become the Company's direct wholly owned subsidiary.
Note C.
Pro Forma Assumptions and Adjustments
The unaudited pro forma condensed consolidated balance sheet as at June 30, 2012 has been prepared assuming that the Acquisition occurred on June 30, 2012.
The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2011 and for the six months ended June 30, 2012 have been prepared assuming that the Acquisition occurred on January 1, 2011.
The unaudited pro forma condensed consolidated financial statements give effect to the Acquisition of the Company and the related elimination of the equity and deficit of Glob Media as follows:
a.
|
Eliminate the Company’s investment in Glob Media and reclass accounts to reflect the equity structure of the Company post Acquisition.
|
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 4 – OIL AND GAS PROPERTIES
All of the following oil and gas properties discussed below have been fully impaired.
(a) Quachita Prospect
The Company has leased various properties totalling approximately 1,971 net acres within the Quachita Trend within the state of Texas for a three year term, all expiring during the year ended 2009, in consideration for $338,353. The Company has a 100% Working Interest and a 77% N.R.I. in the leases. During 2009 the balances of the leases within the Quachita trend were allowed to lapse without renewal by the Company. Accordingly, during 2009 the Company wrote off the original cost of these leases totaling $338,353. As allowed for under the lease which included the Boggs #1 well, the Company has paid a nominal fee to maintain its rights and access to the Boggs #1 well.
Boggs #1
On June 7, 2007, the Company began drilling its first well on the Quachita Prospect (Boggs #1). During 2007 the Company began production testing and evaluation of the well. Of the five tested zones, four produced significant volumes of natural gas. As formation water was also produced with the natural gas in the tested zones, the Boggs #1 is currently under evaluation. To date, $1,336,679 had been incurred on drilling and completion expenditures on the Boggs #1. The Boggs #1 was initially privately funded with the funding investors receiving a 75% Working Interest and a 54% net revenue interest in exchange for providing 100% of all drilling and completion costs. To December 31, 2007, the Company had incurred $1,335,780 of costs on Boggs #1 and had received $759,000 in funding from the private investors. On March 24, 2008, the Company negotiated with the funding investors to acquire their interest in the well for an amount equal to the total amount of their initial investment being $759,000 and forgiveness of any additional amounts owing. Effective March 24, 2008, the Company completed this acquisition and settlement through the issuance of 12,650,000 shares of common stock at $0.063 per share.
As formation water was also produced with the natural gas in the tested zones, the Boggs #1 was fully impaired as of December 31, 2011. While there is potential to exploit lower zones or to recomplete the well under an improved gas pricing environment, an impairment charge of $891,119 was recorded against the well in 2010 and a further impairment charge of $445,560 was recorded against the well in fiscal 2011. In the year ended December 31, 2012, the Company booked an abandonment provision of $50,000 to cover the costs of plugging and abandoning the well.
(b) New Mexico Prospect
The Company to date had leased various properties totalling approximately 7,576 net acres within the state of New Mexico for a five year term in consideration for $112,883. The Company has a 100% working interest and an 84.5% N.R.I. in the leases. On October 31, 2008, the Company entered into an agreement to acquire from Westrock Land Corp. approximately 5,763 additional net acres of property within the State of New Mexico for a five year term in consideration for $388,150. The Company acquired a 100% working interest in approximately 5,763 net acres; and an 81.5% N.R.I. in the leases in approximately 5,763 net acres.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 4 – OIL AND GAS PROPERTIES (continued)
(b) New Mexico Prospect (continued)
On July 9, 2009, the Company entered into a Letter Agreement with FormCap Corp. (“FormCap”), for joint drilling on the Company’s New Mexico prospect whereby FormCap was required to drill and complete two mutually defined targets on the Company’s leases in return for an earned 50% working interest in the entire New Mexico Prospect. During the period FormCap advanced a non-refundable $100,000 deposit under the terms of the option to secure the project in connection with which the Company paid a finders’ fee of $20,000. On September 24, 2009, the Company announced that FormCap could not meet the requirements of the Option Agreement and thus forfeited its rights to the project. The Company retained the $100,000 non-refundable deposit and recorded it as a gain on expired oil and gas lease option during 2009. Due to current market conditions, the Company decided to fully impair these properties in fiscal 2011. An impairment charge of $541,646 was recorded against these properties in fiscal 2011.
(c) Oklahoma Prospect
On May 28, 2009, the Company entered into a Letter Agreement with Bonanza Resources Corporation (“Bonanza”) for an option to earn a 60% interest of Bonanza’s 85% interest in the North Fork 3-D prospect in Beaver County, Oklahoma in approximately 5,600 net acres. The parties intended to enter into a definitive agreement regarding the option and purchase of the 60% interest within 60 days. A non-refundable payment of $150,000 was paid to Bonanza, whereby Bonanza would grant the Company an exercise period of one year. As per a verbal agreement, the 60 day period was extended to August 17, 2009 and subsequently extended to October 28, 2009. On November 30, 2009 an amendment to the original agreement was made whereby the Company increased its option to acquire from 60% to 70% interest of Bonanza’s 85% interest. The Company paid $50,000 during August 2009 and on October 23, 2009 paid an additional $65,000. The balance of $35,000 was due by December 31, 2009. Subsequently on January 12, 2010 the cumulative non-refundable payment was amended from $150,000 to $125,000. On January 15, 2010 the Company made the final payment of $10,000.
In order to exercise the option, the Company will be required to incur $2,400,000 in exploration and drilling expenditures during the Option Period which will be one year. In the event that the Company does not do so the option will terminate, the Company will cease to have any interest in the prospect and Bonanza will retain the benefit of any drilling or exploration expenditures made by the Company during the Option Period. On November 30, 2009 the Agreement between Bonanza and the Company was amended whereby the Company agreed to incur the full cost of drilling one well to completion on the prospect and will have exercised its option to earn its interest in the well and the balance of the Prospect. In the event that the first well is a dry hole, the Company will have the exclusive right and option to participate in any and all further drilling programs on the Prospect and to incur the full cost of drilling a second well to acquire a 75% interest of Bonanza’s 85% interest (59.50% working interest) in both that well and the balance of the Prospect.
On January 15, 2010, the Company entered into a Participation Agreement to finance drilling and completion costs with two partners who will pay 67% of the costs of the first well in the Prospect. The Company will pay 33% of the drilling and completion costs. To December 31, 2009, the Company had accrued the entire estimated cost of the first well of $475,065 of which $316,690 was paid to the Company during the period by the new participants. Also during the period, the Company received a reduction in the well cost from the operator totaling $189,413 which resulted in amounts payable by the new participants being reduced to $190,530.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 4 – OIL AND GAS PROPERTIES (continued)
(c) Oklahoma Prospect (continued)
On February 1, 2010, the Company was informed by its operator that it had drilled the Nowlin #1-19 well to a depth of 8,836 feet. After review of the drilling logs, the Company has determined that oil is not producible in the targeted Morrow A and B sand formations. The well has been plugged and the Company wrote off the net cost of the well of $230,524 during 2010.
(d) Mississippi Prospect
Effective on August 26, 2010, the Board of Directors of the Company authorized the execution of an option agreement dated August 26, 2010 (the “Option Agreement”) with Westrock Land Corp. (“Westrock”), to purchase approximately 21,000 net acres of mineral oil and gas leases on lands located in Lamar, Jones and Forrest counties in the State of Mississippi (the “Acquired Properties”). The Company entered into the Option Agreement with Westrock, as the mineral leaseholder, and received representations that Westrock owned all right, title and interest to all depths, including the Haynesville Shale Formation pursuant to the oil and gas leases with a minimum 75% net revenue interest.
In accordance with the terms and provisions of the Option Agreement: (i) the Company agreed to issue to Westrock an aggregate of 75,000,000 restricted shares of its common stock by November 30, 2010; (ii) Westrock granted to the Company a period to conduct due diligence to October 31, 2010; and (iii) at closing, Westrock conveyed to the Company the Acquired Properties by assignment and bill of sale and other associated documentation. The Company and Westrock anticipated that the closing would occur no later than November 1, 2010.
The Company completed due diligence on the Acquired Properties and issued 75,000,000 restricted common shares, with an estimated fair value of $3,000,000, to Westrock on October 21, 2010.
Due to current market conditions, the Company decided to fully impair these properties in fiscal 2011. An impairment charge of $3,000,000 was recorded against these properties in fiscal 2011.
NOTE 5 – EQUIPMENT
Equipment consists of the following at December 31, 2013 and 2012:
|
|
2013
|
|
|
2012
|
|
Property and equipment, net
|
|
$
|
3,143
|
|
|
$
|
3,143
|
|
Less: accumulated depreciation
|
|
|
1,653
|
|
|
|
237
|
|
Property and equipment, net
|
|
$
|
1,490
|
|
|
$
|
2,906
|
|
Depreciation expense for the year ended December 31, 2013 and the year ended December 31, 2012 was $1,416 and $236, respectively.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 6 – GOODWILL
Pursuant to the share exchange Agreement with Glob Media on June 29, 2012, the Company recorded a goodwill asset of $344,461 (See Note 3 for more information). Goodwill of $344,461 was valued based on the allocation of the deemed purchase price of the shares of Glob Media over the assets acquired and liabilities assumed and will be used in the development of source code to advance the services described above. At December 31, 2013, management of the Company performed an impairment analysis on the goodwill asset. They determined that goodwill was fully impaired as the Company was in the process of changing its business focus from software applications to oil and gas production and therefore recognized an impairment loss of $347,302.
NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
On June 15, 2012, the Company agreed to settle accounts payable debts by issuing 19,000,000 common shares fair valued at $114,000 or $0.006 per share (Note 9).
NOTE 8 – STOCK SPLIT ADJUSTMENT
On July 23, 2012, the Company executed a 5 to 1 forward stock split, which was retrospectively applied to all financial statements. This adjustment did not change total stockholders’ deficit.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)
(a) Share Capital
The Company is authorized to issue 7,000,000,000 shares of common stock with a par value of $0.001 per share.
The Company has 2,000,000,000 common shares issued and 1,463,327,499 common shares outstanding as of December 31, 2013.
On April 22, 2008, the directors of the Company approved a special resolution to undertake a reverse split of the common stock of the Company on a basis of 1 new share for 3 old shares. On July 26, 2006, the directors of the Company approved a special resolution to undertake a forward split of the common stock of the Company on a basis of 2 new shares for 1 old share. On May 10, 2006, the directors of the Company approved a special resolution to undertake a forward split of the common stock of the Company on a basis of 2 new shares for 1 old share. On July 14, 2009, the directors of the Company approved a special resolution to undertake a forward split of the common stock of the Company on a basis of 2 new shares for 1 old share.
On July 16, 2012, the Company filed a Certificate of Change with the Nevada Secretary of State in relation to a five for one forward split of the Company’s common stock.
All references in these financial statements to number of common shares, price per share and weighted average number of common shares outstanding prior to the 2:1 forward stock split on May 10, 2006, the 2:1 forward split on August 8, 2006, the 3:1 reverse stock split on April 22, 2008 the 2:1 forward split on August 3, 2009, and the 5:1 forward split on July 23, 2012 have been adjusted to reflect these stock splits on a retroactive basis, unless otherwise noted.
On December 19, 2006, a founding shareholder of the Company returned 40,000,000 restricted shares of common stock to treasury and the shares were subsequently cancelled by the Company. The shares were returned to treasury for no consideration to the shareholder.
(b) Private Placements
On November 26, 2004, the Company issued 20,666,660 shares of common stock at $0.0075 per share for proceeds of $155,000.
On December 15, 2004, the Company issued 25,166,670 shares of common stock at $0.0075 per share for proceeds of $188,750 and 8,802,670 shares of common stock at $0.0375 per share for proceeds of $330,100.
On March 9, 2005, the Company issued 933,330 shares of common stock at a price of $0.0375 per share for proceeds of $35,000.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) (continued)
(b) Private Placements (continued)
On October 16, 2006, the Company completed a private placement consisting of 3,147,020 units at $0.45 per unit for proceeds of $1,416,158. Each unit consists of one common share and one non-transferable share purchase warrant exercisable at $0.90 per share for the period commencing on October 16, 2006 and ending on October 16, 2008, being the day which is the earlier of 24 months from the date of issuance of the units or 18 months from the effective date of a planned registration statement. Of this private placement, 1,877,780 of the units issued were in exchange for $845,000 previously advanced to the Company by a shareholder. The estimated fair value of the warrants at the date of grant of $592,210, which has been included in additional paid in capital, was determined using the Black-Scholes option pricing model with an expected life of 2 years, risk free interest rate of 4.49%, a dividend yield of 0% and an expected volatility of 153%.
During 2008, the Company completed a private placement consisting of 12,240,000 units at $0.075 per unit for total gross proceeds of $918,000. Each unit consists of one common share and one non-transferable share purchase warrant exercisable at $0.15 per share for a period of 12 months from the date of share issuance. A finders fee of 3.5% ($20,913) was paid on $597,500 of the private placement proceeds received.
During 2009, the Company completed a private placement consisting of 9,800,000 units at $0.025 per unit for total proceeds of $245,000. Each unit consists of one common share and one-half non-transferable share purchase warrant exercisable at $0.50 per share for a period of 12 months from the date of issuance. A finder’s fee of 7% ($3,500) was paid on $50,000 of the private placement proceeds received.
During 2010, the Company completed a private placement consisting of 17,400,000 units at $0.10 per unit for total proceeds of $1,740,000. Each unit consists of one common share and one-half non-transferable share purchase warrant exercisable at $0.20 per share for a period of 12 months from the date of issuance. A finder’s fee of 7% ($7,000) was paid on $100,000 of the private placement proceeds received. Of the total proceeds, $1,468,000 (net of finder’s fee) was received during 2009.
During 2010, the Company completed a private placement consisting of 500,000 units at $0.05 per unit for total proceeds of $25,000. Each unit consists of one common share and one-half non-transferable share purchase warrant exercisable at $0.10 per share for a period of 12 months from the date of issuance.
(c) Other issuances
On February 13, 2008, the Company issued 25,253,560 shares of common stock at a price of $0.075 per share on settlement of related party advances and accrued interest totaling $1,515,214. The difference between the estimated fair value of the common shares issued at issuance and the amount of debt settled totaling $378,803 was recorded as a finance cost during 2008.
On March 24, 2008, the Company issued 15,285,380 shares of common stock at a price of $0.063 per share on settlement of related party advances and the acquisition of the interest in the Boggs #1 well totalling $962,980. The difference between the estimated fair value of the common shares at issuance and the amount of debt settled totaling $45,857 was recorded as a finance cost during 2008.
On July 20, 2009, the Company issued 8,200,000 units at $0.025 per unit on settlement of related party advances of $200,000 and accounts payable of $5,000. Each unit consists of one common share and one non-transferable share purchase warrant exercisable at $0.05 per share for a period of 12 months from the date of issuance.
On October 21, 2010, the Company issued 75,000,000 shares of restricted common stock at a price of $0.04 per share totalling $3,000,000, pursuant to an Option Agreement with Westrock Land Corp to purchase 21,000 net acres in the Mississippi Prospect.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On June 15, 2012, the Company agreed to settle $135,000 of notes and accounts payable debts by issuing 22,500,000 common shares fair valued at $135,000 or $0.006 per share (Notes 7 and 11).
On June 29, 2012, the Company issued 45,378,670 shares of restricted common stock with a value of $272,272 related to the acquisition of Glob Media (Note 3).
On May 7, 2013, the Company issued 17,101,710 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On May 28, 2013, the Company issued 6,427,916 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On June 10, 2013, the Company issued 4,545,454 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On June 18, 2013, the Company issued 4,489,338 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On June 25, 2013, the Company issued 4,500,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On July 2, 2013, the Company issued 6,080,477 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On July 16, 2013, the Company issued 6,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On July 16, 2013, the Company issued 15,584,416 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On July 17, 2013, the Company issued 12,500,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On July 23, 2013, the Company issued 8,471,075 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On July 31, 2013, the Company issued 18,660,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On August 6, 2013, the Company issued 18,660,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) (continued)
(c) Other issuances (continued)
On August 7, 2013, the Company issued 13,500,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On August 26, 2013, the Company issued 21,360,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On August 29, 2013, the Company issued 20,360,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On September 5, 2013, the Company issued 22,300,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On September 9, 2013, the Company issued 8,913,079 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On September 13, 2013, the Company issued 23,400,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On September 20, 2013, the Company issued 24,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On September 27, 2013, the Company issued 25,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013.
On October 3, 2013, the Company issued 30,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On October 9, 2013, the Company issued 30,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On October 14, 2013, the Company issued 32,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On October 17, 2013, the Company issued 32,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On October 21, 2013, the Company issued 28,904,615 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 1, 2013, the Company issued 37,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 8, 2013, the Company issued 38,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 8, 2013, the Company issued 22,727,273 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 13, 2013, the Company issued 25,214,285 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 20, 2013, the Company issued 40,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On November 20, 2013, the Company issued 37,878,788 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 22, 2013, the Company issued 40,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On November 29, 2013, the Company issued 43,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 5, 2013, the Company issued 40,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 9, 2013, the Company issued 43,022,729 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 17, 2013, the Company issued 40,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 18, 2013, the Company issued 50,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 19, 2013, the Company issued 85,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 20, 2013, the Company issued 50,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 23, 2013, the Company issued 50,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 23, 2013, the Company issued 50,000,000 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
On December 30, 2013, the Company issued 5,785,714 common shares pursuant to a convertible promissory note. These common shares were outstanding as of December 31, 2013
Common shares issued and not yet outstanding
During the year ended December 31, 2013, the Company issued 536,672,501 common shares that are not yet outstanding as of December 31, 2013. They are as follows:
On May 31, 2013, the Company issued 83,333,333 common shares pursuant to a convertible promissory note. As of December 31, 2013, these common shares were held in escrow and not outstanding.
On June 14, 2013, the Company issued 26,339,168 common shares pursuant to a convertible promissory note. As of December 31, 2013, these common shares were held in escrow and not outstanding.
On October 31, 2013, the Company issued 150,000,000 common shares pursuant to a convertible promissory note. As of December 31, 2013, these common shares were held in escrow and not outstanding.
On November 11, 2013, the Company issued 75,000,000 common shares pursuant to a convertible promissory note. As of December 31, 2013, these common shares were held in escrow and not outstanding.
On December 18, 2013, the Company issued 202,000,000 common shares pursuant to a convertible promissory note. As of December 31, 2013, these common shares were held in escrow and not outstanding.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 10 – STOCK OPTION PLAN
On April 3, 2006, the Board of Directors of the Company ratified, approved and adopted a Stock Option Plan for the Company in the amount of 16,666,670 shares with an exercisable period up to 10 years. In the event an optionee ceases to be employed by or to provide services to the Company for reasons other than cause, any Stock Option that is vested and held by such optionee may be exercisable within up to ninety calendar days after the effective date that his position ceases. No Stock Option granted under the Stock Option Plan is transferable. Any Stock Option held by an optionee at the time of his death may be exercised by his estate within one year of his death or such longer period as the Board of Directors may determine. On April 28, 2008, the Board of Directors deemed it necessary to approve an amendment to the Stock Option Plan to an aggregate of 25,000,000 shares.
As approved by the Board of Directors, on December 12, 2006, the Company granted 6,166,680 stock options to certain officers, directors and management of the Company at $0.33 per share. The term of these options are five years. The total fair value of these options at the date of grant was estimated to be $1,527,170 and was recorded as a stock based compensation expense during 2006. The fair value of these options was estimated using the Black-Scholes option pricing model with the following assumptions: expected life of 3 years; risk free interest rate of 4.49%; dividend yield of 0% and expected volatility of 187%.
As approved by the Board of Directors on April 30, 2008, the Company granted 12,500,000 stock options to certain officers, directors and management of the Company at $0.10 per share. The term of these options are ten years. The total fair value of these options at the date of grant was estimated to be $436,955 and was recorded as a stock based compensation expense during the period. The fair value of these options was estimated using the Black-Scholes option pricing model with the following assumptions: expected life of 10 years; risk free interest rate of 3.77%; dividend yield of 0% and expected volatility of 210%.
On July 14, 2009, the Company cancelled 17,833,350 stock options to certain officers, directors and management of the Company and authorized the issuance of 15,000,000 new stock options to certain officers, directors and management of the Company at $0.05 per share. The term of the new options is ten years.
As approved by the Board of Directors on July 14, 2009, the Company granted 15,000,000 stock options to certain officers, directors and management of the Company at $0.05 per share of which 6,500,000 options were cancelled and re-issued to certain individuals and 8,500,000 were new options issued. The term of these options are ten years. The total fair value of these options at the date of grant was estimated to be $236,810 and was recorded as a stock based compensation expense during the period. The fair value of these options was estimated using the Black-Scholes option pricing model with the following assumptions: expected life of 10 years; risk free interest rate of 3.50%; dividend yield of 0% and expected volatility of 180%.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 10 – STOCK OPTION PLAN (continued)
As approved by the Board of Directors on September 1, 2009, the Company granted 1,000,000 stock options to a director of the Company at $0.078 per share. The term of these options are ten years. The total fair value of these options at the date of grant was estimated to be $99,860 and was recorded as a stock based compensation expense during the period. The fair value of these options was estimated using the Black-Scholes option pricing model with the following assumptions: expected life of 10 years; risk free interest rate of 3.38%; dividend yield of 0% and expected volatility of 198%.
As approved by the Board of Directors on December 8, 2009, the Company granted 1,000,000 stock options to a director of the Company at $0.116 per share. The term of these options are ten years. The total fair value of these options at the date of grant was estimated to be $129,800 and was recorded as a stock based compensation expense during the period. The fair value of these options was estimated using the Black-Scholes option pricing model with the following assumptions: expected life of 10 years; risk free interest rate of 3.40%; dividend yield of 0% and expected volatility of 196%.
Effective June 15, 2012, the Board of directors ratified the cancellation of 15,000,000 stock options previously granted under the Company’s Stock Option Plan.
The remaining 2,000,000 stock options awarded to two previous directors also expired during the year ended December 31, 2012.
The Company’s stock option activity for the period ended December 31, 2013 is summarized as follows:
|
|
Number of
Options
|
|
|
Weighted average exercise
Price per share
|
|
|
Weighted average remaining
In contractual life
(in years)
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2011
|
|
|
17,000,000
|
|
|
$
|
0.066
|
|
|
|
7.21
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Expired – cancelled
|
|
|
(17,000,000
|
)
|
|
|
0.066
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2012
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Expired – cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 11 – RELATED PARTY TRANSACTIONS
During 2012, $229,423 of amounts due to a former officer and director of the Company were forgiven.
Management Fees
During the years ended December 31, 2013 and 2012, management fees billed to the Company by officers and directors totaled $128,766 and $101,041, respectively. At December 31, 2013 and 2012, the balance due these related parties and unpaid fees totaled $28,136 and $9,518, respectively.
NOTE 12 – LOAN PAYABLE
During 2012, the Company received loan proceeds of $245,000 from an unrelated party pursuant to an unsecured promissory note agreement. The promissory note is due on demand and bears interest at 10% per annum. At December 31, 2013, the note principal plus accrued interest of $8,690 totaled $253,690.
During 2012, the Company received loan proceeds of $25,000 from an unrelated third party pursuant to an unsecured promissory note. The promissory note is due on demand and bears interest at a rate of 10% per annum of which a total of $1,913 has been accrued for interest as of December 31, 2013.
During 2012, the Company received loan proceeds of $60,000 from an unrelated third party pursuant to an unsecured promissory note. The promissory note is due on demand and bears interest at a rate of 10% per annum of which a total of $2,643 has been accrued for interest as of December 31, 2013.
During 2012, the Company received loan proceeds of $99,953 from an unrelated third party pursuant to an unsecured promissory note. The promissory note is due on demand and bears interest at a rate of 10% per annum of which a total of $986 has been accrued for interest as of December 31, 2013.
During 2012, the Company received loan proceeds of $39,500 from an unrelated third party pursuant to an unsecured promissory note. The promissory note is due on demand and bears interest at 10% per annum. At December 31, 2013, the note principal plus accrued interest of $3,530 totaled $43,030.
During 2012, Glob Media received loan proceeds of $50,865 from an unrelated third party pursuant to an unsecured promissory note agreement. The promissory note is due on demand and bears interest at 10% per annum. At December 31, 2013, the note principal plus accrued interest of $2,319 totaled $53,184.
During 2012, Glob Media received loan proceeds from two shareholders for $15,696 and $221 respectively. The loans are unsecured, bear no interest and have no specific repayment terms.
During the year ended December 31, 2013, the Company entered into twenty Securities Purchase Agreements with six unrelated third parties. The unrelated third parties were assigned $738,630 of the Company’s loans payable debt. Pursuant to the agreement, the terms of the debt were restructured to give convertible features, which are further described in note 13. The Company accrued interest on the loans payable in the amount of $9,600 for the year ended December 31, 2013.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 13 – CONVERTIBLE PROMISSORY NOTES
During the year ended December 31, 2013, the Company entered into twenty convertible note agreements.
On April 1, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $32,500 convertible note payable due interest at 12% per annum, unsecured, and due December 1, 2013. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 3 days leading up to the date of conversion. On November 8, 2013, Hanover Holdings,LLC exercised its option to convert $12,500 of debt into 22,727,273 common shares. On November 20, 2013, Hanover Holdings,LLC exercised its option to convert $12,500 of debt into 37,878,788 common shares. On December 9, 2013, Hanover Holdings,LLC exercised its option to convert $7,500 of debt into 43,022,728 common shares.
On April 15, 2013, Magna Group, LLC was assigned $95,000 of the Company’s note payable debt. In connection with assignment of the debt, the Company entered into a Securities Purchase Agreement with Magna Group, LLC for a $95,000 convertible note payable with interest of 12% per annum, unsecured, and due April 14, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the lowest of the three trading prices in the previous 3 days leading up to the date of conversion. On May 6, 2013, Magna Group, LLC exercised its option to convert the entire $95,000 of debt into 17,101,710 common shares.
On May 10, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $31,500 convertible note payable due interest at 12% per annum, unsecured, and due December 1, 2013. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On December 19, 2013, Hanover Holdings,LLC exercised its option to convert $18,700 of debt into 85,000,000 common shares. On December 27, 2013, Hanover Holdings,LLC exercised its option to convert $15,005 of debt into 54,563,636 common shares
On May 10, 2013, Magna Group, LLC was assigned $100,000 of the Company’s note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with Magna Group, LLC for a $100,000 convertible note payable due interest at 12% per annum, unsecured, and due May 10, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On May 28, 2013, Magna Group, LLC exercised its option to convert $35,000 of debt into 6,427,916 common shares. On June 10, 2013, Magna Group, LLC exercised its option to convert $25,000 of debt into 4,545,454 common shares. On June 18, 2013, Magna Group, LLC exercised its option to convert $20,000 of debt into 4,489,338 common shares. On June 28, 2013, Magna Group, LLC exercised its option to convert $20,000 of debt into 6,080,477 common shares.
On May 21, 2013, WHC Capital, LLC was assigned $100,000 of the Company’s note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with WHC Capital ,LLC for a $100,000 convertible note payable due interest at 10% per annum, unsecured, and due March 21, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On June 20, 2013, WHC Capital, LLC exercised its option to convert $20,378 of debt into 4,500,000 common shares. On July 16, 2013, WHC exercised its option to convert $15,840 of debt into 6,000,000 common shares. On July 17, 2013, WHC exercised its option to convert $27,500 of debt into 12,500,000 common shares. On August 7, 2013, WHC exercised its option to convert $24,750 of debt into 13,500,000 common shares. On September 9, 2013,WHC exercised its option to convert $12,419 of debt into 8,913,079 common shares.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On May 31, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $31,500 convertible note payable due interest at 12% per annum, unsecured, and due January 31, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
On May 31, 2013, Magna Group, LLC was assigned $50,000 of the Company’s note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with Magna Group, LLC for a $50,000 convertible note payable due interest at 12% per annum, unsecured, and due January 31, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On July 16, 2013, Magna exercised its option to convert $30,000 of debt into 15,584,416 common shares. On July 23, 2013, Magna exercised its option to convert $20,000 of debt plus $500 in interest into 8,471,075 common shares.
On June 14, 2013, the Company entered into a Securities Purchase Agreement with WHC Capital, LLC for a $45,000 convertible note payable due interest at 10% per annum, unsecured, and due May 21, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 55% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On December 27, 2013, WHC Capital, LLC exercised its option to convert $6,670 of debt into 26,339,167 common shares
On July 24, 2013, CP-US Income Group, LLC was assigned $100,000 of the Company’s note payable debt and $6,545 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $106,545 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On August 26, 2013, CP-US Income Group, LLC exercised its option to convert $8,162 of debt into 5,829,736 common shares. On September 5, 2013, CP-US Income Group, LLC exercised its option to convert $27,875 of debt into 22,300,000 common shares. On September 13, 2013, CP-US Income Group, LLC exercised its option to convert $23,400 of debt into 23,400,000 common shares. On September 20, 2013, CP-US Income Group, LLC exercised its option to convert $20,400 of debt into 24,000,000 common shares. On September 27, 2013, CP-US Income Group, LLC exercised its option to convert $18,750 of debt into 25,000,000 common shares. On October 3, 2013, CP-US Income Group LLC exercised its option to convert $7,958 of debt into 11,369,229 common shares.
On July 24, 2013, CP-US Income Group, LLC was assigned $25,000 of the Company’s note payable debt and $3,303 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $28,303 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On October 17, 2013, CP-US Income Group LLC exercised its option to convert $8,161 of debt into 12,555,492 common shares.
On July 24, 2013, CP-US Income Group, LLC was assigned $60,000 of the Company’s note payable debt and $5,980 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $65,980 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On October 3, 2013, CP-US Income Group LLC exercised its option to convert $13,042 of debt into 18,630,771 common shares. On October 9, 2013, CP-US Income Group LLC exercised its option to convert $19,500 of debt into 30,000,000 common shares. On October 14, 2013, CP-US Income Group LLC exercised its option to convert $20,800 of debt into 32,000,000 common shares. On October 17, 2013, CP-US Income Group LLC exercised its option to convert $12,639 of debt into 19,444,508 common shares.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On July 24, 2013, CP-US Income Group, LLC was assigned $75,000 of the Company’s note payable debt and $35,801 in accrued interest on that note payable debt. In connection with the assignment of debt, the Company entered into a Securities Purchase Agreement with CP-US Income Group, LLC for a $110,801 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion. On July 31, 2013, CP-US Income Group, LLC exercised its option to convert $32,655 of debt into 18,660,000 common shares. On August 6, 2013, CP-US Income Group, LLC exercised its option to convert $27,900 of debt into 18,660,000 common shares. On August 26, 2013, CP-US Income Group, LLC exercised its option to convert $21,742 of debt into 15,530,264 common shares. On August 29, 2013, CP-US Income Group, LLC exercised its option to convert $28,504 of debt into 20,360,000 common shares.
On July 24, 2013, the Company entered into a Securities Purchase Agreement with CP-US Income LLC for a $80,000 convertible note payable due interest at 10% per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
On September 26, 2013, the Company entered into a Securities Purchase Agreement with WHC Capital, LLC for a $25,000 convertible note payable due interest at 10% per annum, unsecured, and due September 26, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
On October 31, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings LLC for a $14,000 convertible note payable due interest at 12% per annum, unsecured, and due on October 31, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
On November 1, 2013, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC for a $133, 705 convertible promissory note payable due interest at 8 % per annum, unsecured, and due November 1, 2014. The $133,705 of debt includes $80,000 in debt assigned from CP-US Income Group pursuant to its convertible promissory note dated July 24, 2013. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 20 trading days leading up to the date of conversion.
On November 1, 2013, IBC Funds, LLC exercised its option to convert $19,525 of debt into 37,000,000 common shares. On November 8, 2013, IBC Funds, LLC exercised its option to convert $17,100 of debt into 38,000,000 common shares. On November 12, 2013, IBC Funds, LLC exercised its option to convert $8,825 of debt into 25,214,285 common shares. On November 20, 2013, IBC Funds,, LLC exercised its option to convert $12,000 of debt into 40,000,000 common shares. On November 22, 2013, IBC Funds, LLC exercised its option to convert $12,000 of debt into 40,000,000 common shares. On November 29, 2013, IBC Funds, LLC exercised its option to convert $10,750 of debt into 43,000,000 common shares. On December 5, 2013, IBC Funds, LLC exercised its option to convert $8,000 of debt into 40,000,000 common shares. On December 17, 2013, IBC, LLC exercised its option to convert $8,000 of debt into 40,000,000 common shares. On December 18, 2013, IBC Funds, LLC exercised its option to convert $10,000 of debt into 50,000,000 common shares. On December 20, 2013, IBC Funds, LLC exercised its option to convert $10,000 of debt into 50,000,000 common shares. On December 23, 2013, IBC Funds, LLC exercised its option to convert $10,000 of debt into 50,000,000 common shares. On December 30, 2013, IBC Funds, LLC exercised its option to convert $1,157 of debt into 5,785,715 common shares.
On November 11, 2013, the Company entered into a Securities Purchase Agreement with Hanover Holdings I, LLC for a $9,000 convertible promissory note payable due interest at 12 % per annum, unsecured, and due November 11, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 20 trading days leading up to the date of conversion.
On November 21, 2013, the Company entered into a Securities Purchase Agreement with WHC Capital LLC for a $5,000 convertible note payable due interest at 10% per annum, unsecured, and due on November 21, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On December 17, 2013, the Company entered into a Securities Purchase Agreement with Tidepool LLC for a $21,000 convertible note payable due interest at 8% per annum, unsecured, and due on July 17, 2014. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 51% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
On December 10, 2013, Tidepool LLC was assigned $41,000 of the Company’s notes payable debt. In connection with assignment of the debt, the Company entered into a Securities Purchase Agreement with Tidepool LLC for a convertible note of $41,000 due interest at 10 % per annum, unsecured, and due on January 1. 2015. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 75% of the market price, calculated as the average of the lowest trading prices in the previous 5 days leading up to the date of conversion.
Conversion of convertible debt
In the year ended December 31, 2013, Magna Group, LLC converted $245,000 of convertible debt and $900 of accrued interest into 62,700,386 common shares, Hanover Holdings LLC converted $64,000 of convertible debt and $4,170 of accrued interest into 243,192,425 common shares, WHC Capital, LLC converted $100,000 of convertible debt and $7,646 of accrued interest into 71,752,246 common shares, CP-US Income LLC converted $260,000 of convertible debt and $51,629 of accrued interest into 326,644,615 common shares, IBC Funds LLC converted $127,357 of convertible debt into 459,000,000 common shares and Tidepool converted $5,000 of convertible debt into 50,000,000 common shares.
The following table summarizes the total outstanding principal on convertible notes payable:
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Convertible Notes Payable - IBC Funds LLC
|
|
$
|
6,348
|
|
|
$
|
-
|
|
Convertible Notes Payable - Hanover Holdings I, LLC
|
|
|
54,500
|
|
|
|
-
|
|
Convertible Notes Payable - WHC Capital, LLC
|
|
|
68,240
|
|
|
|
-
|
|
Convertible Notes Payable - Tidepool
|
|
|
57,000
|
|
|
|
-
|
|
Convertible Notes Payable - CP-US Income, LLC
|
|
|
1,355
|
|
|
|
-
|
|
Total Convertible Notes Payable
|
|
$
|
187,443
|
|
|
$
|
-
|
|
For the years ended December 31, 2013 and 2012, the Company recorded interest expense related to the convertible notes in the amount of $4,274 and $0.
Derivative liability
At December 31, 2013 and December 31, 2012, the Company had $3,114,841 and $0 in derivative liability pertaining to the outstanding convertible notes.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 14 – INCOME TAXES
The Company has adopted FASB ASC 740-10, “Income Taxes”. As of December 31, 2013, and 2012 the Company had net operating loss carry forwards of approximately $7,867,943 and $7,470,219 respectively that may be available to reduce future years’ taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.
Components of net deferred tax assets, including a valuation allowance, are as follows at December 31:
|
|
2013
|
|
|
2012
|
|
Deferred tax assets:
|
|
|
|
|
|
|
Net operating loss carryforward
|
|
$
|
7,867,943
|
|
|
$
|
7,470,219
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
|
4,539,894
|
|
|
|
4,398,597
|
|
Less: Valuation Allowance
|
|
|
(4,539,894
|
)
|
|
|
(4,398,597
|
)
|
|
|
|
|
|
|
|
|
|
Net Deferred Tax Assets
|
|
$
|
-
|
|
|
$
|
-
|
|
The valuation allowance for deferred tax assets as of December 31, 2013 and 2012 was $4,539,894 and $4,398,597 respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would be realized as of December 31, 2013 and 2012.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 14 – INCOME TAXES (continued)
Reconciliation between the statutory rate and the effective tax rate is as follows at December 31:
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
Federal statutory tax rate
|
|
|
(35.0
|
)%
|
|
|
(35.0
|
)%
|
Change in valuation allowance
|
|
|
35.0
|
%
|
|
|
35.0
|
%
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
NOTE 15 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that other than listed below, no material subsequent events exist.
1.
|
On January 10, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC for a $175,909 convertible promissory note payable due interest at 10 % per annum, unsecured, and due on demand. The note is convertible into common shares of the Company at any time from the date of issuance at a conversion rate of 50% of the market price, calculated as the average of the lowest trading prices in the previous 20 trading days leading up to the date of conversion.
|
2.
|
From January 1, 2014 to the April 11, 2014, the Company issued the following common shares pursuant to the conversion of convertible promissory notes;
|
On January 10, 2014, IBC Funds LLC exercised its option to convert $2,000 of debt into 10,000,000 common shares.
On January 13, 2014, Hanover Holdings LLC exercised its option to convert $15,000 of debt into 68,181,819 common shares.
On January 14, 2014, WHC Capital LLC exercised its option to convert $13,117 of debt into 51,104,832 common shares.
On January 15, 2014, IBC Funds LLC exercised its option to convert $9,000 of debt into 60,000,000 common shares.
On January 21, 2014, WHC Capital LLC exercised its option to convert $15,785 of debt into 86,100,000 common shares.
On January 22, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On January 22, 2014, Hanover Holdings LLC exercised its option to convert $9,000 of debt into 81,818,182 common shares.
On January 24, 2014, IBC Funds LLC exercised its option to convert $7,000 of debt into 70,000,000 common shares.
On January 28, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On January 30, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On January 30, 2014, WHC Capital LLC exercised its option to convert $8,800 of debt into 80,000,000 common shares.
On February 3, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 4, 2014, Hanover Holdings LLC exercised its option to convert $9,780 of debt and $$2,280 in accrued interest into 88,909,091 common shares.
On February 7, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 10, 2014, WHC Capital LLC exercised its option to convert $3,028 of debt and $2,490 in accrued interest into 27,524,000 common shares.
On February 13, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 14, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 18, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 19, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 20, 2014, Tide Pool Ventures Corporation exercised its option to convert $11,250 of debt into 150,000,000 common shares.
On February 21, 2014, IBC Funds LLC exercised its option to convert $8,800 of debt into 88,000,000 common shares.
On February 25, 2014, IBC Funds LLC exercised its option to convert $13,900 of debt into 139,000,000 common shares.
On February 26, 2014, Tide Pool Ventures Corporation exercised its option to convert $7,750 of debt into 103,333,333 common shares.
On March 13, 2014, IBC Funds LLC exercised its option to convert $10,500 of debt into 70,000,000 common shares.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On March 20, 2014, IBC Funds LLC exercised its option to convert $10,500 of debt into 70,000,000 common shares.
On March 24, 2014, Tide Pool Ventures Corporation exercised its option to convert $12,000 of debt into 160,000,000 common shares.
On March 25, 2014, IBC Funds LLC exercised its option to convert $17,000 of debt into 170,000,000 common shares.
Common shares issued and not yet outstanding
On January 3, 2014, the Company issued 95,436,364 common shares pursuant to a convertible promissory note. As of April 14, 2014, these common shares were held in escrow and not outstanding.
On March 4, 2014, the Company issued 46,666,667 common shares pursuant to a convertible promissory note. As of April 14, 2014, these common shares were held in escrow and not outstanding.
On March 26, 2014, the Company issued 42,000,000 common shares pursuant to a convertible promissory note. As of April 14, 2014, these common shares were held in escrow and not outstanding.
3.
|
Increase in Authorized Common and Preferred Stock
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On January 7, 2014, the Board of Directors authorized an increase in the Company's shares of common stock to 4,000,000,000 shares, par value $0.001, and to create 20,000,000 shares of blank check preferred stock, par value $0.001. On January 9, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to 4,000,000,000 shares of common stock, par value $0.001, and to create the 20,000,000 shares of blank check preferred stock, par value $0.001 (the “Increase in Authorized”). In accordance with the terms and provisions of the Certificate of Amendment, the Board of Directors is authorized to divide the 20,000,000 shares of preferred stock from time to time into one or more series, and to determine or change by resolution for each such series its designation, the number of shares of such series, the powers, preferences and rights and the qualifications, limitations or restrictions for the shares of such series.
The Increase in Authorized was effective with the Nevada Secretary of State on January 9, 2014 when the Certificate of Amendment was filed. The Increase in Authorized was approved by the Board of Directors and the shareholders holding a majority of the total issued and outstanding shares of common stock on January 7, 2014.
Effective February 10, 2014, the Board of Directors of TagLikeMe Corp., a Nevada corporation (the “Company”) approved that certain designation of 2,000,000 shares of Series A preferred stock (the "Series A Preferred Stock"). The Designation of Series A Preferred Stock was filed with the Nevada Secretary of State on February 14, 2014. The face value of each share of Series A Preferred Stock is $4.00. The foregoing is a summary description of the rights and preferences of the Series A Preferred Stock and does not purport to be complete and is qualified in its entirety by reference to the Designation of Series A Preferred Stock, a form of which is filed hereto as Exhibit 3.2 to this Current Report on Form 8-K and incorporated by reference herein.
On March 13, 2014, the Board of Directors authorized an increase in the Company's shares of common stock to 7,000,000,000 shares, par value $0.001. On March 13, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to 7,000,000,000 shares of common stock, par value $0.001, (the “Increase in Authorized”). The Increase in Authorized was effective with the Nevada Secretary of State on March 13, 2014 when the Certificate of Amendment was filed. The Increase in Authorized was approved by the Board of Directors and the shareholders holding a majority of the total issued and outstanding shares of common stock on March 13, 2014.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
Series A Preferred Stock
The shares of Series A Preferred Stock have certain dividend rights. The holders of the Series A Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors out of funds legally available for such purpose, cash dividends (“Dividends”). So long as any Series A Preferred Stock shall remain outstanding: (i) no dividends whatsoever shall be declared or paid upon, nor shall any distribution be made upon, any shares of any other class of stock of the Company, other than a dividend or distribution payable in Common Stock, and (ii) no shares of any class of stock of the Company shall be redeemed by the Company or purchased or otherwise acquired by the Company or any affiliate thereof, unless the Company is current with the dividends set forth above.
The shares of Series A Preferred Stock have voting rights. The holders of the Series A Preferred Stock shall have the right to vote on any matter to be voted on by the stockholders of the Company (including any election or removal of the directors of the Company) and including to the extent specifically required by Nevada law. The voting rights of all then issued and outstanding shares of Series A Preferred Stock shall equal two times the voting rights of the then total issued and outstanding shares of common stock. Each holder of Series A Preferred Stock shall have that number of votes based on the percentage of equity holdings of the Series A Preferred Stock.
The shares of Series A Preferred Stock shall be convertible, at any time, and/or from time to time, into the number of shares of the Company’s common stock, par value $0.001 per share, equal to the price of the Series A Preferred Stock, divided by the par value of the common stock, subject to adjustment as may be determined by the Board of Directors from time to time (the “Conversion Rate”). For example, assuming a $4.00 price per share of Series A Preferred Stock, and a par value of $0.001 per share for common stock, each share of Series A Preferred Stock would be convertible into 4,000 shares of common stock. Such conversion shall be deemed to be effective on the business day (the “Conversion Date”) following the receipt by the Company of written notice from the holder of the Series A Preferred Stock of the holder’s intention to convert the shares of Series A Stock, together with the holder’s stock certificate or certificates evidencing the Series A Preferred Stock to be converted.
The Company may redeem the Series A Preferred Stock at $0.001 per share by providing a five day written notice to the shareholders of the Series A Preferred Stock. In the event the Company provides the Notice of Redemption, the holders of record of the Series A Preferred Stock will have five business days from date of Notice of Redemption to exercise their conversion rights in accordance with above.
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Securities Exchange Agreement with Nola
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On February 27, 2014, the Board of Directors authorized the execution of that certain securities exchange agreement dated February 27, 2014 (the "Securities Exchange Agreement") among the Company, Nola Energy Inc., a private Nevada corporation (the “Nola”), and the shareholders of Nola who hold of record the total issued and outstanding shares of common stock of Nola. In accordance with the terms and provisions of the Securities Exchange Agreement, the Corporation shall acquire all of the issued and outstanding shares of stock of Nola from its sole shareholder, Gerard Danos, thus making Nola its wholly-owned subsidiary, in exchange for the issuance to Gerard Danos of an aggregate 10,000 shares of its Series A preferred stock of the Corporation. The shares of Series A Preferred Stock have voting rights. Gerard Danos as holder of the Series A preferred stock shall have the right to vote on any matter to be voted on by the stockholders of the Corporation (including any election or removal of the directors of the Corporation) and including to the extent specifically required by Nevada law. The voting rights of all then issued and outstanding shares of Series A preferred stock shall equal two times the voting rights of the then total issued and outstanding shares of common stock.
TAGLIKEME CORP.
(formerly Morgan Creek Energy Corp.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
On February 27, 2014, the Board of Directors authorized the execution of that certain securities exchange agreement dated February 27, 2014 (the "Securities Exchange Agreement") among the Company, Nola Energy Inc., a private Nevada corporation (the “Nola”), and the shareholders of Nola who hold of record the total issued and outstanding shares of common stock of Nola. In accordance with the terms and provisions of the Securities Exchange Agreement, the Corporation shall acquire all of the issued and outstanding shares of stock of Nola from its sole shareholder, Gerard Danos, thus making Nola its wholly-owned subsidiary, in exchange for the issuance to Gerard Danos of an aggregate 10,000 shares of its Series A preferred stock of the Corporation. The shares of Series A Preferred Stock have voting rights. Gerard Danos as holder of the Series A preferred stock shall have the right to vote on any matter to be voted on by the stockholders of the Corporation (including any election or removal of the directors of the Corporation) and including to the extent specifically required by Nevada law. The voting rights of all then issued and outstanding shares of Series A preferred stock shall equal two times the voting rights of the then total issued and outstanding shares of common stock.
In further accordance with the terms and provisions of the Securities Exchange Agreement: (i) Gerard Danos shall be appointed as the President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and a member of the Board of Directors; (ii) Richard Elliot-Square shall resign from all officer positions held and retain his position as a member of the Board of Directors until both parties agree as to his resignation; (iii) execution of an executive service agreement between the Corporation and Richard Elliot-Square; and (iv) execution of a settlement agreement between the Corporation and Richard Elliot-Square regarding the settlement of $225,000 in debt due and owing to Richard Elliot Square.
Thus, this represents a change in control of the Corporation and a change in business operations. Therefore, based on the change in control of the Corporation, the business operations of the Corporation will change to that involving oil and gas exploration and production company. Nola has purchased leases to multiple oilfield properties primarily in southwest Texas. Nola's current leases include:
P.E. White Lease
: 1,215 acres in Duval County, TX, with 13 wells, one currently producing Mirando-quality crude and all others viable for production. An estimated 2.5 million barrels of oil are recoverable on the lease.
Bishop Cattle Company Lease
: 480 acres in Duval County, with 17 production wells onsite, currently all shut-in. Two wells will be immediately placed back into production, one of which was recently production-tested for 10-12 bpd. There are multiple productive zones on this underdeveloped property.
Moody & West Lease
: 183 acres in Duval County with 7 wells, all of which are shut-in but have all produced viable oil from oilsand formations. These wells are believed to have significant reserves remaining behind pipe and undeveloped sands.
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