POLR Polar Petroleum Corporation (CE)

Nevada	333-174433	36-4697119
(State or other jurisdiction of incorporation or organization)	Commission File Number	(I.R.S. Employer Identification No.)

 

Nevada	36-4697119
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

PART I

 

ITEM 1.  BUSINESS

 

History

 

Polar Petroleum was incorporated in the State of Nevada on March 22, 2011 as Post Data, Inc.  We were previously a development stage company formed for purposes of decommissioning electronic data storage devices for permanent inoperability and unrecoverability of electronic data contained therein.  On July 30, 2012, our board and management changed, and our board determined that we would enter into the oil and gas business to engage in the exploration, development and production of oil and gas properties primarily in the State of Alaska.

 

On August 22, 2012, we formed a wholly-owned subsidiary, Polar Petroleum (AK) Corp., in the State of Alaska (the “Subsidiary”) for purposes of operating our oil and gas business in the State of Alaska.

 

On October 24, 2012, we filed a Certificate of Amendment to our Articles of Incorporation (the “Certificate of Amendment”) with the Nevada Secretary of State to change our company name from “Post Data, Inc.” to “Polar Petroleum Corp.” (the “Name Change”) in order to better reflect the change in our business plan to oil and gas exploration, development and production. The effective date of the Name Change was November 2, 2012.

On October 24, 2012, we also filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes (the “Certificate of Change”) with the Nevada Secretary of State to effect a seven-for-one forward stock split of our common stock (the “Forward Stock Split”). The Certificate of Change increased the number of authorized shares of our common stock from 100,000,000 to 700,000,000 and the number of issued and outstanding shares of common stock for shareholders of record as of November 1, 2012, from 5,845,000 shares to 40,915,000 shares.  The effective date of the Forward Stock Split with the Nevada Secretary of State was November 2, 2012. The Name Change and the Forward Split took effect in the OTC markets at the open of business on November 6, 2012.   

 

 

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First Purchase of Oil & Gas Leases

On November 5, 2012, our Subsidiary entered into and closed a lease purchase agreement (the “Hemi/Franklin Purchase Agreement”) with Daniel K. Donkel and Samuel H. Cade (together, the “Sellers”) pursuant to which our Subsidiary acquired 100% of the record title of the Sellers to 17 onshore oil and gas leases located in in the North Slope region of the State of Alaska, which include both the Hemi Springs Project and the Franklin Bluffs Project, while reserving a royalty of 16.67% for the State of Alaska and an overriding royalty of 4% for the Sellers, in exchange for a total purchase price of $1,250,000, with $150,000 of the purchase price paid in cash at closing and the remaining $1,100,000 due in accordance with the terms of a promissory note between our Subsidiary and the Sellers (the “First Promissory Note”).  

These leases cover an aggregate of approximately 46,399 acres located in the North Slope region of the State of Alaska, encompassing State of Alaska Oil and Gas Leases ADL numbers 390939, 391544, 391545, 391750, 391757, 391758, 391766, 391767, 391774, 391775, 391777, 391778, 392104, 392109, 392768, 391759 and 391776.  Three of the 17 properties (the Test Well Leases (as defined below)) have been transferred to the Company, while the remaining 14 are contingent on drilling the Test Well and repaying the First Promissory Note (each as defined below).

The Hemi/Franklin Purchase Agreement also provides that our Subsidiary is required to drill a test well (the “Test Well”) to a depth of at least 8,000 feet on one of three designated Leases, ADL 390939, 391544 and 391545 (the “Test Well Leases”) within two years of the closing of the Hemi/Franklin Purchase Agreement and, upon such drilling of the Test Well, our Subsidiary will assign a 20% working interest in the Test Well Lease so drilled to Donkel Oil & Gas, LLC (“DOG LLC”).  After the first Test Well is drilled DOG LLC will bear its proportionate share (20%) of any infrastructure cost items related to discovery of the well, and if the Test Well is drilled on a Test Well Lease, DOG LLC will also bear its proportionate share of any taxes upon production from that well. Failure to complete drilling of the Test Well will result in our Subsidiary’s forfeiture of its interest in all of the Leases.  Until full payment of the First Promissory Note, we may not encumber, license, lease, transfer, dispose of or burden any of the leases.

The Hemi/Franklin Purchase Agreement contains customary representations and warranties by our Subsidiary and the Sellers.

First Promissory Note

The First Promissory Note is due on October 31, 2014, and bears interest at 0.3% per annum (10% after a default).  We are obligated to pay $125,000.00 (plus accrued interest) every three months for the first twelve months, $100,000 (plus accrued interest) every three months for the 13 th through 21 st months, and $300,000 (plus accrued interest) by the maturity date.  The amounts due under the First Promissory Note may be accelerated in the event of any default in payment.  We may prepay at any time in minimum amounts of $100,000 without premium or penalty.  Upon written of Sellers while the Second Promissory Note remains unpaid, we have agreed to execute and deliver to the Sellers such documents or instruments to secure payment of the Second Promissory Note (including, without limitation, a mortgage, security agreement or other collateral document), in form and substance satisfactory to Sellers, on the Test Well Leases for the benefit of the Sellers to secure payment of the Second Promissory Note.

Escrow Agreement

 

In connection with the Hemi/Franklin Purchase Agreement, our Subsidiary entered into an Escrow Agreement with the Sellers pursuant to which our Subsidiary executed and delivered to the escrow agent assignments to re-assign 100% of its record title to the Test Well Leases back to the Sellers as collateral and security for our Subsidiary’s performance pursuant to the terms of the Hemi/Franklin Purchase Agreement.  In the event our Subsidiary fails to drill the Test Well, the assignments will be delivered by the escrow agent to the Sellers for filing with the State of Alaska. 

 

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Second Purchase of Oil and Gas Leases

 

On May 31, 2013, our Subsidiary entered into a Purchase Agreement (the “North Point Thomson Purchase Agreement”) with Daniel K. Donkel and Samuel H. Cade to acquire a 100% working interest in twelve offshore oil and gas leases in the property known as the North Point Thomson Property. Seven of the leases are subject to a 12.5% royalty retained by the State of Alaska and the rest are subject to a royalty of 16.67% retained by the State of Alaska, and all of them carry an overriding royalty of 4% for the Sellers.  The North Point Thomson Property comprises approximately 19,662 acres, located in Alaska’s North Slope region, encompassing State of Alaska Oil and Gas Leases ADL numbers 392123 - 392134.  The aggregate purchase price was $1,100,000, $100,000 payable at closing and $1,000,000 evidenced by a promissory note between our Subsidiary and the Sellers (the “Second Promissory Note”). Until full payment of the Second Promissory Note, we may not encumber, license, lease, transfer, dispose of or burden any of the leases.

 

Three of the twelve properties (ADL 392131, 392133 or 392134) are in the process of being transferred to the Company, while the remaining nine are contingent on repaying the Second Promissory Note (as defined below).

 

The North Point Thomson Purchase Agreement contains customary representations and warranties by our Subsidiary and the Sellers.

 

Second Promissory Note

 

The Second Promissory Note is due on June 14, 2015, and bears interest at 0.3% per annum (12% after a default).  We are obligated to pay $125,000 (plus accrued interest) every three months during the term and on the maturity date.  The amounts due under the Second Promissory Note may be accelerated in the event of any default in payment.  We may prepay at any time in minimum amounts of $100,000 without premium or penalty.  Upon written demand of Sellers while the Second Promissory Note remains unpaid, we have agreed to execute and deliver to the Sellers such documents or instruments to secure payment of the Second Promissory Note (including, without limitation, a mortgage, security agreement or other collateral document), in form and substance satisfactory to Sellers, on the leases ADL 392131, 392133 or 392134 for the benefit of the Sellers to secure payment of the Second Promissory Note.

 

Escrow Agreement

 

In connection with the North Point Thomson Purchase Agreement, our Subsidiary entered into an Escrow Agreement with the Sellers, pursuant to which our Subsidiary executed and delivered to the escrow agent assignments to re-assign 100% of its record title to the leases ADL 392131, 392133 or 392134 back to the Sellers as collateral and security for our Subsidiary’s performance pursuant to the terms of the North Point Thomson Purchase Agreement.  In the event our Subsidiary defaults under the agreement, the assignments will be delivered by the escrow agent to the Sellers for filing with the State of Alaska. 

 

Other than as described above, we have not undertaken any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of our business. We have not been a party to any bankruptcy, receivership or similar proceeding .

 

Other than as described above, we have not undertaken any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of our business. We have not been a party to any bankruptcy, receivership or similar proceeding .

 

Industry Introduction

 

The oil and gas industry is a complex, multi-discipline sector that varies greatly across geographies. As a heavily regulated industry, operating conditions are subject to political regimes and changing legislation. Governments can either induce or deter investment in exploration and production, depending on legal requirements, fiscal and royalty structures, and regulation. Beyond the political considerations, exploration and production for hydrocarbons is an extremely risky business with countless perils, both endogenous and exogenous to the core business. Exploration and production wells require substantial amounts of investment and are long-term projects, sometimes exceeding twenty to thirty years. Regardless of the efforts spent on an exploration or production prospect, success is difficult to attain. Even though modern equipment including seismic and advanced software has helped geologists find producing sands and map reservoirs, they do not guarantee any particular outcome. Early oil and gas explorers relied on surface indicators to find reservoirs. Drilling is the only method to determine whether a prospect will be productive, and even then many complications can arise during drilling (e.g., those relating to drilling depths, pressure, porosity, weather conditions, permeability of the formation and rock hardness). Typically, there is a significant probability that a particular prospect will turn-up a dry-well, leaving investors with the cost of seismic and a dry well which during current times can total in the millions of dollars. Even if oil is produced from a particular well, there is always the possibility that treatment, at additional cost, may be required to make production commercially viable.   Furthermore, most production profiles decline over time, which hinders any cost-benefit analysis. In sum, oil and gas is an industry with high risks and high entry barriers but significant potential for success.

 

 

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Oil and gas prices determine the commercial feasibility of a project.  Certain projects may become feasible with higher prices or, conversely, may falter with lower prices. Volatility in the pricing of oil, gas, and other commodities has sharpened during the last few years, and particularly in the last year, complicating the practicability of a proper assessment of revenue projections.  Most governments have enforced strict regulations to uphold the highest standards of environmental awareness, thus, holding companies to the highest degree of responsibility and sensibility vis a vis protecting the environment. Aside from such environmental factors, oil and gas drilling is often conducted in populated areas. For a company to be successful in its drilling endeavors, working relationships with local communities are crucial, to promote its business strategies and to avoid any repercussions of disputes that might arise over local business operations.

 

Our Business 

We are an exploration stage company focused on exploration, production and development of oil and natural gas in the United States.  We currently own interests in certain oil and gas drilling areas and land leases located in the North Slope region of the State of Alaska.

 

Our oil and gas interests consist of 29 oil and gas land leases covering approximately 66,061 acres located in the North Slope region of the State of Alaska.  We are currently developing our plan of operation for the leases and intend to begin the process of obtaining all necessary governmental approvals and permits in order to commence our operations.   We have conducted only limited exploration on our Hemi/Franklin leases and none on our North Point Thomson leases, and to date we have not conducted any drilling activities on any of our leased properties.

 

The North Slope Petroleum Province

 

The Arctic Alaska Petroleum Province, encompassing all the lands and adjacent continental shelf areas north of the Brooks Range-Herald arch, is one of the most petroleum productive areas in the United States, having produced about 15 BBO thus far.  According to the US Energy Information Administration, Alaska’s North Slope contains 14 of the 100 largest oil fields in the United States, and five of the 100 largest natural gas fields.  Seven unitized oil fields currently contribute to production, and three additional oil fields have been unitized but are not yet producing.  Most known petroleum accumulations involve structural or combination structural- stratigraphic traps related to closure along the Barrow arch, a regional basement high, which has focused regional hydrocarbon migration since Early Cretaceous time.  Several oil accumulations in stratigraphic traps have been developed in recent years.  In addition to three small gas fields producing for local consumption, more than 20 additional oil and gas discoveries remain undeveloped.

This geologically complex region includes prospective strata within passive-margin, rift, and foreland-basin sequences.  Oil and gas were generated from multiple source rocks throughout the region.  Although some reservoired oils appear to be derived from a single source rock, evidence for significant mixing of hydrocarbons from multiple source rocks indicates a composite petroleum system.  Both extensional and contractional tectonic structures provide ample exploration targets, and recent emphasis on stratigraphic traps has demonstrated a significant resource potential in shelf and turbidite sequences of Jurassic through Tertiary age.

 

Recent estimates of the total mean volume of undiscovered resources in the Arctic Alaska Petroleum Province by the U.S. Geological Survey and U.S. Minerals Management Service are more than 50 billion barrels of oil and natural-gas liquids and 227 trillion cubic feet of gas, distributed approximately equally between Federal offshore and combined onshore and State offshore areas.

 

At present the main thrust of exploration in the North Slope is focused in the Prudhoe Bay area; accordingly, we believe our leases located in the North Slope region may offer potential opportunities for further investigation and exploration.  

 

In order to evaluate the potential of our leases in the North Slope region, we will require further investigation and exploration.  We believe our Alaska leases are in areas that are potentially promising for gas production as indicated by data from ExxonMobil’s Point Thomson Unit and its current construction of a 22-mile pipeline. The Company does not, however, make any representations as to their future production, if any.  Furthermore, any oil and gas recovered from our Hemi/Franklin Leases and North Point Thomson Property, may not be salable until it is determined which infrastructure will be needed to get the product to market.

 

 

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General Location of Our Leases

 

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Hemi Springs and Franklin Bluff Projects

 

On November 5, 2012, our Subsidiary entered into and closed the Hemi/Franklin Purchase Agreement as described above.

 

We refer to our 17 leases in this region as the Hemi/Franklin Leases. These seventeen leases were issued by the Alaska Department of Land (the “ADL”): ADL numbers 390939, 391544, 391545, 391750, 391757 - 391759, 391766 - 391768, 391774 - 391778, and un-issued leases 392104 and 392109. The Hemi/Franklin Leases cover 46,399 acres in the North Slope Region of Alaska. All of the leases are subject to a 16.67% royalty retained by the State of Alaska and a 4% overriding royalty retained by the sellers. We have conducted limited exploration work on the properties.  We acquired aeromagnetic data, which we are currently analyzing and have also completed well analysis of four wells in the area to try to better understand the geology of the area.

 

The Hemi/Franklin Leases are located in Alaska’s North Slope region.

 

Hemi Springs Project Acreage (shown in purple as Donkel/Cade leases)

 

 

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Franklin Bluffs Project Acreage (shown in purple as Donkel/Cade lease)

 

 

 

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The breakdown of the acreage, working interest and net revenue interest, that are related to our Hemi/Franklin Leases is set forth in the table below. Each year the State of Alaska sends an annual lease statement to the Company for the Hemi/Franklin Leases. Mr. Donkel and Mr. Cade receive the lease statement, for the Hemi/Franklin Leases that are in their name and then they forward the lease statements on to the Company. Failure to pay the leases on time will amount to a forfeiting of the unpaid leases.

 

Lease (ADL Lease Serial Number):		Property Description:			Gross Acres:			Working Interest:					Net Revenue Interest: (1)								Lease Expiration Date
1.  ADL 390939; Tract NS2006-0480		T. 6N, R: 13E, Umiat Meridian: Alaska			5,701.00			100			%		79.33	%							1/31/2014
		Sec. 19, Unsurveyed, All;			618.00
		Sec. 20, Unsurveyed, All;			640.00
		Sec. 21, Unsurveyed, All;			640.00
		Sec. 28, Unsurveyed, All;			640.00
		Sec. 29, Unsurveyed, All;			640.00
		Sec. 30, Unsurveyed, All;			620.00
		Sec. 31, Unsurveyed, All;			623.00
		Sec. 32, Unsurveyed, All, and;			640.00
		Sec. 33, Unsurveyed, All.			640.00
2.  ADL 391544; Tract 984		T. 010N, R: 012E, Tract A, Umiat Meridian: Alaska;			2,501.00			100			%		79.33	%							6/30/2017
		Sec. 5, Unsurveyed, All;			640.00
		Sec. 6, Unsurveyed, All;			609.00
		Sec. 7, Unsurveyed, All, including the beds of the unnamed lakes, and;			612.00
		Sec. 8, Unsurveyed, All, including the beds of the unnamed lakes.			640.00
3.  ADL 391545; Tract 987		T. 010N, R: 012E, Tract A, Umiat Meridian: Alaska			2,512,00			100			%		79.33	%							6/30/2017
		Sec. 17, Unsurveyed, All, including the beds of the unnamed lakes;			640.00
		Sec. 18, Unsurveyed, All, including the beds of the unnamed lakes;			615.00
		Sec. 19, Unsurveyed, All, including the beds of the unnamed lakes, and;			617.00
		Sec. 20, Unsurveyed, All, including the beds of the unnamed lakes			640.00
4.  ADL 391750; Tract 813		T. 009N, R: 012E, Tract A, Umiat Meridian: Alaska			2,560.00			100			%		79.33	%							4/30/2018
		Sec. 1, Unsurveyed, All, including the beds of the unnamed lakes;			640.00
		Sec. 2, Unsurveyed, All, including the bed of the unnamed lake;			640.00
		Sec. 11, Unsurveyed, All, and;			640.00
		Sec. 12 Unsurveyed, All, including the beds of the unnamed lakes.			640.00

 

 

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5. ADL 391757; Tract 822		T: 009N, R: 013E, Tract A, Umiat Meridian: Alaska			2,560.00	100			%		79.33	%							4/30/2018
		Sec. 1, Unsurveyed, All;			640.00
		Sec. 2, Unsurveyed, All;			640.00
		Sec. 11, Unsurveyed, All, and;			640.00
		Sec. 12, Unsurveyed, All.			640.00
6.  ADL 391758, Tract 823		T: 009N, R: 013E, Tract A, Umiat Meridian, Alaska		2,560.00				100	%		79.33	%							4/30/2018
		Sec. 3, Unsurveyed, All;		640.00
		Sec. 4, Unsurveyed, All;		640.00
		Sec. 9, Unsurveyed, All, and;		640.00
		Sec. 10, Unsurveyed, All.		640.00
7.  ADL391759; Tract 824;		T. 009N, R: 013E, Tract A, Umiat Meridian: Alaska		2,533.00				100	%		79.33	%							4/30/2018
		Sec. 5, Unsurveyed, All, including the bed of the unnamed lake;		640.00
		Sec. 6, Unsurveyed, All, including the beds of the unnamed lakes;		625.00
		Sec. 7, Unsurveyed, All, including the beds of the unnamed lakes, and;		628.00
		Sec. 8, Unsurveyed, All.		640.00
8.  ADL 391766; Tract 833		T. 009N, R: 014E, Tract A, Umiat Meridian: Alaska;		2,533.00				100	%		79.33	%							4/30/2018
		Sec. 5, Unsurveyed, All, including the bed of the unnamed lake;		640.00
		Sec. 6, Unsurveyed, All, including the bed of the unnamed lake;		625.00
		Sec. 7, Unsurveyed, All, including the bed of the unnamed lake, and;		628.00
		Sec. 8, Unsurveyed, All, including the bed of the unnamed lake.		640.00
9.  ADL 391767; Tract 835		T. 009N, R: 014E, Tract A, Umiat Meridian: Alaska		2,560.00				100	%		79.33	%							4/30/2018
		Sec. 15, Unsurveyed, All, including the bed of the unnamed lake;		640.00
		Sec. 16, Unsurveyed, All, including the bed of the unnamed lake;		640.00
		Sec. 21, Unsurveyed, All, including the bed of the unnamed lake, and;		640.00
		Sec. 22, Unsurveyed, All, including the bed of the unnamed lake.		640.00

 

 

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10.  ADL 392768; Tract 836		T. 009N, R: 014E, Tract A, Umiat Meridian: Alaska		2,544.00						100	%		79.33	%							4/30/2018
		Sec. 17, Unsurveyed, All;		640.00
		Sec. 18, Unsurveyed, All, including the bed of the unnamed lake;		631.00
		Sec. 19, Unsurveyed, All, including the beds of the unnamed lakes, and;		640.00
		Sec. 20, Unsurveyed, All, including the bed of the unnamed lake.		640.00
11. ADL 391774; Tract 985		T: 010N, R: 012E, Tract A, Umiat Meridian: Alaska		2,560.00						100	%		79.33	%							4/30/2018
		Sec. 13, Unsurveyed, All, including the beds of the Kuparuk River and the unnamed lake;		640.00
		Sec. 14, Unsurveyed, All, including the bed of the Kuparuk River;		640.00
		Sec. 23, Unsurveyed, All including the bed of the Kuparuk River, and;		640.00
		Sec. 24, Unsurveyed, All, including the beds of the unnamed lakes.		640.00
12. ADL 391775; Tract 986		T: 010N, R: 012E, Tract A, Umiat Meridian: Alaska.		2,560.00						100	%		79.33%								4/30/2018
		Sec. 15, Unsurveyed, All, including the beds of the Kuparuk River and the unnamed lakes;		640.00
		Sec 16, Unsurveyed, All, including the beds of the unnamed lakes;		640.00
		Sec 21, Unsurveyed, All, including the beds of the unnamed lakes, and;		640.00
		Sec. 22, Unsurveyed, All, including the beds of the Kuparuk River and the unnamed lakes.		640.00
13.  ADL391776; Tract 988;		T. 010N, R: 012E, Tract A, Umiat Meridian: Alaska		2,560.00						100	%		79.33	%							4/30/2018
		Sec. 25, Unsurveyed, All, including the beds of the unnamed lakes;		640.00
		Sec. 26, Unsurveyed, All, including the beds of the Kuparuk River and the unnamed lakes;		640.00
		Sec. 35, Unsurveyed, All, including the beds of the Kuparuk River and the unnamed lakes, and;		640.00
		Sec. 36, Unsurveyed, All, including the beds of the unnamed lakes.		640.00

 

 

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14.  ADL 391777; Tract 998		T. 010N, R: 013E, Tract A, Umiat Meridian: Alaska;		2,560.00						100	%		79.33	%							4/30/2018
		Sec. 27, Unsurveyed, All, including the bed of the unnamed lake;		640.00
		Sec. 28, Unsurveyed, All;		640.00
		Sec. 33, Unsurveyed, All, and;		640.00
		Sec. 34, Unsurveyed, All, including the bed of the unnamed lake.		640.00
15.  ADL 391778; Tract 999		T. 010N, R: 013E, Tract A, Umiat Meridian: Alaska		2,523.00						100	%		79.33	%							4/30/2018
		Sec. 29, Unsurveyed, All, including the beds of the unnamed lakes;		640.00
		Sec. 30, Unsurveyed, All, including the beds of the unnamed lakes;		620.00
		Sec. 31, Unsurveyed, All, including the beds of the unnamed lakes, and;		623.00
		Sec. 32, Unsurveyed, All, including the beds of the unnamed lakes.		640.00
16.  ADL 392104; Tract 976		T.010, R; 011E, Umiat Meridian: Alaska		2,560.00						100	%		79.33	%							11/30/2022
		Sec. 13		640.00
		Sec. 14		640.00
		Sec. 23		640.00
		Sec. 24		640.00
17. ADL 392109; Tract 996		T. 010N, R: 013E, Umiat Meridian: Alaska		2,512.00						100	%		79.33	%							11/30/2022
		Sec. 17		640.00
		Sec. 18		615.00
		Sec. 19		617.00
		Sec. 20		640.00

(1)

Note: According to the Hemi/Franklin Purchase Agreement, our Subsidiary is required to drill a test well (the “Test Well”) to a depth of at least 8,000 feet on one of three designated Leases, ADL 390939, 391544 and 391545 (the “Test Well Leases”) within two years of the closing of the Purchase Agreement. Upon drilling the Test Well, the Subsidiary is also required to assign a 20% working interest in the Test Well Lease to Donkel Oil and Gas, LLC.

 

The following table provides by specific dates, the total amount of rental payments which are due and payable on certain number of our Hemi/Franklin Alaska oil and gas leases containing the indicated total acreage, based on the indicated rental amount per acre:

 

Hemi/Franklin Leases Rental Due Dates	Number of Leases	Total Acreage	Rental Rate/Acre	Total Rental Payment Amt.
2/1/2013	1	5,701.00	$3.00	$17,103.00
5/1/2013	12	30,613.00	$2.00	$61,226.00
7/1/2013	2	5,013.00	$2.00	$10,026.00
5/1/2014	12	30,613.00	$2.50	$76,532.00
7/1/2014	2	5,013.00	$2.50	$12,532.00

 

 

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Limited exploration work has been conducted by the Company on the Hemi/Franklin Leases. We are, however, in discussion with consulting groups to design and implement devised work program.   We acquired aeromagnetic data which we are currently analyzing and have also completed well log analysis of the Franklin Bluffs project area, as well as are in the process of completing well log analysis of three wells in the Hemi Springs project area to try to better understand the geology of the area. We are also in discussions to acquire seismic data for the Hemi Springs Project.

 

Hemi/Franklin Leases Geology

 

Hemi Springs Project Geology

 

The Hemi Springs Project lies to the immediate east of where Eni's now-dissolved Rockflour Unit was originally formed, and completely overlies the location of Pioneer Natural Resources' now-dissolved NE Storms Unit.

 

In the project's surrounding vicinity, past hydrocarbon tests and shows have included those at Hemi Spr. #1, Hemi Spr. #3-9-11, Hemi Spr. Unit #3, Hemi Spr. Sag R. #1 and Burglin #33-1.

 

A total of three wells were drilled in the now-defunct Hemi Springs Unit, one of which (i.e., Pioneer Natural Resource's Hailstorm #1) is located on what are now the Company's Hemi Springs Project leases.

 

Of those three Hemi Springs Unit wells, the key well was the ARCO Hemi Springs State #1.

The well was directionally drilled in 1984 to a depth of 10,937' (10,370' TVD) from a surface location in the extreme southeast corner of a ConocoPhillips/Pioneer lease with the well's bottomhole location being 648' inside the Company's Hemi Springs Project lease ADL391544.

 

The well was originally Certified Capable of Producing in Paying Quantities (CCPPQ) in June 1984. In March 1995, ARCO requested an extension of its suspended status, citing its productive potential.

 

The Lower Cretaceous Kuparuk C Sand earned the well its CCPPQ designation by yielding oil and gas at rates in excess of 500 bopd at 26 to 35 API gravity and up to 1.9 million cubic feet of gas per day (mmcfd) in several tests at depths between 7,190' and 7,220' MD.

 

Below the Kuparuk, the L. Triassic Sadlerochit is an additional exploration target in the Hemi Springs Project area. This horizon is a prolific producer in the adjacent Prudhoe Bay Field.

 

The Sadlerochit is also associated with hydrocarbon tests and shows at two wells: the Mobil/Sohio Hurl State 5-10-13 well (nine miles to east-northeast of State #1 well) and the Placid PB State No. 1 well (two miles further east).

 

Franklin Bluffs Project Geology

 

The relevant formations are the Canning Fm. (6,005' MD), Torok Fm. (9,752' MD), Hue Shale (10,040' MD), GRZ (10,070' MD), Pebble Shale (10,252'), Kemik/Kuparuk "C" (10,320' MD), and the L. Cretaceous Unconformity/Kingak Shale (10,354' MD).

 

Directly west of the project, Unocal drilled multiple wells on their now defunct White Hills Exploration project. Two of the wells – Muskoxen 36-7-8 and Bluebuck 6-7-9 – are only 25 miles west-northwest of the Franklin Bluffs Project lease.

 

These wells were drilled to shallow depths (4,500' and 5,000' respectively) into the Campanian-Paleocene Ugnu-Schrader Bluff sequence.

 

Suggestions of heavy oil were found in the deeper Schrader Bluff in both wells, and rotary sidewall cores contained oil at 3,960' MD (28 API) in the Muskoxen 36-7-8 and at 4,014' MD (31 API) in the Bluebuck 6-7-9.

 

Meanwhile, an Alaska Division of Geological & Geophysical Surveys (DGGS) report from 2009 of the geology in the Sagavanirktok quadrangle, 22 miles to the south, identified large anticlinal structures showing significant variability in their plunge, suggesting a likely hydrocarbon trapping mechanism.

 

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North Point Thomson Property

 

On May 31, 2013, our Subsidiary entered into the North Point Thomson Purchase Agreement  the North Point Thomson Property as described above.

 

We refer to our twelve leases in this region as the North Point Thomson Property. These twelve leases were issued by the Alaska Department of Land (the “ADL”): ADL numbers 392123 - 392134. The leases cover approximately 19,662 acres in the North Point Thomson Property in the North Slope Region of Alaska. Seven of the leases are subject to a 12.5% royalty retained by the State of Alaska and a 4% overriding royalty retained by the sellers, and the other five of the leases are subject to a 16.67% royalty retained by the State of Alaska and a 4% overriding royalty retained by the sellers. We have conducted no exploration work on the properties.

 

The North Point Thomson Property is located in Alaska’s North Slope region.

 

North Point Thomson Project Acreage   (shown in purple as Donkel/Cade leases)

 

 

 

 

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The breakdown of the acreage, working interest and net revenue interest, that are related to our North Point Thomson Property is set forth in the table below. Each year the State of Alaska sends an annual lease statement to the Company for the North Point Thomson Leases associated with the Company. Mr. Donkel and Mr. Cade receive the lease statement, for the North Point Thomson Leases that are in their name and then they forward the lease statements on to the Company. Failure to pay the leases on time will amount to a forfeiting of the unpaid leases.

 

Lease (ADL Lease Serial Number):				Property Description:			Gross Acres:			Working Interest:							Net Revenue Interest:								Lease Expiration Date
1.  ADL392123; Tract 85;				T. 010N, R: 024E, Umiat Meridian: Alaska			1,625.06			100			%				83.5		%						12/31/2022
				Sec. 3, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			106.05
				Sec. 4, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			239.01
				Sec. 9, Protracted All, and ;			640.00
				Sec. 10 Protracted All.			640.00
2.  ADL 392124; Tract 88				T. 010N, R: 024E, Umiat Meridian: Alaska;			911.60			100			%				79.33		%						12/31/2022
				Sec. 15, Protracted N1/2, S1/2 excluding oil and gas lease ADL 31866;			452.75
				Sec. 16, Protracted N1/2, S1/2 excluding oil and gas lease ADL 31866, and;			408.92
				Sec. 22, Protracted E1/2, E1/2 excluding oil and gas leases ADL 31866 and 343109.			49.93
3.  ADL 392125; Tract 94				T. 010N, R: 023E, Umiat Meridian: Alaska			911.60			100			%				83.5		%						12/31/2022
				Sec. 3, Protracted All;			640.00
				Sec. 4, Protracted All;			640.00
				Sec. 9, Protracted, N1/2 N1/2 excluding oil and gas lease ADL 389730, and;			42.92
				Sec. 10, Protracted, N1/2 N1/1 excluding oil and gas lease ADL 389730.			49.93
4.  ADL 392126; Tract 95				T. 010N, R: 023E, Umiat Meridian: Alaska			1,313.02			100			%				79.33		%						12/31/2022
				Sec. 5, Protracted All;			640.00
				Sec. 6, Protracted All;			609.00
				Sec. 7, Protracted, N1/2 N1/2 excluding oil and gas lease ADL 312862, and;			28.12
				Sec. 8, Protracted, N1/2 N1/2 excluding oil and gas leases ADL 312862 and ADL 389730.			35.90

 

 

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5. ADL 392127; Tract 102		T: 011N, R: 03E, Umiat Meridian: Alaska		1,431.02			100	%	83.5	%						12/31/2022
		Sec. 27, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;		3.90
		Sec.28, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1)   of the final decree in U.S. v. Alaska, No. 84 Original;		162.94
		Sec. 33, Protracted All;		640.00
		Sec. 34, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original, and;		520.10
		Sec. 35, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A   (1) of the final decree in U.S. v. Alaska, No. 84 Original.		104.08
6.  ADL 392128, Tract 103		T: 011N, R: 023E, Umiat Meridian, Alaska	2,047.61				100	%	83.5	%						12/31/2022
		Sec. 29, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;	364.22
		Sec. 30, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;	436.39
		Sec. 31, Protracted, All, and;	607.00
		Sec. 32, Protracted, All.	640.00
7.  ADL392129; Tract 104;		T. 010N, R: 022E, Umiat Meridian: Alaska	1,321.26				100	%	79.33	%						12/31/2022
		Sec. 1, Protracted, All	640.00
		Sec. 2, Protracted, All;	640.00
		Sec. 11, Protracted,  N1/2 N1/2 excluding oil and gas leases ADL 312862 and ADL377017, and;	17.78
		Sec. 10 Protracted. N1/2 N1/2 excluding oil and gas lease ADL 312862.	24.48

 

 

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8.  ADL 392130; Tract 105			T. 010N, R: 022E, Umiat Meridian: Alaska;			1,300.29						100		%				79.33	%						12/31/2022
			Sec. 3, Protracted, All;			640.00
			Sec. 2, Protracted, All.			640.00
			Sec. 9, Protracted N1/2 N1/2 excluding oil and gas lease ADL 377017, and;			7.75
			Sec. 10, Protracted, N1/2 N1/2 excluding oil and gas lease ADL 377017.			12.54
9.  ADL 392131; Tract 106			T. 010N, R: 022E, Umiat Meridian: Alaska			1,252.00						100		%				79.33	%						12/31/2022
			Sec. 5, Protracted, All;			640.00
			Sec. 6, Protracted, N1/2, N1/2 S1/2 excluding oil and gas lease ADL 377016;			608.36
			Sec. 7, Protracted, N1/2 N1/2 excluding oil and gas lease ADL 3377016, and;			0.24
			Sec. 8, Protracted, N1/2 N1/1 excluding oil and gas lease ADL 377017.			3.40
10.  ADL 392132; Tract 113			T. 011N, R: 022E, Umiat Meridian: Alaska			2,151.93						100		%				83.5	%						12/31/2022
			Sec. 25, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			452.95
			Sec. 26, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			418.98
			Sec. 35, Protracted, All, and;			640
			Sec. 8, Protracted, All.			640.00
11. ADL 392133; Tract 114			T: 011N, R: 022E, Umiat Meridian: Alaska			2,378.83						100		%				83.5	%						12/31/2022
			Sec. 27, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			522.46
			Sec.28, Protracted All, tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			576.37
			Sec. 33, Protracted, All, and;			640.00
			Sec. 34, Protracted, All.			640.00

 

 

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12. ADL 392134; Tract 115			T: 011N, R: 022E, Umiat Meridian: Alaska.			2,556.45						100		%				83.5	%						12/31/2022
			Sec. 19, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			43.64
			Sec 20, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original			21.92
			Sec 29, Protracted, All tide and submerged land shoreward of or located within the line fixed by coordinates found in Exhibit A (1) of the final decree in U.S. v. Alaska, No. 84 Original;			639.89
			Sec. 30, Protracted, All;			604.00
			Sec. 31, Protracted, All, and;			607.00
			Sec. 32, Protracted, All.			640.00

(1)

Note: The final decree in U.S. v. Alaska, No. 84 Original, fixed the offshore boundary between the United States and the State of Alaska in the Chukchi and Beaufort Seas.  The acreage figures were taken from the State township diagrams depicting the offshore Federal/State boundary approved by the State of Alaska on February 28, 1997.

 

The following table provides by specific dates, the total amount of rental payments which are due and payable on certain number of our North Point Thomson Alaska oil and gas leases containing the indicated total acreage, based on the indicated rental amount per acre:

 

 

North Point Thomson Rental Due Dates	Number of Leases	Total Acreage	Rental Rate/Acre	Total Rental Payment Amt.
01/01/2014	6	12,190.90	$  1.50	$  18,286.35
03/01/2014	1	1,373.25	$  1.50	$    2,059.88
03/01/2014	5	6,098.17	$10.00	$  60,981.70
01/01/2015	6	12,190.90	$  2.00	$  24,381.80
03/01/2015	1	1,373.25	$  2.00	$    2,746.50
03/01/2015	5	6,098.17	$10.00	$  60,981.70

 

No exploration work has been conducted by the Company on the North Point Thomson Property. We are, however, in discussion with consulting groups to design and implement devised work program, including an initial technical assessment, purchasing and then the interpretation of gravity-magnetic data information, and obtaining well log analysis and interpretation, as well as seismic data acquisition.

 

North Point Thomson Geology

 

The North Point Thomson Project sits in the middle of several Tertiary shelf-slope oil accumulations that progress from older to younger moving from southwest to northeast.

 

The band of oldest accumulations is anchored on the west by the turbidites of the Badami Unit and proposed Telemark Unit, and on the east by the discoveries at Yukon Gold (120 MMBO) and Sourdough (100 MMBO).

 

 

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The project's acreage is in the next band, younger and to the northeast, which is represented towards its east end by the U. Paleocene Flaxman Sands (PTU) and by the Base Eocene Sand (150 MMBO assigned) in the Stinson #1 discovery well.

 

The youngest band lies nine miles northeast of the project at the site of Unocal/Shell's Hammerhead-Sivulliq discovery, with reserves of 100 to 200 MMBO in Brookian-aged sands.

 

In 1992, ARCO drilled three wells along trend to the east, making the Kuvlum discovery (160-300 MMBO) when its #1 well flowed 3,400 BOPD (34 API) from highly-faulted Oligocene sands.

 

The Company believes, based upon currently available geological data and maps from the public domain that our lease prospect contains the Thomson Sand Reservoir (Department of Natural Resources, State of Alaska, Point Thomson Unit Application for the Second Expansion and Third Contraction of the Unit Area, May 24, 2002), and additional targets for the North Point Thomson project include the Pre-Mississippian of the 1990 ARCO Stinson oil discovery.

 

Reserves

 

Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations.  In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

 

·

Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from known reservoirs, and under existing economic conditions, operating methods, and government regulations. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

 

·	Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.

 

·	Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.

 

The Company has no proved oil and natural gas reserves. The Company, has conducted an initial technical assessment, the purchase and interpretation of magnetic data for the Hemi/Franklin Leases, well log analysis and interpretation on the Franklin Bluffs project and is interpreting the well log analysis on the Hemi Springs Project. On our North Point Thomson Leases, we are in the process of our completing the initial technical assessment on the property, and are in the process of purchasing gravity-magnetic data and well log analysis for the North Point Thomson Leases. The Company currently does not have sufficient production records, geoscience and engineering data or other information, nor are there installed means of delivering oil and gas or related substances from our properties to market, to enable us to compute quantities of proved, probable or possible oil and gas reserves, and there can be no assurance that our properties contain recoverable, economically producible oil or gas resources.

Business Strategy

Our strategy is to increase shareholder value through strategic acquisitions, appraisal drilling and development. We are focused on the acquisition, appraisal, development and exploitation of oil and gas properties.  We are also searching for possible joint-ventures and new prospects that fit our strategic focus.   The Company is currently focused on investing in and acquiring potential oil and gas reserves within the United States.  The Company’s strategy consists of the following key elements:

·	Acquire on- or offshore domestic production and drilling opportunities;

 

·	Initiate development drilling program;

 

·	Initial focus on drilling prospect along North Slope Region of Alaska;

 

·	Exploit management team’s experience in this region.

 

 

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Though it is possible to finance and drill an oil or gas resource property that hosts an oil or gas deposit into production, the costs for doing so are considerable, and the subsequent potential return on investment for our shareholders would be very risky.  Therefore, in order to reduce that risk we hope to develop joint ventures or strategic partnerships or sell a portion of any oil or gas deposits that we may discover to another oil and gas company. It is customary in the oil and gas industry in North America for smaller entities to “farm-out” a portion of a proposed drilling program.  In the “farm-out” process a company that holds oil and gas rights disposes of a portion of its interest in those rights to another entity that then becomes responsible for all or part of the financial commitment for the drilling and exploration well.  The second aspect of this strategy involves “promotion,” which refers to the spread between the proportion of the farm-out and the proportion of revenue, if any, received by the company farming-in.  By way of example, a company farming-in may pay for 80% of the cost of a well but receive only 56% of the revenue.  The company farming in participates at an 80% level (funds 80% of the cost of drilling the well) but receives 56% of the net revenue (known as a 56% working interest).  In other words, the company farming-in receives $0.70 in working interest for each dollar of participation interest (the 56% is calculated by multiplying 80% at a $.70 per dollar to arrive at a net 56% working interest). The difference is called promotion and is a common way for smaller, less capitalized companies to advance their properties to the drilling stage.  The “farm-out” example provided is an example of the type of arrangement that can be made in the industry.  The amount of working interest received varies on the merits of the property and the ability of each side to negotiate.  The principal is that the company owning the property receives a benefit by virtue of its ownership.

 

Currently we do not have any such arrangements under contract.

 

By farming-out a proportion of our Leases, it would provide an immediate return to our shareholders without us having to bear the full cost of drilling wells.  This strategy also would allow the Company to conserve capital in order to allow us to continue operations.

 

Contemplated Activities

 

We are continually evaluating other drilling and acquisition opportunities for possible participation. Generally, at any one time, we are engaged in various stages of evaluation in connection with one or more drilling or acquisition opportunities. Unless required by applicable law, our policy is generally to not disclose the specifics of any such opportunity until such time as that transaction is finalized and we have entered into a definitive agreement regarding the same and then, only when such transaction is material to our business. Similarly, we do not speculate on the outcome of such ventures until the drilling, production or other results are available and have been verified by us.

 

We may alter or vary all or part of these contemplated activities based upon changes in circumstances, including, but not limited to, unforeseen opportunities, inability to negotiate favorable acquisitions, farmouts, joint ventures, or divestitures, commodity prices, lack of cash flow, lack of funding and/or other events which we are not able to anticipate.

 

Alaska Fiscal Regime

 

Two distinct oil and gas fiscal regimes exist in Alaska, one of which governs exploration and production (“E&P”) operations on the North Slope.  The fiscal regime involves cash rebates from the State based on a percentage of exploration costs.

 

Steady production declines from legacy brownfields such as Prudhoe Bay and Kuparuk have led to significant operational challenges for the Trans-Alaska Pipeline System (“TAPS”).  In response, the Alaska legislature passed a generous fiscal incentive program for North Slope E&P operations in April 2013.  This legislation provides cash reimbursements for approximately 85% of exploration drilling expenditures through January 1, 2016, in the form of two distinct programs:

 

·	Cash rebates for 40% of exploration and appraisal costs.  Development, facilities and infrastructure expenditures are not eligible.

 

·

Carried forward losses (“CFLs”) reimbursed as cash rebates that cover up to 45% of exploration costs.  An operator only qualifies for CFLs prior to reaching profitability, typically at first oil.  But rather than accumulating as a deduction to be claimed at first oil, the legislation allows operators to now claim CFLs early as a direct cash rebate that is for all material intents and purposes identical to the 40% exploration cost rebate program.  The CFL amount goes down to 35% beginning January 1, 2016.

 

Both our Hemi/Franklin and our North Point Thomson Property E&P campaigns may be eligible for both cash rebate programs, but at this time we cannot give assurance this will be so.  Our business plan to explore our properties was developed before this legislation was adopted, and so is not dependent on the availability of these reimbursements.  However, the credits, should they be available, would likely have a material impact on our results of operations and cash flows.

 

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Competition

We compete with other companies for financing and for the acquisition of new oil and gas properties. Many of the oil and gas exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of oil and gas properties of merit, on exploration of their properties and on development of their properties. In addition, they may be able to afford more geological and other technical expertise in the targeting and exploration of oil and gas properties. This competition could result in competitors having properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could have an adverse impact on our ability to achieve the financing necessary for us to conduct further exploration of our acquired properties.

We will also compete with other junior oil and gas exploration companies for financing from a limited number of investors that are prepared to make investments in junior oil and gas exploration companies. The presence of competing junior oil and gas exploration companies may have an adverse impact on our ability to raise additional capital in order to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the oil and gas properties under investigation and the price of the investment offered to investors.

Oil and Gas Regulation

 

The governmental laws and regulations which could have a material impact on our Company are as follows:

 

Drilling and Production

 

These types of regulation include permit requirements for the drilling of wells, drilling bonds and reports concerning operations. Most states regulate one or more of the following: (i) the location of wells; (ii) the method of drilling and casing wells; (iii) the rates of production or "allowables"; (iv) the surface use and restoration of properties upon which wells are drilled; (v) the plugging and abandoning of wells; and (vi) notice to surface owners and other third parties.

 

State laws may regulate the size and shape of drilling and spacing units or proration units governing the pooling of oil and natural gas properties. Some states allow forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be implemented by third parties and may reduce our interest in the unitized properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells generally prohibit the venting or flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of natural gas and oil we can produce from our wells or limit the number of wells or the locations at which we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and natural gas liquids within its jurisdiction.

 

Environmental Regulation

 

Our activities will be subject to existing federal, state and local laws and regulations governing environmental quality and pollution control. Our operations will be subject to stringent environmental regulation by state and federal authorities including the Environmental Protection Agency ("EPA"). Such regulation can increase the cost of such activities. In most instances, the regulatory requirements relate to water and air pollution control measures.

 

Waste Disposal

 

The Resource Conservation and Recovery Act ("RCRA"), and comparable state statutes, affect oil and gas exploration and production activities by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup of "hazardous wastes" and on the disposal of non-hazardous wastes. Under the auspices of the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. Drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of crude oil, natural gas, or geothermal energy constitute "solid wastes", which are regulated under the less stringent non-hazardous waste provisions, but there is no guarantee that the EPA or the individual states will not adopt more stringent requirements for the handling of non-hazardous wastes or categorize some non-hazardous wastes as hazardous for future regulation.

 

 

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Air Emissions

 

Our operations are subject to local, state and federal regulations for the control of emissions of air pollution. Major sources of air pollutants are subject to more stringent, federally imposed permitting requirements. Administrative enforcement actions for failure to comply strictly with air pollution regulations or permits are generally resolved by payment of monetary fines and correction of any identified deficiencies.  Alternatively, regulatory agencies could require us to forego construction, modification or operation of certain air emission sources.

 

Clean Water Act

 

The Clean Water Act imposes restrictions and controls on the discharge of produced waters and other wastes into navigable waters. Permits must be obtained to discharge pollutants into state and federal waters and to conduct construction activities in waters and wetlands. The Clean Water Act requires us to construct a fresh water containment barrier between the surface of each drilling site and the underlying water table. This involves the insertion of a seven-inch diameter steel casing into each well, with cement on the outside of the casing. Certain state regulations and the general permits issued under the Federal National Pollutant Discharge Elimination System program prohibit the discharge of produced waters and sand, drilling fluids, drill cuttings and certain other substances related to the oil and natural gas industry into certain coastal and offshore waters. Further, the EPA has adopted regulations requiring certain oil and natural gas exploration and production facilities to obtain permits for storm water discharges. Costs may be associated with the treatment of wastewater or developing and implementing storm water pollution prevention plans.

 

The Clean Water Act and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges for oil and other pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any environmental damage caused by the release and for natural resource damages resulting from the release. We will comply in all material respects with the requirements of the Clean Water Act and state statutes enacted to control water pollution.

 

Our operations will also be subject to laws and regulations requiring removal and cleanup of environmental damages under certain circumstances. Laws and regulations protecting the environment have generally become more stringent in recent years, and may in certain circumstances impose “strict liability,” rendering a corporation liable for environmental damages without regard to negligence or fault on the part of such corporation. Such laws and regulations may expose us to liability for the conduct of operations or conditions caused by others, or for acts which may have been in compliance with all applicable laws at the time such acts were performed. The modification of existing laws or regulations or the adoption of new laws or regulations relating to environmental matters could have a material adverse effect on our operations.

 

Subsidiarie s

We wholly own and operate Polar Petroleum (AK) Corp., an Alaska corporation.

 

Employees

We have no employees other than Daniel Walker, our sole officer and director.

We plan to outsource independent consultant engineers and geologists on a part time basis to conduct specific corporate business and exploration programs on our properties in order to carry out our plan of operations   for the foreseeable future.   Consultants will be retained on the basis of ability and experience.

 

Intellectual Property

We do not own any copyrights, patents or trademarks.

Internet Website

Our website is located at www.polarpetro.com

 

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Research and Development

The Company conducts oil and gas exploration activities on oil and gas properties in order to assess whether these claims possess commercially exploitable oil and gas deposits. Otherwise, we do not spend any significant amount of time in research and development activities.

ITEM 1A. RISK FACTORS.

An investment in our securities involves a high degree of risk.  You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities.  If any of the following risks actually occurs, our business, financial condition, and/or results of operations could be harmed.  In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.  You should only purchase our securities if you can afford to suffer the loss of your entire investment.

 

Risks Related to our Business:

We have a limited operating history upon which an evaluation of our prospects can be made.

 

We were incorporated in March 2011, and we recently entered the oil and gas business. Our lack of operating history makes an evaluation of our business and prospects very difficult. Our prospects must be considered speculative, considering the risks, expenses, and difficulties frequently encountered in the establishment of a new business. We cannot be certain that our business will be successful or that we will generate significant revenues.

 

We have limited revenues to sustain our operations.

 

We are currently developing our business and have not generated any revenues to date. We are not able to predict whether we will be able to develop our business and generate any significant revenues. If we are not able to complete the successful development of our business plan, generate significant revenues and attain sustainable operations, then our business will fail.

 

We will need additional financing to execute our business plan.

We have no revenues from our current operations to support our operating costs and anticipated drilling programs. We will need substantial additional funds to:

 

●	effectuate our business plan;
●	fund the acquisition, exploration, development and production of oil and natural gas in the future;
●	fund future drilling programs; and
●	hire and retain key employees.

 

We may seek funds through public or private equity or debt financing, via strategic transactions, and/or from other sources. There are no assurances that future funding will be available on favorable terms or at all. If additional funding is not obtained, we may need to reduce, defer or cancel drilling programs, planned initiatives, or overhead expenditures to the extent necessary.  The failure to fund our operating and capital requirements could have a material adverse effect on our business, financial condition and results of operations.

Failure to successfully complete the terms of the Purchase Agreement, Escrow Agreement and Promissory Note will adversely effect our business, financial condition, and results of operations.

As part of the Purchase Agreement, that our wholly-owned subsidiary Polar Petroleum (AK) Corp., entered into with Mr. Donkel and Mr. Cade, we are required to make certain payments on a quarterly basis. The required payments are $125,000 a quarter for the first twelve (12) months, then $100,000 a quarter for the second twelve (12) months, and a $300,000 payment on or before the last day of the twenty-fourth (24) month after the date of the Promissory Note that was entered into as part of the Purchase Agreement. The Company is also required within the first two (2) years after closing the Purchase Agreement to drill at least one, eight thousand (8,000) foot deep test well, on one of the three designated leases, or the Company will forfeit the Company’s interest in all the leases. If the Company fails to either make the required payments or fails to drill the required eight thousand (8,000) foot test well as per the Purchase Agreement, the Company will be materially negatively affected, all money and effort put into the Leases will be lost, and the Company may cease operations entirely.

 

 

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Failure to successfully complete the terms of the Purchase Agreements , Escrow Agreements and Promissory Notes will adversely affect our business, financial condition, and results of operations.

As part of the two Purchase Agreements that our wholly-owned subsidiary, Polar Petroleum (AK) Corp., entered into with Mr. Donkel and Mr. Cade, we are required to make certain payments on a quarterly basis as described above . The Company is also required within the first two years after closing the Hemi/Franklin Purchase Agreement to drill at least one 8,000 foot deep test well, on one of the three designated leases, or the Company will forfeit the Company’s interest in all the leases. If the Company fails to either make the required payments or fails to drill the required 8,000 foot test well as per the Hemi/Franklin Purchase Agreement, the Company will be materially negatively affected, all money and effort put into the Hemi/Franklin Leases will be lost, and the Company may cease operations entirely.  Likewise, if we fail to pay the First or Second Promissory Notes in accordance with their terms, we may lose the leases, which would have a material adverse effect and could cause the Company to cease operations entirely.

Additional capital may be costly or difficult to obtain.

Additional capital, whether through the offering of equity or debt securities, may not be available on reasonable terms or at all, especially in light of the current economy and dislocations in the credit and capital markets. If we are unable to obtain required additional capital, we may have to curtail our plans or cut back on existing business and, further, we may not be able to continue operating if we do not generate sufficient revenues from operations needed to stay in business.  We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.

 

Because we are small and have limited access to additional capital, we may have to limit our exploration and development activity, which may result in a loss of investment.

We have a small asset base and limited access to additional capital. Accordingly, we must limit our exploration and development activity. As such, we may not be able to complete an exploration and development program that is as thorough as our management would like. In that event, existing resources may go undiscovered. Without finding resources, we will not be able to generate revenues and investors may lose their investment.

 

State of Alaska Incentive Program

 

We anticipate that the Company should be entitled to an effective cash reimbursement of a significant proportion of certain of its exploration costs pursuant to certain tax laws of the State of Alaska. We have made certain assumptions concerning the availability and timing of certain estimated cash payments to which we believe the Company should or may be entitled pursuant to such tax laws. The detailed conditions required to be fulfilled in order to qualify for either tax credits or the purchase by the State of Alaska of such tax credits remain the subject of further investigation and analysis by the Company. There can be no certainty or guarantee that such tax credits or the whole or any part of the sums that we currently anticipate and assume will become available to the Company, either within the time period anticipated by us or at all.

Oil exploration and development activities are subject to many risks which may affect our ability to obtain any level of commercial success.  

 

Oil exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may negatively affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-ins of connected wells resulting from extreme weather conditions, insufficient storage or transportation capacity or other geological and mechanical conditions. Production delays and declines from normal field operating conditions cannot be eliminated and can be expected to negatively affect revenue and cash flow levels to varying degrees.

 

Our commercial success depends on our ability to find, acquire, develop and commercially produce oil and natural gas resources.  

 

Our ability to generate revenues will depend not only on our ability to explore and develop any properties we may acquire, but also on our ability to select and acquire suitable producing properties or prospects.  We cannot guarantee that we will be able to locate satisfactory properties for acquisition or participation.  Moreover, if such acquisitions or participations are identified, we may determine that current markets, terms of acquisition and participation or pricing conditions make such acquisitions or participations economically disadvantageous.  In addition, because we have limited capital, we may not be able to complete an exploration program as thorough as our management would like. We cannot guarantee that commercial quantities of oil will be discovered or acquired by us.

 

 

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Our operations may rely extensively on third-parties who, if not successful, could have a material adverse effect on our results of operation.

Our current ability to develop and grow our operations depends on the success of our consultants and drilling partners.  As a result, we do not control the timing or success of the development, exploitation, production and exploration activities relating to our leasehold interests.  If our consultants and drilling partners are not successful in such activities relating to our leasehold interests, or are unable or unwilling to perform, our financial condition and results of operation would be materially adversely affected. As of the date of this filing, the Company has not entered into any third-party arrangements or agreements.

Our oil and gas operations are subject to operating hazards that may increase our operating costs to prevent such hazards, or may materially affect our operating results if any of such hazards were to occur.

Oil and natural gas exploration, development and production operations are subject to all the risks and hazards typically associated with such operations, including hazards such as fire, explosion, blowouts, cratering, unplanned gas releases and spills, each of which could result in substantial damage to our wells, production facilities, other property and the environment or in personal injury. Oil and gas production operations are also subject to all the risks typically associated with such operations, including encountering unexpected formations or pressures, premature decline of reservoirs and the invasion of water into hydrocarbon producing formations. Losses resulting from the occurrence of any of these risks could negatively affect our results of operations, liquidity and financial condition.

To date, we have not generated any revenues from our oil lease interests.  In addition, we will not have revenues to support our activities should the wells drilled or properties acquired prove not to be commercially viable.  We cannot guarantee that commercial quantities of oil and gas will be successfully produced as a result of our exploration and development efforts.  Further there is no guarantee that we will generate sufficient revenues from current production.

Our exploration and development activities will depend in part on the evaluation of data obtained through geophysical testing and geological analysis, as well as test drilling activity.

 

The results of geophysical testing and geological analysis are subjective, and we cannot guarantee that the exploration and development activities we conduct based on positive analysis will produce oil or gas in commercial quantities or costs.  As we perform developmental and exploratory activities, further data required for evaluation of our oil and gas interests will become available.  The exploration and development activities that will be undertaken by us are subject to greater risks than those associated with the acquisition and ownership of producing properties.  The drilling of development wells, although generally consisting of drilling to reservoirs believed to be productive, may result in dry holes or a failure to produce oil or gas in commercial quantities.  Moreover, any drilling of exploratory wells is subject to significant risk of dry holes.

We may depend on the services of third parties for material aspects of our operations, including drilling operators, and accordingly if we cannot obtain certain third party services, we may not be able to operate.

 

We may rely on third parties to operate the assets in which we possess an interest. Assuming the presence of commercial quantities of oil on our property, the success of the oil operations, whether considered on the basis of drilling operations or production operations, will depend largely on whether the operator of the property properly fulfills our obligations.  As a result, our ability to exercise influence over the operation of these assets or their associated costs may be extremely limited.  Our performance will therefore depend upon a number of factors that may be outside of our control, including the timing and amount of capital expenditures, the operator’s expertise and financial resources, the approval of other participants, the selection of technology, and risk management practices.  The failure of third party operators and their contractors to perform their services in a proper manner will negatively affect our operations.

 

Our lack of diversification will increase the risk of an investment in us, and our financial condition and results of operations may deteriorate if we fail to diversify.

 

Our current business focus is on the oil and gas industry in the State of Alaska. Larger companies have the ability to manage their risk by diversification. However, we currently lack diversification, in terms of both the nature and geographic scope of our business. As a result, we will likely be impacted more acutely by factors affecting our industry or the regions in which we operate, than we would if our business were more diversified, enhancing our risk profile.

 

 

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If we are unable to successfully compete with the large number of oil and natural gas producers in our industry, we may not be able to achieve profitable operations.

 

Oil and natural gas exploration is intensely competitive in all its phases and involves a high degree of risk.  We compete with numerous other participants in the search for and the acquisition of oil and natural gas properties and in the marketing of oil and natural gas.  Our competitors include energy companies that have substantially greater financial resources, staff and facilities than us. Our ability to succeed in the future will depend not only on our ability to explore and develop our existing properties, but also on our ability to select and acquire suitable producing properties or prospects for exploratory drilling.  Competitive factors in the distribution and marketing of oil and natural gas include price and methods and reliability of delivery.  Competition may also be presented by alternate fuel sources.

 

We are highly dependent on our strategic relationships, which are subject to change.

Our ability to successfully acquire additional properties, to participate in drilling opportunities and to identify and enter into commercial arrangements will depend on developing and maintaining close working relationships with industry participants and our ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment.  Our inability to maintain close working relationships with industry participants or continue to acquire suitable property may impair our ability to execute our business plan.

To develop our business, we need to continue to foster the business relationships of our management to enter into strategic relationships, which may take the form of joint ventures with other private parties and contractual arrangements with other crude oil and natural gas companies.  We may not be able to establish these strategic relationships, or if established, we may not be able to maintain them.  In addition, our relationships with strategic partners may require us to incur expenses or undertake activities we would not otherwise be inclined to in order to fulfill our obligations to these partners or maintain our relationships.  If sufficient strategic relationships are not established and maintained, our business prospects, financial condition and results of operations may be materially adversely affected.

 

Our property is held in the form of leases and working interests in leases. If the specific requirements of such leases and working interests are not met, the instrument may terminate or expire.

 

Our property is held under interests in oil and gas leases and working interests in leases. If we fail to meet the specific requirements of each lease or working interest, especially future drilling and production requirements, the lease may be terminated or otherwise expire. We cannot be assured that we will be able to meet our obligations under each lease and working interest. The termination or expiration of our working interest relating to any lease would harm our business, financial condition and results of operations.

 

Current global financial conditions have been characterized by increased volatility which could negatively impact our business and future prospects.

 

Current global financial conditions and recent market events have been characterized by increased volatility and the resulting tightening of the credit and capital markets has reduced the amount of available liquidity and overall economic activity. We cannot guarantee that debt or equity financing, the ability to borrow funds or cash generated by operations will be available or sufficient to meet or satisfy our initiatives, objectives or requirements. Our inability to access sufficient amounts of capital on terms acceptable to us for our operations will negatively impact our business, prospects, liquidity and financial condition.

 

Our officers and directors are engaged in other activities that could conflict with our interests. Therefore, our officers and directors may not devote sufficient time to our affairs, which may affect our ability to conduct business activities and generate revenues.

 

Our officers and directors have existing responsibilities and may have additional responsibilities to provide management and services to other entities. As a result, conflicts of interest between us and the other activities of those entities may occur from time to time, in that our officers and directors shall have conflicts of interest in allocating time, services, and functions between the other business ventures in which they may be or become involved and our affairs.

 

 

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We depend on the efforts and abilities of our sole officer and director.

 

We have one full time employee, Daniel Walker. Outside demands on his time may prevent him from devoting sufficient time to our operations. In addition, the demands on his time will increase because of our status as a public company.  Mr. Walker has very limited experience managing a public company, which may impact our ability to meet our financial and business objectives as potential investors may not want to invest in a company whose management has limited public company experience. The interruption of the services of our management could significantly hinder our operations, profits and future development, if suitable replacements are not promptly obtained.   We cannot guarantee that our management will remain with us.

  

Seasonal weather conditions and other factors could adversely affect our ability to conduct drilling activities.

Our operations could be adversely affected by seasonal weather conditions and wildlife restrictions on federal leases. In some areas, certain drilling and other oil and gas activities can only be conducted during limited times of the year, typically during the summer months. This would limit our ability to operate in these areas and could intensify competition during those times for drilling rigs, oil field equipment, services, supplies and qualified personnel, which may lead to periodic shortages. These constraints and the resulting shortages or high costs could delay our operations and materially increase our operating and capital costs, which could have a material adverse effect upon us and our results of operations.

 

We are subject to various regulatory requirements, including environmental regulations, and may incur substantial costs to comply and remain in compliance with those requirements.

 

Our operations in the United States are subject to regulation at the federal, state and local levels, including regulation relating to matters such as the exploration for and the development, production, marketing, pricing, transmission and storage of oil and gas, as well as environmental and safety matters.  Failure to comply with applicable regulations could result in fines or penalties being owed to third parties or governmental entities, the payment of which could negatively impact our financial condition or results of operations.  Our operations are subject to significant laws and regulations, which may negatively affect our ability to conduct business or increase our costs.  Extensive federal, state and local laws and regulations relating to health and environmental quality in the United States affect nearly all of our operations.  These laws and regulations set various standards regulating various aspects of health and environmental quality, provide for penalties and other liabilities for the violation of these standards, and in some circumstances, establish obligations to remediate current and former facilities and off-site locations.

Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and gas operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of the applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. The discharge of oil or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy such discharge. No assurance can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely impact our financial condition, results of operations or prospects.  We could incur significant liability for damages, clean-up costs and/or penalties in the event of discharges into the environment, environmental damage caused by us or previous owners of our property or non-compliance with environmental laws or regulations. In addition to actions brought by governmental agencies, we could face actions brought by private parties or citizens groups.

 

Moreover, we cannot predict what legislation or regulations will be enacted in the future or how existing or future laws or regulations will be administered, enforced or made more stringent. Compliance with more stringent laws or regulations, or more vigorous enforcement policies of the regulatory agencies, could require us to make material expenditures for the installation and operation of systems and equipment for remedial measures, all of which could have a material adverse effect on our financial condition or results of operations.

 

 

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The market for oil and natural gas is subject to a number of factors that are beyond our control, and may adversely impact our ability to generate significant revenues, or to achieve profitability.

 

The marketability and price of oil and natural gas that may be acquired or discovered by us will be affected by numerous factors beyond our control.  Our ability to generate revenues may depend upon acquiring space on pipelines that deliver hydrocarbons to commercial markets. We may be affected by deliverability uncertainties related to the proximity of our properties to pipelines and processing facilities, by operational problems with such pipelines and facilities, and by government regulation relating to price, taxes, royalties, land tenure, allowable production, the export of oil and gas and by many other aspects of the oil and gas business.

 

Our ability to generate revenues and grow our operations are substantially dependent on prevailing prices of oil and natural gas. Our ability to borrow and to obtain additional capital on attractive terms is also substantially dependent upon oil and natural gas prices. Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and a variety of additional factors beyond our control. These factors include economic conditions in the United States, the actions of the Organization of Petroleum Exporting Countries, governmental regulation, political stability in the Middle East and elsewhere, the foreign supply of oil, the price of foreign imports and the availability of alternative fuel sources. Any substantial and extended decline in the price of oil and natural gas would have an adverse effect on our borrowing capacity, revenues, profitability and cash flows from operations.

 

Volatile commodity prices make it difficult to estimate the value of producing properties for acquisition and often cause disruption in the market for producing properties, as buyers and sellers have difficulty agreeing on such value. Price volatility also makes it difficult to budget for and project the return on acquisitions and development and exploitation projects.

The potential profitability of oil and gas properties depends upon factors beyond our control.

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect our financial performance. In addition, a productive well may become uneconomic in the event that water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. These factors cannot be accurately predicted and the combination of these factors may result in us not receiving an adequate return on invested capital.

 

The costs to meet our reporting requirements as a public company subject to the Exchange Act of ‘34 will be substantial and may result in us having insufficient funds to operate our business.

We will incur ongoing expenses associated with professional fees for accounting and legal expenses associated with being a public company. We estimate that these costs will range up to $150,000 per year for the next few years. Those fees will be higher if our business volume and activity increases.  Those obligations will reduce and possibly eliminate our ability and resources to fund our operations and may prevent us from meeting our normal business obligations.

 

 

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Risks Related to our Common Stock

 

Trading in our Common Stock was temporarily suspended by the SEC, and we have been and may continue to be subject to regulatory actions that have a material adverse effect on the liquidity and price of our Common Stock, directly or indirectly through the effect of such actions on investor confidence.

On June 10, 2013, the SEC announced the suspension, pursuant to Section 12(k) of the Exchange Act, of trading in the securities of the Company, commencing at 9:30 a.m. EDT on June 10, 2013, and terminating at 11:59 p.m. EDT on June 21, 2013. The Commission temporarily suspended trading in the securities of Polar because of questions regarding the accuracy and adequacy of assertions by Polar, and by others, to investors in press releases and promotional material concerning, among other things, the company’s assets, operations, and financial condition. This order was entered pursuant to Section 12(k) of the Securities Exchange Act.

 

Following this type of trading suspension, a broker-dealer generally may not solicit investors to buy or sell the previously-suspended over-the-counter stock until certain requirements are met. A broker-dealer must file and clear with the Financial Industry Regulatory Authority, Inc. (“FINRA”) a Form 211 representing that it has satisfied all applicable requirements, including those of Rule 15c2-11 and FINRA Rule 6432. Rule 15c2-11 requires, among other things, that broker-dealers review and maintain certain information regarding an issuer and have a reasonable basis under the circumstances for believing that the information is accurate in all material respects and the sources of the information are reliable.

Although we continue to seek to have our common stock quoted, we have not yet retained a broker-dealer to file a Form 211 with the FINRA, and we do not know when, if at all, any quotation of our securities will again be entered.  We therefore expect the liquidity and price of our Common Stock to materially decrease.  Additionally, there can be no assurance that the SEC or other regulators or third parties will not take further regulatory or legal action against the Company. Any such action, and lack of investor confidence, would have a material adverse effect on the Company, and the liquidity and price of the Common Stock. 

The Company has been informed that the SEC has issued an order directing a private investigation to determine whether (a) Polar, its officers, directors, employees, partners, subsidiaries and/or affiliates, or other persons or entities, may have been or may be offering to sell, selling and delivering after sale to the public, or offering to sell or to buy, certain securities, including, but not limited to Polar common stock, as to which no registration statement was or is in effect and for which no exemption from registration was or is available; (b) Polar, its officers, directors, employees, partners, subsidiaries and/or affiliates, and/or other persons or entities, in the offer or sale or in connection with the purchase or sale of certain securities, may have been or may be employing devices, schemes or artifices to defraud, obtaining money or property by means of untrue statements of material fact or omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were or are made, not misleading, or engaging in transactions, acts, practices or courses of business which operated, operate, or would operate as a fraud or deceit upon any person; (c) consultants, partners and/or affiliates of Polar, and/or others, may have published, given publicity to, or circulated any notice, circular, advertisement, newspaper, article, letter, investment service or communication which, though not purporting to offer Polar’s securities for sale, describes such security for a consideration received or to be received, directly or indirectly, from Polar, without fully disclosing the receipt of such consideration and the amount thereof; or (d) Polar, its officers, directors, employees, partners, subsidiaries and/or affiliates may have been or may be filing or causing to be filed with the SEC annual reports on Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q that may have contained untrue statements of material fact or may have omitted and may omit to state material facts necessary, or may have failed to add such further material information as may be necessary, in order to make the statements made, in the light of the circumstances under which they were or are made, not misleading.   The SEC has issued to the Company a subpoena for documents and ordered the deposition of Company officers. 

 

The Company is unaware of any of the purported actions and omissions referred to above and is cooperating fully with the SEC’s staff in their investigation.  There has been no change to the Company’s business plan. 

 

While the Company intends to work diligently to resolve any issues with the SEC, there can be no assurance that the SEC or other regulators or third parties will not take further regulatory or legal action against the Company.  Any such action, and lack of investor confidence, would have a material adverse effect on the Company, and the liquidity and price of our securities.

 

 

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There Is No Present Market for Our Stock and No Assurance That Any Future Market Will Develop.

 

Our common stock is currently a grey market stock not eligible for quotation on the OTC Bulletin Board.  There is no market maker for our common stock.  Grey market stocks are not traded or quoted on an exchange or inter-dealer quotation system, but are reported by broker-dealers to their self-regulatory organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites.  Since grey market securities are not traded or quoted on an exchange or inter-dealer quotation system, investor's bids and offers are not collected in a central spot, so market transparency is diminished and Best Execution of orders, or any execution at all, is difficult.  Because our common stock is not listed on any securities exchange or quoted on an inter-dealer quotation system, our stock has very limited liquidity and may receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

 

Our stock price may be volatile, which may result in losses to our stockholders.

 

Even if a market for our common stock develops, our stock price may be volatile.  The stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies quoted on the over-the-counter markets generally have been very volatile and have experienced sharp share-price and trading-volume changes.  If a market for our common stock develops, the trading price of our common stock is likely to be volatile and could fluctuate widely in response to many of the following factors, some of which are beyond our control:

 

	·   variations in our operating results;
	·   changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;
	·   changes in operating and stock price performance of other companies in our industry;
	·   additions or departures of key personnel; and
	·   future sales of our common stock.

 

Domestic and international stock markets often experience significant price and volume fluctuations.  These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock. In particular, following initial public offerings, the market prices for stocks of companies often reach levels that bear no established relationship to the operating performance of these companies.  These market prices are generally not sustainable and could vary widely.  In the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation has often been initiated.  

Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and may grant voting powers, rights and preference that differ from or may be superior to those of the registered shares.

 

Our articles of incorporation allow us to issue 20,000,000 shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. Furthermore, Daniel Walker serves as our sole director and, therefore, has the ability to issue preferred stock without shareholder approval, especially in the event the offering is not subscribed sufficiently to constitute a majority of the issue and outstanding shares of common stock. As a result, our sole director could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

 

Investors should not look to dividends as a source of income.

 

We do not intend to pay cash dividends in the foreseeable future.  Consequently, any economic return will initially be derived, if at all, from appreciation in the fair market value of our stock, and not as a result of dividend payments.

 

 

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Our common shares are thinly-traded, and in the future, may continue to be thinly-traded, and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate such shares.

 

We cannot predict the extent to which an active public market for our common stock will develop or be sustained due to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.

 

The market price for our common stock may be particularly volatile given our status as a relatively small company and lack of significant revenues that could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.

 

The market for our common shares may be characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will be more volatile than a seasoned issuer for the indefinite future. The potential volatility in our share price is attributable to a number of factors. First, as noted above, our common shares may be sporadically and/or thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our stockholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those sales without adverse impact on its share price. Secondly, an investment in us is a speculative or “risky” investment due to our lack of revenues or profits to date. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

 

Volatility in our common stock price may subject us to securities litigation.

The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

Volatility of stock price may restrict sale opportunities.

Our stock price is affected by a number of factors, including stockholder expectations, financial results, the introduction of new products by us and our competitors, general economic and market conditions, estimates and projections by the investment community and public comments by other persons, and many other factors, many of which are beyond our control.  We may be unable to achieve analysts’ revenue or earnings forecasts, which may be based on projected volumes and sales of many product types and/or new products, certain of which are more profitable than others.  There can be no assurance that we will achieve projected levels of revenues. As a result, our stock price is subject to significant volatility and stockholders may not be able to sell our stock at attractive prices.

 

Our common stock is subject to penny stock rules, which may make it more difficult for our stockholders to sell their common stock.

 

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the SEC.  Penny stocks generally are equity securities with a price of less than $5.00 per share.  The penny stock rules require a broker-dealer, prior to a purchase or sale of a penny stock not otherwise exempt from the rules, to deliver to the customer a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.  In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules.

 

 

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We will need additional capital, and the sale of additional shares or other equity securities could result in additional dilution to our stockholders.

 

Our current cash and cash equivalents are not sufficient to meet our anticipated cash needs for the near future. We will require additional cash resources for investments and acquisitions we may decide to pursue. If our resources are insufficient to satisfy our cash requirements, we will seek to sell additional equity or debt securities. The sale of additional equity securities could result in additional dilution to our stockholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

 

Restrictions on the reliance of Rule 144 by former shell companies.

 

Prior to November 5, 2012, the Company had been a “shell company” as defined in Rule 12b-2 under the Exchange Act.  Pursuant to Rule 144(i), restricted and control securities issued by a current or former shell company (such as our common stock) that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the Company (a) is no longer a shell company; and (b) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports. 

 

We are a voluntary filer of reports with the SEC and are not currently subject to the reporting requirements of section 13 or 15(d) of the Exchange Act.  While we intend in the future to register our common stock under Section 12 of the Exchange Act and thus become subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, we cannot assure when this will occur.   Consequently, restricted and control shares of our common stock (e.g., those issued in a business combination or an unregistered private placement of securities) cannot currently be sold in reliance upon Rule 144.  Even after we have met the criteria above, any restrictive legends on certificates for our common stock cannot be removed except in connection with an actual sale meeting the foregoing requirements or pursuant to an effective registration statement.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2. PROPERTIES.

 

Our oil and gas interests consist of 29 oil and gas leases covering approximately 66,061acres located in the North Slope region.  We are currently developing our plan of operation for the leases and intend to begin the process of obtaining all necessary governmental approvals and permits in order to commence our operations.   The descriptions of our oil and gas leases contained in Item 1, “Business,” above are incorporated herein by reference.

 

Office Lease

 

Our office is located at 4300 B Street, Suite 505, Anchorage, Alaska, and our telephone number is (907) 561-3001. We currently pay approximately $1,000 a month to lease this space, and our lease is for a period of one year.  As of the date of this filing, the Company has not sought to move our office. Additional space may be required as the Company expands its operations. Management does not foresee any significant difficulties in obtaining any required additional space. The Company currently does not own any real property. We have described our oil and gas leases above.

 

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ITEM 3. LEGAL PROCEEDINGS.

Legal Proceedings

In the ordinary course of our business, we may from time to time become subject to routine litigation or administrative proceedings that are incidental to our business.  We are not a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.

On June 10, 2013, the Securities and Exchange Commission (the “SEC”) issued an order suspending trading in our common stock on the OTC Bulletin Board and OTC Markets for a period of eleven days ending on June 21, 2013.  In its order, the SEC alleged that there was “a lack of current and accurate information concerning the securities of [Polar Petroleum] because of questions regarding the adequacy and accuracy of assertions by Polar, and by others, to investors in press releases and promotional material concerning, among other things, the [C]ompany’s assets, operations, and financial condition.”  Neither the Company nor any of its officers or directors has issued, produced, authorized or paid for any promotional materials concerning the Company, its securities, assets, operations or financial condition, nor is any of them aware of the identity of any persons who have issued, produced, authorized or paid for any such promotional materials.  With respect to its press releases, the Company is not aware of any untrue statements of material fact or any omission to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

 

The Company has been informed that the SEC has issued an order directing a private investigation to determine whether (a) Polar, its officers, directors, employees, partners, subsidiaries and/or affiliates, or other persons or entities, may have been or may be offering to sell, selling and delivering after sale to the public, or offering to sell or to buy, certain securities, including, but not limited to Polar common stock, as to which no registration statement was or is in effect and for which no exemption from registration was or is available; (b) Polar, its officers, directors, employees, partners, subsidiaries and/or affiliates, and/or other persons or entities, in the offer or sale or in connection with the purchase or sale of certain securities, may have been or may be employing devices, schemes or artifices to defraud, obtaining money or property by means of untrue statements of material fact or omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were or are made, not misleading, or engaging in transactions, acts, practices or courses of business which operated, operate, or would operate as a fraud or deceit upon any person; (c) consultants, partners and/or affiliates of Polar, and/or others, may have published, given publicity to, or circulated any notice, circular, advertisement, newspaper, article, letter, investment service or communication which, though not purporting to offer Polar’s securities for sale, describes such security for a consideration received or to be received, directly or indirectly, from Polar, without fully disclosing the receipt of such consideration and the amount thereof; or (d) Polar, its officers, directors, employees, partners, subsidiaries and/or affiliates may have been or may be filing or causing to be filed with the SEC annual reports on Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q that may have contained untrue statements of material fact or may have omitted and may omit to state material facts necessary, or may have failed to add such further material information as may be necessary, in order to make the statements made, in the light of the circumstances under which they were or are made, not misleading.   The SEC has issued to the Company a subpoena for documents and ordered the deposition of Company officers. 

 

The Company is unaware of any of the purported actions and omissions referred to above and is cooperating fully with the SEC’s staff in their investigation.  There has been no change to the Company’s business plan. 

 

While the Company intends to work diligently to resolve any issues with the SEC, there can be no assurance that the SEC or other regulators or third parties will not take further regulatory or legal action against the Company.   Any such action, and lack of investor confidence, would have a material adverse effect on the Company, and the liquidity and price of our securities.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

 

 

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PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

 

On June 10, 2013, the Securities and Exchange Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934, of trading in the securities of Polar at 9:30 a.m. EDT on June 10, 2013, and terminating at 11:59 p.m. EDT on June 21, 2013. The Commission temporarily suspended trading in the securities of Polar because of questions regarding the accuracy and adequacy of assertions by Polar, and by others, to investors in press releases and promotional material concerning, among other things, the company’s assets, operations, and financial condition. This order was entered pursuant to Section 12(k) of the Securities Exchange Act.

 

Our common stock was previously quoted on the Over-the-Counter Bulletin Board (“OTCBB”) from January 12, 2012, through June 10, 2013.  Our common stock is currently a grey market stock not eligible for quotation on the OTCBB.  There is no market maker for our common stock.  Grey market stocks are not traded or quoted on an exchange or inter-dealer quotation system, but are reported by broker-dealers to their self-regulatory organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites.  Since grey market securities are not traded or quoted on an exchange or inter-dealer quotation system, investor's bids and offers are not collected in a central spot, so market transparency is diminished and Best Execution of orders, or any execution at all, is difficult.

 

Because our common stock is not listed on any securities exchange or quoted on an inter-dealer quotation system, our stock has very limited liquidity and may receive less or no coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.   Because quotations on our common stock may be limited, sporadic or nonexistent, it may be deemed that there is not an established public trading market for our common stock.

The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTCBB since we began trading January 12, 2012, through June 10, 2013, based on our fiscal year end March 31. These prices represent quotations between dealers without adjustment for retail markup, markdown or commission and may not represent actual transactions.   There has been very limited trading activity in our common stock, and the prices quoted may not be a reliable indication of the value of our common stock.

                                                                                                                                                                                                          

Fiscal Year Ended			Bid Prices 1
March 31,	Period		High				Low
2012	First Quarter ended June 30, 2011			N/A				N/A
	Second Quarter ended Sept. 30, 2011			N/A				N/A
	Third Quarter ended Dec. 31, 2011			N/A				N/A
	Fourth Quarter ended March 31, 2012			N/A				N/A
2013	First Quarter ended June 30, 2012		$	0.036			$	0.014
	Second Quarter ended June 30, 2012			0.164				0.014
	Third Quarter ended Dec. 31, 2012			0.650				0.016
	Fourth Quarter ended March 31, 2013			1.580			$	0.650
2014	First Quarter (through June 10, 2013)			5.950			$	0.750
	Second Quarter ending Sept. 30, 2013			N/A				N/A

 

1.  Prices adjusted for 7-for-1 forward stock split on November 2, 2012.

 

 

 

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Holders

 

As of August 7, 2013 , an aggregate of 43,742,828 shares of our common stock were issued and outstanding and were owned by approximately 28 holders of record, based on information provided by our transfer agent.

 

Penny Stock Regulation

Shares of our common stock will probably be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks”. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:

●	a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
●	a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities’ laws;
●	a brief, clear, narrative description of a dealer market, including "bid" and "ask” prices for penny stocks and the significance of the spread between the "bid" and "ask" price;
●	a toll-free telephone number for inquiries on disciplinary actions;
●	definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and
●	such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:

●	the bid and offer quotations for the penny stock;
●	the compensation of the broker-dealer and its salesperson in the transaction;
●	the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
●	monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.

 

Description of Registrant’s Securities

 

We have authorized capital stock consisting of 700,000,000 shares of common stock, $0.001 par value per share (“Common Stock”)  and 20,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”).

 

 

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Dividends

We have not paid any cash dividends on our common stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our common stock will be paid in the future.

 

Preferred Stock   

We have not designated the right and preferences of our Preferred Stock. The availability or issuance of these shares could delay, defer, discourage or prevent a change in control.

Equity Compensation Plans

We do not have any equity compensation plans in place, whether approved by the shareholders or not.

Warrants, Options and Convertible Securities

We do not have any outstanding warrants, options or convertible securities.

Recent Sales of Unregistered Securities

 

On March 25, 2011, the Company authorized the sale of 14,000,000 shares of its common stock to its founding President for $.001 per share for a total of $20,000 cash to provide initial working capital.  The issuance of the shares was exempt from registration under the Securities Act as it did not involve any public offering.

On August 7, 2012, the Company’s former President and director sold 14,000,000 shares of common stock to our new sole officer and director, Daniel Walker, in a private transaction.  

On October 11, 2012, the Company issued 7,000,000 shares of the Company’s common stock (“Shares”) to Daniel Walker, its sole officer and director (“Walker”), valued at $100,000 as payment for services rendered to the Company.  The issuance of the shares was exempt from registration under the Securities Act as it did not involve any public offering.

(The share numbers above are after giving effect to the 7-for-1 Forward Stock Split on November 2, 2012.)

On November 6, 2012, the Company entered into a subscription agreement with a non-U.S. investor pursuant to which the Company issued 1,500,000 shares of the Company’s $.001 par value common stock in exchange for proceeds of $150,000, or $0.10 per share.  The issuance of the shares was exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S.

On December 18, 2012, the Company entered into a subscription agreement with a non-U.S. investor pursuant to which the Company issued 225,000 shares of the Company’s $.001 par value common stock in exchange for proceeds of $90,000, or $0.40 per share.  The issuance of the shares was exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S.

On December 24, 2012, the Company entered into a subscription agreement with a non-U.S. investor pursuant to which the Company issued 312,500 shares of the Company’s $.001 par value common stock in exchange for proceeds of $125,000, or $0.40 per share.  The issuance of the shares was exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S.

 

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During March 2013, the Company issued 90,000 shares of common stock to three individuals valued at $76,500.  The shares were issued for services pursuant to Advisor to the Board Agreements as described in Item 9B below (the “Advisory Board Agreements”).  The issuance of the shares was exempt from registration under the Securities Act as it did not involve any public offering.

 

The Company requested drawdowns per the Equity Financing Agreement (as defined in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital resources” below) as follows:

·	On February 8, 2013, in the amount of $125,000 for 184,775 shares of the Company’s common stock.

·	On April 16, 2013, in the amount of $100,000 for 156,128 shares of the Company’s common stock.

·	On May 6, 2013, in the amount of $150,000 for 64,412 shares of the Company’s common stock.

·	On May 15, 2013, in the amount of $250,000 for 80,013 shares of the Company’s common stock.

The above issuances of the shares were exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S.  See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” below for more information about the Equity Financing Agreement.

On July 1, 2013, the Company issued 90,000 shares of common stock to three individuals.  The shares were issued for services pursuant to the Advisory Board Agreements.  The issuance of the shares was exempt from registration under the Securities Act as it did not involve any public offering.

On July 22, 2013, the Company issued 125,000   shares of common stock to two individuals.  The shares were issued for services pursuant to the Advisory Board Agreements.  The issuance of the shares was exempt from registration under the Securities Act as it did not involve any public offering.

 

ITEM 6.       SELECTED FINANCIAL DATA.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

ITEM 7.       MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate,” “may,” “could” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Our Business Overview

Polar Petroleum (“Polar”) was incorporated in the State of Nevada on March 22, 2011 as Post Data, Inc.  We were previously a development stage company formed for purposes of decommissioning electronic data storage devices for permanent inoperability and unrecoverability of electronic data contained therein.  On July 30, 2012, our board and  management changed and we entered into the oil and gas business to engage in the exploration, development and production of oil and gas properties primarily in the State of Alaska.  The Company has selected March 31 as its fiscal year end.

 

 

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Results of Operations for the fiscal years ended March 31, 2013 and March 31, 2012

Revenues

The Company has not generated any revenues for the fiscal years ended March 31, 2013 and 2012.

Operating Expenses

The Company expenses for fiscal years ended March 31, 2013 and 2012 were $374,807 and $52,421, respectively.  Operating expenses increased in 2013 due to directors’ salaries, consulting expenses, and increased operational activities with the purchase of the Alaska Oil and Gas Property Leases as well as the issuance of stock for services.  We anticipate incurring further increased expenses once we begin exploration activities and will require additional funding to support our working capital needs.

Net loss for the year ended March 31, 2013 and 2012 was $375,442 and $52,437, respectively.

Financial Condition

Total assets.  Total assets at March 31, 2013 and 2012 were $1,352,393 and $0, respectively.  Total assets consist of cash, prepaid expenses and deposits, equipment, website, and oil and gas properties.

Total liabilities.  Total liabilities at March 31, 2013 and 2012 were $1,064,822 and $3,487, respectively.  Total liabilities at March 31, 2013 consist of accounts payable and accrued expenses of $28,895, shareholder loans of $60,927, current portion of note payable of $475,000 and long term portion of note payable of $500,000 due under the Oil and Gas Lease Purchase Agreements.

 

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

The Company has a net loss from operations for the fiscal year ended March 31, 2013.  Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern is entirely dependent on the Company’s ability to raise additional capital in order to implement its business plan as set forth in Item 1, “Business,” above. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

At March 31, 2013 we had working capital deficit of $552,318 or the amount by which our current liabilities exceed our current assets.  Our working capital deficit was due to the results of purchases of oil and gas properties.

 

Net cash used in operating activities for the fiscal year ended March 31, 2013 was $182,723.  Net cash used in investing activities for the year ended March 31, 2013 was $365,555.  Net cash provided by financing activities for the year ended March 31, 2013 was $550,552, generated primarily from proceeds of sales of our common stock.

We estimate that in order to carry out our exploration and development program as outlined in Item 1, “Business,” above over the next 12 months, we will have to expend approximately $1.8 million, none of which is currently on hand.  We may seek to raise funds through public or private sale of our equity or debt securities or borrowing funds from private or institutional lenders.  If we raise additional funds through the issuance of debt securities, these securities would have rights that are senior to holders of our common stock and could contain covenants that restrict our operations. Any additional equity financing would likely be substantially dilutive to our stockholders, particularly given the prices at which our common stock had been trading prior to the suspension of trading.  In addition, if we raise additional funds through the sale of equity securities, new investors could have rights superior to our existing stockholders. This could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool of outstanding equity.

 

 

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There can be no assurance that we will be successful in obtaining additional funding in sufficient amounts or on terms acceptable to us, if at all.  If we are unable to raise sufficient additional funds when needed, we would be required to curtail significantly or delay or eliminate part or all of our exploration and development plans and/or dispose of some or all of our properties.  If we are not able to raise the required funds, we may not be able to meet our lease payment obligations on our properties, and as a result we may lose our interests in these projects and all previously invested capital.

 

On March 18, 2013, we entered into a drawdown equity financing agreement (the “Equity Financing Agreement”) with US Energy Investments Ltd. (“US Energy”), pursuant to which we could sell and issue to US Energy, and US Energy was obligated to purchase from us, up to $10,000,000 worth of restricted shares of our common stock from time to time over a 36-month period, provided that certain conditions were met.  The effective date of the Agreement was February 7, 2013 (the “Effective Date”). The financing arrangement entered into by us and US Energy is commonly referred to as an “equity line of credit” or an “equity drawdown facility.”

 

Pursuant to the Equity Financing Agreement, we could, in our sole discretion, issue and exercise drawdowns against $10,000,000 over a 36-month period (the “Commitment Period”) commencing on the Effective Date.

 

We could request a drawdown once every six trading days and there must be a minimum of five trading days between each drawdown request.  The maximum amount we could draw down at any one time was an amount equal to (i) 200% of the average daily trading volume of our common stock during the 10 trading days prior to the date of the drawdown request, or (ii) Five Hundred Thousand Dollars ($500,000), whichever is larger.  Notwithstanding the foregoing, no drawdown could exceed $500,000 or such amount that would otherwise cause US Energy to exceed a beneficial ownership of 4.99% of our outstanding common stock.

 

On the day of the delivery of the drawdown notice, the purchase price (the “Purchase Price) was set at 75% percent of the volume weighted average price (the “VWAP”) of the preceding ten days’ closing price of the Company’s common stock on the Principal Market.

 

The term of the Equity Financing Agreement was 36 months from the Effective Date, unless otherwise terminated earlier. The Equity Financing Agreement would terminate if (i) there shall occur any stop order or suspension of the Company for an aggregate of 50 trading days, other than due to the acts of the Investor, during the Commitment Period, or (ii) the Company shall at any time fail materially to comply with its covenants in the Equity Financing Agreement and such failure is not cured within 30 days after receipt of written notice from the Investor, provided, however, that this termination provision shall not apply to any period commencing upon the filing of an amendment to such Company filings and ending upon the date on which such amendment is cleared by the SEC.

 

On August 2, 2013, the Equity Financing Agreement was terminated by US Energy, due to the ineligibility of the Company’s common stock for quotation on the OTCBB.  (See Item 5, “ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Market Information” above.)  There were no early termination penalties incurred by the Company or US Energy as a result of the termination of the Equity Financing Agreement.

 

We currently have no committed source of debt or equity financing.

Going Concern :

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Future Financing:

 

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

 

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Off-Balance Sheet Arrangements:

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Contractual Obligations :

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Recently Issued Accounting Pronouncements :

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The report of the independent registered public accounting firm and the financial statements listed on the accompanying index at page F-1 of this report are filed as part of this report.

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

TABLE OF CONTENTS

As of March 31, 2013

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of March 31, 2013 and 2012	F-2
Consolidated statements of Operations for the Fiscal Years Ended March 31, 2013 and 2012 and for the Period from March 22, 2011 (date of Inception) to March 31, 2013	F-3
Consolidated Statement of Stockholder’s Equity (Deficit) as of March 31, 2013	F-4
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2013 and 2012 and for the Period from March 22, 2011 (date of Inception) to March 31, 2013	F-5
Notes to the Consolidated Financial Statements	F-6 to F-16

 

 

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To the Board of Directors and Stockholders

Polar Petroleum Corp.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheets of Polar Petroleum Corp. as of March 31, 2013 and 2012, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the two-year period ended March 31, 2013 and for the period from March 22, 2011 (inception) to March 31, 2013. Polar Petroleum Corp.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Polar Petroleum Corp. as of March 31, 2013 and 2012, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2013 and for the period March 22, 2011 (inception) to March 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3, the Company has incurred an operating deficit since its inception, is in the exploration stage and has generated no operating revenue.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MartinelliMick PLLC

MartinelliMick PLLC

Spokane, Washington

July 11, 2013

 

F-1

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POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

 

		March 31,				March 31,
		2013				2012
ASSETS
Current Assets
Cash		$	2,274			$	-
Prepaid expenses and deposits			10,230				-
Total Current Assets			12,504				-
Equipment, net of accumulated depreciation of $666			1,996				-
Website, net of accumulated amortization $0			58,665				-
Oil and gas properties, unproved property			1,279,228				-
TOTAL ASSETS		$	1,352,393			$	-
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses		$	28,895			$	3,112
Loans from stockholders			60,927				375
Current portion of note payable			475,000				-
Total Current Liabilities			564,822				3,487
Long term portion of note payable			500,000				-
Total Liabilities			1,064,822				3,487
Commitments and Contingencies			-				-
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, par value $0.001, 20,000,000 shares authorized,     none issued and outstanding			-
Common stock, par value $.001, 700,000,000 shares authorized and    43,227,275 and 33,915,000 shares outstanding, respectively.			43,228				33,915
Additional paid-in capital			673,222				16,035
Deficit accumulated during the development stage			(428,879	)			(53,437	)
Total Stockholders' Equity (Deficit)			287,571				(3,487	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	1,352,393			$	-

 

See accompanying notes to the consolidated financial statements.

 

 

F-2

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

		Fiscal Year				Fiscal Year				Cumulative Totals
		Ended				Ended				Mar 22, 2011
		March 31,				March 31,				(Inception) to
		2013				2012				March 31, 2013
INCOME		$	-			$	-			$	-
OPERATING EXPENSES
Organizational expenses			3,442				300				4,742
Taxes and licenses			200				875				1,075
Office expenses			39,234				1,528				40,762
Accounting			24,760				15,532				40,292
Legal expenses			27,803				20,720				48,523
DTC eligibility			-				10,000				10,000
Other services			279,368				3,466				282,834
Total Operating Expenses			374,807				52,421				428,228
NET LOSS BEFORE OTHER INCOME (EXPENSE)			(397,807	)			(52,421	)			(428,228	)
OTHER INCOME (EXPENSE)
Interest			(1,343	)			(16	)			(1,359	)
Gain on currency exchange			708				-				708
Total Other Income (Expense)			(635	)			(16	)			(651	)
NET LOSS		$	(375,442	)		$	(52,437	)		$	(428,228	)
NET LOSS PER BASIC AND DILUTED SHARES		$	(0.01	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON    SHARES OUTSTANDING			37,957,492				26,120,899

See accompanying notes to the consolidated financial statements.

 

F-3

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM MARCH 22, 2011 (INCEPTION) THROUGH MARCH 31, 2013

 

		Common Stock								Additional Paid-in				Deficit accumulated during the development				Stockholders' Equity
		Shares				Amount				Capital				stage				(Deficit)
Beginning balance, March 22, 2011 (Inception)			-			$	-			$	-			$	-			$	-
Sale of shares at $.001 per share, March 2011			14,000,000				14,000				6,000				-				20,000
Net loss, period ended March 31, 2011			-				-				-				(1,000	)			(1,000	)
Balances, March 31, 2011			14,000,000				14,000				6,000				(1,000	)			19,000
Sale of shares at $.001 per share, August 2011			19,915,000				19,915				8,535				-				28,450
Related party website labor donation			-				-				1,500				-				1,500
Net loss, fiscal year ended March 31, 2012			-				-				-				(52,437	)			(52,437	)
Balance, March 31, 2012			33,915,000				33,915				16,035				(53,437	)			(3,487	)
Shares issued for services			7,090,000				7,090				169,410				-				176,500
Sale of shares at $.10 per shares, November 2012			1,500,000				1,500				148,500				-				150,000
Sale of shares at $.40 per shares, December 2012			537,500				538				214,462				-				215,000
Sale of shares at $.68 per shares, February 2013			184,775				185				124,815				-				125,000
Net loss, fiscal year ended March 31, 2013			-				-				-				(375,442	)			(375,442	)
Balance, March  31, 2013			43,227,275			$	43,228			$	673,222			$	(428,879)			$	287,571

 

See accompanying notes to the consolidated financial statements.

 

 

 

F-4

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Fiscal Year Ended March 31, 2013				Fiscal Year Ended March 31, 2012				Cumulative Totals March 22, 2011(Inception) to March 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(375,442	)		$	(52,437	)		$	(428,879	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Shares issued for services			176,500				-				176,500
Depreciation expense			666				-				666
Changes in assets and liabilities
Increase in prepaid expenses and deposits			(10,230	)			-				(10,230	)
Increase in accounts payable			25,783				3,112				28,895
Non-cash service donation			-				1,500				1,500
Net cash used in operating activities			(182,723	)			(47,825	)			(231,548	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment			(2,662	)			-				(2,662	)
Purchase of website			(58,665	)			-				(58,665	)
Purchase of oil and gas properties			(304,228	)			-				(304,228	)
Net cash used in investing activities			(365,555	)			-				(365,555	)
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from stockholders			60,552				375				60,927
Sale of common stock			490,000				28,450				538,450
Net cash provided by financing activities			550,552				28,825				599,377
Net change in cash			2,274				(19,000	)			2,274
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			-				19,000				-
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	2,274			$	-			$	2,274
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	855			$	-			$	855
Cash paid for taxes		$	-			$	-			$	-
NON-CASH TRANSACTION:
Related party donation of website development labor		$	-			$	1,500			$	1,500
Acquisition of oil and gas properties with debt		$	1,100,000			$	-			$	1,100,000

 

F-5

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

 

NOTE 1-                ORGANIZATION AND BASIS OF PRESENTATION

 

Polar Petroleum (“Polar”) was incorporated in the State of Nevada on March 22, 2011 as Post Data, Inc.  We were previously a development stage company formed for purposes of decommissioning electronic data storage devices for permanent inoperability and unrecoverability of electronic data contained therein.  On July 30, 2012, our management changed and we entered into the oil and gas business to engage in the exploration, development and production of oil and gas properties primarily in the State of Alaska.  The Company has selected March 31 as it fiscal year end.

 

On August 22, 2012, we formed a wholly-owned subsidiary, Polar Petroleum (AK) Corp., in the State of Alaska for purposes of operating our oil and gas business in the State of Alaska.

 

On October 24, 2012, we filed a Certificate of Amendment to our Articles of Incorporation (the “Certificate of Amendment”) with the Nevada Secretary of State to change our company name from “Post Data, Inc.” to “Polar Petroleum Corp.” (the “Name Change”) in order to better reflect the change in our business plan to oil and gas exploration, development and production. The effective date of the Name Change was November 2, 2012.

 

On October 24, 2012, we also filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes (the “Certificate of Change”) with the Nevada Secretary of State to effect a seven for one forward stock split of our common stock (the “Forward Stock Split”). The Certificate of Change increased the number of authorized shares of our common stock from 100,000,000 to 700,000,000 and the number of issued and outstanding shares of common stock for shareholders of record as of November 1, 2012, from 5,845,000 shares to 40,915,000 shares.  The effective date of the Forward Stock Split with the Nevada Secretary of State was November 2, 2012. The Name Change and the Forward Split took effect in the OTC markets at the open of business on November 6, 2012.  

 

NOTE 2-               SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Principles of Consolidation

 

The financial statements include the accounts of Polar and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments through which we exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments through which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method.

 

Exploration Stage Company

 

The Company is considered to be in the exploration stage as defined in FASC 915-10-05, “Development Stage Entity.”     The Company is devoting substantially all of its efforts to the execution of its business plan.

 

 

F-6

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 2-               SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

 

Basic and Diluted Loss Per Share

 

The Company follows financial accounting standards, which provide for calculation of “basic” and “diluted” earnings per share.  Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period.  Diluted earnings per share reflect the potential dilution of any other securities that could share in the earnings of the entity.  There were no common stock equivalents outstanding at March 31, 2013 and March 31, 2012.  If there were, however, they would still be excluded from the calculation of diluted earnings per share.  Net losses for the periods would have made the calculation result anti-dilutive.

 

Revenue Recognition

 

The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.  The Company has recognized no revenue since inception.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consists principally of currency on hand, demand deposits at commercial banks, and liquid investment funds having a maturity of three months or less at the time of purchase.  The Company had $2,274 and $0 cash available as of March 31, 2013 and March 31, 2012, respectively.

 

Property and Equipment

 

Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term.

 

Intangible Assets

 

All of our intangible assets are subject to amortization and are amortized using the straight-line method over their estimated period of benefit. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.

 

 

F-7

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 2-               SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Oil and Gas Properties

 

Oil and gas investments are accounted for by the full-cost method of accounting.  Accordingly, all costs associated with property acquisition, exploration, and development activities are capitalized.  Depletion of capitalized oil and gas well costs is provided using the units of production method based on estimated proved developed oil and gas reserves of the respective oil and gas properties. Significant undeveloped leases are assessed individually for impairment, based on the Company’s current exploration plans, and a valuation allowance is provided if impairment is indicated.

 

Asset Retirement Obligations

 

In August 2001, the FASB issued ASC 410-20,"Accounting for Asset Retirement Obligations" (ASC 410-20). ASC 410-20 requires that the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method.

 

Impairment of Long-Lived Assets

 

In accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long lived assets such as oil and gas properties and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset 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 estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of the fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.  Impairment of unproved oil and gas properties is determined by ASC 932, “Extractive Activities – Oil and Gas”.  The Company had no impairment charges as of March 31, 2013.

 

COMMITMENTS AND CONTINGENCIES

 

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.  There were no commitments or contingencies as of March 31, 2013

 

Income Taxes

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

 

F-8

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 2-                SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Foreign Currency Translation

 

The financial statements are presented in United States dollars.  In accordance with ASC 830“Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated into United States dollars at rates of exchange in effect at the balance sheet date.  Non-monetary items, including equity, are translated at the historical rate of exchange.  Revenues and expenses are translated at the average rates of exchange during the year.

 

Research and Development

 

Costs related to software development are included in research and development expense until the point that technological feasibility is reached.  Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products.

 

Recently Enacted Accounting Standards

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

 

  NOTE 3-              GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.  The Company has incurred an operating deficit since its inception, is in the development stage and has generated no operating revenue. These items raise substantial doubt about the Company’s ability to continue as a going concern.

 

In view of these matters, realization of the assets of the Company is dependent upon the Company’s ability to meet its financial requirements through equity financing and the success of future operations.  These consolidated financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

 

NOTE 4 -               EQUIPMENT

 

Equipment is carried at cost, less accumulated depreciation.  Maintenance and repairs are charged to current operations as incurred. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts, and any gain or loss on the disposition is included in other income. Depreciation expense is computed using the straight-line method over three years.

 

 

F-9

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 4 -               EQUIPMENT  (Continued)

 

Property and equipment and accumulated depreciation are as follows:

		March 31. 2013				March 31, 2012
Office Equipment		$	2,662			$	-
Less:  Accumulated Depreciation		$	(666	)		$	-
Property, Plant, and Equipment, Net		$	1,996			$	-

 

Depreciation expense was $666 and $0 for the years ended March 31, 2013 and 2012, respectively.

 

NOTE 5 -               WEBSITE

 

Website and accumulated amortization are as follows:

 

		March 31. 2013				March 31, 2012
Website		$	58,665			$	-
Less:  Accumulated Depreciation		$	-			$	-
Property, Plant, and Equipment, Net		$	58,665			$	-

 

There was no amortization expense for either year since the website has not been placed in service.  Once in service the asset will be amortized over its estimated useful life of 5 years.

NOTE 6 -               OIL WELL PROPERTIES

 

Purchase Agreement

 

On November 5, 2012, Polar Petroleum (AK) Corp., a wholly-owned subsidiary (the “Subsidiary”) of Polar entered into and closed a lease purchase agreement (the “Purchase Agreement”) with Daniel K. Donkel and Samuel H. Cade (together, the “Sellers”) pursuant to which the Subsidiary will acquire 100% of the record title of the Sellers to 17 oil and gas leases located in the State of Alaska (the “Leases”), while reserving a royalty of 16.67% for the State of Alaska and an overriding royalty of 4% for the Sellers, in exchange for a total purchase price of $1,250,000, with $150,000 of the purchase price due in cash at closing and the remaining $1,100,000 due in accordance with the terms of a promissory note between the Subsidiary and the Sellers (the “ First Promissory Note”).  The Purchase Agreement also provides that the Subsidiary is required to drill a test well (the “Test Well”) to a depth of at least 8,000 feet on one of three designated Leases (the “Test Well Leases”) within 2 years of the closing of the Purchase Agreement and, upon such drilling of the Test Well, the Subsidiary will assign a 20% working interest in such Test Well Lease to Donkel Oil & Gas, LLC.  Failure to complete drilling of the Test Well will result in the Subsidiary’s forfeiture of its interest in all of the three Test Well Leases.  The Purchase Agreement contains customary representations and warranties by the Subsidiary and the Sellers.

 

 

F-10

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 6 -               OIL WELL PROPERTIES (Continued)

 

Escrow Agreement

 

In connection with the Purchase Agreement, the Subsidiary entered into an Escrow Agreement with the Sellers (the “Escrow Agreement”) pursuant to which the Subsidiary executed and delivered to the escrow agent assignments (the “Assignments”) to re-assign 100% of its record title to the Test Well Leases back to the Sellers as collateral and security for the Subsidiary’s performance pursuant to the terms of the Purchase Agreement.  In the event the Subsidiary fails to drill the Test Well, the Assignments will be delivered by the escrow agent to the Sellers for filing with the State of Alaska.  

 

Acquisition of Assets

 

The Subsidiary acquired the Leases pursuant to the Purchase Agreement..  The Leases consist of an aggregate of approximately 46,399 acres located in the North Slope region of the State of Alaska.  As of March 31, 2013, 3 of the 17 properties have been transferred to the Company while the remaing 14 are contingent on the performance of the contract.

NOTE 7 -               NOTE PAYABLE

 

In connection with the Purchase Agreement, the Subsidiary entered into  the First  Promissory Note with the Sellers in the amount of $1,100,000.00.  The First Promissory Note bears an annual interest rate of 0.30% and is payable in installments of $125,000 due every three months for the first year, $100,000 due every three months thereafter and the final payment of $300,000 due on or before October 31, 2014.   The First Promissory Note is secured by terms and provisions of the Purchase Agreement.  

NOTE 8 -               LOANS FROM STOCKHOLDERS

 

A Stockholder has made unsecured loans to the Company for working capital purposes.  The total loans were $60,927 and $375 as of March 31, 2013 and 2012, respectively, and are due on demand.

 

NOTE 9 -             STOCKHOLDERS’ EQUITY (DEFICIT)

 

Preferred Stock

 

As of March 31, 2013, the Company has 20,000,000 shares of preferred stock authorized with a par value of $0.001 per share.  No preferred shares are issued and outstanding.

 

 

F-11

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 9 -             STOCKHOLDERS’ EQUITY (DEFICIT) (Continued)

   

Common Stock

 

As of March 31, 2013, the Company has 700,000,000 shares of common stock authorized with a par value of $0.001 per share. 43,227,275 shares are outstanding as of March 31, 2013.

 

The following details the stock transactions for the Company:

 

On March 25, 2011, the Company authorized the sale of 14,000,000 shares of its common stock to its founding President for $.001 per share for a total of $20,000 cash to provide initial working capital.

 

During August, 2011, the Company sold 19,915,000 shares at $.001 per share for proceeds of $28,450.  The proceeds were used for administrative expenses.

 

On August 7, 2012, the Company’s former President and director sold 14,000,000 shares of common stock to a new sole officer and director, in a private transaction.  As a result of the stock purchase, the new President owns 14,000,000 shares of common stock.

 

On October 11, 2012, the Company issued 7,000,000 shares of the Company’s common stock (“Shares”) to Daniel Walker, its sole officer and director (“Walker”), valued at $100,000 as payment for services rendered to the Company.

 

On November 6, 2012, the Company entered into a subscription agreement with a non-U.S. investor pursuant to which the Company issued 1,500,000 shares of the Company’s $.001 par value common stock in exchange for proceeds of $150,000, or $0.10 per share.

 

On December 18, 2012, the Company entered into a subscription agreement with a non-U.S. investor pursuant to which the Company issued 225,000 shares of the Company’s $.001 par value common stock in exchange for proceeds of $90,000, or $0.40 per share.

 

On December 24, 2012, the Company entered into a subscription agreement with a non-U.S. investor pursuant to which the Company issued 312,500 shares of the Company’s $.001 par value common stock in exchange for proceeds of $125,000, or $0.40 per share.

 

On February 8, 2013, the Company requested a draw down (as described below) from investor in which the Company issued 184,775 shares of the Company’s $.001 par value common stock in exchange for proceeds of $125,000, or $0.68 per share.

 

During March 2013, the Company issued 90,000 shares of common stock to three individuals valued at $76,500.  The shares were issued for services per the Advisory agreements discussed in Note 11.

 

 

F-12

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 9 -             STOCKHOLDERS’ EQUITY (DEFICIT) (Continued)

 

Drawdown Equity Financing Agreement with US Energy Investments Ltd. (Equity Line of Credit)

 

On March 18, 2013, we entered into a drawdown equity financing agreement (the “Drawdown Equity Financing Agreement”) with US Energy Investments Ltd. (“US Energy”), pursuant to which we may sell and issue to US Energy, and US Energy is obligated to purchase from us, up to $10,000,000 worth of restricted shares of our common stock from time to time over a 36-month period, provided that certain conditions are met. The effective date of the Agreement is February 7, 2013, (the “Effective Date”). The financing arrangement entered into by us and US Energy is commonly referred to as an “equity line of credit” or an “equity drawdown facility.”

 

Pursuant to the Drawdown Equity Financing Agreement, we may, in our sole discretion, issue and exercise drawdowns against $10,000,000 over a 36-month period (the “Commitment Period”) commencing on the Effective Date of the Drawdown Equity Financing Agreement. Before we can exercise a drawdown, we must have caused a sufficient number of shares of our common stock to be authorized to cover the shares to be issued pursuant to a drawdown.

 

We may request a drawdown once every six trading days and there must be a minimum of five trading days between each drawdown request.

 

The maximum amount we can draw down at any one time is an amount equal to (i) 200% of the average daily trading volume of our common stock during the 10 trading days prior to the date of the drawdown request, or (ii) Five Hundred Thousand Dollars ($500,000), whichever is of a larger value. Notwithstanding the foregoing, no drawdown can exceed $500,000 or such amount that would otherwise cause US Energy to exceed a beneficial ownership of 4.99% of our outstanding common stock.

 

On the day of the delivery of the drawdown notice, the purchase price (the “Purchase Price) will be set. The Purchase Price shall be set at Seventy-Five (75%) percent of the volume weighted average price (the “VWAP”) of the preceding ten (10) day’s closing price of the Company’s common stock on the Principal Market..

 

The term of the Drawdown Equity Financing Agreement will end 36 months from the date the Drawdown Equity Financing Agreement becomes Effective, unless otherwise terminated earlier. The Drawdown Equity Financing Agreement will terminate if (i) there shall occur any stop order or suspension of the Company for an aggregate of fifty (50) Trading Days, other than due to the acts of the Investor, during the Commitment Period, or (ii) the Company shall at any time fail materially to comply with the requirements of Article VI of the Drawdown Equity Financing Agreement and such failure is not cured within thirty (30) days after receipt of written notice from the Investor, provided, however, that this termination provision shall not apply to any period commencing upon the filing of an amendment to such Company filings and ending upon the date on which such amendment is cleared by the SEC. 

 

On August 2, 2013, the Drawdown Equity Financing Agreement was terminated by US Energy due to the ineligibility of our Common Stock for quotation on the OTCBB.

 

F-13

---

 

POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

 

NOTE 10 -           PROVISION FOR INCOME TAXES

 

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income regardless of when reported for tax purposes.  Deferred taxes are provided in the consolidated financial statements under FASC 740-10-65-1 to give effect to the temporary differences which may arise from differences in the bases of fixed assets, depreciation methods  and allowances based on the income taxes expected to be payable in future years.  Minimal development stage deferred tax assets arising as a result of net operating loss carry-forwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.  Operating loss carry-forwards generated during the period from March 22, 2011 (date of inception) through March 31, 2013, of approximately $428,546 will begin to expire in 2031-2033.  Accordingly, deferred tax assets of approximately $150,000 (calculated at an expected federal rate of 35%) were completely offset by a valuation allowance.  The U.S. net operating loss carryovers may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% change in ownership as determined under the regulations.  The Company has not filed any U.S. federal tax returns and has not filed any state and local tax returns.  The Company plans to file in the future once revenues are generated. The Company believes no material tax balance is due for all tax returns which have not yet been filed.   All unfiled income tax returns are subject to income tax examination by tax authorities and the statute of limitations for tax examinations does not begin to run until returns are filed.  Filed tax returns are subject to examination beginning with the period ended March 31, 2011.

 

The Company has no tax positions at March 31, 2013, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

 

The Company recognizes interest accrued relative to unrecognized tax benefits in interest expense and penalties in operating expense.  During the period from March 22, 2011, inception, to March 31, 2013, the Company recognized no income tax related interest and penalties.  The Company had no accruals for income tax related interest and penalties at March 31, 2013. 

 

On August 2, 2013, the EFA was terminated by US Energy due to ineligibility of CS for quote on OTCBB.

NOTE 11 -            EMPLOYEE AGREEMENTS/RELATED PARTY TRANSACTIONS

 

On February 4, 2013, Polar Petroleum Corp., a Nevada corporation (the “Company”) entered into an Employment Agreement (the “Agreement”) with Daniel Walker (“Mr. Walker”) an individual. Pursuant to the terms and conditions of the Agreement, Mr. Walker shall serve as the Corporation’s President and Chief Executive Officer and shall assume such other positions as reasonable requested by the Board of Directors, commencing on January 1, 2013 for a term of two (2) years, which shall automatically be renewed for additional successive terms of one (1) year unless earlier terminated.  In exchange for his services, Mr. Walker shall receive a monthly salary of Six Thousand Six Hundred and Sixty Six Dollars and Sixty Seven Cents ($6,666.67) which may be converted into shares of the Company’s common stock, at the sole discretion of the Company, per the terms and conditions of the Agreement.  Before the employee agreement was put in place, Mr. Walker received a consulting fee per month from the company.  A total of $45,833 was recorded under consulting fees during the period ended March 31, 2013.

 

On February 4, 2013, the Company entered into Advisor to the Board Agreements (the “Advisory Board Agreements”) by and among the Corporation, Steven Costa (“Mr. Costa”), Peter Brown (“Mr. Brown”), and David Walker (“Mr. David Walker”), commencing on January 1, 2013, pursuant to which Mr. Costa, Mr. Brown, and Mr. David Walker will join the Company’s Board of Advisors, until terminated by either party. Mr. Costa, Mr. Brown, and Mr. David Walker shall serve on the Board of Advisors and will present at the Advisory Board Meetings for a compensation of One Thousand Two Hundred Dollars ($1200.00) per meeting, and will be granted One Hundred Twenty Thousand restricted shares of the Company’s common stock, which will be issued on a quarterly basis of Thirty Thousand (30,000) restricted shares a quarter, per the terms and conditions of the Advisory Board Agreements. 

 

During the fiscal year ended March 31, 2013, the Company paid $45,833 to DWOG Consulting, a company owned by our Chief Executive Officer, Daniel Walker, for consulting services. 

 

 

F-14

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POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

 

NOTE 12 -           OIL AND GAS PROPERTY LEASE PAYMENTS

 

The following provides the total amount of rental payments which are due and payable on a certain number of Alaska oil and gases leases obtained in the ”Purchase Agreement” as described in Note 6:

Rental	Number
Due	of	Total	Rental
Date	Leases	Acreage	Rate/Acre	Amount
5/1/2013	12	30,613	2	$  61,226
7/1/2013	2	5,013	2	$  10,026
5/1/2014	12	30,613	2.5	$  76,532
7/1/2014	2	5,013	2.5	$  12,532
5/1/2015	12	30,613	3	$  91,839
7/1/2015	2	5,013	3	$  15,039
Total amount due				$267,195

 

In addition to the annual leases payments above starting January 1, 2014, the Company will pay $10/acre for seven years for two leases with an aggregate of 5,120 acres for a total of $51,200 annual rental due.  After the seventh year and beyond, the Company will pay $250/acre for these two leases subject to reduction dependent on development activities.

NOTE 13 -           SUBSEQUENT EVENTS

 

On April 25, 2013, Polar entered into Advisor to the Board Agreements (the “Advisory Board Agreements”) by and among the Company, David Gross (Mr. Gross), and Donald Brizzolara (Mr. Brizzolara) with an effective date of April 22, 2013, pursuant to which Mr. Gross, and Mr. Brizzolara, will join the Company’s Board of Advisors, until terminated by either party. Mr. Gross, will be our Head of Alaskan Explorations, and Mr. Brizzolara will be our Chief Geological Advisor.  Mr. Gross, and Mr. Brizzolara, shall serve on our Board of Advisors and will present at the Advisory Board Meetings for compensation of Two Hundred Fifty Thousand (250,000) restricted shares of the Company’s common stock per year of service that will be issued on a quarterly basis of Sixty Two Thousand Five Hundred (62,500) restricted shares for each quarter served in arrears. In addition, Mr. Gross, and Mr. Brizzolara, will be compensated One Thousand ($1,000) dollars per day for services as required, per the terms and conditions of those certain Advisory Board Agreements.

 

On May 28, 2013, Polar entered into an Advisory Board Agreement with Adrian Pilcher on the same terms as the Advisory Board Agreements of Messrs, Costa, Walker and Brown.

 

On May 31, 2013, the Subsidiary entered into with Daniel K. Donkel and Samuel H. Cade to acquire twelve offshore oil and gas leases in the property known as the North Point Thomson Property. Seven of the leases are subject to a 12.5% royalty retained by the State of Alaska and the rest are subject to a royalty of 16.67% retained by the State of Alaska, and all of them carry an overriding royalty of 4% for the Sellers.  The North Point Thomson Property comprises approximately 19,662 acres, located in Alaska’s North Slope region, encompassing State of Alaska Oil and Gas Leases ADL numbers 392123 - 392134.  The aggregate purchase price was $1,100,000, $100,000 payable at closing and $1,000,000 evidenced by a promissory note between the Subsidiary and the Sellers (the “Second Promissory Note”).   The Second Promissory Note is due on June 14, 2015, and bears interest at 0.3% per annum (12% after a default).  We are obligated to pay $125,000 (plus accrued interest) every three months during the term and on the maturity date.

 

F-15

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POLAR PETROLEUM CORP.

(f/k/a Post Data, Inc.).

 (AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NOTE 13 -           SUBSEQUENT EVENTS

 

Subsequent to March 31, 2013, the Company requested drawdowns under the Drawdown Equity Financing Agreement (as described above) as follows:

·	On April 16, 2013, in the amount of $100,000 for 156,128 shares of the Company’s $.001 par value common stock.

·	On May 6, 2013, in the amount of $150,000 for 64,412 shares of the Company’s $.001 par value common stock.

·	On May 15, 2013, in the amount of $250,000 for 80,013 shares of the Company’s $.001 par value common stock.

 

On July 1, 2013, the Company issued 90,000 shares of common stock to three individuals valued at $135,000.  The shares were issued for services per the Advisory agreements discussed above .

 

On July 22, 2013, the Company issued 125,000   shares of common stock to two individuals valued at $ 98,750 .  The shares were issued for services pursuant to the Advisory Board Agreements discussed above.

 

On August 2, 2013, the Equity Financing Agreement was terminated by US Energy, due to the ineligibility of the Company’s common stock for quotation on the OTCBB.   There were no early termination penalties incurred by the Company or US Energy as a result of the termination of the Equity Financing Agreement.

 

 

F-16

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

 

In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by the Company’s management, who also serves as the Chief Executive Officer/Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of March 31, 2013. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

 

Based on the evaluation, our Chief Executive Officer/Chief Financial Officer concluded disclosure controls and procedures were not effective as of March 31, 2013.

 

Management’s Report on Internal Control over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

 

·	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

 

·

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

 

·	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2013. In making this assessment, it used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that, as of March 31, 2013, the Company’s internal control over financial reporting is not effective based on those criteria due to the material weaknesses as described below.

 

 

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The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: domination of management by a single individual without adequate compensating controls, inadequate segregation of duties consistent with control objectives, and lack of an audit committee. These material weaknesses were identified by our Chief Executive who also serves as our Financial Officer in connection with the above annual evaluation.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: domination of management by a single individual without adequate compensating controls, inadequate segregation of duties consistent with control objectives, and lack of an audit committee. These material weaknesses were identified by our Chief Executive who also serves as our Financial Officer in connection with the above annual evaluation.

Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.

Changes in Internal Control

 

As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the year ended March 31, 2013, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

 

ITEM 9B. OTHER INFORMATION

 

On February 4, 2013, Polar entered into Advisor to the Board Agreements (the “Advisory Board Agreements”) with each of Steven Costa, David Walker and Peter Brown.  Pursuant to these agreements, each of these individuals will join the Company’s Board of Advisors, until terminated by either party.  Each such individual will present at Advisory Board Meetings and will receive compensation of 120,000 restricted shares of the Company’s common stock per year of service, to be issued on a quarterly basis of 30,000 restricted shares for each quarter served, in arrears. In addition, each such individual will each be compensated $1,200 dollars per Advisory Board meeting and will be reimbursed for reasonable expenses, per the terms and conditions of the Advisory Board Agreements.

 

 

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On April 25, 2013, Polar entered into Advisory Board Agreements with each of David Gross and Donald Brizzolara.  Pursuant to these agreements, each of these individuals will join the Company’s Board of Advisors, until terminated by either party.  Mr. Gross will be our Head of Alaskan Explorations, and Mr. Brizzolara will be our Chief Geological Advisor.  Mr. Gross and Mr. Brizzolara will serve on our Board of Advisors and will present at Advisory Board Meetings and will each receive compensation of 250,000 restricted shares of the Company’s common stock per year of service, to be issued on a quarterly basis of 62,500 restricted shares for each quarter served, in arrears. In addition, Mr. Gross, and Mr. Brizzolara will each be compensated $1,000 dollars per day for services as required and will be reimbursed for reasonable expenses, per the terms and conditions of the Advisory Board Agreements.

 

On May 28, 2013, Polar entered into an Advisory Board Agreement with Adrian Pilcher on the same terms as the Advisory Board Agreements of Messrs. Costa, Walker and Brown.

 

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

Set forth in the table below is the name and age of each director  and executive officer of Polar Petroleum as of the date of this annual report, together with all positions and offices of the Company held by each and the term of office and the period during which each has served:

Name	Age	Position with the Company	Term Of Office
Daniel Walker	29	President/ Secretary/ Treasurer/Director	July 30, 2012 - Present

Term of Office

 

Each of our officers is elected by the Company’s Board of Directors and their terms of office are at the discretion of the Board.  Our officers serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors. At the present time, members of the Board of Directors are not compensated for their services to the Board

 

Background of Executive Officers and Directors

Daniel Walker. Mr. Walker, age 29, has over seven years of business management experience.  From April 2011 to June 2012, Mr. Walker worked for Terrex Seismic, a seismic data collection company based in Brisbane, Australia. During his time at Terrex, Mr. Walker offered management support for a number of projects across Australia and worked in conjunction with companies such as Beach Energy and Santos. From September 2008 to April 2011, Mr. Walker served as the general manager for E. F. M. Pty Ltd., an agricultural production company based in Cairns, Australia, where Mr. Walker managed the company’s day to day operations and marketing. From January 2005 to September 2008, Mr. Walker was the Managing Director of DBI Freight Ltd., a mining logistics company based in North Yorkshire, England with clients such as Halliburton, Schlumberger, Baker Hughes and Marriotts. Mr. Walker still retains a working interest in the logistics sector and is currently working alongside Marriotts on their York Potash Project. Mr. Walker was awarded a B.Sc. degree in Chemistry from a University in Great Britain in June 2004.  Mr. Walker is not an officer or director of any other reporting company.

Family Relationships

There are no family relationships among our directors or executive officers.

 

 

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Significant Employees

We have no significant employees other than the officers and directors described above.

Employment Agreements

Under an employee agreement with Daniel Walker effective January 1, 2013 , Mr. Walker will serve as the Corporation’s President and Chief Executive Officer and shall assume such other positions as reasonably requested by the Board of Directors, for a term of two years, which shall automatically be renewed for additional successive terms of one year unless either party gives 90 day’s prior notice or otherwise terminated.  In exchange for his services, Mr. Walker will receive a monthly salary of $6,666.67.

At the Company’s sole discretion, Mr. Walker’s salary may be converted into shares of the Company’s Common Stock pursuant to the conversion price of that particular month. The conversion price shall be determined by the closing price on the last trading day of each month, at a twenty-five percent (25%) discount to market as of the trading date.

The employment agreement may be terminated by the Company at any time with or without cause.

Audit Committee

We do not have a standing audit committee, an audit committee financial expert, or any committee or person performing a similar function.  We currently have limited working capital and no revenues.  Management does not believe that it would be in our best interests at this time to retain independent directors to sit on an audit committee.  If we are able to raise sufficient financing in the future, then we will likely seek out and retain independent directors and form an audit, compensation committee and other applicable committees.

 

Board of Directors

We do not have an independent director.  Our Directors are reimbursed, however, for expenses, if any, for attendance at meetings of the Board of Directors but do not receive other compensation therefor .  Our Board of Directors may designate from among its members an executive committee and one or more other committees but has not done so to date.  We do not have a nominating committee or a nominating committee charter.  Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders.  To date this has not been a problem as no security holders have made any such recommendations.  Our director performs all functions that would otherwise be performed by committees.  Given the present size of our board it is not practical for us to have committees.  If we are able to grow our business and increase our operations we intend to expand the size of our board and allocate responsibilities accordingly.

Compliance with Section 16(a) of the Exchange Act

Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Accordingly, our officers, directors and principal stockholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.

 

Code of Ethics

We have not yet adopted a Code of Ethics.

 

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ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table.    The following table sets forth information concerning the total compensation paid or accrued by us for the fiscal years ended March 31, 2013 and 2012 , to all individuals that served as our principal executive officer or acted in a similar capacity for us at any time during the fiscal year ended March 31, 2013 .  No other officers of the Company received compensation exceeding $100,000 during these periods

 

Summary Compensation Table
Name and Principal Position	Fiscal Year Ended	Salary $	Bonus $	Non-Cash Stock Awards $	Option Awards $	Non-Equity Incentive Plan Compensation $	Nonqualified Deferred Compensation Earnings $	All Other Compensation $	Total $
Daniel Walker President (1)	2013	20,000	0	100,000	0	0	0	45,833	165,833
	2012	0	0	0	0	0	0	0	0
Gerald O’Reilly President (2)	2013	0	0	0	0	0	0	0	0
	2012	0	0	0	0	0	0	0	0

 

(1)	On July 30, 2012, Daniel Walker became our President.
(2)	On July 30, 2012, Gerald O’Reilly resigned as our President.

 

 

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Stock Options/SAR Grants . No grants of stock options or stock appreciation rights have been made since our date of incorporation.

 

Outstanding Equity Awards at Fiscal Year-end.  As of March 31, 2012, the following named executive officer had the following unexercised options, stock that has not vested, and equity incentive plan awards:

Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options # Exercisable	# Un-exercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock Not Vested	Market Value of Shares or Units Not Vested	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights Not Vested	Value of Unearned Shares, Units or Other Rights Not Vested
Daniel Walker	0	0	0	0	n/a	0	0	0	0
Gerald O’Reilly President	0	0	0	0	n/a	0	0	0	0
Bruce Hellinga Secretary, Treasurer,	0	0	0	0	n/a	0	0	0	0

 

Long-Term Incentive Plans .   As of March 31, 2013, we had no group life, health, hospitalization, or medical reimbursement or relocation plans in effect. Further, we had no pension plans or plans or agreements which provide compensation on the event of termination of employment or corporate change in control.

 

Director Compensation.  Daniel Walker serves as the only director.  See above under employee agreements for details of compensation.

 

Indemnification

No director of the Company will have personal liability to the Company or any of its stockholders for monetary damages for breach of fiduciary duty as a director involving any act or omission of any such director since provisions have been made in the Articles of Incorporation limiting such liability.  The foregoing provisions shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or, which involve intentional misconduct or a knowing violation of law, (iii) under applicable Sections of the Nevada Revised Statutes, (iv) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes or, (v) for any transaction from which the director derived an improper personal benefit.

 

The Bylaws provide for indemnification of the directors, officers, and employees of the Company in most cases for any liability suffered by them or arising out of their activities as directors, officers, and employees of the Company if they were not engaged in willful misfeasance or malfeasance in the performance of his or her duties; provided that in the event of a settlement the indemnification will apply only when the Board of Directors approves such settlement and reimbursement as being for the best interests of the Corporation.  The Bylaws, therefore, limit the liability of directors to the maximum extent permitted by Nevada law (Section 78.751).

 

 

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth the beneficial ownership of the Company's sole officer and  director, and by persons who are known to the Company to own more than five percent of the Company's common stock as of August 7, 2013 .  Under relevant provisions of the Exchange Act, a person is deemed to be a "beneficial owner" of a security if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security.  A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership in 60 days.  More than one person may be deemed to be a beneficial owner of the same securities.  The percentage ownership of each stockholder is calculated based on the total number of outstanding shares of our common stock as of August 7, 2013 .

Amount and Nature of Beneficial Ownership as of August 7, 2013 .

Name of Beneficial Owner of Common Shares	Address of Beneficial Owner of common Shares	Number of Common Shares Owned	Percentage of Issued and Outstanding Common Shares
Daniel Walker, President, Secretary, Treasurer, Director	4300 B Street, Suite 505, Anchorage, Alaska 99503	21,000,000	49%

Securities Authorized for Issuance under Equity Compensation Plans

We have not adopted any equity compensation plans since our inception.

Changes in Control

 

On October 11, 2012, the Company issued 1,000,000 shares of the Company’s common stock to Daniel Walker, its sole officer and director, valued at $100,000 or $0.10 per share as payment for services rendered to the Company. As a result, Mr. Walker owned an aggregate of 3,000,000 shares of the Company’s common stock, representing approximately 51.32% of the Company’s issued and outstanding common stock.  (The numbers are before giving effect to the 7-for-1 Forward Stock Split on November 2, 2012.)

Other than the foregoing, there are no present arrangements or pledges of the Company’s securities which may result in a change of control of the Company.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Transactions with Related Persons.  

 

The information set forth in Item 10—Employment Agreements and in Item 11 is incorporated herein by reference. On October 11, 2012, we issued 1,000,000 (7,000,000 shares post split) shares of our common stock to Daniel Walker, our sole officer and director, valued at $100,000 or $0.10 per share as payment for services rendered to us.

 

During the fiscal year ended March 31, 2013, Polar owed $60,927 to Daniel Walker for loans made to the Company for operating expenses.

 

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Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

 

With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manor:

 

§	Disclosing such transactions in reports where required;

§	Disclosing in any and all filings with the SEC, where required;

§	Obtaining disinterested directors consent; and

§	Obtaining shareholder consent where required

 

Director Independence

 

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2) (although our common stock is not listed on NASDAQ).  The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship, which in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

According to the NASDAQ definition, Daniel Walker, our sole director, is not an independent director because he is also an executive officer of the Company.

Review, Approval or Ratification of Transactions with Related Persons

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees .

The aggregate fees billed to us by our principal accountant for services rendered during the fiscal year ended March 31, 2013 and 2012 , is set forth in the table below:

Fee Category		Fiscal year ended March 31, 2013				Fiscal year ended March 31, 2012
Audit fees (1)		$	16,298			$	11,160
Audit-related fees (2)			0				0
Tax fees (3)			0				0
All other fees (4)			0				0
Total fees		$	16,298			$	11,160

 

 

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(1) Audit fees consist of fees incurred for professional services rendered for the audit of our financial statements, for reviews of our interim financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2) Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our financial statements, but are not reported under “Audit fees.”

(3) Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4) All other fees consist of fees billed for all other services.

Audit Fees

 

During the fiscal years ended March 31, 2013, we incurred approximately $16,298 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal years ended March 31, 2013.

 

During the fiscal year ended March 31, 2012, we incurred approximately $11,160 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended March 31, 2012.

 

Audit-Related Fees

 

The aggregate fees billed during the fiscal years ended March 31, 2013 and 2012 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $-0- and $-0-, respectively.

 

Tax Fees

 

The aggregate fees billed during the fiscal years ended March 31, 2013 and 2012 for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning were $-0- and $-0-, respectively .

 

All Other Fees

 

The aggregate fees billed during the fiscal years ended March 31, 2013 and 2012 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.

Audit Committee’s Pre-Approval Practice .  

We do not have an audit committee.  Our board of directors performs the function of an audit committee.  Section 10A(i) of the Securities Exchange Act of 1934, as amended, prohibits our auditors from performing audit services for us as well as any services not considered to be audit services unless such services are pre-approved by our audit committee or, in cases where no such committee exists, by our board of directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.

 

 

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibits

 

The following exhibits are filed or furnished with or incorporated by reference in this report.

 

In reviewing the agreements included or incorporated by reference as exhibits to this Annual Report on Form 10-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

 

•	have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

 

•	may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

 

•	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

 

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Annual Report on Form 10-K and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

Exhibit
Number	Description of Exhibit		Filing
3.01	Articles of Incorporation		Filed with the SEC on May 24, 2011 as Exhibit 3.2 to our Registration of Securities on Form S-1
3.02	Certificate of Amendment to Articles of Incorporation		Filed with the SEC on October 30, 2012 as Exhibit 3.1 to our Current Report on Form 8-K.
3.03	Bylaws		Filed with the SEC on May 24, 2011as Exhibit 3.3 to our Registration of Securities on Form S-1
10.01	Informal Agreement between the Company and its president Gerald O’Reilly		Filed with the SEC on May 24, 2011 as Exhibit 10 to our Registration of Securities on Form S-1/A.
10.02	Purchase Agreement By and Between Polar Petroleum (AK) Corp., The Sellers, dated October 30, 2012		Filed with the SEC on November 13, 2012 as Exhibit 10.1 to our Current Report on Form 8-K.
10.03	Promissory Note By and Between Polar Petroleum (AK) Corp., The Sellers and Allen & Vellone, P.C. dated October 31, 2012		Filed with the SEC on November 13, 2012 as Exhibit 10.2 to our Current Report on Form 8-K.
10.04	Escrow Agreement By and Between Polar Petroleum (AK) Corp., The Sellers and Allen & Vellone, P.C., dated October 30, 2012.		Filed with the SEC on November 13, 2012 as Exhibit 10.3 to our Current Report on Form 8-K.
10.05	Joint Instruction Letter By and Between Polar Petroleum (AK) Corp., The Sellers and Allen & Vellone, P.C. dated November 6, 2012		Filed with the SEC on November 13, 2012 as Exhibit 10.4 to our Current Report on Form 8-K.
10.06	Private Placement Agreement By and Between the Company and Early Dawn Consulting, Ltd., Dated December 18, 2012		Filed with the SEC on January 1, 2013 as Exhibit 10.1 to our Current Report on Form 8-K.
10.07	Private Placement Agreement By and Between the Company and Early Dawn Consulting Ltd., Dated December 24, 2012		Filed with the SEC on January 1, 2013 as Exhibit 10.2 to our Current Report on Form 8-K.
10.08	Employment Agreement Between Polar Petroleum, Corp., And Daniel Walker Dated February 4, 2013.		Filed with the SEC on February 8, 2013, as Exhibit 10.1 to our Current Report on Form 8-K.
10.09	Advisory Board Agreement Between Polar Petroleum, Corp., And Steven Costa Dated February 4, 2013.		Filed with the SEC on February 8, 2013, as Exhibit 10.2 to our Current Report on Form 8-K.
10.10	Advisory Board Agreement Between Polar Petroleum, Corp., And David Walker Dated  February 4, 2013		Filed with the SEC on February 8, 2013, as Exhibit 10.3 to our Current Report on Form 8-K.
10.11	Advisory Board Agreement Between Polar Petroleum, Corp., And Peter Brown Dated February 4, 2013.		Filed with the SEC on February 8, 2013, as Exhibit 10.4 to our Current Report on Form 8-K.
10.12	Form Of Drawdown Equity Financing Agreement (Equity Line Of Credit), Dated March 18, 2013		Filed with the SEC on March, 2013 as Exhibit 10.1 to our Current Report on Form 8-K.
10.13	Advisory Board Agreement Between Polar Petroleum, Corp., And David Gross Dated April 25, 2013		Filed with the SEC on May 2, 2013 as Exhibit 10.1 to our Current Report on Form 8-K.
10.14	Advisory Board Agreement Between Polar Petroleum, Corp., And Donald Brizzolara, Dated April 25, 2013		Filed with the SEC on May 2, 2013 as Exhibit 10.2 to our Current Report on Form 8-K.
10.15	Letter Of Intent By And Amongst Polar Petroleum, (AK) Corp., And Daniel Donkel. And Samuel Cade, Dated May 20, 2013.		Filed with the SEC on May 23, 2013 as Exhibit 10.1 to our Current Report on Form 8-K.
10.16	Advisory Board Agreement Between Polar Petroleum, Corp., And Adrian Pilcher Dated, May 28, 2013.		Filed with the SEC on May 31, 2013, as Exhibit 10.1 to our Current Report on Form 8-K.
10.17	Purchase Agreement By And Amongst Polar Petroleum (AK) Corp., And Daniel K. Donkel And Samuel Cade, Dated May 31, 2013		Filed with the SEC on June 4, 2013 as Exhibit 10.1 to our Current Report on Form 8-K.
31.01	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14		Filed herewith.
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act		Furnished herewith.  This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
101.INS*	XBRL Instance Document		Furnished herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document		Furnished herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document		Furnished herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document		Furnished herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document		Furnished herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document		Furnished herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Polar Petroleum Corp.,

a Nevada corporation

Date:  August 15, 2013	By:	/s/ Daniel Walker
		Daniel Walker President (Principal Executive, Financial and Accounting Officer)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  August 15, 2013	By:	/s/ Daniel Walker
		Daniel Walker Director

 

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED

 

PURSUANT TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

 

1.	No annual report to security holders covering the company’s last fiscal year has been sent as of the date of this report.

 

2.	No proxy statement, form of proxy, or other proxy soliciting material relating to the company’s last fiscal year has been sent to any of the company’s security holders with respect to any annual or other meeting of security holders.

 

3.	If such report or proxy material is furnished to security holders subsequent to the filing of this Annual Report on Form 10-K, the company will furnish copies of such material to the Commission at the time it is sent to security holders.

 

 

 

 

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