Item 1. Financial Statements
PERKINS OIL & GAS INC.
CONDENSED BALANCE SHEETS
(Unaudited)
|
|
|
September 30,
2017
|
|
|
June 30,
2017
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,989
|
|
|
$
|
-
|
|
|
Total Current Assets
|
|
|
1,989
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas Property (SE method)
|
|
|
5,483
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
7,472
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
17,025
|
|
|
$
|
9,767
|
|
|
Due to related party
|
|
|
5,603
|
|
|
|
5,603
|
|
|
Accrued interest payable
|
|
|
1,027
|
|
|
|
-
|
|
|
Promissory notes payable
|
|
|
10,000
|
|
|
|
-
|
|
|
|
|
|
33,655
|
|
|
|
15,370
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
33,655
|
|
|
|
15,370
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 75,000,000 shares authorized; 6,750,000 and 6,750,000 shares issued and outstanding as of September 30, 2017 and June 30, 2017
|
|
|
6,750
|
|
|
|
6,750
|
|
|
Additional paid-in capital
|
|
|
111,011
|
|
|
|
111,011
|
|
|
Accumulated deficit
|
|
|
(143,944
|
)
|
|
|
(133,131
|
)
|
|
Total stockholders’ deficit
|
|
|
(26,183
|
)
|
|
|
(15,370
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$
|
7,472
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
PERKINS OIL & GAS INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
For the three months ended
|
|
|
|
|
September30,
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
2,133
|
|
|
|
2,590
|
|
|
Professional fees
|
|
|
7,653
|
|
|
|
4,000
|
|
|
|
|
|
9,786
|
|
|
|
6,590
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(9,786
|
)
|
|
|
(6,590
|
)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,027
|
)
|
|
|
(494
|
)
|
|
TOTAL OTHER EXPENSES
|
|
|
(1,027
|
)
|
|
|
(494
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(10,813
|
)
|
|
$
|
(7,084
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss per Common Share
|
|
$
|
(0.00
|
)
|
|
|
(0.00
|
)
|
|
Basic and Diluted Weighted Average Common Shares Outstanding
|
|
|
6,750,000
|
|
|
|
6,750,000
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
PERKINS OIL & GAS INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
For the three months ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(10,813
|
)
|
|
$
|
(7,084
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
7,258
|
|
|
|
1,827
|
|
|
Accrued interest payable
|
|
|
1,027
|
|
|
|
493
|
|
|
Net cash used in operating activities
|
|
|
(2,528
|
)
|
|
|
(4,764
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Lease cost on oil and gas property
|
|
|
(5,483
|
)
|
|
|
-
|
|
|
Net cash used in investing activities
|
|
|
(5,483
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of notes payable
|
|
|
10,000
|
|
|
|
8,000
|
|
|
Net cash provided by financing activities
|
|
|
10,000
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
1,989
|
|
|
|
3,236
|
|
|
Cash and cash equivalents - beginning of period
|
|
|
-
|
|
|
|
668
|
|
|
Cash and cash equivalents - end of period
|
|
$
|
1,989
|
|
|
$
|
3,904
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Cash paid for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
PERKINS OIL & GAS INC.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Perkins Oil & Gas, Inc. (“The Company”) was incorporated in the State of Nevada on May 25, 2012 and established a fiscal year end of June 30. The Company intends to engage in the exploration and development of oil and gas properties. The Company’s activities to date have been limited to organization and capital. The Company is currently looking for new wells.
Basis of presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending June 30, 2018. Notes to the unaudited condensed financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2018 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended June 30, 2017 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on November 15, 2017.
Certain prior-period amounts have been reclassified to conform to the current period presentation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company continually evaluates its estimates and judgments. The Company bases its estimates and judgments on historical experience and other factors that it believes to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $1,989 and $0 in cash as at September 30, 2017 and June 30, 2017, respectively.
Related Party Balances and Transactions
The Company follows FASB ASC 850, “
Related Party Disclosures
,” for the identification of related parties and disclosure of related party transaction. <see Note 5>
Fair Value of Financial Instruments
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
|
Level 1 -
|
quoted prices in active markets for identical assets or liabilities
|
|
|
|
|
Level 2 -
|
quoted prices for similar assets and liabilities in active markets or inputs that are observable
|
|
|
|
|
Level 3 -
|
inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
|
The recorded amounts of financial instruments, including cash equivalents, accounts payable, and notes payable approximate their market value as of September 30, 2017.
Oil and Gas Properties
Oil and gas acquisition expenditures are accounted for in accordance with the successful efforts method of accounting. Direct costs incurred for finding oil and natural gas reserves, are initially capitalized until the properties are evaluated and determined to be either productive or nonproductive. Such evaluations are made on a periodic basis. If an exploratory well is determined to be nonproductive, the costs will be charged to expense.
As of September 30, 2017, the Company incurred $5,483 acquisition costs associated with the acquisition of leases in the states of Wyoming , North Dakota and Colorado. <see Note 3>
Recent Accounting Pronouncements
The Company has reviewed and analyzed the above recent accounting pronouncements, and notes no material impact on the financial statements as of September 30, 2017.
NOTE 2 – GOING CONCERN
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has a working capital deficit of $31,666 and an accumulated deficit of $143,944. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 – OIL AND GAS PROPERTY
During the three months ended September 30, 2017, the Company incurred $5,483 acquisition costs associated with the acquisition of leases in the states of Wyoming, North Dakota and Colorado, which were capitalized initially and losses will be recognized in the future if the values of unproved properties are determined to be impaired on the basis of a required periodic assessment.
NOTE 4 – PROMISSORY NOTE PAYABLE
Promissory note payable consisted of the following at September 30, 2017 and June 30, 2017:
|
|
|
September 30
|
|
|
June 30
|
|
|
|
|
2017
|
|
|
2017
|
|
|
Convertible Note - July 2017
|
|
$
|
10,000
|
|
|
$
|
-
|
|
|
Less current portion of promissory note payable
|
|
|
10,000
|
|
|
|
-
|
|
|
Long-term promissory note payable
|
|
$
|
-
|
|
|
$
|
-
|
|
On July 17, 2017, the Company issued a 50% demand promissory note to an unaffiliated party for cash proceed of $10,000. The note bears interest rate at 50% per annum and is due on demand. As of September 30, 2017, the accrued interest on the note was $1,027.
NOTE 5 – RELATED PARTY TRANSACTIONS
As of September 30, 2017, the amount due to the Company’s Chief Office for payment of expenses on behalf of the Company was $5,603 and $5,603, respectively.
NOTE 6 – STOCKHOLDERS EQUITY
The Company has authorized 75,000,000 shares with a par value $0.001 per share.
As of September 30, 2017, the Company has 6,750,000 common shares issued and outstanding. During the three months ended September 30, 2017, no shares were issued.
NOTE 7 - SUBSEQUENT EVENTS
On November 2, 2017, the Company issued a 55% demand promissory note to an unaffiliated party for cash proceed of $8,000. The note bears interest rate at 55% per annum and is due on demand.
Management has evaluated subsequent events through the date these condensed financial statements were available to be issued. Based on our evaluation no other material events have occurred that require disclosure.
Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our consolidated unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.
As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Perkins Oil & Gas, Inc., unless otherwise indicated.
Corporate Overview
We are an exploration stage company, incorporated in the State of Nevada on May 25, 2012, as a for-profit company, and electing a fiscal year end of June 30.
We owned a 25% working interest and an 18.75% net revenue interest in a lease of three acres located in Webster Parrish, Louisiana, known as the Perkins Lease. Effective April 18, 2015 our company transferred its interest in the Perkins Oil Slack (Perkins No. 001, Serial No. 192865) to Indian Wells Investments of LA, LLC. Also in conjunction with the transfer in exchange for cancellation of outstanding debt of $8,475 our company agreed to pay Four Star Oil Company, Inc. $5,500. Our company is currently looking for a new well.
Our focus for the current fiscal year will be to pursue acquisition of additional leases and/or existing oil and gas wells which have potential for production, if revenues warrant.
We are an exploration stage company with limited revenues and operating history. The mailing address of the principal executive offices is 17330 Preston Road, Suite 200D, Dallas, TX 75252. Our telephone number is (201) 730-6454.
We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.
We do not have any subsidiaries.
Results of Operations
Our financial statements from inception (May 25, 2012) through September 30, 2017 report $0 in revenue and a cumulative deficit of $143,944.
Three months ended September 30, 2017 compared to three months ended September 30, 2016.
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
Change
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Amount
|
|
|
%
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
Operating expenses
|
|
|
(9,786
|
)
|
|
|
(6,590
|
)
|
|
|
(3,196
|
)
|
|
|
48
|
|
|
Net loss
|
|
|
(10,813
|
)
|
|
|
(7,084
|
)
|
|
|
(3,729
|
)
|
|
|
53
|
|
For the three months ended September 30, 2017 and 2016, our net loss was solely from our operating expenses. Our operating expenses consisted primarily of professional fees and administrative expenses.
Liquidity and Capital Resources
The following table provides selected financial data about our company as of September 30, 2017 and June 30, 2017, respectively.
Working Capital
|
|
|
September 30,
|
|
|
June 30,
|
|
|
Change
|
|
|
|
|
2017
|
|
|
2017
|
|
|
Amount
|
|
|
%
|
|
|
Cash and cash equivalents
|
|
$
|
1,989
|
|
|
$
|
-
|
|
|
$
|
1,989
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
$
|
1,989
|
|
|
$
|
-
|
|
|
$
|
1,989
|
|
|
|
-
|
|
|
Total current liabilities
|
|
$
|
33,655
|
|
|
$
|
15,370
|
|
|
$
|
18,285
|
|
|
|
119
|
|
|
Working capital deficit
|
|
$
|
(31,666
|
)
|
|
$
|
(15,370
|
)
|
|
$
|
(16,296
|
)
|
|
|
106
|
|
Cash Flows
|
|
|
Three Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Cash Flows used in Operating Activities
|
|
$
|
(2,528
|
)
|
|
$
|
(4,764
|
)
|
|
Cash Flows used in Investing Activities
|
|
|
(5,483
|
)
|
|
|
-
|
|
|
Cash Flows providing by Financing Activities
|
|
|
10,000
|
|
|
|
8,000
|
|
|
Net Increase in Cash During Period
|
|
$
|
1,989
|
|
|
$
|
3,236
|
|
On September 30, 2017, our Company’s cash balance was $1,989 and total assets were $7,472. On June 30, 2017, our Company’s cash balance was $0 and total assets were $0. The Company opened a bank account in July 2017 and incurred acquisition cost on oil and gas property of $5,483 during three months ended September 30, 2017.
On September 30, 2017, our Company had total liabilities of $33,655, compared with total liabilities of $15,370 as at June 30, 2017. The increase was due to the increase in accounts payable and the issuance of promissory notes of $10,000 in July 2017.
On September 30, 2017, our Company had working capital deficiency of $31,666 compared with working capital deficiency of $15,370 as at June 30, 2017. The increase in working capital was primarily attributed to the increase in accounts payable from the leases cost for the oil and gas property and legal fees.
Cash Flow from Operating Activities
During the three months ended September 30, 2017, our Company used $2,528 in operating activities, compared to $4,764 cash used in operating activities during the three months ended September 30, 2016. The cash used in operating activities for the three months ended September 30, 2017, was attributed to net loss of $10,813 reduced by an increase in accounts payable and accrued liabilities of $7,258 and an increase in accrued interest payable from the promissory notes of $1,027. The cash used in operating activities for the three months ended September 30, 2016, was attributed to net loss of $7,084 reduced by an increase in accounts payable of $1,827 and an increase in accrued interest payable from the promissory notes of $493.
Cash Flow from Investing Activities
During the three months ended September 30, 2017, our Company used $5,483 in investing activities, compared to $0 used in investing activities during the three months ended September 30, 2016. The cash used in investing activities for the three months ended September 30, 2017, was attributed to lease cost on oil and gas property of $5,483.
Cash Flow from Financing Activities
During the three months ended September 30, 2017, our Company received $10,000 from financing activities compared to $8,000 received from financing activities during the three months ended September 30, 2016. The cash flow for financing activities for the three months ended September 30, 2017, was a result of $10,000 proceeds from the issuance of promissory notes to an unaffiliated party. During the three months ended September 30, 2016, we received $80,000 from a related party.
Plan of Operation
Our plan of operation for the twelve months following the date of this report is to secure a property/well to continue exploration activities
Off-Balance Sheet Arrangements
We have no 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, and capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:
The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements would not be prevented or detected on a timely basis.
We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.