PART I
I
tem
1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A.
Directors
and Senior Management
Not
applicable.
Not
applicable.
The
independent auditors for the Company are Davidson & Company,
LLP, Suite 1200, 609 Granville Street, Vancouver, B.C., V7Y 1G6 for
the Company’s December 31, 2018, 2017 and 2016 year ends. The
former independent auditors for the Company, Anton & Chia, LLP,
Certified Public Accountants, Suite 540, 3501 Jamboree Road,
Newport Beach, CA 92660 audited the Company’s December 31,
2015 and 2014 year ends.
I
tem
2.
OFFER STATISTICS AND EXPECTED TIMETABLE
Not
Applicable.
A.
Selected
Financial Data
The
Company was incorporated as Pacific Alliance Ventures Ltd. in the
State of Nevada on October 20, 2003. The Company changed its name
to Eurasia Energy Limited on November 28, 2005. The Company
completed a continuation of its jurisdiction from Nevada to
Anguilla, B.W.I. on December 31, 2007. The Company has selected a
December 31 year end. The Company’s selected historical
financial data for the periods from January 1, 2016 to December 31,
2016 (audited) and January 1, 2017 to December 31, 2017 (audited)
and January 1, 2018 to December 31, 2018 (audited) are set out in
the table below. The selected financial data provided below are not
necessarily indicative of the future results of operations or
financial performance of the Company. The Company has not paid any
dividends on its common shares and it does not expect to pay
dividends in the foreseeable future.
|
|
Period
from
Jan.
1, 2016 to
Dec.
31, 2016
|
Period
from
Jan.
1, 2017 to
Dec.
31, 2017
|
Period
from
Jan.
1, 2018 to
Dec.
31, 2018
|
|
Amounts in
Accordance with US GAAP (Presented in U.S. dollars):
|
|
|
|
|
Total
assets
|
$
21,454
|
$
4,020
|
$
1,865
|
|
Operating
revenue
|
-
|
-
|
-
|
|
Net working
capital
|
$
18,054
|
$
(4,783
)
|
$
(18,655
)
|
|
Shareholders’
Equity (Deficiency)
|
$
18,054
|
$
(4,783
)
|
$
(18,655
)
|
|
Net loss from
operations
|
$
(24,401
)
|
$
(22,837
)
|
$
(13,872
)
|
|
Loss per share
(basic and diluted)
|
$
(0.00
)
|
$
(0.00
)
|
$
(0.00
)
|
|
Weighted average
number of common shares (basic and diluted)
|
34,548,368
|
34,548,368
|
34,548,368
|
B.
Capitalization
and Indebtedness
Not
applicable.
C.
Reasons
for the Offer and Use of Proceeds
Not
applicable.
The
following risks relate specifically to the Company’s business
and should be considered carefully. The occurrence of any one or
more of the events outlined under this section could have severe
consequences on the Company's business, financial condition and
results of operations and could result in the cessation of
operations or bankruptcy.
We have a limited operating history and a history of losses and
expect future losses, and there can be no assurances that we will
achieve and sustain profitability, which makes our ability to
continue as a going concern questionable and puts your investment
at risk.
We have
incurred significant net losses and negative cash flow from
operations since our inception. We reported net loss of $13,872 in
2018. We will expect to continue to incur losses in 2019 and will
need to continue to raise additional funds through equity offerings
for our business to survive.
Our
financial statements have been prepared on a going concern basis,
which presumes the realization of assets and the settlement of
liabilities in the normal course of operations. The application of
the going concern principle is dependent upon the Company achieving
profitable operations to generate sufficient cash flows to fund
continued operations, or, in the absence of adequate cash flows
from operations, obtaining additional financing. If the Company is
unable to achieve profitable operations or obtain additional
financing, we may be required to reduce or to limit operations, or
cease operations altogether. The auditors’ report on the
December 31, 2018 financial statements contains an explanatory
paragraph that states that the Company has historically incurred
losses and has an accumulated deficit which raises substantial
doubt about the Company’s ability to continue as a going
concern. The financial statements do not include any adjustments
that might result from the outcome of this
uncertainty.
We will need additional capital to continue to operate our
business. Failure to raise additional equity or debt financing will
result in the termination of operations and the loss of your
investment.
We have
no expectation of revenue in the next 24 months.
As an
oil and gas exploration company, we are seeking long term
opportunities. In the relative short term, 24 months, we have no
expectation of revenues. Without revenue, we require ongoing
capital injections through the sale of our shares. We cannot be
certain that equity financing will be available to us on favorable
terms when required or at all. If we cannot raise funds in a timely
manner or on acceptable terms, we may not be able to continue in
operation.
If we
successfully raise additional funds through the issuance of debt,
we will be required to service that debt and are likely to become
subject to restrictive covenants and other restrictions contained
in the instruments governing that debt, which may limit our
operational flexibility. If we raise additional funds through the
issuance of equity securities, then those securities may have
rights, preferences or privileges senior to the rights of holders
of our common stock, and holders of our common stock will
experience dilution.
If our key personnel leave the Company, our Company will cease
operations and you will lose your investment.
The
future success of our Company depends on certain key members of
management. We are currently dependent on our President and Chief
Executive Officer, Nicholas W. Baxter, for our development plans.
Mr. Baxter has extensive oil and gas exploration experience and
contacts and his departure would result in our Company ceasing to
operate as an oil and gas exploration company.
Tax Risks – Our Company may continue to be taxed as a U.S.
corporation disentitling us to any tax advantages in
Anguilla.
Our
Company converted from Nevada to Anguilla, B.W.I. on December 31,
2007. Our Company is now taxed as an Anguilla corporation. The
American Jobs Creation Act of 2004 includes provisions the effect
of which is to treat certain corporations that undergo
“inversion transactions” as United States corporations.
As a result, future income would be subject to United States income
tax. There is a risk that the Internal Revenue Service would
interpret the rules so as to treat our Company as a United States
corporation. Our Company would be disentitled to tax advantages in
Anguilla and any future earnings would be reduced
accordingly.
Our shares are considered Penny Stock and are subject to the Penny
Stock rules, which may adversely affect your ability to sell your
shares.
Rules
15g-1 through 15g-9 promulgated under the Exchange Act impose sales
practice and disclosure requirements on certain broker-dealers who
engage in certain transactions involving Penny Stock. Subject to
certain exceptions, a Penny Stock generally includes any non-NASDAQ
equity security that has a market price of less than $5.00 per
share. Our shares are deemed to be Penny Stock for the purposes of
the Exchange Act. The additional sales practice and disclosure
requirements imposed upon broker-dealers may discourage
broker-dealers from effecting transactions in our shares, which
could severely limit the market liquidity of our shares and impede
the sale of our shares in the secondary market.
Under
the Penny Stock regulations, a broker-dealer selling Penny Stock to
anyone other than an established customer or Accredited Investor
(generally, an individual with net worth in excess of $1,000,000 or
an annual income exceeding $200,000, or $300,000 together with his
or her spouse) must make a special suitability determination for
the purchaser and must receive the purchaser's written consent to
the transaction prior to sale, unless the broker-dealer or the
transaction is otherwise exempt. In addition, the Penny Stock
regulations require the broker-dealer to deliver, prior to any
transaction involving a Penny Stock, a disclosure schedule prepared
by the Commission relating to the Penny Stock market, unless the
broker-dealer or the transaction is otherwise exempt. A
broker-dealer is also required to disclose commissions payable to
the broker-dealer and the registered representative and current
quotations for the securities. Finally, a broker-dealer is required
to send monthly statements disclosing recent price information with
respect to the Penny Stock held in a customer's account and
information with respect to the limited market in Penny
Stocks.
Substantial sales of our common stock could cause our stock price
to fall.
Our
shares are thinly traded. If our stockholders sell substantial
amounts of our common stock, the market price of our common stock
will decline and there may be few buyers for your
shares.
We have not declared dividends and may never declare dividends,
which may affect the value of your shares.
We have
never declared or paid dividends on our common stock and do not
expect to pay any dividends in the near future.
I
tem
4.
INFORMATION ON THE COMPANY
A.
History
and Development of the Company
The
Company was incorporated as Pacific Alliance Ventures Ltd. in the
State of Nevada on October 20, 2003. The Company changed its name
to Eurasia Energy Limited on November 28, 2005. The Company
completed a continuation of its jurisdiction from Nevada to
Anguilla, B.W.I. on December 31, 2007.
Since
its incorporation, the Company has not undergone any material
reclassification, merger or consolidation, and has no subsidiaries.
The Company has not completed any acquisitions or dispositions of
material assets. It has not undergone a material change in the
types of products or services it renders. The Company has not been
the subject of any bankruptcy, receivership or similar
proceedings.
The
Company has not made any principal capital expenditures or
divestitures. The Company has not received nor made any public
takeover offers.
We are
engaged in oil and gas exploration. We entered into a memorandum of
understanding (“MOU”) with the State Oil Company of the
Azerbaijan Republic (“SOCAR”) which granted our Company
the exclusive right to negotiate an Exploration, Rehabilitation,
Development and Production Sharing Agreement (“ERDPSA”)
for a 600 square kilometer oil and gas block (the
“Block”) in the Republic of Azerbaijan. The effective
date of the original MOU was December 7, 2005. This MOU expired on
December 7, 2006. The Block includes the producing Alyat-Deniz oil
and gas field and seven additional exploration structures namely,
the Hamamdag-Deniz, Garasu, Sangi-Mugan, Ulfat, Aran-Deniz, Dashly
and Sabayil structures. The Block is located in the shallow coastal
waters of the Azerbaijan sector of the Caspian Sea approximately 70
kilometers south of the Azerbaijan capital of Baku.
In
November, 2006, management met with SOCAR officials in Baku and
notified SOCAR in writing that the Company had completed its
development plan and was ready to enter into negotiations for the
main principals of the ERDPSA. Management was informed by SOCAR
officials that the lawsuit brought against our Company by
Commonwealth Oil & Gas Company Limited
(“Commonwealth”) materially prejudiced our
Company’s opportunity to extend the MOU. Despite having
completed our development plan in 2006 and being ready, willing and
able to commence negotiations on the main principals of the ERDPSA
before the MOU expired, SOCAR declined to negotiate with our
Company and the MOU expired on December 7, 2006.
In
August, 2007, we completed a private placement of 4,000,000 units
at $0.25 per unit which raised proceeds of $1,000,000. These
proceeds have been sufficient to fund our ongoing operations. We
will continue to conserve our cash reserves through
2019.
On February 10, 2010, Eurasia, Commonwealth, Arawak Energy Limited
(“Arawak”) and Nicholas W. Baxter
(“Baxter”) signed a participation agreement (the
“Participation Agreement”) which brought final
resolution to the litigation proceedings among Eurasia, Baxter,
Arawak and Commonwealth which had been ongoing since 2006. The
Participation Agreement sought to establish the terms upon which
the parties would co-operate with each other to identify and seek
to obtain a direct or indirect interest in an upstream oil and gas
project in the Azerbaijan Republic. As prescribed under the
Participation Agreement, Eurasia was reimbursed by Commonwealth for
51% of Eurasia’s agreed third party costs incurred to date in
connection with its attempts to obtain an upstream oil and gas
project in the Azerbaijan Republic.
As at
the end of the fiscal year ended December 31, 2012, Eurasia
management was of the view that Eurasia had exhausted all available
avenues for advancing its interest in the Alyat Deniz project in
Azerbaijan. Since first identifying the Alyat Deniz Project,
Eurasia has faced competition on various fronts from more advanced
and well financed companies vying to establish or expand their oil
and gas holdings in the region. Despite our management team’s
experience and past success in Azerbaijan and the inclusion of
experienced and well financed participating partners, we have not
attained our goal and our Company does not consider it prudent to
continue to compete for this project. Management will continue to
assess its oil and gas industry contacts with a view to potentially
sourcing a new project which will benefit from the inclusion of
Eurasia as a publicly traded investment platform.
Our
Company’s entry into the MOU with SOCAR and change of
business did not result in the issuance of any equity or debt
securities by our Company. The transaction did not constitute a
reverse takeover or “back door listing”.
We do
not expect any changes in the number of our employees over the next
12 months. We will not be purchasing any plant or significant
equipment over the next 24 months. Our current management team will
satisfy our requirements for the next 24 months. Our President and
C.E.O., Mr. Nicholas W. Baxter, currently works part time on our
Company's affairs on an “as needed” basis. Our C.F.O.,
Mr. Graham Crabtree, spends approximately 10 hours per month on our
Company's affairs.
References in this
information statement to “the Company,”
“we,” “us,” and “our” refer to
Eurasia Energy Limited.
Our
executive offices are located at 294 Heywood House, Anguilla,
British West Indies. Our telephone number is (264)
476-5202.
C.
Organizational
Structure
The
Company is not part of a corporate group. The Company has no
subsidiaries and no corporate controlling shareholder.
D.
Property,
Plant and Equipment
The
Company has no material tangible fixed assets at this
time.
I
tem
4A.
UNRESOLVED STAFF COMMENTS
Not
applicable.
I
tem
5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion is management’s explanation of factors
that have affected the Company’s financial condition and
results of operations for the historical periods covered by the
financial statements, and management’s assessment of factors
and trends which are anticipated to have material effect on the
Company’s financial condition and results of operations in
future periods.
The
following discussion and analysis of the Company’s financial
condition and results of operations for the fiscal years ended
December 31, 2018, 2017 and 2016 should be read in conjunction with
the Company’s financial statements and related notes included
in this annual report in accordance with “Item 8 –
Financial Information”. The Company’s financial
statements included in this annual report were prepared in
accordance with United States Generally Accepted Accounting
Principles.
All
statements other than statements of historical facts included in
this Report and located elsewhere herein regarding industry
prospects and the Company's financial position are forward-looking
statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been
correct. Important factors that could cause actual results to
differ materially from the Company's expectations ("Cautionary
Statements") are disclosed in this Report, including, without
limitation, in conjunction with the forward-looking statements
included in this Report under "Risk Factors." All subsequent
written and oral forward-looking statements attributed to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the Cautionary Statement.
|
|
For the years ended
December 31
|
|
|
|
|
|
|
REVENUE:
|
|
|
|
|
Sales
|
-
|
-
|
-
|
|
Gross
Profit:
|
-
|
-
|
-
|
|
EXPENSES:
|
|
|
|
|
General and
administrative
|
$
3,486
|
$
6,574
|
$
7,908
|
|
|
$
10,386
|
$
16,263
|
$
16,493
|
|
Loss before other
items:
|
$
(13,872
)
|
$
(22,837
)
|
$
(24,401
)
|
|
Other
Items:
|
|
|
|
|
Other
Income
|
$
0
|
$
0
|
$
0
|
|
Loss for the
year:
|
$
(13,872
)
|
$
(22,837
)
|
$
(24,401
)
|
Year Ended December 31, 2018 Compared to Year Ended December 31,
2017
Revenue and Other Income
We do
not expect any revenues for the foreseeable future.
Operating Expenses
The
Company’s operating expenses for the year ended December 31,
2018 was $13,872 compared to $22,837 for the year ended December
31, 2017.
The
Company’s general and administrative expenses for the year
ended December 31, 2018 was $3,486 compared to $6,574 for the year
ended December 31, 2017. The Company's professional fees expense
for the year ended December 31, 2018 was $10,386 compared to
$16,263 for the year ended December 31, 2017.
Net Income
The
Company’s net loss for the year ended December 31, 2018 was
$13,872 compared to a net loss of $22,837 for the year ended
December 31, 2017. The decrease in the current year was primarily
due to minimal ongoing expenses while the Company remains
inactive.
Year Ended December 31, 2017 Compared to Year Ended December 31,
2016
Revenue and Other Income
We do
not expect any revenues for the foreseeable future.
Operating Expenses
The
Company’s operating expenses for the year ended December 31,
2017 was $22,837 compared to $24,401 for the year ended December
31, 2016.
The
Company’s general and administrative expenses for the year
ended December 31, 2017 was $6,574 compared to $7,908 for the year
ended December 31, 2016. The Company's professional fees expense
for the year ended December 31, 2017 was $16,263 compared to
$16,493 for the year ended December 31, 2016.
Net Income
The
Company’s net loss for the year ended December 31, 2017 was
$22,837 compared to a net loss of $24,401 for the year ended
December 31, 2016. The decrease in the current year was primarily
due to minimal ongoing expenses while the Company remains
inactive.
B.
Liquidity
and Capital Resources
As at
December 31, 2018, the Company had cash in the amount of
$1,865.
The
Company estimates its operating costs for the next 12 months will
include $nil for travel and $15,000 for office, administrative and
business development. There is no assurance that the Company will
be able to obtain additional funding when needed, or that such
funding, if available, can be obtained on terms acceptable to the
Company.
Failure
to obtain additional funding will result in delay or indefinite
postponement of our oil and gas development and exploration
activities. Any funds raised by the Company through the issuance of
equity or convertible debt securities will cause the Company's
current stockholders to experience dilution. Such securities may
grant rights, preferences or privileges senior to those of the
Company's common stockholders.
There
is no assurance that the Company will earn revenue, operate
profitably or provide a return on investment to its security
holders.
To
date, all funding for the Company’s business and ongoing
operations has come from common share issuances. The Company is
facing challenging equity market conditions and general uncertainty
with respect to its operations and ability to continue as a going
concern as a result of its failure in securing a long term oil and
gas project. These conditions make it extremely difficult for the
Company to access additional equity or debt financing. Accordingly,
the Company is preserving its current cash reserves, so it did not
pay salaries in cash in 2018.
The
Company’s officers and manager took no cash or stock
compensation from the Company in 2018.
As of
the date of this Form 20-F Annual Report, the Company had
34,548,368 issued and outstanding common shares.
C.
Research
and Development, Patents and Licenses, Etc.
The
Company has not developed a research and development policy. The
Company holds no patents or licenses including technology
licenses.
The
Company is not yet generating revenue from sales. The Company is in
its exploration stage and has not established oil and gas
production, sales or inventory trends.
E.
Off-Balance
Sheet Arrangements
The
Company has no off-balance sheet arrangements.
F.
Tabular
Disclosure of Contractual Obligations
The
Company currently has no contractual obligations in the nature of
long term debt obligations, capital finance lease obligations,
operating lease obligations or purchase obligations.
Not
applicable.
I
tem
6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors
and Senior Management
|
Name
|
Position
|
Other Reporting Companies
In Canada or the United States
|
|
Company
|
Position
|
|
Nicholas
W. Baxter
|
President,
Chief Executive Officer and Director
|
Lexaria
Bioscience Corp. (CSE and OTC-QB)
Jericho
Oil Corporation (TSX-V)
|
Director
Director
|
|
Graham
Crabtree
|
Chief
Financial Officer
|
N/A
|
N/A
|
The
following sets out the principal occupations and related experience
for the directors and senior officers of the Company over the past
five years. None of the Company’s officers or directors are
related by blood or marriage. There is no arrangement or
understanding among major shareholders, customers or suppliers of
the Company pursuant to which any officer or director of our
Company was selected to that position.
Nicholas W. Baxter
has served as a Director of our Company
since March 31, 2005. Mr. Baxter has served as our President and
Chief Executive Officer since November 28, 2005. Mr. Baxter has a
25 year career in international resource exploration and
development. Originally trained as a geophysicist, Mr. Baxter
received a Bachelor of Science (Honors) from the University of
Liverpool in 1975. Mr. Baxter has worked on geophysical survey and
exploration projects in the U.K., Europe, Africa and the Middle
East.
Graham Crabtree
has served as Chief Financial Officer since
September 1, 2008. Mr. Crabtree received an HND in Business
Studies from Liverpool Polytechnic (now Liverpool John Moores
University) and became a Fellow of the Association of Chartered and
Certified Accountants (FCCA) after studying at Manchester
Polytechnic (now Manchester Metropolitan University). Mr.
Crabtree operates an Anguilla based accounting and tax consultancy
business serving clients in the nearby islands of the former
Netherlands, Antilles. Mr. Crabtree has been involved in the
financial service industry since the early 1990’s being a
founding member of the Anguilla Financial Services Association of
which he is a former President, Secretary, Ethics Chairman and
Treasurer. Mr. Crabtree is also the Treasurer of the Anguilla
Branch of the Society of Trust and Estate Practitioners. In
1999, Mr. Crabtree resigned his membership from the Association of
Chartered and Certified Accountants as a member in good
standing. Mr. Crabtree continues to maintain a keen interest
in developments in the world of accounting and finance. Mr.
Crabtree has a wide range of experience in the financial services
industry and has served as an officer and director of both private
and publicly traded companies.
There
are presently two Executive Officers of the Company, President and
Chief Executive Officer, Mr. Nicholas W. Baxter and Chief Financial
Officer, Mr. Graham Crabtree. “Executive Officer” means
the President, any Vice-President in charge of a principal business
unit such as sales, finance or production and any officer of the
Company or a subsidiary who performs a policy-making function for
the Company whether or not that person is also a director of the
Company or the subsidiary, and the Chairman and any Vice-Chairman
of the board of directors of the Company if that person performs
the functions of that office on a full-time basis.
Set out
below is a summary of compensation paid during the Company’s
most recently completed financial year to the Company’s
Executive Officers:
|
|
|
|
|
Name and
Principal
Position
|
|
|
|
Other
Annual Compensation
$
|
|
Securities
Underlying
Options /
SARs
#
|
|
|
Nicholas W.
Baxter
President, C.E.O. and
Director
|
2018
|
$Nil
|
$
0
|
$
0
|
$
0
|
Nil
|
$
0
|
|
Graham
Crabtree
C.F.O.
|
2018
|
$Nil
|
$
0
|
$
0
|
$
0
|
Nil
|
$
0
|
Options and Stock Appreciate Rights (SARs)
During
the year ended December 31, 2018, the Company did not grant any
stock options.
Compensation of Directors
The
Company currently has no independent directors. We define an
“independent director” as one who does not serve as an
officer or consultant or in any other capacity with our Company. No
director’s fees were paid in 2018.
The
Company has no other arrangements, standard or otherwise, pursuant
to which directors are compensated by the Company for their
services in their capacity as directors, or for committee
participation, involvement in special assignments or for services
as consultant or expert during the most recently completed
financial year.
Long Term Incentive Plan (LTIP) Awards
The
Company has no LTIP awards authorized or issued.
The
board of directors of the Company is currently comprised of
Nicholas W. Baxter. Each director of the Company is elected and
holds office until his successor takes office or until his earlier
death, resignation or removal. The board of directors currently has
established no committees other than the audit committee. The
members of the Company’s audit committee are Nicholas Baxter.
There are no directors’ service contracts with the Company
providing for benefits upon termination of employment.
As of
December 31, 2018, the Company had no employees.
The
following table lists as of May 7, 2019, the share ownership of all
of the Company’s directors and members of its administrative,
supervisory and management bodies. The Company has only one class
of shares issued and outstanding being, common shares, with a par
value of $0.001, and all of the common shares have the same voting
rights. The Company has no outstanding stock options. None of the
persons named in the following table hold any warrants to purchase
shares of the Company.
|
Name and Position
|
Number of
Shares Held
|
Percentage of
Shares Held (%)
(1)
|
|
Nicholas
W. Baxter
|
7,573,364
common shares
|
21.9%
|
|
Graham
Crabtree
|
6,788,333
common shares
|
19.6%
|
(1)
The percentage
ownership positions are based on 34,548,368 shares outstanding as
of May 7, 2019.
I
tem
7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
The
Company is a publicly traded corporation, the shares of which are
owned by Canadian residents, U.S. residents and residents of other
countries. As of May 7, 2019, the following parties had ownership
of 5% or greater of the Company’s common shares, all of which
have the same voting rights attached thereto as all other common
shares of the Company.
|
Name
|
Number of Common
Shares Held
|
Percentage of
Common Shares Held
|
|
Nicholas
W. Baxter
Aberdeen,
Scotland
|
7,573,364
|
21.9%
|
|
Graham
Crabtree
Anguilla,
B.W.I.
|
6,788,333
|
19.6%
|
As of
May 7, 2019, the Company had approximately 275 shareholders holding
34,548,368 shares.
Other
than as disclosed above, the Company is not aware of any other
company, any foreign government or any other person, jointly or
severally, that directly or indirectly controls the Company. The
Company is not aware of any arrangements, the operation of which
may at a future date result in a change of control of the
Company.
B.
Related
Party Transactions
During
the year ended December 31, 2018, there were no related party
transactions.
C.
Interests
of Experts and Counsel
Not
applicable.
I
tem
8.
FINANCIAL INFORMATION
A.
Financial
Statements and Other Financial Information
Financial Statements filed as part of this annual report under item
18:
Financial
Statements of Eurasia Energy Limited for the year ended December
31, 2018
Report
of Davidson & Company, LLP, Chartered Professional Accountants
dated May 10, 2019
Balance
Sheets as of December 31, 2018 and 2017
Statements of
Operations for the years ended December 31, 2018, 2017 and
2016
Statements of
Stockholders’ Equity (Deficiency) for the years ended
December 31, 2018, 2017 and 2016
Statements of Cash
Flows for the years ended December 31, 2018, 2017 and
2016
Notes
to Financial Statements
Since
the date of the audited financial statements for the year ended
December 31, 2018, there have been no significant changes in the
Company’s operations.
I
tem
9.
THE OFFER AND LISTING
A.
Offer
and Listing Details
Our
common shares were quoted for trading on the OTC Bulletin Board on
December 2, 2004 under the symbol "PALV". Effective on January 12,
2006, the Company changed its name to “Eurasia Energy
Limited” and changed its ticker symbol to “EUEN”.
The Company completed a continuation of its jurisdiction from
Nevada to Anguilla, B.W.I. on December 31, 2007. Effective on
January 22, 2008, the Company’s shares began trading on the
OTC-BB under the modified symbol “EUENF” which denotes
Eurasia is now a foreign issuer. The Company’s shares now
trade on the OTC-PK. The following quotations obtained from
Stockwatch and/or Quotemedia reflect the highs and low bids for our
common stock based on inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual
transactions.
The
high and low bid prices of our common stock for the periods
indicated below are as follows:
(a)
Five most recent
full financial years (January 1, 2014 to December 31, 2018) –
annual high and low prices:
|
National Association of Securities Dealers OTC Bulletin
Board
|
|
|
|
Year Ended:
|
High (Bid)
|
Low
(Ask)
|
|
December
31, 2018
|
$0.0055
|
$0.0013
|
|
December
31, 2017
|
$0.02
|
$0.01
|
|
December
31, 2016
|
$0.01
|
$0.01
|
|
December
31, 2015
|
$0.015
|
$0.0035
|
|
December
31, 2014
|
$1.00
|
$0.0035
|
(b)
Two most recent
full financial years and subsequent period (January 1, 2017 to May
7, 2019) – high and low for each quarter:
|
National Association of Securities Dealers OTC Bulletin
Board
|
|
|
|
Quarter Ended:
|
High (Bid)
|
Low
(Ask)
|
|
April
1, 2019 to May 7, 2019
|
$0.006
|
$0.006
|
|
March
30, 2019
|
$0.005
|
$0.0021
|
|
December
31, 2018
|
$0.0018
|
$0.0013
|
|
September
30, 2018
|
$0.0055
|
$0.0036
|
|
June
30, 2018
|
$0.0036
|
$0.0021
|
|
March
30, 2018
|
$0.05
|
$0.01
|
|
December
31, 2017
|
$0.02
|
$0.01
|
|
September
30, 2017
|
N/A
|
N/A
|
|
June
30, 2017
|
$0.01
|
$0.01
|
|
March
30, 2017
|
N/A
|
N/A
|
(c)
Recent six months
(November, 2018 to April, 2019) – high and low for each
month:
|
National Association of Securities Dealers OTC Bulletin
Board
|
|
|
|
Month Ended
|
High (Bid)
|
Low
(Ask)
|
|
April,
2019
|
N/A
|
N/A
|
|
March,
2019
|
$0.005
|
$0.0021
|
|
February,
2019
|
$0.0075
|
$0.0021
|
|
January,
2019
|
$0.0021
|
$0.0021
|
|
December,
2018
|
$0.0018
|
$0.0013
|
|
November,
2018
|
N/A
|
N/A
|
Our
common shares are issued in registered form. Nevada Agency &
Transfer Company Limited, Suite 880, 50 West Liberty Street, Reno,
Nevada, 89501 USA, (Telephone: 775-322-0626; Facsimile:
775-322-5623) is the registrar and transfer agent for our common
shares. On May 7, 2019, there were approximately 275 shareholders
of our common shares and 34,548,368 shares
outstanding.
Not
applicable.
The
common shares of the Company are quoted on FINRA’s OTC-PK
under the symbol “EUENF”.
The
Company’s common stock is subject to the regulations on penny
stocks; consequently, the market liquidity for the common stock may
be adversely affected by such regulations limiting the ability of
broker/dealers to sell the Company’s common stock and the
ability of shareholders to sell their securities in the secondary
market in the United States.
Rules
15g-1 through 15g-9 promulgated under the Exchange Act impose sales
practice and disclosure requirements on certain broker-dealers who
engage in certain transactions involving Penny Stock. Subject to
certain exceptions, a Penny Stock generally includes any non-NASDAQ
equity security that has a market price of less than $5.00 per
share. The additional sales practice and disclosure requirements
imposed upon broker-dealers may discourage broker-dealers from
effecting transactions in our shares, which could severely limit
the market liquidity of our shares and impede the sale of our
shares in the secondary market.
Under
the Penny Stock regulations, a broker-dealer selling Penny Stock to
anyone other than an established customer or Accredited Investor
(generally, an individual with net worth in excess of $1,000,000 or
an annual income exceeding $200,000, or $300,000 together with his
or her spouse) must make a special suitability determination for
the purchaser and must receive the purchaser's written consent to
the transaction prior to sale, unless the broker-dealer or the
transaction is otherwise exempt. In addition, the Penny Stock
regulations require the broker-dealer to deliver, prior to any
transaction involving a Penny Stock, a disclosure schedule prepared
by the Commission relating to the Penny Stock market, unless the
broker-dealer or the transaction is otherwise exempt. A
broker-dealer is also required to disclose commissions payable to
the broker-dealer and the registered representative and current
quotations for the securities. Finally, a broker-dealer is required
to send monthly statements disclosing recent price information with
respect to the Penny Stock held in a customer's account and
information with respect to the limited market in Penny
Stocks.
Nevada
Agency & Transfer Company, located at Suite 880, 50 West
Liberty Street, Reno, Nevada 89501, is the registrar and transfer
agent for the Company’s common shares.
Not
applicable.
Not
applicable.
Not
applicable.
I
tem
10.
ADDITIONAL INFORMATION
The
Company has an authorized share capital of 100,000,000 common
shares with a par value of $0.001 per share. The Company currently
has 34,548,368 common shares issued and outstanding as fully paid
and non-assessable.
B.
Memorandum
and Articles of Association
Previously
filed with the Securities and Exchange Commission on the
Company’s Form S-4 Registration Statement filed on July 23,
2007.
The
Company has not yet entered into any material
contracts.
There
are no foreign exchange controls in B.W.I. and funds can be moved
easily. There is no restriction in this regard.
International
Business Companies established in Anguilla, B.W.I. are exempt from
the payment of Income Tax and Stamp Duty.
F.
Dividends
and Paying Agents
Not
applicable.
Not
applicable.
The
documents concerning the Company which are referred to in this Form
20-F Annual Report are either annexed hereto as exhibits
(see Item 19)
or may be
inspected at the principal offices of the Company.
I.
Subsidiary
Information
The
Company has no subsidiaries.
QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our
Company does not engage in market activities or invest in financial
instruments which give rise to market risk for the Company’s
financial resources. Our current assets are maintained in cash in
U.S. dollars. Unallocated excess working capital has from time to
time been invested in short term guaranteed investment
certificates.
I
tem
12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not
applicable.
Not
applicable.
Not
applicable.
D.
American
Depository Shares
Not
applicable.
Index of Exhibits
Articles of
Incorporation and amendments thereto, as filed with the
Registrant’s Form 10-SB on February 27, 2004, incorporated
herein by reference.
Bylaws as filed
with the Registrant’s Form 10-SB on February 27, 2004,
incorporated herein by reference.
Certificate of
Amendment to Articles of Incorporation filed with the
Registrant’s Form S-4 on July 23, 2007, incorporated herein
by reference.
Articles of
Continuance filed with the Registrant’s Form S-4 on July 23,
2007, incorporated herein by reference.
Bylaws filed with
the Registrant’s Form S-4 on July 23, 2007, incorporated
herein by reference.
Dissent and
Appraisal Rights of the Nevada Revised Statutes filed with the
Registrant’s Form S-4 on July 23, 2007, incorporated herein
by reference.
Form of
Dissenter’s Appraisal Notice filed with the
Registrant’s Form S-4 on July 23, 2007, incorporated herein
by reference.
Plan of Conversion
dated November 1, 2006, as filed with the Registrant’s Form
S-4 on July 23, 2007, incorporated herein by
reference.
Form S-4
Registration Statement filed on July 23, 2007, incorporated herein
by reference.
Code of Ethics
filed with the Registrant’s Form 10-KSB on March 30, 2007,
incorporated herein by reference.
Section 302
Certification of CEO
Section 302
Certification of CFO
Section 906
Certification of CEO
Section 906
Certification of CFO
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
|
EURASIA
ENERGY LIMITED
|
|
|
|
|
|
|
|
Date: May 14,
2019
|
By:
|
/s/ Nicholas W.
Baxter
|
|
|
|
|
Nicholas W.
Baxter,
|
|
|
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
Date:
May 14,
2019
|
By:
|
/s/ Graham
Crabtree
|
|
|
|
|
Graham
Crabtree,
|
|
|
|
|
Chief Financial
Officer
|
|
EURASIA
ENERGY LIMITED
Financial
Statements
(Expressed
in U.S. Dollars)
December 31,
2018
Index
Balance
Sheets
Statements of
Operations
Statements of
Stockholders’ Equity (Deficiency)
Statements of Cash
Flows
Notes
to Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Shareholders and Directors of
Eurasia
Energy Limited
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Eurasia Energy
Limited (the “Company”), as of December 31, 2018 and
December 31, 2017, and the related statements of operations,
changes in stockholders’ equity (deficiency), and cash flows
for the years ended December 31, 2018, 2017, and 2016, and the
related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of
the Company as of December 31, 2018 and December 31, 2017, and the
results of its operations and its cash flows for the years ended
December 31, 2018, 2017, and 2016 in conformity with accounting
principles generally accepted in the United States of
America.
Going Concern
The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has not raised funding
or generated revenue from operations and has limited assets to
explore investment opportunities which raise substantial doubt
about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Basis for Opinion
These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audits we are required to obtain an understanding of
internal control over financial reporting 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.
Our
audits included performing procedures to assess the risks of
material misstatements of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
We have
served as the Company’s auditor since 2017.
“DAVIDSON & COMPANY LLP”
|
Vancouver,
Canada
|
Chartered
Professional Accountants
|
May 7,
2019
|
|
|
|
December
31, 2018 and 2017
|
|
|
|
|
|
|
|
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash
|
$
1,865
|
$
4,020
|
|
Total
assets
|
$
1,865
|
$
4,020
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable and accrued liabilities
|
$
4,583
|
$
8,803
|
|
Total
current liabilities
|
4,583
|
8,803
|
|
|
|
|
|
Long
term liabilities
|
|
|
|
Loan
payable (Note 5)
|
15,937
|
-
|
|
Total
liabilities
|
$
20,520
|
$
8,803
|
|
|
|
|
|
Stockholders' equity (deficiency)
(Note
6)
|
|
|
|
Common stock,
$0.001 par value, 100,000,000 authorized shares
|
|
|
|
(34,548,368
issued and outstanding as of December 31, 2018, 2017 and
2016)
|
34,548
|
34,548
|
|
Additional paid-in
capital
|
7,104,130
|
7,104,130
|
|
Accumulated
deficit
|
(7,157,333
)
|
(7,143,461
)
|
|
|
|
|
|
Total
stockholders' equity (deficiency)
|
$
(18,655
)
|
$
(4,783
)
|
|
|
|
|
|
Total
liabilities and stockholders' equity (deficiency)
|
$
1,865
|
$
4,020
|
|
|
|
|
|
Basis of
presentation and going concern (Note 2)
|
|
|
|
|
|
|
(The
accompanying notes are an integral part of these financial
statements)
|
|
|
|
|
For
the years ended December 31, 2018, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
General
and administrative
|
$
3,486
|
$
6,574
|
$
7,908
|
|
Professional
fees
|
10,386
|
16,263
|
16,493
|
|
Net
loss
|
13,872
|
22,837
|
24,401
|
|
|
|
|
|
|
Basic and diluted
loss per common share
|
$
(0.00
)
|
$
(0.00
)
|
$
(0.00
)
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
-basic
and diluted
|
34,548,368
|
34,548,368
|
34,548,368
|
|
|
|
|
|
|
|
|
|
|
(The
accompanying notes are an integral part of these financial
statements)
|
|
|
STATEMENTS
OF STOCKHOLDERS' EQUITY (DEFICIENCY)
|
For
the years ended December 31, 2018, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December
31, 2015
|
34,548,368
|
$
34,548
|
$
7,104,130
|
$
(7,096,223
)
|
$
42,455
|
|
|
|
|
|
|
|
|
Net loss for the
year
|
-
|
-
|
-
|
(24,401
)
|
(24,401
)
|
|
|
|
|
|
|
|
|
Balance, December
31, 2016
|
34,548,368
|
34,548
|
7,104,130
|
(7,120,624
)
|
18,054
|
|
|
|
|
|
|
|
|
Net loss for the
year
|
-
|
-
|
-
|
(22,837
)
|
(22,837
)
|
|
|
|
|
|
|
|
|
Balance, December
31, 2017
|
34,548,368
|
34,548
|
7,104,130
|
(7,143,461
)
|
(4,783
)
|
|
|
|
|
|
|
|
|
Net loss for the
year
|
-
|
-
|
-
|
(13,872
)
|
(13,872
)
|
|
|
|
|
|
|
|
|
Balance, December
31, 2018
|
34,548,368
|
$
34,548
|
$
7,104,130
|
$
(7,157,333
)
|
$
(18,655
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(The
accompanying notes are an integral part of these financial
statements)
|
|
|
|
|
For
the years ended December 31, 2018, 2017 and 2016
|
|
|
|
|
|
|
|
|
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
Cash
flows used in operating activities
|
|
|
|
|
Net
loss for the year
|
$
(13,872
)
|
$
(22,837
)
|
$
(24,401
)
|
|
|
|
|
|
|
Changes
in non-cash working capital items
|
|
|
|
|
Accrued
interest payable
|
937
|
-
|
-
|
|
Prepaid
expenses
|
-
|
-
|
1,194
|
|
Accounts
payable and accrued liabilities
|
(4,220
)
|
5,403
|
224
|
|
Net cash used in
operating activities
|
(17,155
)
|
(17,434
)
|
(22,983
)
|
|
|
|
|
|
|
Cash
flows from investing activities
|
-
|
-
|
-
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
Loan
received
|
15,000
|
-
|
-
|
|
Net cash provided
by financing activities
|
15,000
|
-
|
-
|
|
|
|
|
|
|
Change
in cash during the year
|
(2,155
)
|
(17,434
)
|
(22,983
)
|
|
|
|
|
|
|
Cash, beginning of
year
|
4,020
|
21,454
|
44,437
|
|
|
|
|
|
|
Cash,
end of year
|
$
1,865
|
$
4,020
|
$
21,454
|
|
|
|
|
|
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 1 - Organization of the Company and Description of the
Business
Eurasia Energy Limited (“the Company”) was incorporated
as Pacific Alliance Ventures Ltd. in the State of Nevada on October
20, 2003. The Company changed its name to Eurasia Energy Limited on
November 28, 2005. The Company completed a continuation of its
jurisdiction from Nevada to Anguilla, B.W.I. on December 31, 2007
and is currently inactive.
Note 2 - Basis of Presentation and Going Concern
The accompanying financial statements are presented in U.S. dollars
and have been prepared in accordance with accounting principles
generally accepted in the United States of America (“US
GAAP”) and pursuant to the accounting and disclosure rules
and regulations of the U.S. Securities and Exchange Commission (the
“SEC”).
Going Concern
The accompanying financial statements are prepared assuming the
Company will continue as a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business.
The Company has and is expected to incur net losses and cash
outflows from operations in pursuit of maintaining the listing
status of the Company.
During the year ended December 31, 2018, the Company has not raised
any funds or generated any revenue from operations and has
limited assets to explore investment opportunities. At
December 31, 2018, the Company had cash of
$1,865. Management anticipates that the Company will
have to raise additional funds and/or generate revenue from
investors within twelve months to continue operations. Additional
funding will be needed to explore investment opportunities and
maintain the listing status of the Company. Obtaining additional
funding will be subject to a number of factors, including general
market conditions. These factors may impact the timing, amount,
terms or conditions of additional financing available to us. If the
Company is unable to raise sufficient funds, management will be
forced to de-list the Company or cease our operations.
Management has determined that there is substantial doubt about the
Company's ability to continue as a going concern within one year
after the financial statements are issued. The accompanying
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or
amounts and classification of liabilities that might result from
this uncertainty.
Note 3 - Significant Accounting Policies
(a)
Principles
of Accounting
These financial statements have been prepared in accordance with
generally accepted accounting principles (“GAAP”) in
the United States of America (“U.S.”).
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 3 - Significant Accounting Policies - Continued
The preparation of financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Management makes its best
estimate of the ultimate outcome for these items based on
historical trends and other information available when the
financial statements are prepared. Changes in estimates are
recognized in accordance with the accounting rules for the
estimate, which is typically in the period when new information
becomes available to management. Actual results could differ from
those estimates.
The Company considers all highly liquid instruments purchased with
an original maturity of three months or less to be cash
equivalents. At December 31, 2018 and December 31, 2017, there were
no cash equivalents.
The Company follows the asset and liability method of accounting
for income taxes whereby deferred income taxes are recognized for
the deferred income tax consequences attributable to differences
between the financial statement carrying values of existing assets
and liabilities and their respective income tax bases (temporary
differences). Deferred income tax assets and liabilities are
measured using enacted income tax rates expected to apply to
taxable income in the years in which temporary differences are
expected to be recovered or settled. The effect on deferred income
tax assets and liabilities of a change in tax rates is included in
profit or loss in the period in which the change occurs. The amount
of deferred income tax assets recognized is limited to the amount
that is more likely than not to be realized.
(e)
Earnings
(Loss) Per Share
Basic earnings (loss) per share is computed by dividing net
earnings (loss) for the year attributable to common stockholders by
the weighted average number of common shares outstanding for the
period. Diluted earnings (loss) per share is computed by dividing
net loss for the year attributable to common stockholders by the
weighted average number of common shares outstanding and dilutive
common stock equivalents for the period. At December 31, 2018 and
December 31, 2017, there were no stock options
outstanding.
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 3 - Significant Accounting Policies - Continued
(f)
Stock-Based
Compensation
The Company grants stock options to buy common shares of the
Company to directors, officers, employees and consultants. An
individual is classified as an employee when the individual is an
employee for legal or tax purposes, or provides services similar to
those performed by an employee.
The fair value of stock options is measured on the date of grant,
using the Black-Scholes option pricing model and is recognized over
the vesting period. Consideration paid for the shares on the
exercise of stock options is credited to share
capital.
In situations where equity instruments are issued to non-employees
and some or all of the goods or services received by the entity as
consideration cannot be specifically identified, they are measured
at the fair value of the share-based payment, using the
Black-Scholes option pricing model.
(g)
Foreign
Currency Translation
The Company maintains a U.S. dollar bank account at a financial
institution in Canada. Foreign currency transactions are translated
into their functional currency, which is the U.S. dollar, in the
following manner:
At the transaction date, each asset, liability, revenue and expense
is translated into the functional currency by the use of the
exchange rate in effect at that date. At the period end, monetary
assets and liabilities are translated into U.S. dollars by using
the exchange rate in effect at that date. Transaction gains and
losses that arise from exchange rate fluctuations are included in
the results of operations.
(h)
Financial
Instruments
The Company classifies financial assets and liabilities as
held-for-trading, available-for-sale, held-to-maturity, loans and
receivables or other financial liabilities depending on their
nature. Financial assets and financial liabilities are recognized
at fair value on their initial recognition, except for those
arising from certain related party transactions which are accounted
for at the transferor’s carrying amount or exchange
amount.
Financial assets and liabilities classified as held-for-trading are
measured at fair value, with gains and losses recognized in net
income. Financial assets classified as held-to-maturity, loans and
receivables, and financial liabilities other than those classified
as held-for-trading are measured at amortized cost, using the
effective interest method of amortization. Financial assets
classified as available-for-sale are measured at fair value, with
unrealized gains and losses being recognized as other comprehensive
income until realized, or if an unrealized loss is considered other
than temporary, the unrealized loss is recorded in
income.
The Company classifies its financial instruments as
follows:
Cash is classified as held for trading and is measured at fair
value using Level 1 inputs. Accounts payable and accrued
liabilities and loan payable are classified as other financial
liabilities, and have a fair value approximating its carrying
value, due to its short-term.
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 4 - Recent Accounting Pronouncements
Accounting Pronouncements Adopted During the Period
(i)
Revenue
from contracts with customers
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts
with Customers." ASU 2014-09 requires a company to recognize
revenue when promised goods or services are transferred to
customers in an amount that reflects the consideration to which the
company expects to be entitled in exchange for those goods and
services. The guidance requires five steps to be applied: 1)
identify the contract(s) with customers, 2) identify the
performance obligations in the contract, 3) determine the
transaction price, 4) allocate the transaction price to the
performance obligation in the contract and 5) recognize revenue
when (or as) the entity satisfies a performance obligation. The
guidance also requires both quantitative and qualitative
disclosures, which are more comprehensive than existing revenue
standards. The disclosures are intended to enable financial
statement users to understand the nature, timing and uncertainty of
revenue and the related cash flow.
Effective January 1, 2018, the Company adopted the new accounting
standard, and all the related amendments, on a modified
retrospective basis, with no cumulative effect adjustment to equity
needed. The standard did not have a material impact on the
company's results of operations or cash flows nor does the Company
expect it to have a material impact on future periods. Pursuant to
ASU 2014-09, revenues are recognized as control transfers to the
customers. Adoption of the standard did not have any impact on the
financial statements of the Company.
In August 2014, the FASB issued ASU No.
2014-15,
“Presentation of
Financial Statements – Going
Concern”
which is
authoritative guidance on management’s responsibility to
evaluate whether there is substantial doubt about an entity’s
ability to continue as a going concern and provide related footnote
disclosures, codified in ASC 205-40,
Going
Concern
. The guidance provides
a definition of the term substantial doubt, requires an evaluation
every reporting period including interim periods, provides
principles for considering the mitigating effect of
management’s plans, requires certain disclosures when
substantial doubt is alleviated as a result of consideration of
management’s plans, requires an express statement and other
disclosures when substantial doubt is not alleviated, and requires
an assessment for a period of one year after the date that the
financial statements are issued (or available to be
issued).
The Company adopted this guidance for the fiscal year effective
from January 1, 2018. Its adoption did not have a material effect
on the Company’s financial statements.
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 4 - Recent Accounting Pronouncements - Continued
Accounting Pronouncements Adopted During the Period -
Continued
(iii)
Share-based
payment accounting
In March 2016, the FASB issued ASU
2016-09,
“Improvements
to Employee Share-Based Payment
Accounting”,
which
modifies the accounting for excess tax benefits and tax
deficiencies associated with share-based payments, the accounting
for forfeitures, and the classification of certain items on the
statement of cash flows. ASU 2016-09 eliminates the requirement to
recognize excess tax benefits in additional paid-in capital
(“APIC”), and the requirement to evaluate tax
deficiencies for APIC or income tax expense classification, and
provides for these benefits or deficiencies to be recorded as an
income tax expense or benefit in the income statement. With these
changes, tax-related cash flows resulting from share-based payments
will be classified as operating activities as opposed to financing,
as currently presented.
The Company adopted the standard effective from January 1, 2018.
Adoption of the standard did not have any material impact on the
financial statements of the Company.
(iv)
Statement
of cash flows
In August 2016, the FASB issued ASU
2016-15,
Statement of Cash
Flows
(Topic 230), which
addresses eight specific cash flow issues and is intended to reduce
diversity in practice in how certain cash receipts and cash
payments are presented and classified in the statement of cash
flows.
On November 17, 2016, the FASB issued ASU No.
2016-18,
Statement of Cash Flows (Topic
230): Restricted Cash
, a
consensus of the FASB’s Emerging Issues Task Force (the
“Task Force”). The new standard requires that the
statement of cash flows explain the change during the period in the
total of cash, cash equivalents, and amounts generally described as
restricted cash or restricted cash equivalents. Entities will also
be required to reconcile such total to amounts on the balance sheet
and disclose the nature of the restrictions.
The Company adopted both standards effective from January 1, 2018.
Adoption of the standards did not have an impact on the results of
operation, cash flows, other than presentation, or financial
condition.
Recent Accounting Pronouncements Not Yet Adopted
(i)
Share-based
payment to non-employees
In June 2018, the FASB issued ASU No.
2018-07,
Compensation – Stock
Compensation (Topic 718): Improvements to Non-employee Share-based
Payment Accounting
. The
standard expands the scope of Topic 718 to include share-based
payments issued to nonemployees for goods or services, simplifying
the accounting for share-based payments to non-employees by
aligning it with the accounting for share-based payments to
employees, with certain exceptions. The standard is effective for
fiscal years beginning after December 15, 2018, including interim
periods within those fiscal years with early adoption permitted,
including adoption in an interim period. The Company does not
believe the adoption of this standard will have a significant
impact on its financial statements.
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 4 - Recent Accounting Pronouncements - Continued
Recent Accounting Pronouncements Not Yet Adopted -
Continued
(ii)
Fair
value measurement
In August 2018, the FASB issued ASU No.
2018-13,
Fair Value Measurement –
Disclosure Framework – Changes to the Disclosure Requirements
for Fair Value Measurement
,
which makes a number of changes meant to add, modify or remove
certain disclosure requirements associated with the movement
against or hierarchy associated with Level 1, Level 2 and Level 3
fair value measurements. The standard is effective for fiscal years
and interim periods within those fiscal years beginning after
December 15, 2019. Early adoption is permitted upon issuance of the
update. The Company does not expect the adoption of this guidance
to have a material impact on its financial
statements.
(iii)
Revenue
from collaborative arrangements
In November 2018, the FASB issued ASU No. 2018-18, which amended
ASC 808,
Collaborative
Arrangements
and ASC
606,
Revenue from Contracts with
Customers
(“ASU
2018-18”), to require that transactions in collaborative
arrangements be accounted for under ASC 606 if the counterparty is
a customer for a good or service (or bundle of goods and services)
that is a distinct unit of account. The amendments also preclude
entities from presenting consideration from transactions with a
collaborator that is not a customer together with revenue
recognized from contracts with customers. The standard is effective
for fiscal years and interim periods within those fiscal years
beginning after December 15, 2019. Early adoption is permitted,
including in any interim period, provided an entity has already
adopted ASC 606 or does so concurrently with the adoption of this
guidance. The Company is currently evaluating the impact of its
pending adoption of ASU 2018-18 on its financial
statements.
Other accounting standards that have been issued or proposed by the
FASB or other standards-setting bodies that do not require adoption
until a future date are not expected to have a material impact on
the Company’s financial statements upon
adoption.
Note 5 – Loan Payable
On May 18, 2018, the Company obtained a loan of $15,000 from a
third-party bearing interest at 10% per annum. The loan has no
repayment terms and can be repaid at any time.
At December 31, 2018, an interest of $937 was recorded as part of
the loan payable.
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 6 - Equity
Authorized: 100,000,000 common shares, par value
$0.001
No common stock was issued during the years ended December 31,
2018, 2017 and 2016.
The Company did not have any outstanding share purchase warrants at
December 31, 2018, 2017 and 2016.
During the years ended December 31, 2018, 2017 and 2016, the
Company did not have any share purchase warrants issued, cancelled
or exercised.
The Company has adopted a stock option plan (the
“Plan”) to grant options to directors, officers,
employees, and consultants. Under the Plan, the Company may grant
options to acquire up to 3,000,000 common shares of the Company.
The exercise price of each option will not be less than the fair
market value price of the Company’s stock on the date of
grant. The Plan is administered by the Board of
Directors.
The movement of options is summarized as follows:
EURASIA ENERGY LIMITED
Notes to Financial Statements
(Expressed in U.S. Dollars)
December 31, 2018
Note 6 - Equity - Continued
(c)
Stock
Options - Continued
There were 2,550,000 stock options at an exercise price of $0.05
which expired unexercised on April 2, 2017.
At December 31, 2018, there was no outstanding stock
options.
Note 7 - Related Party Transactions
During the year ended December 31, 2018, the Company paid corporate
and administrative service charges of $nil (2017: $nil; 2016:
$3,581) to a law firm of which a director of the Company is the
owner.
As of December 31, 2018, the Company had an amount of $nil
(December 31, 2017: $1,450; December 31, 2016: $nil) owing to a law
firm of which a director of the Company is the owner.
Note 8 - Income Taxes
The Company was liable for taxes in the United States until it
completed its continuation from the State of Nevada, U.S.A. to
Anguilla, British West Indies since December 31, 2007. There is no
income tax imposed on companies by the government of Anguilla,
British West Indies.
For the years ended December 31, 2018, 2017 and 2016, the Company
did not have any income for tax purposes and therefore, no tax
liability or expense has been recorded in these financial
statements.
For U.S. tax reporting purpose, the Company has available net
operating loss carryforwards of approximately $1,338,000 for tax
purposes to offset future taxable income which expires commencing
2026 through the year 2029. Pursuant to the Tax Reform Act of 1986,
annual utilization of the Company’s net operating loss
carryforwards may be limited if a cumulative change in ownership of
more than 50% is deemed to occur within any three-year
period.
The deferred tax asset associated with the tax loss carryforwards
is approximately $455,000 at December 31, 2018. The Company has
provided a full valuation allowance against the deferred tax
asset.
Note 9 - Fair Value Accounting
Fair value measurement is based on 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.
The standard describes three levels of inputs that may be used to
measure fair value which are:
Level 1 - Quoted prices that are available in active markets for
identical assets or liabilities.
Level 2 - Quoted prices in active markets for similar assets that
are observable.
Level 3 - Unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the
assets or liabilities.
The Company’s cash is measured at fair value using Level 1
inputs.