TGRO Tiger Oil and Energy Inc (CE)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2018, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2017 audited financial statements. The results of operations for the period ended September 30, 2018 are not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN  

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. 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 – SIGNIFICANT 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Consolidation

The accompanying consolidated financial statements included all of the accounts of the Company and its wholly-owned subsidiaries, C2R, Inc., a Nevada Corporation, Jett Rink Oil, LLC, a Kansas Limited Liability Company, and Tiger Dynamics, Inc., a Nevada Corporation. All intercompany transactions have been eliminated.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of the Company’s financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and financial instruments which mature within six months of the date of purchase.

Oil and Gas Properties

The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including certain payroll, asset retirement costs, other internal costs, and interest incurred for the purpose of finding oil and natural gas reserves, are capitalized. Internal costs that are capitalized are directly attributable to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred. Proceeds from the sale of oil and natural gas properties are applied to reduce the capitalized costs of oil and natural gas properties unless the sale would significantly alter the relationship between capitalized costs and proved reserves, in which case a gain or loss is recognized.

Capitalized costs associated with impaired properties and capitalized costs related to properties having proved reserves, plus the estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 410 “Asset Retirement and Environmental Obligations” (FASB ASC 410), are amortized using the unit-of-production method based on proved reserves. Capitalized costs of oil and natural gas properties, net of accumulated amortization and deferred income taxes, are limited to the total of estimated future net cash flows from proved oil and natural gas reserves, discounted at ten percent, plus the cost of unevaluated properties.  Under certain specific conditions, companies could elect to use subsequent prices for determining the estimated future net cash flows. The use of subsequent pricing is no longer allowed. There are many factors, including global events that may influence the production, processing, marketing and price of oil and natural gas. A reduction in the valuation of oil and natural gas properties resulting from declining prices or production could adversely impact depletion rates and capitalized cost limitations. Capitalized costs associated with properties that have not been evaluated through drilling or seismic analysis, including exploration wells in progress at June 30, 2018, are excluded from the unit-of-production amortization. Exclusions are adjusted annually based on drilling results and interpretative analysis. 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Oil and Gas Properties (Continued)

Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the statements of operations.

Costs of oil and gas properties are depleted using the unit-of-production method. For the six months ended June 30, 2018 and 2017, the Company recognized $-0- and $-0-, respectively, of depletion expense related to oil and gas production during the period.

Ceiling Test

In applying the full cost method, the Company performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of property and equipment is compared to the value of its proved reserves discounted at a ten percent interest rate of future net revenues, based on current economic and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties.  

Revenue Recognition

Revenues from the sale of oil and natural gas are recognized when the product is delivered at a fixed or determinable price, title has transferred, and collectability is reasonably assured.  For oil sales, this occurs when the customer takes delivery of oil from the operators’ storage tanks.

Loss per Share

The Company has adopted ASC 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The Company had 80,125,000 potential dilutive shares of common stock as of September 30, 2018 that were excluded as their effect was anti-dilutive.

NOTE 4 – OIL AND GAS PROPERTIES

On April 3, 2014, the Company signed an election to participate in the first of three wells with Toto Energy, LLC in Cowley County, Kansas. The Company will earn a 30 percent working interest and a 24.45 percent net royalty interest in the well. The Company capitalized $213,000 of cash payments made to commence operations development of the well.

NOTE 4 – OIL AND GAS PROPERTIES (Continued)

On May 10, 2014, the Company signed an election to participate in the second of three wells with Toto Energy, LLC in Cowley County, Kansas. The Company will earn a 30 percent working interest and a 24.45 percent net royalty interest in the well. The Company capitalized $189,000 of cash payments made to commence operations development of the well.

On July 23, 2016 the Company received $58,684 from the operator of two of its oil and gas leases. The payment received represented a partial refund of the Company’s previous $404,837 in payments made to the operator pursuant to the terms of an Authorization for Expenditures (“AFE”) Agreement. The Company’s original payments under the AFE were capitalized to oil and gas properties in 2014. All capitalized costs pursuant to the AFE were fully impaired during the year ended December 31, 2015. As the capitalized costs had been previously impaired, the $58,684 was recorded as a gain on property settlement for the period ended December 31, 2016.

Oil and gas properties are stated at cost. As of September 30, 2018 and December 31, 2017, oil and gas properties, net consisted of the following:

NOTE 5 – CONVERTIBLE NOTES PAYABLE

Chancery Lane Notes

On January 3, 2014, the Company received $600,000 in connection with a convertible note financing commitment, the terms of which call for the Company to receive three tranches of $200,000 each on a callable convertible note wherein the Company borrows the sum at five percent interest for one year and the investor can elect to continue to receive the interest on the note or have the Company issue the investor shares of common stock of the Company at $0.50 per share to retire the debt. The notes came due on December 12, 2014. On July 1, 2018, $30,000 of the total outstanding principal balance was transferred to and assumed by a separate third-party entity, leaving a total unpaid principal balance of $570,000 at September 30, 2018, the full total being in default. At September 30, 2018 accrued interest on the notes totaled $134,990.

Adar Bay Note

On January 22, 2018, the Company received $71,250 from a third-party lender pursuant to a $75,000 convertible promissory note. The note bears interest at a rate of 8.0 percent per annum, and is due in full on January 22, 2019. The note is convertible into shares of the Company’s common stock at a strike price equal to 50 percent of the lowest bid price of the lower of a) the last 20 days prior to conversion, or b) the 20 days immediately preceding the note closing date. On August 22, 2018, the Company received an additional $35,000 pursuant to the same terms. As of September 30, 2018, the aggregate principal balance outstanding on the notes totaled $110,000, and accrued interest totaled $5,490. Additionally, the Company has recorded a net debt discount totaling $23,425, and a derivative liability totaling $142,380.

NOTE 5 – CONVERTIBLE NOTES PAYABLE (Continued)

G.W. Holdings Note

On January 24, 2018, the Company received $75,000 from a third-party lender pursuant to a $78,750 convertible promissory note. The note bears interest at a rate of 10.0 percent per annum, and is due in full on January 24, 2019. The note is convertible into shares of the Company’s common stock at a strike price equal to 50 percent of the lowest bid price of the lower of the last 20 days prior to conversion. As of September 30, 2018, the Company has recorded $4,298 in accrued interest on the note, a net debt discount totaling $25,027, and a derivative liability totaling $149,940.

Black Ridge Holdings Notes

On July 1, 2018, Black Ridge Holdings, LLC (“Black Ridge”) assumed a $30,000 portion of the Company’s convertible note previously due to Chancery Lane. On July 1, 2018, the full principal balance of the note was converted into 4,958,678 shares of common stock. Pursuant to this transaction, accrued interest totaling $6,686 was recorded as a gain on conversion of debt.

On July 1, 2018, Black Ridge assumed a $24,000 portion of the Company’s notes payable due to a related-party. Pursuant to this assumption of debt, the new note payable to Black Ridge became convertible into shares of the Company’s common stock at a conversion price equal to 60 percent of the lowest bid price from the 25 days prior to conversion. On July 31, 2018, Black Ridge elected to convert $16,200 of the note into 5,000,000 shares of the Company’s common stock. As of September 30, 2018, the remaining principal balance payable pursuant to the note totaled $7,800, and accrued interest totaled $98. Additionally, the Company recorded a net debt discount of $5,850, and a derivative liability totaling $14,059.

NOTE 6 – NOTES PAYABLE – RELATED PARTY

On June 11, 2015 the Company borrowed $5,000 from a related-party entity. Pursuant to the terms of the note, the principal accrues interest at a rate of five percent per annum, is unsecured, and was due in full on June 11, 2016. Subsequent to the initial borrowing the Company borrowed an additional $57,500 from the same lender under the same terms. On July 25, 2016 the Company paid $40,000 against the outstanding principal of the notes. Accrued interest totaling $1,340 was forgiven at the time of payment, and recorded as additional paid-in capital. At September 30, 2018 the total outstanding principal balance due to the lender was $22,500, and aggregate accrued interest on the notes totaled $2,429.

On May 6, 2015 the Company borrowed $5,000 from an related-party entity. The note, accrued interest at a rate of five percent per annum, was unsecured, and was due in full on May 6, 2016. On July 25, 2015 the note, inclusive of all unpaid principal and interest, was transferred to and assumed by a different related party entity. On July 25, 2016 the Company repaid the full $5,000 principal balance due under the terms of the note. Accrued interest on the note totaling $305 was forgiven at the time of payment, and recorded as additional paid-in capital. During the year ended December 31, 2017, the Company borrowed an additional $10,000 from the same entity. The outstanding principal balance on the note as of June 30, 2018 totaled $10,000 This note accrues interest at a rate of five percent per annum and is due twelve months from the note date. As of September 30, 2018, accrued interest on the note totaled $527.

On March 7, 2016 the Company borrowed $10,000 from a related-party. Pursuant to the terms of the note the principal accrues interest at a rate of five percent per annum, is unsecured, and is due in full on May 6, 2017. On May 2, 2016 the Company borrowed an additional $4,000 under the same terms. On October 4, 2016 the Company borrowed an additional $25,000 under the same terms. During the year ended December 31, 2017, the Company borrowed an additional $10,000 under the same terms. During the three months ended March 3, 2018, the Company paid $25,000 against note principal. On July 1, 2018, the entire $24,000 principal balance was assumed by an unrelated third-party entity. A total of $3,906 in interest having accrued on the note through June 30, 2018 remained outstanding and payable at September 30, 2018.

NOTE 7 – NOTES PAYABLE

On May 3, 2018 the Company borrowed $10,000 from an unrelated third-party entity. Pursuant to the terms of the note, the principal accrues interest at a rate of eight percent per annum, is unsecured, and is due in full on May 2, 2019. The note is convertible into shares of the Company’s common stock at a strike price to be determined via arm’s-length negotiation between the Company and the lender within 48 hours of the Company’s receipt of the lender’s conversion request. On September 25, 2018, the lender elected to convert $7,000 in note principal into 5,000,000 shares of the Company’s common stock. At September 30, 2018 the total outstanding principal balance due to the lender was $3,000, and aggregate accrued interest on the notes totaled $188.

NOTE 8 – ASSET RETIREMENT OBLIGATIONS

The total future asset retirement obligation is estimated by management based on the Company’s net working interests in all wells and facilities, estimated costs to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At June 30, 2018 the Company estimated the undiscounted cash flows related to asset retirement obligation to total approximately $105,500. The actual costs to settle the obligation are expected to occur in approximately 25 years. Through September 30, 2018, the Company established an asset retirement obligation of $9,860 for the wells acquired by the Company, which was capitalized to the value of the oil and gas properties. The fair value of the liability at September 30, 2018 and December 31, 2017 is estimated to be $13,861 and $13,178, respectively, using a risk- free rate of 9.31 percent and inflation rates between 3.87 and 4.81 percent. Total accretion expense on the asset retirement obligation was $683 and $625 for the nine-month periods ended September 30, 2018 and 2017, respectively.

NOTE 9 – STOCKHOLDERS’ DEFICIT

The Company has 25,000,000 preferred shares authorized at a par value of $0.001 and 625,000,000 common shares authorized at par value of $0.001.  As of September 30, 2018, the Company has 22,013 shares of preferred stock and 117,063,740 shares of common stock issued and outstanding.  

On April 23, 2018 the Company resolved to issue 65,000,000 common shares of common stock to the Company’s president. The shares were issued at $0.017 per share, being the closing sale price on the date of issuance. Pursuant to this issuance, the Company recognized $1,098,500 in stock compensation expense. Additionally, the shares satisfied $6,500 in accrued director fees payable to the Company’s president.

On July 1, 2018, the Company issued 4,958,678 shares of common stock to an unrelated third-party entity upon conversion of a note payable.

On July 31, 2018 the Company issued 5,000,000 shares of common stock to an unrelated third-party entity pursuant to the partial conversion of a note payable.

On September 19, 2018, the Company issued 5,000,000 shares of common stock to an unrelated third-party entity pursuant to the partial conversion of a note payable.

During the year ended December 31, 2017, the Company cancelled 20,000 shares of preferred stock, and 5,623,097 shares of common stock.