Nevada
|
98-0511130
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
326 S. Coast Highway, Suite 102
Redondo Beach, CA
|
90277
|
(Address of principal executive offices)
|
(Zip Code)
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
(i)
|
The audited financial statements of the 20.5% Working Interest as of and for the years ended August 31, 2013 and August 31, 2012, are attached as Exhibit 99.1 to this Form 8-K/A and incorporated by reference into this Form 8-K/A.
|
|
(ii)
|
The unaudited financial statements of the 20.5% Working Interest as of November 30, 2013 and August 31, 2013 and for the three month periods ended November 30, 2013 and 2012, are attached as Exhibit 99.2 to this Form 8-K/A and incorporated by reference into this Form 8-K/A.
|
|
(iii)
|
The consent of L. L. Bradford & Co., our independent auditors, is attached as Exhibit 23 to this Form 8-K/A.
|
|
(i) | Unaudited Pro Forma Combined Balance Sheet as of November 30, 2013. |
|
(ii)
|
Unaudited Pro Forma Combined Statement of Operations for the three months ended November 30, 2013 and the year ended August 31, 2013.
|
|
(iii) | Notes to Pro Forma adjustments. |
Exhibit
Number
|
Description
|
23
|
Consent of L.L Bradford & Co.
|
99.1
|
20.5% Working Interest in DEEP Lease Audited Financial Statements as of and for the years in the period ended August 31, 2013 and August 31, 2012.
|
99.2
|
20.5% Working Interest in DEEP Lease Unaudited Condensed Financial Statements as of November 30, 2013 and August 31, 2013 and for the three month periods ended November 30, 2013 and 2012.
|
99.3
|
Unaudited Pro Forma Combined Financial Statements.
|
Dated:
|
April 10, 2014
|
By:
|
/s/ Darren Katic
|
Darren Katic
|
|
Chief Executive Officer
|
Report of Independent Registered Public Accounting Firm
|
2
|
Statements of financial condition as of August 31, 2013 and 2012
|
3
|
Statements of operations and changes in owners’ equity for the years ended August 31, 2013 and 2012
|
4
|
Statements of cash flows for the years ended August 31, 2013 and 2012
|
5
|
Notes to financial statements
|
6
|
20.5% Working Interest in the DEEP Lease
|
||||||||
Statements of Financial Condition
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Accounts receivable
|
$ | 5,546 | $ | 4,170 | ||||
Inventory
|
2,173 | 2,621 | ||||||
Prepaid expenses
|
394 | 617 | ||||||
Total current assets
|
8,113 | 7,408 | ||||||
Fixed assets:
|
||||||||
Machinery and equipment, net of accumulated
|
||||||||
depreciation of $4,670 and $3,425, respectively
|
4,048 | 5,293 | ||||||
Other assets:
|
||||||||
Capitalized oil and gas properties, net of accumulated
|
||||||||
depletion of $18,422 and $14,252, respectively
|
91,557 | 95,727 | ||||||
Total assets
|
$ | 103,718 | $ | 108,428 | ||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 3,908 | $ | 2,156 | ||||
Net profits interest payable, current portion
|
3,725 | 3,398 | ||||||
Total current liabilities
|
7,633 | 5,554 | ||||||
Long-term liabilities:
|
||||||||
Asset retirement obligations
|
31,781 | 29,291 | ||||||
Net profits interest payable, net of current portion
|
34,608 | 38,334 | ||||||
Total long-term liabilities
|
66,389 | 67,625 | ||||||
Total liabilities
|
74,022 | 73,179 | ||||||
Commitments:
|
- | - | ||||||
Owners' equity:
|
||||||||
Owners' equity
|
29,696 | 35,249 | ||||||
Total owners' equity
|
29,696 | 35,249 | ||||||
Total liabilities and owners' equity
|
$ | 103,718 | $ | 108,428 |
20.5% Working Interest in the DEEP Lease
|
||||||||
Statements of Operations and Changes in Owners' Equity
|
||||||||
Year Ended
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
Oil revenues
|
$ | 24,857 | $ | 25,720 | ||||
Expenses:
|
||||||||
Direct operating costs
|
17,843 | 13,093 | ||||||
Depreciation, depletion and amortization
|
7,905 | 7,811 | ||||||
General and administrative expenses
|
1,200 | 1,450 | ||||||
Total expenses
|
26,948 | 22,354 | ||||||
Net operating (loss) income
|
(2,091 | ) | 3,366 | |||||
Other income (expense):
|
||||||||
Interest expense
|
(3,958 | ) | (4,280 | ) | ||||
Total other income (expense)
|
(3,958 | ) | (4,280 | ) | ||||
Net (loss)
|
$ | (6,049 | ) | $ | (914 | ) | ||
Owners' equity - beginning
|
$ | 35,249 | $ | 25,461 | ||||
Owners' funding
|
496 | 10,702 | ||||||
Net (loss)
|
(6,049 | ) | (914 | ) | ||||
Owners' equity - ending
|
$ | 29,696 | $ | 35,249 |
Statements of Cash Flows
|
||||||||
Year Ended
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities
|
||||||||
Net (loss)
|
$ | (6,049 | ) | $ | (914 | ) | ||
Depreciation, depletion and amortization
|
5,415 | 5,516 | ||||||
Accretion of asset retirement obligation
|
2,490 | 2,295 | ||||||
Accretion of net profits interest payable
|
3,958 | 4,280 | ||||||
Adjustments to reconcile net (loss) to cash
|
||||||||
from operating activities:
|
||||||||
Accounts receivable
|
(1,376 | ) | (1,824 | ) | ||||
Inventory
|
448 | (23 | ) | |||||
Prepaid expenses
|
223 | (223 | ) | |||||
Accounts payable and accrued expenses
|
1,751 | (11,868 | ) | |||||
Net cash provided by (used in) operating activities
|
6,860 | (2,761 | ) | |||||
Cash flows from financing activities
|
||||||||
Owners' funding
|
496 | 10,702 | ||||||
Payment on net profits interest agreement
|
(7,356 | ) | (7,941 | ) | ||||
Net cash (used in) provided by financing activities
|
(6,860 | ) | 2,761 | |||||
Net change in cash
|
- | - | ||||||
Cash, beginning
|
- | - | ||||||
Cash, ending
|
$ | - | $ | - | ||||
Supplemental disclosures:
|
||||||||
Interest paid
|
$ | 3,958 | $ | 4,280 |
Asset retirement obligations, August 31, 2011
|
$
|
26,996
|
||
Liabilities incurred during the period
|
-
|
|||
Liabilities settled during the period
|
-
|
|||
Accretion
|
2,295
|
|||
Asset retirement obligations, August 31, 2012
|
$
|
29,291
|
||
Liabilities incurred during the period
|
-
|
|||
Liabilities settled during the period
|
-
|
|||
Accretion
|
2,490
|
|||
Asset retirement obligations, August 31, 2013
|
$
|
31,781
|
NPI liability, August 31, 2011
|
$
|
45,393
|
||
Accretion recorded during the period
|
4,280
|
|||
Payments made during the period
|
(7,941
|
)
|
||
NPI liability, August 31, 2012
|
$
|
41,732
|
||
Accretion recorded during the period
|
3,957
|
|||
Payments made during the period
|
(7,356
|
)
|
||
NPI liability, August 31, 2013
|
$
|
38,333
|
|
·
|
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe receivables and payables approximate fair value at August 31, 2013.
|
|
·
|
Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
|
·
|
Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including oil price quotations and contract terms.
|
Fair Value Measurement
|
||||||||||||
August 31, 2013
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Capitalized oil and gas properties
|
$
|
-
|
$
|
-
|
$
|
91,557
|
||||||
Net profit interest liability
|
-
|
-
|
(38,333
|
)
|
||||||||
Asset retirement obligation
|
-
|
-
|
(31,781
|
)
|
||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
21,443
|
Condensed statements of financial condition as of November 30, 2013 (unaudited) and August 31, 2013
|
2
|
Unaudited condensed statements of operations for the three months ended November 30, 2013 and 2012
|
3
|
Unaudited condensed statements of cash flows for the three months ended November 30, 2013 and 2012
|
4
|
Unaudited condensed statement of changes in owners’ equity for the period ended November 30, 2013
|
5
|
Notes to unaudited condensed financial statements
|
6
|
Condensed Statements of Financial Condition
|
||||||||
November 30,
|
August 31,
|
|||||||
2013
|
2013
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Accounts receivable
|
$ | 5,746 | $ | 5,546 | ||||
Inventory
|
1,119 | 2,173 | ||||||
Prepaid expenses
|
112 | 394 | ||||||
Total current assets
|
6,977 | 8,113 | ||||||
Fixed assets:
|
||||||||
Machinery and equipment, net of accumulated
|
||||||||
depreciation of $4,981 and $4,670, respectively
|
3,736 | 4,048 | ||||||
Other assets:
|
||||||||
Capitalized oil and gas properties, net of accumulated
|
||||||||
depletion of $19,924 and $18,422, respectively
|
90,055 | 91,557 | ||||||
Total assets
|
$ | 100,768 | $ | 103,718 | ||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 2,188 | $ | 3,908 | ||||
Net profits interest payable, current portion
|
3,819 | 3,725 | ||||||
Total current liabilities
|
6,007 | 7,633 | ||||||
Long-term liabilities:
|
||||||||
Asset retirement obligations
|
32,456 | 31,781 | ||||||
Net profits interest payable, net of current portion
|
33,617 | 34,608 | ||||||
Total long-term liabilities
|
66,073 | 66,389 | ||||||
Total liabilities
|
72,080 | 74,022 | ||||||
Commitments:
|
- | - | ||||||
Owners' equity:
|
||||||||
Owners' equity
|
28,688 | 29,696 | ||||||
Total owners' equity
|
28,688 | 29,696 | ||||||
Total liabilities and owners' equity
|
$ | 100,768 | $ | 103,718 |
Condensed Statements of Operations
|
||||||||
(Unaudited)
|
||||||||
Three Months Ended
|
||||||||
November 30,
|
||||||||
2013
|
2012
|
|||||||
Oil revenues
|
$ | 7,435 | $ | 7,207 | ||||
Expenses:
|
||||||||
Direct operating costs
|
3,557 | 3,782 | ||||||
Depreciation, depletion and amortization
|
2,495 | 2,325 | ||||||
General and administrative expenses
|
129 | 245 | ||||||
Total expenses
|
6,181 | 6,352 | ||||||
Net operating income
|
1,254 | 855 | ||||||
Other income (expense):
|
||||||||
Interest expense
|
(936 | ) | (1,021 | ) | ||||
Total other income (expense)
|
(936 | ) | (1,021 | ) | ||||
Net income (loss)
|
$ | 318 | $ | (166 | ) |
20.5% Working Interest in the DEEP Lease
|
||||||||
Condensed Statements of Cash Flows
|
||||||||
(Unaudited)
|
||||||||
Three Months Ended
|
||||||||
November 30,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities
|
||||||||
Net income (loss)
|
$ | 318 | $ | (166 | ) | |||
Depreciation, depletion and amortization
|
1,820 | 1,703 | ||||||
Accretion of asset retirement obligation
|
675 | 622 | ||||||
Accretion of net profits interest payable
|
936 | 1,021 | ||||||
Adjustments to reconcile net (loss) to cash
|
||||||||
from operating activities:
|
||||||||
Accounts receivable
|
(200 | ) | (490 | ) | ||||
Inventory
|
1,048 | 1,317 | ||||||
Prepaid expenses
|
282 | 283 | ||||||
Accounts payable and accrued expenses
|
(1,719 | ) | (83 | ) | ||||
Net cash provided by operating activities
|
3,160 | 4,207 | ||||||
Cash flows from financing activities
|
||||||||
Payment to owners
|
(1,326 | ) | (2,349 | ) | ||||
Payment on net profits interest agreement
|
(1,834 | ) | (1,858 | ) | ||||
Net cash (used in) financing activities
|
(3,160 | ) | (4,207 | ) | ||||
Net change in cash
|
- | - | ||||||
Cash, beginning
|
- | - | ||||||
Cash, ending
|
$ | - | $ | - | ||||
Supplemental disclosures:
|
||||||||
Interest paid
|
$ | 936 | $ | 1,021 |
20.5% Working Interest in the DEEP Lease
|
||||
Condensed Statement of Changes in Owners' Equity
|
||||
(Unaudited)
|
||||
Owners' Equity
|
||||
Balance, August 31, 2012
|
$ | 35,249 | ||
Owners' funding
|
496 | |||
Net income (loss)
|
(6,049 | ) | ||
Balance, August 31, 2013
|
29,696 | |||
Payment to owners
|
(1,326 | ) | ||
Net income
|
318 | |||
Balance, November 30, 2013
|
$ | 28,688 |
2013
|
2012
|
|||||||
Asset retirement obligations, August 31
|
$ | 31,781 | $ | 29,291 | ||||
Liabilities incurred during the period
|
- | - | ||||||
Liabilities settled during the period
|
- | - | ||||||
Accretion
|
675 | 622 | ||||||
Asset retirement obligations, November 30
|
$ | 32,456 | $ | 29,913 |
2013
|
2012
|
|||||||
NPI liability, August 31
|
$
|
38,333
|
$
|
41,732
|
||||
Accretion recorded during the period
|
937
|
1,020
|
||||||
Payments made during the period
|
(1,834
|
)
|
(1.858
|
)
|
||||
NPI liability, November 30
|
$
|
37,436
|
$
|
40,894
|
●
|
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe receivables and accounts payable approximate fair value at August 31, 2013.
|
●
|
Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
●
|
Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including oil price quotations and contract terms.
|
Fair Value Measurement
|
||||||||||||
November 30, 2013
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Capitalized oil and gas properties
|
$
|
-
|
$
|
-
|
$
|
90,055
|
||||||
Net profit interest liability
|
-
|
-
|
(37,436
|
)
|
||||||||
Asset retirement obligation
|
-
|
-
|
(32,456
|
)
|
||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
20,163
|
Sara Creek Gold Corp. | |||||||
Pro Forma Combined Consolidated Balance Sheet
|
|||||||
As of November 30, 2013
|
Sara Creek
|
20.5% DEEP
Lease
|
Pro Forma
|
Sara Creek
|
|||||||||||||
Historical
|
Historical
|
Adjustments
|
Pro Forma
|
|||||||||||||
ASSETS
|
||||||||||||||||
Current assets:
|
||||||||||||||||
Cash
|
$ | 18,793 | $ | - | $ | 457,024 | a | $ | 275,817 | |||||||
$ | (200,000 | ) | b | |||||||||||||
Accounts receivable
|
21,780 | 5,746 | - | 27,526 | ||||||||||||
Inventory
|
3,637 | 1,119 | - | 4,756 | ||||||||||||
Prepaid expenses
|
363 | 112 | - | 475 | ||||||||||||
Total current assets
|
44,573 | 6,977 | 257,024 | 308,574 | ||||||||||||
Machinery and equipment, net
|
12,144 | 3,736 | 15,880 | |||||||||||||
Capitalized oil properties, net
|
319,208 | 90,055 | 171,312 | b | 580,575 | |||||||||||
Deposits
|
5,000 | - | - | 5,000 | ||||||||||||
TOTAL ASSETS
|
$ | 380,925 | $ | 100,768 | $ | 428,336 | $ | 910,029 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable and accrued liabilities
|
$ | 139,178 | $ | 2,188 | $ | - | $ | 141,366 | ||||||||
Net profits interest payable, current portion
|
12,414 | 3,819 | - | 16,233 | ||||||||||||
Total current liabilities
|
151,592 | 6,007 | - | 157,599 | ||||||||||||
Long term liabilities:
|
||||||||||||||||
Loans payable to related parties
|
90,205 | - | - | 90,205 | ||||||||||||
Asset retirement obligations
|
105,494 | 32,456 | - | 137,950 | ||||||||||||
Net profits interest payable, long term portion
|
109,267 | 33,617 | - | 142,884 | ||||||||||||
Total liabilities
|
456,558 | 72,080 | - | 528,638 | ||||||||||||
Stockholders' equity:
|
||||||||||||||||
Common stock
|
25,962 | - | 4,775 | a | 30,737 | |||||||||||
Common stock payable
|
2,000 | - | - | 2,000 | ||||||||||||
Additional paid in capital
|
323,664 | - | 452,249 | a | 775,913 | |||||||||||
Owners' equity
|
- | 28,688 | (28,688 | ) | b | - | ||||||||||
Deficit
|
(427,259 | ) | - | - | (427,259 | ) | ||||||||||
Total stockholders' equity (deficit)
|
(75,633 | ) | 28,688 | 428,336 | 381,391 | |||||||||||
Total liabilities and stockholders' equity
|
$ | 380,925 | $ | 100,768 | $ | 428,336 | $ | 910,029 |
Sara Creek Gold Corp.
|
Pro Forma Combined Consolidated Statement of Operations
|
Three Months Ended November 30, 2013
|
Sara Creek
|
Sara Creek
|
20.5% DEEP
|
||||||||||||||||||
Consolidated
|
Legal Entity
|
Lease
|
Pro Forma
|
Sara Creek
|
||||||||||||||||
Historical(1)
|
Historical(2)
|
Historical
|
Adjustments
|
Pro Forma
|
||||||||||||||||
Oil revenue
|
$ | 25,764 | $ | 3,932 | $ | 7,435 | $ | (1,599 | ) | c | $ | 35,532 | ||||||||
Expenses:
|
||||||||||||||||||||
Direct operating expenses
|
12,972 | 2,380 | 3,557 | (1,412 | ) | c | 17,497 | |||||||||||||
Depreciation, depletion and amortization
|
8,110 | - | 2,495 | 221 | d | 10,826 | ||||||||||||||
Professional fees
|
71,071 | 17,910 | - | (6,365 | ) | c | 82,616 | |||||||||||||
General and administrative
|
6,231 | 6,115 | 129 | (4,855 | ) | c | 7,620 | |||||||||||||
Total operating expenses
|
98,384 | 26,405 | 6,181 | (12,411 | ) | 118,559 | ||||||||||||||
Net operating income (loss)
|
(72,620 | ) | (22,473 | ) | 1,254 | 10,812 | (83,027 | ) | ||||||||||||
Other expense:
|
||||||||||||||||||||
Interest expense
|
3,413 | - | 936 | - | 4,349 | |||||||||||||||
Total other expense
|
3,413 | - | 936 | - | 4,349 | |||||||||||||||
Income (loss) before provision for income tax
|
(76,033 | ) | (22,473 | ) | 318 | 10,812 | (87,376 | ) | ||||||||||||
Provision for income tax
|
- | - | - | - | - | |||||||||||||||
Net income (loss)
|
$ | (76,033 | ) | $ | (22,473 | ) | $ | 318 | $ | 10,812 | $ | (87,376 | ) | |||||||
Net loss per common share - basic and diluted
|
$ | - | $ | - | ||||||||||||||||
Weighted average common shares outstanding -
|
||||||||||||||||||||
basic and diluted
|
17,654,293 | 13,172,692 | e | 30,826,985 |
(1) On October 25, 2013, Sara Creek Gold Corp. completed its acquisition of SCNRG, LLC. However, for accounting purposes, SCNRG is deemed to be the acquiror. Accordingly, the consolidated statement of operatons of Sara Creek consist of SCNRG's historical results consolidated with Sara Creek from the date of completion of the reverse merger on October 25, 2013.
|
|||||||||||
(2) Represents the non-consolidated statement of operations of Sara Creek Gold Corp., the legal entity, for the three months ended November 30, 2013.
|
Sara Creek Gold Corp.
|
Pro Forma Combined Consolidated Statement of Operations
|
Twelve Months Ended August 31, 2013
|
Sara Creek
|
Sara Creek
|
20.5% DEEP
|
||||||||||||||||||
Consolidated
|
Legal Entity
|
Lease
|
Pro Forma
|
Sara Creek
|
||||||||||||||||
Historical(1)
|
Historical(2)
|
Historical
|
Adjustments
|
Pro Forma
|
||||||||||||||||
Oil revenue
|
$ | 80,792 | $ | 3,932 | $ | 24,857 | $ | - | $ | 109,581 | ||||||||||
Expenses:
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Direct operating expenses
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58,797 | 2,380 | 17,843 | - | 79,020 | |||||||||||||||
Depreciation, depletion and amortization
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25,695 | - | 7,905 | 777 | d | 34,377 | ||||||||||||||
Professional fees
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16,790 | 61,090 | - | - | 77,880 | |||||||||||||||
General and administrative
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8,636 | 18,215 | 1,200 | - | 28,051 | |||||||||||||||
Total operating expenses
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109,918 | 81,685 | 26,948 | 777 | 219,328 | |||||||||||||||
Net operating income (loss)
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(29,126 | ) | (77,753 | ) | (2,091 | ) | (777 | ) | (109,747 | ) | ||||||||||
Other expense (income):
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Interest expense
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12,865 | 61,489 | 3,958 | - | 78,312 | |||||||||||||||
Other
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- | (9,273 | ) | - | - | (9,273 | ) | |||||||||||||
Total other expense
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12,865 | 52,216 | 3,958 | - | 69,039 | |||||||||||||||
Loss before provision for income tax
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(41,991 | ) | (129,969 | ) | (6,049 | ) | (777 | ) | (178,786 | ) | ||||||||||
Provision for income tax
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- | - | - | - | - | |||||||||||||||
Net loss
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$ | (41,991 | ) | $ | (129,969 | ) | $ | (6,049 | ) | $ | (777 | ) | $ | (178,786 | ) | |||||
Net loss per common share - basic and diluted
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$ | (0.01 | ) | $ | (0.01 | ) | ||||||||||||||
Weighted average common shares outstanding -
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basic and diluted
|
5,882,117 | 24,854,866 | e | 30,736,983 |
(1) On October 25, 2013, Sara Creek Gold Corp. completed its acquisition of SCNRG, LLC. However, for accounting purposes, SCNRG is deemed to be the acquiror. Accordingly, the consolidated statement of operations of Sara Creek for the year ended August 31, 2013, consist of SCNRG's historical results.
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(2) Represents the non-consolidated statement of operations of Sara Creek Gold Corp., the legal entity, for the twelve months ended August 31, 2013.
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(a)
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To record the sale of 4,775,000 units. Each unit is comprised of one share of common stock and a warrant entitling the holder to buy 0.5 shares of common stock for $0.20 per share, exercisable for five years.
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(b)
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To record the purchase of a 20.5108% working interest in the DEEP Lease.
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(c)
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To eliminate revenue and expenses for Sara Creek for the period October 25, 2013, to November 30, 2013, which amounts are included in both the Sara Creek Consolidated and Sara Creek Legal Entity columns.
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(d)
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To record additional depletion expense on consideration assigned to oil properties.
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(e)
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To increase weighted average share count to reflect the recapitalization of SCNRG, LLC and the pro forma period, together with the unit offering in (a) above.
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