Nevada
|
98-0511130
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
326 S. Pacific 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 12.8% 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 12.8% Working Interest as of February 28, 2014 and August 31, 2013 and for the three and six month periods ended February 28, 2014 and 2013 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 February 28, 2014. |
|
(ii)
|
Unaudited Pro Forma Combined Statement of Operations for the six months ended February 28, 2014 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
|
12.8% 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
|
12.8% Working Interest in DEEP Lease Unaudited Condensed Financial Statements as of February 28, 2014 and August 31, 2013 and for the three and six month periods ended February 28, 2014 and 2013.
|
99.3
|
Unaudited Pro Forma Combined Financial Statements.
|
Dated:
|
July 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
|
Statements of Financial Condition
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Accounts receivable
|
$ | 3,466 | $ | 2,606 | ||||
Inventory
|
1,358 | 1,638 | ||||||
Prepaid expenses
|
246 | 386 | ||||||
Total current assets
|
5,070 | 4,630 | ||||||
Fixed assets:
|
||||||||
Machinery and equipment, net of accumulated
|
||||||||
depreciation of $2,919 and $2,141, respectively
|
2,530 | 3,308 | ||||||
Other assets:
|
||||||||
Capitalized oil and gas properties, net of accumulated
|
||||||||
depletion of $11,514 and $8,907, respectively
|
57,223 | 59,829 | ||||||
Total assets
|
$ | 64,823 | $ | 67,767 | ||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 2,442 | $ | 1,349 | ||||
Net profits interest payable, current portion
|
2,328 | 2,123 | ||||||
Total current liabilities
|
4,770 | 3,472 | ||||||
Long-term liabilities:
|
||||||||
Asset retirement obligations
|
19,863 | 18,307 | ||||||
Net profits interest payable, net of current portion
|
21,630 | 23,958 | ||||||
Total long-term liabilities
|
41,493 | 42,265 | ||||||
Total liabilities
|
46,263 | 45,737 | ||||||
Commitments:
|
- | - | ||||||
Owners' equity:
|
||||||||
Owners' equity
|
18,560 | 22,030 | ||||||
Total owners' equity
|
18,560 | 22,030 | ||||||
Total liabilities and owners' equity
|
$ | 64,823 | $ | 67,767 |
Statements of Operations and Changes in Owners' Equity
|
||||||||
Year Ended
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
Oil revenues
|
$ | 15,535 | $ | 16,075 | ||||
Expenses:
|
||||||||
Direct operating costs
|
11,152 | 8,183 | ||||||
Depreciation, depletion and amortization
|
4,941 | 4,882 | ||||||
General and administrative expenses
|
749 | 906 | ||||||
Total expenses
|
16,842 | 13,971 | ||||||
Net operating (loss) income
|
(1,307 | ) | 2,104 | |||||
Other income (expense):
|
||||||||
Interest expense
|
(2,474 | ) | (2,675 | ) | ||||
Total other income (expense)
|
(2,474 | ) | (2,675 | ) | ||||
Net (loss)
|
$ | (3,781 | ) | $ | (571 | ) | ||
Owners' equity - beginning
|
$ | 22,030 | $ | 15,913 | ||||
Owners' funding
|
311 | 6,688 | ||||||
Net (loss)
|
(3,781 | ) | (571 | ) | ||||
Owners' equity - ending
|
$ | 18,560 | $ | 22,030 |
Statements of Cash Flows
|
||||||||
Year Ended
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities
|
||||||||
Net (loss)
|
$ | (3,781 | ) | $ | (571 | ) | ||
Depreciation, depletion and amortization
|
3,385 | 3,448 | ||||||
Accretion of asset retirement obligation
|
1,556 | 1,434 | ||||||
Accretion of net profits interest payable
|
2,474 | 2,675 | ||||||
Adjustments to reconcile net (loss) to cash
|
||||||||
from operating activities:
|
||||||||
Accounts receivable
|
(860 | ) | (1,140 | ) | ||||
Inventory
|
280 | (14 | ) | |||||
Prepaid expenses
|
139 | (140 | ) | |||||
Accounts payable and accrued expenses
|
1,094 | (7,418 | ) | |||||
Net cash provided by (used in) operating activities
|
4,287 | (1,726 | ) | |||||
Cash flows from financing activities
|
||||||||
Owners' funding
|
311 | 6,688 | ||||||
Payment on net profits interest agreement
|
(4,598 | ) | (4,962 | ) | ||||
Net cash (used in) provided by financing activities
|
(4,287 | ) | 1,726 | |||||
Net change in cash
|
- | - | ||||||
Cash, beginning
|
- | - | ||||||
Cash, ending
|
$ | - | $ | - | ||||
Supplemental disclosures:
|
||||||||
Interest paid
|
$ | 2,474 | $ | 2,675 |
Asset retirement obligations, August 31, 2011
|
$
|
16,873
|
||
Liabilities incurred during the period
|
-
|
|||
Liabilities settled during the period
|
-
|
|||
Accretion
|
1,434
|
|||
Asset retirement obligations, August 31, 2012
|
$
|
18,307
|
||
Liabilities incurred during the period
|
-
|
|||
Liabilities settled during the period
|
-
|
|||
Accretion
|
1,556
|
|||
Asset retirement obligations, August 31, 2013
|
$
|
19,863
|
NPI liability, August 31, 2011
|
$
|
28,369
|
||
Accretion recorded during the period
|
2,675
|
|||
Payments made during the period
|
(4,963
|
)
|
||
NPI liability, August 31, 2012
|
$
|
26,081
|
||
Accretion recorded during the period
|
2,474
|
|||
Payments made during the period
|
(4,597
|
)
|
||
NPI liability, August 31, 2013
|
$
|
23,958
|
|
·
|
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
|
$
|
-
|
$
|
-
|
$
|
57,223
|
||||||
Net profit interest liability
|
-
|
-
|
(23,958
|
)
|
||||||||
Asset retirement obligation
|
-
|
-
|
(19,863
|
)
|
||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
13,402
|
Condensed statements of financial condition as of February 28, 2014 (unaudited) and August 31, 2013
|
2
|
Unaudited condensed statements of operations for the three and six months ended February 28, 2014 and 2013
|
3
|
Unaudited condensed statements of cash flows for the six months ended February 28, 2014 and 2013
|
4
|
Unaudited condensed statement of changes in owners’ equity for the period ended February 28, 2014
|
5
|
Notes to unaudited condensed financial statements
|
6
|
Condensed Statements of Financial Condition
|
||||||||
February 28,
|
August 31,
|
|||||||
2014
|
2013
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Accounts receivable
|
$ | 1,341 | $ | 3,466 | ||||
Inventory
|
1,665 | 1,358 | ||||||
Prepaid expenses
|
249 | 246 | ||||||
Total current assets
|
3,255 | 5,070 | ||||||
Fixed assets:
|
||||||||
Machinery and equipment, net of accumulated
|
||||||||
depreciation of $3,308 and $2,919, respectively
|
2,141 | 2,530 | ||||||
Other assets:
|
||||||||
Capitalized oil and gas properties, net of accumulated
|
||||||||
depletion of $13,363 and $11,514, respectively
|
55,373 | 57,223 | ||||||
Total assets
|
$ | 60,769 | $ | 64,823 | ||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 1,761 | $ | 2,442 | ||||
Net profits interest payable, current portion
|
2,447 | 2,328 | ||||||
Total current liabilities
|
4,208 | 4,770 | ||||||
Long-term liabilities:
|
||||||||
Asset retirement obligations
|
20,707 | 19,863 | ||||||
Net profits interest payable, net of current portion
|
20,376 | 21,630 | ||||||
Total long-term liabilities
|
41,083 | 41,493 | ||||||
Total liabilities
|
45,291 | 46,263 | ||||||
Commitments:
|
- | - | ||||||
Owners' equity:
|
||||||||
Owners' equity
|
15,478 | 18,560 | ||||||
Total owners' equity
|
15,478 | 18,560 | ||||||
Total liabilities and owners' equity
|
$ | 60,769 | $ | 64,823 |
12.8% Working Interest in the DEEP Lease
|
||||||||||||||||
Condensed Statements of Operations
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
February 28,
|
February 28,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Oil revenues
|
$ | 3,001 | $ | - | $ | 7,648 | $ | 4,504 | ||||||||
Expenses:
|
||||||||||||||||
Direct operating costs
|
1,408 | 2,804 | 3,631 | 5,168 | ||||||||||||
Depreciation, depletion and amortization
|
1,128 | 752 | 2,688 | 2,205 | ||||||||||||
General and administrative expenses
|
490 | 189 | 572 | 342 | ||||||||||||
Total expenses
|
3,026 | 3,745 | 6,891 | 7,715 | ||||||||||||
Net operating income (loss)
|
(25 | ) | (3,745 | ) | 757 | (3,211 | ) | |||||||||
Other income (expense):
|
||||||||||||||||
Interest expense
|
(571 | ) | (625 | ) | (1,155 | ) | (1,263 | ) | ||||||||
Total other income (expense)
|
(571 | ) | (625 | ) | (1,155 | ) | (1,263 | ) | ||||||||
Net (loss)
|
$ | (596 | ) | $ | (4,370 | ) | $ | (398 | ) | $ | (4,474 | ) |
12.8% Working Interest in the DEEP Lease
|
||||||||
Condensed Statements of Cash Flows
|
||||||||
(Unaudited)
|
||||||||
Six Months Ended
|
||||||||
February 28,
|
||||||||
2014
|
2013
|
|||||||
Cash flows from operating activities
|
||||||||
Net income (loss)
|
$ | (398 | ) | $ | (4,474 | ) | ||
Depreciation, depletion and amortization
|
1,844 | 1,427 | ||||||
Accretion of asset retirement obligation
|
844 | 778 | ||||||
Accretion of net profits interest payable
|
1,155 | 1,263 | ||||||
Adjustments to reconcile net (loss) to cash
|
||||||||
from operating activities:
|
||||||||
Accounts receivable
|
2,125 | 2,606 | ||||||
Inventory
|
89 | (1,529 | ) | |||||
Prepaid expenses
|
(3 | ) | - | |||||
Accounts payable and accrued expenses
|
(682 | ) | 3,451 | |||||
Net cash provided by operating activities
|
4,974 | 3,522 | ||||||
Cash flows from financing activities
|
||||||||
Payment to owners
|
(2,684 | ) | (1,216 | ) | ||||
Payment on net profits interest agreement
|
(2,290 | ) | (2,306 | ) | ||||
Net cash (used in) financing activities
|
(4,974 | ) | (3,522 | ) | ||||
Net change in cash
|
- | - | ||||||
Cash, beginning
|
- | - | ||||||
Cash, ending
|
$ | - | $ | - | ||||
Supplemental disclosures:
|
||||||||
Interest paid
|
$ | 1,155 | $ | 1,263 |
12.8% Working Interest in the DEEP Lease
|
||||
Condensed Statement of Changes in Owners' Equity
|
||||
(Unaudited)
|
||||
Owners' Equity
|
||||
Balance, August 31, 2012
|
$ | 22,030 | ||
Owners' funding
|
311 | |||
Net (loss)
|
(3,781 | ) | ||
Balance, August 31, 2013
|
18,560 | |||
Payment to owners
|
(2,684 | ) | ||
Net (loss)
|
(398 | ) | ||
Balance, February 28, 2014
|
$ | 15,478 |
2014
|
2013
|
|||||||
Asset retirement obligations, beginning
|
$ | 19,863 | $ | 18,307 | ||||
Liabilities incurred
|
- | - | ||||||
Liabilities settled
|
- | - | ||||||
Accretion
|
844 | 1,556 | ||||||
Asset retirement obligations, ending
|
$ | 20,707 | $ | 19,863 |
2014
|
2013
|
|||||||
NPI liability, beginning
|
$ | 23,958 | $ | 26,082 | ||||
Accretion
|
1,155 | 2,474 | ||||||
Payments
|
(2,290 | ) | (4,598 | ) | ||||
NPI liability, ending
|
$ | 22,823 | $ | 23,958 |
|
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
|
||||||||||||
February 28, 2014
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Capitalized oil and gas properties
|
$
|
-
|
$
|
-
|
$
|
55,373
|
||||||
Net profit interest liability
|
-
|
-
|
(22,823
|
)
|
||||||||
Asset retirement obligation
|
-
|
-
|
(20,707
|
)
|
||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
11,843
|
Sara Creek Gold Corp.
|
Pro Forma Combined Consolidated Balance Sheet
|
As of February 28, 2014
|
Sara Creek
|
12.8% DEEP
Lease
|
Pro Forma
|
Sara Creek
|
||||||||||||||
Historical
|
Historical
|
Adjustments
|
Pro Forma
|
||||||||||||||
ASSETS
|
|||||||||||||||||
Current assets:
|
|||||||||||||||||
Cash
|
$ | 74,287 | $ | - | $ | 120,000 | a | $ | 69,287 | ||||||||
(125,000 | ) | b | |||||||||||||||
Accounts receivable
|
11,801 | 1,341 | - | 13,142 | |||||||||||||
Inventory
|
9,841 | 1,665 | - | 11,506 | |||||||||||||
Prepaid expenses
|
17,920 | 249 | - | 18,169 | |||||||||||||
Total current assets
|
113,849 | 3,255 | (5,000 | ) | 112,104 | ||||||||||||
Machinery and equipment, net
|
14,619 | 2,141 | - | 16,760 | |||||||||||||
Capitalized oil properties, net
|
578,959 | 55,373 | 109,522 | b | 743,854 | ||||||||||||
Deposits
|
5,000 | - | - | 5,000 | |||||||||||||
TOTAL ASSETS
|
$ | 712,427 | $ | 60,769 | $ | 104,522 | $ | 877,718 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||
Current liabilities:
|
|||||||||||||||||
Accounts payable and accrued liabilities
|
$ | 202,818 | $ | 1,761 | $ | - | $ | 204,579 | |||||||||
Net profits interest payable, current portion
|
16,643 | 2,447 | - | 19,090 | |||||||||||||
Loans payable to related parties, short term
|
13,000 | - | 40,000 | a | 53,000 | ||||||||||||
Convertible notes payable, short term
|
- | - | 50,000 | a | 50,000 | ||||||||||||
Total current liabilities
|
232,461 | 4,208 | 90,000 | 326,669 | |||||||||||||
Long term liabilities:
|
|||||||||||||||||
Loans payable to related parties, long term
|
90,572 | - | - | 90,572 | |||||||||||||
Asset retirement obligations
|
140,819 | 20,707 | - | 161,526 | |||||||||||||
Net profits interest payable, long term portion
|
138,874 | 20,376 | - | 159,250 | |||||||||||||
Total liabilities
|
602,726 | 45,291 | 90,000 | 738,017 | |||||||||||||
Stockholders' equity:
|
|||||||||||||||||
Common stock
|
35,737 | - | 300 | a | 36,037 | ||||||||||||
Common stock payable
|
40,000 | - | - | 40,000 | |||||||||||||
Additional paid in capital
|
637,714 | - | 29,700 | a | 667,414 | ||||||||||||
Owners' equity
|
- | 15,478 | (15,478 | ) | b | - | |||||||||||
Deficit
|
(603,750 | ) | - | - | (603,750 | ) | |||||||||||
Total stockholders' equity
|
109,701 | 15,478 | 14,522 | 139,701 | |||||||||||||
Total liabilities and stockholders' equity
|
$ | 712,427 | $ | 60,769 | $ | 104,522 | $ | 877,718 |
Sara Creek Gold Corp.
|
Pro Forma Combined Consolidated Statement of Operations
|
Six Months Ended February 28, 2014
|
Sara Creek
|
Sara Creek
|
20.5% DEEP
|
12.8% DEEP
|
||||||||||||||||||||||
Consolidated
|
Legal Entity
|
Lease
|
Lease
|
Pro Forma
|
Sara Creek
|
||||||||||||||||||||
Historical(1)
|
Historical(2)
|
Historical
|
Historical
|
Adjustments
|
Pro Forma
|
||||||||||||||||||||
Oil revenue
|
$ | 44,112 | $ | 6,673 | $ | 12,236 | $ | 7,648 | $ | (4,340 | ) | c | $ | 66,329 | |||||||||||
Expenses:
|
|||||||||||||||||||||||||
Direct operating expenses
|
20,992 | 3,398 | 5,810 | 3,631 | (2,430 | ) | c | 31,401 | |||||||||||||||||
Depreciation, depletion and amortization
|
15,957 | 1,547 | 4,301 | 2,688 | (1,057 | ) | d | 23,436 | |||||||||||||||||
Professional fees
|
193,043 | 65,098 | - | - | (53,553 | ) | c | 204,588 | |||||||||||||||||
General and administrative
|
59,896 | 56,395 | 915 | 572 | (55,135 | ) | c | 62,774 | |||||||||||||||||
131 | e | ||||||||||||||||||||||||
Total operating expenses
|
289,888 | 126,438 | 11,026 | 6,891 | (112,044 | ) | 322,199 | ||||||||||||||||||
Net operating income (loss)
|
(245,776 | ) | (119,765 | ) | 1,210 | 757 | 107,704 | (255,870 | ) | ||||||||||||||||
Other expense:
|
|||||||||||||||||||||||||
Interest expense
|
6,748 | - | 1,849 | 1,155 | 5,000 | f | 14,752 | ||||||||||||||||||
Total other expense
|
6,748 | - | 1,849 | 1,155 | 5,000 | 14,752 | |||||||||||||||||||
Income (loss) before provision for income tax
|
(252,524 | ) | (119,765 | ) | (639 | ) | (398 | ) | 102,704 | (270,622 | ) | ||||||||||||||
Provision for income tax
|
- | - | - | - | - | - | |||||||||||||||||||
Net income (loss)
|
$ | (252,524 | ) | $ | (119,765 | ) | $ | (639 | ) | $ | (398 | ) | $ | 102,704 | $ | (270,622 | ) | ||||||||
Net loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||||||||
Weighted average common shares outstanding -
|
|||||||||||||||||||||||||
basic and diluted
|
24,477,454 | 8,172,790 | g | 32,650,244 |
(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.
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(2) Represents the non-consolidated statement of operations of Sara Creek Gold Corp., the legal entity, for the six months ended February 28, 2014.
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Sara Creek Gold Corp.
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Pro Forma Combined Consolidated Statement of Operations
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Twelve Months Ended August 31, 2013
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Sara Creek
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Sara Creek
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20.5% DEEP
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12.8% DEEP
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Consolidated
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Legal Entity
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Lease
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Lease
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Pro Forma
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Sara Creek
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Historical(1)
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Historical(2)
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Historical
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Historical
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Adjustments
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Pro Forma
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Oil revenue
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$ | 80,792 | $ | 3,932 | $ | 24,857 | $ | 15,535 | $ | - | $ | 125,116 | |||||||||||||
Expenses:
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Direct operating expenses
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58,797 | 2,380 | 17,843 | 11,152 | - | 90,172 | |||||||||||||||||||
Depreciation, depletion and amortization
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25,695 | - | 7,905 | 4,941 | 983 | d | 39,524 | ||||||||||||||||||
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 | 749 | - | 28,800 | |||||||||||||||||||
Total operating expenses
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109,918 | 81,685 | 26,948 | 16,842 | 983 | 236,376 | |||||||||||||||||||
Net operating income (loss)
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(29,126 | ) | (77,753 | ) | (2,091 | ) | (1,307 | ) | (983 | ) | (111,260 | ) | |||||||||||||
Other expense (income):
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Interest expense
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12,865 | 61,489 | 3,958 | 2,474 | 10,000 | f | 90,786 | ||||||||||||||||||
Other
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- | (9,273 | ) | - | - | - | (9,273 | ) | |||||||||||||||||
Total other expense
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12,865 | 52,216 | 3,958 | 2,474 | 10,000 | 81,513 | |||||||||||||||||||
Loss before provision for income tax
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(41,991 | ) | (129,969 | ) | (6,049 | ) | (3,781 | ) | (10,983 | ) | (192,773 | ) | |||||||||||||
Provision for income tax
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- | - | - | - | - | - | |||||||||||||||||||
Net loss
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$ | (41,991 | ) | $ | (129,969 | ) | $ | (6,049 | ) | $ | (3,781 | ) | $ | (10,983 | ) | $ | (192,773 | ) | |||||||
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
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5,882,117 | 25,154,866 | g | 31,036,983 |
(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 following sources of financing, which together with cash on hand funded the purchase price of the 12.8% Working Interest:
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a.
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Short-term loan from D. Katic, an officer and significant shareholder in the amount of $40,000. This loan bears interest at 10% per annum.
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b.
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Short-term convertible note payable in the amount of $50,000, which bears interest at 12.0% per annum.
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c.
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Sale of 300,000 units at $0.10 per unit for total proceeds of $30,000. 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 12.8% 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 February 28, 2014, 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 for both the 20.5% and 12.8% Working Interest acquisitions.
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(e)
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To eliminate expenses for the 20.5% Working Interest for the period February 1, 2014, to February 28, 2014, which amounts are included in both the Sara Creek Consolidated and the 20.5% Working Interest columns.
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(f)
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To record interest expense associated with the short-term loan and the convertible notes payable in (a) above.
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(g)
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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 and the 4,775,000 units sold to finance the purchase of the 20.5% Working interest. These latter units had the same terms as described in (a) above.
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