Nevada
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26-3062721
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
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o |
Accelerated filer
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o |
Non-accelerated filer
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o |
Smaller reporting company
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þ |
(Do not check if a smaller reporting company)
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November 30,
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August 31,
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|||||||
2011
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2011
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|||||||
(Unaudited)
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(Audited)
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|||||||
ASSETS
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||||||||
CURRENT ASSETS
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||||||||
Cash
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$ | 327,175 | $ | 487,017 | ||||
Prepaids
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13,125 | 21,875 | ||||||
Other
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3,436 | 3,436 | ||||||
Total current assets
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343,736 | 512,328 | ||||||
Total assets
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$ | 343,736 | $ | 512,328 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
CURRENT LIABILITIES
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||||||||
Accounts payable and accrued liabilities
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$ | 401,739 | $ | 299,701 | ||||
Notes payable | 70,000 | 72,500 | ||||||
Asset retirement obligation
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80,000 | 80,000 | ||||||
Total current liabilities
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551,739 | 452,201 | ||||||
STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
Capital Stock
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||||||||
Authorized:
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||||||||
75,000,000 common shares, par value $0.001 per share
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||||||||
Issued and outstanding:
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||||||||
7,196,870 common shares at November 30, 2011 and August 31, 2011
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7,197 | 7,197 | ||||||
Additional paid-in capital
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1,683,890 | 1,683,890 | ||||||
Deficit accumulated during the exploration stage
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(1,899,090 | ) | (1,630,960 | ) | ||||
Total stockholders' equity (deficit)
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(208,003 | ) | 60,127 | |||||
Total liabilities and stockholders' equity (deficit)
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$ | 343,736 | $ | 512,328 |
Cumulative results
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||||||||||||
from July 22, 2008 | ||||||||||||
(inception) to
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Three Months Ended November 30,
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|||||||||||
November 30, 2011
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2011
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2010
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||||||||||
OPERATING EXPENSES
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||||||||||||
Office, travel and general
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$ | 112,777 | $ | 19,632 | $ | 3,488 | ||||||
Management fees
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273,548 | 75,000 | 15,000 | |||||||||
Consulting
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413,279 | 66,428 | 84,500 | |||||||||
Professional fees
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225,492 | 62,735 | 10,205 | |||||||||
Oil and gas property impairment
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879,994 | 44,335 | - | |||||||||
(1,905,090 | ) | (268,130 | ) | (113,193 | ) | |||||||
OTHER INCOME
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||||||||||||
Gain on forgiveness of accounts payable
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6,000 | - | - | |||||||||
NET LOSS
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$ | (1,899,090 | ) | $ | (268,130 | ) | $ | (113,193 | ) | |||
BASIC AND DILUTED NET LOSS PER COMMON SHARE
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$ | (0.04 | ) | $ | (0.02 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF BASIC
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||||||||||||
AND DILUTED COMMON SHARES OUTSTANDING
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7,196,870 | 6,600,000 |
Cumulative results
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||||||||||||
from July 22, 2008 | ||||||||||||
(inception) to
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Three Months Ended November 30,
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November 30, 2011
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2011
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2010
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||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
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||||||||||||
Net loss
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$ | (1,899,090 | ) | $ | (268,130 | ) | $ | (113,193 | ) | |||
Adjustments to reconcile net loss to net cash
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||||||||||||
used in operating activities:
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||||||||||||
Gain on forgiveness of accounts payable
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(6,000 | ) | - | - | ||||||||
Oil and gas property impairment
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879,994 | 44,335 | - | |||||||||
Changes in working capital items -
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||||||||||||
Prepaids and other
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(16,561 | ) | 8,750 | - | ||||||||
Accounts payable and accrued liabilities
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332,244 | 57,703 | 49,003 | |||||||||
Net cash used in operating activities
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(709,413 | ) | (157,342 | ) | (64,190 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
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||||||||||||
Expenditures on oil and gas properties
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(724,500 | ) | - | - | ||||||||
Cash used by investing activities
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(724,500 | ) | - | - | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
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||||||||||||
Common stock and warrants sold for cash, net of fees
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1,656,851 | - | - | |||||||||
Common stock redeemed for cash
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(100 | ) | - | - | ||||||||
Proceeds from notes payable
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554,500 | - | 57,000 | |||||||||
Repayments of notes payable
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(484,500 | ) | (2,500 | ) | - | |||||||
Loans from related parties
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34,337 | - | 10,000 | |||||||||
Net cash provided by (used in) financing activities
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1,761,088 | (2,500 | ) | 67,000 | ||||||||
INCREASE (DECREASE) IN CASH
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327,175 | (159,842 | ) | 2,810 | ||||||||
CASH, BEGINNING OF PERIOD
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- | 487,017 | 4,758 | |||||||||
CASH, END OF PERIOD
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$ | 327,175 | $ | 327,175 | $ | 7,568 | ||||||
SUPPLEMENTAL DISCLOSURE:
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||||||||||||
Cash paid for interest
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$ | - | $ | - | $ | - | ||||||
Cash paid for income taxes
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$ | - | $ | - | $ | - | ||||||
Forgiveness of debt | $ | 9,337 | $ | - | - | |||||||
NON-CASH ACTIVITIES:
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Accrued expenditures on oil and gas properties
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$ | 75,494 | $ | 44,335 | $ | - | ||||||
Common stock issued as repayment of note payable
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$ | 25,000 | $ | - | $ | - | ||||||
Asset retirement obligation
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$ | 80,000 | $ | - | $ | - |
Payments due by period
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||||||||||||||||||||
Contractual Obligations
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Total
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Less than 1 Year
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1-3 Years
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3-5 Years
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More than 5 Years
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|||||||||||||||
Loans and Advances
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$
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70,000
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$
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70,000
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—
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—
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—
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Exhibit Number
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Exhibit Name
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3.1.1
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Articles of Incorporation(1)
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3.1.2
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Amendment to Articles of Incorporation(2)
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3.2
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Bylaws(3)
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10.1
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Farmout and Participation Agreement dated March 31, 2011(4)
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Rule 13a-14(a) Certifications
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||
Rule 13a-14(a) Certifications
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Section 1350 Certifications
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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(1)
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Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 dated November 12, 2008.
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(2)
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Incorporated by reference to Exhibit 3.1 to the Company’s 8-K report dated April 28, 2010.
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(3)
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Incorporated by reference to Exhibit 3.2 to the Company’s 8-K report dated April 28, 2010.
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(4)
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Incorporated by reference to Exhibit 10.1 to the Company’s 8-K report dated April 6, 2011.
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EFL OVERSEAS, INC.
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Dated: January 16, 2012 |
BY:
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/s/ Keith Macdonald
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Keith Macdonald,
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Principal Executive Officer
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BY:
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/s/ Herbert Schmidt
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Herbert Schmidt,
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Principal Financial and Accounting Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of EFL Overseas, Inc.;
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2.
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Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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January 16, 2012
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/s/ Keith Macdonald | |
Keith Macdonald, | |||
Principal Executive Officer |
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1.
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I have reviewed this Quarterly Report on Form 10-Q of EFL Overseas, Inc.;
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2.
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Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is make known to us by others within those entities, particularly during the period in which this report is being prepared;
|
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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January 16, 2012
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/s/ Herbert Schmidt | |
Herbert Schmidt, | |||
Principal Financial Officer |
(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
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EFL OVERSEAS, INC. | |||
Date: January 16, 2012
|
/s/ Keith Macdonald | ||
Keith Macdonald, | |||
Principal Executive Officer | |||
Date: January 16, 2012
|
/s/ Herbert Schmidt | ||
Herbert Schmidt, | |||
Principal Financial Officer |
'!L;W)E '0O:'1M;#L@
M8VAA '0O:'1M;#L@8VAA
SUBSEQUENT EVENTS
|
3 Months Ended |
---|---|
Nov. 30, 2011
|
|
Notes to Financial Statements | |
SUBSEQUENT EVENTS |
As of November 30, 2011, the Company has accrued stock-based compensation totaling $86,774 under the terms of a consulting services agreement with an entity controlled by its Chief Executive Officer. During December 2011 the Company issued 22,974 shares of its restricted common stock, at a weighted average conversion price of $3.78 per share, in satisfaction of that liability under the agreement.
During December 2011, the Company retired $70,000 in non-interest bearing notes payable to an unrelated party. In exchange for the notes, the Company issued 23,334 investment units to the noteholder. The investment units were priced at $3.00 each and consisted of one share of the Companys common stock, and one stock purchase warrant. Each stock purchase warrant entitles the holder to purchase one share of the Companys common stock at a price of $4.50 per share until November 5, 2013. |
Balance Sheets (Unaudited) (USD $)
|
Nov. 30, 2011
|
Aug. 31, 2011
|
---|---|---|
ASSETS | ||
Cash | $ 327,175 | $ 487,017 |
Prepaids | 13,125 | 21,875 |
Other | 3,436 | 3,436 |
Total current assets | 343,736 | 512,328 |
Total assets | 343,736 | 512,328 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
Accounts payable and accrued liabilities | 401,739 | 299,701 |
Notes payable | 70,000 | 72,500 |
Asset retirement obligation | 80,000 | 80,000 |
Total current liabilities | 551,739 | 452,201 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Capital Stock Authorized: 75,000,000 common shares, par value $0.001 per share Issued and outstanding: 7,196,870 common shares at November 30, 2011 and August 31, 2011 | 7,197 | 7,197 |
Additional paid-in capital | 1,683,890 | 1,683,890 |
Deficit accumulated during the exploration stage | (1,899,090) | (1,630,960) |
Total stockholders' deficit | (208,003) | 60,127 |
Total liabilities and stockholders' equity (deficit) | $ 343,736 | $ 512,328 |
\87!%=;IX/^<#AT]D;X"^5"O@LDJ/Y.7+VB*<1<3O7X2_84
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M41(J.WJ%(0LP8!W(ZTJ5*^!I$>U=<.UL<"Z),5>Y81<' Unaudited Interim Financial Statements The unaudited interim financial statements
of EFL Overseas, Inc. (the Company) have been prepared in accordance with United States generally accepted accounting
principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange
Commission (SEC). They do not include all information and footnotes required by GAAP for complete financial statements.
However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial
statements for the year ended August 31, 2011 included in the Companys Annual Report on Form 10-K filed with the SEC. The
unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K.
In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring
adjustments, have been made. Operating results for the three month period ended November 30, 2011 are not necessarily indicative
of the results that may be expected for the year ending August 31, 2012. Recent Accounting Pronouncements The Company has reviewed recently issued accounting
pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have
a material impact on its financial position, results of operations or cash flows. "+ text.join( " " + text[p] + " ' + raw + ' San Miguel Oil Project On March 31, 2011, the Company initiated oil
and gas operations by entry into a Farmout and Participation Agreement (the Agreement) which provided for its acquisition
of a net working interest ranging from 21.25% to 42.5%, in a 2,629 acre oil and gas lease known as the Matthews Lease, insofar
as that lease covers from the surface to the base of the San Miguel formation (the Lease). The Lease is located in
Zavala County, Texas, is unproven and has no current production. As such, the costs capitalized in connection with that property
are not currently subject to depletion. During April and May 2011, the Company drilled
and completed the a test well on the Lease (the Test Well), performed injection operations and earned its initial
interest in the Lease. The Test Well was drilled into the San Miguel heavy oil zone to a depth of 3,168 feet. The well encountered
oil and was completed as a San Miguel producer. After completion, it was determined that the oil was subject to significant viscosity
changes related to temperature reductions from formation to recovery at surface. The Test Well was stimulated with nitrified hydrochloric
acid and placed on production. To date, however, oil viscosity has prohibited economic operation. As a result of the application
of a full cost pool "ceiling test", the Company determined that the book value of the Lease was impaired to the
extent of its carrying value. Accordingly, during August 2011 and November 2011, the Company recognized losses on the impairment
of oil and gas assets of $835,659 and $44,335, respectively. The carrying value of oil and gas properties was likewise reduced
to reflect the impairment of the Lease. The Company continues to investigate various
methods to improve production from the Test Well. L&
M6FY=<"_1WHZ9/V&*JL$^^F4KNQ4
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3 Months Ended
Notes to Financial Statements
BASIS OF PRESENTATION
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3 Months Ended
Notes to Financial Statements
OIL AND GAS PROPERTIES
Stockholders Equity
Common Stock Shares Par value
$ 0.001
$ 0.001
Common Stock Shares Authorized
75,000,000
75,000,000
Common Stock Shares Issued
7,196,870
7,196,870
Common Stock Shares Outstanding
7,196,870
7,196,870
3 Months Ended
Document And Entity Information
Entity Registrant Name
EFL OVERSEAS, INC.
Entity Central Index Key
0001448806
Document Type
10-Q
Document Period End Date
Nov. 30,
2011
Amendment Flag
false
Current Fiscal Year End Date
--08-31
Is Entity a Well-known Seasoned Issuer?
No
Is Entity a Voluntary Filer?
No
Is Entity's Reporting Status Current?
Yes
Entity Filer Category
Smaller Reporting Company
Entity Public Float
$ 10,866,491
Entity Common Stock, Shares Outstanding
7,243,178
Document Fiscal Period Focus
Q1
Document Fiscal Year Focus
2012
3 Months Ended
40 Months Ended
OPERATING EXPENSES
Office, travel and general
$ 19,632
$ 3,488
$ 112,777
Management fees
75,000
15,000
273,548
Consulting
66,428
84,500
413,279
Professional fees
62,735
10,205
225,492
Oil and gas property impairment
44,335
0
879,994
Total Expense
(268,130)
(113,193)
(1,905,090)
OTHER INCOME
Gain on forgiveness of accounts payable
0
0
6,000
NET LOSS
$ (268,130)
$ (113,193)
$ (1,899,090)
BASIC AND DILUTED NET LOSS PER COMMON SHARE
$ (0.04)
$ (0.02)
WEIGHTED AVERAGE NUMBER OF BASIC AND DILUTED COMMON SHARE OUTSTANDING
7,196,870
6,600,000