-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MWzkMxfIKIsR6bSTmG8qHCbdjdHmbloYfrhwSyGanZEHLtATaoCLsAlREbFA2rzw DQTV0i+xzqet3Ie1xnXyzw== 0001227528-10-000134.txt : 20101122 0001227528-10-000134.hdr.sgml : 20101122 20101119203045 ACCESSION NUMBER: 0001227528-10-000134 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20100930 FILED AS OF DATE: 20101122 DATE AS OF CHANGE: 20101119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIGO ENERGY, INC. CENTRAL INDEX KEY: 0000278165 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 020314487 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09047 FILM NUMBER: 101207023 BUSINESS ADDRESS: STREET 1: 2580 ANTHEM VILLAGE DRIVE CITY: HENDERSON STATE: NV ZIP: 89052 BUSINESS PHONE: 702-399-9777 MAIL ADDRESS: STREET 1: 2580 ANTHEM VILLAGE DRIVE CITY: HENDERSON STATE: NV ZIP: 89052 FORMER COMPANY: FORMER CONFORMED NAME: STRATEGIC GAMING INVESTMENTS, INC. DATE OF NAME CHANGE: 20060501 FORMER COMPANY: FORMER CONFORMED NAME: LEFT RIGHT MARKETING TECHNOLOGY INC DATE OF NAME CHANGE: 20031002 FORMER COMPANY: FORMER CONFORMED NAME: LEFT RIGHT MAKETING TECHNOLOGY INC DATE OF NAME CHANGE: 20030815 10-Q 1 agoe10q093010.txt AMERIGO ENERGY, 10-Q U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2010 AMERIGO ENERGY, INC. (Exact name of small business issuer as specified in its charter) Delaware 20-3454263 ------ ---------- (State State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 2580 Anthem Village Drive Henderson, NV 89052 (Address of principal executive offices) (Zip Code) (702) 399-9777 (Issuer's telephone number) Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO[ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ({section}232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [ ] NO[X] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer[ ] Accelerated filer[ ] Non-accelerated filer (Do not check if a smaller reporting company)[ ] Smaller reporting company[X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES [ ] NO [X] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 22,805,058 shares of common stock, $0.001 par value, and 500,000 shares of preferred stock, as of October 25, 2010 TABLE OF CONTENTS ITEM 1. FINANCIAL STATEMENTS................................................. CONSOLIDATED BALANCE SHEET................................................. CONSOLIDATED STATEMENT OF OPERATIONS....................................... STATEMENT OF STOCKHOLDER'S EQUITY.......................................... CONSOLIDATED STATEMENT OF CASH FLOWS....................................... NOTES TO FINANCIAL STATEMENTS.............................................. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK............ ITEM 4. CONTROLS AND PROCEDURES.............................................. PART II - OTHER INFORMATION.................................................... ITEM 1. LEGAL PROCEEDINGS.................................................... ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS............................ ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................... ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................. ITEM 5. OTHER INFORMATION.................................................... ITEM 6. EXHIBITS............................................................. SIGNATURES..................................................................... PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERIGO ENERGY, INC. CONSOLIDATED BALANCE SHEET
As of As of September 30, 2010 December 31, 2009 ASSETS Current assets Cash $ 304 $ 570 Accounts receivable 99,167 79,456 -------- -------- Total current assets 99,472 80,026 Other current assets Advances to related party 81,571 22,107 Notes receivable - related party - 384,951 Accrued interest receivable - related party - 40,569 -------- -------- Total other current assets 81,571 447,627 Property, plant and equipment Leasehold improvements 53,371 63,266 Office equipment, net of depreciation 7,785 13,298 Property and Equipment, net 18,369 73,742 Proved reserves, net of depletion 609,576 1,651,961 Software, net 4,589 5,504 -------- -------- Total property, plant and equipment 693,690 1,807,770 Other Assets Investment in GreenStart - 42,236 Investment in Granite Energy 98,053 98,053 Deposits 950 950 -------- -------- Total other assets 99,003 141,238 Total assets $ 973,735 $2,476,661 ========= ========== LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 210,435 $ 171,182 Accounts payable - related party 131,164 99,664 Advances from related parties 38,873 39,736 Payroll liabilities 35,730 96,730 Judgment payable 120,000 - -------- -------- Total current liabilities 536,203 407,312 Notes payable - related parties 368,904 370,456 Accrued interest - related parties 30,885 10,107 -------- -------- Total liabilities 935,992 787,874 Stockholders' (deficit) Preferred stock (25,000,000 shares authorized & 500,000 shares outstanding at 9-30-10 and 12-31-09) 500 - Common stock; $.001 par value; 100,000,000 shares authorized; 22,805,058 shares outstanding at September 30, 2010 and 22,780,058 at December 31, 2009 33,346 33,321 Additional paid-in capital 28,474,422 28,218,698 Stock receivable (665,600) (665,600) Accumulated deficit (27,804,926) (25,897,632) -------- -------- Total stockholders' (deficit) 37,744 1,688,787 -------- -------- Total liabilities and stockholders' (deficit) $ 973,735 $2,476,661 ========= ========== AMERIGO ENERGY, INC. CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended Nine Months Ended 9/30/2010 9/30/2009 9/30/2010 9/30/2009 Revenue Oil revenues $21,515 $58,829 $109,237 $136,012 Gas revenues 6,875 13,062 52,335 37,724 Rental income - 3,390 3,390 10,170 Sale on oil packages - - - - -------- -------- ------- -------- Total Revenue 28,390 75,281 164,963 183,906 Gross Profit - 55,419 Operating expenses Lease operating expenses 10,221 48,579 94,466 105,217 Consulting expense 10,500 14,500 31,500 59,500 Selling, general and administrative 7,357 18,039 23,583 69,417 Professional fees 106,874 133,220 353,041 387,693 Depreciation and amortization expense 6,699 8,099 22,444 24,296 Depletion expense 25,159 96,810 73,884 266,477 -------- -------- ------- -------- Total operating expenses 166,809 319,246 598,919 912,600 -------- -------- ------- -------- Loss from operations (138,419) (243,965) (433,957) (728,693) Other income (expenses): - Loss on sale of automobile - - - (1,883) Loss from rescinded merger - (14,606) - (14,606) Loss on sale of building - - (22,083) - Loss on disposal of oil lease (816,651) (816,651) - Write off of receivables (468,901) - (468,901) - Interest expense (7,105) (3,310) (20,778) (3,310) Loss on investment in GreenStart, Inc. - - (42,236) - Interest income 5,771 5,656 17,312 35,732 Other income - - - 72 Other expense - - (120,000) - ---------- -------- ---------- -------- Total other income (expenses) (1,286,886) (12,259) (1,473,337) 16,007 ---------- -------- ---------- -------- Loss before provision for income taxes (1,425,305) (256,224) (1,907,294) (712,687) Provision for income taxes Net loss $(1,425,305) $(256,224) $(1,907,294) $(712,687) =========== ========= ========== ========= Basic and diluted (loss) per common share (0.06) (0.01) (0.08) (0.01) =========== ========= ========== ========= Basic and diluted weighted average common shares outstanding 22,805,058 21,771,823 22,805,058 21,771,823 =========== ========= ========== ========= AMERIGO ENERGY, INC. STATEMENT OF STOCKHOLDER'S EQUITY Additional Stock Stock Total Common Stock Preferred Stock Paid-in Subscriptions Subscriptions Accumulated Stockholders' Shares Amount Shares Amount Capital Receivable Payable Deficit Deficit Balance, 20,071,235 $30,613 - - $25,968,776 $(665,600) $12,000 $(13,013,896) $12,331,893 ========== ======= ====== ====== =========== ========== ======== ============= =========== December 31, 2008 Shares issued 1,567,244 1,567 - - 1,565,677 - - - 1,567,244 for purchase of oil interests (see Note 4) Adjustment to - - - - 32,147 - - - 32,147 beginning balance of assets purchased Shares issued 133,344 133 - - 266,555 - - - 266,688 for purchase of oil interests - Justice Heirs Shares issued 1,008,235 1,008 - - 385,543 - (12,000) - 374,551 for warrants Net loss - - - - - - - ( 12,883,736) (12,883,736) ---------- ------- ------ ------ ---------- ---------- ---------- ------------- ------------ Balance, December 31, 2009 22,780,058 $33,321 - - $28,218,697 $(665,600) $- $(25,897,632) $1,688,787 ========== ======= ====== ====== =========== ========== ======== ============= =========== Shares issued 25,000 25 - - 6,225 - - - 6,250 for purchase of Kunkel interest Preferred Stock - - 500,000 500 249,500 - - - 250,000 issued to settle accrued salary Net loss - - - - - - - (1,907,294) (1,907,294) ---------- ------- ------ ------ ---------- ---------- ---------- ------------- ------------ Balance, September 30, 2010 22,805,058 $33,346 500,000 500 $28,474,422 $(665,600) $- $(27,804,926) $37,744 ========== ======= ====== ====== =========== ========== ======== ============= =========== AMERIGO ENERGY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Nine months ended Nine months ended September 30, 2010September 30, 2009 Cash flows from operating activities: Net loss (1,907,294) $(256,224) Adjustments to reconcile net loss to net cash used by operating activities: Loss on sale of building 22,083 Loss on Disposal of Oil Leases 812,051 Write off of Bad Debts 437,061 Impairment of oil investment in GreenStart 42,236 $ - Changes in operating assets and liabilities: Increase in accounts receivable (19,711) (23,067) Increase in note receivable and interest due from GreenStart (5,771) (28,414) Increase in note receivable and interest - (20,016) Depletion, depreciation and amortization 96,328 185,864 (Increase) / decrease in advances and bank receivables - 32,150 Increase / (decrease) in accounts payable 39,253 7,583 Increase / (decrease) in accounts payable - related party 31,500 32,170 Increase / (decrease) in short term note payable 120,000 - Increase / (decrease) in accrued payroll 189,000 (18,936) --------- --------- Net cash used by operating activities $(143,264) $(88,890) Cash flows from investing activities: Sale of office building $27,169 Disposal of Oil Leases $162,700 Purchase of oil and gas interests - 12,881 --------- --------- Net cash used by investing activities $189,869 $12,881 Cash flows from financing activities: Loan to (from) related party $(46,871) (63,808) Increase in stock payable - 345,616 --------- --------- Net cash provided by financing activities $(46,871) $281,808 --------- --------- Net increase in cash (266) 205,800 Cash, beginning of period 570 1,300 --------- --------- Cash, end of period $304 $207,100 ========= =========
AMERIGO ENERGY, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY Description of Business and History - Amerigo Energy, Inc., a Delaware corporation ("AGOE" or the "Company"), formerly named Strategic Gaming Investments, Inc., was incorporated in 1973. Prior to August 2008, the Company was involved in various businesses, none of which were successful. In August of 2008, our Board of Directors voted to get approval from the shareholders of the Company for a name change from Strategic Gaming Investments, Inc. to Amerigo Energy, Inc. The company received the approval from a majority of its stockholders and filed the amendment to its Articles of Incorporation with the State of Delaware. The name change became effective by the State of Delaware on August 26, 2008. The Company also requested a new stock symbol as a result of the name change. Our new trading symbol is "AGOE". On October 31, 2008, the Company entered into a Reorganization pursuant to Reorganization Agreement dated as of October 31, 2008. In the Reorganization, Granite Energy, Inc. sold to the Company substantially all of its assets and operations, including its subsidiary, Amerigo, Inc., and its controlling interest in GreenStart, Inc. in exchange for 10,000,000 restricted shares of Common Stock of the Company. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the combined accounts of Amerigo, Inc., a Nevada Corporation. All material intercompany transactions and accounts have been eliminated in consolidation. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. COMPREHENSIVE INCOME FASB Accounting Standard Codification Topic 220-10, "Comprehensive Income" ("ASC 220-10"), requires that total comprehensive income be reported in the financial statements. ASC 220-10 establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. It requires (a) classification of the components of other comprehensive income by their nature in a financial statement and (b) the display of the accumulated balance of the other comprehensive income separate from retained earnings and additional paid-in capital in the equity section of a statement of financial position. The Company's financial statements do not include any of the components of other comprehensive income during the year ended December 31, 2009 and the quarter ended September 30, 2010. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made. PROPERTY AND EQUIPMENT Depreciation is computed primarily on the straight-line method for financial statements purposes over the following estimated useful lives: ESTIMATED CATEGORY LIFE Office building 20 years Vehicles 7 years Equipment 7 years Leasehold Improvements 7 years Furniture and Fixtures 5 years All assets are booked at historical cost. Management reviews on an annual basis the book value, along with the prospective dismantlement, restoration, and abandonment costs and estimate residual value for the assets, in comparison to the carrying values on the financial statements. On December 31, 2009, the Company recognized an impairment loss on the book value of the building it owns in the amount of $45,000. The carrying value subsequent to impairment is $56,100, net of accumulated depreciation. The building was sold during the nine months ended September 30, 2010. OIL AND GAS PRODUCING ACTIVITIES The Company uses the successful efforts method of accounting for its oil and natural gas properties. Exploration costs such as exploratory geological and geophysical costs and delay rentals are charged against earnings as incurred The costs to acquire, drill and equip exploratory wells are capitalized pending determinations of whether proved reserves can be attributed to the Company's interests as a result of drilling the well. If management determines that commercial quantities of oil and natural gas have not been discovered, costs associated with exploratory wells are charged to exploration expense. Costs to acquire mineral interests, to drill and equip development wells, to drill and equip exploratory wells that find proved reserves, and related costs to plug and abandon wells and costs of site restoration are capitalized. Depreciation, depletion and amortization ("DD&A") of oil and gas properties is computed using a straight-line method based on estimated useful lives due to the Company's inability to complete a reserve study and ascertain reserve estimates. Capitalized acquisition costs are depleted based on total estimated useful lives. Capitalized costs to drill and equip wells are depreciated and amortized based on total useful lives. Investments in unproved properties are not amortized until proved reserves associated with the prospects can be determined or until impairment occurs. Oil and natural gas properties are periodically assessed for impairment. Unproved oil and gas properties that are individually significant are periodically assessed for impairment of value and a loss is recognized at the time of impairment by providing an impairment allowance. Costs of properties that become productive are transferred to proved oil and natural gas properties. Capitalized costs of producing oil and gas properties, after considering estimated residual salvage values, are depreciated and depleted by the straight-line method. Support equipment and other property and equipment are depreciated over their estimated useful lives. On the sale or retirement of a complete unit of a proved property, the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in income. On the sale of an entire interest in an unproved property for cash or cash equivalent, gain or loss on the sale is recognized, taking into consideration the amount of any recorded impairment if the property has been assessed individually. If a partial interest in an unproved property is sold, the amount received is treated as a reduction of the cost of the interest retained. REVENUE RECOGNITION Oil, gas and natural gas liquids revenues are recognized when the products are sold to a purchaser at a fixed or determinable price, delivery has occurred and title has transferred, and collection of the revenue is reasonably assured. CONCENTRATIONS OF CREDIT RISK Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counter parties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below. The Company operates in one primary segment, the oil and gas industry. The Company's customers are located within the United States of America. Financial instruments that subject the Company to credit risk consist principally of oil and gas sales which are based on a short-term purchase contracts from Teppco Oil (US) Company and various other gatherers in the area, with related accounts receivable subject to credit risk. ACCOUNTS RECEIVABLE Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation allowance have not been material to the financial statements at December 31, 2009 and September, 30, 2010; the Company's financial statements do not include an allowance for doubtful accounts because management believes that no allowance is required at those dates. NET LOSS PER COMMON SHARE FASB Accounting Standards Codification Topic 260-10, "Earnings per Share", requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti- dilutive effect on diluted earnings per share are excluded from the calculation. INCOME TAXES The Company accounts for its income taxes in accordance with FASB Codification Topic 740-10 ("ASC 740-10"), which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Management feels the Company will have a net operating loss carryover to be used for future years. Such losses may not be fully deductible due to the significant amounts of non-cash service costs. The Company has established a valuation allowance for the full tax benefit of the operating loss carryovers due to the uncertainty regarding realization. STOCK-BASED COMPENSATION The Company has adopted FASB Accounting Standards Codification Topic 718-10, "Compensation- Stock Compensation" ("ASC 718-10") which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors. Under the fair value recognition provisions of ASC 718-10, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of stock-based awards at the grant date requires considerable judgment, including estimating the expected future volatility of our stock price, estimating the expected length of term of granted options and selecting the appropriate risk-free rate. There is no established trading market for our stock. DIVIDENDS The Company has not yet adopted any policy regarding payment of dividends. GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred recurring losses, has used significant cash in support of its operating activities and, based upon current operating levels, requires additional capital or significant reconfiguration of its operations to sustain its operations for the foreseeable future. These factors, among others, may indicate that the Company will be unable to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flow to meet obligations on a timely basis and ultimately to attain profitability. The Company has obtained working capital through equity offerings and management plans to obtain additional funding through equity or debt financings in the future. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. RECENT ACCOUNTING PRONOUNCEMENTS In January 2010, the FASB issued Accounting Standards Update 2010-02, "Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary". This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160. The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company. In January 2010, the FASB issued Accounting Standards Update 2010-01, "Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force)". This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis. The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company. In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities-Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures. This amendment to Topic 932 has improved the reserve estimation and disclosure requirements by (1) updating the reserve estimation requirements for changes in practice and technology that have occurred over the last several decades and (2) expanding the disclosure requirements for equity method investments. This is effective for annual reporting periods ending on or after December 31, 2009. However, an entity that becomes subject to the disclosures because of the change to the definition oil- and gas- producing activities may elect to provide those disclosures in annual periods beginning after December 31, 2009. Early adoption is not permitted. The Company does not expect the provisions of ASU 2010-03 to have a material effect on the financial position, results of operations or cash flows of the Company. In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics-Technical Corrections to SEC Paragraphs. In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-05 (ASU 2010-05), Compensation - Stock Compensation (Topic 718). This standard codifies EITF Topic D-110 Escrowed Share Arrangements and the Presumption of Compensation. In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements. This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company. In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-07 (ASU 2010-07), Not-for-Profit Entities (Topic 958): Not-for-Profit Entities: Mergers and Acquisitions. This amendment to Topic 958 has occurred as a result of the issuance of FAS 164. The Company does not expect the provisions of ASU 2010-07 to have a material effect on the financial position, results of operations or cash flows of the Company. In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various Topics. This amendment eliminated inconsistencies and outdated provisions and provided the needed clarifications to various topics within Topic 815. The amendments are effective for the first reporting period (including interim periods) beginning after issuance (February 2, 2010), except for certain amendments. The amendments to the guidance on accounting for income taxes in reorganization (Subtopic 852-740) should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. For those reorganizations reflected in interim financial statements issued before the amendments in this Update are effective, retrospective application is required. The clarifications of the guidance on the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts (hybrid instruments) containing embedded derivative features at the date of adoption. The Company does not expect the provisions of ASU 2010-08 to have a material effect on the financial position, results of operations or cash flows of the Company. In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (TOPic 855), amending guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on our financial statements. In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-14 (ASU 2010-14), Accounting for Extractive Activities - Oil and Gas. This amendment makes amendments to paragraph 932- 10- S99-1 due to SEC release No. 33-8995, Modernization of Oil and Gas Reporting. The Company does not expect the provisions of ASU 2010-14 to have a material effect on the financial position, results of operations or cash flows of the Company. In April 2010, the FASB issued ASU No. 2010-17, "Revenue Recognition - Milestone Method (Topic 605): Milestone Method of Revenue Recognition" (codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. ASU 2010-17 is effective for interim and annual periods beginning after June 15, 2010. The adoption of ASU 2010-17 is not expected to have any material impact on our financial position, results of operations or cash flows. NOTE 3 - ACQUISITION AND DISPOSAL OF ASSETS DURING THE YEAR ENDED DECEMBER 31, 2009 During the year ended December 31, 2009, the Company issued 1,567,244 shares of our Company Common Stock in exchange for the purchase of various oil interests. On August 14, 2009, the Company completed the purchase of certain lease oil, gas, and mineral interests in the Justice Heirs A, B, and C leases operated by SWJN Oil Company. The Justice leases are located in Archer County, Texas. The Company acquired thirty three and 43/100 percent (33.43%) net revenue interests (NRI) and forty one and 67/100 percent (41.67%) working interests (WI) in the Justice Heirs leases from various entities or individuals. The leases purchased consist of the above mentioned net revenue and working interests in approximately 600 acres. The three leases have produced an average of 263 barrels of oil each month for the last 12 months. The purchased interests had gross revenues of approximately $62,600 in the past twelve months, an average of $5,217 per month for all three leases. In December 2009, the Company's agreement as part of the JJ Young oil and gas lease interest expired and the Company recognized an impairment loss in the amount of $60,000 on the asset and removed it from the books. DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2010: During the 9 months ended September 30, 2010, the Company received notice that a building of ours was a part of a lawsuit for past due property taxes, in the amount of $54,827. Due to complications in paperwork and transfer of ownership, the Company was not the party being named in the lawsuit. Subsequently, the Company had been notified that the building had a lien placed on it and was sold at an auction. The Company's building was auctioned for $27,168 this amount went towards the back taxes of the previous owner. The Company has notified the previous owner that a receivable for $27,168 was recorded on the Company's books. The terms of this receivable have not been negotiated yet. The Company also had to record a loss in the amount of $22,083 on the building. Additionally, when funds are available the Company intends on hiring an attorney to attempt to be refunded the money from the county for unlawful sale of our property. During the 9 months ended September 30, 2010, the Company sold two of its oil leases. The value of the properties had declined due to equipment issues, as well as strained relationships with vendors and pumpers in the area. After searching and consulting with many advisors it was determined to be in the best interest of the company to sell the leases. The company did not have the financial resources to provide the workovers and improvements required to keep the leases going. One lease was sold for $62,700. The book value of the lease was $627,828, net of depreciation $38,892. The Company recorded a loss of $565,128 on the sale of the lease. The second lease sold for $112,500, $31,350 of this sale price went directly to pay the remainder of the property taxes owed related to the previous owner. This amount was recorded as a receivable from the previous owner. The book value of this lease was $340,673, net of $27,829 depreciation. The Company recorded a loss of $251,523 on the sale of the lease. NOTE 4 - NOTES PAYABLE As of September 30, 2010, as discussed in Note 3, the Company has issued three notes payable for a total of $373,365 as part of the purchase of certain lease oil, gas, and mineral interests in the Justice Heirs A, B, and C leases. The obligations were to be paid monthly for a period of five years with interest of seven percent (7%) accruing on the outstanding balance. The monthly payment amount is not to exceed seventy five percent (75%) of the minimum net revenue interest (NRI) from the prior month's production. As of September 30, 2010, the balance outstanding was $368,904 and interest had been accrued in the amount of $30,885. Since the leases in question were sold, the company has agreed to require the payments come from our other oil leases to satisfy these notes and to have the notes secured by the other assets of the company. NOTE 5 - JUDGMENT PAYABLE The company entered into a settlement agreement to pay $120,000 to an individual for his interest in certain oil and gas leases. This note was payable at $10,000 per month starting April 1, 2010, with subsequent payments due on the first of each month. The company was unable to meet the payment deadlines set forth and the individual has converted the notes payable into a judgment payable. The company is unsure of the outcome of this transaction as the company does not have the resources to settle this liability with cash. The company may be forced to settle the judgment with other assets of the company. NOTE 6 - STOCKHOLDERS' EQUITY As of September 30, 2010, there were 22,805,058 shares of common stock outstanding and 500,000 preferred shares outstanding. DURING THE YEAR ENDED DECEMBER 31, 2009, THE COMPANY ISSUED COMMON STOCK AND WARRANTS AS FOLLOWS: COMMON STOCK During the year ended December 31, 2009, the Company issued 1,567,244 shares of our Company Common Stock at $1.00 per share in exchange for the purchase of various oil interests. In addition, on August 14, 2009, the Company entered into a purchase agreement for the purchase of certain lease oil, gas, and mineral interests in the Justice Heirs A, B, and C leases. As part of this agreement, the Company issued 133,344 shares of restricted common stock to related parties in addition to other forms of payment for their interests in the said leases. See Note 3 for full information regarding the purchase. On December 31, 2009 the Company issued 1,008,235 shares of our Common Stock for warrants purchased. See Warrants below. WARRANTS The Company issued warrants for the purchase of our Company's Common Stock at $0.35, $0.40 and $1.00 per share on December 31, 2008. A total of 2,335,945 shares of common stock were subscribed to through the warrants. The shares would have been issued if all payments from warrant holders are received no later than December 31, 2009. As per the warrant exercise documentation, the shares of common stock were issued on December 31, 2009, for the prorated amount of payments received, since the payments were not made in their entirety. The remaining shares payable were removed from the records, and the transaction has been finalized. DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2010, THE COMPANY ISSUED COMMON AND PREFERRED STOCK AS FOLLOWS: COMMON STOCK During the nine months ended September 30, 2010, the company issued 25,000 shares of our Company Common Stock at $0.25 per share in exchange for the purchase of oil interest. PREFERRED STOCK During the nine months ended September 30, 2010, the company issued 500,000 shares of our Company Preferred Stock to settle $250,000 worth of salary payable. This preferred stock carries a voting power of 250 times the amount per common share. NOTE 7 - RELATED PARTY TRANSACTIONS As of September 30, 2010, the Company holds $384,951 in notes receivable from GreenStart, Inc., in which the Company is a shareholder. $356,820 of the note was sold to the Company from Granite Energy as part of the reorganization on October 31, 2008. This asset is due on demand and accrues interest at 6% annually. The accrued interest receivable on this loan totaled $57,880. As of September 30, 2010 the company decided it was in the best interest of the company to write off this receivable. The company does believe the amount is still owed and will continue their efforts to collect it, but due to the financial position of GreenStart, Inc. the likelihood of collection forced the company to remove the asset from our balance sheet. As of September 30, 2010, the Company had $35,730 in accrued payroll payable to the Company's current and former officers. On September 15, 2010 the company settled $250,000 of salary payable with the Chief Financial Officer and Chief Executive Officer. This amount was settled with 500,000 shares Preferred Stock of the company. This Preferred Stock carries a voting power of 250 times the amount per Common Share. On September 15, 2010 the CEO reduced his salary to $6,000 per month due to the reduced assets of the company as well as to reduce the company overhead. During the 3 months ended September 30, 2010, the Company wrote off a related party receivable in the amount of $26,069. Management reviewed the ability to collect the amounts owed from the related party and determined that the related party was unable to pay. As of September 30, 2010, the Company has $57,856 in liabilities due to a firm controlled by the Company's Chief Executive Officer. This loan is non-interest bearing and has no due date assigned to it. The Company has a consulting agreement with a firm controlled by the Company's Chief Executive Officer for a fee of $3,500 per month. The consulting firm and its personnel have been engaged to assist in organizing and completing the process of filings with the Securities and Exchange Commission and other administrative tasks. The Company owed the firm $131,164 as of September 30, 2010 which is included as part of Accounts payable - related party in the accompanying financial statements. As of September 30, 2010, as discussed in Note 3 and Note 4, the Company has issued three notes payable for a total of $373,365 as part of the purchase of certain lease oil, gas, and mineral interests in the Justice Heirs A, B, and C leases operated by SWJN Oil Company. The obligations were to be paid monthly for a period of five years with interest of seven percent (7%) accruing on the outstanding balance. The monthly payment amount was not to exceed seventy five percent (75%) of the minimum net revenue interest (NRI) from the prior month's production. As of September 30, 2010, the balance outstanding was $368,904 and interest had been accrued in the amount of $30,885. A material relationship exists between Bullfrog Management, LLC and the Company in that Bullfrog Management, LLC is managed by the wife of S. Matthew Schultz, the former CEO. A material relationship also exists between Peachtree Consultants, LLC and the Company in that it is managed by a firm owned by the CEO/CFO, Jason F. Griffith. Jacque Lybbert is the wife of Bruce Lybbert, a former Director of the Company. NOTE 8 - DEFERRED INCOME TAX The Company accounts for its income taxes in accordance with FASB Codification Topic 740-10 ("ASC 740-10"). The Company incurred net operating losses during all periods presented resulting in a deferred tax asset, which was fully allowed for in a valuation allowance. As a result, the net benefit and expense resulted in no income taxes. NOTE 9 - ENVIRONMENTAL MATTERS Various federal and state authorities have authority to regulate the exploration and developments of oil and gas and mineral properties with respect to environmental matters. Such laws and regulations, presently in effect or as hereafter promulgated, may significantly affect the cost of its current oil production and any exploration and development activities undertaken by the Company, or its Operators, and could result in loss or liability to the Company in the event that any such operations are subsequently deemed inadequate for purposes of any such law or regulation. NOTE 10 - SUBSEQUENT EVENTS The company has evaluated subsequent events through November 10, 2010, the date which the financial statements were available to be issued. The company has determined that, other than disclosed below, there were no other event that warranted disclosure or recognition in the financial statements. WHERE YOU CAN FIND ADDITIONAL INFORMATION We have filed with the Securities and Exchange Commission this Form 10-Q, including exhibits, under the Securities Act. You may read and copy all or any portion of the registration statement or any reports, statements or other information in the files at SEC's Public Reference Room located at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. You can request copies of these documents upon payment of a duplicating fee by writing to the Commission. You may call the Commission at 1-800-SEC-0330 for further information on the operation of its public reference room. Our filings, including the registration statement, will also be available to you on the website maintained by the Commission at http://www.sec.gov. We intend to furnish our stockholders with annual reports which will be filed electronically with the SEC containing consolidated financial statements audited by our independent auditors, and to make available to our stockholders quarterly reports for the first three quarters of each year containing unaudited interim consolidated financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This discussion contains forward-looking statements. The reader should understand that several factors govern whether any forward-looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward-looking statements include plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the Company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward- looking statements contained herein will be realized. Based on actual experience and business development, the Company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the Company's results of operations. In light of the significant uncertainties inherent in the forward-looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. A complete discussion of these risks and uncertainties are contained in our Annual Financial Statements included in the Form 10-K for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission on March 31, 2010. INTRODUCTION The Company derives its revenues from its producing oil and gas properties, of which the substantial majority are predominantly oil properties. These properties consist of working interests in producing oil wells having proved reserves. Our capital for investment in producing oil properties has been provided by the sale of common stock to its shareholders. The following is a discussion of the Company's financial condition, results of operations, financial resources and working capital. This discussion and analysis should be read in conjunction with the Company's financial statements contained in this Form 10-Q. OVERVIEW RESULTS OF OPERATIONS REVENUES For the 3 months ending September 30, 2010, the Company generated $28,390 in revenues from royalties on producing oil and gas properties. For the 3 months ending September 30, 2009, the Company generated $3,390 in revenues from the rental income in addition to royalties on producing oil and gas properties in the amount of $71,891. For the 9 months ending September 30, 2010, the Company generated $3,390 in revenues from the rental income in addition to royalties on producing oil and gas properties in the amount of $161,573. For the 9 months ending September 30, 2009, the Company generated $3,390 in revenues from the rental income in addition to royalties on producing oil and gas properties in the amount of $173,736. OPERATING EXPENSES Lease Operating - Lease operating expense for the 3 months ended September 30, 2010 totaled $10,221 as compared to $48,579 for the 3 months ended September 30, 2009. The decrease is directly related to the sale of leases during the period. Consulting - Consulting expenses were $10,500 for the 3 months ended September 30, 2010 as compared to $14,500 for the 3 months ended September 30, 2009. The decrease of $4,000 was related to the decrease in monthly fees for services performed by a company controlled by our chief financial officer. General and Administrative - General and administrative expenses were $7,357 for the 3 months ended September 30, 2010, compared to $18,039 for the 3 months ended September 30, 2009, representing an decrease of $10,682. The decrease in general and administrative expense reflects the decrease in rent, travel, and other expenditures during the period. Professional Fees - Professional fees for the 3 months ended September 30, 2010 were $106,874 as compared to $133,220 for the 3 months ended September 30, 2009. The decrease was related to the decrease in the use of consultants in addition to filing fees and associated filings that took place during the previous year. Depreciation, Amortization, and Depletion - Depreciation and amortization expense was $6,699 for the 3 months ended September 30, 2010. Depreciation and amortization was $8,099 during the 3 months ended September 30, 2009. This difference is related to the loss of the building. The depletion expense for the 3 months ended September 30, 2010 was $25,159 and was calculated based on an estimate using the straight line method over the estimated lives of the proved interests until production studies have been completed on the oil and gas properties. There was $96,810 in depletion expenses for the 3 months ended September 30, 2009. The decrease is directly related to the impairment of the value of the assets during the last fiscal year, which adjusted the book value off of which depletion is calculated. It is also related to the sale of leases during the quarter. Lease Operating - Lease operating expense for the 9 months ended September 30, 2010 totaled $94,466 as compared to $105,217 for the 9 months ended September 30, 2009. The decrease is directly related to the sale of producing leases during the period. Consulting- Consulting expenses were $31,500 for the 9 months ended September 30, 2010 as compared to $59,500 for the 9 months ended September 30, 2009. The decrease of $28,000 was related to the decrease in monthly fees for services performed by a company controlled by our chief financial officer. General and Administrative - General and administrative expenses were $23,583 for the 9 months ended September 30, 2010, compared to $69,417 for the 9 months ended September 30, 2009, representing an decrease of $45,834. The decrease in general and administrative expense reflects the decrease in rent, travel, and other expenditures during the period. Professional Fees - Professional fees for the 9 months ended September 30, 2010 were $353,041 as compared to $387,693 for the 9 months ended September 30, 2009. The decrease was related to the decrease in the use of consultants in addition to filing fees and associated filings that took place during the previous year. Depreciation, Amortization, and Depletion - Depreciation and amortization expense was $22,444 for the 9 months ended September 30, 2010. Depreciation and amortization was $24,296 during the 9 months ended September 30, 2009. This difference is related to the loss of the building during the previous quarter. The depletion expense for the 9 months ended September 30, 2010 was $73,884 and was calculated based on an estimate using the straight line method over the estimated lives of the proved interests until production studies have been completed on the oil and gas properties. There was $266,477 in depletion expenses for the 9 months ended September 30, 2009. The decrease is directly related to the impairment of the value of the assets during the last fiscal year, which adjusted the book value off of which depletion is calculated. It is also related to the sale of leases during the quarter. OTHER INCOME AND EXPENSES During the 3 months ended September 30, 2010, interest income was $5,771, compared to $5,656 during the 3 months ended September 30, 2009, representing an increase of $115. The increase relates to the accrued interest on the $384,951 note receivable from a related party. See Note 7 for further information on the related party note receivable. During the 3 months ended September 30, 2010, interest expense was $7,105, compared to $3,310 during the 3 months ended September 30, 2009, representing and increase of $3,795. The increase relates to the accrued interest on the $368,904 note payable to a related party. See notes 3, 4, and 7 for further information on the related party note payable. During the 3 months ended September 30, 2010, the Company sold two of its oil leases and had to record losses. The Company recorded a loss of $251,523 on the sale of the Kunkel Lease and the company recorded a loss of $565,128 on the sale of the Justice Heirs Lease. The total loss recorded on the sale of leases was $816,651. During the 3 months ended September 30, 2010, the Company wrote off a related party receivable in the amount of $26,069. Management reviewed the ability to collect the amounts owed from the related party and determined that the related party was unable to pay. During the 9 months ended September 30, 2010, interest income was $17,312, compared to $35,732 during the 9 months ended September 30, 2009, representing a decrease of $18,420. The decrease relates to the accrued interest on the $384,951 note receivable from a related party. See Note 7 for further information on the related party note payable. During the 9 months ended September 30, 2010, interest expense was $20,778, compared to $3,310 during the 9 months ended September 30, 2009, representing and increase of $17,468. The increase relates to the accrued interest on the $368,904 note payable to a related party. See notes 3, 4, and 6 for further information on the related party note payable. During the 9 months ended September 30, 2010, the Company lost its building due to the back taxes of its previous owner and had to record a loss in the amount of $22,083. During the 9 months ended September 30, 2010, the Company sold two of its oil leases and had to record losses. The Company recorded a loss of $251,523 on the sale of the Kunkel Lease and the company recorded a loss of $565,128 on the sale of the Justice Heirs Lease. The total loss recorded on the sale of leases was $816,651. During the 9 months ended September 30, 2010, the Company wrote off a related party receivable in the amount of $26,069. Management reviewed the ability to collect the amounts owed from the related party and determined that the related party was unable to pay. NET LOSS ATTRIBUTABLE TO COMMON STOCK The Company realized a net loss of $982,473 for the 3 months ending September 30, 2010. This is compared to a net loss of $12,259 for the 3 months ended September 30, 2009, an increase of $970,214. The increase in net loss is directly attributable to the losses recorded for the sale of the oil leases and the decrease in revenues due to those sales. The Company realized a net loss of $1,464,462 for the 9 months ending September 30, 2010. This is compared to a net loss of $712,687 for the 9 months ended September 30, 2009, an increase of $751,775. The increase in net loss is directly attributable to the losses recorded for the sale of the oil leases and the decrease in revenues due to those sales. LIQUIDITY AND CAPITAL RESOURCES At September 30, 2010, we had cash in the amount of $304 and a working capital deficit of $436,731, as compared to cash in the amount of $570 and a working capital deficit of $327,286 as of December 31, 2009. In addition, our stockholders' equity was $37,744 at September 30, 2010, compared to stockholders' equity of $1,688,787 at December 31, 2009. Our accumulated deficit increased from $25,897,632 at December 31, 2009 to $27,804,925 at September 30, 2010. Our operations used net cash of $143,264 during the nine months ended September 30, 2010, compared to $88,890 during the nine months ended September 30, 2009, a increase of $54,374. Our cash from investing activities was $189,869 for the nine months ended September 30, 2010 and $12,881 for the nine months ended September 30, 2009. Our financing activities used net cash of $46,871 during the nine months ended September 30, 2010, compared to net cash of $281,808 during the nine months ended September 30, 2009. INFLATION The Company's results of operations have not been affected by inflation and management does not expect inflation to have a material impact on its operations in the future. OFF- BALANCE SHEET ARRANGEMENTS The Company currently does not have any off-balance sheet arrangements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not Applicable ITEM 4. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS We evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2010, the end of the period covered by this Quarterly Report on Form 10-Q. This evaluation was undertaken by our chief executive officer, Jason F. Griffith. Mr. Griffith serves as our principal executive officer, principal accounting and financial officer. We reviewed and evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the fiscal quarter covered by this report, as required by Securities Exchange Act Rule 13a-15, and concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management on a timely basis, including our principal executive officer and principal financial and accounting officer. CONCLUSIONS Based on this evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file pursuant to the Exchange Act are recorded, processed, summarized, and reported in such reports within the time periods specified in the Securities and Exchange Commission's rules and forms. CHANGES IN INTERNAL CONTROLS There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter, i.e., the three months ended September 30, 2010, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Amerigo has signed an agreement with an individual to acquire his interest in certain oil and gas leases for $120,000, payable at $10,000 per month starting April 1, 2010, with subsequent payments due on the 1st of each month. The term of the note is One (1) year. Upon final payment and settlement of the note, the individual will return all shares of stock along with his interest in various programs. As of the date of this filing, no payments have been made on this note payable. The individual has converted the note payable into a judgment payable. The company is unsure of the outcome of this transaction as the company does not have the resources to settle this liability with cash so the company may be forced to settle the judgment with other assets of the company. As of September 30, 2010, other than the lawsuit disclosed in the previous paragraphs, the Company is not a party to any pending material legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company's Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 5. OTHER INFORMATION. As of August 16, 2010 S. Matthew Schultz resigned as Chief Executive Officer of the company. Jason F. Griffith was appointed as the new Chief Executive Officer. ITEM 6. EXHIBITS (a) Exhibits. 31.1 Certification of our Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of our Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 18, 2010 By: /s/ Jason F. Griffith --------------------- Jason F. Griffith Chief Executive Officer, and Chief Financial Officer EX-31 2 agoeex_31-1.txt AMERIGO ENERGY, EXHIBIT 31.1 EXHIBIT 31.1 CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A)/15(D)-14(A) I, Jason F. Griffith, certify that: 1.I have reviewed this quarterly report on Form 10-Q of Amerigo Energy, Inc. for the fiscal quarter ended September 30, 2010; 2.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 this report; 3.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; 4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for registrant and have: a) 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; b) 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; c) 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 d) 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 annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5.I have disclosed, based on my 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): a) 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 b) 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. 1.I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 18, 2010 /s/ Jason F. Griffith Chief Executive Officer (Principal Executive Officer) EX-31 3 agoeex_31-2.txt AMERIGO ENERGY, EXHIBIT 31.2 EXHIBIT 31.2 CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A)/15(D)-14(A) I, Jason F. Griffith, certify that: 1.I have reviewed this quarterly report on Form 10-Q of Amerigo Energy, Inc. for the fiscal quarter ended September 30, 2010; 2.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 this report; 3.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; 4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for registrant and have: a) 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; b) 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; c) 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 d) 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 annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5.I have disclosed, based on my 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): a) 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 b) 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. 1.I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 18, 2010 /s/ Jason F. Griffith Chief Financial Officer (Principal Financial Officer) EX-32 4 agoeex_32-1.txt AMERIGO ENERGY, EXHIBIT 32.1 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Amerigo Energy, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Jason F. Griffith, Chief Executive Officer and Chief Financial Officer of the Company do certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Jason F. Griffith Chief Executive Officer Chief Financial Officer November 18, 2010 -----END PRIVACY-ENHANCED MESSAGE-----