10-K 1 deepwell10ksept03.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2003 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to_____________ Commission file number 0 - 24012 DEEP WELL OIL & GAS, INC. (formerly ALLIED DEVICES CORPORATION) ------------------------------------- (Exact name of registrant as specified in its charter) Nevada 13 - 3087510 --------------------------------------------- ---------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 31 Walmer Rd., Unit 6, Toronto, Ontario, M5R 2W7, Canada -------------------------------------------------------- (Address of principal executive offices - Zip code) (416) 928 - 3095 ---------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act during the preceding 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 a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ___ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No ___ ------ The aggregate market value of the voting stock held by non-affiliates of the Registrant (based upon the closing price of the Registrant's common stock on December 31, 2003 of $0.55 per share) was approximately $90,878. Shares of common stock held by each executive officer and director of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of December 31, 2003, the Registrant had approximately 2,165,233 shares of Common Stock, $.001 par value per share outstanding. This figure accounts for, or takes into consideration, a reverse split of the Company's common stock that occurred and became effective on November 21, 2003. For financial statement purposes, the Company has shown 6,165,233 shares of common stock issued and outstanding. This incorporates an additional 4 million shares that are to be issued by the Company as ordered by the Bankruptcy Court. DEEP WELL OIL & GAS, INC. ------------------------- INDEX ----- PART I Item 1. Business 1 Item 2. Properties 6 Item 3. Legal Proceedings 6 Item 4. Submission of Matters to a Vote of Security Holders 6 PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters 6 Item 6. Selected Financial Data 8 Item 7. Management's Discussion and Analysis or Plan of Operation 9 Item 7A. Quantitative and Qualitative Disclosure About Market Risks 12 Item 8. Financial Statements and Supplementary Data 12 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 20 Item 9A. Controls and Procedures 21 PART III Item 10. Directors and Executive Officers of the Registrant 21 Item 11. Executive Compensation 22 Item 12. Security Ownership of Certain Beneficial Owners and Management 22 Item 13. Certain Relationships and Related Transactions 23 Item 14. Principal Accountant Fees and Services 23 PART IV Item 15. Exhibits and Reports on Form 8-K 24 SIGNATURES 24 PART I ITEM 1. BUSINESS HISTORY Deep Well Oil & Gas, Inc. ("Deep Well Oil & Gas", "Deep Well" or the "Company") (formerly "Allied Devices Corporation") was originally incorporated on July 18, 1988 under the laws of the state of Nevada as Worldwide Stock Transfer, Inc. These articles were complicated and lengthy, the type of provisions one would expect to find in by-laws, and consisted of 14 pages, single-spaced. On October 25, 1990, an amendment to our articles was made changing our name to Illustrious Mergers, Inc. At that time an article prohibiting preemptive rights was also added. On June 18, 1991, a company known as Allied Devices Corporation was merged with and into Illustrious Mergers, Inc., and our name was at that time changed to Allied Devices Corporation. On August 19, 1996, a company called Absolute Precision, Inc., was merged with and into us and we retained our name; however, as a result of that transaction, our principal offices were relocated to New York. We thereafter engaged in substantial business operations, primarily in the manufacture and distribution of standard and custom precision mechanical assemblies and components throughout the United States, however, on February 19, 2003, we filed a Petition for Relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in and for the Eastern District of New York titled In re: Allied Devices Corporation, et al., Chapter 11, Case No. 03-80962-511 ("the Bankruptcy Action"). REORGANIZATION On July 23, 2003, a Liquidating Plan of Reorganization ("Plan") was filed and submitted to the Bankruptcy Court for the Court's approval. See Exhibit 2.1 attached hereto, a full and complete copy of such Plan. See also Form 8-K/A filed by the Company on November 25, 2003 for additional information. On September 10, 2003, after notice to all creditors and a formal hearing, U.S. Bankruptcy Judge Melanie L. Cyganowski issued an "Order Confirming Liquidating Plan of Reorganization" in the Bankruptcy Action (hereinafter "Bankruptcy Order"). In conjunction with that Bankruptcy Order, the Company's liabilities, among other things, were paid off and extinguished. See Exhibit 2.2 attached hereto and incorporated by reference, a full and complete copy of such Bankruptcy Order. The Bankruptcy Order, among other things, implements a change of control whereby Champion Equities, a Utah limited liability company ("Champion"), a Mr. David Roff, of Toronto, Canada ("Roff"), and a group of new investors, took control of the Company. The principal provisions of the Plan, which are authorized and implemented by the Bankruptcy Order, are the following, which is not an exhaustive list thereof: 1 a) the termination of present management and the present Board of Directors and appointment of Mr. David Roff in their place and stead; b) giving a Utah entity known as Champion Industries ("Champion"), the power and authority to appoint such other directors, in addition to Mr. Roff, as Champion, in its sole discretion deems appropriate; c) the reverse split of the Company's common capital stock 1-for-30 on the basis of 5,048,782 shares issued and outstanding immediately prior to the Bankruptcy Order; d) authorizing Champion to amend the Company's Articles of Incorporation and Bylaws to (i) effect a quasi-reorganization for accounting purposes, (ii) provide the maximum indemnification or other protections to the Company's officers and directors that is allowed under applicable law, (iii) conform to the provisions of the Plan and the corollary Confirmation Order, (iv) set the authorized stock of the Company, post-reverse split, at fifty million (50,000,000) common capital shares; and (v) take all action necessary and appropriate to carry out the terms of the Plan; e) authorizing Champion, without solicitation of or notice to shareholders, to issue (i) 2,000,000 post-reverse split shares of the Company's common stock to the Company's new management, and (ii) 4,000,000 post-reverse split shares, legend free, in the sole and unfettered discretion of Champion; f) the Company's Board of Directors, was authorized, without seeking or obtaining shareholder approval to take any and all actions necessary or appropriate to effectuate amendments to the Company's Certificate of Incorporation and/or Bylaws called for under the Plan and the Company's Board of Directors and officers was authorized to execute, verify, acknowledge, file and publish any and all instruments or documents that may be required to accomplish the same; and g) the Company's charter is to be amended in conformance with applicable bankruptcy rules and the amended charter or bylaws shall, among other provisions, authorize the issuance of any new shares while simultaneously prohibiting the issuance of nonvoting equity securities to the extent required by section 1123(a)(6) of the United States Bankruptcy Code. After the entry of the Bankruptcy Order, the Company drafted and submitted a form of Restated and Amended Articles of Incorporation to the Secretary of State of Nevada implementing the foregoing, including but not limited to other provisions required of the Company under the Bankruptcy Order. As a result of the Bankruptcy Order giving Mr. Roff the power and authority to change the Company's name and direction, we decided to change our name from "Allied Devices Corporation" to "Deep Well Oil and Gas, Inc." Accordingly, in the form of Restated and Amended Articles of Incorporation filed with the State of Nevada in October, we changed our name to "Deep Well Oil and Gas, Inc." Our 2 form of Restated and Amended Articles of Incorporation was accepted by the Nevada Secretary of State on October 22, 2003, pursuant to provisions of Nevada corporate law allowing the amending of corporate articles on the basis of orders entered by U.S. Bankruptcy Courts. A complete copy of our accepted form of Restated and Amended Articles of Incorporation, signed by Mr. Roff and stamped by the Nevada Secretary of State, is attached hereto as Exhibit 3.1. Prior to the Bankruptcy Order adopting the Liquidating Plan of Reorganization, there were 5,048,782 outstanding shares of our common stock. Following the Bankruptcy Order and the acceptance by the Nevada Secretary of State of our form of Restated and Amended Articles which implements the 1-for-30 reverse split of our shares, and rounding up any fractional shares to the nearest share and also, after the issuance of 2 million shares to Mr. Roff as ordered by the Bankruptcy Court, there are now 2,165,233 issued and outstanding shares of the Registrant's common stock. For financial statement purposes, the Company has shown 6,165,233 shares of common stock issued and outstanding. This incorporates the additional 4 million shares that are to be issued by the Company as ordered by the Bankruptcy Court. As part of the implementation of the Bankruptcy Order, the Company's stock symbol was changed from ALDVQ to DWOG. The Company's stock is quoted on the "Pink Sheets". FRESH START Upon emergence from Chapter 11 proceedings on September 10, 2003, the Company adopted fresh-start reporting in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting By Entities in Reorganization Under the Bankruptcy Code (SOP 90-7). In connection with the adoption of fresh-start reporting, a new entity has been deemed created for financial reporting purposes. For financial reporting purposes, the Company adopted the provisions of fresh-start reporting effective September 10, 2003. All periods presented prior to September 10, 2003, have been designated Predecessor Company. BUSINESS The Company is no longer operating as Allied Devices Corporation, the Predecessor Company, and has emerged from Chapter 11 protection as a development stage company with no assets and liabilities. The past results of the Predecessor Company are no longer relevant to the operations of the Company. As a result of the Bankruptcy Order and the implementation of the Liquidating Plan of Reorganization, we are currently headquartered in Toronto, Canada at the address set forth above. We intend to enter into the oil and gas exploration business once our restructuring is completed. At this time, we presently intend to look for properties or projects involving "heavy oil" projects. "Heavy oil" is a dark black, viscous oil that does not flow well and which has a high carbon to hydrogen ratio, along with a high amount of carbon residues, asphaltenes, sulphur, nitrogen, heavy metals, aromatics and/or waxes. Heavy oil is younger in 3 age than the typical oil people are familiar with. It is found at relatively shallow depths in the earth where there is not as much heat and pressure. In this regard, reference is made the website "Heavyoil.com". As the world's oil supplies become depleted, we believe that there will be more reliance on heavy oil. No assurance can be made or given that we will successfully engage in the oil and gas business or the heavy oil business, nor can any assurance be given that even if we are remotely or relatively successful, that we will have a profit or that our stock will appreciate in value. At this time, the Company is in discussions to acquire properties or projects involving "heavy oil" projects. RISKS The Company has no recent operating history and no representation is made, nor is any intended, that the Company will in fact be able to carry on future business activities successfully. Development stage companies like the Company compete to obtain favorable business opportunities. The Company faces competition from other development stage companies similarly situated. The Company is unable to ascertain the exact number of competitor companies, or whether or when such competitors' competitive positions could improve or change. Thus, The Company may be unable to acquire merger or other partners or otherwise locate business combinations on terms acceptable to management. Accordingly, such competition, although customary with development stage companies, could result in delays, increased costs, or other types of adverse consequences affecting The Company and its financial condition. Need for Additional Capital or Financing and Risks Associated Therewith Management does not presently intend to borrow funds to compensate any persons, consultants, promoters or affiliates in relation to the implementation of its plans. However, if the Company engages outside advisors or consultants in its search for opportunities, it may be necessary for the Company to attempt to raise additional funds. As of the date hereof, the Company has not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital. In the event the Company does need to raise capital, most likely the only method available to the Company would be the private sale of its securities. These possible private sales would more than likely have to be to persons known by the director or other shareholders of the Company or to venture capitalists that would be willing to accept the substantial risks associated with investing in a company with limited history, no current operations and nominal capital. Because of the nature of the Company as a development stage company, it is unlikely that it could make a public offering of securities or be able to borrow any significant sum from either a commercial or private lender. Management will attempt to acquire funds or financing, if necessary, on the best available 4 terms. However, there can be no assurance that the Company will be able to obtain additional funding or financing when and if needed, or that such funding, if available, can be obtained on terms reasonable or acceptable to the Company. Although not presently anticipated, a possibility exists that the Company would offer and sell additional securities to its existing shareholders or their affiliates or possibly even "accredited investors." Risks of Penny Stock Investing The Company's common stock is considered to be a "penny stock" because it meets one or more of the definitions in the Exchange Act Rule 3a51-1, a Rule made effective on July 15, 1992. These include but are not limited to the following: (i) the stock trades at a price less than five dollars ($5.00) per share; (ii) it is NOT traded on a "recognized" national exchange; (iii) it is NOT quoted on the NASD's automated quotation system (NASDAQ), or even if so, has a price less than five dollars ($5.00) per share; OR (iv) is issued by a company with net tangible assets less than $2,000,000, if in business more than three years continuously, or $5,000,000, if in business less than a continuous three years, or with average revenues of less than $6,000,000 for the past three years. The principal result or effect of being designated a "penny stock" is that securities broker-dealers cannot recommend the stock but must trade in it on an unsolicited basis. Risks Related to Broker-Dealer Requirements Involving Penny Stocks / Risks Affecting Trading and Liquidity Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated thereunder by the Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account. These rules may have the effect of reducing the level of trading activity in the secondary market, if and when one develops. Potential investors in the Company's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock." Moreover, Commission Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Pursuant to the Penny Stock Reform Act of 1990, broker-dealers are further obligated to provide 5 customers with monthly account statements. Compliance with the foregoing requirements may make it more difficult for investors in the Company's stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise. EMPLOYEES The Company currently has one part time employee. We expect to hire from time to time, independent consultants and contractors during the stages of implementing our plans. ITEM 2. PROPERTY Administrative operations are conducted from the offices of a consulting firm known as Brave Consulting located at Mr. Roff's offices in Toronto, Canada. We expect to operate for as long as possible from these offices to minimize operating expenses. We do not currently pay rent for these offices and do not anticipate paying rent to Mr. Roff or Brave Consulting for any such offices in the future. Our operations do not currently require office or laboratory space to meet our objectives, and therefore administration from these offices is sufficient. At some point in the future, as may be necessary to implement and carry our plans to engage in the oil and gas business, we may require additional office space requiring rental expense, but we do not anticipate any such need during the next six to nine months. We will however, incur common office operating expenses such as telephone, office supplies, postage, etc. ITEM 3. LEGAL PROCEEDINGS See Item 1 of Part I hereof titled "Business" and Item 7 of Part II hereof titled "Management's Discussion and Analysis or Plan of Operation" for a detailed discussion of the Company's Bankruptcy Action. The company is not currently aware of any legal proceedings or claims that the company believes will have, individually or in the aggregate, a material adverse effect on the company's financial position or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS PREDECESSOR COMPANY 6 The Company's common stock was originally listed on the National Association of Securities Dealers Automated SmallCap Market ("NASDAQ") as of November 17, 1994. Following the downturn in sales and profits in 2001-2002, the Company no longer met the listing criteria for NASDAQ's SmallCap Market and accordingly the Company's stock was delisted to the OTC Bulletin Board ("OTC-BB") on September 16, 2002. Subsequent to the delisting, the Company did not file its Form 10-Q for the quarter ended December 31, 2002 on a timely basis, and accordingly, the Company's stock was delisted to the Pink Sheets on March 25, 2003. SUCCESSOR COMPANY The Company's stock is currently quoted on the Pink Sheets under the symbol DWOG. The Company's trading ranges by quarter for fiscal 2003 and 2002 were as follows: High Low Fiscal 2002 First Quarter $1.45 $0.65 Second Quarter $1.16 $0.40 Third Quarter $0.70 $0.35 Fourth Quarter $0.47 $0.05 Fiscal 2003 First Quarter $0.24 $0.12 Second Quarter $0.13 $0.01 Third Quarter $0.03 $0.002 Fourth Quarter $0.002 $0.0003 The Company has not paid cash dividends since inception. The Company intends to retain all of its earnings, if any, for use in its business and does not anticipate paying any cash dividends in the foreseeable future. The payment of any future dividends will be at the discretion of the board of directors and will depend upon a number of factors, including future earnings, the success of the company's business activities, capital requirements, the general financial condition and future prospects of the company, general business conditions and such other factors as the board of directors may deem relevant. As of October 16, 2003, we had approximately 423 holders of record of the Successor Company's common stock. RECENT SALES OF UNREGISTERED SECURITIES On September 10, 2003, the Company issued 2 million shares of common stock to Mr. David Roff pursuant to the Bankruptcy Order. For financial statement purposes, the Company has shown 6,165,233 shares of common stock issued and outstanding. This incorporates the additional 4 million shares that are to be issued by the Company as ordered by the Bankruptcy Court. 7 ITEM 6. SELECTED FINANCIAL DATA The Company emerged from Chapter 11 proceedings with no assets and no liabilities and a new plan of operation. Upon emergence from Chapter 11 proceedings on September 10, 2003, we adopted fresh-start reporting in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting By Entities in Reorganization Under the Bankruptcy Code. The Company has included selected financial data for the Successor Company. The following selected financial data should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Form 10-K. Deep Well Oil & Gas, Inc. (Development Stage Company) Selected Financial Data Period Sep. 10 - Sep. 30 2003 -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS DATA: Revenue $ -- Expenses $ 50,000 Net loss $ (50,000) Net loss per share - basic and diluted $ (0.01) Weighted average outstanding shares 6,165,233 Sep. 30 2003 -------------------------------------------------------------------------------- BALANCE SHEET DATA: Total assets $-- Total debt $-- Stockholders' equity $-- -------------------------------------------------------------------------------- 8 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS All statements contained herein that are not historical facts, including, but not limited to, statements regarding the Company's current business strategy, the Company's projected sources and uses of cash, and the Company's plans for future development and operations, are based upon current expectations. These statements are forward-looking in nature and involve a number of risks and uncertainties. Actual results may differ materially. Among the factors that could cause actual results to differ materially are the following: the availability of sufficient capital to finance the Company's business plans on terms satisfactory to the Company; competitive factors; changes in labor, equipment and capital costs; changes in regulations affecting the Company's business; future acquisitions or strategic partnerships; general business and economic conditions; and factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which statements are made pursuant to the Private Litigation Reform Act of 1995 and, as a result, are pertinent only as of the date made. REORGANIZATION On February 19, 2003, the Company filed a Petition for Relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in and for the Eastern District of New York titled In re: Allied Devices Corporation, et al., Chapter 11, Case No. 03-80962-511 ("the Bankruptcy Action"). On July 23, 2003, a Liquidating Plan of Reorganization ("Plan") was filed and submitted to the Bankruptcy Court for the Court's approval. See Exhibit 2.1 attached hereto, a full and complete copy of such Plan. See also Form 8-K/A filed by the Company on November 25, 2003 for additional information. On September 10, 2003, after notice to all creditors and a formal hearing, U.S. Bankruptcy Judge Melanie L. Cyganowski issued an "Order Confirming Liquidating Plan of Reorganization" in the Bankruptcy Action (hereinafter "Bankruptcy Order"). In conjunction with that Bankruptcy Order, the Company's liabilities, among other things, were paid off and extinguished. See Exhibit 2.2 attached hereto and incorporated by reference, a full and complete copy of such Bankruptcy Order. The Bankruptcy Order, among other things, implements a change of control whereby Champion Equities, a Utah limited liability company ("Champion"), a Mr. David Roff, of Toronto, Canada ("Roff"), and a group of new investors, took control of the Company. The principal provisions of the Plan, which are authorized and implemented by the Bankruptcy Order, are the following, which is not an exhaustive list thereof: 9 a) the termination of present management and the present Board of Directors and appointment of Mr. David Roff in their place and stead; b) giving a Utah entity known as Champion Industries ("Champion"), the power and authority to appoint such other directors, in addition to Mr. Roff, as Champion, in its sole discretion deems appropriate; c) the reverse split of the Company's common capital stock 1-for-30 on the basis of 5,048,782 shares issued and outstanding immediately prior to the Bankruptcy Order; d) authorizing Champion to amend the Company's Articles of Incorporation and Bylaws to (i) effect a quasi-reorganization for accounting purposes, (ii) provide the maximum indemnification or other protections to the Company's officers and directors that is allowed under applicable law, (iii) conform to the provisions of the Plan and the corollary Confirmation Order, (iv) set the authorized stock of the Company, post-reverse split, at fifty million (50,000,000) common capital shares; and (v) take all action necessary and appropriate to carry out the terms of the Plan; e) authorizing Champion, without solicitation of or notice to shareholders, to issue (i) 2,000,000 post-reverse split shares of the Company's common stock to the Company's new management, and (ii) 4,000,000 post-reverse split shares, legend free, in the sole and unfettered discretion of Champion; f) the Company's Board of Directors, was authorized, without seeking or obtaining shareholder approval to take any and all actions necessary or appropriate to effectuate amendments to the Company's Certificate of Incorporation and/or Bylaws called for under the Plan and the Company's Board of Directors and officers was authorized to execute, verify, acknowledge, file and publish any and all instruments or documents that may be required to accomplish the same; and g) the Company's charter is to be amended in conformance with applicable bankruptcy rules and the amended charter or bylaws shall, among other provisions, authorize the issuance of any new shares while simultaneously prohibiting the issuance of nonvoting equity securities to the extent required by section 1123(a)(6) of the United States Bankruptcy Code. After the entry of the Bankruptcy Order, the Company drafted and submitted a form of Restated and Amended Articles of Incorporation to the Secretary of State of Nevada implementing the foregoing, including but not limited to other provisions required of the Company under the Bankruptcy Order. As a result of the Bankruptcy Order giving Mr. Roff the power and authority to change the Company's name and direction, we decided to change our name from "Allied Devices Corporation" to "Deep Well Oil and Gas, Inc." Accordingly, in the form of Restated and Amended Articles of Incorporation filed with the State of Nevada in October, we changed our name to "Deep Well Oil and Gas, Inc." Our form of Restated and Amended Articles of Incorporation was accepted by the Nevada Secretary of State on October 22, 2003, pursuant to provisions of Nevada 10 corporate law allowing the amending of corporate articles on the basis of orders entered by U.S. Bankruptcy Courts. A complete copy of our accepted form of Restated and Amended Articles of Incorporation, signed by Mr. Roff and stamped by the Nevada Secretary of State, is attached hereto as Exhibit 3.1. Prior to the Bankruptcy Order adopting the Liquidating Plan of Reorganization, there were 5,048,782 outstanding shares of our common stock. Following the Bankruptcy Order and the acceptance by the Nevada Secretary of State of our form of Restated and Amended Articles which implements the 1-for-30 reverse split of our shares, and rounding up any fractional shares to the nearest share and also, after the issuance of 2 million shares to Mr. Roff as ordered by the Bankruptcy Court, there are now 2,165,233 issued and outstanding shares of the Registrant's common stock. For financial statement purposes, the Company has shown 6,165,233 shares of common stock issued and outstanding. This incorporates the additional 4 million shares that are to be issued by the Company as ordered by the Bankruptcy Court. PLAN OF OPERATION The Company is no longer operating as Allied Devices Corporation, the Predecessor Company, and has emerged from Chapter 11 protection as a development stage company with no assets and liabilities. Accordingly, the Company has prepared this Plan of Operations to discuss its current plans. The past results of the Predecessor Company are no longer relevant to the operations of the Company. As a result of the Bankruptcy Order and the implementation of the Liquidating Plan of Reorganization, we are currently headquartered in Toronto, Canada at the address set forth above. We intend to enter into the oil and gas exploration business once our restructuring is completed. At this time, we presently intend to look for properties or projects involving "heavy oil" projects. "Heavy oil" is a dark black, viscous oil that does not flow well and which has a high carbon to hydrogen ratio, along with a high amount of carbon residues, asphaltenes, sulphur, nitrogen, heavy metals, aromatics and/or waxes. Heavy oil is younger in age than the typical oil people are familiar with. It is found at relatively shallow depths in the earth where there is not as much heat and pressure. In this regard, reference is made the website "Heavyoil.com". As the world's oil supplies become depleted, we believe that there will be more reliance on heavy oil. No assurance can be made or given that we will successfully engage in the oil and gas business or the heavy oil business, nor can any assurance be given that even if we are remotely or relatively successful, that we will have a profit or that our stock will appreciate in value. 11 At this time, the Company is in discussions to acquire properties or projects involving "heavy oil" projects. Reference is made to our Form 8-K/A filed on EDGAR on November 25, 2003. OFFICES Administrative operations are conducted from the offices of a consulting firm known as Brave Consulting located at Mr. Roff's offices in Toronto, Canada. We expect to operate for as long as possible from these offices to minimize operating expenses. We do not currently pay rent for these offices and do not anticipate paying rent to Mr. Roff or Brave Consulting for any such offices in the future. Our operations do not currently require office or laboratory space to meet our objectives, and therefore administration from these offices is sufficient. At some point in the future, as may be necessary to implement and carry our plans to engage in the oil and gas business, we may require additional office space requiring rental expense, but we do not anticipate any such need during the next six to nine months. We will however, incur common office operating expenses such as telephone, office supplies, postage, etc. RAISING CAPITAL The Company currently lacks the capital resources to implement and carry out its business plan as described herein. Operations to date have involved identification of properties and leases we wish to investigate for oil and gas potential. We believe we have sufficient capital resources funded through current shareholders to perform initial investigations in this regard. At some point in the future we expect to raise additional capital, either through debt, equity or any combination thereof. In the event that additional capital is raised at some time in the future, existing shareholders will experience dilution of their interest in the Company. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 12 SELLERS & ANDERSEN L.L.C. --------------------------- Certified Public Accountants and Business Consultants Member SEC Practice Section of the AICPA 941 East 3300 South, Suite 202 Salt Lake City, Utah 84106 Telephone 801 486-0096 Fax 801 486-0098 Board of Directors Deep Well Oil & Gas, Inc. Toronto, Ontario, Canada REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We have audited the accompanying balance sheet of Deep Well Oil & Gas, Inc. (development stage company) at September 30, 2003 and the statements of operations, stockholders' equity, and cash flows for the period September 10, 2003 to September 30, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Deep Well Oil & Gas, Inc. at September 30, 2003 and the statements of operations, and cash flows for the period September 10, 2003 to September 30, 2003 in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company will need additional working capital for its planned activity, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in the notes to the financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Salt Lake City, Utah December 18, 2003 s\Sellers & Andersen L.L.C. 13 Deep Well Oil & Gas, Inc. (Development Stage Company) Balance Sheet September 30, 2003 ------------------------------------------------------------------------------- Assets Current assets Cash $ -- ------------------------------------------------------------------------------- Total current assets -- ------------------------------------------------------------------------------- Total assets $ -- =============================================================================== Liabilities and Stockholders' Equity Current liabilities Accounts payable $ -- ------------------------------------------------------------------------------- Total current liabilities -- ------------------------------------------------------------------------------- Total liabilities -- ------------------------------------------------------------------------------- Stockholders' Equity Common stock, 50,000,000 shares authorized at $.001 par value; 6,165,233 shares issued and outstanding 6,165 Capital in excess of par value 43,835 Deficit accumulated during the development stage - dated September 10, 2003 - note 1 (50,000) ------------------------------------------------------------------------------- Total stockholders' equity -- ------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ -- =============================================================================== The accompanying notes are an integral part of these financial statements 14 Deep Well Oil & Gas, Inc. (Development Stage Company) Statement of Operations For the period September 10, 2003 to September 30, 2003 Revenue $ -- Expenses 50,000 ------------------------------------------------------------------------------- Net loss $ (50,000) =============================================================================== Net loss per share - basic and diluted $ (0.01) =============================================================================== Weighted average outstanding shares 6,165,233 =============================================================================== The accompanying notes are an integral part of these financial statements 15
Deep Well Oil & Gas, Inc. (Development Stage Company) Statement of Changes in Stockholders Equity Common Stock Capital in Total --------------------------- Excess of Accumulated Stockholders' Shares Amount Par Value Deficit Equity ----------------------------------------------------------------------- Balance, September 10, 2003 165,233 165 (165) -- -- Issuance of common stock pursuant to bankruptcy agreement September 10, 2003 - notes 1 & 4 6,000,000 6,000 44,000 -- 50,000 Net operating loss for the period September 10, 2003 to September 30, 2003 -- -- -- (50,000) (50,000) ----------------------------------------------------------------------- Balance, September 30, 2003 6,165,233 $ 6,165 $ 43,835 $ (50,000) $ -- ======================================================================= The accompanying notes are an integral part of these financial statements
16 Deep Well Oil & Gas, Inc. (Development Stage Company) Statement of Cash Flows For the period September 10, 2003 to September 30, 2003 Cash flows from operating activities Net loss (50,000) Adjustments to reconcile net loss to net cash provided by operating activities: Issuance of common stock for expenses - note 1 50,000 ------------------------------------------------------------------------- Net change in cash from operating activities - ------------------------------------------------------------------------- Cash flows from investing activities ------------------------------------------------------------------------- Cash flows from financing activities ------------------------------------------------------------------------- Net increase (decrease) in cash - Cash, beginning of period - ------------------------------------------------------------------------- Cash, end of period - ========================================================================= Schedule of non-cash operating activities Issuance of 6,000,000 common shares pursuant to bankruptcy agreement - expenses $ 50,000 The accompanying notes are an integral part of these financial statements 17 Deep Well Oil & Gas, Inc. (Development Stage Company) Notes to Financial Statements 1. ORGANIZATION The Company, and its former subsidiaries, were engaged in the manufacture and distribution of standard and custom precision mechanical assemblies and components throughout the United States. On February 19, 2003 the Company filed a petition for bankruptcy in the United States Bankruptcy Court under Chapter 11 in the Eastern District of New York titled "Allied Devices Corporation, Case No. 03-80962-511". The Company emerged from bankruptcy pursuant to a Bankruptcy Court Order entered on September 10, 2003 with no remaining assets or liabilities. The terms of the bankruptcy settlement included (1) a reverse common stock split of 30 shares of outstanding stock for one share (2) increasing the authorized common capital stock from 25,000,000 to 50,000,000 shares with a par value of $.001 (3) a change in the name of the Company from "Allied Devices Corporation" to "Deep Well Oil & Gas, Inc." (4) and the authorization for the issuance of 2,000,000 post split restricted common shares and 4,000,000 post split common shares in exchange for $50,000, which was paid into the bankruptcy court by the recipients of the shares. Restated and amended articles of incorporation completing the terms of the bankruptcy have been filed in the state of Nevada. This report has been prepared showing the name "Deep Well Oil & Gas, Inc." and the post split common stock, with $.001 par value, from inception. The accumulated deficit has been restated to zero and dated September 10, 2003 with the statement of operations to begin on that date. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Methods ------------------ The Company recognizes income and expenses based on the accrual method of accounting. Dividend Policy --------------- The Company has not yet adopted a policy regarding payment of dividends. Financial and Concentrations Risk --------------------------------- The Company does not have any concentration or related financial credit risk. Income Taxes ------------ The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and 18 liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized. On September 30, 2003, the Company had a net operating loss available for carry forward of $50,000. The income tax benefit of approximately $15,000 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is undeterminable since the Company has no operations. The loss carryover will expire in 2023. Revenue Recognition ------------------- Revenue is recognized on the sale and delivery of a product or the completion of a service provided. Advertising and Market Development ---------------------------------- The company expenses advertising and market development costs as incurred. Basic and Diluted Net Income (Loss) Per Share --------------------------------------------- Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of the preferred share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report. Financial Instruments --------------------- The carrying amounts of financial instruments are considered by management to be their estimated fair values. Estimates and Assumptions Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements. Recent Accounting Pronouncements -------------------------------- The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements. 19 3. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES An officer-director, or his controlled entity, has acquired 32% of the Company's outstanding common capital stock. 4. COMMON CAPITAL STOCK The outstanding common capital stock on February 19, 2003 (the date the Company filed for bankruptcy) was 5,048,742 shares. As part of the settlement from the bankruptcy the Company completed a reverse stock split, reducing the outstanding shares to 165,233, and the rights to issue 6,000,000 post split common shares, in exchange for $50,000, resulting in total outstanding shares of 6,165,233. (note 1) On the report date the 6,000,000 shares were in the process of being issued, and for reporting purposes the shares are shown as outstanding on September 30, 2003. 5. GOING CONCERN The Company intends to seek business opportunities that will provide a profit, however, the Company does not have the working capital necessary to be successful in this effort, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through short term related party loans, and equity funding, which will enable the Company to operate for the coming year. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Effective March 20, 2003, BDO Seidman, LLP (the "Predecessor Accountant") resigned as the independent auditors for the Company. Sellers and Andersen, LLC (the "Successor Accountant") were appointed as the Company's new independent accountants. The Company's Board of Directors approved this action on November 10, 2003. During the last two fiscal years ended September 30, 2002 and 2001 and the subsequent periods to March 20, 2003 (i) there were no disagreements between the Company and BDO Seidman, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of BDO Seidman, LLP would have caused BDO Seidman, LLP to make reference to the matter in its reports on the Company's financial statements, and (ii) BDO Seidman, LLP's reports did not contain an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope, or accounting principles. During the last two most recent fiscal years ended September 30, 2002 and 2001 and the subsequent periods to March 20, 2003, there were no reportable events as the term described in Item 304(a)(1)(iv) of Regulation S-B. BDO Seidman, LLP's opinion in its report on the Company's financial statements for the year ended September 30, 2002 and 2001, expressed substantial doubt with respect to the Company's ability to continue as a going concern. 20 The Company has not previously consulted with the Successor Accountant regarding the application of accounting principles to a specific completed or contemplated transaction or the type of audit opinion that might be rendered on the Company's financial statements. ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. Mr. David Roff, the Company's current President, CEO and CFO has concluded, based on his evaluation as of a date within 90 days prior to the filing of this report, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported as specified in the Securities and Exchange Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, as appropriate, to allow timely decisions regarding required disclosure. (b) Changes in internal controls over financial reporting. Since the Company filed its Form 10-K for the year ended September 30, 2002, the Company has entered and emerged from Chapter 11 protection under the U.S. Bankruptcy Code with a new board of directors and new management. The Company contracted the past management of the Company, including its CFO, to assist in the preparation of the financial statements presented herein (for the Predecessor Company) and believes that the control environment that existed to prepare this financial information has not materially affected, or is not reasonably likely to materially affect, our internal control over financial reporting. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers and directors of the Company are as follows: Name Age Position David Roff 32 President, CEO, Chairman of the Board, Sole Director and CFO 21 Brief biographies of the Executive Officers and Directors of the Company are set forth below. All Directors hold office until the next Annual Stockholders' Meeting or until their death, resignation, retirement, removal, disqualification or until their successors have been elected and qualified. Vacancies in the existing Board may be filled by majority vote of the remaining Directors. Officers of the Company serve at the will of the Board of Directors. There are no written employment contracts outstanding. David Roff, age 32, is the co-president of a private consulting firm called Brave Consulting. Brave Consulting invested in, started and manages four private Internet companies. Mr. Roff has held this position since 2001. From 1998 until 2001, Mr. Roff founded and was vice president of an investor relations and public relations firm. From 1995 until 1998, Mr. Roff was a management consultant for Coopers & Lybrand Consulting where he advised large financial institutions, mutual funds, pension funds and other organizations on technology, internal control strategies and where he additionally provided computer audit support. Mr. Roff has a Bachelor of Arts degree from the University of Western Ontario located in London, Ontario. He is also a Canadian Chartered Accountant. ITEM 11. EXECUTIVE COMPENSATION No executive officer currently receives any cash compensation or other benefits from the Company. Cash compensation amounts will be determined in the future based on the services to be rendered and time devoted to the affairs of the Company and the availability of funds. Other elements of compensation, if any, will be determined at that time or at other times in the future. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the number and percentage of the shares of the Company's Common Stock owned of record and beneficially by each person or entity owning more than 5% of such shares and by all executive officers, officers and directors, as a group at December 31, 2003: Number of Shares Percentage of Shares Name Beneficially Owned Beneficially Owned (1) David Roff (2) 2,000,000 92.4% All officers and directors as a group (1 person) 2,000,000 92.4% (1) Based on 2,165,233 common shares outstanding on December 31, 2003. (2) The address for David Roff is c/o Deep Well Oil & Gas, Inc., 31 Walmer Rd., Suite 6, Toronto, Ontario, Canada, M5R 2W7. 22 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not applicable. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table is a summary of the fees billed to us by Sellers & Andersen, LLC for professional services for the fiscal years ended September 30, 2003 and September 30, 2002: Fee Category Fiscal 2003 Fees Fiscal 2002 Fees Audit Fees $4,075 - Audit-Related Fees - - Tax Fees - - All Other Fees - - - - Total Fees $4,075 - ====== === Audit Fees. Consists of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by Sellers & Andersen, LLC in connection with statutory and regulatory filings or engagements. Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees." These services include employee benefit plan audits, accounting consultations in connection with acquisitions, attest services that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards. Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax compliance, tax audit defense, customs and duties, mergers and acquisitions, and international tax planning. All Other Fees. Consists of fees for products and services other than the services reported above. In fiscal 2003 and 2002, there were no other fees other than as reported above. 23 PART IV ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS o 2.1 - July 23, 2003, Liquidating Plan of Reorganization of Allied Devices Corporation, now known as Deep Well Oil and Gas, Inc. o 2.2 - September 10, 2003, Order and Plan of Reorganization of the U.S. Bankruptcy Court in and for the Eastern District of New York, In re: Allied Devices Corporation, Chapter 11, Case No. 03-80962-511 o 3.1 - Restated and Amended Articles of Incorporation filed with and accepted by the Secretary of State of Nevada on October 22, 2003, changing the name to "Deep Well Oil and Gas, Inc." and otherwise implementing the Plan o 31 - Certification of President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 o 32 - Certification of President and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 REPORTS ON FORM 8-K The Company has filed the following Form 8-K's since it filed a Form 10-K for the year ended September 30, 2002 with the SEC on January 14, 2003: o February 20, 2003 - Form 8-K filed to announce the Company's voluntary filing for relief under Chapter 11 of the U.S. Bankruptcy Code. o April 15, 2003 - Form 8-K filed with a press release announcing that the Company's auditors had declined to continue as auditors of the Company and that the Company intended at the time to wind down its operations and liquidate its assets. o November 18, 2003 - Form 8-K filed to announce the Company's emergence from Chapter 11 of the U.S. Bankruptcy Code, the change in control of the Company, the change in the Company's certifying accountant and the changes in the Company's directors. o November 25, 2003 - Form 8-K/A filed to amend the Company's discussion of the change in the Company's certifying accountant. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEEP WELL OIL & GAS, INC. (Registrant) Dated: December 31, 2003 By: /s/ DAVID ROFF ------------------- David Roff President, CFO and Sole Director 24