0001607062-15-000356.txt : 20150814 0001607062-15-000356.hdr.sgml : 20150814 20150813213826 ACCESSION NUMBER: 0001607062-15-000356 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20150331 FILED AS OF DATE: 20150814 DATE AS OF CHANGE: 20150813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Avalon Oil & Gas, Inc. CENTRAL INDEX KEY: 0000918573 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841168832 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12850 FILM NUMBER: 151052321 BUSINESS ADDRESS: STREET 1: 310 FOURTH AVENUE SOUTH STREET 2: SUITE 7000 CITY: MINNEAPOLIS STATE: MN ZIP: 55415 BUSINESS PHONE: (952) 746-9652 MAIL ADDRESS: STREET 1: 310 FOURTH AVENUE SOUTH STREET 2: SUITE 7000 CITY: MINNEAPOLIS STATE: MN ZIP: 55415 FORMER COMPANY: FORMER CONFORMED NAME: XDOGS COM INC DATE OF NAME CHANGE: 20000225 FORMER COMPANY: FORMER CONFORMED NAME: SLED DOGS CO DATE OF NAME CHANGE: 19950112 FORMER COMPANY: FORMER CONFORMED NAME: SNOWRUNNER INC DATE OF NAME CHANGE: 19940203 10-K 1 aogn33115form10k.htm FORM 10-K

 
 
 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

FORM 10-K

 

 

 

 

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the year ended March 31, 2015

 

Or

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission File Number: 1-12850

 

AVALON OIL & GAS, INC.

(Exact Name of Small Business Issuer as specified in its charter)

 

Nevada   84-1168832
(State or other jurisdiction of incorporation or organization)   (I.R.S. employer identification no.)

 

 

 310 Fourth Avenue South, Suite 7000
Minneapolis, MN 55415

(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code:
(952) 746-9652

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to section 12(g) of the Act: None.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 

☐  Yes  ☒ No

 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ☐

 

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 of 1934 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  ☐ No

 

Indicate by 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. ☐

 

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 (§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 ☐

 

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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  ☐ Accelerated filer  ☐
Non-accelerated filer    ☐   (Do not check if a smaller reporting company) Smaller reporting company  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  ☐  Yes   No

 

16,548,062 shares of our common stock were issued and outstanding as of August 5, 2015.

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TABLE OF CONTENTS

 

    Page
PART I    
Item 1. Business 3
Item 1A. Risk Factors 6
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. (Removed and Reserved) 8
     
PART II    
Item 5. Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities 8
Item 6. Selected Financial Data 10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
Item 8. Consolidated Financial Statements 13
Item 9. Changes and Disagreements With Accountants on Accounting and Financial Disclosures 13
Item 9A. Controls and Procedures 13
Item 9B . Other Information 14
     
PART III    
Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance 14
Item 11. Executive Compensation 16
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 18
Item 13. Certain Relationships and Related Transactions, and Director Independence 19
Item 14. Principal Accountant Fees and Services 19
Item 15. Exhibits and Financial Statement Schedules 20
     
SIGNATURES 21

 

-2-

 

PART I

 

References in this document to "us," "we," the "Registrant," or the "Company" refer to Avalon Oil & Gas, Inc., and its predecessors.

 

Statements contained in this Form 10-K discuss future expectations and plans which are considered forward-looking statements as defined by Section 27 (a) of the Securities and Exchange Act of 1934, as amended. Sentences which incorporate words such as "believes," "intends," expects," "predicts," "may," "will," "should," "contemplates," "anticipates," or similar statements are based on our beliefs and expectations using the most current information available to us. In view of the fact that our discussions in the Form 10-K are based on upon estimates and beliefs concerning circumstances and events which have not yet occurred, the anticipated results are subject to changes and variations as future operations and events actually occur and could differ materially from those discussed in forward-looking statements. Moreover, although we reasonably expect, to the best of our knowledge and belief, that the results to be achieved by us will be as set forth in the following discussion, the following discussion is not a guarantee and there can be no assurance that any of the potential results which are described will occur. Furthermore, there will usually be differences between the forecasted and actual results because events and circumstances frequently do not occur as expected, and the difference may be material.

 

ITEM 1. BUSINESS

 

Business Development

 

Avalon Oil & Gas, Inc. (the "Company") was originally incorporated in Colorado in April 1991 under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs" which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S. Bankruptcy Code. In May, 1999, we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. On July 22, 2005, the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares par value of $0.001, and engage in the acquisition of producing oil and gas properties. On November 16, 2011, a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001.  This amendment was not filed with the Nevada Secretary of State.  

 

On June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned.  The reverse split was effective on July 23, 2012.   On September 28, 2012, we held a special meeting of Avalon’s shareholders and approved an amendment to the Company’s Articles of Incorporation such that the Company would be authorized to issue up to 200,000,000 shares of common stock.  We filed an amendment with the Nevada Secretary of State on April 10, 2013, to increase our authorized shares to 200,000,000.

 

Acquisition Strategy

 

Our strategy is to acquire oil and gas producing properties that have proven reserves and established in-field drilling locations with a combination of cash, debt, and equity. We believe that acquisition of such properties minimizes our risk, allows us to generate immediate cash flow, and provides in-field drilling locations to expand production within the proven oil and gas fields. We will aggressively develop these low cost/low risk properties in order to enhance shareholder value. In addition, Avalon's technology group acquires oil production enhancing technologies. 

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In furtherance of the foregoing strategy, we have engaged in the following transactions during the last three years:

 

During the year ended March 31, 2013, we advanced $160,000 for the purchase of oil and gas producing properties in Western Oklahoma, pending the completion of due diligence by the Company, if the Seller is not able to deliver clear title to these properties these funds will be returned to us.

 

On July 1, 2013, the Company acquired a fifty percent (50%) working interest in the Moody and West Lease, Duval County, Texas.

 

On October 10, 2013, the Company entered into a Technology Scouting Agreement with IP Technology Exchange, Inc. ("IP TechEx"), to identify potential technology acquisition and licensing opportunities.  Our alliance with IP TechEx will enable us to develop a portfolio of new technologies within the oil and gas industry.

 

On March 19, 2014, the Company formed Weyer Partners, LLC, a one hundred percent (100%) wholly owned Minnesota Corporation. Weyer Partners, LLC, was formed to operate oil and gas properties in Oklahoma and Texas.

 

On May 9, 2014, the Company formed AFS Holdings, Inc., a one hundred percent (100%) wholly owned Nevada Corporation. AFS Holding, Inc., was formed to leverage the Company’s relationship with IP TechEx, and market technology licensed from IP TechEx.

 

On September 29, 2014 the Company acquired the assets of Kensington Energy Limited Partnership – 1985, Kensington Energy Limited Partnership – 1986, Kensington Energy Limited Partnership – 1987, Kensington Energy Company, Kensington Group Venture Kensington Group Venture I, Kensington Group Venture II, and Kensington Group Venture III for a combination of cash and debt.

 

On December 1, 2014, the Company acquired a license for proprietary products and solutions to prevent corrosion on new sump equipment and sump equipment currently in use. These proprietary products can be used on new or used sump equipment and will substantially minimize corrosion.

 

On December 15, 2014, the Company renewed its Technology Scouting Agreement with IP TechEx for an additional three (3) years.

 

We plan to raise additional capital during the coming fiscal year, but currently have not identified additional funding sources. Our ability to continue operations is highly dependent upon our ability to obtain additional financing, or generate revenues from our acquired oil and gas leasehold interests, none of which can be guaranteed.

 

Ultimately, our success is dependent upon our ability to generate revenues from our acquired oil and gas leasehold interests, and to achieve profitability, which is dependent upon a number of factors, including general economic conditions and the sustained profitability resulting from the operation of the acquired oil and gas leaseholds. There is no assurance that even with adequate financing or combined operations, we will generate revenues and be profitable.

 

PATENTS, TRADEMARKS, AND PROPRIETARY RIGHTS

 

On May 17, 2006, The Company signed a strategic alliance agreement with Innovaro Corporation, a technology transfer company to develop a portfolio of new technologies for the oil and gas industry.

-4-

 

On March 29, 2007, The Company acquired Leak Location Technologies, Inc., ("LLT"). LLT owns an exclusive license to a system for determining the presence and location of leaks in underground pipes.

 

On May 17, 2007, The Company renewed its strategic alliance agreement with Innovaro Corporation, a technology transfer company to develop a portfolio of new technologies for the oil and gas industry.

 

On August 16, 2007, Kent Rodriguez, the Company's President and CEO, presented a proposal to the Board of Directors to spin-off Oiltek Inc. ("Oiltek"), which specializes in oil and gas recovery technology to Avalon's shareholders. The oil and gas technology include, but are not limited, to the Patent; a system to detect hazardous gas leaks including small leaks in natural gas pipelines; and a system for intelligent drilling and completion sensors to provide real-time oil reservoir monitoring of subsurface information.

 

On September 22, 2007 the Company entered into an agreement with respect to its purchase of a 75.6% interest in Oiltek for $50,000 and the right of Oiltek to promote Avalon's intellectual property. We are working with IP Technology Exchange, Inc. to market this intellectual property.

 

On October 10, 2013, the Company entered into a Technology Scouting Agreement with IP Technology Exchange, Inc. ("IP TechEx"), to identify potential technology acquisition and licensing opportunities.  Our alliance with IP TechEx will enable us to develop a portfolio of new technologies within the oil and gas industry.

 

On December 1, 2014, the Company acquired a license for proprietary products and solutions to prevent corrosion on new sump equipment and sump equipment currently in use. These proprietary products can be used on new or used sump equipment and will substantially minimize corrosion.

 

On December 15, 2014, the Company renewed its Technology Scouting Agreement with IP TechEx for an additional three (3) years.

 

ENVIRONMENTAL MATTERS

 

During the last three fiscal years, compliance with environmental laws and regulations did not have a specific impact on the Company's operations. The Company does not anticipate that it will incur any material capital expenditures for environmental control facilities during the next fiscal year.

 

EMPLOYEES

 

As of March 31, 2015 we had two full time employees, our President, Kent Rodriguez and an administrative assistant. The Board retains consultants and advisors on as needed basis.  They are compensated with cash and also with the issuance of the Company’s common stock. We also have three part time employees at this time.

-5-

 

RESEARCH AND DEVELOPMENT

 

During the last three fiscal years, we did not incur research and development expenses.

 

ITEM 1A.  RISK FACTORS

 

Any investment in our securities is highly speculative.  The Company's business and ownership of shares of our common stock are subject to numerous risks.  You should not purchase our shares if you cannot afford to lose your entire investment. You should consider the following risks before acquiring any of our shares.

 

We have never been, and may never be, profitable.

 

During the past several years, we have attempted, without success, to generate revenues and profits. For the year ended March 31, 2015, we incurred a net profit of $100,314. The net profit was due to a one time gain from the extinguishment of debt. There can be no assurance that we will ever be profitable from our operations.

 

We need additional capital.

 

We need additional financing to continue operations. The amount required depends upon our business operations, and the capital needs of our acquisition of the certain oil and gas leasehold interests. We may be unable to secure this additional required financing on a timely basis, under terms acceptable to us, or at all. To obtain additional financing, we will likely sell additional equity securities, which will further dilute shareholders' ownership in us. Ultimately, if we do not raise the required capital, we may need to cease operations.

 

We are dependent upon our key personnel.

 

We are highly dependent upon the services of Kent A. Rodriguez, our President and Chief Executive Officer. If he terminated his services with us, our business would suffer.

 

There is only a limited trading market for our securities.

 

Our Common Stock is traded on the OTCQB. The prices quoted may not reflect the price at which you can resell your shares. Because of the low price of our stock, we are subject to particular rules of the U.S. Securities and Exchange Commission that make it difficult for stock brokers to solicit customers to purchase our stock. This reduces the number of potential buyers of our stock and may reduce the value of your shares. There can be no assurance that a trading market for our stock will continue or that you will ever be able to resell your shares at a profit, or at all.

-6-

Our management controls us.

 

Our current officers and directors own approximately 45% of our outstanding stock and are able to affect the election of the members of our Board of Directors and make corporate decisions. Mr. Rodriguez, by his ownership of Class A Preferred Stock, has the right to vote 40% of our voting securities. Accordingly, even if we issue additional shares to third parties, Mr. Rodriguez will continue to control at least 40% of our voting securities. This voting concentration may also have the effect of delaying or preventing a change in our management or control or otherwise discourage potential acquirers from attempting to gain control of us. If potential acquirers are deterred, you may lose an opportunity to profit from a possible acquisition. See "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and "Market for Common Equity and Related Stockholder Matters".

 

A significant number of shares are eligible for public sale, potentially depressing our stock price. Under the SEC's Rule 144, shares issued in issuances which are not registered with the SEC generally first become eligible for public resale after six months. Shareholders who are affiliates of us generally may resell only a limited number of their privately acquired shares after six months. After six months, stockholders who are not affiliated with us may resell any number of their privately acquired shares pursuant to Rule 144. The resale of the shares we have privately issued, or the potential for their future public resale, may depress our stock price.

 

Our governing documents and Nevada law may discourage the potential acquisitions of our business. Our Board of Directors may issue additional shares of capital stock and establish their rights, preferences and classes, in most cases without stockholder approval. In addition, we may become subject to anti-takeover provisions found in Section 89.378-78.379 of the Nevada Business Corporation Act which may deter changes in control of our management which have not been approved by our Board of Directors.

 

ITEM 2.  PROPERTIES

 

Our corporate office is located at 310 Fourth Avenue South, Suite 7000, Minneapolis, Minnesota 55415. This office space is leased from an unaffiliated third party on a month to month lease, for a monthly rental of $1,000.

 

On July 2, 2008, we signed a letter agreement to acquire all of the oil and gas producing assets owned by Bedford Energy, Inc. in the East Chandler Field, Lincoln County, Oklahoma. We increased our current interest in the Grace #2 well and acquired working interests in four other producing wells in the East Chandler Field, the Grace #1, Grace #3, Grace #5A and Grace #6 wells.

 

We increased our working interest in the Grace #2 from 2.5% to 7.5%; and increasing our net revenue interest in the Grace #2 to 11.95%. We initially acquired our working interest in the Grace #2 well in June, 2008.  We also acquired acquiring a 10% working interest and 13.825% net revenue interest in the Grace #1, Grace #3, Grace #5A and Grace #6 wells and a 50% working interest in a salt water disposal well and offset and development acreage in the two quarter sections (320 acres)  adjoining the Grace Wells in the East Chandler Field.

 

The table below shows the Company’s working interests in the Grace Wells:

 

Well  

March 31, 2015

and 2014

Working Interest

Grace #1   65.25 %
Grace #2   55.75 %
Grace #3   64.00 %
Grace #5A   52.00 %
Grace #6   58.00 %

 

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We expect to increase our ownership in the Grace Wells. As of March 31, 2015, the working interest owners owe the Company $151,236.  We will file a claim against these working interest owners and foreclose on this claim to increase our ownership.

 

ITEM 3.  LEGAL PROCEEDINGS

 

The Company is not a party to any legal proceedings that would have a material effect on the Company’s operations.

 

ITEM 4.   MINE SAFETY DISCLOSURES (Not applicable)

 

PART II

 

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

(a) Principal Market or Markets

 

Effective with the close of business on June 19, 1997, our Common Stock was delisted from the NASDAQ Small Cap Market. In June of 1997, our Common Stock began trading on the NASD Over-the-Counter Bulletin Board ("OTCBB").  Since April 2010 our Common Stock has traded and continues to trade on the electronic OTCQB and OTCBB market.  Market makers and other dealers provided bid and ask quotations of our Common Stock. We trade under the symbol "AOGN".

 

The table below represents the range of high and low bid quotations of our Common Stock as reported during the reporting period herein. The following bid price market quotations represent prices between dealers and do not include retail markup, markdown, or commissions; hence, they may not represent actual transactions.

 

Per Share Common Stock Bid Prices by Quarter For the Two Most Recent Fiscal Years            
    High     Low  
Quarter Ended March 31, 2015   $ 0.08     $ 0.04  
Quarter Ended December 31, 2014   $ 0.10     $ 0.06  
Quarter Ended September 30, 2014   $ 0.10     $ 0.07  
Quarter Ended June 30, 2014   $ 0.10     $ 0.06  
Quarter Ended March 31, 2014   $ 0.10     $ 0.07  
Quarter Ended December 31, 2013   $ 0.27     $ 0.09  
Quarter Ended September 30, 2013   $ 0.30     $ 0.12  
Quarter Ended June 30, 2013   $ 0.18     $ 0.06  

 

As of June 29, 2015, 16,548,062 shares of our Common Stock were outstanding and the number of holders of record of our Common Stock at that date was approximately 985. However, we estimate that there are a significantly greater number of shareholders because a substantial number of our shares are held in nominee names by brokerage firms.

 

(b) Dividends

 

No dividends on the Common Stock were paid by us during the fiscal year ended March 31, 2015, or the fiscal year ended 2014, nor do we anticipate paying dividends on Common Stock in the foreseeable future. Holders of Common Stock are entitled to receive such dividends as may be declared by our Board of Directors.

-8-

 

(c) Securities Authorized for Issuance Under Equity Compensation Plans.

 

We have not established an Equity Compensation Plan and have not authorized the issuance of any securities under such plan.

 

(d) Preferred Stock.

 

Our Articles of Incorporation authorize us to issue up to 1,000,000 shares of $0.10 par value preferred stock, with such classes, series and preferences as our Board of Directors may determine from time to time. In June 2002, our Board of Directors authorized the issuance of 100 shares of Series A Convertible Preferred Stock (the "Series A Preferred Stock"). Our Board further agreed to issue all of the Series A Preferred Stock to our Chairman and President, Kent Rodriguez, in satisfaction of $500,000 in loans made by Mr. Rodriguez

 

The Series A Preferred Stock accrues dividends at the rate of 8% per annum on the original purchase price for the shares. If declared by the Board of Directors, these dividends are payable quarterly, beginning in September 2002. We are prohibited from paying any dividends on our Common Stock until all accrued dividends are paid on our Series A Preferred Stock.

 

If we liquidate or dissolve, and after payment of our debts, the holders of the Series A Preferred Stock are entitled to a preference payment before we make any distributions to our Common Stockholders. The preference amount is equal to the original purchase price for the Series A Preferred shares plus accrued, but unpaid dividends. As of March 31, 2015, the liquidation value is $532,950.

 

The Series A Preferred Stock is convertible at any time into 40% of the then outstanding shares of Common Stock and securities convertible into Common Stock on a fully diluted basis. However, conversion is limited to the number of shares of Common Stock available for issuance under our articles of incorporation.

 

Regardless of whether or not the Series A Preferred Stock has been converted to our Common Stock, the Series A Preferred Stockholder is entitled to vote, at all times, on an as-if converted basis. The Preferred Stockholder, Mr. Rodriguez, has the right to vote the Series A Preferred Stock together with his other holdings in the Company.

 

In March, 2013, our Board of Directors authorized the issuance of 2,000 shares of Series B Preferred Stock (the "Series B Preferred Stock"). The face amount of share of the Series B Preferred Stock is $1,000. There are currently 1,625 shares of Series B Preferred Stock outstanding. As of March 31, 2015, the liquidation value is $1,625,000,

 

On March 14, 2014, we filed an amendment with the Nevada Secretary of State increasing the interest rate on the Series B Preferred Shares to nine percent (9.00%), effective on April 1, 2014 and changing the payment date to from January 15th of each year to April 1st. The next interest payment on the Series B Preferred Stock will be on April 1, 2016.

 

The Series B Preferred Stock accrues dividends at the rate of 9% per annum on the original purchase price for the shares. If declared by the Board of Directors, these dividends are payable annually, beginning in January 2014. We are prohibited from paying any dividends on our Common Stock until all accrued dividends are paid on our Series B Preferred Stock.  The Series B Preferred Stock ranks junior to the Series A Preferred Stock owned by our President and Chief Executive Officer, as to Dividends and to a distribution of assets in the event of a liquidation of assets.

 

The Holders of Series B Preferred Stock do not have any voting rights and their consent is not required to take any sort of corporate action.

 

RECENT SALES OF UNREGISTERED SECURITIES

 

The Company sold the following unregistered securities between January 1, 2015 and March 31, 2015:

 

In March 2015 the Company issued 85 shares Series B Preferred Stock to an accredited investor for $85,000.

 

In March 2015 the Company issued 1,540,000 shares of Common Stock to pay all of the accrued interest on our Series B Preferred Stock as of March 31, 2015.

 

In March 2015 we issued 500,000 Shares of Common Stock along with $6,000 to extinguish a $150,000 Promissory Note and $90,000 in accrued interest.

 

During the twelve months ended March 31, 2015 and 2014, the Company incurred $135,599 and $24,780 in dividends on Series B preferred stock.  

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All other unregistered securities sold by the Company during the past three years, but prior to January 1, 2015, have been included in the Company's 10-Q filings.

 

All of the unregistered securities sold were issued directly by the Company, and no commissions or fees were paid in connection with any of these transactions. The transactions were private, and the Company endeavored to comply both with Regulation D, and also Section 4(2) of the Securities Act of 1933, as amended, as exemption(s) from registration. The Company exercised reasonable care to assure that the purchasers of the securities are not underwriters and were "accredited investors" under Regulation D and/or sophisticated investors.

 

ITEM 6.  SELECTED FINANCIAL DATA

 

Not  applicable.

 

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

RESULTS OF OPERATIONS AND PLAN OF OPERATION

 

The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes related thereto. The discussion of results, causes and trends should not be construed to infer conclusions that such results, causes or trends necessarily will continue in the future.

 

For the year ended March 31, 2015 compared to the year ended March 31, 2014

 

Revenues

 

Revenues for the year ended March 31, 2015 were $110,371, a decrease of $45,951 or approximately 29% compared to revenue of $156,322 for the year ended March 31, 2014. Revenue from the sale of oil and gas decreased as a result of the lower market price of oil and natural gas.

 

Lease Operating Expenses

 

During the year ending March 31, 2015, our lease operating expenses were $100,060, a decrease of $33,973 or approximately 25% compared to $134,033 for the year ended March 31, 2014.  The decrease was due the completion of the workover costs on the Miller County Arkansas properties.

 

Selling, General, and Administrative Expenses

 

Selling, general and administrative expenses for the year ended March 31, 2015 were $285,534 a decrease of $316,769 or approximately 53% compared to selling, general and administrative expenses of $602,303 during the year ended March 31, 2014.   Selling, general and administrative expenses for 2015 consisted primarily of payroll and related costs of $48,000; legal and accounting fees in the amount of $51,269; facilities costs in the amount of $21,786; investor relations costs of $9,761; travel and entertainment expenses of $49,381; office expenses of $7,377 and consulting fees in the amount of $33,080; financing expenses of $13,895 and licensing fees of $17,184.  The decrease was due primarily from a reduction in legal and accounting fees of $51,269 and in financing expenses of $13,895 during the year ended March 31, 2015 compared to $74,051 and $60,000, respectively for the year ended March 31, 2014.

 

Stock-based Compensation

 

Stock-based compensation for the year ended March 31, 2015 was $24,454, an increase of $24,454 or approximately 100% compared to non-cash compensation of $0 for the year ended March 31, 2014.  This increase was the result of more common stock issuances to outside consultants as payment for services rendered.

-10-

Depreciation, Depletion, and Amortization

 

Depreciation, Depletion, and Amortization were $74,411 for the year ended March 31, 2015 an increase of $11,365 or approximately 18% compared to $63,046 for the year ended March 31, 2014, due to a slight increase in the depletion allowance.

 

Gain on Sale of Property

 

During the year ended March 31, 2015, the Company did not sell any oil and gas properties.

 

Gain on Extinguishment of Debt, Notes Payable and Accrued Interest and Dividends Payable

 

During the year ended March 31, 2015, the Company had a net gain on the extinguishment of debt in the amount of $424,624 as compared with $5,884 for the year ended March 31, 2014. The gain was due to settlement of two promissory notes plus accrued interest.

 

During the year ended March 31, 2015, the Company did not have a gain or loss from the conversion of notes payable and accrued interest, as compared to a loss of $57,050 on the conversion of notes payable and accrued interest for the year ended March 31, 2014.

 

In addition, for the year ended March 31, 2015, the Company had a net gain from the conversion of dividends payable on Preferred B shares of $82,779, an increase of 100% as compared to $0 for the year ended March 31, 2014. We issued 1,540,000 shares of our Common Stock to pay the outstanding dividend payable of $144,379, on the 1,540 outstanding shares of Series B Preferred Stock. The 1,540,000 shares of Common Stock were valued at the market price of $0.04 per share of $61,600, resulting in a one- time net gain of $82,779.

 

Interest Expense, net of Interest Income

 

Interest expense, net of interest income of $43,101 for the year ended March 31, 2015, a decrease of $48,651 or approximately 53%  compared to interest expense, net of $91,752 for the year ended March 31, 2014. This decrease is due to a reduction in the outstanding principal balances of notes payable.

 

Net Profit (Loss)

 

For the reasons stated above, our net profit for the year ended March 31, 2015, was $100,314 an increase of $886,292 or approximately 113% compared to a net loss of $785,978 during the year ended March 31, 2014.

 

Liquidity and Capital Resources

 

Going Concern

 

The March 31, 2015, financial statements have been prepared assuming the Company will continue as a going concern. However, the Company has incurred a loss of $30,898,873 from inception through March 31, 2015, and has a working capital deficiency of $363,453 and stockholders’ equity of $1,690,152, respectively, at March 31, 2015. The Company currently has minimal revenue generating operations and expects to incur substantial operating expenses in order to expand its business. As a result, the Company expects to incur operating losses for the foreseeable future.  The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

-11-

 

Our cash and cash equivalents were $135,713 on March 31, 2015, compared to $223,914 on March 31, 2014. We met our liquidity needs through the issuance of our common stock, preferred stock, and notes payable for cash and from the revenue derived from our oil and gas operations.

 

We need to raise additional capital during the fiscal year, but currently have not acquired sufficient additional funding. Our ability to continue operations as a going concern is highly dependent upon our ability to obtain immediate additional financing, or generate revenues from our acquired oil and gas leasehold interest, and to achieve profitability, none of which can be guaranteed. Unless additional funding is obtained, it is highly unlikely that we can continue to operate. There is no assurance that even with adequate financing or combined operations, we will generate revenues and be profitable.

 

Ultimately, our success is dependent upon our ability to generate revenues from our acquired oil and gas leasehold interests.

 

Operating activities

 

Net cash used by operating activities for the year ended March 31, 2015 was $230,343, compared to $381,594 used in the year ended March 31, 2014.

 

The Company had a net profit of $100,314 for the year ended March 31, 2015, compared to a net loss of $785,978 for the year ended March 31, 2014.  Net accounts receivable for the year ended March 31, 2015 were $33,344 compared to $54,226 for the year ended March 31, 2014.

 

Investing activities

 

For the year ended March 31, 2015 we invested $120,000 for the purchase of the Kensington Energy Assets, and repayments on notes receivable of $7,142.

 

Financing activities

 

Our financing activities for the year ended March 31, 2015 provided cash of $255,000 as compared to $611,200 for the year ended March 31, 2014. We plan to raise additional capital during the coming fiscal year.  Cash generated by financing activities primarily consisted of $260,000 from the issuance of Series B Preferred Stock and $60,000 from the issuance of two (2) Promissory Notes.

 

Critical Accounting Policies

 

The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based on information available. These estimates and assumptions affect the reporting amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A summary of the significant accounting policies is described in Note 1 to the financial statements.

 

Recently enacted accounting standards

 

During the year, The Financial Accounting Standards Board (“FASB”) has issued various pronouncements, none of which apply to the current financial statements.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Material Commitments

 

We have no material commitments during the next twelve (12) months.

-12-

Purchase of Significant Equipment

 

During the twelve months ended March 31, 2015 and March 31, 2014, we used $0 for the purchase of equipment.

 

ITEM 8.   FINANCIAL STATEMENTS.

 

Our audited Financial Statements begin on page F-1.

 

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

ITEM 9A.  CONTROLS AND PROCEDURES

 

 Our principal executive and financial officers, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of March 31, 2012, have concluded that as of March 31, 2015, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure, and (ii) is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

 

There have been no changes in our internal controls or in other factors that could affect these controls during or subsequent to the end of the period covered by this report.

-13-

 

Management’s Annual Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance with respect to the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures which:

 

● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

 

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

 

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2015 based upon the criteria set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

This Annual Report does not include an attestation report of our registered public accounting firm with respect to internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission which permit us to provide only our management’s report in this Annual Report.

 

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our internal control over financial reporting as of March 31, 2015, the end of the period covered by this Annual Report on Form 10-K for the year ended March 31, 2015. In making this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework, published in 1992. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting were effective during the 2015 fiscal year at the reasonable assurance level, as we had personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP. As a result we were able to test whether our financial activity level controls or our information technology general controls were operating sufficiently to identify a deficiency, or combination of deficiencies, that may result in a reasonable possibility that a material misstatement of the financial statements would be prevented or detected on a timely basis. Management has reviewed the financial statements and underlying information included in this Annual Report on Form 10-K in detail and believes the procedures performed are adequate to fairly present our financial position, results of operations and cash flows for the periods presented in all material respects.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting identified during our year ended March 31, 2015, which have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B.  OTHER INFORMATION

 

None.

PART III

 

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Our Directors and Executive Officers are shown below:

 

Name   Age   Position
Kent Rodriguez   55   Chief Executive Officer, President, Secretary, and Principal Financial Officer
Jill Allison   51   Director
Douglas Barton   75   Director
Rene Haeusler   60   Director

 

-14-

 

Each Director is serving a term of office, which will continue until the next annual meeting of shareholders and until the election and qualification of his respective successor.

 

KENT RODRIGUEZ

 

Mr. Rodriguez joined the Company as Chief Executive Officer, Secretary, and Principal Financial Officer in May 2009. Since 1995, he has been the Managing Partner of Weyer Capital Partners, a Minneapolis-based venture capital corporation. From 1985 to 1995, he was employed by the First National Bank of Elmore, Elmore, Minnesota, in various capacities. He has a B.A. degree in Geology from Carleton College, and an Executive MBA from the Harvard Business School.

 

JILL ALLISON

 

Ms. Allison joined the Company as a Director in May 2009. She has over 20 years of diversified management experience in business development and technology commercialization. Prior to joining Avalon, Ms. Allison managed a technology strategy consulting practice with focus in the market convergence of physical and IT security industries. Her venture development background includes market leadership positions with Monsanto, Iridian Technologies, Pinkertons and Cylink Corporation. She holds a B.A. in Economics from Gustavus Adolphus College; a Master's in International Management (MIM) in Marketing from the American Graduate School of International Management (Thunderbird), Glendale, AZ; and an MBA in Strategic and Entrepreneurial Management from the Wharton School of the University of Pennsylvania, where she focused on strategic alliances and management of technology.

 

DOUGLAS BARTON

 

Mr. Barton has served as a Director of the Company since May 2009. From 1987 to the present, he has been the President and sole owner of Venture Communications, Inc., a private promotion, development, and marketing consulting firm. He has a B.S. degree in Economics/History from the University of Minnesota.

 

RENE HAUSLER

 

Mr. Häusler has served as a Director of the Company since August 2010.  He is a Political and Business Consultant, is Chairman of the Board and Managing Director of all companies of the L’Avenir Group.  He also serves as Chairman of the Board of Bowl Construction AG , Member of the Board of ProgressNow!invest AG , a SIX-listed private equity investment company, and is a member of the Board of Directors of ThaiSwiss SME-Industrial Center Ltd ., Pranburi, Thailand, and of Sempre-Automaten AG and Theracon AG in Switzerland. His background includes Assistant to the Managerial Committee and Head of several departments for Bank Sogenal.  He also served as a member of the military-diplomatic Swiss delegation to the Neutral Nations Supervisory Commission (NNSC) in Korea, as liaison officer to the UN High Command and the Government of South Korea.  Mr. Häusler has a Master’s degree in history, political science and constitutional law from the University of Zurich/Switzerland. From 1995 – 1999 he was also a guest lecturer at the Chulalongkorn University in Bangkok (Thailand). He has published two books and numerous articles on political psychology, economy and stock markets.   Mr. Häusler is an experienced equity investment professional with a wide range of public company and private equity expertise in international markets for commodities, mineral exploration, biotechnology, and software.

 

The Company's Directors will serve in such capacity until the next annual meeting of the Company's shareholders and until their successors have been elected and qualified. There are no family relationships among the Company's officers and directors, nor are there any arrangements or understanding between any of the directors or officers of the Company or any other person pursuant to which any officer or director was or is to be selected as an officer or director. The Directors took action sixteen (16) times by written consent during the fiscal year ended March 31, 2015.

-15-

In 2009, the Board of Directors established a Compensation Committee. It is currently comprised of Messrs. Barton and Häusler. The Compensation Committee held one (1) meeting in fiscal 2015.

 

In May 2009, the Board of Directors established an Audit Committee. It is currently comprised of Messrs. Barton and Häusler. The Audit Committee held one (1) meeting in fiscal 2015.

 

We have adopted a Code of Ethics which is designed to ensure that our directors and officers meet the highest standards of ethical conduct. The Code of Ethics requires that our directors and officers comply with all laws and other legal requirements, conduct business in an honest and ethical manner and otherwise act with integrity and in our best interest.

 

Involvement in Legal Proceedings

 

We are not aware that any of our officers and directors were, or have been involved in any material legal proceedings which would have any effect upon the Company.

 

Compliance with Section 16(a) of the Securities Exchange Act of 1934

 

Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires our officers and directors and persons owning more than ten (10%) percent of our Common Stock to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"). Additionally, Item 405 of Regulation S-B under the 34 Act requires us to identify in our Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent fiscal year or prior fiscal years. Given these requirements, we have the following report to make under this section. None of our officers or directors, and all persons owning more than ten percent of its shares have filed the subject reports, if required, on a timely basis during the past fiscal year.

 

ITEM 11.  EXECUTIVE COMPENSATION

 

The following table sets forth information concerning the compensation for services in all capacities rendered to us for the year ended March 31, 2015, of our Chief Executive Officer and our other executive officers.  We did not have any corporate officers whose annual compensation exceeded $100,000 in the fiscal year ended March 31, 2015.

 

SUMMARY COMPENSATION TABLE

 

 

Name and

Principal

Position

 

 

 

Year

 

Salary

($)

   

Bonus

($)

   

Stock

Awards

($)

   

Option

Awards

($)

   

Non-Equity

Incentive Plan

Compensation

($)

   

Nonqualified

Deferred

Compensation

Earnings

($)

   

All Other

Compensation

($) (2)

   

Total

($)

 
Kent Rodriguez   2015   $ 48,000     $ -     $ -     $ -     $ -     $ -     $ 40,000     $ 88,000 (2)(1)
CEO and President   2014   $ 48,000     $ -     $ -     $ -     $ -     $ -     $ 40,000     $ 88,000 (2)(1)
    2013   $ 48,000     $ -     $ -     $ -     $ -     $ -     $ 40,000     $ 88,000 (2)(1)

 

(1)  Mr. Rodriguez owns the 100 shares of Preferred Stock outstanding.  These shares pay an 8% dividend.  We paid Mr. Rodriguez $65,000 in 2015 and $38,800 in 2014.  The balance due Mr. Rodriguez as of March 31, 2015 is $32,950.

 

(2)  In 2015, Mr. Rodriguez was under an employment agreement dated April 1, 2014 that expired on March 31, 2015, pursuant to which he was compensated at an annual rate of 48,000. The Company extended the agreement for another year. During the fiscal year ending March 31, 2015, we paid Mr. Rodriguez $44,500, and accrued $48,000.  During the fiscal year ending March 31, 2014, we paid Mr. Rodriguez $42,400, and accrued $48,000, The balance due Mr. Rodriguez as of March 31, 2014 is $211,317.

-16-

 

Outstanding Equity Awards at Fiscal Year-End as of March 31, 2015

 

    Option Awards     Stock Awards  
Name  

Number of Securities Underlying Unexercised Options

(#)

Exercisable

   

Number of Securities Underlying Unexercised Options

(#)

Nonexercisable

   

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options

(#)

   

Option Exercise Price

($)

    Option Expiration Date    

Number of Shares or Units of Stock That Have Not Vested

(#)

   

Market Value of Shares or Units of Stock That Have Not Vested

($)

   

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested

(#)

   

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested

($)

   
None     -       -       -       -       -       -       -       -       -    
                                                                                 

 

 Director Compensation

 

Name  

Fees Earned

or Paid in

Cash

($)

   

Stock

Awards

($)

   

Option

Awards

($)

   

Non-Equity

Incentive Plan

Compensation

($)

   

Nonqualified

Deferred

Compensation

Earnings

($)

   

All Other

Compensation

($)

   

Total

($)

 
Kent Rodriguez   -     $ -     -     -     -     -     -  
Jill Allison   $ -     $ 6,000     -     -     -     -     6,000  
Douglas Barton   $ -     6,000     -     -     -     -     6,000  
Rene Häusler   $ -     $ 6,000     $ -     $ -     $ -     $ -     $ 6,000  

 

EMPLOYMENT AGREEMENTS

 

The Company has an employment agreement with its President.  The employment agreement provides for salaries and benefits.  In addition to salary and benefits provisions, the agreement includes defined commitments should the employer terminate the employee with or without cause.

-17-

 

KENT RODRIGUEZ

 

In 2014, Mr. Rodriguez was under an employment agreement dated April 1, 2011 that expired on March 31, 2015, pursuant to which he was compensated at an annual rate of $48,000. We extended this agreement for another year.  During the fiscal year ended March 31, 2015, we paid Mr. Rodriguez $44,500, and accrued $48,000.  During the fiscal year ended March 31, 2014, we paid Mr. Rodriguez $42,400, and accrued $48,000. The balance due to Mr. Rodriguez as of March 31, 2015 is $211,317.

 

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth certain information regarding ownership of our Common Stock as of March 31, 2015 by (i) each person known by us to be the beneficial owner of more than five (5%) percent of our outstanding Common Stock; (ii) each director of our Company; and (iii) all executive officers and directors of our Company as a group. As of March 31, 2015, we had a total of 16,548,062 common shares issued and outstanding.

 

Name of Beneficial Owner   Amount of and Nature Beneficial ownership     % of Outstanding Common stock  
Kent Rodriguez (1)            
310 Fourth Avenue South, Suite 7000            
Minneapolis, MN 55415     11,036,048       40.03 %
                 
Douglas Barton                
310 Fourth Avenue South, Suite 7000                
Minneapolis, MN 55415     60,667     0.37 %
                 
Jill Allison                
310 Fourth Avenue South, Suite 7000                
Minneapolis, MN 55415     60,000     0.36 %
                 
Rene Häusler (2)                
310 Fourth Avenue South, Suite 7000                
Minneapolis, MN 55415     193,565     1.17 %
               
IP Technology Exchange, Inc.              

3802 Spectrum Blvd, Suite 128E

Tampa, FL 33612

    1,920,000     11.60 %
               
Recon Technology, Inc              
9 Fulin Road              
Bejing, 100107 China     2,800,000         16.92 %
               
Maerki Baumann & Company AG (3)                
Dreikonigstrasse 6              
CH -8002, Zurich, Switzerland     3,033,937     18.33 %
               
CEDE & Co.              
P.O. Box 222                
Bowling Green Station          

New York, NY 10274

    3,898,108       31.52  %      

 

(1)   Includes 11,042,031 shares of Common Stock issuable upon the conversion of 100 shares of Series A Preferred Stock.
(2)   Includes 13,334 shares owned by L’Avenir Finanz an affiliate of Mr. Häusler

(3)   Maerki Baumann & Company AG, holds the shares as custodian on behalf of fourteen (14) of their clients.

 

-18-

 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

Preferred Stock

 

The 100 shares of Series A Preferred Stock, issued to an officer/director as payment for $500,000 in promissory notes, are convertible into the number of shares of common stock sufficient to represent 40 percent (40%) of the fully diluted shares outstanding after their issuance. The Series A Preferred Stock pays an eight percent (8%) dividend. The dividends are cumulative and payable quarterly. The Series A Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. The Series A Preferred Stock provides for voting rights on an "as converted to common stock" basis.

 

During the years ended March 31, 2015 and 2014, the Company incurred $40,000 in Class A preferred stock dividends, respectively. As of March 31, 2015, there is $32,950 in accrued preferred stock dividends payable.

 

The holders of the Series A Preferred Stock have the right to convert each share of preferred stock into a sufficient number of shares of common stock to equal 40% of the then fully-diluted shares outstanding. Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of shares of common stock issuable upon exercise, conversion or exchange of outstanding options, and warrants. In the event that the Company does not have an adequate number of shares of Common Stock authorized, upon a conversion request, only the maximum allowable number of shares of Series A preferred stock shall convert into Common Stock and the remaining shares of Series A preferred Stock shall convert upon lapse of the applicable restrictions.

 

Employment Agreements

 

KENT RODRIGUEZ

 

In 2014, Mr. Rodriguez was under an employment agreement dated April 1, 2011 that expired on March 31, 2015, pursuant to which he was compensated at an annual rate of 48,000. We extended this agreement for another year.  During the fiscal year ending March 31, 2015, we paid Mr. Rodriguez $44,500, and accrued $48,000.  During the fiscal year ending March 31, 2014, we paid Mr. Rodriguez $42,400, and accrued $48,000. The balance due Mr. Rodriguez as of March 31, 2015 is $211,317.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

1. AUDIT FEES.

 

Our audit fees for the years ended March 31, 2015 and 2014 were as follows:

 

2015   2014
$ 52,500   $ 52,500
         

 

-19-

 

2. TAX FEES.

 

Our tax return fees for the years ended March 31, 2015 and 2013 2014 were as follows:

 

2015   2014
$ -   $ -
         

 

3. ALL OTHER FEES.

 

2015   2014
$ -   $ -
         

 

PART IV

 

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

Exhibit

Number

  Description
     
3.1   Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Registration Statement on Form SB-2, Registration No. 33-74240C).*
3.2   Restated Bylaws (Incorporated by reference to Exhibit 3.2 to Registration Statement on Form SB-2, Registration No. 33-74240C). *
3.3   Articles of Incorporation for the State of Nevada. (Incorporated by reference to Exhibit 2.2 to Form 10-KSB filed February 2000) *
3.4   Articles of Merger for the Colorado Corporation and the Nevada Corporation (Incorporated by reference to Exhibit 3.4 to Form 10-KSB filed February 2000) *
3.5   Bylaws of the Nevada Corporation (Incorporated by reference to Exhibit 3.5 to Form 10-KSB filed February 2000) *
4.1   Specimen of Common Stock (Incorporated by reference to Exhibit to Registration Statement on Form SB-2, Registration No. 33-74240C). *
10.1   Employment Agreement between the Company and Kent Rodriguez dated April 1, 2011 *
10.2   Promissory Note between the Company and Peter Messerli  dated January 6, 2011, in the amount of $200.000 *
10.3   Promissory Note between the Company and Maerki Baumann & Company AG dated January 11, 2011, in the amount of $250,000  *

10.4

 

10.5

 

Promissory Note between the Company and Maerki Baumann & Company AG dated January 27, 2012, in the amount of $200,000 *

Certificate of Designation Series B Preferred Stock *

31.1   Certification
32.1   Certification

 

* Incorporated by reference to a previously filed exhibit or report.

-20-

 

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.

 

  Avalon Oil & Gas, Inc.  
       
Date: August 14, 2015 By: /s/ Kent Rodriguez          
    Kent Rodriguez  
   

Chief Executive Officer, President,

Secretary and Principal Financial Officer

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Company in the capacities and on the dates indicated.

 

Date: August 14, 2015 By: /s/ Kent Rodriguez          
    Kent Rodriguez  
   

Chief Executive Officer, President,

Secretary and Principal Financial Officer

 

 

 

Date: August 14, 2015 By: /s/ Jill Allison          
    Jill Allison  
    Director  

 

 

Date: August 14, 2015 By: /s/ Douglas Barton          
    Douglas Barton  
    Director  

 

 

Date: August 14, 2015 By: /s/ Rene Häusler  
    Rene Häusler  
    Director  

 

-21-

 

    Page
Report of Independent Registered Public Accounting Firm F-2
Consolidated Balance Sheets F-3
  Consolidated Balance Sheets (continued) F-4
Consolidated Statements of Operations F-5
Consolidated Statement of Cash Flows F-6
Consolidated Statement of Cash Flows (Continued) F-7
  Statement of Changes in Shareholders’ Deficit F-8
   Notes to Consolidated Financial Statements  F-9

 

 

 

F-1

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Shareholders of Avalon Oil & Gas, Inc.

 

We have audited the accompanying consolidated balance sheets of Avalon Oil & Gas, Inc. (the “Company”) as of March 31, 2015 and 2014, and the related consolidated statements of operations, changes in shareholders’ deficit, and cash flows for each of the years in the two-year period ended March 31, 2015. Avalon Oil & Gas, Inc.’s management is responsible for these consolidate financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Avalon Oil & Gas, Inc. as of March 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company has incurred significant losses from operations since its inception and has a working capital deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

/s/Bernstein & Pinchuk LLP

 

Bernstein & Pinchuk LLP

New York, New York
August 14, 2015  
   

 

 

 

F-2

 

Avalon Oil & Gas, Inc.
Consolidated Balance Sheets
           
           
    

March 31,

2015

    

March 31,

2014

 
           
Assets          
           
Current Assets:          
  Cash and cash equivalents  $135,713   $223,914 
  Accounts receivable, net of allowance for doubtful          
    accounts of $0 and $0   33,344    54,226 
  Notes receivable   11,429    15,714 
  Deposits and prepaid expenses   368,946    302,057 
  Receivables from joint interests, net of allowance          
    for doubtful accounts of $131,236 and $136,873   20,000    20,000 
           
Total current assets   569,432    615,911 
           
  Notes receivable   —      2,857 
  Property and equipment, net   18,125    —   
  Unproven oil & gas properties   1,867,183    1,867,183 
  Producing oil & gas properties, net   239,283    149,477 
  Intellectual property rights, net   53,234    95,815 
           
Total Assets  $2,747,257   $2,731,243 
           
The accompanying notes are an integral part of these financial statements.

F-3

 

Avalon Oil & Gas, Inc.
Consolidated Balance Sheets (Continued)
           
           
    

March 31,

2015

    

March 31,

2014

 
           
Liabilities and Stockholders' Equity          
           
Current Liabilities:          
  Accounts payable and accrued liabilities   433,751    579,536 
  Accrued payroll - related parties   211,317    207,817 
  Dividends payable   32,950    66,730 
  Accrued liabilities to joint interest   10,567    11,596 
  Notes payable - related party   20,000    26,000 
  Notes payable   224,300    —   
    —      —   
Total current liabilities   932,885    891,679 
           
  Notes payable, net of discount   —      514,300 
  Accrued asset retirement obligation (ARO) liability   124,220    112,927 
           
Total Liabilities   1,057,105    1,518,906 
           
Commitments and contingencies          
           
Stockholders' Equity          
           
          
 Preferred stock, Series A, $.10 par value,  1,000,000 shares authorized; 100 shares issued and outstanding as of March 31, 2015 and 2014, liquidation  preference of $532,950 and $541,950 as of March 31, 2015 and 2014   10    10 
 Preferred stock, Series B, $.10 par value, 2,000 shares authorized; 1,625 shares issued and 1,300 shares issued and outstanding  as of March 31, 2015 and 2014, liquidation preference of $1,625,000 and $1,324,780 as of March 31, 2015 and 2014   164    130 
 Common stock, $.001 par value: 200,000,000 shares authorized 16,548,062 and 11,658,062 shares issued and outstanding at March 31, 2015 and March 31, 2014, respectively   16,549    11,659 
Additional paid in capital   32,572,302    32,024,126 
Accumulated deficit   (30,898,873)   (30,823,588)
           
Total Stockholders' Equity   1,690,152    1,212,337 
           
Total Liabilities and Stockholders' Equity  $2,747,257   $2,731,243 
           
The accompanying notes are an integral part of these financial statements.

F-4

 

Avalon Oil & Gas, Inc.
Consolidated Statements of Operations
 
       
    For the year ended    For the year ended 
    March 31, 2015    March 31, 2014 
           
           
Oil & Gas Sales  $110,371   $156,322 
           
Operating expenses:          
  Lease operating expense, severance taxes          
    and ARO accretion   100,060    134,033 
  Selling, general and administrative expenses   285,534    602,303 
  Stock based compensation   24,454    —   
  Depreciation, depletion, and amortization   74,411    63,046 
           
Total operating expenses   484,459    799,382 
           
Operating loss   (374,088)   (643,060)
           
Other income (expense):          
           
  Gain on extinguishment of debt   424,624    5,884 
  (Loss) on conversion of notes payable   —      (57,050)
  Gain on conversion of dividends payable   82,779    —   
  Other miscellaneous income   10,100    —   
  Interest expense, net   (43,101)   (91,752)
           
Total other income (expense)   474,402    (142,918)
           
Gain (loss) before income tax   100,314    (785,978)
           
Provision for income taxes   —      —   
           
Net Income (loss)  $100,314   $(785,978)
           
Preferred stock dividends  $(175,599)  $(64,780)
           
Net loss attributable to common shareholders  $(75,285)  $(850,758)
           
           
Net loss per share - basic and diluted  $(0.006)  $(0.085)
           
Weighted average shares outstanding - basic and diluted   12,722,363    10,009,185 
           
The accompanying notes are an integral part of these financial statements.

 

F-5

 

Avalon Oil & Gas, Inc.
Consolidated Statement of Cash Flows
       
       
    For the year ended    For the year ended 
    March 31, 2015    March 31, 2014 
           
Cash flows from operating activities:          
Net income (loss)  $100,314   $(785,978)
Adjustments to reconcile net income (loss) to net cash used          
 in operating activities:          
   Stock based compensation   24,454    262,001 
   Gain on extinguishment of debt   (424,624)   (5,884)
   Gain (loss) on conversion of debt   —      57,050 
   Gain on conversion of dividends payable   (82,779)   —   
   Stock issued for reduction of interest on notes payable   176,959    —   
   Stock issued for licensing fees   15,000    —   
   Depreciation   4,532    —   
   Depletion   27,298    20,459 
   Depreciation and ARO liability   2,896    2,896 
   Amortization of intangible assets   42,581    42,587 
 Net change in operating assets and liabilities:          
   Accounts receivable   20,882    (1,559)
   Accounts payable and other accrued expenses   (143,149)   11,568 
   Dividends payable   —      —   
   Due to related party   (6,000)   5,000 
   Asset retirement obligation accretion   11,293    10,266 
           
Net cash (used) in operationg activities   (230,343)   (381,594)
           
Cash flows from investing activities:          
 Deposit on the purchase of additional assets   22,657    (142,057)
 Purchase of property and equipment   (22,657)   —   
 Acquisition of oil producing properties   (120,000)   —   
 Principle payments received on notes receivable   7,142    6,434 
           
Net cash (used) in investing activities   (112,858)   (135,623)
           
Cash flows from financing activities:          
 Payments on notes payable   —      —   
 Proceeds from notes payable   60,000    —    
 Common stock issued for cash   —      300,000 
 Preferred stock B issued for cash   260,000    350,000 
 Dividends paid on preferred stock   (65,000)   (38,800)
           
Net cash provided by financing activities   255,000    611,200 
           
The accompanying notes are an integral part of these financial statements.

F-6

 

Avalon Oil & Gas, Inc.
Consolidated Statement of Cash Flows (Continued)
 
       
    For the year ended    For the year ended 
    March 31, 2015    March 31, 2014 
           
Net (decrease) increase in cash and cash equivalents   (88,201)   93,983 
           
Cash and cash equivalents at beginning of the year   223,914    129,931 
           
Cash and cash equivalents at end of the year  $135,713   $223,914 
           
Supplemental disclosures of cash flow information:          
                                     Cash paid during the period for:          
                                                                            Interest  $8,500   $72,000 
                                                                            Taxes  $—     $—   
Common stock issued in exchange for consulting          
 services  $99,000   $262,001 
           
Common stock issued in exchange for licenses  $15,000   $262,001 
           
Common stock issued for conversion of note payable,          
 accrued interest, and assumption of debt  $52,500   $109,007 
           
Common stock issued for the conversion of dividends payable  $61,600   $262,001 
           
Gain (Loss) on estinguishment of debt  $424,624   $5,884 
           
Preferred stock issued in exchange for consulting          
 services  $15,000   $262,001 
           
Preferred stock issued for conversion of note payable,          
 accrued interest, and assumption of debt  $50,000   $600,000 
           
The accompanying notes are an integral part of these financial statements.

 

F-7

 

AVALON OIL AND GAS, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
(Restated to reflect June 2012 300 to 1 reverse stock split)
                              
    

Preferred Stock,

Series A

    

Preferred Stock,

Series B

   Common Stock      
    Shares    Par Value    Shares    Par Value    Shares    Par Value    Additional Paid-In Capital      Retained      
Balance at March 31, 2013   100   $10    150   $15    6,208,062   $6,209   $30,408,684     $(29,972,830)  $442,088 
                                                
                                                
Preferred stock issued for common stock           200    20    (2,000,000)   (2,000)   1,980          —  
Preferred stock issued for conversion of notes payable           600    60            599,940          600,000 
Preferred stock issued for cash           350    35            349,965          350,000 
Common stock issued for conversion of note payable and assumption liabilities                   1,050,000    1,050    107,957          109,007 
Common stock issued for consulting services                   3,100,000    3,100    258,900          262,000 
Common stock issued for cash                   3,300,000    3,300    296,700          300,000 
                                         
Preferred Dividends                                 (64,780)   (64,780)
Net loss                                (785,978)  $(785,978)
Balance at March 31, 2014   100   $10    1,300   $130    11,658,062   $11,659   $32,024,126     $(30,823,588)  $1,212,337 
                                                
                                                
Preferred shares issued in exchange for notes payable           50    5            49,995          50,000 
Common stock issued for consulting services                   200,000    200    13,800          14,000 
Preferred stock issued for cash           260    27            259,973          260,000 
Preferred stock issued in exchange for consulting services           15    2            14,998          15,000 
Common stock issued for licenses                   300,000    300    14,700          15,000 
Common stock issued for consulting services                   1,700,000    1,700    83,300          85,000 
Common stock issued in exchange for notes payable                   1,150,000    1,150    51,350         52,500 
Common stock issued in exchange for dividends payable                   1,540,000    1,540    60,060         61,600 
Preferred Dividends                                        (175,599)   (175,599)
Net income   —                                100,314   $100,314 
Balance at March 31, 2015   100   $10    1,625   $164    16,548,062   $16,549   $32,572,302     $(30,898,873)  $1,690,152 
                                                
The accompanying notes are an integral part of these financial statements.

 

F-8

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Operations

 

Avalon Oil & Gas, Inc. (the "Company") was originally incorporated in Colorado in April 1991 under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs" which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S. Bankruptcy Code. In May, 1999, we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. On July 22, 2005, the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares par value of $0.001, and engage in the acquisition of producing oil and gas properties.  On November 16, 2011, a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001.

 

On June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned.  The reverse split was effective on July 23, 2012.   On September 28, 2012, we held a special meeting of Avalon’s shareholders and approved an amendment to the Company’s Articles of Incorporation such that the Company would be authorized to issue up to 200,000,000 shares of common stock.  We filed an amendment with the Nevada Secretary of State on April 10, 2013, to increase our authorized shares to 200,000,000.

 

The Company is currently in the process of raising funds to acquire oil and gas properties and related oilfield technologies, which the Company plans to develop into commercial applications.

 

On September 22, 2007 the Company entered into an agreement with respect to its purchase of a 75.6% interest in Oiltek, Inc. (Oiltek) for $50,000 and the right of Oiltek to market Avalon's intellectual property.

 

On March 19, 2014, the Company formed Weyer Partners, LLC, (“Weyer”) a one hundred percent (100%) wholly owned Minnesota Corporation. Weyer Partners, LLC, was formed to operate oil and gas properties in Oklahoma and Texas. Weyer is consolidated in these financial statements.

 

On May 9, 2014, the Company formed AFS Holdings, Inc., (“AFS”) a one hundred percent (100%) wholly owned Nevada Corporation. AFS Holding, Inc., was formed to leverage the Company’s relationship with IP TechEx, and market technology licensed from IP TechEx. AFS is consolidated in these financial statements.

F-9

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Principles of consolidation

 

The consolidated financial statements include the accounts of the Company and the Company’s subsidiary’s Oiltek, Inc., AFS Holdings, Inc., and Weyer Partners, LLC. All significant inter-company items have been eliminated in consolidation.

 

Going Concern

 

The March 31, 2015, consolidated financial statements have been prepared assuming the Company will continue as a going concern. However, the Company has incurred a loss of $30,898,873 from inception through March 31, 2015, and has a working capital deficiency of $363,453 and stockholders’ equity of $1,690,152 as of March 31, 2015. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The Company currently has minimal revenue generating operations and expects to incur substantial operating expenses in order to expand its business. As a result, the Company expects to incur operating losses for the foreseeable future.  The Company will continue to seek equity and debt financing to meet our operating losses. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

 

Basis of Accounting

 

The Company's financial statements are prepared using the accrual method of accounting. Revenues are recognized when earned and expenses when incurred.

F-10

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist primarily of cash on deposit, certificates of deposit, money market accounts, and investment grade commercial paper that are readily convertible into cash and purchased with original maturities of three months or less. The Company maintains its cash balances at several financial institutions. Accounts at the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000.

 

Fair Value of Financial Instruments

 

The Company's financial instruments are cash and cash equivalents, accounts receivable, accounts payable, notes payable, notes receivable and long-term debt. The recorded values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The recorded values of notes payable, notes receivable and long-term debt approximate their fair values, as interest approximates market rates.

 

Accounts Receivable and Receivables from the Joint Interest

 

Management periodically assesses the collectability of the Company's accounts receivable and receivables from the Joint Interest. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company had an allowance for receivables from the Joint Interest of $131,236 and $136,873 for the years ended March 31, 2015 and 2014.

 

Oil and Natural Gas Properties

 

The Company follows the full cost method of accounting for natural gas and oil properties.  Under the full cost concept, all costs incurred in acquiring, exploring, and developing properties cost center are capitalized when incurred and are amortized as mineral reserves in the cost center are produced, subject to a limitation that the capitalized costs not exceed the value of those reserves.  The unamortized costs relating to a property that is surrendered, abandoned, or otherwise disposed of are accounted for as an adjustment of accumulated amortization, rather than as a gain or loss that enters into the determination of net income, until all of the properties constituting the amortization base are disposed of, at which point gain or loss is recognized. All acquisition, exploration, and development costs are capitalized. The Company capitalizes all internal costs, including: salaries and related fringe benefits of employees directly engaged in the acquisition, exploration and development of natural gas and oil properties, as well as other identifiable general and administrative costs associated with such activities. During the year ended March 31, 2014 no acquisition costs were capitalized.  During the year ended March 31, 2015, we capitalized $120,000 for the purchase of the Kensington Energy Assets. Oil and natural gas properties are reviewed for recoverability at least annually or when events or changes in circumstances indicate that its carrying value may exceed future undiscounted cash inflows. As of March 31, 2015 and 2014, the Company had not identified any such impairment.

F-11

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Property and Equipment, net

 

Property and equipment is reviewed on an annual basis for impairment and as of March 31, 2015, the Company had not identified any such impairment. Repairs and maintenance are charged to operations when incurred and improvements and renewals are capitalized.

 

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method for financial reporting purposes and accelerated methods for tax purposes.

 

Their estimated useful lives are as follows:

 

            Office Equipment:  5-7 Years

 

Asset Retirement Obligations

 

In accordance with the provisions of Financial Accounting Standards Board “FASB” Accounting Standard Codification “ASC” 410-20-15, “Accounting for Asset Retirement Obligations”, the Company records the fair value of its liability for asset retirement obligations in the period in which it is incurred and a corresponding increase in the carrying amount of the related long live assets. Over time, the liability is accreted to its present value at the end of each reporting period, and the capitalized cost is depreciated over the useful life of the related assets. Upon settlement of the liability, the Company will either settle the obligation for its recorded amount or incur a gain or loss upon settlement. The Company's asset retirement obligations relate to the plugging and abandonment of its oil properties.

 

Intellectual Property Rights, net

 

The cost of licensed technologies acquired is capitalized and will be amortized over the shorter of the term of the licensing agreement or the remaining life of the underlying patents.

 

The Company evaluates recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that intangible assets carrying amount may not be recoverable. Such circumstances include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of cost significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the assets against the estimated undiscounted future cash flows associated with it.

 

There were not any impairment losses for the fiscal years ended March 31, 2015 and 2014.

 

Should the sum of the expected cash flows be less than the carrying amount of assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying amount of the assets, exceed fair value. Estimated amortization of intangible assets over the next five years is as follows:

 

March 31,      
       
2016   $ 42,587  
2017     10,647  
    $ 53,234  
         

 

F-12

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

Stock Based Compensation

 

Share awards granted to employees and independent directors are accounted for under ASC 718, "Share-Based Payment". ASC 718-10 eliminates accounting for share-based compensation transaction using the intrinsic value method and requires instead that such transactions be accounted for using a fair-value-based method. The Company has elected to adopt the provisions of ASC 718-10 effective January 1, 2006, under the modified prospective transition method, in which compensation cost was recognized beginning with the effective date (a) based on the requirements of ASC 718-10 for all share-based payments granted after the effective date and (b) based on the requirements of ASC 718-10 for all awards granted to employees prior to the effective date of ASC 718-10 that remain unvested on the effective date.

 

The Company records share-based compensation expense for awards granted to non-employees in exchange for services at fair value in accordance with the provisions of ASC 505-50, "Equity Based" payment to non-employees. For the awards granted to non-employees, the Company will record compensation expenses equal to the fair value of the share options at the measurement date, which is determined to be the earlier of the performance commitment date or the service completion date.

 

Warrants

 

The value of warrants issued is recorded at their fair values as determined by use of a Black Scholes Model at such time or over such periods as the warrants vest.

 

Loss per Common Share

 

ASC 260-10-45, “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 are 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.  In addition, the Company had a net loss during current period so dilutive securities would decrease negative EPS and have an anti-dilutive effect.

 

Income Taxes

 

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial   statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, 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 income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

ASC 740-10-25, “Accounting for Uncertainty in Income Taxes”, is intended to clarify the accounting for uncertainty in income taxes recognized in a company's financial statements and prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

Under ASC 740-10-25, evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

F-13

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

 

The adoption of ASC 740-10-25 at January 1, 2007 did not have a material effect on the Company's financial position.

 

Revenue Recognition

 

In accordance with the requirements ASC topic 605 "Revenue Recognition", revenues are recognized at such time as (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller's price to the buyer is fixed or determinable and (4) collectability is reasonably assured. Specifically, oil and gas sales are recognized as income at such time as the oil and gas are delivered to a viable third party purchaser at an agreed price. Interest income is recognized as it is earned.

F-14

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 2:   RECEIVABLE FROM JOINT INTERESTS

 

The Company is the operator of certain wells acquired in the Expanded Bedford Agreement (see note 4).  Pursuant to an operating agreement (the “Operating Agreement”), the Company charges the other owners of the Grace Wells for their pro-rata share of operating and workover expenses.  These receivables are carried on the Company’s balance sheet as Receivable from Joint Interests. At March 31, 2015 and 2014, the amount of these receivables is $151,236 and $156,873, respectively.  During the year ended March 31, 2015, the Company deemed the collectability of the receivable from joint interests in the amount of $131,236 and 136,873, respectively as unlikely.  

 

NOTE 3: DEPOSITS AND PREPAID EXPENSES

 

During the year ended March 31, 2015 and 2014 the Company has advanced $279,400 and $302,057 toward the purchase of properties.

 

During the year ended March 31, 2015 the Company prepaid consulting fees in the amount of $100,000 which is being amortized over 36 months. Amortization through March 31, 2015 was $10,454.

 

    March 31, 2015     March 31, 2014  
Deposits on wells   $ 279,400     $ 302,057  
Prepaid consulting fees     100,000       -  
      379,400       302,057  
Less: Accumulated amortization on prepaid fees     (10,454 )     -  
Total   $ 368,946     $ 302,057-  

 

NOTE 4: PROPERTY AND EQUIPMENT

 

A summary of property and equipment at March 31, 2015 and 2014 is as follows:

 

    March 31, 2015     March 31, 2014  
Office Equipment   $ 41,778     $ 41,778  
Vehicles     22,657       -  
Leasehold improvements     -0-       -0-  
      64,435       41,778  
Less: Accumulated depreciation     (46,310 )     (41,778 )
Total   $ 18,125     $ -  

 

Depreciation expense for the years ended March 31, 2015 and 2014 was $4,532 and $0, respectively.

F-15

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 5: INTELLECTUAL PROPERTY RIGHTS

 

A summary of the intellectual property rights at March 31, 2015 and 2014, are as follows:

 

    March 31, 2015     March 31, 2014  
Intelli-well   $ 425,850     $ 425,850  
Less: accumulated amortization     (372,616 )     (330,035 )
Total   $ 53,234     $ 95,815  

 

Amortization expense for the years ended March 31, 2015 and 2014 was $42,851 and $42,587, respectively.   

F-16

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 6: OIL AND GAS PROPERTY ACTIVITY

 

The table below shows the Company’s working interests in the Grace Wells as of March 31, 2015 and 2014:

 

Well  

March 31, 2014

Working Interest

    Additional Acquisition     March 31, 2015 Working Interest  
Grace #1     65.25 %     0 %     65.25 %
Grace #2     55.75 %     0 %     55.75 %
Grace #3     64.00 %     0 %     64.00 %
Grace #5A     52.00 %     0 %     52.00 %
Grace #6     58.00 %     0 %     58.00 %

 

 

Producing oil and gas properties consist of the following:

 

    March 31, 2015     March 31, 2014  
Lincoln County, Oklahoma   $ 111,402     $ 111,402

 

 

Lipscomb County, Texas     250,082       250,082  
Miller County, Arkansas     139,909       139,909  
Ward Petroleum Assets     290,500       290,500  
Kensington Energy Assets     120,000       -  
Other Properties     159,856       159,856  
 Total Properties     1,237,078       1,117,078

 

 

 

                 
Asset retirement cost, net     37,676       40,572  
Property impairments      (481,072      (481,072
Less: Depletion     (554,399 )     (527,101 )
Net   $ 239,283     $ 149,477  

 

For the year ended March 31, 2015 and 2014, depletion per Bbl was $6.85 and $5.14, respectively.

 

F-17

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 7: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

Accounts payable and accrued liabilities consisted of the following:

 

   

March 31,

2015

    March 31, 2014  
Accounts payable   $ 371,722     $ 375,272  
Accrued interest     62,030       204,264  
Total   $ 433,752     $ 579,536  

 

NOTE 8: NOTES PAYABLE

 

    March 31, 2015     March 31, 2014  
On May 8, 2006, the Company entered into a convertible note payable agreement with a shareholder in the amount of $100,000.  The note carries an interest rate of 10% per annum and matures of November 8, 2006.  The note holder has the right to convert the note and accrued interest at a rate of $0.01 per share.  The value of this conversion feature was treated as a loan discount for the full $100,000 of the loan and was amortized to interest expense over the life of the loan.   On May 8, 2007 the note was extended for one year.  The conversion feature of the note was valued at $25,852 and was treated as a prepaid loan costs.  The prepaid loan costs have been amortized over the life of the new note. On October 19, 2007, the note holder converted $30,000 of principal plus accrued interest of $16,152 for 1,350,000 shares of common stock. On November 30, 2007, the note holder converted $10,000 of principal for 950,000 shares of common stock. On January 31, 2008, the note holder converted $10,000 of principal and accrued interest of $600 for 1,250,000 shares of common stock. On February 29, 2008, the note holder converted $8,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On June 6, 2008, the note holder converted $7,000 of principal and $1,372 of accrued interest for 1,550,000 shares of common stock. On June 23, 2008, the note holder converted $10,000 of principal and $395 of accrued interest for 1,500,000 shares of common stock. On October 15, 2008, the note holder converted $5,000 of principal and $10,000 of interest for 3,300,000 shares of common stock. On December 3, 2008, the note holder converted $3,000 of principal and $201 of interest for 2,000,000 shares of common stock. On February 24, 2009, the note holder converted $2,000 of principal and $167 of accrued interest into 4,000,000 shares of common stock During the three months ended September 30, 2009, the Company issued 33,000,000 shares for the conversion of $2,000 of principal and $367 of accrued interest on this note, and for other consideration.  During the three months ended December 31, 2009, the Company issued 30,000,000 shares of common stock for the conversion of $1,000 principal and $361 of accrued interest on this note and for other considerations. During the period ended March 31, 2014, the Company issued 450,000 shares of common stock for the conversion of $450 principal. Interest in the amount of $180 and $183 was accrued on this note during the year ended March 31, 2015 and 2014, respectively.   The maturity of this note has been extended until April 1, 2016.   $ 1,800     $ 1,800  
                 
On November 11, 2008, the Company issued a convertible promissory note to an investor in the amount of $50,000.  The current balance of the note is $30,000. The note carries an interest rate of 10% per annum and a maturity date of October 1, 2009.  The note holder has the right to convert the note and accrued interest into shares of the Company’s common stock at a rate of $3.00 per share. The discount is being amortized to interest expense over the life of the note via the effective interest method. Interest in the amount of $3,000 and $3,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. Accrued interest was $14,877 and $11,876 respectively at March 31, 2015 and 2014.  The maturity date of this note has been extended until April 1, 2016.     30,000       30,000  
                 
On December 22, 2008, the Company issued a promissory note to an investor in the amount of $150,000.  This note carries an interest rate of 10% per annum and matures of December 15, 2009.  In addition to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable. At the time of the issuance of the shares to the note holder, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized to interest expense over the life of the note, 1 year, via the effective interest method.  Interest in the amount of $10,891 and $15,000 was accrued on this note during the years ended March 31, 2015 and 2014, respectively. Accrued interest was $79,110 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 650,000 shares of common stock to the note holder on December 22, 2014.     -0-       150,000  
                 
On December 31, 2008, the Company received a cash advance from an investor in the amount of $100,000.  On January 1, 2009, the Company received an additional $50,000 and the Company entered into a note payable agreement in the amount of $150,000.  The note bears interest at a rate of 10% per annum and matures on December 15, 2009.  In additional to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  At the time of issuance of the shares to the note holders, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized over the life of the note via the effective interest method. Interest in the amount of $14,836 and $15,000 was accrued on this note the years ended March 31, 2015 and 2014, respectively. The total accrued interest was $78,123 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 500,000 shares of common stock and the payment of $5,000 to the note holder on March 27, 2014.     -0-     150,000  

 

F-18

 

    March 31, 2015     March 31, 2014  
On January 27, 2009, the Company issued a promissory note to an investor in the amount of $50,000.  The note carries an interest rate of 10% per annum and matures on December 15, 2009.  In addition to the note payable, the Company issued 1,000,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  The shares are value using the closing market price on the date the note was signed and have a value of $25,000.  The discount will be amortized over the life of the note via the effective interest method.  Interest in the amount of $5,000 and $5,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. . Accrued interest was $30,863 and $25,863 at March 31, 2015 and 2014 respectively. The maturity date of this note has been extended until Apri1 1, 2016.   $ 50,000     $ 50,000  
                 
On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $2,500.  This note bears interest at a rate of 8% per annum and matures on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $2,500 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $200 and $200 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.     2,500       2,500  
                 
On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $5,000.  This note bears interest at a rate of 8% per annum and matured on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $5,000 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $400 and $400 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.     5,000       5,000  

  

 

 

 

 

 

 

 

 

 

F-19

  

    March 31, 2015     March 31, 2014  
On January 1, 2011 the Company issued a convertible note payable in the amount of $250,000.  This note bears interest at a rate of 8% per annum and will mature on April 1, 2015.   The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $95,000 was recorded as a discount to the note and is being amortized to interest expense. A discount of $-0- and $94,050 was deducted for the years ended March 31, 2015 and 2014 respectively.  Interest in the amount of $4,010 and $17,945 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. Accrued interest was $5,858 and $1,847 at March 31, 2015 and 2014 respectively as interest in the amount of $0 and $40,482 was paid through the years. In January 2014 the Company exchanged 125 shares of class B preferred stock for $125,000 in principal. In June 2014, the Company exchanged 50 shares of its Series B Preferred Stock for $50,000 in principal. The maturity date of this note has been extended until Apri1 1, 2016.   $ 75,000     $ 125,000  
                 
On September 29, 2014, the Company issued two promissory notes note payable in the total amount of $60,000.  These notes bear interest at a rate of 5% per annum, matured on January 1, 2014, and were extended until December 1, 2015. Accrued interest as of March 31, 2015 was $1,504.     60,000       -0-  
                 
Total outstanding   $ 224,300     $ 514,300  

  

F-20

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

    Note     Unamortized     Net of  
March 31, 2015:   Amount     Discounts     Discount  
Notes payable – long-term portion   $ -     $ -     $    
Notes payable – current portion      224,300       -       224,300  
Total   $  224,300     $ -     $ 224,300  

 

 

    Note     Unamortized     Net of  
 March 31, 2014:   Amount     Discounts     Discount  
Notes payable – long-term portion   $ 514,300     $ (0)     $ 514,300  
Notes payable – current portion     -0-       (0)     -0-  
Total   $ 514,300     $ (0 )   $ 514,300  

 

 

 

Minimum future principal payments under the note payable are due as follows during the years ended March 31:

 

 

         
2016   224,300  
    $ 224,300  

 

NOTE 9: RELATED PARTY TRANSACTIONS

 

During the fiscal year ended March 31, 2015 and 2014 the president advanced the Company $0 and $5,000 respectively. The balance as of March 31, 2015 and 2014 were $20,000 and $26,000 respectively.

F-21

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Preferred Stock

 

The 100 shares of Series A Preferred Stock were issued on June 3, 2002 as payment for $500,000 in promissory notes, are convertible into the number of shares of common stock sufficient to represent forty percent (40%) of the fully diluted shares outstanding after their issuance The holder of these shares of Series A Preferred Stock is our President, Kent Rodriguez. The Series A Preferred Stock pays an eight percent (8%) dividend. The dividends are cumulative and payable quarterly. The Series A Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. The Series A Preferred Stock provides for voting rights on an "as converted to common stock" basis.

 

During the years ended March 31, 2015 and 2014, the Company incurred $40,000 in Class A preferred stock dividends, respectively.

 

The holders of the Series A Preferred Stock have the right to convert each share of preferred stock into a sufficient number of shares of common stock to equal 40% of the then fully-diluted shares outstanding. Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of shares of common stock issuable upon exercise, conversion or exchange of outstanding options, and warrants. In the event that the Company does not have an adequate number of shares of Common Stock authorized, upon a conversion request, only the maximum allowable number of shares of Series A preferred stock shall convert into Common Stock and the remaining shares of Series A preferred Stock shall convert upon lapse of the applicable restrictions.

 

Employment Agreements

 

KENT RODRIGUEZ

 

During the years ended March 31, 2015 and 2014, the Company charged to operations the amount of $48,000 in annual salary for Mr. Rodriguez, of which $44,500 and $42,400 was paid to him during the years ended March 31, 2015 and 2014, respectively.  As of March 31, 2015 and 2014, the balances of accrued and unpaid salaries were $211,317 and $207,817.

 

NOTE 10: INCOME TAXES

 

Deferred income taxes result from the temporary difference arising from the use of accelerated depreciation methods for income tax purposes and the straight-line method for financial statement purposes, and an accumulation of Net Operating Loss carry forwards for income tax purposes with a valuation allowance against the carry forwards for book purposes.

F-22

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in deferred tax assets are Federal and State net operating loss carry forwards of $30,798,559 which will expire beginning in 2028.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon our cumulative losses through March 31, 2015, we have provided a valuation allowance reducing the net realizable benefits of these deductible differences to $0 at March 31, 2015.  The amount of the deferred tax asset considered realizable could change in the near term if projected future taxable income is realized.  Due to significant changes in the Company's ownership, the Company's future use of its existing net operating losses may be limited.

 

A reconciliation between the actual income tax expense and income taxes computed by applying the statutory Federal and state income tax rates to income from continuing operations before income taxes is as follows:

 

   

Twelve Months

Ended

March 31,

2015

   

Twelve Months

Ended

March 31,

2014

 
Computed “expected” income tax benefit at approximately 38.73%   $ (10,471,510 )   $ (10,480,020 )
Change in valuation allowance     10,471,510       10,480,020  
    $ -     $ -  

 

NOTE 11: STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

Series A Preferred Stock

 

The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.10 per share.  As of March 31, 2015 and 2014, the Company has 100 shares of Series A preferred stock issued and outstanding.

 

During the twelve months ended March 31, 2015 and 2014, the Company incurred $40,000 respectively in Series A preferred stock dividends, and paid $49,000 and $38,800 for the twelve months ended March 31, 2015 and 2014 respectively. As of March 31, 2015 and 2014, the accrued balance due Mr. Rodriguez was $32,950 and $41,950 respectively. The liquidation preference as of March 31, 2015 and March 31, 2014 was $532,950 or $53,295 per share.

 

The 100 shares of Series A Preferred Stock, issued to Mr. Rodriguez as payment for $500,000 in promissory notes, are convertible into the number of shares of common stock sufficient to represent 40 percent (40%) of the fully diluted shares outstanding after their issuance. The Series A Preferred Stock pays an eight percent (8%) dividend. The dividends are cumulative and payable quarterly. The Series A Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. The Series A Preferred Stock provides for voting rights on an "as converted to common stock" basis.

 

The holders of the Series A Preferred Stock have the right to convert the preferred stock into shares of common stock such that if converted simultaneously, they shall represent forty percent (40%) of the fully diluted shares outstanding after their issuance. Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of shares of common stock issuable upon exercise, conversion or exchange of outstanding options, warrants, or convertible securities.

 

Series B Preferred Stock

 

In March, 2013, our Board of Directors authorized the issuance of 2,000 shares of Series B Preferred Stock, par value $0.10 per share (the "Series B Preferred Stock").  The face amount of share of the Series B Preferred Stock is $1,000.  As of March 31, 2015 and 2014, the Company has 1,625 and 1,300 shares of Series B preferred stock respectively issued and outstanding. The liquidation preference as of March 31, 2015 and March 31, 2014 was $1,625,000 and $1,324,780 or $1,000.00 and $1,019.06 per share, respectively.

 

The Series B Preferred Stock accrues dividends at the rate of 9% per annum on the original purchase price for the shares. These dividends are payable annually, beginning in January 2014. We are prohibited from paying any dividends on our Common Stock until all accrued dividends are paid on our Series B Preferred Stock.  The Series B Preferred Stock ranks junior to the Series A Preferred Stock owned by our President and Chief Executive Officer, as to Dividends and to a distribution of assets in the event of a liquidation of assets.

 

The Holders of Series B Preferred Stock do not have any voting rights and their consent is not required to take any sort of corporate action.

 

Series B Preferred Stock Issuances during the year ended March 31, 2015:

 

In April 2014 we exchanged 50 shares Series B Preferred Stock for $50,000 of notes payable.

 

In September 2014 we issued 175 Shares of Series B Preferred Stock to an accredited investor for $175,000.

 

In October 2014 we issued 15 shares Series B Preferred Stock for consulting services for $15,000.

 

In March 2015 we issued 85 Shares of Series B Preferred Stock to an accredited investor for $85,000.

 

In March 2015 we issued 1,540,000 Shares of Common Stock for all accrued interest as of March 31, 2015, on the outstanding 1,625 shares of our Series B Preferred Stock.

 

During the twelve months ended March 31, 2015 and 2014, the Company incurred $135,599 and $24,780 in dividends on Series B preferred stock.  

 

Total dividends payable from both A and B preferred shares at March 31, 2015 and 2014 is $32,950 and $66,730 respectively.

 

F-23

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Common Stock

 

On June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned.  The reverse split was effective on July 23, 2012.

 

The Company has authorized 200,000,000 shares of common stock with a par value of $0.001 per share.  As of March 31, 2015 and 2014, the Company has 16,548,062 and 6,208,062 shares of common stock issued and outstanding.

 

Common stock issuances during the year ended March 31, 2014:

 

On May 3, 2013, the Company issued 500,000 shares of Common Stock for $50,000 or $0.10 per share, and was based on current market value at the date of issuance.

 

On May 5, 2013, the Company issued 100,000 shares of Common Stock for compensation for the placement of 500,000 shares of Common Stock and 50 Shares of Series B Preferred Stock for $100,000 to a third party.  The value of these shares in the amount of $10,000, or $0.10 per share was charged to operations, and was based on the current market value at the date of issuance.

 

On June 4, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $8,000 or $0.08 per share and was based on the current market value on the date of issuance. $100 has been credited to the note payable, and a loss of $7,900 was recognized on this conversion, and was charged to operations.

 

On June 28, 2013, the Company issued 2,800,000 shares of Common Stock for $250,000, and was based on current market value at the date of issuance.

 

On June 28, 2013, the Company issued 500,000 shares of Common Stock to a consultant, the value of these shares in the amount of $50,000, or $0.10 per share was charged to operations, and was based on the current market value at the date of issuance.

 

On July 1, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $17,000, or $0.17 per share which was based on the current market value on the date of issuance. $100 has been credited to the note payable, and a loss of $16,900 was recognized on this conversion, and was charged to operations.

 

On July 2, 2013, the Company issued 180,000 shares of Common Stock to its board of directors, the value of these shares in the amount of $18,000, or $0.10 per share was charged to operations, and was based on the on current market value at the date of issuance.

 

On July 26, 2013, the Company issued 250,000 shares of Common Stock to a consultant, the value of these shares in the amount of $25,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On September 13, 2013, the Company issued 150,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $22,500, or $0.15 per share which was based on the current market value on the date of issuance. $150 has been credited to the note payable, and a loss of $22,350 was recognized on this conversion, and was charged to operations.

 

On October 10, 2013, the Company issued 220,000 shares of common stock to a consultant, the value of these shares in the amount of $22,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On October 16, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $10,000 or $0.10 per share which was based on the current market value on the date of issuance. $100 has been credited to the note payable, and a loss of $9,900 was recognized on this conversion, and was charged to operations.

 

On November 6, 2013, the Company issued 250,000 to a consultant, the value of these shares in the amount of $25,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On March 25, 2014 the Company exchanged 2,000,000 shares of Common Stock for 200 shares of Series B Preferred Stock.

 

On March 31, 2014, the Company issued 600,000 shares of common stock for payment of accrued interest of $51,507.  

 

F-24

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

On March 31, 2014 the Company issued 1,600,000 shares of common stock to a consultant, the value of these shares in the amount of $112,000, or $0.07 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

Common stock issuances during the year ended March 31, 2015:

 

On April 25, 2014, the Company issued 200,000 shares of common stock to a consultant, the value of these shares in the amount of $14,000, or $0.07 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On December 1, 2014, the Company issued 300,000 shares of common stock for a technology licensing agreement dated December 1, 2014, the value of these shares in the amount of $15,000, or $0.05 per share was charged to operations, and was valued at the middle of the closing bid price and the closing offering price of the Company's common stock on the date the Consulting Agreement was executed by the Company

 

On December 15, 2015, the Company issued 650,000 shares of common stock in exchange for a $150,000 promissory note payable and $90,000 of accrued interest. The value of these shares in the amount of $32,500, or $0.05 per share and was valued at closing bid price of the Company's common stock on the date the Agreement was executed by the Company. $207,500 was treated as a gain from this transaction.

 

On December 26, 2014, the Company issued 1,700,000 shares of common to a consultant, the value of these shares in the amount of $85,000, or $0.05 per share was charged to operations, and was valued at the middle of the closing bid price and the closing offering price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On March 25, 2015, the Company issued 1,540,000 shares of common stock to the holders of Series B Preferred Stock to pay all accrued interest as of March 31, 2015. The value of these shares is in the amount of $61,600, or $.04 per share.

 

On March 27, 2015, the Company issued 500,000 shares of common stock along with $6,000, in exchange for a $150,000 promissory note payable and $90,000 of accrued interest. The value of these shares in the amount of $20,000 or $0.04 per share, and were valued at closing bid price of the Company's common stock on the date the Agreement was executed by the Company, $215,000 was treated as a gain from this transaction.

 

Options

 

There are no stock options outstanding.

 

F-25

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Warrants

 

The following table summarizes the warrants outstanding and the related prices for the shares of the Company’s common stock issued to non-employees of the Company at March 31, 2015:

 

Transactions involving warrants are summarized as follows: 

    Number of Shares    

Weighted Average

Exercise Price Per Share

 
Outstanding at March 31, 2014     167     $ 600.00  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     167       -  
Outstanding at March 31, 2015     -0-     $    

 

NOTE 12: TECHNOLOGY LICENSE AGREEMENTS

 

On December 1, 2014, the Company entered into an exclusive license agreement for anti-corrosion technology from Ronald Knight in exchange for three hundred thousand (300,000) shares of our common stock. This license calls for an earned royalty of three percent (3.00%) on sales of licensed products and services as they may relate to corrosion prevention and maintenance of sump pumps at gasoline and diesel dispensing locations, including, but not limited to gas stations, convenience stores, trucking companies, bus companies, and any other locations where gasoline and/or diesel is dispensed. We did not have any revenue for the period ended March 31, 2015.

F-26

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 13: LOSS PER SHARE

 

ASC 260-10-45 requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations. As the Company is in a loss position during the year ended March 31, 2015 and 2014, there is no dilutive effect included. The net loss per share was $0.006 and $0.085 for March 31, 2015 and 2014.

 

 

NOTE 14: COMMITMENTS AND CONTINGENCIES

 

Commitments and contingencies through the date of these financial statements were issued have been considered by the Company and none were noted which were required to be disclosed.

 

NOTE 15: ASC 932-235-55 SUPPLEMENTAL DISCLOSURES 

 

Net Capitalized Costs

 

The Company's aggregate capitalized costs related to natural gas and oil producing activities are summarized as follows:

 

    March 31, 2015     March 31, 2014  
             
Natural gas and oil properties and related equipment:            
Proven   $ 1,274,754     $ 1,165,546  
Unproven     1,867,183       1,867,183  
Accumulated depreciation, depletion, and impairment     (1,035,471 )     (1,008,173 )
Net capitalized costs   $ 2,106,466     $ 2,016,660  

 

Future development of the unproven properties is dependent on future financing and market prices for oil and gas. 

 

Costs Incurred

 

Costs incurred in natural gas and oil property acquisition, exploration and development activities that have been capitalized are summarized as follows:

 

    March 31, 2015     March 31, 2014  
             
Acquisition of properties   $ 120,000     $ - 0 -  
Development costs     - 0 -       - 0 -  
Total costs incurred   $ 120,000     $ - 0 -  

 

F-27

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Results of Operations for Natural Gas and Oil Producing Activities

 

The Company's results of operations from natural gas and oil producing activities are presented below for the fiscal years ended March 31, 2015 and 2014. The following table includes revenues and expenses associated directly with the Company's natural gas and oil producing activities. It does not include any interest costs and general and administrative costs and, therefore, is not necessarily indicative of the contribution to consolidated net operating results of the Company's natural gas and oil operations.

 

    March 31, 2015    

March 31,

 2014

 
             
Production revenues   $ 110,371     $ 156,322  
Production costs     (100,060 )     (134,033 )
Impairment of property     -       -  
Depreciation and depletion expense     (74,411 )     (63,046 )
    $ (64,100 )   $ (40,757)  
Imputed income tax provision (1)     -       -  
Results of operation for natural gas / oil producing activity   $ (64,100 )   $ (40,757)  

 

(1)  The imputed income tax provision is hypothetical (at the statutory rate) and determined without regard to the Company's deduction for general and administrative expenses, interest costs and other income tax credits and deductions, nor whether the hypothetical tax provision will be payable.

 

F-28

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Natural Gas and Oil Reserve Quantities

 

The following schedule contains estimates of proved natural gas and oil reserves attributable to the Company. Proved reserves are estimated quantities of natural gas and oil that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are those which are expected to be recovered through existing wells with existing equipment and operating methods. Reserves are stated in thousand cubic feet (mcf) of natural gas and barrels (bbl) of oil. Geological and engineering estimates of proved natural gas and oil reserves at one point in time are highly interpretive, inherently imprecise and subject to ongoing revisions that may be substantial in amount. Although every reasonable effort is made to ensure that the reserve estimates are accurate, due to their nature reserve estimates are generally less precise than other estimates presented in connection with financial statement disclosures.

 

    Oil - bbls  
Proved reserves:      
       
Balance as of March 31, 2006     -  
         
Purchase of reserves-in-place     29,815  
Extensions and discoveries     -  
Production     (1,043 )
Balance as of March 31, 2007     28,772  
         
Purchase of reserves-in-place     11,560  
Extensions and discoveries     4,216  
Change in estimates     (11,911 )
Production     (3,504 )
Balance as of March 31, 2008     29,133  
         
Purchase of reserves-in-place     22,282  
Extensions and discoveries     -  
Change in estimates     -  
Production     (5,768 )
Balance as of March 31, 2009     45,647  
         
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     -  
Production     (22,514 )
Balance as of March 31, 2010     23,133  

 

Purchase of reserves-in-place     4,823  
Extensions and discoveries     -  
Change in estimates     -  
Production     (5,291 )
Balance as of March 31, 2011     22,665  
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     4,506  
Production     (2,439 )
Balance as of March 31, 2012     24,732  
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     2,873  
Production     (2,290)  
Balance as of March 31, 2013     25,315  

 

F-29

 

 

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

 

Purchase of reserves-in-place     -
Extensions and discoveries     -
Change in estimates     7,736
Production     (3,979)
Balance as of March 31, 2014     29,072
       
Purchase of reserves-in-place     4,759
Extensions and discoveries     -
Change in estimates     3,251
Production     (2,145)
Balance as of March 31, 2015     34,937

F-30

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

Standardized Measure of Discounted Future Net Cash Flows

 

The following schedule presents the standardized measure of estimated discounted future net cash flows from the Company's proved reserves for the fiscal years ended March 31, 2015 and 2014. Estimated future cash flows are based on independent reserve data. Because the standardized measure of future net cash flows was prepared using the prevailing economic conditions existing at March 31, 2015 and 2014, it should be emphasized that such conditions continually change. Accordingly, such information should not serve as a basis in making any judgment on the potential value of the Company's recoverable reserves or in estimating future results of operations.

 

   

March 31,

2015

   

March 31,

2014

 
Future production revenue   $ 1,317,165     $ 1,126,270  
Future production costs     (675,670 )     (566,261 )
Future development costs     -       -  
Future cash flows before income taxes     641,495       560,009  
Future income tax     -       -  
Future net cash flows     641,495       560,009  
Effect of discounting future annual cash flows at 10%     (253,043 )     (234,457 )
Standard measure of discounted net cash flows   $ 388,452     $ 325,552  

 

(1)  The weighted average oil wellhead price used in computing the Company's reserves were $80.60 per bbl and $93.51 per bbl at March 31, 2015 and 2014, respectively. The weighted average gas wellhead price used in computing the Company's reserves were $3.34 and $3.63/mmbtu at March 31, 2015 and 2014, respectively. The oil and gas pricing were calculated using the arithmetic average of the price on the first day of each month that was received for each property during the previous fiscal year.  These prices were held constant throughout the economic life of the properties.  Previous year run checks were used to determine the actual prices received.

 

The following schedule contains a comparison of the standardized measure of discounted future net cash flows to the net carrying value of proved natural gas and oil properties at March 31, 2015 and 2014:

 

   

March 31,

2015

   

March 31,

2014

 
Standardized measure of discount future net cash flows   $ 388,452     $ 325,552  
                 
Proved natural oil and gas property, net of accumulated                
depreciation, depletion, and amortization, including                
impairment     239,283       149,477  
                 
Standardized measure of discount future net cash flows in                
excess of net carrying value of proved natural oil and                
gas properties   $ 149,169     $ 176,075  

 

F-31

AVALON OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2015 AND 2014

 

NOTE 16:  SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the issuance of the consolidated financial statements and no subsequent event is identified.

 

We will continue to review our operations with the regard to the current market price oil and natural gas.

F-32


 

 

EX-31.1 2 ex31_1.htm EXHIBIT 31.1

Exhibit 31.1

 

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Kent Rodriguez, certify that:

 

1.   I have reviewed this Form 10-K of Avalon Oil & Gas, Inc.;
   
 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.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
   
 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 an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
   
 5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 
   
 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.
     

 

Date: August 13, 2015 By: /s/ Kent Rodriguez  
    Kent Rodriguez  
   

Chief Executive Officer, President,

Secretary and Principal Financial Officer

 
EX-32.1 3 ex32_1.htm EXHIBIT32.1

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 Annual Report of Avalon Oil & Gas, Inc. (the "Company") on Form 10-K for the period ending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kent Rodriguez, Chief Executive Officer and Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

 (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 result of operations of the Company.

 

Date: August 13, 2015 By: /s/ Kent Rodriguez  
    Kent Rodriguez  
   

Chief Executive Officer, President,

Secretary and Principal Financial Officer

 

 

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 4,532  
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STOCKHOLDERS' EQUITY - Preferred Stock (Details Narrative) - USD ($)
1 Months Ended 12 Months Ended
Mar. 31, 2015
Sep. 30, 2014
Mar. 31, 2015
Mar. 31, 2014
Jan. 31, 2015
Oct. 31, 2014
Apr. 30, 2014
Mar. 25, 2014
Mar. 31, 2013
Preferred stock, shares issued 100   100            
Preferred stock dividends     $ 175,599 $ 64,780          
Preferred stock dividends paid     $ 40,000 $ 40,000          
Common stock issued 16,548,062   16,548,062 11,658,062          
Accrued balance due to Mr.Rodriguez $ 211,317   $ 211,317 $ 207,817          
Preferred stock, Series A                  
Preferred stock, shares authorized 1,000,000   1,000,000 1,000,000          
Preferred stock, par value $ 0.10   $ 0.10 $ 0.10          
Preferred stock, shares issued 100   100 100          
Preferred stock, shares outstanding 100   100 100          
Accrued balance due to Mr.Rodriguez $ 32,950   $ 32,950            
Liquidation preference $ 532,950   $ 532,950 $ 541,950          
Fully diluted shares outstanding percentage 40.00%   40.00%            
Preferred stock, Series B                  
Preferred stock, shares authorized 2,000   2,000 2,000          
Preferred stock, par value $ 0.10   $ 0.10 $ 0.10         $ .10
Preferred stock, shares issued 1,625   1,625 1,300         2,000
Preferred stock, shares outstanding 1,625   1,625 1,300          
Preferred stock dividends     $ 32,950 $ 66,730          
Liquidation preference $ 1,625,000   $ 1,625,000 $ 1,324,780          
Liquidation preference per share $ 1,000.00   $ 1,000.00 $ 1,019.06          
Dividend rate on preferred stock     9.00%            
Preferred stock face amount $ 1,000   $ 1,000 $ 1,000         $ 1,000
Preferred stock sold amount to accredited investor $ 85,000 $ 175,000              
Preferred stock shares sold to accredited investor 85 175              
Preferred stock exchanged, shares 200   200   400   50 200  
Preferred stock exchanged $ 200,000   $ 200,000   $ 400,000   $ 50,000    
Preferred stock, Series B | Consulting Services                  
Preferred stock, shares issued           175      
Preferred stock face amount           $ 175,000      
Preferred stock, Series A                  
Preferred stock, shares authorized       1,000,000          
Preferred stock, par value       $ 0.10          
Preferred stock, shares issued       100          
Preferred stock, shares outstanding       100          
Preferred stock dividends     40,000 $ 40,000          
Preferred stock dividends paid     $ 49,000 38,800          
Accrued balance due to Mr.Rodriguez       41,950          
Liquidation preference       $ 53,295          
Preferred stock issued to officer/director on conversion of promissory notes, Shares     100            
Preferred stock issued to officer/director on conversion of promissory notes     $ 500,000            
Dividend rate on preferred stock     8.00%            
Common Stock for Accrued Interest                  
Preferred stock, shares issued 1,625   1,625            
Common stock issued 1,540,000   1,540,000            
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Notes Payable (Details 2)
Mar. 31, 2015
USD ($)
Summary of minimum future principal payments  
2016 $ 224,300
Total $ 224,300
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STOCKHOLDERS' EQUITY - Common Stock (Details Narrative) - USD ($)
12 Months Ended
Mar. 27, 2015
Dec. 26, 2014
Jul. 02, 2014
Apr. 25, 2014
Mar. 31, 2014
Nov. 06, 2013
Oct. 16, 2013
Oct. 10, 2013
Sep. 13, 2013
Jul. 28, 2013
Jul. 26, 2013
Jul. 01, 2013
Jun. 28, 2013
Jun. 04, 2013
May. 05, 2013
May. 03, 2013
Mar. 31, 2015
Mar. 31, 2014
Jan. 31, 2015
Apr. 30, 2014
Mar. 25, 2014
Apr. 10, 2013
Nov. 16, 2012
Sep. 28, 2012
Jul. 22, 2005
Common stock, shares authorized         200,000,000                       200,000,000 200,000,000       200,000,000 3,000,000,000 200,000,000 1,000,000,000
Common stock, par value         $ 0.001                       $ .001 $ 0.001         $ .001   $ .001
Common stock, shares issued         11,658,062                       16,548,062 11,658,062              
Common stock, shares outstanding         11,658,062                       16,548,062 11,658,062              
Common stock issued for compensation, value                                 $ (24,454)                
Common stock issued for conversion of note payable, value                                 $ 52,500 $ 109,007              
Gain (Loss) on conversion of notes payable                                   57,050              
Common stock issued for accrued interest, Value         $ 51,507                         $ 51,507              
Common stock issued for accrued interest, shares         600,000                         600,000              
Consulting Services                                                  
Common stock issued for compensation, shares   1,700,000   200,000 1,600,000                                        
Common stock issued for compensation, value   $ 85,000   $ 14,000 $ 112,000                                        
Promissory Note [Member]                                                  
Common stock issued for conversion of note payable, value $ 6,000                                                
Common stock issued for conversion of note payable, shares 500,000                                                
Credited amount on conversion of notes payable $ 150,000                                                
Gain (Loss) on conversion of notes payable $ 215,000                                                
Common Stock                                                  
Common stock, shares authorized         200,000,000                       200,000,000 200,000,000              
Common stock, par value         $ 0.001                       $ 0.001 $ 0.001              
Common stock, shares issued         6,208,062                       16,548,062 6,208,062              
Common stock, shares outstanding         6,208,062                       16,548,062 6,208,062              
Common stock issued for cash, value                         $ 250,000     $ 50,000                  
Common stock issued for cash, shares                         2,800,000     500,000                  
Common stock issued for compensation, shares                             100,000                    
Common stock issued for compensation, value                             $ 10,000                    
Common stock, par value per share             $ .10   $ .15     $ .17                          
Common stock issued for conversion of note payable, value             $ 10,000   $ 22,500     $ 17,000   $ 8,000                      
Common stock issued for conversion of note payable, shares             100,000   150,000     100,000   100,000                      
Credited amount on conversion of notes payable             $ 100   $ 150     $ 100   $ 100                      
Gain (Loss) on conversion of notes payable             $ (9,900)   $ (22,350)     $ (16,900)   $ (7,900)                      
Stock Issued To A Consultant                                                  
Common stock issued for compensation, shares                   500,000                              
Common stock issued for compensation, value                   $ 50,000                              
Common stock, par value per share           $ .10   $ .10     $ .10                            
Common stock issued for services, value           $ 25,000   $ 22,000   $ 25,000 $ 25,000                            
Common stock issued for services, shares           250,000   220,000   250,000 250,000                            
Stock Issued To Board Of Directors                                                  
Common stock issued for services, value     $ 18,000                                            
Common stock issued for services, shares     180,000                                            
Preferred stock, Series B                                                  
Common stock exchanged for Preferred Shares                                         2,000,000        
Preferred stock exchanged, shares                                 200   400 50 200        
XML 17 R46.htm IDEA: XBRL DOCUMENT v3.2.0.727
Notes Payable (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Summary of notes payable    
Notes payable $ 224,300 $ 514,300
Convertible Debt [Member]    
Summary of notes payable    
Notes payable 1,800 1,800
Convertible Debt Two [Member]    
Summary of notes payable    
Notes payable 2,500 2,500
Convertible Debt Three [Member]    
Summary of notes payable    
Notes payable 5,000 5,000
Convertible Debt Four [Member]    
Summary of notes payable    
Notes payable 75,000 125,000
Promissory Note [Member]    
Summary of notes payable    
Notes payable 0 150,000
Promissory Note Two [Member]    
Summary of notes payable    
Notes payable 50,000 50,000
Promissory Note Three [Member]    
Summary of notes payable    
Notes payable 60,000 0
Convertible Promissory Note [Member]    
Summary of notes payable    
Notes payable 30,000 30,000
Note Payable    
Summary of notes payable    
Notes payable $ 0 $ 150,000
XML 18 R33.htm IDEA: XBRL DOCUMENT v3.2.0.727
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated amortization of intangible assets (Details) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2015
Mar. 31, 2014
Estimated amortization of intangible assets     $ 42,581 $ 42,587
Estimated amortization of intangible assets        
Estimated amortization of intangible assets $ 10,647 $ 42,587    
XML 19 report.css IDEA: XBRL DOCUMENT /* Updated 2009-11-04 */ /* v2.2.0.24 */ /* DefRef Styles */ ..report table.authRefData{ background-color: #def; border: 2px solid #2F4497; font-size: 1em; position: absolute; } ..report table.authRefData a { display: block; font-weight: bold; } ..report table.authRefData p { margin-top: 0px; } ..report table.authRefData .hide { background-color: #2F4497; padding: 1px 3px 0px 0px; text-align: right; } ..report table.authRefData .hide a:hover { background-color: #2F4497; } ..report table.authRefData .body { height: 150px; overflow: auto; width: 400px; } ..report table.authRefData table{ font-size: 1em; } /* Report Styles */ ..pl a, .pl a:visited { color: black; text-decoration: none; } /* table */ ..report { background-color: white; border: 2px solid #acf; clear: both; color: black; font: normal 8pt Helvetica, Arial, san-serif; margin-bottom: 2em; } ..report hr { border: 1px solid #acf; } /* Top labels */ ..report th { background-color: #acf; color: black; font-weight: bold; text-align: center; } ..report th.void { background-color: transparent; color: #000000; font: bold 10pt Helvetica, Arial, san-serif; text-align: left; } ..report .pl { text-align: left; vertical-align: top; white-space: normal; width: 200px; white-space: normal; /* word-wrap: break-word; */ } ..report td.pl a.a { cursor: pointer; display: block; width: 200px; overflow: hidden; } ..report td.pl div.a { width: 200px; } ..report td.pl a:hover { background-color: #ffc; } /* Header rows... */ ..report tr.rh { background-color: #acf; color: black; font-weight: bold; } /* Calendars... */ ..report .rc { background-color: #f0f0f0; } /* Even rows... */ ..report .re, .report .reu { background-color: #def; } ..report .reu td { border-bottom: 1px solid black; } /* Odd rows... */ ..report .ro, .report .rou { background-color: white; } ..report .rou td { border-bottom: 1px solid black; } ..report .rou table td, .report .reu table td { border-bottom: 0px solid black; } /* styles for footnote marker */ ..report .fn { white-space: nowrap; } /* styles for numeric types */ ..report .num, .report .nump { text-align: right; white-space: nowrap; } ..report .nump { padding-left: 2em; } ..report .nump { padding: 0px 0.4em 0px 2em; } /* styles for text types */ ..report .text { text-align: left; white-space: normal; } ..report .text .big { margin-bottom: 1em; width: 17em; } ..report .text .more { display: none; } ..report .text .note { font-style: italic; font-weight: bold; } ..report .text .small { width: 10em; } ..report sup { font-style: italic; } ..report .outerFootnotes { font-size: 1em; } XML 20 R57.htm IDEA: XBRL DOCUMENT v3.2.0.727
Loss Per Share (Details) - $ / shares
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Loss Per Share (Textual)    
Net loss per share $ .0006 $ 0.085
XML 21 R25.htm IDEA: XBRL DOCUMENT v3.2.0.727
DEPOSITS AND PREPAID EXPENSES (Tables)
12 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
Deposits and Prepaid Expenses
    March 31, 2015     March 31, 2014  
Deposits on wells   $ 279,400     $ 302,057  
Prepaid consulting fees     100,000       -  
      379,400       302,057  
Less: Accumulated amortization on prepaid fees     (10,454 )     -  
Total   $ 368,946     $ 302,057-  
XML 22 R50.htm IDEA: XBRL DOCUMENT v3.2.0.727
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Related Party Transactions [Abstract]    
Advances from the president of the Company $ 0 $ 5,000
Total Advances to company $ 20,000 26,000
Shares of Series A Preferred Stock issued to an officer/director as payment for promissory notes 100  
Value of promissory notes to an officer/director $ 500,000  
Series A Preferred Stock conversion percentage, fully diluted shares outstanding after issuance 40.00%  
Series A Preferred Stock dividend payment percentage 8.00%  
Stock dividends incurred $ 40,000 40,000
Amount charged to operations in annual salary 48,000 48,000
Amount of compensation paid to Mr. Rodriquez 44,500 42,400
Balance of accrued and unpaid salaries $ 211,317 $ 207,817
XML 23 R42.htm IDEA: XBRL DOCUMENT v3.2.0.727
OIL AND GAS PROPERTY ACTIVITY - Working interests in the Grace Wells (Details)
Mar. 31, 2015
Mar. 31, 2014
Grace #1 Well    
Working interest 65.25% 65.25%
Grace #2 Well    
Working interest 55.75% 55.75%
Grace #3 Well    
Working interest 64.00% 64.00%
Grace #5A Well    
Working interest 52.00% 52.00%
Grace #6 Well    
Working interest 58.00% 58.00%
XML 24 R37.htm IDEA: XBRL DOCUMENT v3.2.0.727
DEPOSITS AND PREPAID EXPENSES (Details Narrative) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Notes to Financial Statements    
Deposits on wells $ 279,400 $ 302,057
Prepaid consulting fees $ 100,000  
XML 25 R52.htm IDEA: XBRL DOCUMENT v3.2.0.727
INCOME TAXES (Details Narrative)
Mar. 31, 2015
USD ($)
Income Tax Disclosure [Abstract]  
Federal and State net operating loss carry forwards $ 30,798,559
Valuation allowance reducing the net realizable benefits of deductible differences $ 0
XML 26 R61.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details 3) - bbl
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2011
Mar. 31, 2010
Mar. 31, 2009
Mar. 31, 2008
Mar. 31, 2007
Summary of contains estimates of proved natural gas and oil reserves                  
Beginning Balance 29,072.00 25,315.00 24,732.00 22,665.00 23,133.00 45,647.00 29,133.00 28,772.00 28,772.00
Purchase of reserves-in-place         4,823   22,282 11,560 29,815
Extensions and discoveries               4,216.00  
Change in estimates 3,251 7,736.00 2,873.00 4,506.00       (11,911.00)  
Production (2,145) (3,979.00) (2,290.00) (2,439.00) (5,291.00) (22,514.00) (5,768.00) (3,504.00) (1,043.00)
Balance 34,937 29,072.00 25,315.00 24,732.00 22,665.00 23,133.00 45,647.00 29,133.00 28,772.00
XML 27 R47.htm IDEA: XBRL DOCUMENT v3.2.0.727
Notes Payable (Details 1) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Summary of notes payable    
Notes payable - long-term portion   $ 514,300
Total $ 224,300 514,300
Note Amount    
Summary of notes payable    
Notes payable - long-term portion   $ 514,300
Notes payable - current portion $ 224,300  
Total $ 224,300 $ 514,300
Unamortized Discounts    
Summary of notes payable    
Notes payable - long-term portion    
Notes payable - current portion    
Total    
Net Of Discount    
Summary of notes payable    
Notes payable - long-term portion   $ 514,300
Notes payable - current portion $ 224,300  
Total $ 224,300 $ 514,300
XML 28 R9.htm IDEA: XBRL DOCUMENT v3.2.0.727
DEPOSITS AND PREPAID EXPENSES
12 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
DEPOSITS AND PREPAID EXPENSES

NOTE 3: DEPOSITS AND PREPAID EXPENSES

 

During the year ended March 31, 2015 and 2014 the Company has advanced $279,400 and $302,057 toward the purchase of properties.

 

During the year ended March 31, 2015 the Company prepaid consulting fees in the amount of $100,000 which is being amortized over 36 months. Amortization through March 31, 2015 was $10,454.

 

    March 31, 2015     March 31, 2014  
Deposits on wells   $ 279,400     $ 302,057  
Prepaid consulting fees     100,000       -  
      379,400       302,057  
Less: Accumulated amortization on prepaid fees     (10,454 )     -  
Total   $ 368,946     $ 302,057-  

XML 29 R62.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details 4) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Schedule presents the standardized measure of estimated discounted future net cash flows    
Future production revenue $ 1,317,165 $ 1,126,270
Future production costs $ (675,670) $ (566,261)
Future development costs    
Future cash flows before income taxes $ 641,495 $ 560,009
Future net cash flows 641,495 560,009
Effect of discounting future annual cash flows at 10% (253,043) (234,457)
Standard measure of discounted net cash flows $ 388,452 $ 325,552
XML 30 R43.htm IDEA: XBRL DOCUMENT v3.2.0.727
OIL AND GAS PROPERTY ACTIVITY - Producing oil and gas properties (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Extractive Industries [Abstract]    
Lincoln County, Oklahoma $ 111,402 $ 111,402
Other properties, net 1,237,078 1,117,078
Asset retirement obligation 37,676 40,572
Property impairments (481,072) (481,072)
Less: Depletion (554,399) (527,101)
Net $ 239,283 $ 149,477
XML 31 R29.htm IDEA: XBRL DOCUMENT v3.2.0.727
NOTES PAYABLE (Tables)
12 Months Ended
Mar. 31, 2015
Debt Disclosure [Abstract]  
Summary of notes payable

 

    March 31, 2015     March 31, 2014  
On May 8, 2006, the Company entered into a convertible note payable agreement with a shareholder in the amount of $100,000.  The note carries an interest rate of 10% per annum and matures of November 8, 2006.  The note holder has the right to convert the note and accrued interest at a rate of $0.01 per share.  The value of this conversion feature was treated as a loan discount for the full $100,000 of the loan and was amortized to interest expense over the life of the loan.   On May 8, 2007 the note was extended for one year.  The conversion feature of the note was valued at $25,852 and was treated as a prepaid loan costs.  The prepaid loan costs have been amortized over the life of the new note. On October 19, 2007, the note holder converted $30,000 of principal plus accrued interest of $16,152 for 1,350,000 shares of common stock. On November 30, 2007, the note holder converted $10,000 of principal for 950,000 shares of common stock. On January 31, 2008, the note holder converted $10,000 of principal and accrued interest of $600 for 1,250,000 shares of common stock. On February 29, 2008, the note holder converted $8,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On June 6, 2008, the note holder converted $7,000 of principal and $1,372 of accrued interest for 1,550,000 shares of common stock. On June 23, 2008, the note holder converted $10,000 of principal and $395 of accrued interest for 1,500,000 shares of common stock. On October 15, 2008, the note holder converted $5,000 of principal and $10,000 of interest for 3,300,000 shares of common stock. On December 3, 2008, the note holder converted $3,000 of principal and $201 of interest for 2,000,000 shares of common stock. On February 24, 2009, the note holder converted $2,000 of principal and $167 of accrued interest into 4,000,000 shares of common stock During the three months ended September 30, 2009, the Company issued 33,000,000 shares for the conversion of $2,000 of principal and $367 of accrued interest on this note, and for other consideration.  During the three months ended December 31, 2009, the Company issued 30,000,000 shares of common stock for the conversion of $1,000 principal and $361 of accrued interest on this note and for other considerations. During the period ended March 31, 2014, the Company issued 450,000 shares of common stock for the conversion of $450 principal. Interest in the amount of $180 and $183 was accrued on this note during the year ended March 31, 2015 and 2014, respectively.   The maturity of this note has been extended until April 1, 2016.   $ 1,800     $ 1,800  
                 
On November 11, 2008, the Company issued a convertible promissory note to an investor in the amount of $50,000.  The current balance of the note is $30,000. The note carries an interest rate of 10% per annum and a maturity date of October 1, 2009.  The note holder has the right to convert the note and accrued interest into shares of the Company’s common stock at a rate of $3.00 per share. The discount is being amortized to interest expense over the life of the note via the effective interest method. Interest in the amount of $3,000 and $3,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. Accrued interest was $14,877 and $11,876 respectively at March 31, 2015 and 2014.  The maturity date of this note has been extended until April 1, 2016.     30,000       30,000  
                 
On December 22, 2008, the Company issued a promissory note to an investor in the amount of $150,000.  This note carries an interest rate of 10% per annum and matures of December 15, 2009.  In addition to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable. At the time of the issuance of the shares to the note holder, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized to interest expense over the life of the note, 1 year, via the effective interest method.  Interest in the amount of $10,891 and $15,000 was accrued on this note during the years ended March 31, 2015 and 2014, respectively. Accrued interest was $79,110 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 650,000 shares of common stock to the note holder on December 22, 2014.     -0-       150,000  
                 
On December 31, 2008, the Company received a cash advance from an investor in the amount of $100,000.  On January 1, 2009, the Company received an additional $50,000 and the Company entered into a note payable agreement in the amount of $150,000.  The note bears interest at a rate of 10% per annum and matures on December 15, 2009.  In additional to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  At the time of issuance of the shares to the note holders, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized over the life of the note via the effective interest method. Interest in the amount of $14,836 and $15,000 was accrued on this note the years ended March 31, 2015 and 2014, respectively. The total accrued interest was $78,123 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 500,000 shares of common stock and the payment of $5,000 to the note holder on March 27, 2014.     -0-       150,000  

 

    March 31, 2015     March 31, 2014  
On January 27, 2009, the Company issued a promissory note to an investor in the amount of $50,000.  The note carries an interest rate of 10% per annum and matures on December 15, 2009.  In addition to the note payable, the Company issued 1,000,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  The shares are value using the closing market price on the date the note was signed and have a value of $25,000.  The discount will be amortized over the life of the note via the effective interest method.  Interest in the amount of $5,000 and $5,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. . Accrued interest was $30,863 and $25,863 at March 31, 2015 and 2014 respectively. The maturity date of this note has been extended until Apri1 1, 2016.   $ 50,000     $ 50,000  
                 
On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $2,500.  This note bears interest at a rate of 8% per annum and matures on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $2,500 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $200 and $200 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.     2,500       2,500  
                 
On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $5,000.  This note bears interest at a rate of 8% per annum and matured on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $5,000 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $400 and $400 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.     5,000       5,000  

  

    March 31, 2015     March 31, 2014  
On January 1, 2011 the Company issued a convertible note payable in the amount of $250,000.  This note bears interest at a rate of 8% per annum and will mature on April 1, 2015.   The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $95,000 was recorded as a discount to the note and is being amortized to interest expense. A discount of $-0- and $94,050 was deducted for the years ended March 31, 2015 and 2014 respectively.  Interest in the amount of $4,010 and $17,945 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. Accrued interest was $5,858 and $1,847 at March 31, 2015 and 2014 respectively as interest in the amount of $0 and $40,482 was paid through the years. In January 2014 the Company exchanged 125 shares of class B preferred stock for $125,000 in principal. In June 2014, the Company exchanged 50 shares of its Series B Preferred Stock for $50,000 in principal. The maturity date of this note has been extended until Apri1 1, 2016.   $ 75,000     $ 125,000  
                 
On September 29, 2014, the Company issued two promissory notes note payable in the total amount of $60,000.  These notes bear interest at a rate of 5% per annum, matured on January 1, 2014, and were extended until December 1, 2015. Accrued interest as of March 31, 2015 was $1,504.     60,000       -0-  
                 
Total outstanding   $ 224,300     $ 514,300  

Schedule of notes payable with classification

 

    Note     Unamortized     Net of  
March 31, 2015:   Amount     Discounts     Discount  
Notes payable – long-term portion   $ -     $ -     $    
Notes payable – current portion      224,300       -       224,300  
Total   $  224,300     $ -     $ 224,300  

 

 

    Note     Unamortized     Net of  
 March 31, 2014:   Amount     Discounts     Discount  
Notes payable – long-term portion   $ 514,300     $ (0)     $ 514,300  
Notes payable – current portion     -0-       (0)     -0-  
Total   $ 514,300     $ (0 )   $ 514,300  

 

 

Minimum future principal payments due under note payable

Minimum future principal payments under the note payable are due as follows during the years ended March 31:

 

 

         
2016   224,300  
    $ 224,300  

XML 32 R28.htm IDEA: XBRL DOCUMENT v3.2.0.727
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)
12 Months Ended
Mar. 31, 2015
Payables and Accruals [Abstract]  
Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consisted of the following:

 

   

March 31,

2015

    March 31, 2014  
Accounts payable   $ 371,722     $ 375,272  
Accrued interest     62,030       204,264  
Total   $ 433,752     $ 579,536  

XML 33 R56.htm IDEA: XBRL DOCUMENT v3.2.0.727
Technology license agreement (Details) - 12 months ended Mar. 31, 2015 - shares
Total
Technology License Agreement (Textual)  
Shares exchanged for exclusive license agreement 300,000
Percentage of net sales as royalty income 3.00%
XML 34 R44.htm IDEA: XBRL DOCUMENT v3.2.0.727
OIL AND GAS PROPERTY ACTIVITY (Details Narrative) - $ / bbl
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Extractive Industries [Abstract]    
Depletion per Bbl 6.85 5.14
XML 35 R30.htm IDEA: XBRL DOCUMENT v3.2.0.727
INCOME TAXES (Tables)
12 Months Ended
Mar. 31, 2015
Income Tax Disclosure [Abstract]  
Income from continuing operations before income taxes

   

Twelve Months

Ended

March 31,

2015

   

Twelve Months

Ended

March 31,

2014

 
Computed “expected” income tax benefit at approximately 38.73%   $ (10,471,510 )   $ (10,480,020 )
Change in valuation allowance     10,471,510       10,480,020  
    $ -     $ -  

XML 36 R31.htm IDEA: XBRL DOCUMENT v3.2.0.727
STOCKHOLDERS' EQUITY (Tables)
12 Months Ended
Mar. 31, 2015
Equity [Abstract]  
Transactions involving warrants

    Number of Shares    

Weighted Average

Exercise Price Per Share

 
Outstanding at March 31, 2014     167     $ 600.00  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     167       -  
Outstanding at March 31, 2015     -0-     $    

 

XML 37 R8.htm IDEA: XBRL DOCUMENT v3.2.0.727
RECEIVABLE FROM JOINT INTERESTS
12 Months Ended
Mar. 31, 2015
Receivables [Abstract]  
RECEIVABLE FROM JOINT INTERESTS

NOTE 2:   RECEIVABLE FROM JOINT INTERESTS

 

The Company is the operator of certain wells acquired in the Expanded Bedford Agreement (see note 4).  Pursuant to an operating agreement (the “Operating Agreement”), the Company charges the other owners of the Grace Wells for their pro-rata share of operating and workover expenses.  These receivables are carried on the Company’s balance sheet as Receivable from Joint Interests. At March 31, 2015 and 2014, the amount of these receivables is $151,236 and $156,873, respectively.  During the year ended March 31, 2015, the Company deemed the collectability of the receivable from joint interests in the amount of $131,236 and 136,873, respectively as unlikely.  

XML 38 R32.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Tables)
12 Months Ended
Mar. 31, 2015
Asc 932-235-55 Supplemental Disclosures  
Summary of aggregate capitalized costs related to natural gas and oil producing activities

    March 31, 2015     March 31, 2014  
             
Natural gas and oil properties and related equipment:            
Proven   $ 1,274,754     $ 1,165,546  
Unproven     1,867,183       1,867,183  
Accumulated depreciation, depletion, and impairment     (1,035,471 )     (1,008,173 )
Net capitalized costs   $ 2,106,466     $ 2,016,660  

 

Summary of costs incurred in natural gas and oil property acquisition, exploration and development activities

    March 31, 2015     March 31, 2014  
             
Acquisition of properties   $ 120,000     $ - 0 -  
Development costs     - 0 -       - 0 -  
Total costs incurred   $ 120,000     $ - 0 -  

 

Results of Operations for Oil and Gas Producing Activities Disclosure

    March 31, 2015    

March 31,

 2014

 
             
Production revenues   $ 110,371     $ 156,322  
Production costs     (100,060 )     (134,033 )
Impairment of property     -       -  
Depreciation and depletion expense     (74,411 )     (63,046 )
    $ (64,100 )   $ (40,757)  
Imputed income tax provision (1)     -       -  
Results of operation for natural gas / oil producing activity   $ (64,100 )   $ (40,757)  

Summary of natural gas and oil reserve quantities

    Oil - bbls  
Proved reserves:      
       
Balance as of March 31, 2006     -  
         
Purchase of reserves-in-place     29,815  
Extensions and discoveries     -  
Production     (1,043 )
Balance as of March 31, 2007     28,772  
         
Purchase of reserves-in-place     11,560  
Extensions and discoveries     4,216  
Change in estimates     (11,911 )
Production     (3,504 )
Balance as of March 31, 2008     29,133  
         
Purchase of reserves-in-place     22,282  
Extensions and discoveries     -  
Change in estimates     -  
Production     (5,768 )
Balance as of March 31, 2009     45,647  
         
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     -  
Production     (22,514 )
Balance as of March 31, 2010     23,133  

Purchase of reserves-in-place     4,823  
Extensions and discoveries     -  
Change in estimates     -  
Production     (5,291 )
Balance as of March 31, 2011     22,665  
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     4,506  
Production     (2,439 )
Balance as of March 31, 2012     24,732  
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     2,873  
Production     (2,290)  
Balance as of March 31, 2013     25,315  

 

 

Purchase of reserves-in-place     -
Extensions and discoveries     -
Change in estimates     7,736
Production     (3,979)
Balance as of March 31, 2014     29,072
       
Purchase of reserves-in-place     4,759
Extensions and discoveries     -
Change in estimates     3,251
Production     (2,145)
Balance as of March 31, 2015     34,937

 

Summary of standardized measure of discounted future net cash flows to estimating future results of operations

   

March 31,

2015

   

March 31,

2014

 
Future production revenue   $ 1,317,165     $ 1,126,270  
Future production costs     (675,670 )     (566,261 )
Future development costs     -       -  
Future cash flows before income taxes     641,495       560,009  
Future income tax     -       -  
Future net cash flows     641,495       560,009  
Effect of discounting future annual cash flows at 10%     (253,043 )     (234,457 )
Standard measure of discounted net cash flows   $ 388,452     $ 325,552  

Summary of standardized measure of discounted future net cash flows

   

March 31,

2015

   

March 31,

2014

 
Standardized measure of discount future net cash flows   $ 388,452     $ 325,552  
                 
Proved natural oil and gas property, net of accumulated                
depreciation, depletion, and amortization, including                
impairment     239,283       149,477  
                 
Standardized measure of discount future net cash flows in                
excess of net carrying value of proved natural oil and                
gas properties   $ 149,169     $ 176,075  

XML 39 R40.htm IDEA: XBRL DOCUMENT v3.2.0.727
INTELLECTUAL PROPERTY RIGHTS - Summary of intellectual property rights (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]    
Intelli-well $ 425,850 $ 425,850
Less: accumulated amortization (372,616) (330,035)
Total $ 53,234 $ 95,815
XML 40 R53.htm IDEA: XBRL DOCUMENT v3.2.0.727
STOCKHOLDERS' EQUITY - Transactions involving warrants (Details) - $ / shares
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Equity [Abstract]    
Outstanding at March 31, 2014 167 167
Granted    
Exercised    
Cancelled or expired 167  
Outstanding at March 31, 2015 0 167
Weighted Average Price Per Share, Outstanding at March 31, 2014 $ 600.00  
Weighted Average Price Per Share, Granted    
Weighted Average Price Per Share, Exercised    
Weighted Average Price Per Share, Cancelled or expired    
Weighted Average Price Per Share, Outstanding at March 31, 2015   $ 600.00
XML 41 R2.htm IDEA: XBRL DOCUMENT v3.2.0.727
Consolidated Balance Sheets - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Current Assets:    
Cash and cash equivalents $ 135,713 $ 223,914
Accounts receivable, net of allowance for doubtful accounts of $0 and $0 33,344 54,226
Notes receivable 11,429 15,714
Deposits and prepaid expenses 368,946 302,057
Receivables from joint interests, net of allowance for doubtful accounts of $131,236 and $136,873 20,000 20,000
Total current assets $ 569,432 615,911
Notes receivable   $ 2,857
Property and equipment, net $ 18,125  
Unproven oil & gas properties 1,867,183 $ 1,867,183
Producing oil & gas properties, net 239,283 149,477
Intellectual property rights, net 53,234 95,815
Total Assets 2,747,257 2,731,243
Current Liabilities:    
Accounts payable and accrued liabilities 433,752 579,536
Accrued payroll - related parties 211,317 207,817
Dividends payable 32,950 66,730
Accrued liabilities to joint interest 10,567 11,596
Notes payable - related party 20,000 $ 26,000
Notes payable 224,300  
Total current liabilities $ 932,885 $ 891,679
Notes payable, net of discount   514,300
Accrued asset retirement obligation (ARO) liability $ 124,220 112,927
Total Liabilities 1,057,105 1,518,906
Stockholders' Equity    
Preferred stock, Series A: $.10 par value, 1,000,000 shares authorized, 100 shares issued and outstanding stated at redemption value, as of December 31, 2013 and March 31, 2013, respectively; Series B: $.10 par value, 2,000 shares authorized, 200 shares issued and outstanding stated at redemption value as of December 31, 2013 and March 31, 2013, respectively 10 10
Preferred stock, Series B, $.10 par value, 2,000 shares authorized; 1,625 shares and 1,300 shares issued and outstanding started at redemption value as March 31, 2015 and March 31, 2014, liquidation preference of $1,625,000 and $1,324,780 as of March 31, 2015 and 2014 164 130
Common stock, $.001 par value: 200,000,000 shares authorized 16,548,062 and 11,658,062 shares issued and outstanding at March 31, 2015 and March 31, 2014, respectively 16,549 11,659
Additional paid in capital 32,572,302 32,024,126
Accumulated deficit (30,898,873) (30,823,588)
Total Stockholders Equity 1,690,152 1,212,337
Total Liabilities and Stockholders' Equity $ 2,747,257 $ 2,731,243
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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Accounts payable and accrued liabilities (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Payables and Accruals [Abstract]    
Accounts payable $ 371,722 $ 375,272
Accrued liabilities 62,030 204,264
Total $ 433,752 $ 579,536

XML 44 R6.htm IDEA: XBRL DOCUMENT v3.2.0.727
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT - USD ($)
Preferred Stock, Series A
Preferred stock, Series B
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Retained
Total
Beginning balance at Mar. 31, 2013 $ 10 $ 15 $ 6,209 $ 30,408,684   $ (29,972,830) $ 442,088
Beginning balance, Shares at Mar. 31, 2013 100 150 6,208,062        
Preferred stock issued for common stock   $ 20 $ (2,000) 1,980      
Preferred stock issued for common stock, shares   200 (2,000,000)        
Preferred Stock issued for conversion of note payable   $ 60   599,940     $ 600,000
Preferred Stock issued for conversion of note payable, Shares   600          
Stock issued for cash     $ 3,300 296,700     300,000
Stock issued for cash, Shares     3,300,000        
Preferred Stock issued for cash   $ 35   349,965     350,000
Preferred Stock issued for cash, Shares   350          
Common stock issued for conversion of note payable and assumption liabilities     $ 1,050 107,957     109,007
Common stock issued for conversion of note payable and assumption liabilities, Shares     1,050,000        
Stock issued for consulting services     $ 3,100 258,900     262,000
Stock issued for consulting services, Shares     3,100,000        
Preferred Dividends           $ (64,780) (64,780)
Net Loss           (785,978) (785,978)
Balance at Mar. 31, 2014 $ 10 $ 130 $ 11,659 32,024,126   (30,823,588) 1,212,337
Balance, Shares at Mar. 31, 2014 100 1,300 11,658,062        
Preferred Stock issued for conversion of note payable   $ 5   49,995     50,000
Preferred Stock issued for conversion of note payable, Shares   50          
Common stock issued for consulting services   $ 200   13,800     14,000
Common stock issued for consulting services, shares   200,000          
Preferred Stock issued for cash   $ 27   259,973     260,000
Preferred Stock issued for cash, Shares   260          
Common stock issued for consulting services (b)     $ 1,700 83,300     85,000
Common stock issued for consulting services (b), shares     1,700,000        
Common stock issued for licenses     $ 300 14,700     15,000
Common stock issued for licenses, shares     300,000        
Common stock issued for conversion of note payable and assumption liabilities     $ 1,150 51,350     52,500
Common stock issued for conversion of note payable and assumption liabilities, Shares     1,150,000        
Stock issued for consulting services   $ 2   14,998     15,000
Stock issued for consulting services, Shares   15          
Common stock issued in exchange for dividends payable     $ 1,540 60,060     61,600
Common stock issued in exchange for dividends payable, shares     1,540,000        
Preferred Dividends           (175,599) (175,599)
Net Loss           100,314 100,314
Balance at Mar. 31, 2015 $ 10 $ 164 $ 16,549 $ 32,572,302   $ 30,898,873 $ 1,690,152
Balance, Shares at Mar. 31, 2015 100 1,625 16,548,062        
XML 45 R59.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details 1) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Summary of costs incurred in natural gas and oil property acquisition, exploration and development activities    
Acquisition of properties $ 120,000 $ 0
Development costs 0 0
Total costs incurred $ 120,000 $ 0
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.2.0.727
RECEIVABLE FROM JOINT INTERESTS (Details Narrative) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Receivables [Abstract]    
Receivables from Joint Interests $ 156,873 $ 156,873
Unlikely collectability of receivable from joint interests amount $ 131,236 $ 136,873
XML 47 R22.htm IDEA: XBRL DOCUMENT v3.2.0.727
SUBSEQUENT EVENTS
12 Months Ended
Mar. 31, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 16:  SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the issuance of the consolidated financial statements and no subsequent event is identified.

 

We will continue to review our operations with the regard to the current market price oil and natural gas.

XML 48 R36.htm IDEA: XBRL DOCUMENT v3.2.0.727
DEPOSITS AND PREPAID EXPENSES - Deposits and Prepaid Expenses (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Deposits on wells $ 279,400 $ 302,057
Prepaid consulting fees 100,000  
DepositsAndPrepaidExpenses 379,400 $ 302,057
Less: Accumulated amortization on prepaid fees (1,054)  
Total    
DepositsAndPrepaidExpenses $ 368,946 $ 302,057
XML 49 R24.htm IDEA: XBRL DOCUMENT v3.2.0.727
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
12 Months Ended
Mar. 31, 2015
Accounting Policies [Abstract]  
Estimated amortization of intangible assets

March 31,      
       
2016   $ 42,587  
2017     10,647  
    $ 53,234  
         

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Mar. 31, 2015
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Operations

 

Avalon Oil & Gas, Inc. (the "Company") was originally incorporated in Colorado in April 1991 under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs" which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S. Bankruptcy Code. In May, 1999, we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. On July 22, 2005, the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares par value of $0.001, and engage in the acquisition of producing oil and gas properties.  On November 16, 2011, a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001.

 

On June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned.  The reverse split was effective on July 23, 2012.   On September 28, 2012, we held a special meeting of Avalon’s shareholders and approved an amendment to the Company’s Articles of Incorporation such that the Company would be authorized to issue up to 200,000,000 shares of common stock.  We filed an amendment with the Nevada Secretary of State on April 10, 2013, to increase our authorized shares to 200,000,000.

 

The Company is currently in the process of raising funds to acquire oil and gas properties and related oilfield technologies, which the Company plans to develop into commercial applications.

 

On September 22, 2007 the Company entered into an agreement with respect to its purchase of a 75.6% interest in Oiltek, Inc. (Oiltek) for $50,000 and the right of Oiltek to market Avalon's intellectual property.

 

On March 19, 2014, the Company formed Weyer Partners, LLC, (“Weyer”) a one hundred percent (100%) wholly owned Minnesota Corporation. Weyer Partners, LLC, was formed to operate oil and gas properties in Oklahoma and Texas. Weyer is consolidated in these financial statements.

 

On May 9, 2014, the Company formed AFS Holdings, Inc., (“AFS”) a one hundred percent (100%) wholly owned Nevada Corporation. AFS Holding, Inc., was formed to leverage the Company’s relationship with IP TechEx, and market technology licensed from IP TechEx. AFS is consolidated in these financial statements.

 

Principles of consolidation

 

The consolidated financial statements include the accounts of the Company and the Company’s subsidiary’s Oiltek, Inc., AFS Holdings, Inc., and Weyer Partners, LLC. All significant inter-company items have been eliminated in consolidation.

 

Going Concern

 

The March 31, 2015, consolidated financial statements have been prepared assuming the Company will continue as a going concern. However, the Company has incurred a loss of $30,898,873 from inception through March 31, 2015, and has a working capital deficiency of $363,453 and stockholders’ equity of $1,690,152 as of March 31, 2015. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The Company currently has minimal revenue generating operations and expects to incur substantial operating expenses in order to expand its business. As a result, the Company expects to incur operating losses for the foreseeable future.  The Company will continue to seek equity and debt financing to meet our operating losses. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

 

Basis of Accounting

 

The Company's financial statements are prepared using the accrual method of accounting. Revenues are recognized when earned and expenses when incurred. 

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist primarily of cash on deposit, certificates of deposit, money market accounts, and investment grade commercial paper that are readily convertible into cash and purchased with original maturities of three months or less. The Company maintains its cash balances at several financial institutions. Accounts at the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000.

 

Fair Value of Financial Instruments

 

The Company's financial instruments are cash and cash equivalents, accounts receivable, accounts payable, notes payable, notes receivable and long-term debt. The recorded values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The recorded values of notes payable, notes receivable and long-term debt approximate their fair values, as interest approximates market rates.

 

Accounts Receivable and Receivables from the Joint Interest

 

Management periodically assesses the collectability of the Company's accounts receivable and receivables from the Joint Interest. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company had an allowance for receivables from the Joint Interest of $131,236 and $136,873 for the years ended March 31, 2015 and 2014.

 

Oil and Natural Gas Properties

 

The Company follows the full cost method of accounting for natural gas and oil properties.  Under the full cost concept, all costs incurred in acquiring, exploring, and developing properties cost center are capitalized when incurred and are amortized as mineral reserves in the cost center are produced, subject to a limitation that the capitalized costs not exceed the value of those reserves.  The unamortized costs relating to a property that is surrendered, abandoned, or otherwise disposed of are accounted for as an adjustment of accumulated amortization, rather than as a gain or loss that enters into the determination of net income, until all of the properties constituting the amortization base are disposed of, at which point gain or loss is recognized. All acquisition, exploration, and development costs are capitalized. The Company capitalizes all internal costs, including: salaries and related fringe benefits of employees directly engaged in the acquisition, exploration and development of natural gas and oil properties, as well as other identifiable general and administrative costs associated with such activities. During the year ended March 31, 2014 no acquisition costs were capitalized.  During the year ended March 31, 2015, we capitalized $120,000 for the purchase of the Kensington Energy Assets. Oil and natural gas properties are reviewed for recoverability at least annually or when events or changes in circumstances indicate that its carrying value may exceed future undiscounted cash inflows. As of March 31, 2015 and 2014, the Company had not identified any such impairment.

 

Property and Equipment, net

 

Property and equipment is reviewed on an annual basis for impairment and as of March 31, 2015, the Company had not identified any such impairment. Repairs and maintenance are charged to operations when incurred and improvements and renewals are capitalized.

 

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method for financial reporting purposes and accelerated methods for tax purposes.

 

Their estimated useful lives are as follows:

 

            Office Equipment:  5-7 Years

 

Asset Retirement Obligations

 

In accordance with the provisions of Financial Accounting Standards Board “FASB” Accounting Standard Codification “ASC” 410-20-15, “Accounting for Asset Retirement Obligations”, the Company records the fair value of its liability for asset retirement obligations in the period in which it is incurred and a corresponding increase in the carrying amount of the related long live assets. Over time, the liability is accreted to its present value at the end of each reporting period, and the capitalized cost is depreciated over the useful life of the related assets. Upon settlement of the liability, the Company will either settle the obligation for its recorded amount or incur a gain or loss upon settlement. The Company's asset retirement obligations relate to the plugging and abandonment of its oil properties.

 

Intellectual Property Rights, net

 

The cost of licensed technologies acquired is capitalized and will be amortized over the shorter of the term of the licensing agreement or the remaining life of the underlying patents.

 

The Company evaluates recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that intangible assets carrying amount may not be recoverable. Such circumstances include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of cost significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the assets against the estimated undiscounted future cash flows associated with it.

 

There were not any impairment losses for the fiscal years ended March 31, 2015 and 2014.

 

Should the sum of the expected cash flows be less than the carrying amount of assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying amount of the assets, exceed fair value. Estimated amortization of intangible assets over the next five years is as follows:

 

March 31,      
       
2016   $ 42,587  
2017     10,647  
    $ 53,234  
         

 

Stock Based Compensation

 

Share awards granted to employees and independent directors are accounted for under ASC 718, "Share-Based Payment". ASC 718-10 eliminates accounting for share-based compensation transaction using the intrinsic value method and requires instead that such transactions be accounted for using a fair-value-based method. The Company has elected to adopt the provisions of ASC 718-10 effective January 1, 2006, under the modified prospective transition method, in which compensation cost was recognized beginning with the effective date (a) based on the requirements of ASC 718-10 for all share-based payments granted after the effective date and (b) based on the requirements of ASC 718-10 for all awards granted to employees prior to the effective date of ASC 718-10 that remain unvested on the effective date.

 

The Company records share-based compensation expense for awards granted to non-employees in exchange for services at fair value in accordance with the provisions of ASC 505-50, "Equity Based" payment to non-employees. For the awards granted to non-employees, the Company will record compensation expenses equal to the fair value of the share options at the measurement date, which is determined to be the earlier of the performance commitment date or the service completion date.

 

Warrants

 

The value of warrants issued is recorded at their fair values as determined by use of a Black Scholes Model at such time or over such periods as the warrants vest.

 

Loss per Common Share

 

ASC 260-10-45, “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 are 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.  In addition, the Company had a net loss during current period so dilutive securities would decrease negative EPS and have an anti-dilutive effect.

 

Income Taxes

 

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial   statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, 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 income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

ASC 740-10-25, “Accounting for Uncertainty in Income Taxes”, is intended to clarify the accounting for uncertainty in income taxes recognized in a company's financial statements and prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

Under ASC 740-10-25, evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

 

Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

 

The adoption of ASC 740-10-25 at January 1, 2007 did not have a material effect on the Company's financial position.

 

Revenue Recognition

 

In accordance with the requirements ASC topic 605 "Revenue Recognition", revenues are recognized at such time as (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller's price to the buyer is fixed or determinable and (4) collectability is reasonably assured. Specifically, oil and gas sales are recognized as income at such time as the oil and gas are delivered to a viable third party purchaser at an agreed price. Interest income is recognized as it is earned.

XML 52 R3.htm IDEA: XBRL DOCUMENT v3.2.0.727
Consolidated Balance Sheets (Parenthetical) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Allowance for doubtful accounts $ 0 $ 0
Allowance for doubtful accounts on receivables from joint interests $ 131,236 $ 136,873
Preferred stock, shares issued 100  
Common stock, par value $ .001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 16,548,062 11,658,062
Common stock, shares outstanding 16,548,062 11,658,062
Preferred stock, Series A    
Preferred stock, par value $ 0.10 $ 0.10
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 100 100
Preferred stock, shares outstanding 100 100
Preferred stock, liquidation preference $ 532,950 $ 541,950
Preferred stock, Series B    
Preferred stock, par value $ 0.10 $ 0.10
Preferred stock, shares authorized 2,000 2,000
Preferred stock, shares issued 1,625 1,300
Preferred stock, shares outstanding 1,625 1,300
Preferred stock, liquidation preference $ 1,625,000 $ 1,324,780
XML 53 R17.htm IDEA: XBRL DOCUMENT v3.2.0.727
STOCKHOLDERS' EQUITY
12 Months Ended
Mar. 31, 2015
Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 11: STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

Series A Preferred Stock

 

The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.10 per share.  As of March 31, 2015 and 2014, the Company has 100 shares of Series A preferred stock issued and outstanding.

 

During the twelve months ended March 31, 2015 and 2014, the Company incurred $40,000 respectively in Series A preferred stock dividends, and paid $49,000 and $38,800 for the twelve months ended March 31, 2015 and 2014 respectively. As of March 31, 2015 and 2014, the accrued balance due Mr. Rodriguez was $32,950 and $41,950 respectively. The liquidation preference as of March 31, 2015 and March 31, 2014 was $532,950 or $53,295 per share.

 

The 100 shares of Series A Preferred Stock, issued to Mr. Rodriguez as payment for $500,000 in promissory notes, are convertible into the number of shares of common stock sufficient to represent 40 percent (40%) of the fully diluted shares outstanding after their issuance. The Series A Preferred Stock pays an eight percent (8%) dividend. The dividends are cumulative and payable quarterly. The Series A Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. The Series A Preferred Stock provides for voting rights on an "as converted to common stock" basis.

 

The holders of the Series A Preferred Stock have the right to convert the preferred stock into shares of common stock such that if converted simultaneously, they shall represent forty percent (40%) of the fully diluted shares outstanding after their issuance. Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of shares of common stock issuable upon exercise, conversion or exchange of outstanding options, warrants, or convertible securities.

 

Series B Preferred Stock

 

In March, 2013, our Board of Directors authorized the issuance of 2,000 shares of Series B Preferred Stock, par value $0.10 per share (the "Series B Preferred Stock").  The face amount of share of the Series B Preferred Stock is $1,000.  As of March 31, 2015 and 2014, the Company has 1,625 and 1,300 shares of Series B preferred stock respectively issued and outstanding. The liquidation preference as of March 31, 2015 and March 31, 2014 was $1,625,000 and $1,324,780 or $1,000.00 and $1,019.06 per share, respectively.

 

The Series B Preferred Stock accrues dividends at the rate of 9% per annum on the original purchase price for the shares. These dividends are payable annually, beginning in January 2014. We are prohibited from paying any dividends on our Common Stock until all accrued dividends are paid on our Series B Preferred Stock.  The Series B Preferred Stock ranks junior to the Series A Preferred Stock owned by our President and Chief Executive Officer, as to Dividends and to a distribution of assets in the event of a liquidation of assets.

 

The Holders of Series B Preferred Stock do not have any voting rights and their consent is not required to take any sort of corporate action.

 

Series B Preferred Stock Issuances during the year ended March 31, 2015:

 

In April 2014 we exchanged 50 shares Series B Preferred Stock for $50,000 of notes payable.

 

In September 2014 we issued 175 Shares of Series B Preferred Stock to an accredited investor for $175,000.

 

In October 2014 we issued 15 shares Series B Preferred Stock for consulting services for $15,000.

 

In March 2015 we issued 85 Shares of Series B Preferred Stock to an accredited investor for $85,000.

 

In March 2015 we issued 1,540,000 Shares of Common Stock for all accrued interest as of March 31, 2015, on the outstanding 1,625 shares of our Series B Preferred Stock.

 

During the twelve months ended March 31, 2015 and 2014, the Company incurred $135,599 and $24,780 in dividends on Series B preferred stock.  

 

Total dividends payable from both A and B preferred shares at March 31, 2015 and 2014 is $32,950 and $66,730 respectively.

 

Common Stock

 

On June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned.  The reverse split was effective on July 23, 2012.

 

The Company has authorized 200,000,000 shares of common stock with a par value of $0.001 per share.  As of March 31, 2015 and 2014, the Company has 16,548,062 and 6,208,062 shares of common stock issued and outstanding.

 

Common stock issuances during the year ended March 31, 2014:

 

On May 3, 2013, the Company issued 500,000 shares of Common Stock for $50,000 or $0.10 per share, and was based on current market value at the date of issuance.

 

On May 5, 2013, the Company issued 100,000 shares of Common Stock for compensation for the placement of 500,000 shares of Common Stock and 50 Shares of Series B Preferred Stock for $100,000 to a third party.  The value of these shares in the amount of $10,000, or $0.10 per share was charged to operations, and was based on the current market value at the date of issuance.

 

On June 4, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $8,000 or $0.08 per share and was based on the current market value on the date of issuance. $100 has been credited to the note payable, and a loss of $7,900 was recognized on this conversion, and was charged to operations.

 

On June 28, 2013, the Company issued 2,800,000 shares of Common Stock for $250,000, and was based on current market value at the date of issuance.

 

On June 28, 2013, the Company issued 500,000 shares of Common Stock to a consultant, the value of these shares in the amount of $50,000, or $0.10 per share was charged to operations, and was based on the current market value at the date of issuance.

 

On July 1, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $17,000, or $0.17 per share which was based on the current market value on the date of issuance. $100 has been credited to the note payable, and a loss of $16,900 was recognized on this conversion, and was charged to operations.

 

On July 2, 2013, the Company issued 180,000 shares of Common Stock to its board of directors, the value of these shares in the amount of $18,000, or $0.10 per share was charged to operations, and was based on the on current market value at the date of issuance.

 

On July 26, 2013, the Company issued 250,000 shares of Common Stock to a consultant, the value of these shares in the amount of $25,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On September 13, 2013, the Company issued 150,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $22,500, or $0.15 per share which was based on the current market value on the date of issuance. $150 has been credited to the note payable, and a loss of $22,350 was recognized on this conversion, and was charged to operations.

 

On October 10, 2013, the Company issued 220,000 shares of common stock to a consultant, the value of these shares in the amount of $22,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On October 16, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.  The fair market value of these shares was $10,000 or $0.10 per share which was based on the current market value on the date of issuance. $100 has been credited to the note payable, and a loss of $9,900 was recognized on this conversion, and was charged to operations.

 

On November 6, 2013, the Company issued 250,000 to a consultant, the value of these shares in the amount of $25,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On March 25, 2014 the Company exchanged 2,000,000 shares of Common Stock for 200 shares of Series B Preferred Stock.

 

On March 31, 2014, the Company issued 600,000 shares of common stock for payment of accrued interest of $51,507.  

 

On March 31, 2014 the Company issued 1,600,000 shares of common stock to a consultant, the value of these shares in the amount of $112,000, or $0.07 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

Common stock issuances during the year ended March 31, 2015:

 

On April 25, 2014, the Company issued 200,000 shares of common stock to a consultant, the value of these shares in the amount of $14,000, or $0.07 per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On December 1, 2014, the Company issued 300,000 shares of common stock for a technology licensing agreement dated December 1, 2014, the value of these shares in the amount of $15,000, or $0.05 per share was charged to operations, and was valued at the middle of the closing bid price and the closing offering price of the Company's common stock on the date the Consulting Agreement was executed by the Company

 

On December 15, 2015, the Company issued 650,000 shares of common stock in exchange for a $150,000 promissory note payable and $90,000 of accrued interest. The value of these shares in the amount of $32,500, or $0.05 per share and was valued at closing bid price of the Company's common stock on the date the Agreement was executed by the Company. $207,500 was treated as a gain from this transaction.

 

On December 26, 2014, the Company issued 1,700,000 shares of common to a consultant, the value of these shares in the amount of $85,000, or $0.05 per share was charged to operations, and was valued at the middle of the closing bid price and the closing offering price of the Company's common stock on the date the Consulting Agreement was executed by the Company.

 

On March 25, 2015, the Company issued 1,540,000 shares of common stock to the holders of Series B Preferred Stock to pay all accrued interest as of March 31, 2015. The value of these shares is in the amount of $61,600, or $.04 per share.

 

On March 27, 2015, the Company issued 500,000 shares of common stock along with $6,000, in exchange for a $150,000 promissory note payable and $90,000 of accrued interest. The value of these shares in the amount of $20,000 or $0.04 per share, and were valued at closing bid price of the Company's common stock on the date the Agreement was executed by the Company, $215,000 was treated as a gain from this transaction.

 

Options

 

There are no stock options outstanding.

 

Warrants

 

The following table summarizes the warrants outstanding and the related prices for the shares of the Company’s common stock issued to non-employees of the Company at March 31, 2015:

 

Transactions involving warrants are summarized as follows: 

    Number of Shares    

Weighted Average

Exercise Price Per Share

 
Outstanding at March 31, 2014     167     $ 600.00  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     167       -  
Outstanding at March 31, 2015     -0-     $    

 

XML 54 R1.htm IDEA: XBRL DOCUMENT v3.2.0.727
Document and Entity Information - USD ($)
12 Months Ended
Mar. 31, 2015
Aug. 05, 2015
Document And Entity Information    
Entity Registrant Name Avalon Oil & Gas, Inc.  
Entity Central Index Key 0000918573  
Document Type 10-K  
Document Period End Date Mar. 31, 2015  
Amendment Flag false  
Current Fiscal Year End Date --03-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Public Float   $ 16,548
Entity Common Stock, Shares Outstanding   16,548,062
Document Fiscal Period Focus FY  
Document Fiscal Year Focus 2014  
XML 55 R18.htm IDEA: XBRL DOCUMENT v3.2.0.727
TECHNOLOGY LICENSE AGREEMENTS
12 Months Ended
Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
TECHNOLOGY LICENSE AGREEMENTS

NOTE 12: TECHNOLOGY LICENSE AGREEMENTS

 

On December 1, 2014, the Company entered into an exclusive license agreement for anti-corrosion technology from Ronald Knight in exchange for three hundred thousand (300,000) shares of our common stock. This license calls for an earned royalty of three percent (3.00%) on sales of licensed products and services as they may relate to corrosion prevention and maintenance of sump pumps at gasoline and diesel dispensing locations, including, but not limited to gas stations, convenience stores, trucking companies, bus companies, and any other locations where gasoline and/or diesel is dispensed. We did not have any revenue for the period ended March 31, 2015.

XML 56 R4.htm IDEA: XBRL DOCUMENT v3.2.0.727
Consolidated Statements of Operations - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Statement [Abstract]    
Oil & Gas Sales $ 110,371 $ 156,322
Operating expenses:    
Lease operating expense, severance taxes and ARO accretion 100,060 134,033
Selling, general and administrative expenses 285,534 $ 602,303
Stock based compensation 24,454  
Depreciation, depletion, and amortization 74,411 $ 63,046
Total operating expenses 484,459 799,382
Operating loss (374,088) (643,060)
Other income (expense):    
Gain on extinguishment of debt $ 424,624 5,884
(Loss) on conversion of notes payable   $ (57,050)
Gain on conversion of dividends payable $ 82,779  
Other miscellaneous income 10,100  
Interest expense, net (43,101) $ (91,752)
Total other income (expense) 474,402 (142,918)
Gain (Loss) before income tax $ 100,314 $ (785,978)
Provision for income taxes    
Net Income (loss) $ 100,314 $ (785,978)
Preferred stock dividends (175,599) (64,780)
Net loss attributable to common shareholders $ (75,285) $ (850,758)
Net loss per share - basic and diluted $ (.006) $ (0.085)
Weighted average shares outstanding - basic and diluted 12,722,363 10,009,185
XML 57 R12.htm IDEA: XBRL DOCUMENT v3.2.0.727
OIL AND GAS PROPERTY ACTIVITY
12 Months Ended
Mar. 31, 2015
Extractive Industries [Abstract]  
OIL AND GAS PROPERTY ACTIVITY

NOTE 6: OIL AND GAS PROPERTY ACTIVITY

 

The table below shows the Company’s working interests in the Grace Wells as of March 31, 2015 and 2014:

 

Well  

March 31, 2014

Working Interest

    Additional Acquisition     March 31, 2015 Working Interest  
Grace #1     65.25 %     0 %     65.25 %
Grace #2     55.75 %     0 %     55.75 %
Grace #3     64.00 %     0 %     64.00 %
Grace #5A     52.00 %     0 %     52.00 %
Grace #6     58.00 %     0 %     58.00 %

 

 

Producing oil and gas properties consist of the following:

 

    March 31, 2015     March 31, 2014  
Lincoln County, Oklahoma   $ 111,402     $ 111,402

 

 

Lipscomb County, Texas     250,082       250,082  
Miller County, Arkansas     139,909       139,909  
Ward Petroleum Assets     290,500       290,500  
Kensington Energy Assets     120,000       -  
Other Properties     159,856       159,856  
 Total Properties     1,237,078       1,117,078

 

 

 

                 
Asset retirement cost, net     37,676       40,572  
Property impairments      (481,072      (481,072
Less: Depletion     (554,399 )     (527,101 )
Net   $ 239,283     $ 149,477  

 

For the year ended March 31, 2015 and 2014, depletion per Bbl was $6.85 and $5.14, respectively.

 

XML 58 R11.htm IDEA: XBRL DOCUMENT v3.2.0.727
INTELLECTUAL PROPERTY RIGHTS
12 Months Ended
Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
INTELLECTUAL PROPERTY RIGHTS

NOTE 5: INTELLECTUAL PROPERTY RIGHTS

 

A summary of the intellectual property rights at March 31, 2015 and 2014, are as follows:

 

    March 31, 2015     March 31, 2014  
Intelli-well   $ 425,850     $ 425,850  
Less: accumulated amortization     (372,616 )     (330,035 )
Total   $ 53,234     $ 95,815  

 

Amortization expense for the years

XML 59 R23.htm IDEA: XBRL DOCUMENT v3.2.0.727
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Mar. 31, 2015
Accounting Policies [Abstract]  
Nature of Operations

Nature of Operations

 

Avalon Oil & Gas, Inc. (the "Company") was originally incorporated in Colorado in April 1991 under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs" which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S. Bankruptcy Code. In May, 1999, we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. On July 22, 2005, the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares par value of $0.001, and engage in the acquisition of producing oil and gas properties.  On November 16, 2011, a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001.

 

On June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned.  The reverse split was effective on July 23, 2012.   On September 28, 2012, we held a special meeting of Avalon’s shareholders and approved an amendment to the Company’s Articles of Incorporation such that the Company would be authorized to issue up to 200,000,000 shares of common stock.  We filed an amendment with the Nevada Secretary of State on April 10, 2013, to increase our authorized shares to 200,000,000.

 

The Company is currently in the process of raising funds to acquire oil and gas properties and related oilfield technologies, which the Company plans to develop into commercial applications.

 

On September 22, 2007 the Company entered into an agreement with respect to its purchase of a 75.6% interest in Oiltek, Inc. (Oiltek) for $50,000 and the right of Oiltek to market Avalon's intellectual property.

 

On March 19, 2014, the Company formed Weyer Partners, LLC, (“Weyer”) a one hundred percent (100%) wholly owned Minnesota Corporation. Weyer Partners, LLC, was formed to operate oil and gas properties in Oklahoma and Texas. Weyer is consolidated in these financial statements.

 

On May 9, 2014, the Company formed AFS Holdings, Inc., (“AFS”) a one hundred percent (100%) wholly owned Nevada Corporation. AFS Holding, Inc., was formed to leverage the Company’s relationship with IP TechEx, and market technology licensed from IP TechEx. AFS is consolidated in these financial statements.

Principles of consolidation

Principles of consolidation

 

The consolidated financial statements include the accounts of the Company and the Company’s subsidiary’s Oiltek, Inc., AFS Holdings, Inc., and Weyer Partners, LLC. All significant inter-company items have been eliminated in consolidation.

Going Concern

Going Concern

 

The March 31, 2015, consolidated financial statements have been prepared assuming the Company will continue as a going concern. However, the Company has incurred a loss of $30,898,873 from inception through March 31, 2015, and has a working capital deficiency of $363,453 and stockholders’ equity of $1,690,152 as of March 31, 2015. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The Company currently has minimal revenue generating operations and expects to incur substantial operating expenses in order to expand its business. As a result, the Company expects to incur operating losses for the foreseeable future.  The Company will continue to seek equity and debt financing to meet our operating losses. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

Basis of Accounting

Basis of Accounting

 

The Company's financial statements are prepared using the accrual method of accounting. Revenues are recognized when earned and expenses when incurred.

Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash and cash equivalents consist primarily of cash on deposit, certificates of deposit, money market accounts, and investment grade commercial paper that are readily convertible into cash and purchased with original maturities of three months or less. The Company maintains its cash balances at several financial institutions. Accounts at the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company's financial instruments are cash and cash equivalents, accounts receivable, accounts payable, notes payable, notes receivable and long-term debt. The recorded values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The recorded values of notes payable, notes receivable and long-term debt approximate their fair values, as interest approximates market rates.

Accounts Receivable

Accounts Receivable and Receivables from the Joint Interest

 

Management periodically assesses the collectability of the Company's accounts receivable and receivables from the Joint Interest. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company had an allowance for receivables from the Joint Interest of $131,236 and $136,873 for the years ended March 31, 2015 and 2014.

Oil and Natural Gas Properties

Oil and Natural Gas Properties

 

The Company follows the full cost method of accounting for natural gas and oil properties.  Under the full cost concept, all costs incurred in acquiring, exploring, and developing properties cost center are capitalized when incurred and are amortized as mineral reserves in the cost center are produced, subject to a limitation that the capitalized costs not exceed the value of those reserves.  The unamortized costs relating to a property that is surrendered, abandoned, or otherwise disposed of are accounted for as an adjustment of accumulated amortization, rather than as a gain or loss that enters into the determination of net income, until all of the properties constituting the amortization base are disposed of, at which point gain or loss is recognized. All acquisition, exploration, and development costs are capitalized. The Company capitalizes all internal costs, including: salaries and related fringe benefits of employees directly engaged in the acquisition, exploration and development of natural gas and oil properties, as well as other identifiable general and administrative costs associated with such activities. During the year ended March 31, 2014 no acquisition costs were capitalized.  During the year ended March 31, 2015, we capitalized $120,000 for the purchase of the Kensington Energy Assets. Oil and natural gas properties are reviewed for recoverability at least annually or when events or changes in circumstances indicate that its carrying value may exceed future undiscounted cash inflows. As of March 31, 2015 and 2014, the Company had not identified any such impairment.

Property and Equipment, net

Property and Equipment, net

 

Property and equipment is reviewed on an annual basis for impairment and as of March 31, 2015, the Company had not identified any such impairment. Repairs and maintenance are charged to operations when incurred and improvements and renewals are capitalized.

 

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method for financial reporting purposes and accelerated methods for tax purposes.

 

Their estimated useful lives are as follows:

 

            Office Equipment:  5-7 Years

Asset Retirement Obligations

Asset Retirement Obligations

 

In accordance with the provisions of Financial Accounting Standards Board “FASB” Accounting Standard Codification “ASC” 410-20-15, “Accounting for Asset Retirement Obligations”, the Company records the fair value of its liability for asset retirement obligations in the period in which it is incurred and a corresponding increase in the carrying amount of the related long live assets. Over time, the liability is accreted to its present value at the end of each reporting period, and the capitalized cost is depreciated over the useful life of the related assets. Upon settlement of the liability, the Company will either settle the obligation for its recorded amount or incur a gain or loss upon settlement. The Company's asset retirement obligations relate to the plugging and abandonment of its oil properties.

Intellectual Property Rights, net

Intellectual Property Rights, net

 

The cost of licensed technologies acquired is capitalized and will be amortized over the shorter of the term of the licensing agreement or the remaining life of the underlying patents.

 

The Company evaluates recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that intangible assets carrying amount may not be recoverable. Such circumstances include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of cost significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the assets against the estimated undiscounted future cash flows associated with it.

 

There were not any impairment losses for the fiscal years ended March 31, 2015 and 2014.

 

Should the sum of the expected cash flows be less than the carrying amount of assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying amount of the assets, exceed fair value. Estimated amortization of intangible assets over the next five years is as follows:

 

March 31,      
       
2016   $ 42,587  
2017     10,647  
    $ 53,234  
         

Stock Based Compensation

Stock Based Compensation

 

Share awards granted to employees and independent directors are accounted for under ASC 718, "Share-Based Payment". ASC 718-10 eliminates accounting for share-based compensation transaction using the intrinsic value method and requires instead that such transactions be accounted for using a fair-value-based method. The Company has elected to adopt the provisions of ASC 718-10 effective January 1, 2006, under the modified prospective transition method, in which compensation cost was recognized beginning with the effective date (a) based on the requirements of ASC 718-10 for all share-based payments granted after the effective date and (b) based on the requirements of ASC 718-10 for all awards granted to employees prior to the effective date of ASC 718-10 that remain unvested on the effective date.

 

The Company records share-based compensation expense for awards granted to non-employees in exchange for services at fair value in accordance with the provisions of ASC 505-50, "Equity Based" payment to non-employees. For the awards granted to non-employees, the Company will record compensation expenses equal to the fair value of the share options at the measurement date, which is determined to be the earlier of the performance commitment date or the service completion date.

Warrants

Warrants

 

The value of warrants issued is recorded at their fair values as determined by use of a Black Scholes Model at such time or over such periods as the warrants vest.

Loss per Common Share

Loss per Common Share

 

ASC 260-10-45, “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 are 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.  In addition, the Company had a net loss during current period so dilutive securities would decrease negative EPS and have an anti-dilutive effect.

Income Taxes

Income Taxes

 

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial   statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, 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 income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

ASC 740-10-25, “Accounting for Uncertainty in Income Taxes”, is intended to clarify the accounting for uncertainty in income taxes recognized in a company's financial statements and prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

Under ASC 740-10-25, evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

 

Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

 

The adoption of ASC 740-10-25 at January 1, 2007 did not have a material effect on the Company's financial position.

Revenue Recognition

Revenue Recognition

 

In accordance with the requirements ASC topic 605 "Revenue Recognition", revenues are recognized at such time as (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller's price to the buyer is fixed or determinable and (4) collectability is reasonably assured. Specifically, oil and gas sales are recognized as income at such time as the oil and gas are delivered to a viable third party purchaser at an agreed price. Interest income is recognized as it is earned.

XML 60 R19.htm IDEA: XBRL DOCUMENT v3.2.0.727
LOSS PER SHARE
12 Months Ended
Mar. 31, 2015
Earnings Per Share [Abstract]  
LOSS PER SHARE

NOTE 13: LOSS PER SHARE

 

ASC 260-10-45 requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations. As the Company is in a loss position during the year ended March 31, 2015 and 2014, there is no dilutive effect included. The net loss per share was $0.006 and $0.085 for March 31, 2015 and 2014.

XML 61 R15.htm IDEA: XBRL DOCUMENT v3.2.0.727
RELATED PARTY TRANSACTIONS
12 Months Ended
Mar. 31, 2015
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 9: RELATED PARTY TRANSACTIONS

 

During the fiscal year ended March 31, 2015 and 2014 the president advanced the Company $0 and $5,000 respectively. The balance as of March 31, 2015 and 2014 were $20,000 and $26,000 respectively.

 

Preferred Stock

 

The 100 shares of Series A Preferred Stock were issued on June 3, 2002 as payment for $500,000 in promissory notes, are convertible into the number of shares of common stock sufficient to represent forty percent (40%) of the fully diluted shares outstanding after their issuance The holder of these shares of Series A Preferred Stock is our President, Kent Rodriguez. The Series A Preferred Stock pays an eight percent (8%) dividend. The dividends are cumulative and payable quarterly. The Series A Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. The Series A Preferred Stock provides for voting rights on an "as converted to common stock" basis.

 

During the years ended March 31, 2015 and 2014, the Company incurred $40,000 in Class A preferred stock dividends, respectively.

 

The holders of the Series A Preferred Stock have the right to convert each share of preferred stock into a sufficient number of shares of common stock to equal 40% of the then fully-diluted shares outstanding. Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of shares of common stock issuable upon exercise, conversion or exchange of outstanding options, and warrants. In the event that the Company does not have an adequate number of shares of Common Stock authorized, upon a conversion request, only the maximum allowable number of shares of Series A preferred stock shall convert into Common Stock and the remaining shares of Series A preferred Stock shall convert upon lapse of the applicable restrictions.

 

Employment Agreements

 

KENT RODRIGUEZ

 

During the years ended March 31, 2015 and 2014, the Company charged to operations the amount of $48,000 in annual salary for Mr. Rodriguez, of which $44,500 and $42,400 was paid to him during the years ended March 31, 2015 and 2014, respectively.  As of March 31, 2015 and 2014, the balances of accrued and unpaid salaries were $211,317 and $207,817.

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ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details 2) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Summary of results of operations from natural gas and oil producing activities    
Production revenues $ 110,371 $ 156,322
Production costs $ (100,060) $ (134,033)
Impairment of property    
Depreciation and depletion expense $ (74,411) $ (63,046)
Results of operation for natural gas / oil producing activity gross $ (64,100) $ (40,757)
Imputed income tax provision (1)    
Results of operation for natural gas / oil producing activity $ (64,100) $ (40,757)
XML 63 R13.htm IDEA: XBRL DOCUMENT v3.2.0.727
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
12 Months Ended
Mar. 31, 2015
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 7: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

Accounts payable and accrued liabilities consisted of the following:

 

   

March 31,

2015

    March 31, 2014  
Accounts payable   $ 371,722     $ 375,272  
Accrued interest     62,030       204,264  
Total   $ 433,752     $ 579,536  

XML 64 R14.htm IDEA: XBRL DOCUMENT v3.2.0.727
NOTES PAYABLE
12 Months Ended
Mar. 31, 2015
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 8: NOTES PAYABLE

 

    March 31, 2015     March 31, 2014  
On May 8, 2006, the Company entered into a convertible note payable agreement with a shareholder in the amount of $100,000.  The note carries an interest rate of 10% per annum and matures of November 8, 2006.  The note holder has the right to convert the note and accrued interest at a rate of $0.01 per share.  The value of this conversion feature was treated as a loan discount for the full $100,000 of the loan and was amortized to interest expense over the life of the loan.   On May 8, 2007 the note was extended for one year.  The conversion feature of the note was valued at $25,852 and was treated as a prepaid loan costs.  The prepaid loan costs have been amortized over the life of the new note. On October 19, 2007, the note holder converted $30,000 of principal plus accrued interest of $16,152 for 1,350,000 shares of common stock. On November 30, 2007, the note holder converted $10,000 of principal for 950,000 shares of common stock. On January 31, 2008, the note holder converted $10,000 of principal and accrued interest of $600 for 1,250,000 shares of common stock. On February 29, 2008, the note holder converted $8,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On June 6, 2008, the note holder converted $7,000 of principal and $1,372 of accrued interest for 1,550,000 shares of common stock. On June 23, 2008, the note holder converted $10,000 of principal and $395 of accrued interest for 1,500,000 shares of common stock. On October 15, 2008, the note holder converted $5,000 of principal and $10,000 of interest for 3,300,000 shares of common stock. On December 3, 2008, the note holder converted $3,000 of principal and $201 of interest for 2,000,000 shares of common stock. On February 24, 2009, the note holder converted $2,000 of principal and $167 of accrued interest into 4,000,000 shares of common stock During the three months ended September 30, 2009, the Company issued 33,000,000 shares for the conversion of $2,000 of principal and $367 of accrued interest on this note, and for other consideration.  During the three months ended December 31, 2009, the Company issued 30,000,000 shares of common stock for the conversion of $1,000 principal and $361 of accrued interest on this note and for other considerations. During the period ended March 31, 2014, the Company issued 450,000 shares of common stock for the conversion of $450 principal. Interest in the amount of $180 and $183 was accrued on this note during the year ended March 31, 2015 and 2014, respectively.   The maturity of this note has been extended until April 1, 2016.   $ 1,800     $ 1,800  
                 
On November 11, 2008, the Company issued a convertible promissory note to an investor in the amount of $50,000.  The current balance of the note is $30,000. The note carries an interest rate of 10% per annum and a maturity date of October 1, 2009.  The note holder has the right to convert the note and accrued interest into shares of the Company’s common stock at a rate of $3.00 per share. The discount is being amortized to interest expense over the life of the note via the effective interest method. Interest in the amount of $3,000 and $3,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. Accrued interest was $14,877 and $11,876 respectively at March 31, 2015 and 2014.  The maturity date of this note has been extended until April 1, 2016.     30,000       30,000  
                 
On December 22, 2008, the Company issued a promissory note to an investor in the amount of $150,000.  This note carries an interest rate of 10% per annum and matures of December 15, 2009.  In addition to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable. At the time of the issuance of the shares to the note holder, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized to interest expense over the life of the note, 1 year, via the effective interest method.  Interest in the amount of $10,891 and $15,000 was accrued on this note during the years ended March 31, 2015 and 2014, respectively. Accrued interest was $79,110 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 650,000 shares of common stock to the note holder on December 22, 2014.     -0-       150,000  
                 
On December 31, 2008, the Company received a cash advance from an investor in the amount of $100,000.  On January 1, 2009, the Company received an additional $50,000 and the Company entered into a note payable agreement in the amount of $150,000.  The note bears interest at a rate of 10% per annum and matures on December 15, 2009.  In additional to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  At the time of issuance of the shares to the note holders, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized over the life of the note via the effective interest method. Interest in the amount of $14,836 and $15,000 was accrued on this note the years ended March 31, 2015 and 2014, respectively. The total accrued interest was $78,123 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 500,000 shares of common stock and the payment of $5,000 to the note holder on March 27, 2014.     -0-       150,000  

    March 31, 2015     March 31, 2014  
On January 27, 2009, the Company issued a promissory note to an investor in the amount of $50,000.  The note carries an interest rate of 10% per annum and matures on December 15, 2009.  In addition to the note payable, the Company issued 1,000,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  The shares are value using the closing market price on the date the note was signed and have a value of $25,000.  The discount will be amortized over the life of the note via the effective interest method.  Interest in the amount of $5,000 and $5,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. . Accrued interest was $30,863 and $25,863 at March 31, 2015 and 2014 respectively. The maturity date of this note has been extended until Apri1 1, 2016.   $ 50,000     $ 50,000  
                 
On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $2,500.  This note bears interest at a rate of 8% per annum and matures on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $2,500 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $200 and $200 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.     2,500       2,500  
                 
On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $5,000.  This note bears interest at a rate of 8% per annum and matured on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $5,000 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $400 and $400 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.     5,000       5,000  

  

    March 31, 2015     March 31, 2014  
On January 1, 2011 the Company issued a convertible note payable in the amount of $250,000.  This note bears interest at a rate of 8% per annum and will mature on April 1, 2015.   The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $95,000 was recorded as a discount to the note and is being amortized to interest expense. A discount of $-0- and $94,050 was deducted for the years ended March 31, 2015 and 2014 respectively.  Interest in the amount of $4,010 and $17,945 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. Accrued interest was $5,858 and $1,847 at March 31, 2015 and 2014 respectively as interest in the amount of $0 and $40,482 was paid through the years. In January 2014 the Company exchanged 125 shares of class B preferred stock for $125,000 in principal. In June 2014, the Company exchanged 50 shares of its Series B Preferred Stock for $50,000 in principal. The maturity date of this note has been extended until Apri1 1, 2016.   $ 75,000     $ 125,000  
                 
On September 29, 2014, the Company issued two promissory notes note payable in the total amount of $60,000.  These notes bear interest at a rate of 5% per annum, matured on January 1, 2014, and were extended until December 1, 2015. Accrued interest as of March 31, 2015 was $1,504.     60,000       -0-  
                 
Total outstanding   $ 224,300     $ 514,300  

 

    Note     Unamortized     Net of  
March 31, 2015:   Amount     Discounts     Discount  
Notes payable – long-term portion   $ -     $ -     $    
Notes payable – current portion      224,300       -       224,300  
Total   $  224,300     $ -     $ 224,300  

 

 

    Note     Unamortized     Net of  
 March 31, 2014:   Amount     Discounts     Discount  
Notes payable – long-term portion   $ 514,300     $ (0)     $ 514,300  
Notes payable – current portion     -0-       (0)     -0-  
Total   $ 514,300     $ (0 )   $ 514,300  

 

 

 

Minimum future principal payments under the note payable are due as follows during the years ended March 31:

 

 

         
2016   224,300  
    $ 224,300  

XML 65 R16.htm IDEA: XBRL DOCUMENT v3.2.0.727
INCOME TAXES
12 Months Ended
Mar. 31, 2015
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 10: INCOME TAXES

 

Deferred income taxes result from the temporary difference arising from the use of accelerated depreciation methods for income tax purposes and the straight-line method for financial statement purposes, and an accumulation of Net Operating Loss carry forwards for income tax purposes with a valuation allowance against the carry forwards for book purposes.

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in deferred tax assets are Federal and State net operating loss carry forwards of $30,798,559 which will expire beginning in 2028.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon our cumulative losses through March 31, 2015, we have provided a valuation allowance reducing the net realizable benefits of these deductible differences to $0 at March 31, 2015.  The amount of the deferred tax asset considered realizable could change in the near term if projected future taxable income is realized.  Due to significant changes in the Company's ownership, the Company's future use of its existing net operating losses may be limited.

 

A reconciliation between the actual income tax expense and income taxes computed by applying the statutory Federal and state income tax rates to income from continuing operations before income taxes is as follows:

 

   

Twelve Months

Ended

March 31,

2015

   

Twelve Months

Ended

March 31,

2014

 
Computed “expected” income tax benefit at approximately 38.73%   $ (10,471,510 )   $ (10,480,020 )
Change in valuation allowance     10,471,510       10,480,020  
    $ -     $ -  

 

XML 66 R64.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details Textual) - $ / shares
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Natural Gas [Member]    
ASC 932 235 55 SUPPLEMENTAL DISCLOSURES (Textual)    
Weighted average wellhead price used in computing the Company's reserves   $ 3.34
Oil [Member]    
ASC 932 235 55 SUPPLEMENTAL DISCLOSURES (Textual)    
Weighted average wellhead price used in computing the Company's reserves   $ 93.51
Oil [Member]    
ASC 932 235 55 SUPPLEMENTAL DISCLOSURES (Textual)    
Weighted average wellhead price used in computing the Company's reserves $ 80.60  
Natural Gas [Member]    
ASC 932 235 55 SUPPLEMENTAL DISCLOSURES (Textual)    
Weighted average wellhead price used in computing the Company's reserves $ 3.63  
XML 67 R63.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details 5) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Principal sources of change in standardized measure of discounted future net cash flow relating to prove oil and gas reserves    
Standardized measure of discount future net cash flows $ 388,452 $ 325,552
Proved natural oil and gas property, net of accumulated depreciation, depletion, and amortization, including impairment 239,283 149,477
Standardized measure of discount future net cash flows in excess of net carrying value of proved natural oil and gas properties $ 149,169 $ 176,075
XML 68 R34.htm IDEA: XBRL DOCUMENT v3.2.0.727
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
2 Months Ended 12 Months Ended 276 Months Ended
Jul. 23, 2012
Mar. 31, 2015
Mar. 31, 2014
Mar. 31, 2015
May. 09, 2014
Mar. 19, 2014
Apr. 10, 2013
Mar. 31, 2013
Nov. 16, 2012
Sep. 28, 2012
Sep. 22, 2007
Jul. 22, 2005
Authorized number of shares of common stock   200,000,000 200,000,000 200,000,000     200,000,000   3,000,000,000 200,000,000   1,000,000,000
Common stock authorized, par value   $ .001 $ 0.001 $ .001         $ .001     $ .001
Reverse split terms 300 to 1                      
Percentage of interest                     75.60%  
Purchase price of interest in Oiltek                     $ 50,000  
Loss incurred from inception       $ (30,898,873)                
Working capital deficiency   $ 363,453   363,453                
Stockholders' Equity   1,690,152 $ 1,212,337 1,690,152       $ 442,088        
Accounts at institutions insured by FDIC   250,000   250,000                
Allowance for accounts receivable from joint working interests   131,236 $ 136,873 $ 131,236                
Acquisition costs   $ (120,000)                    
Estimated useful lives; Office Equipment       5 years                
Weyer                        
Percentage of interest           100.00%            
AFS                        
Percentage of interest         100.00%              
XML 69 R51.htm IDEA: XBRL DOCUMENT v3.2.0.727
INCOME TAXES (Details) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Tax Disclosure [Abstract]    
Income tax rate 38.73% 38.73%
Computed "expected" income tax expense $ (10,471,510) $ (10,480,020)
Change in valuation allowance $ 10,471,510 $ 10,480,020
Income taxes, total    
XML 70 R21.htm IDEA: XBRL DOCUMENT v3.2.0.727
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES
12 Months Ended
Mar. 31, 2015
Asc 932-235-55 Supplemental Disclosures  
ASC 932-235-55 SUPPLEMENTAL DISCLOSURES

NOTE 15: ASC 932-235-55 SUPPLEMENTAL DISCLOSURES 

 

Net Capitalized Costs

 

The Company's aggregate capitalized costs related to natural gas and oil producing activities are summarized as follows:

 

    March 31, 2015     March 31, 2014  
             
Natural gas and oil properties and related equipment:            
Proven   $ 1,274,754     $ 1,165,546  
Unproven     1,867,183       1,867,183  
Accumulated depreciation, depletion, and impairment     (1,035,471 )     (1,008,173 )
Net capitalized costs   $ 2,106,466     $ 2,016,660  

 

Future development of the unproven properties is dependent on future financing and market prices for oil and gas. 

 

Costs Incurred

 

Costs incurred in natural gas and oil property acquisition, exploration and development activities that have been capitalized are summarized as follows:

 

    March 31, 2015     March 31, 2014  
             
Acquisition of properties   $ 120,000     $ - 0 -  
Development costs     - 0 -       - 0 -  
Total costs incurred   $ 120,000     $ - 0 -  

 

 

Results of Operations for Natural Gas and Oil Producing Activities

 

The Company's results of operations from natural gas and oil producing activities are presented below for the fiscal years ended March 31, 2015 and 2014. The following table includes revenues and expenses associated directly with the Company's natural gas and oil producing activities. It does not include any interest costs and general and administrative costs and, therefore, is not necessarily indicative of the contribution to consolidated net operating results of the Company's natural gas and oil operations.

 

    March 31, 2015    

March 31,

 2014

 
             
Production revenues   $ 110,371     $ 156,322  
Production costs     (100,060 )     (134,033 )
Impairment of property     -       -  
Depreciation and depletion expense     (74,411 )     (63,046 )
    $ (64,100 )   $ (40,757)  
Imputed income tax provision (1)     -       -  
Results of operation for natural gas / oil producing activity   $ (64,100 )   $ (40,757)  

 

(1)  The imputed income tax provision is hypothetical (at the statutory rate) and determined without regard to the Company's deduction for general and administrative expenses, interest costs and other income tax credits and deductions, nor whether the hypothetical tax provision will be payable.

 

Natural Gas and Oil Reserve Quantities

 

The following schedule contains estimates of proved natural gas and oil reserves attributable to the Company. Proved reserves are estimated quantities of natural gas and oil that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are those which are expected to be recovered through existing wells with existing equipment and operating methods. Reserves are stated in thousand cubic feet (mcf) of natural gas and barrels (bbl) of oil. Geological and engineering estimates of proved natural gas and oil reserves at one point in time are highly interpretive, inherently imprecise and subject to ongoing revisions that may be substantial in amount. Although every reasonable effort is made to ensure that the reserve estimates are accurate, due to their nature reserve estimates are generally less precise than other estimates presented in connection with financial statement disclosures.

 

    Oil - bbls  
Proved reserves:      
       
Balance as of March 31, 2006     -  
         
Purchase of reserves-in-place     29,815  
Extensions and discoveries     -  
Production     (1,043 )
Balance as of March 31, 2007     28,772  
         
Purchase of reserves-in-place     11,560  
Extensions and discoveries     4,216  
Change in estimates     (11,911 )
Production     (3,504 )
Balance as of March 31, 2008     29,133  
         
Purchase of reserves-in-place     22,282  
Extensions and discoveries     -  
Change in estimates     -  
Production     (5,768 )
Balance as of March 31, 2009     45,647  
         
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     -  
Production     (22,514 )
Balance as of March 31, 2010     23,133  

 

Purchase of reserves-in-place     4,823  
Extensions and discoveries     -  
Change in estimates     -  
Production     (5,291 )
Balance as of March 31, 2011     22,665  
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     4,506  
Production     (2,439 )
Balance as of March 31, 2012     24,732  
Purchase of reserves-in-place     -  
Extensions and discoveries     -  
Change in estimates     2,873  
Production     (2,290)  
Balance as of March 31, 2013     25,315  

 

 

 

Purchase of reserves-in-place     -
Extensions and discoveries     -
Change in estimates     7,736
Production     (3,979)
Balance as of March 31, 2014     29,072
       
Purchase of reserves-in-place     4,759
Extensions and discoveries     -
Change in estimates     3,251
Production     (2,145)
Balance as of March 31, 2015     34,937

 

Standardized Measure of Discounted Future Net Cash Flows

 

The following schedule presents the standardized measure of estimated discounted future net cash flows from the Company's proved reserves for the fiscal years ended March 31, 2015 and 2014. Estimated future cash flows are based on independent reserve data. Because the standardized measure of future net cash flows was prepared using the prevailing economic conditions existing at March 31, 2015 and 2014, it should be emphasized that such conditions continually change. Accordingly, such information should not serve as a basis in making any judgment on the potential value of the Company's recoverable reserves or in estimating future results of operations.

 

   

March 31,

2015

   

March 31,

2014

 
Future production revenue   $ 1,317,165     $ 1,126,270  
Future production costs     (675,670 )     (566,261 )
Future development costs     -       -  
Future cash flows before income taxes     641,495       560,009  
Future income tax     -       -  
Future net cash flows     641,495       560,009  
Effect of discounting future annual cash flows at 10%     (253,043 )     (234,457 )
Standard measure of discounted net cash flows   $ 388,452     $ 325,552  

 

(1)  The weighted average oil wellhead price used in computing the Company's reserves were $80.60 per bbl and $93.51 per bbl at March 31, 2015 and 2014, respectively. The weighted average gas wellhead price used in computing the Company's reserves were $3.34 and $3.63/mmbtu at March 31, 2015 and 2014, respectively. The oil and gas pricing were calculated using the arithmetic average of the price on the first day of each month that was received for each property during the previous fiscal year.  These prices were held constant throughout the economic life of the properties.  Previous year run checks were used to determine the actual prices received.

 

The following schedule contains a comparison of the standardized measure of discounted future net cash flows to the net carrying value of proved natural gas and oil properties at March 31, 2015 and 2014:

 

   

March 31,

2015

   

March 31,

2014

 
Standardized measure of discount future net cash flows   $ 388,452     $ 325,552  
                 
Proved natural oil and gas property, net of accumulated                
depreciation, depletion, and amortization, including                
impairment     239,283       149,477  
                 
Standardized measure of discount future net cash flows in                
excess of net carrying value of proved natural oil and                
gas properties   $ 149,169     $ 176,075  

 

XML 71 R26.htm IDEA: XBRL DOCUMENT v3.2.0.727
INTELLECTUAL PROPERTY RIGHTS (Tables)
12 Months Ended
Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of intellectual property rights

    March 31, 2015     March 31, 2014  
Intelli-well   $ 425,850     $ 425,850  
Less: accumulated amortization     (372,616 )     (330,035 )
Total   $ 53,234     $ 95,815  

XML 72 R49.htm IDEA: XBRL DOCUMENT v3.2.0.727
Notes Payable (Details Narrative)
12 Months Ended
Mar. 31, 2015
Convertible Debt [Member]  
Notes payable

On May 8, 2006, the Company entered into a convertible note payable agreement with a shareholder in the amount of $100,000.  The note carries an interest rate of 10% per annum and matures of November 8, 2006.  The note holder has the right to convert the note and accrued interest at a rate of $0.01 per share.  The value of this conversion feature was treated as a loan discount for the full $100,000 of the loan and was amortized to interest expense over the life of the loan.   On May 8, 2007 the note was extended for one year.  The conversion feature of the note was valued at $25,852 and was treated as a prepaid loan costs.  The prepaid loan costs have been amortized over the life of the new note. On October 19, 2007, the note holder converted $30,000 of principal plus accrued interest of $16,152 for 1,350,000 shares of common stock. On November 30, 2007, the note holder converted $10,000 of principal for 950,000 shares of common stock. On January 31, 2008, the note holder converted $10,000 of principal and accrued interest of $600 for 1,250,000 shares of common stock. On February 29, 2008, the note holder converted $8,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock. On June 6, 2008, the note holder converted $7,000 of principal and $1,372 of accrued interest for 1,550,000 shares of common stock. On June 23, 2008, the note holder converted $10,000 of principal and $395 of accrued interest for 1,500,000 shares of common stock. On October 15, 2008, the note holder converted $5,000 of principal and $10,000 of interest for 3,300,000 shares of common stock. On December 3, 2008, the note holder converted $3,000 of principal and $201 of interest for 2,000,000 shares of common stock. On February 24, 2009, the note holder converted $2,000 of principal and $167 of accrued interest into 4,000,000 shares of common stock During the three months ended September 30, 2009, the Company issued 33,000,000 shares for the conversion of $2,000 of principal and $367 of accrued interest on this note, and for other consideration.  During the three months ended December 31, 2009, the Company issued 30,000,000 shares of common stock for the conversion of $1,000 principal and $361 of accrued interest on this note and for other considerations. During the period ended March 31, 2014, the Company issued 450,000 shares of common stock for the conversion of $450 principal. Interest in the amount of $180 and $183 was accrued on this note during the year ended March 31, 2015 and 2014, respectively.   The maturity of this note has been extended until April 1, 2016.

Convertible Debt Two [Member]  
Notes payable

On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $2,500.  This note bears interest at a rate of 8% per annum and matures on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $2,500 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $200 and $200 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.

Convertible Debt Three [Member]  
Notes payable

On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount of $5,000.  This note bears interest at a rate of 8% per annum and matured on October 1, 2007.  The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $5,000 was recorded as a discount to the note and was amortized to interest expense during the period ended December 31, 2006.   Interest in the amount of $400 and $400 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. The maturity date of this note has been extended until Apri1 1, 2016.

Convertible Debt Four [Member]  
Notes payable

On January 1, 2011 the Company issued a convertible note payable in the amount of $250,000.  This note bears interest at a rate of 8% per annum and will mature on April 1, 2015.   The principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.  A beneficial conversion feature in the amount of $95,000 was recorded as a discount to the note and is being amortized to interest expense. A discount of $-0- and $94,050 was deducted for the years ended March 31, 2015 and 2014 respectively.  Interest in the amount of $4,010 and $17,945 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively. Accrued interest was $5,858 and $1,847 at March 31, 2015 and 2014 respectively as interest in the amount of $0 and $40,482 was paid through the years. In January 2014 the Company exchanged 125 shares of class B preferred stock for $125,000 in principal. In June 2014, the Company exchanged 50 shares of its Series B Preferred Stock for $50,000 in principal. The maturity date of this note has been extended until Apri1 1, 2016.

Promissory Note [Member]  
Notes payable

On December 22, 2008, the Company issued a promissory note to an investor in the amount of $150,000.  This note carries an interest rate of 10% per annum and matures of December 15, 2009.  In addition to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable. At the time of the issuance of the shares to the note holder, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized to interest expense over the life of the note, 1 year, via the effective interest method.  Interest in the amount of $10,891 and $15,000 was accrued on this note during the years ended March 31, 2015 and 2014, respectively. Accrued interest was $79,110 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 650,000 shares of common stock to the note holder on December 22, 2014.

Promissory Note Two [Member]  
Notes payable

On January 27, 2009, the Company issued a promissory note to an investor in the amount of $50,000.  The note carries an interest rate of 10% per annum and matures on December 15, 2009.  In addition to the note payable, the Company issued 1,000,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  The shares are value using the closing market price on the date the note was signed and have a value of $25,000.  The discount will be amortized over the life of the note via the effective interest method.  Interest in the amount of $5,000 and $5,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. . Accrued interest was $30,863 and $25,863 at March 31, 2015 and 2014 respectively. The maturity date of this note has been extended until Apri1 1, 2016.

Promissory Note Three [Member]  
Notes payable

On September 29, 2014, the Company issued two promissory notes note payable in the total amount of $60,000.  These notes bear interest at a rate of 5% per annum, matured on January 1, 2014, and were extended until December 1, 2015. Accrued interest as of March 31, 2015 was $1,504.

Convertible Promissory Note [Member]  
Notes payable

On November 11, 2008, the Company issued a convertible promissory note to an investor in the amount of $50,000.  The current balance of the note is $30,000. The note carries an interest rate of 10% per annum and a maturity date of October 1, 2009.  The note holder has the right to convert the note and accrued interest into shares of the Company’s common stock at a rate of $3.00 per share. The discount is being amortized to interest expense over the life of the note via the effective interest method. Interest in the amount of $3,000 and $3,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively. Accrued interest was $14,877 and $11,876 respectively at March 31, 2015 and 2014.  The maturity date of this note has been extended until April 1, 2016.

Note Payable  
Notes payable

On December 31, 2008, the Company received a cash advance from an investor in the amount of $100,000.  On January 1, 2009, the Company received an additional $50,000 and the Company entered into a note payable agreement in the amount of $150,000.  The note bears interest at a rate of 10% per annum and matures on December 15, 2009.  In additional to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.  The shares are considered a discount to the note payable.  At the time of issuance of the shares to the note holders, the market price of the shares exceeded the fair value of the note payable; as a result the value of the discount was capped at the face value of the note, $150,000.  The discount will be amortized over the life of the note via the effective interest method. Interest in the amount of $14,836 and $15,000 was accrued on this note the years ended March 31, 2015 and 2014, respectively. The total accrued interest was $78,123 on March 31, 2014. The principal and interest on this note was extinguished with the issuance of 500,000 shares of common stock and the payment of $5,000 to the note holder on March 27, 2014.

XML 73 R41.htm IDEA: XBRL DOCUMENT v3.2.0.727
INTELLECTUAL PROPERTY RIGHTS (Details Narrative) - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]    
Estimated amortization of intangible assets $ 42,581 $ 42,587
XML 74 R5.htm IDEA: XBRL DOCUMENT v3.2.0.727
Consolidated Statement of Cash Flows - USD ($)
12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Cash flows from operating activities:    
Net income (loss) $ 100,314 $ (785,978)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock based compensation 24,454 262,001
Gain on extinguishment of debt $ (424,624) (5,884)
Gain (Loss) on conversion of debt   $ 57,050
Gain on conversion of dividends payable $ 82,779  
Stock issued for reduction of interest on notes payable 176,959  
Stock issued for licensing fees 15,000  
Depreciation 4,532  
Depletion 27,298 $ 20,459
Depreciation and ARO liability 2,896 2,896
Amortization of intangible assets 42,581 42,587
Net change in operating assets and liabilities:    
Accounts receivable 20,882 (1,559)
Accounts payable and other accrued expenses $ (143,149) $ 11,568
Dividends payable    
Due to related party $ (6,000) $ 5,000
Asset retirement obligation accretion 11,293 10,266
Net cash (used) in operating activities (230,343) (381,594)
Cash flows from investing activities:    
Deposit on the purchase of additional assets 22,657 $ (142,057)
Purchase of property and equipment (22,657)  
Acquisition of oil producing properties (120,000)  
Principle payments received on notes receivable 7,142 $ 6,434
Net cash provided in investing activities $ (112,858) $ (135,623)
Cash flows from financing activities:    
Payments on notes payable    
Proceeds from notes payable $ 60,000  
Common stock issued for cash   $ 300,000
Preferred stock B issued for cash $ 260,000 350,000
Dividends paid on preferred stock (65,000) (38,800)
Net cash provided in financing activities 255,000 611,200
Net (decrease) in cash and cash equivalents (88,201) 93,983
Cash and cash equivalents at beginning of period 223,914 129,931
Cash and cash equivalents at end of period 135,713 223,914
Supplemental disclosures of cash flow information:    
Cash paid during the period for Interest $ 8,500 $ 72,000
Cash paid during the period for Taxes    
Common stock issued in exchange for consulting services $ 99,000 $ 262,001
Common stock issued in exchange for licenses 15,000 262,001
Common stock issued for conversion of note payable, accrued interest, and assumption of debt 52,500 109,007
Common stock issued for the conversion of dividends payable 61,600 262,001
Gain (Loss) on extinguishment of debt 424,624 5,884
Preferred stock issued in exchange for consulting services 15,000 262,001
Preferred stock issued for conversion of notes payable, accrued interest, and assumption of debt $ 50,000 $ 600,000
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PROPERTY AND EQUIPMENT
12 Months Ended
Mar. 31, 2015
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 4: PROPERTY AND EQUIPMENT

 

A summary of property and equipment at March 31, 2015 and 2014 is as follows:

 

    March 31, 2015     March 31, 2014  
Office Equipment   $ 41,778     $ 41,778  
Vehicles     22,657       -  
Leasehold improvements     -0-       -0-  
      64,435       41,778  
Less: Accumulated depreciation     (46,310 )     (41,778 )
Total   $ 18,125     $ -  

 

Depreciation expense for the years ended March 31, 2015 and 2014 was $4,532 and $0, respectively.

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ASC 932-235-55 SUPPLEMENTAL DISCLOSURES (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Natural gas and oil properties and related equipment:    
Proven $ 1,274,754 $ 1,165,546
Unproven 1,867,183 1,867,183
Accumulated depreciation, depletion, and impairment (1,035,471) (1,008,173)
Net capitalized costs $ 2,106,466 $ 2,016,660
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OIL AND GAS PROPERTY ACTIVITY (Tables)
12 Months Ended
Mar. 31, 2015
Extractive Industries [Abstract]  
Working interests in the Grace Wells

 

Well  

March 31, 2013

Working Interest

    Additional Acquisition     March 31, 2014 Working Interest  
Grace #1     65.25 %     0 %     65.25 %
Grace #2     55.75 %     0 %     55.75 %
Grace #3     64.00 %     0 %     64.00 %
Grace #5A     52.00 %     0 %     52.00 %
Grace #6     58.00 %     0 %     58.00 %

Producing oil and gas properties

 

    March 31, 2014     March 31, 2013  
Lincoln County, Oklahoma   $ 111,402     $ 111,402  
Other properties, net     1,005,676       1,005,676  
Asset retirement cost     40,572       43,468  
Property impairments      (481,072      (481,072
Less: Depletion     (527,101 )     (506,641 )
Net   $ 149,477     $ 172,833  

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Stock Issued To A Consultant  
CommonStockParValuePerShare AOGN_CommonStockParValuePerShare $ .10
Stock Issued To Board Of Directors  
CommonStockParValuePerShare AOGN_CommonStockParValuePerShare .10
Common Stock  
CommonStockParValuePerShare AOGN_CommonStockParValuePerShare .10
CommonStockParValuePerShare AOGN_CommonStockParValuePerShare 0.08
CommonStockParValuePerShare AOGN_CommonStockParValuePerShare $ 0.10
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PROPERTY AND EQUIPMENT (Details) - USD ($)
Mar. 31, 2015
Mar. 31, 2014
Leasehold improvements $ 0 $ 0
Total Gross 64,435 41,778
Less: Accumulated depreciation (46,310) $ (41,778)
Total 18,125  
Office Equipment    
Total Gross 41,778 $ 41,778
Vehicles    
Total Gross $ 22,657  
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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 14: COMMITMENTS AND CONTINGENCIES

 

Commitments and contingencies through the date of these financial statements were issued have been considered by the Company and none were noted which were required to be disclosed.