UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 000-09047
AMERIGO ENERGY, INC.
(Exact name of Smaller Reporting Company as specified in its charter)
Delaware 20-3454263
---------------------------- ----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2580 Anthem Village Drive
Henderson, NV 89052
(Address of principal executive offices)
(702) 399-9777
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $0.001 PAR VALUE
(Title if Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No []
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T ({section}
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes [ ]
No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ({section} 229.405 of this chapter) 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 is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act) [ ] Yes [X] No
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. 24,880,416 shares of common
stock outstanding as of March 31, 2013
TABLE OF CONTENTS
ITEM 1. DESCRIPTION OF BUSINESS................................................
ITEM 1A. RISK FACTORS..........................................................
ITEM 2. DESCRIPTION OF PROPERTY................................................
ITEM 3. LEGAL PROCEEDINGS......................................................
ITEM 4. MINE SAFETY DISCLOSURES................................................
PART II........................................................................
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...............
ITEM 6. SELECTED FINANCIAL DATA................................................
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS...................................................
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A(T). CONTROLS AND PROCEDURES............................................
ITEM 9B. OTHER INFORMATION.....................................................
PART III.......................................................................
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE...............
ITEM 11. EXECUTIVE COMPENSATION................................................
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES................................
PART IV........................................................................
ITEM 15. EXHIBITS..............................................................
PART I
Forward-Looking Statements
References in this annual report to "the Company," "we," "us" or "our" are
intended to refer to the Company. This report contains numerous "forward-
looking statements" that involve substantial risks and uncertainties. These
include, without limitation, statements relating to future drilling and
completion of wells, well operations, production, prices, costs and expenses,
cash flow, investments, business strategies and other plans and objectives of
our management for future operations and activities and other such matters
including, but not limited to:
- Failure to obtain, or a decline in, oil or gas production, or a decline in
oil or gas prices,
- Incorporate estimates of required capital expenditures,
- Increase in the cost of drilling, completion and oil production or other
costs of production and operations,
- An inability to meet growth projections, and
- Other risk factors set forth under "Risk Factors" in this annual report.
In addition, the words "believe", "may", "could", "when", "estimate",
"continue", "anticipate", "intend", "expect", and similar expressions, as
they relate to the Company, our business or our management, are intended to
identify forward-looking statements.
These statements are based on our beliefs and the assurances we made using
information currently available to us. Because these statements reflect our
current views concerning future events, these statements involve risks,
uncertainties and assumptions. Our actual results could differ materially from
the results discussed in the forward-looking statements. Some, but not all, of
the factors that may cause these differences include those discussed below
under the section entitled "Risk Factors" in this annual report. You should not
place undue reliance on these forward-looking statements. You should also
remember that these statements are made only as of the date of this report and
future events may cause them to be less likely to prove to be true.
Glossary of Terms
DEPLETION is the reduction in petroleum reserves due to production.
FORMATION is a reference to a group of rocks of the same age extending over a
substantial area of a basin.
HYDROCARBONS refer to oil, gas, condensate and other petroleum products.
PARTICIPATION INTEREST or WORKING INTEREST is an equity interest (compared
with a royalty interest) in an oil and gas property whereby the participating
interest holder pays its proportionate percentage share of development and
operating costs and receives a corresponding net revenue interest share of the
proceeds of hydrocarbon sales after deduction of royalties due on the gross
income.
PROSPECT is a potential hydrocarbon trap which has been confirmed by geological
and geophysical studies to the degree that drilling of an exploration well is
warranted.
DEVELOPMENT RESERVES of crude oil, natural gas, or natural gas liquids are
estimated quantities that geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions, i.e., prices and costs as of
the date the estimate is made. Prices include consideration of changes in
existing prices provided only by contractual arrangements, but not on
escalations based upon future conditions.
Reservoirs are considered Development if economic producibility is supported by
either actual production or conclusive formation tests or if core analysis
and/or log interpretation demonstrates economic producibility with reasonable
certainty. The area of a reservoir considered development includes (1) that
portion delineated by drilling and defined by fluid contacts, if any, and (2)
the immediately adjoining portions not yet drilled that can be reasonably
judged as economically productive on the basis of available geological and
engineering data. In the absence of data on fluid contacts, the lowest known
structural occurrence of hydrocarbons controls the lower development limit of
the reservoir.
Development reserves are estimates of hydrocarbons to be recovered from a given
data forward. They are expected to be revised as hydrocarbons are produced and
additional data become available.
Reserves that can produced economically through the application of established
improved recovery techniques are included in the development classification
when these qualifications are met: (1) successful testing by a pilot project,
or the operation of an installed program in that reservoir, provides support
for the engineering analysis on which the project or program was based, and (2)
it is reasonably certain the project will proceed. Estimates of development
reserves do not include the following: (1) oil that may become available from
known reservoirs but is classified separately as indicated additional reserves;
(2) crude oil, natural gas, and natural gas liquids, the recovery of which is
subject to reasonable doubt because of uncertainty as to geology, reservoir
characteristics, or economic factors; (3) crude oil, natural gas, and natural
gas liquids, that may occur in undrilled prospects; and (4) crude oil, natural
gas, and natural gas liquids, that may be recovered from oil shales, coal,
gilsonite and other such sources.
DEVELOPMENT RESERVES A subcategory of development reserves. They are those
reserves that can be expected to be recovered through existing wells with
existing equipment and operating methods. Additional oil and gas expected to be
obtained through application of fluid injection or other improved recovery
techniques for supplementing the natural forces and mechanisms of primary
recovery are considered developed only after testing by a pilot project or
after the operation of an installed program has confirmed through production
response that increased recovery will be achieved.
PROVED UNDEVELOPED RESERVES is a subcategory of proved reserves. They are
reserves that are expected to be recovered from new wells on undrilled acreage,
or from existing wells where a relatively major expenditure is required for
recompletion. Reserves on undrilled acreage are limited to those drilling units
offsetting productive units that are reasonably certain of production when
drilled. Proved reserves for other undrilled units are claimed only where it
can be demonstrated with certainty that there is continuity of production from
the existing productive formation. Estimates for proved undeveloped reserves
are not attributable to any acreage for which an application of fluid injection
or other improved recovery technique is contemplated, unless such techniques
have been proved effective by actual tests in the area and in the same
reservoir.
RESERVOIR is a porous and permeable sedimentary rock formation containing
adequate pore space in the rock to provide storage space for oil, gas or water.
TRAP is a geological structure in which hydrocarbons aggregate to form an oil
or gas field.
ITEM 1. DESCRIPTION OF BUSINESS
BUSINESS OVERVIEW
Amerigo Energy, Inc., a Delaware corporation ("AGOE" or the "Company"),
formerly named Strategic Gaming Investments, Inc., was incorporated in 1973.
Prior to 2008, the Company was involved in various businesses, none of which
were successful.
In August of 2008, our Board of Directors voted to get approval from the
shareholders of the Company for a name change from Strategic Gaming
Investments, Inc. to Amerigo Energy, Inc. The company received the approval
from a majority of its stockholders and filed the amendment to its Articles of
Incorporation with the State of Delaware. The name change became effective by
the State of Delaware on August 26, 2008. The Company also requested a new
stock symbol as a result of the name change. Our new trading symbol is "AGOE".
The Amerigo Energy's business plan included developing oil and gas reserves
while increasing the production rate base and cash flow. The plan was to
continue acquiring oil and gas leases for drilling and to take advantage of
other opportunities and strategic alliances. Due to declines in production on
the oil leases the company had an interest in, the company has been forced to
explore its position in the oil industry. In 2011, the company began an
aggressive approach to reduce the debt on the company's books as well as
looking to diversify the investment holdings, while still maintaining limited
interest in oil leases. The company is aggressively looking for potential oil
leases to acquire as well as businesses which will fit with the company's
strategy. Analyzing opportunities in the oil industry as well as other
potential investments has gone slower than planned, but the company is
committed to implementing its business plan.
Our wholly-owned subsidiary, Amerigo, Inc., incorporated in Nevada on January
11, 2008, holds minimal assets, including oil lease interests.
GENERAL DISCUSSION OF OPERATIONS
EMPLOYEES AND CONSULTANTS
The Company currently has no employees. We contract the services of consultants
in the various areas of expertise, as required. Jason F. Griffith, Chief
Executive Officer of the Company, and Chief Financial Officer of the Company,
currently devotes no more than 50% of his time to the operations of the
Company.
The amount of time devoted to the Company currently by officers and consultants
is due to the limited operations and resources of the Company. However, the
Company feels the time devoted to operations is enough to cover the current
operational requirements.
Expected Significant Changes In The Number Of Employees
The Company does not expect any significant change in the number of employees
over the next 12 months of operations. As noted previously, the Company
currently coordinates all operations, using its Officers and various
consultants as necessary.
The Company's website address is http://www.amerigoenergy.com; however, the
site has come down and is being revamped to account for the updates to the
company's business plan.
ITEM 1A. RISK FACTORS
Risks Related to Amerigo Energy's Business
Amerigo Energy is subject to a high degree of risk as Amerigo Energy is
considered to be in unsound financial condition. The following risks, if any
one or more occurs, could materially harm our business, financial condition or
future results of operations. If that occurs, the trading price of the Amerigo
Energy's Common Stock could decline.
We Have a History
Since Amerigo Energy's inception (formerly known as Strategic Gaming
Investments, Inc.) we have not been profitable and have reported net losses.
For the years ended December 31, 2012 and December 31, 2011 we incurred net
losses of $191,364 and $301,445, respectively. Our accumulated deficit as of
December 31, 2012 was $15,922,521. No assurance can be given that Amerigo
Energy will be successful in reaching or maintaining profitable operations,
particularly given Amerigo Energy's minimal business operations. Accordingly,
we will likely continue to experience liquidity and cash flow problems.
Lack of Liquidity
Amerigo Energy's Common Stock is currently quoted for public trading on the
Over-the-Counter Bulletin Board under the ticker symbol "AGOE". The trading
price of the Amerigo Energy's common stock has been subject to wide
fluctuations. Trading prices of Amerigo common stock may fluctuate in response
to a number of factors, many of which will be beyond Amerigo Energy's control.
The stock market has generally experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the
operating performance of companies with limited or no business operations.
These broad market and industry factors may adversely affect the market price
of Amerigo Energy's Common Stock, regardless of our operating performance.
Further, until such time as Amerigo Energy is an operating company, it is
unlikely that a measurable trading market will exist for Amerigo Energy's
Common Stock.
Amerigo Energy's Common Stock is a "Penny Stock" and should be Considered "High
Risk" and Subject to Marketability Restrictions.
Since Amerigo Energy's Common Stock is a "penny stock", as defined in Rule
3a51-1 under the Securities Exchange Act, it will be more difficult for
investors to liquidate their investment. Until the trading price of the Common
Stock rises above $5.00 per share, if ever, trading in the Common Stock is
subject to the "penny stock" rules of the Securities Exchange Act specified in
rules 15g-1 through 15g-10. Those rules require broker-dealers, before
effecting transactions in any penny stock, to:
- Deliver to the customer, and obtain a written receipt for, a
disclosure document;
- Disclose certain price information about the stock;
- Disclose the amount of compensation received by the broker-dealer or
any associated person of the broker-dealer;
- Send monthly statements to customers with market and price
information about the penny stock; and
- In some circumstances, approve the purchaser's account under certain
standards and deliver written statements to the customer with information
specified in the rules.
Consequently, the "penny stock" rules may restrict the ability or willingness
of broker-dealers to sell the Common Stock and may affect the ability of
holders to sell their Common Stock in the secondary market and the price at
which such holders can sell any such securities. These additional procedures
could also limit our ability to raise additional capital in the future.
Funding Difficulties
Given Amerigo Energy's historical operating results, obtaining financing will
be extremely difficult. This is further compounded by the extremely limited
liquidity in Amerigo Energy's Common Stock and the minimal strong business
operations. Financing, if available, will likely be significantly dilutive to
our common stockholders and will not necessarily improve the liquidity of
Amerigo Energy's common stock without a vast improvement in our operating
results. In the event we are unsuccessful in procuring adequate financing, our
financial condition and results of operations will be further materially
adversely affected.
"Going Concern" Qualification
As a result of Amerigo Energy's deficiency in working capital at December 31,
2012 and other factors, Amerigo Energy's auditors have stated in their report
that there is substantial doubt about Amerigo Energy's ability to continue as a
going concern. In addition, Amerigo Energy's cash position is inadequate to pay
the costs associated with its operations. No assurance can be given that any
debt or equity financing, if and when required, will be available. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets and classification of
liabilities that might be necessary should Amerigo Energy be unable to continue
existence.
Risks Applicable to Amerigo Energy's Oil and Gas Business
Speculative Nature of Oil and Gas Development Activities ("Project"); Natural
and Other Hazards. Exploration, drilling and development of oil and gas
properties is not an exact science and involves a high degree of risk. There is
no assurance that oil or gas will be found within any prospects or that, if
found, sufficient oil or gas production will be obtained to enable Amerigo
Energy to recoup its investment in the Project. During any drilling or
completion of any prospect, Amerigo Energy could encounter hazards including
unusual or unexpected formations, high formation, pressures or other
conditions, blow-outs, fires, failure of equipment, and downhole collapses.
There can be no assurance that in the event of such problems Amerigo Energy
will have sufficient funds to solve such problems. Furthermore, the Project may
be subject to liability for pollution and other damages and will be subject to
statutes and regulations relating to environmental matters. Although Amerigo
Energy and/or the operator drilling the prospects will obtain and maintain the
insurance coverage, Amerigo Energy may suffer losses due to hazards against
which it cannot insure or against which it may elect not to insure.
Drilling and Production Risks. Exploration for oil and gas is speculative by
its very nature, and involves a high risk of loss. A large number of prospects
result in dry holes, and others do not produce oil or gas in sufficient
quantities to make them commercially profitable to complete or place in
production. Many risks are involved that experience, knowledge, scientific
information and careful evaluation cannot avoid. An investor must be prepared
to lose all of an investment as there can be no assurance that any prospect
will result in or continue to have oil or gas production or that production, if
obtained, will be profitable. Oil and gas prospects sometimes experience
production decline that is rapid and unexpected. Initial production from a
prospect (if any) does not accurately indicate any consistent level of
production to be derived from it.
Importance of Future Prices, Supply and Demand for Oil and Gas. The revenues
which might be generated from the activities of Amerigo Energy will be highly
dependent upon the future prices and demand for oil and gas. Factors which may
affect prices and demand include worldwide supply; the price of oil produced in
the United States or imported from foreign countries; consumer demand; price
and availability of alternative fuels; federal and state regulation; and
general, national and worldwide economic and political conditions.
In addition to the widely-recognized volatility of the oil market, the gas
market is also unsettled due to a number of factors. In the past, production
from gas prospects in many geographic areas of the United States has been
curtailed for considerable periods of time due to a lack of market demand, and
such curtailments may exist in the future. Further, there may be an excess
supply of gas in the area of the prospects. In that event, it is possible that
prospects will be shut in or that gas in those areas will be sold on terms less
favorable than might otherwise be obtained. The combination of these factors,
among others, makes it particularly difficult to estimate accurately future
prices of oil and gas, and any assumptions concerning future prices may prove
incorrect.
Competition. There are large numbers of companies and individuals engaged in
exploration for oil and gas and the development of oil and gas properties.
Accordingly, Amerigo Energy will encounter strong competition from independent
operators and major oil companies. Many of the companies so encountered have
financial resources and staffs considerably larger than those available to
Amerigo Energy. There are numerous companies and individuals engaged in the
organization and conduct of oil and gas programs and there is a high degree of
competition among such companies in the offering of their programs.
Markets for Sale of Production. The ability of Amerigo Energy to market oil and
gas found and produced, if any, will depend on numerous factors beyond the
control of Amerigo Energy, the effect of which cannot be accurately predicted
or anticipated. Some of these factors include, without limitation, lifting and
transportation costs, the availability of a ready market, the effect of federal
and state regulation of production, refining, transportation and sales, and
general national and worldwide economic conditions. There is no assurance that
Amerigo Energy will be able to market oil or gas produced by the prospects at
prices that will prove to be economic after costs.
Price Control and Possible Energy Legislation. There are currently no federal
price controls on oil or gas production so that sales of oil or gas by Amerigo
Energy can be made at uncontrolled market prices. However, there can be no
assurance that Congress will not enact controls at any time. No prediction can
be made as to what additional energy legislation may be proposed, if any, nor
which bills may be enacted nor when any such bills, if enacted, would become
effective.
Environmental Regulations. The exploration, development and production of oil
and gas is subject to various federal and state laws and regulations to protect
the environment. Various states and governmental agencies are considering, and
some have adopted, laws and regulations regarding environmental control which
could adversely affect the business of Amerigo Energy. Compliance with such
legislation and regulations, together with any penalties resulting from
noncompliance therewith, will increase the cost of oil and gas development and
production. Some of these costs may ultimately be borne by Amerigo Energy.
Government Regulation. The oil and gas business is subject to extensive
governmental regulation under which, among other things, rates of production
from wells may be fixed. Governmental regulation also may limit or otherwise
affect the market for production and the price which may be paid for that
production. Governmental regulations relating to environmental matters could
also affect Amerigo Energy's operations. The nature and extent of various
regulations, the nature of other political developments and their overall
effect upon Amerigo Energy are not predictable. The availability of a ready
market for oil and gas, if any, discovered by Amerigo Energy or from existing
production and the price obtained for the oil and gas will depend upon numerous
factors, including the extent of domestic production and foreign imports of gas
and/or oil, the proximity and capacity of pipelines, intrastate and interstate
market demand, the extent and effect of federal regulations on the sale of oil
and/or natural gas in interstate and intrastate commerce, and other government
regulation affecting the production and transportation of oil and/or gas. In
addition, certain daily allowable production constraints may change from time
to time, the effect of which cannot be predicted by management. There is no
assurance that Amerigo Energy will be able to market any oil or gas found or
acquired by it at favorable prices, if at all.
Uninsured Risks and Other Potential Liabilities. Amerigo Energy's operations
will be subject to all of the operating risks normally connected with drilling
for and producing oil and gas, such as blow-outs, pollution, premises
liability, workplace injury and other risks and events which could result in
the Program incurring substantial losses or liabilities. Amerigo Energy
anticipates securing insurance as it deems prudent, affordable, necessary and
appropriate. Certain risks of Amerigo Energy, the Project, the Operator and
Non-Operating interest holders are uninsurable and others may be either
uninsured or only partially insured or limited because of high premium costs,
the unavailability of such insurance and/or for other reasons. In the event
Amerigo Energy and/or the Project incurs uninsured losses or liabilities, all
parties may be at risk and the Project's funds available for exploration and
development, as well as funds available for Amerigo Energy's other and ongoing
operations, may be reduced or lost completely.
Decline Curve. Production from all oil and gas wells declines over time. The
actual rate of decline is subject to numerous factors and cannot, in normal
circumstances, be calculated in advance. Production also fluctuates for many
reasons. Prospective investors should understand that production from any well
may fluctuate and will ultimately decline, rendering the well non-commercial.
Dependence upon Amerigo and the Operators. The operations and financial success
of Amerigo Energy depends significantly on its management and of the drilling
guarantor. In the event that management of any of these companies becomes
unable or unwilling to continue to direct the operations of Amerigo Energy,
Amerigo Energy could be adversely affected.
Unpredictability of Oil and Gas Investment. Numerous factors, including
fluctuations in oil and gas prices and operating costs and the productive life
of the wells make it difficult to predict returns with any accuracy.
Marketing and Pricing. The market for oil and gas produced from the wells is
difficult to predict, as well as the costs incurred in connection with such
production. Particularly in the case of natural gas, a market may not
immediately be available for the gas from a well because of its distance from a
pipeline. The gas may therefore remain unsold for an indefinite period of time.
Nevertheless, Amerigo Energy will exercise its best efforts to obtain a market
for any natural gas produced from the well as soon as possible if production is
achieved.
Costs of Treating Natural Gas. Companies that own natural gas production often
require that natural gas have certain characteristics before they will purchase
it. Gas from an Amerigo Energy well may have to be treated so that the
purchasers will take delivery. This treatment might include increasing the
pressure, dehydrating it, removing CO2 or other impurities and other items of a
similar nature. These treatments may require that additional facilities be
built or services be performed. Because these costs concern the operation of a
gas well they are treated as lease operating expenses and are generally
recouped out of production. The costs of any additional facilities are often
paid initially by the first purchasers or gatherers of production, who then
reimburse themselves by recouping these capital costs through a minimal
reduction of the price paid for the gas. If any gas produced by a well requires
special treatment as described above, Amerigo Energy will attempt to minimize
the costs associated with treatment and maximize the Project's profits from the
sale of the gas.
Delays in Receipt of Cash. Amerigo Energy is involved in the exploration for
and development of oil and gas reserves. The unavailability of, or delay in
obtaining, necessary materials for drilling and completion activities, or in
securing title opinions dated to the first production, may delay, for
significant periods after the discovery and production of hydrocarbons, the
distribution of any cash to Amerigo Energy. Because each prospect will be
drilled and completed in succession and not concurrently, revenue, if any, from
each prospect will also be distributed in succession with the completion of the
prospect.
The loss of executive officers or key employees could have a material adverse
effect on our business.
The Company depends greatly on the efforts of our executive officer and other
key personnel to manage our operations. The loss or unavailability of any of
our executive officer or other key personnel could have a material adverse
effect on our business.
The company has no plans to pay dividends on its common stock, and you may not
receive funds without selling your common stock.
The Board of Directors of the Company does not intend to declare or pay
dividends on the Company's Common Stock in the foreseeable future. Instead, the
Board of Directors generally intends to invest any future earnings in the
business. Subject to Nevada law, the Company's Board of Directors will
determine the payment of future dividends on the Company's Common Stock, if
any, and the amount of any dividends in light of any applicable contractual
restrictions limiting the Company's ability to pay dividends, the Company's
earnings and cash flow, the Company's capital requirements, the Company's
financial condition, and other factors the Company's Board of Directors deems
relevant. Accordingly, you may have to sell some or all of your Common Stock in
order to generate cash flow from your investment. You may not receive a gain on
your investment when you sell the Company's Common Stock and may lose the
entire amount of your investment.
Dilution could have an adverse affect on the ownership of the stockholders in
the registrant.
The Company may issue more Common Stock at prices determined by the board of
directors in any private placements or offerings of securities, possibly
resulting in dilution of the value of the Common Stock, and, given there is no
preemptive right to purchase Common Stock, if a stockholder does not purchase
additional Common Stock, the percentage share ownership of the stockholder in
the Company will be reduced.
The business of the company may be adversely affected if the company has
material weaknesses or significant deficiencies in its internal control over
financial reporting in the future.
As a public company the Company will incur significant legal, accounting,
insurance and other expenses. The Sarbanes-Oxley Act of 2002, as well as
compliance with other SEC and exchange listing rules, will increase our legal
and financial compliance costs and make some activities more time-consuming and
costly. Furthermore, SEC rules require that our chief executive officer and
chief financial officer periodically certify the existence and effectiveness of
our internal control over financial reporting. Our independent registered
public accounting firm will be required, beginning with our Annual Report on
Form 10-K for our fiscal year ending on December 31, 2012, to attest to our
assessment of our internal control over financial reporting.
During the course of our testing, we may identify deficiencies that would have
to be remediated to satisfy the SEC rules for certification of our internal
controls over financial reporting. As a consequence, we may have to disclose in
periodic reports we file with the SEC significant deficiencies or material
weaknesses in our system of internal controls. The existence of a material
weakness would preclude management from concluding that our internal control
over financial reporting is effective, and would preclude our independent
auditors from issuing an unqualified opinion that our internal control over
financial reporting is effective. In addition, disclosures of this type in our
SEC reports could cause investors to lose confidence in our financial reporting
and may negatively affect the trading price of our Common Stock. Moreover,
effective internal controls are necessary to produce reliable financial reports
and to prevent fraud. If we have deficiencies in our disclosure controls and
procedures or internal control over financial reporting it may negatively
impact our business, results of operations and reputation.
Cautionary note regarding forward-looking statements and other information
contained in this prospectus
This Prospectus contains some forward-looking statements. Forward-looking
statements give our current expectations or forecasts of future events. You can
identify these statements by the fact that they do not relate strictly to
historical or current facts. Forward-looking statements involve risks and
uncertainties. Forward-looking statements include statements regarding, among
other things, (a) our projected sales, profitability, and cash flows, (b) our
growth strategies, (c) anticipated trends in our industries, (d) our future
financing plans and (e) our anticipated needs for working capital. They are
generally identifiable by use of the words "may," "will," "should,"
"anticipate," "estimate," "plans," "potential," "projects," "continuing,"
"ongoing," "expects," "management believes," "we believe," "we intend" or the
negative of these words or other variations on these words or comparable
terminology. These statements may be found under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," as
well as in this Prospectus generally. In particular, these include statements
relating to future actions, prospective products or product approvals, future
performance or results of current and anticipated products, sales efforts,
expenses, the outcome of contingencies such as legal proceedings, and financial
results.
Any or all of our forward-looking statements in this report may turn out to be
inaccurate. They can be affected by inaccurate assumptions we might make or by
known or unknown risks or uncertainties. Consequently, no forward-looking
statement can be guaranteed. Actual future results may vary materially as a
result of various factors, including, without limitation, the risks outlined
under "Risk Factors" and matters described in this Prospectus generally. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this filing will in fact occur. You
should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date on which they are
made, and, except to the extent required by federal securities laws, we
undertake no obligation to publicly update any forward-looking statements,
whether as the result of new information, future events, or otherwise.
ITEM 2. DESCRIPTION OF PROPERTY
The corporate offices of the Company are located in Henderson, Nevada, at 2580
Anthem Village Drive, Henderson, NV 89052. The Company does not pay rent at
this space as of 4th quarter 2011; however as operations increase this should
change.
CURRENT OIL AND GAS PROPERTIES
The Company, in October 2008, acquired its first oil and gas interests and
properties. The following descriptions of our oil interests include the
amounts acquired in the reorganization as well as interests that were purchased
with shares of our Common Stock in 2008 and 2009. Please see the Note 2 to the
Financial Statements for accounting policies related to these oil and gas
properties. Also note many of these interests have been sold or disposed of by
the company.
All information related to the oil and gas interests held by the Company that
can be reasonably obtained has been disclosed in this filing. There have not
been any reserve studies performed on the interests we hold as of the date of
this filing due to the fact that it would be cost ineffective due to the
materiality of the production on the interests as well as our lack of majority
interest in the leases.
OIL PRODUCING PROPERTIES
WEST BURKE
The West Burke lease consists of 115.27 acres of land. The lease has a total of
7 wells, with 5 pumping wells and 2 injection wells. The lease is located in
Wichita County, Texas
The Company acquired a 18.49% working interest and 13.78% net revenue interest
as part of the reorganization with Granite Energy on October 31, 2008.
Additionally, in December of 2008 and 1st quarter of 2009, the Company acquired
an additional 13.93% and 9.11% working interest and 10.38% and 6.79% net
revenue interest, respectfully, with the issuance of our Common Stock.
As of December 31, 2011, the Company holds a 41.54% total working interest and
30.95% net revenue interest in West Burke.
During the year ended December 2011, the lease did not produce any barrels of
oil. No revenue has been recognized from the lease. No impairment has been
determined necessary for the West Burke leases as of December 31, 2012.
In 2011, the company sold and used its interest in the West Burke lease to
settle $72,814 of debt on the company's books.
PHILLIPS B
The Phillips B leases are located in Cotton County, Oklahoma and are currently
operated by SJ OK Oil Company. We receive any revenues from oil sold to Teppco
Oil (US) Company, net of oil lease expenses for that period.
In December of 2008, the Company acquired an additional 6.53% working interest
and 4.90% net revenue interest with the issuance of our Common Stock.
During the year ended December 2011, the lease produced a total of 1,599.83
barrels of oil at an average price of $89.95 per barrel for the year ended
December 31, 2011. Net revenues of $2,649 have been recognized from revenues of
$6,531 net of lease operating expenses in the amount of $3,882.
During November 2011 the company sold half of its interest in the Phillips B
for $2,445.04 and used the other half of the interest to settle debts on the
company's books. As of December 31, 2012 the company held no interest in the
Phillips B lease.
OIL AND GAS PRODUCING PROPERTIES
MELISSA HENSLEY (GOLDFINCH 1)
The Melissa Hensley well is located in Kingfisher County, Oklahoma and is
operated by H Petro R, Inc. Revenues from this interest are received net of any
lease expenses.
The Company acquired a 27.96% working interest and 20.97% net revenue interest
on October 31, 2008. In December of 2008, the Company acquired an additional
26.14% working interest and 19.61% net revenue interest with the issuance of
our Common Stock. In the year ended December 31, 2009, the Company acquired an
additional 5.48% working interest and 4.11% net revenue interest with the
issuance of our Common Stock. In March 2011 the company settled debts with all
of their interest in the Melissa Hensley Lease.
As of December 31, 2012, the Company held no interest in the Melissa Hensley
lease.
During the year ended December 2011, the Company's interest in the lease
produced approximately 1,771 MCF's of gas at an average price of $4.85 per MCF,
and 82 barrels of oil at an average price of $86.04 per barrel. This resulted
in revenue of $14,497 and lease operating expenses of $12,594 for a net revenue
to the Company of $1,903.
As the interest in the lease was used to settle debts, the carrying value of
the interests at December 31, 2012 and 2011, net of depletion, was $0 and
$51,676, respectively.
DJ HANKS (GOLDFINCH 4)
The DJ Hanks well is located in Kingfisher County, Oklahoma and is operated by
H Petro R, Inc. Revenues from this interest are received net of any lease
expenses.
The Company acquired a 5.27% working interest and 3.95% net revenue interest on
October 31, 2008. Additionally, In December of 2008, the Company acquired an
additional 43.08% working interest and 32.31% net revenue interest with the
issuance of our Common Stock. In 2010, the company purchased 3.20% working
interest in the Kunkel Lease from an investor by giving the investor 10%
working interest in the DJ Hanks Lease. In March 2011 the company settled debts
with interest in the DJ Hanks Lease. The company retains an approximate 1.34%
interest in the lease.
As of December 31, 2011, the Company holds an approximate 1.34% interest in the
DJ Hanks lease.
During the year ended December 2011, the Company's interest in the lease
produced 217.48 MCF's of gas at an average price of $8.26 per MCF, and 51.95
barrels of oil at an average price of $86.04 per barrel. This resulted in
revenue of $7,008 and estimated lease operating expenses of $1,814 for a net
estimated revenue to the Company of $5,194.
During the year ended December 2012, the Company's interest in the lease
produced 50.06 MCF's of gas at an average price of $6.54 per MCF, and 11.12
barrels of oil at an average price of $82.75 per barrel. This resulted in
revenue of $1,248 and estimated lease operating expenses of $671 for a net
estimated revenue to the Company of $577.
As the interest in the majority of the lease was used to settle debts, the
carrying value of the interests at December 31, 2012 and 2011, net of
depletion, was $0 and $0, respectively.
RICHARD HENSLEY (GOLDFINCH 2)
The Richard Hensley well is located in Kingfisher County, Oklahoma and is
operated by H Petro R, Inc. Revenues from this interest are received net of any
lease expenses.
The Company acquired a 19.55% working interest and 14.66% net revenue interest
on October 31, 2008. Additionally, in December of 2008, the Company acquired an
additional 32.52% working interest and 24.39% net revenue interest with the
issuance of our Common Stock. In October 2011, the company settled debts with
all of their interest in the Richard Hensley lease.
As of December 31, 2012, the Company holds no interest in the Richard Hensley
lease.
During the year ended December 2011, the lease had no production. This resulted
in estimated revenue of $0 and estimated lease operating expenses of $5,921 for
a net loss to the Company of $5,921. The carrying value of the interests at
December 31, 2012 and 2011, net of depletion, was $0 and $0, respectively.
BROOKS HENSLEY (GOLDFINCH 3)
The Brooks Hensley well is located in Kingfisher County, Oklahoma and is
operated by H Petro R, Inc. Revenues from this interest are received net of any
lease expenses.
The Company acquired a 49.58% working interest and 37.23% net revenue interest
on October 31, 2008. Additionally, In December of 2008, the Company acquired an
additional 12.31% working interest and 9.23% net revenue interest with the
issuance of our Common Stock. In March 2011, the company settled debts with all
of their interest in the Brooks Hensley lease.
As of December 31, 2012, the Company holds no interest in the Brooks Hensley
lease.
During the year ended December 2011, the lease produced a total of 406.89 MCF's
of gas at an average price of $5.43 per MCF, and 84 barrels of oil at an
average price of $86.04 per barrel. This resulted in revenue of $8,746 and
lease operating expenses of $2,569for a net revenue to the Company of $6,177.
As the interest in the lease was used to settle debts, the carrying value of
the interests at December 31, 2012 and 2011, net of depletion, was $0 and
$47,848, respectively.
EXPLORATORY LEASES AND PROPERTY
As of December 31, 2012 and 2011, due to lack of production, reserve studies,
or potential in the near term of development, all exploratory lease interests
listed below were impaired to zero percent of their book value.
TIGERSHARK
The Company acquired a 27.96% working interest and 20.97% net revenue interest
on October 31, 2008. In December of 2008, the Company acquired an additional
26.14% working interest and 19.61% net revenue interest with the issuance of
our Common Stock. In the year ended December 31, 2009, the Company acquired an
additional 6.47% working interest and 4.88% net revenue interest with the
issuance of our Common Stock.
As of December 31, 2012 and 2011, the Company holds a 60.58% total working
interest and 45.46% net revenue interest in the Tigershark lease.
OTHER EXPLORATORY LEASES
In December of 2008 and 2009, the Company acquired a working interest and net
revenue interest with the issuance of our Common Stock. The Exploratory leases
that were acquired as part of these conversions were Evergreen 1, Roadrunner,
Southgold 1 (Tony), Southgold 2, Southgold 3, and name pending - Escavada. Due
to non-production on the other leases as well as the recent prices of oil and
gas, it is not expected that any of these leases will be drilled.
ITEM 3. LEGAL PROCEEDINGS
Amerigo had signed an agreement with the individual to acquire his interest in
certain oil and gas leases for $120,000, payable at $10,000 per month starting
April 1, 2010, with subsequent payments due on the 1st of each month. The term
of the note was One (1) year. Upon final payment and settlement of the note,
the individual will return all shares of stock (with properly executed stock
power) that he individually holds of Amerigo Energy, along with his entire
interest in the Kunkel lease, which is 3.20% working interest (2.54% net
revenue interest), as well as his ownership in what is known as the 4 Well
Program (0.325% working interest, 0.2438% net revenue interest). During 2010,
the individual sold his interest in the Kunkel lease. The company has not kept
current with the agreement and the individuals promissory note has now been
escalated to a judgment against the company. As of the date of this filing,
terms of settling the judgment have not been resolved.
As of December 31, 2012, other than discussed above that occurred subsequent to
year end, the Company is not a party to any pending material legal proceeding.
To the knowledge of management, no federal, state or local governmental agency
is presently contemplating any proceeding against the Company. To the knowledge
of management, no director, executive officer or affiliate of the Company, any
owner of record or beneficially of more than five percent of the Company's
Common Stock is a party adverse to the Company or has a material interest
adverse to the Company in any proceeding.
ITEM 4. MINE SAFETY DISCLOSURES
None.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Amerigo Energy (formerly known as Strategic Gaming Investments, Inc.) shares of
Common Stock are not traded on an established market. Amerigo Energy Stock is
traded through broker/dealers and in private transactions, and quotations are
reported on the OTCQB under the symbol "AGOE". OTCQB quotations reflect
interdealer prices, without mark-up, mark-down or commission and may not
represent actual transactions. The table below sets forth the range of high and
low prices paid for transactions in Amerigo Energy shares of Common Stock as
reported on the OTCQB for the periods indicated. No dividends have been
declared or paid on Amerigo Energy Common Stock and none are likely to be
declared or paid in the near future.
Effective July 23, 2012, the Company had its stock quotation under the symbol
"AGOE" deleted from the OTC Bulletin Board (the "OTCBB"). The symbol was
deleted for factors beyond the Company's control due to various market makers
electing to shift their orders from the OTCBB. As a result of not having a
sufficient number of market makers providing quotes on the Company's common
stock on the OTCBB for four consecutive days, the Company was deemed to be
deficient in maintaining a listing standard at the OTCBB pursuant to Rule 15c2-
11. That determination was made entirely without the Company's knowledge. The
Company's common stock is now listed for quotation on the OTCQB under the
symbol "AGOE".
The following table sets forth the quarterly high and low bid prices for our
Common Stock during our last two fiscal years, adjusted for the recent stock
split. The quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission, and do not necessarily represent actual buy and sell
transactions.
COMMON STOCK
High Low
---- ---
FISCAL YEAR ENDED DECEMBER 31, 2011:
Fiscal Quarter Ended March 31, 2011 0.41 0.25
Fiscal Quarter Ended June 30, 2011 0.38 0.02
Fiscal Quarter Ended September 30, 2011 0.05 0.01
Fiscal Quarter Ended December 31, 2011 0.05 0.005
FISCAL YEAR ENDED DECEMBER 31, 2012:
Fiscal Quarter Ended March 31, 2012 0.03 0.01
Fiscal Quarter Ended June 30, 2012 0.03 0.01
Fiscal Quarter Ended September 30, 2012 0.04 0.01
Fiscal Quarter Ended December 31, 2012 0.01 0.01
SHAREHOLDERS OF RECORD AND OUTSTANDING SHARES
The authorized capital stock of the Company consists of 100,000,000 shares of
common stock with a par value of $.001 and 25,000,000 shares of preferred stock
at a par value of $.001.
Common Stock. The holders of the common stock are entitled to one vote per
share on each matter submitted to a vote at any meeting of the shareholders.
Shares of common stock do not carry cumulative voting rights, and therefore a
majority of the shares of outstanding common stock will be able to elect the
entire Board of Directors, and if they do so, minority stockholders would not
be able to elect any persons to the Board of Directors. Our Amended By-laws
provide that a majority of the issued and outstanding shares of the Company
shall constitute a quorum for shareholders' meeting except with respect to
certain matters for which a greater percentage quorum is required by statute or
our Articles of Incorporation or By-laws.
Shareholders of The Company have no pre-emptive rights to acquire additional
shares of common stock or other securities. The common stock is not subject to
redemption and carries no subscription or conversion rights.
Preferred Stock. As of December 31, 2012, there were 500,000 preferred shares
issued and outstanding. Preferred stockholders are entitled to 250 votes per 1
share of preferred stock. The Board of Directors is authorized by the Articles
of Incorporation to prescribe by resolution the voting powers, designations,
preferences, limitations, restrictions, reactive rights and distinguishing
designations of the preferred shares if issued.
The stock transfer agent for the Company is Empire Stock, located at 1859
Whitney Mesa Dr., Henderson, NV 89014. Their telephone number is (702) 818-
5898.
HOLDERS
On December 31, 2012, there were approximately 379 holders of Amerigo Energy,
Inc. Common Stock. Due to the prior name change and reverse stock split there
are additional beneficial holders which have not converted their stock.
DIVIDENDS AND OTHER DISTRIBUTIONS
Amerigo Energy has never paid cash dividends on our common stock or preferred
stock. We currently intend to retain earnings, if any, for use in our business
and do not anticipate paying any cash dividends in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES
During 2011, the company issued 9,141,216 shares of company stock to settle
$646,880 in debts on the company's books.
During 2011 the company entered into a settlement agreement with a company we
had purchased oil interest from. As part of this agreement the company returned
8,500,000 shares of stock that were part of the purchase agreement signed in
2008. These shares were cancelled and are no longer outstanding.
The company also issued 69,277 shares of stock for previously purchased oil
interest at a value of $69,277. During 2011 the company realized that the
previous transfer agent never issued the shares as part of an agreement that
was signed in 2009.
During 2011, 2,000,000 shares were issued for consulting services in lieu of
cash, these shares were valued at $80,000.
During the quarter ended March 31, 2012, the entered into a buyback agreement
with a shareholder. The company agreed to buy back 1,500,000 shares for a
purchase price of $1,500. These shares were cancelled with the transfer agent
and are no longer outstanding.
During the year ended December 31, 2012, the company issued 100,000 shares of
common stock to a consultant for services rendered and valued at $1,000.
ITEM 6. SELECTED FINANCIAL DATA
This section is not required for smaller reporting entities.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This discussion contains forward-looking statements. The reader should
understand that several factors govern whether any forward-looking statement
contained herein will be or can be achieved. Any one of those factors could
cause actual results to differ materially from those projected herein. These
forward-looking statements include plans and objectives of management for
future operations, including plans and objectives relating to the products and
the future economic performance of the Company. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions, future business decisions, and the
time and money required to successfully complete development projects, all of
which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of those assumptions could prove inaccurate and, therefore,
there can be no assurance that the results contemplated in any of the forward-
looking statements contained herein will be realized. Based on actual
experience and business development, the Company may alter its marketing,
capital expenditure plans or other budgets, which may in turn affect the
Company's results of operations. In light of the significant uncertainties
inherent in the forward-looking statements included therein, the inclusion of
any such statement should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved.
INTRODUCTION
The Company derives its revenues from its producing oil and gas properties.
These properties consist of working interests in producing oil wells having
proved reserves. Our capital for investment in producing oil properties has
been provided by the sale of common stock to its shareholders.
The following is a discussion of the Company's financial condition, results of
operations, financial resources and working capital. This discussion and
analysis should be read in conjunction with the Company's financial statements
contained in this Form 10-K.
OVERVIEW
RESULTS OF OPERATIONS
REVENUES
For the year ended December 31, 2012 and 2011, the Company recognized $1,248
and $36,782 in revenues from royalties on producing oil and gas properties and
no revenue from rental income. The decrease in oil and gas revenue is directly
related to the reduction of ownership interest in the leases.
OPERATING EXPENSES
Lease Operating - Lease operating expense for the year ended December 31, 2012
totaled $671 as compared to $24,041 for the prior year. During 2012 the
reduction in ownership interest in leases caused a decrease in expenses.
General and Administrative- General and administrative expenses were $4,635 for
the year ended December 31, 2012, compared to $14,848 for the year ended
December 31, 2011.
Professional Fees - Professional fees for the year ended December 31, 2012 were
$186,326 as compared to $300,472 for the period ended December 31, 2011. The
decrease was related to the decrease in consulting fees which are part of the
consulting agreement with the Chief Executive Officer of the Company, as well
as the decreased usage of outside consultants.
Depreciation, Amortization, and Depletion - Depreciation and amortization
expenses on the fixed assets was $0 and $1,220 for the year ended December 31,
2012 and 2011. The depletion expense for the year ended December 31, 2012 and
2011 was $0 and $1,564 and was calculated based on an estimate using the
straight line method over the estimated lives of the development interests
until production studies have been completed on the recently acquired oil and
gas properties. The decrease is related to the reduction in ownership interest
in leases.
OTHER INCOME AND EXPENSES
During the twelve months ended December 31, 2012 and 2011 the company had no
interest income.
The company accrued $980 in interest expense for year ended December 31, 2012.
The company had no interest expenses in 2011.
During 2011 the company sold one of its leases for more than the book value
which resulted in a gain of $1,397.
During 2011 the company used interest in various oil leases to settle debts on
the company's books. These settlements resulted in a gain to the company in the
amount of $5,742.
During 2011 the company recognized a loss of $3,065 in order to write off the
software the company held that was no longer needed.
NET LOSS ATTRIBUTABLE TO COMMON STOCK
We realized a net loss of $191,364 for the year ended December 31, 2012,
compared to a net loss of $301,445 for the year ended December 31, 2011. The
decrease in net loss is attributable to officers of the company taking a
decrease in salary and cleaning up other expenses.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2012, we had cash in the amount of $55, and a working capital
deficit of $457,335, as compared to cash in the amount of $16 and a working
capital deficit of $265,471 as of December 31, 2011. In addition, our
stockholders' deficit was $456,385 and $264,521 at December 31, 2012 and 2011.
Our accumulated deficit is $15,922,521 at December 31, 2012.
Our operations provided net cash of $1,539 during the year ended December 31,
2011, compared to $356 during the year ended December 31, 2011, an increase of
$1,895.
Our cash used for investing activities was $0 and $0 for the year ended
December 31, 2012 and 2011.
Our financing activities used $1,500 and $0 in net cash during the year ended
December 31, 2012 and 2011., The Company's results of operations have not been
affected by inflation and management does not expect inflation to have a
material impact on its operations in the future.
OFF- BALANCE SHEET ARRANGEMENTS
The Company currently does not have any off-balance sheet arrangements.
ITEM 8. FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Amerigo Energy, Inc.
We have audited the accompanying consolidated balance sheets of Amerigo Energy,
Inc. as of December 31, 2012 and 2011, and the related consolidated statements
of operations, stockholders' equity, and cash flows for each of the years in
the two year period ended December 31, 2012. Amerigo Energy, Inc.'s management
is responsible for these financial statements. Our responsibility is to express
an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the financial position of Amerigo Energy, Inc. as of
December 31, 2012 and 2011, and the results of its operations and its cash
flows for each of the years in the two year period ended December 31, 2012 in
conformity with accounting principles generally accepted in the United States
of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has an accumulated deficit of $15,922,521
since inception, which raises substantial doubt about its ability to continue
as a going concern. Management's plans concerning these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ L.L. Bradford & Company, LLC
L.L. Bradford & Company, LLC
April 12, 2013
Las Vegas, Nevada
AMERIGO ENERGY, INC.
CONSOLIDATED BALANCE SHEET
As of As of
December 31, 2012 December 31, 2011
-----------------------------------------
ASSETS
Current assets
Cash $55 $16
-------------------------------
Total current assets 55 16
Other Assets
Deposits 950 950
-------------------------------
Total assets $1,005 $966
===============================
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $38,087 $39,604
Accounts payable - related party 138,655 18,215
Advances from related parties 16,077 16,077
Payroll liabilities 108,000 36,000
Accrued Interest - Related Parties 36,571 35,591
Judgement payable 120,000 120,000
-------------------------------
Total current liabilities 457,390 265,487
Long-term liabilities
Total liabilities 457,390 265,487
Stockholders' (deficit)
Preferred stock (25,000,000 shares authorized
& 500,000 shares outstanding at Sep. 30, 2012) 500 500
Common stock; $.001 par value; 100,000,000 shares authorized; 24,124,824 and
25,524,824 shares outstanding at Dec 31, 2012 and Dec 31 2011 respectively 24,124 25,524
Additional paid-in capital 15,441,512 15,440,612
Accumulated deficit (15,922,521) (15,731,157)
-------------------------------
Total stockholders' (deficit) (456,385) (264,521)
-------------------------------
Total liabilities and stockholders' (deficit) $1,005 $966
===============================
AMERIGO ENERGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended
December 31, 2012 December 31, 2011
------------------------------------------
Revenue
Oil revenues $921 $ 23,352
Gas revenues 327 13,431
------------- ---------
Total Revenue 1,248 36,782
Operating expenses
Lease operating expenses 671 24,041
Selling, general and administrative 4,635 14,848
Professional fees 186,326 300,472
Depreciation and amortization expense - 1,220
Depletion expense - 1,564
------------- ---------
Total operating expenses 191,632 342,145
------------- ---------
Loss from operations (190,384) (305,363)
Other income (expenses):
Interest expense (980) -
Write off of assets/Loss on sale of assets - (3,065)
Other expense - (157)
Gain on Sale of Phillips B. - 1,397
Gain on extinguishment of debt - 5,742
Rounding error - 1
------------- ---------
Total other income (expenses) (980) 3,917
------------- ---------
Net loss $(191,364) $(301,445)
============= ==========
Basic and diluted (loss) per common share $ (0.00) $ (0.01)
============= ==========
Basic and diluted weighted average common
shares outstanding 24,194,398 23,727,708
============= ==========
AMERIGO ENERGY, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
Additional Total
Common Stock Preferred Stock Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Deficit
-------------------- ---------------- ---------- ------------ -------------
Balance,
December 31, 2010 22,814,331 33,356 500,000 500 14,608,105 (15,429,712) (787,750)
==================== ================ ========== ============ ==========
Shares issued 9,141,216 9,141 459,739 468,880
to settle debts
Shares issued 2,000,000 2,000 78,000 80,000
for consulting
services
Shares issued 69,277 70 70
for previously
purchased oil
interest
Settlement of (8,500,000) (8,500) 8,500 -
shares issued to
Granite Energy
Settlement of 220,723 220,723
debts to related
parties
Warrants issued 55,000 55,000
Adjustment to (10,543) 10,543
common stock
account
Rounding error 2 1
Net loss (301,445) (301,445)
Balance,
December 31, 2011 25,524,824 $25,524 500,000 $500 $15,440,612 $(15,731,157 $(264,521)
==================== ================ =========== ============ ==========
Shares issued 100,000 100 900 1,000
for services
Repurchase and (1,500,000) (1,500) (1,500)
retirement of
shares
Net loss (191,364) (191,364)
Balance,
December 31, 2012 24,124,824 $24,124 500,000 $500 $15,441,512 $(15,922,521) $(456,385)
==================== ================ =========== ============= ==========
AMERIGO ENERGY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended
December 31, 2012 December 31, 2011
------------------------------------------
Cash flows from operating activities:
Net loss $(191,364) $(301,445)
Adjustments to reconcile net loss to
net cash used by operating activities:
Sale of oil and gas interests - 150,185
Stock issued for services / settle debt 1,000 433,348
Gain on extinguishment of debt - (5,742)
Depletion, depreciation and amortization - 2,784
Impairment of assets - 3,065
Increase in accounts receivable - 12,416
Increase / (decrease) in accounts payable (1,517) (94,590)
Increase / (decrease) in accounts payable - related party - (183,035)
Increase / (decrease) in advances from related parties 121,420 (22,796)
Increase / (decrease) in accrued payroll 72,000 5,455
Rounding error - (1)
------------- -----------
Net cash Provided by operating activities 1,539 (356)
Cash flows from financing activities:
Repurchase and retirement of shares (1,500)
------------- -----------
Net cash used by financing activities (1,500) -
------------- -----------
Net increase in cash 39 (356)
Cash, beginning of period 16 372
------------- -----------
Cash, end of period $ 55 $ 16
============ ===========
Cash paid for interest $ - $ -
============ ===========
Cash paid for taxes $ - $ -
============ ===========
Supplementary cash flow information:
Stock issued for services $ 1,000 $ -
Oil interest used to settle debts $ - $ (8,099)
============ ===========
AMERIGO ENEGY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
Amerigo Energy, Inc., a Delaware corporation ("AGOE" or the "Company"),
formerly named Strategic Gaming Investments, Inc., was incorporated in 1973.
Prior to 2008, the Company was involved in various businesses, none of which
were successful.
In August of 2008, our Board of Directors voted to get approval from the
shareholders of the Company for a name change from Strategic Gaming
Investments, Inc. to Amerigo Energy, Inc. The company received the approval
from a majority of its stockholders and filed the amendment to its Articles of
Incorporation with the State of Delaware. The name change became effective by
the State of Delaware on August 26, 2008. The Company also requested a new
stock symbol as a result of the name change. Our new trading symbol is "AGOE".
The Amerigo Energy's business plan included developing oil and gas reserves
while increasing the production rate base and cash flow. The plan was to
continue acquiring oil and gas leases for drilling and to take advantage of
other opportunities and strategic alliances. Due to declines in production on
the oil leases the company had an interest in, the company has been exploring
its position in the oil industry. In 2011, the company began an aggressive
approach to reduce the debt on the company's books as well as looking to
diversify the investment holdings, while still maintaining limited interest in
oil leases. The company is aggressively looking for potential oil leases to
acquire as well as businesses which will fit with the company's strategy.
Analyzing opportunities in the oil industry as well as other potential
investments has gone slower than planned, but the company is committed to
implementing its business plan.
Our wholly-owned subsidiary, Amerigo, Inc., incorporated in Nevada on January
11, 2008, holds certain assets, including a minority interest in an oil lease.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the combined accounts of Amerigo,
Inc., a Nevada Corporation. All material intercompany transactions and accounts
have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of highly liquid investments with maturities
of three months or less when purchased.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
COMPREHENSIVE INCOME
FASB Accounting Standard Codification Topic 220-10, "Comprehensive Income"
("ASC 220-10"), requires that total comprehensive income be reported in the
financial statements. ASC 220-10 establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. It requires
(a) classification of the components of other comprehensive income by their
nature in a financial statement and (b) the display of the accumulated balance
of the other comprehensive income separate from retained earnings and
additional paid-in capital in the equity section of a statement of financial
position. The Company's financial statements do not include any of the
components of other comprehensive income during the year ended December 31,
2012 and 2011.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company includes fair value information in the notes to financial
statements when the fair value of its financial instruments is different from
the book value. When the book value approximates fair value, no additional
disclosure is made.
PROPERTY AND EQUIPMENT
Depreciation is computed primarily on the straight-line method for financial
statements purposes over the following estimated useful lives:
CATEGORY Estimated LIFE
Office building 20 years
Vehicles 7 years
Equipment 7 years
Leasehold Improvements 7 years
Furniture and Fixtures 5 years
All assets are booked at historical cost. Management reviews on an annual basis
the book value, along with the prospective dismantlement, restoration, and
abandonment costs and estimate residual value for the assets, in comparison to
the carrying values on the financial statements.
OIL AND GAS PRODUCING ACTIVITIES
The Company uses the successful efforts method of accounting for its oil and
natural gas properties. Exploration costs such as exploratory geological and
geophysical costs and delay rentals are charged against earnings as incurred
The costs to acquire, drill and equip exploratory wells are capitalized
pending determinations of whether development reserves can be attributed to the
Company's interests as a result of drilling the well. If management determines
that commercial quantities of oil and natural gas have not been discovered,
costs associated with exploratory wells are charged to exploration expense.
Costs to acquire mineral interests, to drill and equip development wells, to
drill and equip exploratory wells that find development reserves, and related
costs to plug and abandon wells and costs of site restoration are capitalized.
Depreciation, depletion and amortization ("DD&A") of oil and gas properties is
computed using the unit-of-production method based on recoverable reserves as
estimated by the Company's independent reservoir engineers. Capitalized
acquisition costs are depleted based on total estimated proved developed and
proved undeveloped reserve quantities. Capitalized costs to drill and equip
wells are depreciated and amortized based on total estimated proved developed
reserve quantities. Investments in Exploratory properties are not amortized
until proved reserves associated with the prospects can be determined or until
impairment occurs. Oil and natural gas properties are periodically assessed for
impairment. If the unamortized capitalized costs of proved properties are in
excess of estimated undiscounted future cash flows before income taxes, the
property is impaired. Estimated future cash flows are determined using
management's best estimates and may be calculated using prices consistent with
management expectations for the Company's future oil and natural gas sales.
Exploratory oil and natural gas properties are also periodically assessed for
impairment, and a valuation allowance is provided if impairment is indicated.
Impairment costs are included in exploration expense. Costs of expired or
abandoned leases are charged against the valuation allowance. Costs of
properties that become productive are transferred to proved oil and natural gas
properties.
Exploratory oil and gas properties that are individually significant are
periodically assessed for impairment of value and a loss is recognized at the
time of impairment by providing an impairment allowance. Other Exploratory
properties are amortized based on the Company's experience of successful
drilling and average holding period.
Capitalized costs of producing oil and gas properties, after considering
estimated residual salvage values, are depreciated and depleted by the unit-of-
production method. Support equipment and other property and equipment are
depreciated over their estimated useful lives.
On the sale or retirement of a complete unit of a proved property, the cost and
related accumulated depreciation, depletion, and amortization are eliminated
from the property accounts, and the resultant gain or loss is recognized. On
the retirement or sale of a partial unit of proved property, the cost is
charged to accumulated depreciation, depletion, and amortization with a
resulting gain or loss recognized in income.
On the sale of an entire interest in an Exploratory property for cash or cash
equivalent, gain or loss on the sale is recognized, taking into consideration
the amount of any recorded impairment if the property has been assessed
individually. If a partial interest in an Exploratory property is sold, the
amount received is treated as a reduction of the cost of the interest retained.
Pursuant to ASC 932-235-50-1, the following disclosures for exploratory
activity are made.
a. The amount of capitalized exploratory well costs that is pending the
determination of proved reserves. An entity also shall separately
disclose for each annual period that an income statement is presented
changes in those capitalized exploratory well costs resulting from all
of the following:
1. Additions to capitalized exploratory well costs that are pending the
determination of proved reserves -
2. Capitalized exploratory well costs that were reclassified to wells,
equipment, and facilities based on the determination of proved
reserves
3. Capitalized exploratory well costs that were charged to expense.
Management has assessed this for the company and it is not relevant or
applicable to our operations.
a. he amount of exploratory well costs that have been capitalized for a
period of greater than one year after the completion of drilling at the
most recent balance sheet date and the number of projects for which
those costs relate.
Additionally, for exploratory well costs that have been capitalized for
periods greater than one year at the most recent balance sheet date, an
entity shall provide an aging of those amounts by year, or by using a range
of years, and the number of projects to which those costs relate.
Management has assessed this for the company and it is not relevant or
applicable to our operations.
b. For exploratory well costs that continue to be capitalized for more than
one year after the completion of drilling at the most recent balance
sheet date, a description of the projects and the activities that the
entity has undertaken to date in order to evaluate the reserves and the
projects, and the remaining activities required to classify the
associated reserves as proved. Management has assessed this for the
company and it is not relevant or applicable to our operations.
ASSET RETIREMENT OBLIGATIONS
In accordance with accounting standards for asset retirement obligations (ASC
410), the Company records the fair value of a liability for an asset retirement
obligation (ARO) when there is a legal obligation associated with the
retirement of a tangible long-lived asset and the liability can be reasonably
estimated. No ARO's associated with legal obligations to retire oil and gas
properties have been recognized, as indeterminate settlement dates for the
asset retirements prevent estimation of the fair value of the associated ARO.
The Company performs periodic reviews of its oil and gas properties long-lived
assets for any changes in facts and circumstances that might require
recognition of a retirement obligation.
REVENUE RECOGNITION
Oil, gas and natural gas liquids revenues are recognized when the products are
sold to a purchaser at a fixed or determinable price, delivery has occurred and
title has transferred, and collection of the revenue is reasonably assured.
CONCENTRATIONS OF CREDIT RISK
Credit risk represents the accounting loss that would be recognized at the
reporting date if counter parties failed completely to perform as contracted.
Concentrations of credit risk (whether on or off balance sheet) that arise from
financial instruments exist for groups of customers or counter parties when
they have similar economic characteristics that would cause their ability to
meet contractual obligations to be similarly affected by changes in economic or
other conditions described below.
The Company operates in one primary segment, the oil and gas industry. The
Company's customers are located within the United States of America. Financial
instruments that subject the Company to credit risk consist principally of oil
and gas sales which are based on a short-term purchase contracts from
Enterprise Crude Oil (US) Company and various other gatherers in the area, with
related accounts receivable subject to credit risk.
ACCOUNTS RECEIVABLE
Accounts receivable are stated at the amount management expects to collect from
outstanding balances. Management provides for probable uncollectible amounts
through a charge to earnings and a credit to a valuation allowance based on its
assessment of the current status of individual accounts. Balances outstanding
after management has used reasonable collection efforts are written off through
a charge to the valuation allowance and a credit to trade accounts receivable.
Changes in the valuation allowance have not been material to the financial
statements and at December 31, 2012 and December 31, 2011; the Company's
financial statements do not include an allowance for doubtful accounts because
management believes that no allowance is required at those dates.
Fair value of financial instruments
-----------------------------------
Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of December 31, 2012 and
2011. The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial instruments include
cash and accounts payable. Fair values were assumed to approximate carrying
values for cash and payables because they are short term in nature and their
carrying amounts approximate fair values or they are payable on demand.
Level 1: The preferred inputs to valuation efforts are "quoted prices in active
markets for identical assets or liabilities," with the caveat that the
reporting entity must have access to that market. Information at this level is
based on direct observations of transactions involving the same assets and
liabilities, not assumptions, and thus offers superior reliability. However,
relatively few items, especially physical assets, actually trade in active
markets.
Level 2: FASB acknowledged that active markets for identical assets and
liabilities are relatively uncommon and, even when they do exist, they may be
too thin to provide reliable information. To deal with this shortage of direct
data, the board provided a second level of inputs that can be applied in three
situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges
that fair value measures of many assets and liabilities are less precise. The
board describes Level 3 inputs as "unobservable," and limits their use by
saying they "shall be used to measure fair value to the extent that observable
inputs are not available." This category allows "for situations in which there
is little, if any, market activity for the asset or liability at the
measurement date". Earlier in the standard, FASB explains that "observable
inputs" are gathered from sources other than the reporting company and that
they are expected to reflect assumptions made by market participants
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current
year presentation. These reclassifications had no effect on the results of
operations or stockholders' equity.
NET LOSS PER COMMON SHARE
FASB Accounting Standards Codification Topic 260-10, "Earnings per Share",
requires presentation of "basic" and "diluted" earnings per share on the face
of the statements of operations for all entities with complex capital
structures. Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflect the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
during the period. Dilutive securities having an anti- dilutive effect on
diluted earnings per share are excluded from the calculation.
INCOME TAXES
The Company accounts for its income taxes in accordance with FASB Codification
Topic 740-10 ("ASC 740-10"), which requires recognition of deferred tax assets
and liabilities for future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and tax credit carry forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in operations in the period that
includes the enactment date.
Management feels the Company will have a net operating loss carryover to be
used for future years. Such losses may not be fully deductible due to the
significant amounts of non-cash service costs. The Company has established a
valuation allowance for the full tax benefit of the operating loss carryovers
due to the uncertainty regarding realization.
STOCK-BASED COMPENSATION
The Company has adopted FASB Accounting Standards Codification Topic 718-10,
"Compensation- Stock Compensation" ("ASC 718-10") which requires the
measurement and recognition of compensation expense for all stock-based payment
awards made to employees and directors. Under the fair value recognition
provisions of ASC 718-10, stock-based compensation cost is measured at the
grant date based on the value of the award and is recognized as expense over
the vesting period.
Determining the fair value of stock-based awards at the grant date requires
considerable judgment, including estimating the expected future volatility of
our stock price, estimating the expected length of term of granted options and
selecting the appropriate risk-free rate. There is no established trading
market for our stock.
DIVIDENDS
The Company has not yet adopted any policy regarding payment of dividends.
GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements, the Company has incurred recurring losses, has used
significant cash in support of its operating activities and, based upon current
operating levels, requires additional capital or significant reconfiguration of
its operations to sustain its operations for the foreseeable future. These
factors, among others, may indicate that the Company will be unable to continue
as a going concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's ability to
continue as a going concern is dependent upon its ability to generate
sufficient cash flow to meet obligations on a timely basis and ultimately to
attain profitability. The Company has obtained working capital through equity
offerings and management plans to obtain additional funding through equity or
debt financings in the future. There is no assurance that the Company will be
successful in its efforts to raise additional working capital or achieve
profitable operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
RECENT ACCOUNTING PRONOUNCEMENTS -
The company has evaluated the recent pronouncements and believes that none of
them will have a material effect on the company's financial statements.
NOTE 3 - ACQUISITION AND DISPOSAL OF ASSETS
DURING THE YEAR ENDED DECEMBER 31, 2011:
In November 2011, the company sold 50% of its interest in the Phillips B. lease
to a third party for $2,445. On the same date the company used the other 50% of
its interest to settle $2,445 in debts to Bullfrog Management (an entity
controlled by a prior officer).
On March 1, 2011 the company settled $150,361 in debt on the company books with
oil interest held by the company in leases in Oklahoma.
On September 1, 2011 the Company settled $97,723 in debt on the company books
with the company's interest in the West Burk lease and the Richard Lease. These
leases had previously been written off and had no value on the company's books.
The transaction was recorded as additional paid in capital contribution.
NOTE 4 - NOTES PAYABLE - RELATED PARTY
As of December 31, 2012 and 2011, there are $0 and $0 notes payable outstanding
related to the purchase of the Justice lease. During 2011, these notes were
settled with 4,116,796 shares of stock.
NOTE 5 - STOCKHOLDERS' EQUITY
PREFERRED STOCK
As of December 31, 2012, there were 25,000,000 preferred shares authorized and
500,000 preferred shares outstanding. The board of directors had previously set
the voting rights for the preferred stock at 1 share of preferred to 250 common
shares.
There are 500,000 shares of preferred stock issued and outstanding at December
31, 2012 and 2011, all of which are owned by the current CEO, These shares had
previously been issued in satisfaction of salaries payable, totaling $250,000
to the current CEO and prior officers
During the period ending June 30, 2012, the CEO of the company acquired in a
private transaction the shares of preferred A stock. As of December 31, 2012,
the CEO owns 500,000 shares of preferred stock, which make up 100% of the
preferred stock issued and outstanding.
COMMON STOCK
As of December 31, 2012, there were 100,000,000 shares authorized and there
were 24,124,824 shares of common stock outstanding .
During 2011, the company issued 9,141,216 shares of company stock to settle
$646,880 in debts on the company's books.
During 2011 the company entered into a settlement agreement with a company we
had purchased oil interest from. As part of this agreement the company returned
8,500,000 shares of stock that were part of the purchase agreement signed in
2008. These shares were cancelled and are no longer outstanding.
The company also issued 69,277 shares of stock for previously purchased oil
interest at a value of $69,277. During 2011 the company realized that the
previous transfer agent never issued the shares as part of an agreement that
was signed in 2009.
During 2011, 2,000,000 shares were issued for consulting services in lieu of
cash, these shares were valued at $80,000.
During the quarter ended March 31, 2012, the entered into a buyback agreement
with a shareholder. The company agreed to buy back 1,500,000 shares for a
purchase price of $1,500. These shares were cancelled with the transfer agent
and are no longer outstanding.
During the year ended December 31, 2012, the company issued 100,000 shares of
common stock to a consultant for services rendered and valued at $1,000.
There were no other shares issued during the year 2012. The balance at
December 31, 2012 is 24,124,824 common shares outstanding and 500,000 preferred
shares.
WARRANTS
During the 4th quarter of 2011, the company issued 10,000,000 warrants of the
company stock with an exercise price of $0.01 to an entity the CEO has an
ownership in. The company used the Black Scholes option pricing model to
calculate the value of $55,000 based on a 0% dividend yield, 669% expected
volatility, 0.95% discounts bond rate and a 7 year term. While the warrants
were valued at $55,000, a total of $142,859 was settled with such warrants,
thus $87,859 was considered forgiveness of debt-related party, treated as
additional paid in capital.
Stock options/warrants - The following table summarizes information about
options and warrants granted during the years ended December 31, 2012 and 2011:
Number of Weighted Average
Shares Exercise Price
Balance, December 31, 2010 0 $ -
Options/warrants granted 10,000,000 0.01
Options/warrants expired - -
Options/warrants cancelled, forfeited - -
Options/warrants exercised ---- ---
Balance, December 31, 2011 10,000,000 0.01
Options/warrants granted - -
Options/warrants expired - -
Options/warrants cancelled, forfeited - -
Options/warrants exercised - -
Balance, December 31, 2012 10,000,000 0.01
NOTE 6 - LITIGATION
In 2010, Amerigo signed an agreement with the individual to acquire his
interest in certain oil and gas leases for $120,000, payable at $10,000 per
month starting April 1, 2010, with subsequent payments due on the 1st of each
month. The term of the note was One (1) year. Upon final payment and settlement
of the note, the individual will return all shares of stock (with properly
executed stock power) that he individually holds of Granite Energy and Amerigo
Energy, along with his entire interest in the Kunkel lease, which is 3.20%
working interest (2.54% net revenue interest), as well as his ownership in what
is know as the 4 Well Program (0.325% working interest, 0.2438% net revenue
interest). During 2010, the individual sold his interest in the Kunkel lease.
The company has not kept current with the agreement and the individuals
promissory note has now been escalated to a judgment against the company. As of
the date of this filing, terms of settling the judgment have not been resolved
despite the efforts of the judgment holder to collect on the amount owed.
As of December 31, 2012, other than discussed above that occurred subsequent to
year end, the Company is not a party to any pending material legal proceeding.
To the knowledge of management, no federal, state or local governmental agency
is presently contemplating any proceeding against the Company. To the knowledge
of management, no director, executive officer or affiliate of the Company, any
owner of record or beneficially of more than five percent of the Company's
Common Stock is a party adverse to the Company or has a material interest
adverse to the Company in any proceeding.
NOTE 7 - RELATED PARTY TRANSACTIONS -
The Company has a consulting agreement with a firm controlled by the Company's
Chief Financial Officer for a fee of $3,500 per month. The consulting firm has
been engaged to assist in organizing and completing the process of filings with
the Securities and Exchange Commission and other tasks. As of December 31, 2012
and 2011 the company owed the firm $18,215, and $138,655, respectively. Prior
to December 31, 2011 $200,000 was settled with stock and warrants in lieu of
cash payment (See Note 5).
As of December 31, 2012, the Company's CEO is owed $72,000 in accrued, but not
paid, salary. In January 2013, the CEO entered into a compensation agreement
as discussed in Note 10 Subsequent events.
The Company had an operating agreement with SWJN Oil Company and SJ OK Oil
Company to operate the company's oil and gas leases, the current CEO had a
minority interest in these entities. The fee charged by these companies to
operate these leases is the greater of $1,000 per month or 5% of net oil sales.
During 2011 the CEO sold his interest in SJ OK to an outside party and
subsequent to year end the CEO relinquished his interest in SWJN to an
unrelated third party as well. The total fees Amerigo paid to these entities
during 2012 and 2011 was $0 and $652.
The company also has a lease agreement with AVES. The company rents an office
space from AVES for $1,098 per month. AVES and the building are owned partially
by our current CEO Jason F. Griffith. During June 2011, AVES agreed to waive
the rent to the office space the company uses until the operations increase.
Other Material Transactions. With the exception of the above mentioned
transactions, there have been no material transactions, series of similar
transactions or currently proposed transactions to which the Company or any
officer, director, their immediate families or other beneficial owner is a
party or has a material interest in which the amount exceeds $50,000.
NOTE 8 - INCOME TAX
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial statement
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets as of December 31, 2012
and 2011 are as follows:
Deferred tax assets: 2012 2011
---------- -----------
Net operating loss carryforwards 5,518,182 5,246,818
Stock issued for services 1,000 80,000
Impairment Loss - -
---------- -----------
Net deferred tax asset 5,519,182 5,326,818
A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded as follows:
2012 2011
---------- -----------
Tax at statutory rate (35%) 1,931,714 1,864,386
Increase in valuation allowance (1,931,714) (1,864,386)
---------- -----------
Net deferred tax asset - -
Reconciliation between the statutory rate and the effective tax rate is as
follows at December 31, 2011 and 2010:
2012 2011
---- ----
Federal statutory tax rate (35)% (35)%
Permanent difference and other 35% 35%
At December 31, 2012, the Company had federal net operating loss ("NOL") carry
forwards of approximately $5,519,182. Federal NOLs could, if unused, begin to
expire in 2021. The company has not filed it's corporate tax return for the
2011 or 2012 tax year so the deductibility of the NOL is uncertain.
The valuation allowance for deferred tax assets as of December 31, 2012 was
$5,519,182.
NOTE 9 - ENVIRONMENTAL MATTERS
Various federal and state authorities have authority to regulate the
exploration and developments of oil and gas and mineral properties with respect
to environmental matters. Such laws and regulations, presently in effect or as
hereafter promulgated, may significantly affect the cost of its current oil
production and any exploration and development activities undertaken by the
Company and could result in loss or liability to the Company in the event that
any such operations are subsequently deemed inadequate for purposes of any such
law or regulation.
NOTE 10 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through April 12, 2013, the date
which the financial statements were available to be issued. The Company has
determined that, other than disclosed below, there were no other events that
warranted disclosure or recognition in the financial statements.
In January 2013, the company entered into an employment agreement with the CEO
and ended the prior consulting agreements with him. The terms of his
compensation agreement are $180,000 per year and should the company not have
the funds to cover the amount owed, the amount will accrue interest at 8% per
year.
In February 2013, the company settled $35,592 worth of debt for 35,592 common
shares, valued at $1.00 per share. The CEO of the company was indirectly owed
$14,263 of this debt.
In March 2013, the company announced the acquisition of the license agreement
of Le Flav Spirits for the promotion of a liquor line featuring the celebrity
Flavor Flav. The company issued 360,000 shares of common stock in conjunction
with this acquisition. The company also issued warrants for the purchase of
two million (2,000,000) shares of common stock at $1.00 per shares, with a 5
year exercise period, vested equally at 500,000 shares vested upon every 5,000
cases sold of vodka. The promissory note is to be settled for $1 per bottle
for the first 2,000,000 bottles sold. This will be treated as a convertible
promissory note, convertible at $1.00 per share (at the option of the note
holder). Promissory note bears interest at 8% per year. The Company has the
ability to make principal and interest payments above what is earned from the
'per bottle' during the term. Unless otherwise satisfied, the balance of the
promissory note is due by March 1, 2016. The CEO had a minority interest in
the entity from which the license agreement was purchased.
On March 22, 2013, the Company executed a line of credit agreement with a third
party for $100,000 to be used as purchase order financing for the production of
liquor brands. The line of credit bears interest at twenty percent (20%) on
the advanced amount. In consideration for this line of credit, the company
issued warrants for 300,000 shares of common stock at an exercise price of
$1.00 per share, exercisable for five (5) years. The Company issued 3,000,000
shares of preferred stock as collateral which are being held in trust.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission this Form 10-K
registration statement, including exhibits, under the Securities Act. You may
read and copy all or any portion of the registration statement or any reports,
statements or other information in the files at SEC's Public Reference Room
located at 100 F Street, NE., Washington, DC 20549, on official business days
during the hours of 10 a.m. to 3 p.m.
You can request copies of these documents upon payment of a duplicating fee by
writing to the Commission. You may call the Commission at 1-800-SEC-0330 for
further information on the operation of its public reference room. Our filings,
including the registration statement, will also be available to you on the
website maintained by the Commission at http://www.sec.gov.
We intend to furnish our stockholders with annual reports which will be filed
electronically with the SEC containing consolidated financial statements
audited by our independent auditors, and to make available to our stockholders
quarterly reports for the first three quarters of each year containing
unaudited interim consolidated financial statements.
Our website www.amerigoenergy.com is currently under construction Our website
and the information to be contained on that site, or connected to that site, is
not part of or incorporated by reference into this filing.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9A(T). CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934 ("Exchange Act") is recorded, processed, summarized and
reported within the specified time periods. Our Chief Executive Officer and our
Principal Accounting and Financial Officer (collectively, the "Certifying
Officers") are responsible for maintaining our disclosure controls and
procedures. The controls and procedures established by us are designed to
provide reasonable assurance that information required to be disclosed by the
issuer in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the Commission's rules and forms.
We reviewed and evaluated the effectiveness of the design and operation of our
disclosure controls and procedures, as of the end of the fiscal quarter covered
by this report, as required by Securities Exchange Act Rule 13a-15, and
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed in our reports filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, is accumulated and communicated to management on a timely
basis, including our principal executive officer and principal financial and
accounting officer.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that management document
and test our internal control over financial reporting and include in this
Annual Report on Form 10-K a report on management's assessment of the
effectiveness of our internal control over financial reporting, and to
delineate any material weakness in our internal control. A material weakness is
a deficiency, or a combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a
material misstatement of our annual or interim financial statements will not be
prevented or detected on a timely basis.
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Rule 13a-
15(f) of the Exchange Act. Under the supervision and with the participation of
our management, including our Chief Executive Officer, we conducted an
evaluation of the effectiveness of our internal control over financial
reporting based upon the framework in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on that evaluation, our management concluded that our internal
control over financial reporting is not effective, as of December 31, 2012.
CONCLUSIONS
Based on this evaluation, our principal executive officer and principal
financial and accounting officer concluded that our disclosure controls and
procedures are effective to ensure that the information we are required to
disclose in reports that we file pursuant to the Exchange Act are recorded,
processed, summarized, and reported in such reports within the time periods
specified in the Securities and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS
There were no changes in our internal controls over financial reporting that
occurred during the last fiscal quarter, i.e., the three months ended December
31, 2012, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.
ITEM 9B. OTHER INFORMATION
We have no information that we would have been required to disclose in a report
on Form 8-K during the fourth quarter of the year covered by this Form 10-K.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
(a) Identification of Directors and Executive Officers.
Name Age Term Served*
----- --- ------------
Jason F. Griffith 36 Elected since 2008
CEO/CFO/Director
*All directors hold office until the next annual meeting of the stockholders
and the election and qualification of their successors. Officers are elected
annually by the Board of Directors and serve at the discretion of the Board.
The following is a brief description of the business background of the
directors and executive officers of the Company:
JASON F. GRIFFITH - CEO/CFO/DIRECTOR
Mr. Griffith has served as its Chief Financial Officer as well as a member of
the Board of Directors since October 2008. In the third quarter of 2010, Mr.
Griffith became the Chief Executive Officer of the company as well. Mr.
Griffith's experience includes having served as a chief financial officer for
multiple publicly traded companies. Mr. Griffith has additional experience in
public accounting, which includes being a partner of a CPA firm in Henderson,
Nevada since June 2002, as well as being the accounting manager for another
accounting firm in Henderson, Nevada from August 2001 through June 2002. Mr.
Griffith was previously associated with Arthur Andersen in Memphis, Tennessee
from December 1998 until his move to Nevada in 2001. Prior to joining Arthur
Andersen, Mr. Griffith was pursuing and completed his undergraduate and masters
degree in accounting from Rhodes College in Memphis, Tennessee. He is a
licensed certified public accountant in Nevada, Tennessee, and Georgia. Mr.
Griffith is a member of the American Institute of Certified Public Accountants,
the Association of Certified Fraud Examiners and the Institute of Management
Accountants, along with being a member of the Nevada and Tennessee State
Societies of CPAs.
BOARD OF DIRECTORS; ELECTION OF OFFICERS
All directors hold their office until the next annual meeting of shareholders
or until their successors are duly elected and qualified. Any vacancy occurring
in the board of directors may be filled by the shareholders, the board of
directors, or if the directors remaining in the office constitute less than a
quorum of the board of directors, they may fill the vacancy by the affirmative
vote of a majority of the directors remaining in office. A director elected to
fill a vacancy is elected for the unexpired term of his predecessor in office.
Any directorship filled by reason of an increase in the number of directors
shall expire at the next shareholders' meeting in which directors are elected,
unless the vacancy is filled by the shareholders, in which case the terms shall
expiree on the later of (i) the next meeting of the shareholders or (ii) the
term designated for the director at the time of creation of the position being
filled.
BOARD COMMITTEES
In light of our small size and the fact that we have only two directors, our
board has not yet designated a nominating committee, an audit committee, a
compensation committee, or committees performing similar functions. The board
intends to designate one or more such committees when practicable.
Our board of directors intends to appoint such persons and form such committees
as are required to meet the corporate governance requirements imposed by
Sarbanes-Oxley and any applicable national securities exchanges. Therefore, we
intend that a majority of our directors will eventually be independent
directors and at least one director will qualify as an "audit committee
financial expert" within the meaning of Item 407(d)(5) of Regulation S-K, as
promulgated by the SEC. Additionally, our board of directors is expected to
appoint an audit committee, nominating committee and compensation committee and
to adopt charters relative to each such committee. Until further determination
by the board of directors, the full board of directors will undertake the
duties of the audit committee, compensation committee and nominating committee.
We do not currently have an "audit committee financial expert" since we
currently do not have an audit committee in place.
CODE OF ETHICS
The Company has adopted a Code of Ethics for its principal executive and
financial officers. In the meantime, the Company's management promotes honest
and ethical conduct, full and fair disclosures in its reports with the SEC, and
compliance with the applicable governmental laws and regulations.
ITEM 11. EXECUTIVE COMPENSATION
DIRECTOR AND OFFICER CASH COMPENSATION
The following table sets forth the aggregate cash compensation paid by the
Company for services rendered during the periods indicated to its directors and
executive officers:
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Amerigo Energy
The following sets forth the cash components of Amerigo Energy's executive
officers during the last two fiscal years. The remuneration described in the
table does not include the cost to Amerigo Energy of benefits furnished to the
named executive officers provided to such individuals that are extended in
connection with the conduct of Amerigo Energy's business.
CASH COMPENSATION TABLE
All
Name and Stock Option Other
Principal Position Year Salary ($) Bonus ($) Awards Awards Compensation Total
Jason F. Griffith 2011 0 - - - - 0
Chief Executive Officer 2012 0 - - - - 0
Each director of Amerigo Energy also serves as a director of Amerigo, Inc.
Directors do not receive separate compensation for service as directors of
Amerigo Energy or Amerigo, Inc.
DIRECTOR COMPENSATION
Fees Earned Non-Equity Nanqualified
or Paid Stock Option Incentive Plan Deferred All Other
Name in Cash ($) Awards Awards Compensation Compensation Compensation Total
Jason F. Griffith - - - - - - -
EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS
In January 2013, the company entered into a compensation agreement with the
Chief Executive Officer. The agreement calls for compensation of $180,000 per
year beginning January 1, 2013 and continuing for a five year term. There is
an additional advisory period through December 31, 2022. Should the company
not have the financial ability to pay the salary, the amount owed will convert
to a loan at eight (8%) interest.
Through December 31, 2012, other than as described above, there are no
compensatory plans or arrangements, including payments to be received from
Amerigo Energy, with respect to any party named above which could result in
payments to any such person because of his resignation, retirement, or other
termination of such person's employment with Amerigo Energy or its
subsidiaries, or any change in control of Amerigo Energy, or a change in the
person's responsibilities following a change in control of Amerigo Energy.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Article VI of Amerigo Energy's by-laws, Amerigo Energy may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, except an action by or in the
right of Amerigo Energy, by reason of the fact that he is or was a director,
officer, employee or agent of Amerigo Energy, or is or was serving at the
request of Amerigo Energy as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of Amerigo
Energy, and, with respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful.
Amerigo Energy may also indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of Amerigo Energy to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
Amerigo Energy, or is or was serving at the request of Amerigo Energy as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees, actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of Amerigo Energy. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to Amerigo Energy or for amounts paid in settlement to Amerigo
Energy, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court
deems proper.
Under Delaware law, a director of a Delaware corporation will not be found to
have violated his or her fiduciary duties to the corporation or its
shareholders unless there is proof by clear and convincing evidence that the
director has not acted in good faith, in a manner he or she reasonably believes
to be in or not opposed to the best interests of the corporation, or with the
care that an ordinarily prudent person in a like position would use under
similar circumstances.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The beneficial ownership of each person as described in the table below was
calculated based on 24,124,824 of Amerigo Energy Common Stock outstanding as of
December 31, 2012, according to the record ownership listings as of that date
and the verifications Amerigo Energy solicited and received from each director,
executive officer and five percent holder.
Security Ownership of Certain Beneficial Owners as of December 31, 2012
Title of Name and Address Amount and Nature Percent of
Class of Beneficial Owner of Beneficial Ownership Class
---------------------------------------------------------------------------
Common Jason Griffith. 5,415,025 22.45%
2580 Anthem Village Dr.
Henderson, NV 89052
Security Ownership of Management
Title of Name and Address Amount and Nature Percent of
Class of Beneficial Owner of Beneficial Ownership Class
---------------------------------------------------------------------------
Common Jason F. Griffith 5,415,025* 22.45%
Preferred Chief ExecutiveOfficer 500,000 100.00%
2580 Anthem Village Dr. (1)
Henderson, NV 89052
(1) all of these shares are indirectly owned by a trust controlled by Mr.
Griffith or through entities which Mr. Griffith has ownership interest..
* Total Current Officers and Directors common shares held is 5,415,025 (22.45%)
Management has no knowledge of the existence of any arrangements or pledges of
the Company's securities which may result in a change in control of the
Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -
As of December 31, 2012, the company has $138,655 in liabilities due to a
firm controlled by the Company's Chief Executive Officer. This loan is non-
interest bearing and has no due date assigned to it. Prior to December 31, 2011
$200,000 was settled with stock and warrants in lieu of cash payment.
As of December 31, 2012, the Company's CEO is owed $108,000 in accrued, but not
paid, salary.
The Company had an operating agreement with SWJN Oil Company and SJ OK Oil
Company to operate the company's oil and gas leases, the current CEO previously
had a minority interest in these entities. The fee charged by these companies
to operate these leases was the greater of $1,000 per month or 5% of net oil
sales. During 2011 the CEO sold his interest in SJ OK to an outside party and
in 2012 the CEO relinquished his interest in SWJN to an unrelated third party
as well. The total fees Amerigo paid to these entities during 2011 and 2012 was
$652.
The company also has a lease agreement with AVES. The company rents an office
space from AVES for $1,098 per month. AVES and the building are owned partially
by our current CEO Jason F. Griffith. During October 2011, AVES agreed to waive
the rent to the office space the company uses until operations of the company
increased.
Other Material Transactions. With the exception of the above mentioned
transactions, there have been no material transactions, series of similar
transactions or currently proposed transactions to which the Company or any
officer, director, their immediate families or other beneficial owner is a
party or has a material interest in which the amount exceeds $50,000.
REVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS
The board of directors reviews and approves transactions with directors,
officers, and holders of more than 5% of our voting securities and their
affiliates, or each, a related party. Prior to board consideration of a
transaction with a related party, the material facts as to the related party's
relationship or interest in the transaction are disclosed to the board, and the
transaction is not considered approved by the board unless a majority of the
directors who are not interested in the transaction approve the transaction.
Further, when stockholders are entitled to vote on a transaction with a related
party, the material facts of the related party's relationship or interest in
the transaction are disclosed to the stockholders, who must approve the
transaction in good faith.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT AND NON-AUDIT FEES
Fiscal Year Ended
December 31,
2012 2011
--------------------------
Audit fees $10,000 $10,000
Audit related fees -
Tax fees - -
All other fees - -
PRE APPROVAL OF SERVICES BY THE INDEPENDENT AUDITOR
The Board of Directors has established policies and procedures for the approval
and pre approval of audit services and permitted non-audit services. The Board
has the responsibility to engage and terminate the Company's independent
registered public accountants, to pre-approve their performance of audit
services and permitted non-audit services and to review with the Company's
independent registered public accountants their fees and plans for all auditing
services. All services provided by and fees paid to our auditor, LL Bradford
were approved by our Board of Directors
PART IV
ITEM 15. EXHIBITS
10.1 COMPENSATION AGREEMENT, DATED JANUARY 4, 2013
31.1 CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A)/15(D)-
14(A)
31.2 CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A)/15(D)-
14(A)
32.1 CERTIFICATION OF OUR CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: April 12, 2013
By: /s/ Jason F. Griffith
--------------------------
Jason F. Griffith
Chief Executive and Financial Officer
and Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: April 12, 20132
By: /s/ Jason F. Griffith
---------------------
Jason F. Griffith
Chief Executive and Financial Officer
and Principal Accounting Officer