U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2013
AMERIGO ENERGY, INC.
(Exact name of small business issuer as
specified in its charter)
Delaware 20-3454263
-------------- --------------
(State State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2580 Anthem Village Drive
Henderson, NV 89052
(Address of principal executive offices) (Zip Code)
(702) 399-9777
(Issuer's telephone number)
Indicate by check mark whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. YES [X] NO[ ]
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
({section}232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post
such files). YES [ ] NO[ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer[ ]
Accelerated filer[ ]
Non-accelerated filer (Do not check if a smaller reporting company)[ ]
Smaller reporting company[X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act)
YES [ ] NO [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
25,424,824 shares of common stock, $0.001 par value, as of August 15, 2013
TABLE OF CONTENTS
ITEM 1. FINANCIAL STATEMENTS..............................................
CONSOLIDATED BALANCE SHEET................................................
CONSOLIDATED STATEMENTS OF OPERATIONS.....................................
CONSOLIDATED STATEMENTS OF CASH FLOWS.....................................
NOTES TO FINANCIAL STATEMENTS.............................................
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.........
ITEM 4. CONTROLS AND PROCEDURES...........................................
PART II - OTHER INFORMATION...............................................
ITEM 1. LEGAL PROCEEDINGS.................................................
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.........................
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................
ITEM 4. MINE SAFETY DISCLOSURES...........................................
ITEM 5. OTHER INFORMATION.................................................
ITEM 6. EXHIBITS..........................................................
SIGNATURES................................................................
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERIGO ENERGY, INC.
BALANCE SHEETS
ASSETS
June 30, December 31,
2013 2012
Current assets
Cash $201 $55
Account receivable 755
Prepaids 74,654 -
Interest receivable 9,025 -
Loan receivable 88,810 -
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Total current assets 173,445 55
Other assets
Deposits 950 950
License agreement 2,212,400 -
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Total other assets 2,213,350 950
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Total assets $2,386,795 $1,005
============= ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $147,086 $38,087
Accounts payable - related party 153,603 138,655
Advances from related parties 28,077 16,077
Payroll liabilities 198,000 108,000
Accrued Interest - related Parties - 36,571
Loan payable 10,000 -
Line of credit & interest accrued 98,064 -
Judgment payable 120,000 120,000
Current portion of long-term convertible debt 25,000 -
------------- ----------
Total current liabilities 779,830 457,390
Long-term liabilities
Convertible Note payable 1,975,000 -
------------- ----------
Total liabilities 2,754,830 457,390
Stockholders' (deficit)
Preferred stock; $0.001 par value; 25,000,000 shares
authorized 3,500,000 and 500,000 shares outstanding
as of June 30, 2013 and December 31, 2012, respectively. 3,500 500
Common stock; $0.001 par value; 100,000,000
shares authorized; 25,424,824 and 24,124,824 shares
outstanding of June 30, 2013 and December 31, 2012 respectively. 25,424 24,124
Common stock-authorized and unissued;
755,592 shares and no shares as of
June 30, 2013 and December 31, 2012, respectively. 24,306 -
Unamortized stock-based compensation (28,800) -
Treasury shares (46,000) -
Additional paid-in capital 15,922,458 15,441,512
Accumulated (deficit) (16,268,923) (15,922,521)
------------- ----------
Total stockholders' (deficit) (368,035) (456,385)
------------- ----------
Total liabilities and stockholders' (deficit) $2,386,795 $1,005
============= ==========
AMERIGO ENERGY, INC.
INCOME STATEMENTS
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDING JUNE 30, ENDING JUNE 30,
2013 2012 2013 2012
Revenue
Oil revenues $253 $233 $514 $456
Gas revenues - 129 - 209
Sales 755 - 755 -
----- ---- ------ -----
Total Revenue 1,008 362 1,269 665
Operating expenses
Lease operating expenses 107 128 187 265
Consulting expense 232,003 - 282,903 -
Selling, general and administrative 9,146 600 13,049 3,201
Professional fees 5,250 45,500 8,756 92,712
----- ---- ------ -----
Total operating expenses 246,506 46,228 304,895 96,178
Loss from operations (245,498) (45,866) (303,626) (95,513)
Other income (expenses):
Gain on debt settlement - - 19,195 -
Interest expense (69,580) - (70,996) -
Interest income 7,134 - 9,025 -
----- ---- ------ -----
Total other income (expenses) (62,446) - (42,776) -
Net loss $(307,944) $(45,866) $(346,402) $(95,513)
Net loss per share - basic $(0.01) $(0.00) $(0.01) $(0.00)
Weighted average number of common
shares outstanding - basic 24,470,380 24,131,454 24,297,602 24,131,454
CASH FLOW
FOR THE SIX MONTHS
ENDING JUNE 30,
2013 2012
Cash flows from operating activities:
Net loss $(346,402) $(95,513)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock based compensation - shares for services 16,496 1,000
Debt settled with oil interest -
Stock issued to purchase assets -
Depletion, depreciation and amortization -
Warrants granted 124,807 -
Gain on extinguishment of debt (19,196) -
Changes in operating assets and liabilities:
(Increase) / decrease in accounts receivable (755)
(Increase) / decrease in other assets (9,025)
Increase / (decrease) in accounts payable and accrued liabilities 197,423 953
Increase / (decrease) in accounts payable - related party 13,968 95,084
---------- --------
Net cash Provided by operating activities (22,684) 1,524
Cash flows from investing activities:
(Purchase) sale of oil and gas interest - -
(Purchase) of notes receivable (88,810) -
---------- --------
Net cash (used) by investing activities (88,810) -
Cash flows from financing activities:
Repurchase and retirement of shares - (1,500)
Increase in bank overdraft - -
Proceeds from line of credit 89,640 -
Proceeds from loans 10,000 -
Proceeds from loan - related party 12,000 -
Proceeds from notes payable - -
---------- --------
Net cash provided (used) by financing activities 111,640 (1,500)
Net increase in cash 146 24
Cash, beginning of period 55 16
---------- --------
Cash, end of period $201 $40
Cash paid for interest $- $-
Cash paid for taxes $- $-
Supplementary cash flow information:
Stock issued for services $91,150 $1,000
Warrants issued $124,807
Stock and warrants for License $212,400
Note payable for purchase of intangibles $2,000,000 $-
AMERIGO ENERGY, INC.
AMERIGO ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements included herein, presented in accordance
with United States generally accepted accounting principles and stated in
US dollars, have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these interim financial statements be read in conjunction with the
financial statements of the Company for the year ended December 31, 2012
and notes thereto included in the Company's Form 10-K. The Company follows
the same accounting policies in the preparation of interim reports.
Operating results for the six months ended June 30, 2013 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 2013.
Recent pronouncements:
The Company's management has reviewed all of the FASB's Accounting
Standard Updates through June 30, 2013 and has concluded that none will
have a material impact on the Company's financial statements. Management
does not believe that any other recently issued but not yet effective
accounting pronouncements, if adopted, would have an effect on the
accompanying consolidated financial statements.
Going Concern
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
has incurred cumulative net losses of approximately $16,268,923 since its
inception and requires capital for its contemplated operational and
marketing activities to take place. The Company's ability to raise
additional capital through the future issuances of the common stock is
unknown. The obtainment of additional financing, the successful
development of the Company's contemplated plan of operations, and its
transition, ultimately, to the attainment of profitable operations are
necessary for the Company to continue operations. The ability to
successfully resolve these factors raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements
of the Company do not include any adjustments that may result from the
outcome of these aforementioned uncertainties.
NOTE 2 - OIL AND GAS LEASES
DURING THE SIX MONTHS ENDED JUNE 30, 2013:
For the six months ended June 30, 2013, the Company generated revenues on
producing oil and gas properties in the amount of $514. For the six months
ended June 30, 2012, the Company generated revenues on producing oil and
gas properties in the amount of $665.
The depletion expense for the six months ended June 30, 2013, and 2012 was
$0 and $0 respectively.
NOTE 3 - TRADEMARKS ACQUIRED
As of June 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 10,000 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.
The assets acquired were intangible in nature and will be assessed on an
annual basis.
NOTE 4 - LINE OF CREDIT
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.
As of June 30, 2013, there has been $89,640 received on this line of
credit. This amount is due to be repaid in September 2013. Upon receipt of
these funds, the money was then advanced to the distribution company for
use in production of the liquor brands in relation to purchase orders
received from distributors.
As of June 30, 2012, $8,424 has been recognized as interest expense
related to this line of credit.
NOTE 5 - STOCKHOLDERS' DEFICIT
As of June 30, 2013, there were 25,424,824 shares of common stock
outstanding, 755,592 common stock authorized and unissued and 500,000
preferred shares outstanding.
Preferred Stock
The company pledged 3,000,000 shares of preferred stock as collateral to
the line of credit which was entered into during the quarter.
Common Stock
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. The Company recorded gain on debt
settlement $19,195 and common stock authorized and unissued $36 and these
shares have not been issued by the transfer agent as of May 20, 2013.
In February 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 shares were valued at
$32,400. 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 10,000
cases sold of vodka. The warrants were valued at $180,000. 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.
In February 2013, the Company entered into a consulting agreement with
Flavor Flav. The Company desires to retain the services of a consultant to
assist with the promotion of the company's liquor brands, as well as
negotiate and assist in the acquisition of other liquor brands by well
known personalities. As compensation, the consultant will receive revenue
per cases of Le Flav Vodka sold. For example: the consultant will receive
$1,200.00 for every 100 cases of Le Flav Vodka sold. The consultant will
receive a bonus of twenty five thousand dollars ($25,000.00) based upon
consultant assisting in the acquisition of license agreements with
additional celebrities and well known personalities for additional liquor
brands. Payment of this $25,000 should be made within thirty (30) days of
signing of the new agreement. The consultant will receive a bonus of five
thousand dollars ($5,000.00) upon the release of a new liquor variety in
the market. Payment to be made within thirty (30) days of the first bottle
of the new flavor shipped to the store. The consultant will receive thirty
six thousand dollars ($36,000.00) per year for appearance and promotion
fees.
In March 2013, an addendum was made to above consulting agreement from
February 2013. The following changes are made to compensation references
$36,000 per year, and the term of those is to be paid as follows: $25,000
due within fourteen days of signature of the addendum; balance of $36,000
to be paid from month two to twelve; from month thirty to thirty-six, the
Company will pay $3,000 per month. As of June 30, 2013, total consulting
expense incurred from this consultant is $3,600 and unamortized share-
based compensation is $28,800.
The shares of stock related to the above have not been issued by the
transfer agent as of May 20, 2013.
In April 2013, the Company entered into two consulting agreements, in
which the Company will exchange a total of 2,140,000 fully vested and
earned shares for services. As of June 30, 2013 the Company had yet to
issue the shares there by recording a stock payable and expense in the
amount of $23,550. The Company does have an obligation to issue the
balance of the shares valued at $104,850.
In April 2013, the Company agreed to repurchase 900,000 shares for $10,000
from three investors. Monthly payment over a 10 month period will be made
to pay off the repurchase. Additionally, the Company granted these three
investors, warrants for their respective number of shares. The total value
of the 900,000 warrants in the amount of $36,000 has been recorded as of
June 30, 2013.
In April 2013, the Company issued 5,000 warrants valued at $150, related
to a loan entered into during the quarter.
In June 2013, the Company issued 800,000 shares with a fair value of
$63,200 to two consultants in exchange for services.
In June 2013, the Company entered into a consulting agreement in which the
Company will issue 4,300,000 warrants in exchange for consulting services.
The warrants vesting provisions are as follows: 800,000 at signing;
1,500,000 on December 1, 2013; 2,000,000 on June 1, 2014. All warrants are
fully earned and non forfeitable; these are fair valued as of the
agreement date and recognized over the vesting terms. As of June 30, 2013
a total of $63,657 was recognized as expense.
NOTE 6 - RELATED PARTY TRANSACTIONS
As of June 30, 2013, the Company had $198,000 in accrued payroll payable
to the Company's current officer.
The Company previously had a consulting agreement with a firm controlled
by the Company's Chief Executive Officer for a fee of $3,500 per month.
The consulting firm had been engaged to assist in organizing and
completing the process of filings with the Securities and Exchange
Commission and other tasks. The Company owed the firm $110,623 as of June
30, 2013 which is included as part of Accounts payable - related party in
the accompanying financial statements.
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.
As of June 30, 2013, there has been $89,640 received on this line of
credit. This amount is due to be repaid in September 2013. Upon receipt of
these funds, the money was then advanced to the distribution company for
use in production of the liquor brands in relation to purchase orders
received from distributors. The owner of the distribution company is a
minority shareholder in the company. All funds advanced to the
distribution company for the production of the brands are personally
guaranteed by the shareholder.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through August 15, 2013, the
date which it has made its financial statements available, and has
identified no significant reportable events through that date.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission this Form 10-Q,
including exhibits, under the Securities Act. You may read and copy all or
any portion of the registration statement or any reports, statements or
other information in the files at SEC's Public Reference Room located at
100 F Street, NE., Washington, DC 20549, on official business days during
the hours of 10 a.m. to 3 p.m.
You can request copies of these documents upon payment of a duplicating
fee by writing to the Commission. You may call the Commission at 1-800-
SEC-0330 for further information on the operation of its public reference
room. Our filings, including the registration statement, will also be
available to you on the website maintained by the Commission at
http://www.sec.gov.
We intend to furnish our stockholders with annual reports which will be
filed electronically with the SEC containing consolidated financial
statements audited by our independent auditors, and to make available to
our stockholders quarterly reports for the first three quarters of each
year containing unaudited interim consolidated financial statements.
The company's website address is http://www.amerigoenergy.com; however,
the site has recently come down and is being revamped to account for the
updates to the company's business plan. Our website and the information
contained on that site, or connected to that site, is not part of or
incorporated by reference into this filing.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This discussion contains forward-looking statements. The reader should
understand that several factors govern whether any forward-looking
statement contained herein will be or can be achieved. Any one of those
factors could cause actual results to differ materially from those
projected herein. These forward-looking statements include plans and
objectives of management for future operations, including plans and
objectives relating to the products and the future economic performance of
the Company. Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive and market
conditions, future business decisions, and the time and money required to
successfully complete development projects, all of which are difficult or
impossible to predict accurately and many of which are beyond the control
of the Company. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are reasonable,
any of those assumptions could prove inaccurate and, therefore, there can
be no assurance that the results contemplated in any of the forward-
looking statements contained herein will be realized. Based on actual
experience and business development, the Company may alter its marketing,
capital expenditure plans or other budgets, which may in turn affect the
Company's results of operations. In light of the significant uncertainties
inherent in the forward-looking statements included therein, the inclusion
of any such statement should not be regarded as a representation by the
Company or any other person that the objectives or plans of the Company
will be achieved.
A complete discussion of these risks and uncertainties are contained in
our Annual Financial Statements included in the Form 10-K for the fiscal
year ended December 31, 2012, as filed with the Securities and Exchange
Commission on April 12, 2013.
INTRODUCTION
The Company derives its revenues from its producing oil and gas
properties, of which the substantial majority are predominantly oil
properties. These properties consist of working interests in producing oil
wells having proved reserves. Our capital for investment in producing oil
properties has been provided by the sale of common stock to its
shareholders.
The company additionally receives trademark privilege fees in relation to
its ownership in various liquor brands, namely Le Flav Vodka.
The following is a discussion of the Company's financial condition,
results of operations, financial resources and working capital. This
discussion and analysis should be read in conjunction with the Company's
financial statements contained in this Form 10-Q.
OVERVIEW
RESULTS OF OPERATIONS
REVENUES
For the three months ended June 30, 2013 the company generated revenues on
producing oil and gas properties in the amount of $253. For the three
months ended June 30, 2012 the company generated $362 in revenues from
producing oil and gas properties.
For the six months ended June 30, 2013 the company generated revenues on
producing oil and gas properties in the amount of $514. For the six months
ended June 30, 2012 the company generated $665 in revenues from producing
oil and gas properties. Additionally, the Company generated $755 in
revenues from liquor sales compared to $0 in the six months ending 2012.
OPERATING EXPENSES
The company recorded a $19,195 gain on settlement of debt in relation to
the settling of debt to third parties at less than the face value of the
debt.
THREE MONTHS ENDED
Lease Operating - Lease operating expense for the three months ended June
30, 2013 totaled $107 as compared to $128 for the three months ended June
30, 2012. The decrease is directly related to the decrease in interest the
Company holds.
General and Administrative - General and administrative expenses were
$9,146 for the three months ended June 30, 2013, compared to $600 for the
three months ended June 30, 2012.
Professional Fees - Professional fees for the three months ended June 30,
2013 were $5,250 as compared to $45,500 for the three months ended June
30, 2012. The decrease was related to the decreased use of consultants.
Consulting fees - Consulting fees for the three months ended June 30, 2013
were $232,003 as compared to $0 for the three months ended June 30, 2012.
The increase was related to the increased use of consultants.
OTHER INCOME AND EXPENSES THREE MONTHS ENDED
Interest Expense - Interest expense for the three months ended June 30,
2013 totaled $69,580 as compared to $0 for the three months ended June 30,
2012. The increase is directly related to the increased use of loans in
order to fund operations.
Interest Income - Interest income for the three months ended June 30, 2013
totaled $7,134 as compared to $0 for the three months ended June 30, 2012.
SIX MONTHS ENDED
Lease Operating - Lease operating expense for the six months ended June
30, 2013 totaled $187 as compared to $265 for the six months ended June
30, 2012. The decrease is directly related to the decrease in interest the
Company holds.
General and Administrative - General and administrative expenses were
$13,049 for the six months ended June 30, 2013, compared to $3,201 for the
six months ended June 30, 2012.
Professional Fees - Professional fees for the six months ended June 30,
2013 were $8,756 as compared to $92,712 for the six months ended June 30,
2012. The decrease was related to the decreased use of consultants.
Consulting fees - Consulting fees for the six months ended June 30, 2013
were $282,903 as compared to $0 for the six months ended June 30, 2012.
The increase was related to the increased use of consultants.
OTHER INCOME AND EXPENSES SIX MONTHS ENDED
Interest Expense - Interest expense for the six months ended June 30, 2013
totaled $70,996 as compared to $0 for the six months ended June 30, 2012.
The increase is directly related to the increased use of loans in order to
fund operations.
Interest Income - Interest income for the six months ended June 30, 2013
totaled $9,025 as compared to $0 for the six months ended June 30, 2012.
NET LOSS ATTRIBUTABLE TO COMMON STOCK
The company realized a net loss of $307,944 for the three months ended
June 30, 2013, compared to a net loss of $45,866 for the three months
ended June 30, 2012, an increase of $262,078. The increase in net loss is
partially attributable to the increase in consulting expenses and the gain
on debt settlement as compared to the six months ended June 30, 2012.
The company realized a net loss of $346,402 for the six months ended June
30, 2013, compared to a net loss of $95,513 for the six months ended June
30, 2012, an increase of $250,889. The increase in net loss is partially
attributable to the increase in consulting expenses and the gain on debt
settlement as compared to the six months ended June 30, 2012.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2013, we had cash in the amount of $201 and a working capital
deficit of $606,385. In addition, our stockholders' deficit was $368,035
at June 30, 2013.
Our accumulated deficit increased from $15,922,521 at December 31, 2012 to
$16,268,923 at June 30, 2013.
Our operations provided net cash of ($22,684) during the six months ended
June 30, 2013, compared to earning net cash of $1,524 during the six
months ended June 30, 2012, a decrease of $24,208.
Net cash used by investing activities was ($88,810) for the six months
ended June 30, 2013, compared to providing net cash of $0 for the six
months ended June 30, 2012.
Our financing activities provided net cash of $111,640 during the six
months ended June 30, 2013, compared to using net cash of ($1,500) during
the six month ended June 30, 2012.
INFLATION
The Company's results of operations have not been affected by inflation
and management does not expect inflation to have a material impact on its
operations in the future.
OFF- BALANCE SHEET ARRANGEMENTS
The Company currently does not have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS
We evaluated the effectiveness of our disclosure controls and procedures
as of June 30, 2013, the end of the period covered by this Quarterly
Report on Form 10-Q. This evaluation was undertaken by our Chief Executive
Officer and Chief Financial Officer, Jason F. Griffith.
Mr. Griffith serves as our principal executive officer and as our
principal accounting and financial officer.
We reviewed and evaluated the effectiveness of the design and operation of
our disclosure controls and procedures, as of the end of the fiscal
quarter covered by this report, as required by Securities Exchange Act
Rule 13a-15, and concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed in our
reports filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, is accumulated and
communicated to management on a timely basis, including our principal
executive officer and principal financial and accounting officer.
CONCLUSIONS
Based on this evaluation, our principal executive officer and principal
financial and accounting officer concluded that our disclosure controls
and procedures are effective to ensure that the information we are
required to disclose in reports that we file pursuant to the Exchange Act
are recorded, processed, summarized, and reported in such reports within
the time periods specified in the Securities and Exchange Commission's
rules and forms.
CHANGES IN INTERNAL CONTROLS
There were no changes in our internal controls over financial reporting
that occurred during the last fiscal quarter, i.e., the six months ended
June 30, 2013, that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Amerigo has signed an agreement with 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 is One (1) year. The Company is
offered a prepayment discount if the Company pays $100,000 on or before
Tuesday, June 1, 2010. Upon final payment and settlement of the note, the
individual will return all shares of stock (with properly executed stock
power) that he individual holds of Granite Energy and / or 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).
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 efforts of the judgment holder to collect the amount
owed.
As of June 30, 2013, other than the lawsuit disclosed in the previous
paragraphs, the Company is not a party to any pending material legal
proceeding. To the knowledge of management, no federal, state or local
governmental agency is presently contemplating any proceeding against the
Company. To the knowledge of management, no director, executive officer or
affiliate of the Company, any owner of record or beneficially of more than
five percent of the Company's Common Stock is a party adverse to the
Company or has a material interest adverse to the Company in any
proceeding.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION.
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".
ITEM 6. EXHIBITS
(a) Exhibits.
31.1 Certification of our Principal Executive Officer and Principal
Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
32.1 Certification of our Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. Section 1350)
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: August 19, 2013
By: /s/ Jason F. Griffith
---------------------
Jason F. Griffith
Chief Executive Officer,
and Chief Financial Officer