Attached files
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): November
18,
2009
Alamo
Energy Corp.
(Exact
name of registrant as specified in its charter)
|
Nevada
(State
or other jurisdiction
of
incorporation)
|
000-52687
(Commission
File
Number)
|
98-0489669
(IRS
Employer
Identification
No.)
|
|
10497
Town and Country Way, Suite 310, Houston, Texas
|
77024
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(832)
436-1832
Registrant’s
telephone number, including area code
Green
Irons Holdings Corp., PO
Box 561, Harbour Gates, Providenciales, Turks and Caicos
Islands
(Former
name or former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
1
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
We
have included or incorporated by reference in this current report statements
that may constitute “forward-looking statements” within the meaning of the
federal securities laws. All statements other than statements of historical
facts contained in this current report, including statements regarding our
future results of operations and financial position, business strategy and plans
and objectives of management for future operations, are forward-looking
statements.
The
words “believe,” “may,” “might,” “will,” “should,” “estimate,” “predict,”
“continue,” “anticipate,” “intend,” “expect, “plan,” “project,” “potential” and
similar expressions are intended to identify forward-looking statements. We have
based these forward-looking statements largely on our current expectations and
projections about future events and trends that we believe may affect our
financial condition, results of operations, business strategy, short-term and
long-term business operations and objectives, and financial needs. These
forward-looking statements are subject to a number of risks, uncertainties and
assumptions, including those described in “Risk Factors.” In light of these
risks, uncertainties and assumptions, the forward-looking events and trends
discussed in this current report may not occur and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements.
You
should read this current report completely and with the understanding that our
actual future results may be materially different from what we expect. Given
these uncertainties, you should not place undue reliance on these
forward-looking statements. These forward-looking statements represent our
estimates and assumptions only as of the date of this current report and, except
as required by law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise after the date of this current report. All subsequent
written and oral forward-looking statements attributable to us or any person on
our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section.
Item
1.01. Entry into a Material Definitive Agreement.
Asset
Purchase Agreement
On
November 18, 2009, Green Irons Holdings Corp. (the “Registrant”) completed the
asset purchase and sale transaction (the “Asset Purchase Transaction”)
contemplated by an Asset Purchase and Sale Agreement (the “Asset Purchase
Agreement”) between the Registrant (referred to in this current report as the
“Company,” the “registrant,” “Green Irons,” “we,” “us” and similar terms) and
Alamo Oil Limited, a UK corporation (“Alamo Oil”). The transactions contemplated
by the Asset Purchase Agreement (the “Asset Purchase”) closed on November 18,
2009 (“Closing Date”).
Item 2.01
of this report discusses the consummation of the Asset Purchase Agreement and
various other transactions and events completed in connection with the Asset
Purchase Agreement and are incorporated herein by reference.
Employment
Agreements
As
discussed herein, on November 19, 2009, we entered into certain employment
agreements with our executive officers. A full description of the
terms of the Employment Agreements is contained in Item 2.01 of this report in
the section entitled “Executive
Compensation” and is incorporated herein by reference.
2
Private
Placement
In
connection with the Asset Purchase, on November 18, 2009, we entered into a Note
and Warrant Puchase Agreement with one investor pursaunt to which the investor
agreed to lend up to Two Million Dollars ($2,000,000) to us in multiple
installments in exchange for a senior secured convertible promissory note
(“Note”) with a conversion price of $0.50 per share and three-year warrants to
acquire shares of common stock at an exercise price of $1.00 per share (the
“Warrants”) in the amount of each installment. The first installment of Three
Hundred Thirty Four Thousand Nine Hundred Five Dollars ($334,905) (“First
Installment”) was delivered on the Closing Date and we issued 334,905 Warrants
to the in connection with the First Installment. The Note and Warrant Puchase
Agreement provides that the investor will lend additional installments to us in
amounts as requested by us; provided however, that we provide the proposed use
of proceeds for each requested amount. Each proposed use of proceeds for each
requested amount shall specify that the majority of the proceeds shall be used
for the acquisition of low risk oil and gas rights in geographic regions with
stable governments. The investor shall have sole discretion in determining
whether the proposed use of proceeds meets those requirements.
Post-delivery
of the First Installment and prior to any future installments, we intend to
effectuate a thirty-for-one split (the “Stock Split”) of the authorized number
of shares of its common stock and all of its then-issued and outstanding common
stock, par value $0.001 per share. The Note and Warrant Puchase Agreement
provides that the Note and Warrants issued in exchange for the First Installment
will not be affected by the Stock Split and any future installments shall be
treated on a post-Stock Split basis.
We are
obligated to register the shares of common stock underlying the Note and the
shares of common stock underlying the Warrants for resale as described below
under the heading “Registration Rights Agreements.” A form of the
Note and Warrant Puchase Agreement is included as Exhibit 10.8 to this report. A
form of the Notes is included as Exhibit 10.9 to this report. A form
of the Warrants is included as Exhibit 10.10 to this report. The
issuance was made pursuant to Regulation S promulgated by the SEC. We
believe that exemptions were available because (iii) the sale was made to
eligible non-U.S. persons as that term is defined for purposes of Regulation S,
and with regard to all transactions, (iii) transfer was restricted in accordance
with the requirements of the Securities Act of 1933, as amended (the “Securities
Act”) (including by legending of certificates representing the
securities).
In
connection with the Private Placement, we entered registration rights agreement
with the investor (the “Registration Rights Agreement”). Under the
Registration Rights Agreement, we are obligated to register for resale an
aggregate of 1,004,715 shares of common stock, all of which underlie the Note
and the Warrants under the Securities Act. This
brief description of the Registration Rights Agreement is not intended to be
complete and is qualified in its entirety by reference to the full text of the
Registration Rights Agreement as attached in Exhibit 4.1 to this
report.
In
connection with the Private Placement, we entered security agreement with the
investor (the “Security Agreement”) to secure
the timely payment and performance in full of our obligations pursuant to the
Note. This
brief description of the Security Agreement is not intended to be complete and
is qualified in its entirety by reference to the full text of the Security
Agreement as attached in Exhibit 10.11 to this report.
Subsidiary
Merger and Name Change
Green
Irons owned one hundred percent (100%) of a newly created Nevada corporation
called Alamo Energy Corp., which had no operations or assets (“Alamo Sub”).
Following the closing of the Asset Purchase Transaction, effective as of
November 19, 2009, Alamo Sub merged into Green Irons, resulting in Green Irons
changing its name to “Alamo Energy Corp.”
Stock
Repurchase and Debt Forgiveness Agreement
On the
Closing Date, the Company also entered into a Stock Repurchase and Debt
Forgiveness Agreement (the “Repurchase Agreement”) with Mr. McDougall, pursuant
to which the Company and Mr. McDougall agreed to cancel 4,616,666 shares of
common stock held by Mr. McDougall in exchange for US$61,073.00. Mr. McDougall
also agreed to forgive any debt due to him by the Company. The foregoing
description of the Repurchase Agreement is only a summary and is qualified in
its entirety by reference to the Repurchase Agreement, a copy of which is
attached as an exhibit to this current report and incorporated herein by
reference.
3
Vesting
Agreements
As a
condition to the Private Placement, the investors required our officers and
directors to enter into vesting agreements pursuant to which such holders’
shares are subject to vesting.
A full description of the terms of the vesting agreements is contained in
the section entitled “Certain
Relationships and Related Transactions – Vesting Agreements”
incorporated herein by reference.
Lock-Up
Agreements
As a
condition to the Private Placement, the investors required our officers and
directors to enter into lock-up agreements pursuant to which such holders are
not permitted to dispose of any of their securities in the Company for a period
of one year.
A full description of the terms of the lock-up Agreements is contained in
the section entitled “Certain
Relationships and Related Transactions – Lock-Up Agreements”
incorporated herein by reference.
Item
2.01. Completion of Acquisition or Disposition of
Assets.
On
November 18, 2009, we completed the acquisition of certain assets from Alamo Oil
pursuant to the Asset Purchase Agreement referenced in Item 1.01 of this
report.
In
connection with the Asset Purchase Transaction, Alamo Oil became a stockholder
of the Company holding 350,000 shares of our common
stock. Immediately following the consummation of the Asset Purchase
Transaction and the Repurchase Agreement, we had an aggregate of 1,622,284
shares of common stock actually issued. As a result of the Asset Purchase, Alamo
Oil now holds approximately 22% of the Company’s outstanding shares of common
stock.
Item
2.01(f) of Form 8-K states that if the registrant was a shell company, as we
were immediately before the transaction disclosed under Item 2.01 (i.e., the
reverse acquisition), then the registrant must disclose the information that
would be required if the registrant were filing a general form for registration
of securities on Form 10. Accordingly, we are providing below the
information that would be included in a Form 10 if we were to file a Form
10. Please note that the information provided below relates to the combined
company after the acquisition of Alamo Oil, unless otherwise specifically
indicated or the context otherwise requires.
Additional
information in response to this Item 2.01 is keyed to the Item numbers of Form
10. References throughout to “Alamo Oil” refer to Alamo Oil prior to
the Asset Purchase. References to “Green Irons” or “our predecessor”
refer to Green Irons prior to the Asset Purchase. References to the
“Company,” “we,” or “our” refer to Alamo Energy following the Asset
Purchase.
PART
I
Item
1. Description of Business.
Our
Background. We were incorporated in the State of Nevada on March 29, 2006
as Green Irons Holdings Corp. to conduct a business in the golfing industry. On
November 18, 2009, we entered into an Asset Purchase Agreement, with Alamo Oil.
As a result of the Asset Purchase, we changed management, enter the oil and gas
business, and cease all activity in our former business. Our current business is
comprised solely of the assets purchased of Alamo Oil. We are focused
to exploration, acquisition, development, production and sale of crude oil and
natural gas primarily from exploration and production areas within North
America. We are qualified to do business in the State of Texas as "Texas
Alamo Energy Corp." We have not undergone bankruptcy, receivership, or any
similar proceeding.
4
Our
Business. We are an early stage oil and gas company led by an experienced
management team and focused on exploration and production of oil and natural
gas. Our business plan is to acquire oil and gas properties for
exploration, appraisal and development with the intent to bring the
projects to feasibility at which time we will either contract out the
operations or joint venture the project to qualified interested
parties. Our main priority will be given to projects with near term
cash flow potential, although consideration will be given to projects that may
not be as advanced from a technical standpoint but demonstrate the potential for
significant upside. We are currently negotiating with various third
parties regarding the acquisition of certain oil and gas interests but
no agreements, understanding or arrangements (written or oral)
have been reached.
The
Lozano Lease - Frio County, Western Gulf Province, Texas. In September
2009, Alamo Oil acquired certain oil, gas and mineral leases totaling
approximately 110 gross acres, located in Frio County, Texas. As a result of the
Asset Purchase, we own a seventy-five percent (75%) working interest in the
Lozano lease, which is a currently producing asset with three wells. All three
wells have had recently completed workovers. The production from the
Lozano wells is mature and we believe those wells will produce at least
$30,000 cash flow per quarter and are likely to continue to produce with
slow decline for the foreseeable future.
Frio
County forms a rectangle thirty-seven miles east and west and thirty miles north
and south, and is comprised of 719,360 acres or 1,133 square miles. Since 1990,
the oil industry in Frio County has been successful because of new
oil-extraction technology that permits horizontal drilling to considerable
depths. Frio County lies within the Western Gulf Province, which includes the
portion of Louisiana south of the Lower Cretaceous shelf edge, and Texas south
and east of the Ouachita Fold Belt. The Western Gulf includes Texas Railroad
Districts 1 through 4. The boundaries include the Ouachita Fold Belt, the
southern boundary of East Texas Basin Province (048), the southern boundary of
the Mississippi-Louisiana Salt Basins Province (049), the offshore 3-league
(10.36-mile) limit in Texas, and the offshore 3-mile limit in Louisiana. The
southwest boundary is the Texas-Mexico border. The area of the
Western Gulf is approximately 116,599 square miles. We believe the Western Gulf
is one of the most heavily explored provinces in the country and has led to the
discovery of significant oil and gas fields with considerable oil and gas
reservoirs.
We
also received informal options to purchase other working interests in oil and
gas leases in Texas, ranging from 30% to 100% and which expire at various dates
through March 2010 and which we may purchase for the aggregate amount of
$650,000. If we are unable to purchase these other interests before
the respective expiration dates, or before the purchase of these interests by a
third party, then we lose those rights.
Business
Strategy. Our strategy is to increase shareholder value through strategic
acquisitions, appraisal drilling and development. We are focused on the
acquisition, appraisal development and exploitation of oil
properties. Our assets currently consist of primarily of the Alamo
Property. The company is also searching for possible joint-ventures and new
prospects that fit the Company’s strategic focus.
Competition.
We compete with other companies for financing and for the acquisition of
new oil and gas properties. Many of the oil and gas exploration companies with
whom we compete have greater financial and technical resources than those
available to us. Accordingly, these competitors may be able to spend greater
amounts on acquisitions of oil and gas properties of merit, on exploration of
their properties and on development of their properties. In addition, they may
be able to afford more geological and other technical expertise in the targeting
and exploration of oil and gas properties. This competition could result in
competitors having properties of greater quality and interest to prospective
investors who may finance additional exploration and development. This
competition could have an adverse impact on our ability to achieve the financing
necessary for us to conduct further exploration of our acquired
properties.
We will
also compete with other junior oil and gas exploration companies for financing
from a limited number of investors that are prepared to make investments in
junior oil and gas exploration companies. The presence of competing junior oil
and gas exploration companies may have an adverse impact on our ability to raise
additional capital in order to fund our exploration programs if investors are of
the view that investments in competitors are more attractive based on the merit
of the oil and gas properties under investigation and the price of the
investment offered to investors.
We also
compete with other junior and senior oil and gas companies for available
resources, including, but not limited to, professional exploration and
production, geological and engineering personnel services and supplies, for the
drilling completion and production of hydrocarbon resources.
5
Intellectual
Property. We do not presently own any copyrights, patents or trademarks.
We own the Internet domain name www.alamoenergycorp.com.
Under current domain name registration practices, no one else can obtain an
identical domain name, but someone might obtain a similar name, or the identical
name with a different suffix, such as “.org”, or with a country designation. The
regulation of domain names in the United States and in foreign countries is
subject to change, and we could be unable to prevent third parties from
acquiring domain names that infringe or otherwise decrease the value of our
domain names.
Governmental
Regulation. Our oil and gas operations are subject to various federal,
state and local governmental regulations. Matters subject to regulation include
discharge permits for drilling operations, drilling and abandonment bonds,
reports concerning operations, the spacing of wells, pooling of properties and
taxation. From time to time, regulatory agencies have imposed price controls and
limitations on production by restricting the rate of flow of oil and gas wells
below actual production capacity in order to conserve supplies of oil and gas.
The production, handling, storage, transportation and disposal of oil and gas,
by-products thereof, and other substances and materials produced or used in
connection with oil and gas operations are also subject to regulation under
federal, state and local laws and regulations relating primarily to the
protection of human health and the environment. To date, we have incurred no
cost related to complying with these laws, for remediation of existing
environmental contamination and for plugging and reclamation of our oil and gas
exploration property. The requirements imposed by such laws and regulations are
frequently changed and subject to interpretation, and we are unable to predict
the ultimate cost of compliance with these requirements or their effect on our
operations.
Employees.
As of November 18, 2009 we have two employees, with no significant
employees other than our officers and directors. We plan to outsource
independent consultant engineers and geologists on a part
time basis to conduct the work programs on our mineral properties in order
to carry out our plan of operations.
Facilities.
Our executive offices are located at 10497 Town and Country Way, Suite
310, Houston, Texas 77024, where we occupy approximately 305 square feet of
office space. We sublease our offices from Allan Millmaker in exchange for $500
per month on a month to month basis. We believe that our current office space
and facilities are sufficient to meet our present needs and do not anticipate
the need to secure any additional space.
Internet
Website. Our Internet website is www.alamoenergycorp.com,
which is currently under construction.
Item
1A. Risk Factors.
Our
exploration appraisal and development activities are subject to many risks which
may affect our ability to profitably extract oil reserves or achieve targeted
returns. In addition, continued growth requires that we acquire and
successfully develop additional oil reserves.
Oil
exploration may involve unprofitable efforts, not only from dry wells, but from
wells that are productive but do not produce sufficient net revenues to return a
profit after drilling, operating and other costs. Completion of a well does not
assure a profit on the investment or recovery of drilling, completion and
operating costs. In addition, drilling hazards or environmental damage could
greatly increase the cost of operations, and various field operating conditions
may adversely affect the production from successful wells. These conditions
include delays in obtaining governmental approvals or consents, shut-ins of
connected wells resulting from extreme weather conditions, insufficient storage
or transportation capacity or other geological and mechanical conditions. While
diligent well supervision and effective maintenance operations can contribute to
maximizing production rates over time, production delays and declines from
normal field operating conditions cannot be eliminated and can be expected to
adversely affect revenue and cash flow levels to varying degrees.
Our
commercial success depends on our ability to find, acquire, develop and
commercially produce oil and natural gas reserves. Without the
continual addition of new reserves, any existing reserves and the production
therefrom will decline over time as such existing reserves are depleted. A
future increase in our reserves will depend not only on our ability to explore
and develop any properties we may have from time to time, but also on our
ability to select and acquire suitable producing properties or
prospects. No assurance can be given that we will be able to continue
to locate satisfactory properties for acquisition or
participation. Moreover, if such acquisitions or participations are
identified, we may determine that current markets, terms of acquisition and
participation or pricing conditions make such acquisitions or participations
economically disadvantageous. There is no assurance that commercial
quantities of oil will be discovered or acquired by us.
6
Our
oil and gas operations are subject to operating hazards that may increase our
operating costs to prevent such hazards, or may materially affect our operating
results if any of such hazards were to occur.
Oil
exploration, development and production operations are subject to all the risks
and hazards typically associated with such operations, including hazards such as
fire, explosion, blowouts, cratering, unplanned gas releases and spills,
each of which could result in substantial damage to oil wells, production
facilities, other property and the environment or in personal injury. Oil
production operations are also subject to all the risks typically associated
with such operations, including encountering unexpected formations or pressures,
premature decline of reservoirs and the invasion of water into
hydrocarbon producing formations. Losses resulting from the occurrence of
any of these risks could have a material adverse effect on our results of
operations, liquidity and financial condition.
To date,
we have generated limited revenues from production of our oil lease
interests. Our oil exploration and development activities will be
focused on the exploration and development of our properties which are high-risk
ventures with uncertain prospects for success. In addition, we will
not have earnings to support our activities should the wells drilled or
properties acquired prove not to be commercially viable. No assurance
can be given that commercial quantities of oil will be successfully produced as
a result of our exploration and development efforts. Further there is
no guarantee that we will generate sufficient revenues from production
of our reserves.
Our
exploration and development activities will depend in part on the evaluation of
data obtained through geophysical testing and geological analysis, as well as
test drilling activity. The results of such studies and tests are
subjective, and no assurances can be given that exploration and development
activities based on positive analysis will produce oil in commercial quantities
or costs. As developmental and exploratory activities are performed,
further data required for evaluation of our oil interests will become
available. The exploration and development activities that will be
undertaken by us are subject to greater risks than those associated with the
acquisition and ownership of producing properties. The drilling of
development wells, although generally consisting of drilling to reservoirs
believed to be productive, may result in dry holes or a failure to produce oil
in commercial quantities. Moreover, any drilling of exploratory wells
is subject to significant risk of dry holes.
If
we are unable to successfully compete with the large number of oil producers in
our industry, we may not be able to achieve profitable operations.
Oil
exploration is intensely competitive in all its phases and involves a high
degree of risk. We compete with numerous other participants in the
search for and the acquisition of oil properties and in the marketing of
oil. Our competitors include oil companies that have substantially
greater financial resources, staff and facilities than us. Our
ability to increase reserves in the future will depend not only on our ability
to explore and develop our existing properties, but also on our ability to
select and acquire suitable producing properties or prospects for exploratory
drilling. Competitive factors in the distribution and marketing of
oil include price and methods and reliability of
delivery. Competition may also be presented by alternate fuel
sources.
We
are subject to various regulatory requirements, including environmental
regulations, and may incur substantial costs to comply and remain in compliance
with those requirements.
Our
operations in the United States are subject to regulation at the federal, state
and local levels, including regulation relating to matters such as the
exploration for and the development, production, marketing, pricing,
transmission and storage of oil, as well as environmental and safety
matters. Failure to comply with applicable regulations could result
in fines or penalties being owed to third parties or governmental entities, the
payment of which could have a material adverse effect on our financial condition
or results of operations. Our operations are subject to significant
laws and regulations, which may adversely affect our ability to conduct business
or increase our costs. Extensive federal, state and local laws and
regulations relating to health and environmental quality in the United States
affect nearly all of our operations. These laws and regulations set
various standards regulating various aspects of health and environmental
quality, provide for penalties and other liabilities for the violation of these
standards, and in some circumstances, establish obligations to remediate current
and former facilities and off-site locations.
7
Environmental
legislation provides for, among other things, restrictions and prohibitions on
spills, releases or emissions of various substances produced in association with
oil operations. The legislation also requires that wells and facility sites be
operated, maintained, abandoned and reclaimed to the satisfaction of the
applicable regulatory authorities. Compliance with such legislation can require
significant expenditures and a breach may result in the imposition of fines and
penalties, some of which may be material. Environmental legislation is evolving
in a manner expected to result in stricter standards and enforcement, larger
fines and liability and potentially increased capital expenditures and operating
costs. The discharge of oil or other pollutants into the air, soil or water may
give rise to liabilities to governments and third parties and may require us to
incur costs to remedy such discharge. No assurance can be given that
environmental laws will not result in a curtailment of production or a material
increase in the costs of production, development or exploration activities or
otherwise adversely affect our financial condition, results of operations or
prospects. We could incur significant liability for damages, clean-up
costs and/or penalties in the event of discharges into the environment,
environmental damage caused by us or previous owners of our property or
non-compliance with environmental laws or regulations. In addition to actions
brought by governmental agencies, we could face actions brought by private
parties or citizens groups. Any of the foregoing could have a
material adverse effect on our financial results.
Moreover,
we cannot predict what legislation or regulations will be enacted in the future
or how existing or future laws or regulations will be administered, enforced or
made more stringent. Compliance with more stringent laws or regulations, or more
vigorous enforcement policies of the regulatory agencies, could require us to
make material expenditures for the installation and operation of systems and
equipment for remedial measures, all of which could have a material adverse
effect on our financial condition or results of operations.
Our
ability to successfully market and sell oil is subject to a number of factors
that are beyond our control, and that may adversely impact our ability to
produce and sell oil, or to achieve profitability.
The
marketability and price of oil that may be acquired or discovered by us will be
affected by numerous factors beyond our control. Our ability to
market our oil may depend upon our ability to acquire space on pipelines that
deliver oil to commercial markets. We may also be affected by deliverability
uncertainties related to the proximity of our reserves to pipelines and
processing facilities, by operational problems with such pipelines and
facilities, and by government regulation relating to price, taxes, royalties,
land tenure, allowable production, the export of oil and by many other aspects
of the oil business.
Our
revenues, profitability and future growth and the carrying value of our oil
properties are substantially dependent on prevailing prices of oil. Our ability
to borrow and to obtain additional capital on attractive terms is also
substantially dependent upon oil and natural gas prices. Prices for oil and
natural gas are subject to large fluctuations in response to relatively minor
changes in the supply of and demand for oil, market uncertainty and a variety of
additional factors beyond our control. These factors include economic
conditions, in the United States and Canada, the actions of the Organization of
Petroleum Exporting Countries, governmental regulation, political stability in
the Middle East and elsewhere, the foreign supply of oil, the price of foreign
imports and the availability of alternative fuel sources. Any substantial and
extended decline in the price of oil would have an adverse effect on the
carrying value of our proved reserves, borrowing capacity, revenues,
profitability and cash flows from operations.
Volatile
oil prices make it difficult to estimate the value of producing properties for
acquisition and often cause disruption in the market for oil producing
properties, as buyers and sellers have difficulty agreeing on such value. Price
volatility also makes it difficult to budget for and project the return on
acquisitions and development and exploitation projects.
We
cannot guarantee that title to our properties does not contain a defect that may
materially affect our interest in those properties.
It is our
practice in acquiring significant oil leases or interest in oil leases to retain
lawyers to fully examine the title to the interest under the
lease. In the case of minor acquisitions, we rely upon the judgment
of oil lease brokers or landmen who do the field work in examining records in
the appropriate governmental office before attempting to place under lease a
specific interest. We believe that this practice is widely followed in the oil
industry. Nevertheless, there may be title defects which affect lands comprising
a portion of our properties which may adversely affect us.
8
Our
business may be harmed if we are unable to retain our interests in
leases.
All of
our properties are held under interests in oil and gas mineral leases, some of
which expire within the next twelve months. If we fail to meet the specific
requirements of each lease, especially future drilling and production
requirements, the lease may be terminated or otherwise expire. We cannot be
assured that we will be able to meet our obligations under each lease. The
termination or expiration of our working interest relating to any lease would
harm our business, financial condition and results of operations.
Our
reserve estimates are subject to numerous uncertainties and may be
inaccurate.
There are
numerous uncertainties inherent in estimating quantities of oil reserves and
cash flows to be derived therefrom, including many factors beyond our control.
In general, estimates of economically recoverable oil reserves and the future
net cash flows therefrom are based upon a number of variable factors and
assumptions, such as historical production from the properties, production
rates, ultimate reserve recovery, timing and amount of capital expenditures,
marketability of oil, royalty rates, the assumed effects of regulation by
governmental agencies and future operating costs, all of which may vary from
actual results. All such estimates are to some degree speculative, and
classifications of reserves are only attempts to define the degree of
speculation involved. For those reasons, estimates of the economically
recoverable oil reserves attributable to any particular group of properties,
classification of such reserves based on risk of recovery and estimates of
future net revenues expected therefrom prepared by different engineers, or by
the same engineers at different times, may vary. Our actual production,
revenues, taxes and development and operating expenditures with respect to our
reserves will vary from estimates thereof and such variations could be
material.
Estimates
of proved or unproved reserves that may be developed and produced in the future
are often based upon volumetric calculations and upon analogy to similar types
of reserves rather than actual production history. Estimates based on these
methods are generally less reliable than those based on actual production
history. Subsequent evaluation of the same reserves based upon production
history and production practices will result in variations in the estimated
reserves and such variations could be material.
Our
oil property is held in the form of licenses and leases. If we
default on those licenses or leases, we may lose our interest in those
properties.
Our
properties are held in the form of licenses and leases and working interests in
licenses and leases. If we or the holder of the license or lease fail to meet
the specific requirement of a license or lease, the license or lease may
terminate or expire. There can be no assurance that any of the obligations
required to maintain each license or lease will be met, although we exercise our
commercially reasonable efforts to do so. The termination or expiration of our
licenses or leases or the working interests relating to a license or lease may
have a material adverse effect on our results of operations and
business.
The
loss or unavailability of our key personnel for an extended period of time could
adversely affect our business operations and prospects.
Our
success depends in large measure on certain key personnel, including our
President, Chief Executive Officer and Chief Financial Officer. The loss of the
services of such key personnel could have a material adverse effect on
us. Although we are looking into acquiring key person insurance, we
do not currently have such insurance in effect for these key individuals. In
addition, the competition for qualified personnel in the oil industry is intense
and there can be no assurance that we will be able to continue to attract and
retain all personnel necessary for the development and operation of our
business.
We
depend on the services of third parties for material aspects of our operations,
including drilling operators, and accordingly if we cannot obtain certain third
party services, we may not be able to operate.
We may
rely on third parties to operate some of the assets in which we possess an
interest. Assuming the presence of commercial quantities of oil on our
properties, the success of the oil operations, whether considered on the basis
of drilling operations or production operations, will depend largely on whether
the operator of the property properly fulfils our obligations. As a
result, our ability to exercise influence over the operation of these assets or
their associated costs may be limited, adversely affecting our financial
performance. Our performance will therefore depend upon a number of
factors that may be outside of our full control, including the timing and amount
of capital expenditures, the operator’s expertise and financial resources, the
approval of other participants, the selection of technology, and risk management
practices. The failure of third party operators and their contractors
to perform their services in a proper manner could adversely affect our
operations.
9
We
are subject to the reporting requirements of federal securities laws, which will
be expensive.
We are a
public reporting company in the U.S. and, accordingly, subject to the
information and reporting requirements of the Exchange Act and other federal
securities laws, and the compliance obligations of the Sarbanes-Oxley Act. The
costs of preparing and filing annual and quarterly reports, proxy statements and
other information with the SEC and furnishing audited reports to stockholders
will cause our expenses to be higher than they would be if we remained a
privately-held company. In addition, we will incur substantial expenses in
connection with the preparation of the registration statement and related
documents with respect to the registration of resales of the shares and the
reporting of the Asset Purchase.
Because
we became public by means of a “reverse merger,” we may not be able to attract
the attention of major brokerage firms.
Additional
risks may exist since we will become public through a “reverse merger.”
Securities analysts of major brokerage firms may not provide coverage of us
since there is little incentive to brokerage firms to recommend the purchase of
our common stock. No assurance can be given that brokerage firms will want to
conduct any secondary offerings on behalf of our company in the
future.
Our
compliance with the Sarbanes-Oxley Act and SEC rules concerning internal
controls will be time consuming, difficult and costly.
It will
be time consuming, difficult and costly for us to develop and implement the
internal controls and reporting procedures required by Sarbanes-Oxley after the
Asset Purchase. We will need to hire additional financial reporting, internal
control, and other finance staff in order to develop and implement appropriate
internal controls and reporting procedures. If we are unable to comply with
Sarbanes-Oxley’s internal controls requirements, we may not be able to obtain
the independent accountant certifications that Sarbanes-Oxley Act requires
publicly-traded companies to obtain.
We
may not be able to achieve the benefits we expect to result from the Asset
Purchase.
On
November 18, 2009, we entered into the Asset Purchase Agreement and closed the
Asset Purchase. We may not realize the benefits that we presently
hope to receive as a result of the Asset Purchase, which includes:
• access
to the capital markets of the United States;
• the
increased market liquidity expected to result from the Asset
Purchase;
• the
ability to use registered securities to make acquisition of assets or
businesses;
• increased
visibility in the financial community;
• enhanced
access to the capital markets;
• improved
transparency of operations; and
• perceived
credibility and enhanced corporate image of being a publicly traded
company.
There can
be no assurance that any of the anticipated benefits of the Asset Purchase will
be realized in respect to our business operations. In addition, the attention
and effort devoted to achieving the benefits of the Asset Purchase and attending
to the obligations of being a public company, such as reporting requirements and
securities regulations, could significantly divert management’s attention from
other important issues, which could materially and adversely affect our
operating results or stock price in the future.
10
Upon
closing of the Asset Purchase, we will operate as a public company subject
to evolving corporate governance and public disclosure regulations that may
result in additional expenses and continuing uncertainty regarding the
application of such regulations.
Changing
laws, regulations, and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002 and related rules and
regulations, are creating uncertainty for public companies. We are presently
evaluating and monitoring developments with respect to new and proposed rules
and cannot predict or estimate the amount of the additional compliance costs we
may incur or the timing of such costs. These new or changed laws, regulations,
and standards are subject to varying interpretations, in many cases due to their
lack of specificity, and as a result, their application in practice may evolve
over time as new guidance is provided by courts and regulatory and governing
bodies. This could result in continuing uncertainty regarding compliance matters
and higher costs necessitated by ongoing revisions to disclosure and governance
practices. Maintaining appropriate standards of corporate governance and public
disclosure may result in increased general and administrative expenses and a
diversion of management time and attention from revenue-generating activities to
compliance activities. In addition, if we fail to comply with new or changed
laws, regulations, and standards, regulatory authorities may initiate legal
proceedings against us and our business and our reputation may be
harmed.
We also
expect these new rules and regulations may make it more difficult and more
expensive for us to obtain director and officer liability insurance and we may
be required to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. As a result, it may be more
difficult for us to attract and retain qualified individuals to serve on our
Board of Directors or as executive officers.
We are
currently evaluating and monitoring developments with respect to these new
rules, and we cannot predict or estimate the amount of additional costs we may
incur or the timing of such costs.
Following
the Asset Purchase, our shares may have limited
liquidity.
Following
the Asset Purchase, a substantial portion of our shares of common stock
will be subject to registration, and will be closely held by certain insider
investors. Consequently, the public float for the shares may be highly limited.
As a result, should you wish to sell your shares into the open market you may
encounter difficulty selling large blocks of your shares or obtaining a suitable
price at which to sell your shares.
Our
stock price may be volatile, which may result in losses to our
stockholders.
The stock
markets have experienced significant price and trading volume fluctuations, and
the market prices of companies quoted on the Over-The-Counter Bulletin Board,
where our shares of common stock will be quoted, generally have been very
volatile and have experienced sharp share-price and trading-volume changes. The
trading price of our common stock is likely to be volatile and could fluctuate
widely in response to many of the following factors, some of which are beyond
our control:
|
|
•
|
variations
in our operating results;
|
|
|
•
|
changes
in expectations of our future financial performance, including financial
estimates by securities analysts and
investors;
|
|
|
•
|
changes
in operating and stock price performance of other companies in our
industry;
|
|
|
•
|
additions
or departures of key personnel; and
|
|
|
•
|
future
sales of our common stock.
|
Domestic and international
stock markets often experience significant price and volume fluctuations. These
fluctuations, as well as general economic and political conditions unrelated to
our performance, may adversely affect the price of our common stock. In
particular, following initial public offerings, the market prices for stocks of
companies often reach levels that bear no established relationship to the
operating performance of these companies. These market prices are generally not
sustainable and could vary widely. In the past, following periods of volatility
in the market price of a public company’s securities, securities class action
litigation has often been initiated.
11
If
we fail to maintain the adequacy of our internal controls, our ability to
provide accurate financial statements and comply with the requirements of the
Sarbanes-Oxley Act could be impaired, which could cause our stock price to
decrease substantially.
Since,
prior to the Asset Purchase, Alamo Oil operated as a private company without
public reporting obligations, and it had committed limited personnel and
resources to the development of the external reporting and compliance
obligations that would be required of a public company. Recently, we have taken
measures to address and improve our financial reporting and compliance
capabilities and we are in the process of instituting changes to satisfy our
obligations in connection with joining a public company, when and as such
requirements become applicable to us. Prior to taking these measures, we did not
believe we had the resources and capabilities to do so. We plan to obtain
additional financial and accounting resources to support and enhance our ability
to meet the requirements of being a public company. We will need to continue to
improve our financial and managerial controls, reporting systems and procedures,
and documentation thereof. If our financial and managerial controls, reporting
systems, or procedures fail, we may not be able to provide accurate financial
statements on a timely basis or comply with the Sarbanes-Oxley Act of 2002 as it
applies to us. Any failure of our internal controls or our ability to provide
accurate financial statements could cause the trading price of our common stock
to decrease substantially.
Our
common shares have not yet traded and in the future, may be thinly-traded, and
you may be unable to sell at or near ask prices or at all if you need to sell
your shares to raise money or otherwise desire to liquidate such
shares.
We cannot
predict the extent to which an active public market for our common stock will
develop or be sustained due to a number of factors, including the fact that we
are a small company that is relatively unknown to stock analysts, stock brokers,
institutional investors, and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we became more seasoned and viable. As a consequence,
there may be periods of several days or more when trading activity in our shares
is minimal or non-existent, as compared to a seasoned issuer which has a large
and steady volume of trading activity that will generally support continuous
sales without an adverse effect on share price. We cannot give you any assurance
that a broader or more active public trading market for our common stock will
develop or be sustained, or that current trading levels will be
sustained.
The
market price for our common stock may be particularly volatile given our status
as a relatively small company with a presumably small and thinly-traded “float”
and lack of current revenues that could lead to wide fluctuations in our share
price. You may be unable to sell your common stock at or above your purchase
price if at all, which may result in substantial losses to you.
The
market for our common shares may be characterized by significant price
volatility when compared to seasoned issuers, and we expect that our share price
will be more volatile than a seasoned issuer for the indefinite future. The
potential volatility in our share price is attributable to a number of factors.
First, as noted above, our common shares may be sporadically and/or thinly
traded. As a consequence of this lack of liquidity, the trading of relatively
small quantities of shares by our stockholders may disproportionately influence
the price of those shares in either direction. The price for our shares could,
for example, decline precipitously in the event that a large number of our
common shares are sold on the market without commensurate demand, as compared to
a seasoned issuer that could better absorb those sales without adverse impact on
its share price. Secondly, an investment in us is a speculative or “risky”
investment due to our lack of revenues or profits to date and uncertainty of
future market acceptance for current and potential products. As a consequence of
this enhanced risk, more risk-adverse investors may, under the fear of losing
all or most of their investment in the event of negative news or lack of
progress, be more inclined to sell their shares on the market more quickly and
at greater discounts than would be the case with the stock of a seasoned
issuer.
Stockholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2)
manipulation of prices through pre-arranged matching of purchases and sales and
false and misleading press releases; (3) boiler room practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differential and markups by
selling broker-dealers; and (5) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. Our management is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities. The occurrence of these patterns or practices
could increase the volatility of our share price.
12
We
do not anticipate paying any cash dividends.
We
presently do not anticipate that we will pay any dividends on any of our capital
stock in the foreseeable future. The payment of dividends, if any, would be
contingent upon our revenues and earnings, if any, capital requirements, and
general financial condition. The payment of any dividends will be within the
discretion of our Board of Directors. We presently intend to retain all
earnings, if any, to implement our business plan; accordingly, we do not
anticipate the declaration of any dividends in the foreseeable
future.
Our
common stock may be subject to penny stock rules, which may make it more
difficult for our stockholders to sell their common stock.
Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by
certain penny stock rules adopted by the Securities and Exchange Commission
(“SEC”). Penny stocks generally are equity securities with a price of
less than $5.00 per share. The penny stock rules require a
broker-dealer, prior to a purchase or sale of a penny stock not otherwise exempt
from the rules, to deliver to the customer a standardized risk disclosure
document that provides information about penny stocks and the risks in the penny
stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer’s
account. In addition, the penny stock rules generally require that
prior to a transaction in a penny stock the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the
transaction. These disclosure requirements may have the effect of
reducing the level of trading activity in the secondary market for a stock that
becomes subject to the penny stock rules.
Volatility
in our common stock price may subject us to securities litigation.
The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
In the past, plaintiffs have often initiated securities class action litigation
against a company following periods of volatility in the market price of its
securities. We may, in the future, be the target of similar litigation.
Securities litigation could result in substantial costs and liabilities and
could divert management’s attention and resources.
We
may need additional capital, and the sale of additional shares or other equity
securities could result in additional dilution to our stockholders.
We
believe that our current cash and cash equivalents and anticipated cash flow
from operations will be sufficient to meet our anticipated cash needs for the
near future. We may, however, require additional cash resources due to changed
business conditions or other future developments, including any investments or
acquisitions we may decide to pursue. If our resources are insufficient to
satisfy our cash requirements, we will seek to sell additional equity or debt
securities or obtain a credit facility. The sale of additional equity securities
could result in additional dilution to our stockholders. The incurrence of
additional indebtedness would result in increased debt service obligations and
could result in operating and financing covenants that would restrict our
operations. We cannot assure you that financing will be available in amounts or
on terms acceptable to us, if at all.
13
Item
2. Financial Information.
Selected
Financial Data
You should read the
summary financial data set forth below in conjunction with “Management’s
Discussion and Analysis of Financial Condition or Plan of Operations” and
Alamo Oil’s financial statements and the related notes included elsewhere in
this report. We derived the financial data for the period from September 1, 2009
(inception) to September 30, 2009 from Alamo Oil’s audited financial statements
included in this report. The historical results are not necessarily indicative
of the results to be expected for any future period.
|
For
the Period from
September
1, 2009 (Inception) to September
30,
2009
|
|||||
|
Operating revenues
|
$
|
0
|
|||
|
Operating expenses
|
23,715
|
||||
|
Loss
from operations
|
(23,715)
|
||||
|
Other income (expense)
|
(2)
|
||||
|
Net Loss
|
$
|
(23,717)
|
|||
|
As of
September
30,
2009
|
|||||
|
Balance Sheet Data:
|
|||||
|
Cash and Cash Equivalents
|
$
|
0
|
|||
|
Oil and gas properties
|
300,000
|
||||
|
Total Assets
|
300,000
|
||||
|
Total Liabilities
|
23,365
|
||||
|
Total Stockholders’ equity
|
$
|
276,635
|
|||
Footnotes
The
transaction contemplated under the Asset Purchase Agreement is deemed to be a
reverse acquisition, where Green Irons (the legal acquirer) is considered the
accounting acquiree and Alamo Oil (the legal acquiree) is considered the
accounting acquirer. The assets and liabilities will be transferred
at their historical cost with the capital structure of Green Irons. Green Irons
is deemed a continuation of the business of Alamo Oil, and the historical
financial statements of Alamo Oil will become the historical financial
statements of Green Irons; therefore, the pro forma financial information of
Green Irons is not be presented in this report.
Management’s
Discussion and Analysis of Financial Condition and Results of
Operation.
The
following discussion should be read in conjunction with the financial
information included elsewhere in this Form 8-K, including the Company’s audited
financial statements for the period from September 1, 2009 (inception) to
September 30, 2009, and related notes. Because of the reverse acquisition, the
following discussion relates to the separate financial statements of Alamo Oil,
and reference to the “Company” and to “we,” “our,” and similar words refer to
Alamo Energy.
14
Forward
Looking Statements
This
Current Report on Form 8-K contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 that are based
on current management’s expectations. These statements may be identified by
their use of words like “plans,” “expect,” “aim,” “believe,” “projects,”
“anticipate,” “intend,” “estimate,” “will,” “should,” “could,” and other
expressions that indicate future events and trends. All statements that address
expectations or projections about the future, including statements about our
business strategy, expenditures, and financial results are forward-looking
statements. Our management believes that the expectations reflected in such
forward-looking statements are accurate. However, management cannot assure you
that such expectations will occur.
Actual
results could differ materially from those in the forward looking statements due
to a number of uncertainties including, but not limited to, those discussed in
this section. Factors that could cause future results to differ from these
expectations include general economic conditions, further changes in our
business direction or strategy; competitive factors, oil and gas exploration
uncertainties, and an inability to attract, develop, or retain technical,
consulting, managerial, agents, or independent contractors. As a result, the
identification and interpretation of data and other information and their use in
developing and selecting assumptions from and among reasonable alternatives
requires the exercise of judgment. To the extent that the assumed events do not
occur, the outcome may vary substantially from anticipated or projected results,
and accordingly, no opinion is expressed on the achievability of those
forward-looking statements. No assurance can be given that any of the
assumptions relating to the forward-looking statements specified in the
following information are accurate, and management assumes no obligation to
update any such forward-looking statements. You should not unduly rely on these
forward-looking statements, which speak only as of the date of this Current
Report. Except as required by law, management is not obligated to release
publicly any revisions to these forward-looking statements to reflect events or
circumstances occurring after the date of this report or to reflect the
occurrence of unanticipated events.
Critical
Accounting Policy and Estimates. Our Management's Discussion and Analysis
of Financial Condition and Results of Operations section discusses our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. On an on-going basis, management evaluates its estimates
and judgments, including those related to revenue recognition, accrued expenses,
financing operations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of our financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other
sources.
The
following discussion of our financial condition and results of operations should
be read in conjunction with our audited financial statements for the period from
September 1, 2009 (inception) to September 30, 2009.
Overview
of Alamo Oil. Alamo Oil, an early stage oil and gas company, was
incorporated under the laws of the United Kingdom on September 1,
2009. As a result of the Asset Purchase, Alamo Oil was deemed
to be the acquirer for accounting purposes. Accordingly, the financial statement
data presented are those of Alamo Oil for all periods.
Results
of Operations
Revenues.
We had no revenues for the period from September 1, 2009 (inception) to
September 30, 2009. We hope to generate revenues as we operate our
oil and gas properties and increase our property holdings.
Operating
Expenses. For the period from September 1, 2009 (inception) to September
30, 2009, our total operating expenses were $23,715. Our total operating
expenses consisted of professional fees of $23,330, which is attributed to the
legal expenses and accounting expenses related to becoming a public company,
bank charges of $35 and rent of $350. We expect that we will continue
to incur significant legal and accounting expenses related to being a public
company.
15
Net
Income or Loss. For the period from September 1, 2009
(inception) to September 30, 2009, our net operating loss was $23,717 after $2
in other expense. We expect to continue to incur net losses for the
foreseeable future and until we generate significant
revenues.
Liquidity
and Capital Resources Liquidity
and Capital Resources. We had no cash as of September 30, 2009 and no
total current assets as of that date. As of September 30, 2009, our total assets
of $300,000 were represented solely by our oil and gas properties
held. Our current liabilities were $23,365 as of September 30, 2009,
which was represented by accounts payable and accrued liabilities of
$23,365. We had no other liabilities and no long term commitments or
contingencies as of September 30, 2009.
During
2009, we expect that the legal and accounting costs of becoming a public company
will continue to impact our liquidity and we may need to obtain funds to pay
those expenses. We also expect that we will incur significant expenses related
to oil and gas exploration and development. Other than the
anticipated increases in legal and accounting costs due to the reporting
requirements of becoming a reporting company and expenses related to oil and gas
exploration and development, we are not aware of any other known trends, events
or uncertainties, which may affect our future liquidity.
Off-Balance
Sheet Arrangements. We have no off-balance sheet
arrangements.
Related
Party Transactions.
For a
description of our related party transactions, please see the section of this
Current Report entitled “Certain Relationships and Related
Transactions.”
Item
3. Description of Property.
Facilities.
Our executive offices are located at 10497 Town and Country Way, Suite
310, Houston, Texas 77024, where we occupy approximately 305 square feet of
office. We sublease our offices from Allan Millmaker in exchange for $500 per
month on a month to month basis. We believe that our current office space and
facilities are sufficient to meet our present needs and do not anticipate the
need to secure any additional space.
Further,
we have the following oil and gas property in connection with our principal
business activities:
The
Lozano Lease - Frio County, Western Gulf Province, Texas. In September
2009, Alamo Oil acquired certain oil, gas and mineral leases totaling
approximately 110 gross acres, located in Frio County, Texas. As a result of the
Asset Purchase, we own a seventy-five percent (75%) working interest in the
Lozano lease, which is a currently producing asset with three wells. All three
wells have had recently completed workovers. We believe those wells
will produce at least $30,000 cash flow per quarter. The production volumes are
expected to continue to produce with little decline for the foreseeable
future. The Lozano Lease has potential for production enhancement from the
existing wells and also additional infill drilling on the lease. Further review
and appraisal of the production performance and assessment of the remaining
recoverable reserves is required to address this potential.
We also
received informal options to purchase other working interests in oil and gas
leases in Texas, ranging from 30% to 100% and which expire at various dates
through March 2010 and which we may purchase for the aggregate amount of
$650,000. If we are unable to purchase these other interests before
the respective expiration dates, or before the purchase of these interests by a
third party, then we lose those rights.
Frio
County forms a rectangle thirty-seven miles east and west and thirty miles north
and south, and is comprised of 719,360 acres or 1,133 square miles. Since 1990,
the oil industry in Frio County has been successful because of new
oil-extraction technology that permits horizontal drilling to considerable
depths. Frio County lies within the Western Gulf Province, which includes the
portion of Louisiana south of the Lower Cretaceous shelf edge, and Texas south
and east of the Ouachita Fold Belt. The Western Gulf includes Texas Railroad
Districts 1 through 4. The boundaries include the Ouachita Fold Belt, the
southern boundary of East Texas Basin Province (048), the southern boundary of
the Mississippi-Louisiana Salt Basins Province (049), the offshore 3-league
(10.36-mile) limit in Texas, and the offshore 3-mile limit in Louisiana. The
southwest boundary is the Texas-Mexico border. The area of the
Western Gulf is approximately 116,599 square miles. We believe the Western Gulf
is one of the most heavily explored provinces in the country and has led to the
discovery of significant oil and gas fields with considerable oil and gas
reservoirs.
16
Item
4. Security Ownership of Certain Beneficial Owner and
Management.
The
following table sets forth certain information regarding the shares of common
stock beneficially owned or deemed to be beneficially owned as of November 19,
2009 by (i) each person whom we know beneficially owns more than 5% of our
common stock, (ii) each of our directors, (iii) our officers, and (iv) all of
our directors and executive officers as a group.
Except as
indicated by the footnotes below, we believe, based on the information furnished
to us, that the beneficial owners named in the table below have sole voting and
investment power with respect to all shares of our common stock that they
beneficially own, subject to applicable community property laws.
In
computing the number of shares of common stock beneficially owned by a person
and the percentage ownership of that person, we deemed outstanding shares of
common stock subject to options or warrants held by that person that are
currently exercisable or exercisable within 60 days of November 19,
2009. We did not deem those shares outstanding, however, for the
purpose of computing the percentage ownership of any other
person.
|
Name
of Beneficial Owner and Address
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class (3)
|
||||||
|
Allan
Millmaker
10497
Town and Country Way, Suite 310
Houston,
Texas 77024
|
233,334
Shares (1)
Chief
Executive Officer,
President,
Director
|
14.38%
|
||||||
|
Philip
Mann
10497
Town and Country Way, Suite 310 Houston, Texas 77024
|
100,000
Shares (2)
Chief
Financial Officer,
Secretary,
Director
|
6.16%
|
||||||
|
Alamo
Oil Limited
5
Spinnaker Close,
Hedon
Hull, United Kingdom
HU12
8RE101
|
350,000
Shares
|
21.57%
|
||||||
|
All
Executive Officers and Directors
as
a Group (2 persons)
|
333,334
Shares
|
20.54%
|
||||||
|
(1)
|
Includes
116,667 shares which are subject to the Vesting Agreement dated November
19, 2009.
|
|||||||
|
(2)
|
Includes
50,000 shares which are subject to the Vesting Agreement dated November
19, 2009.
|
|||||||
|
(3)
|
Percentage
of beneficial ownership of our common stock is based on 1,622,284 shares
of common stock outstanding as of the date of the table.
|
|||||||
Item
5. Directors and Executive Officers.
Appointment
of New Officers and Directors
The
following table sets forth the names, ages and principal positions of our
executive officers and directors as of November 19, 2009:
|
Name
|
Age
|
Positions
held:
|
||
|
Allan
Millmaker
|
57
|
Chief
Executive Officer, President, Director
|
||
|
Philip
Mann
|
23
|
Chief
Financial Officer, Secretary,
Director
|
17
Biographical
Information
Allan
Millmaker. Mr. Millmaker, our Chief Executive Officer and President, has
over thirty years of experience in the oil and gas industry. From
2005 to the present, Mr. Millmaker has worked as an independent project
generator specializing in the development of quality oil and gas projects and
oil service business ventures. From 2002 to 2005, Mr. Millmaker worked for
Bluewater Offshore Production Systems (U.S.A.), Inc., one of Europe’s leading
providers to the offshore oil industry, where he was responsible for operations
in North and South America. From 1995 to 2001, Mr. Millmaker worked for Navion
ASA as Senior Vice President for the Floating Production Business. His division
was responsible for developing business for the Multipurpose Shuttle Tankers and
establishing Navion as a Floating Production Storage and Offloading (FPSO)
upplier. During his tenure, Navion won contracts for the Navion Munin FPSO,
operating at the Lufeng 22-1 field in the South China Sea and the Berge Hugin
FPSO, which is producing at the Pierce field in the UK sector of the North Sea.
From 1991 to 1995, he acted as an independent consultant for Kerr McGee in the
UK on the Gryphon project and later for Shell on the Troll and Draugen
projects.
From 1979
to 1986, he worked for Mobil Exploration Norway Inc.’s engineering team, helping
to bring the Statfjord “A” wells on-stream, and later became Offshore Production
Supervisor. In 1983, he joined Mobil’s operations team where he was Operations
Superintendent for the Statfjord “A” platform and in 1986, Platform Manager for
Statfjord “B” platform. When the operatorship of the Statfjord field
was transferred to Statoil, Mr. Millmaker accepted the offer to continue with
Statoil and from 1987 was seconded to Shell as Deputy Project Manager on the
Troll Phase 1 Project. In 1989 he joined Shell as Operations Manager on the
Northwest Shelf Gas Project in Western Australia.
From 1974
to 1979, Mr. Millmaker served as a production engineer for British Petroleum
(BP) in Abu Dhabi, where he worked in the production and drilling departments.
He obtained a first class honors B.Sc. degree in Production Engineering and
Management at the University of Strathclyde, Glasgow in 1974. Mr. Millmaker is
not an officer or director of any other reporting company.
Philip
Mann. Mr. Mann is our Chief Financial Officer and Secretary. For the past
five years, Mr. Mann has provided independent accounting and financial services,
including preparing budgets, financial reports, tax and audit functions, to
various private and public companies. He was awarded an International
Baccalaureate Certificate from King William’s College, Isle of Man in
2004.
Mr. Mann
is not an officer or director of any other reporting company.
There are
no orders, judgments, or decrees of any governmental agency or administrator, or
of any court of competent jurisdiction, revoking or suspending for cause any
license, permit or other authority to engage in the securities business or in
the sale of a particular security or temporarily or permanently restraining any
of our officers or directors from engaging in or continuing any conduct,
practice or employment in connection with the purchase or sale of securities, or
convicting such person of any felony or misdemeanor involving a security, or any
aspect of the securities business or of theft or of any felony. Nor are any of
the officers or directors of any corporation or entity affiliated with us so
enjoined.
There are
no family relationships among our directors or among our executive
officers.
Our Board
of Directors does not have an Audit Committee, Compensation Committee, or
Nominating and Corporate Governance Committee because, due to the Board’s
composition and our relatively limited operations, we are able to effectively
manage the issues normally considered by such committees. Our new Board of
Directors may undertake a review of the need for these committees.
Security
holders may send communications to our board of directors by writing to 10497
Town and Country Way, Suite 310, Houston, Texas 77024, attention Board of
Directors or any specified director. Any correspondence received at the
foregoing address to the attention of one or more directors is promptly
forwarded to such director or other directors.
18
Item
6. Executive Compensation.
Upon
consummation of the Asset Purchase Transaction on November 18, 2009, our
executive officers were reconstituted and none of our current executive officers
served as our executive officers during the years ended April 30, 2008 and April
30, 2009. The following table shows for the years ended April 30,
2008 and April 30, 2009, the compensation awarded to or paid to, or earned by
all individuals who served as our executive officers during the years ended
April 30, 2008 and April 30, 2009.
|
Name
and Principal +
Position
|
Year
Ended
|
Salary
$
|
Bonus
$
|
Stock
Awards
$
|
Option
Awards
$
|
Non-Equity
Incentive
Plan Compensation
$
|
Nonqualified
Deferred
Compensation
Earnings
$
|
All
Other Compensation
$
|
Total
$
|
|
Sandy
McDougall
President,
CEO, CFO, Secretary
|
2009
|
None
|
None
|
None
|
None
|
None
|
None
|
None
|
None
|
|
2008
|
None
|
None
|
None
|
None
|
None
|
None
|
None
|
None
|
Stock
Options/SAR Grants. No grants of stock options or stock appreciation
rights were granted in the years ended April 30, 2008 and April 30,
2009.
Long-Term
Incentive Plans. There are no arrangements or plans in which we provide
pension, retirement or similar benefits for directors or executive officers. We
do not have any material bonus or profit sharing plans pursuant to which cash or
non-cash compensation is or may be paid to our directors or executive
officers.
Employment
Contracts and Termination of Employment. On November 19, 2009, we entered
into an executive employment agreement with Allan Millmaker (“Millmaker
Agreement”). Under the terms of the Millmaker Agreement, Mr.
Millmaker has agreed to serve as our President and Chief Executive Officer for a
period of three years. The Millmaker Agreement provides for an
initial base salary of $6,000 per month. The base salary amount shall increase
by One Thousand Dollars ($1,000) after the last day of each of our fiscal
quarters during the first fiscal year of the Millmaker
Agreement. Mr. Millmaker is also eligible to participate in
benefit and incentive programs we may offer. This brief description of the
Millmaker Agreement is not intended to be complete and is qualified in its
entirety by reference to the full text of the Millmaker Agreement as attached in
Exhibit 10.1 to this report.
On
November 19, 2009, we entered into an executive employment agreement with Philip
Mann (“Mann Agreement”). Under the terms of the Mann Agreement, Mr.
Mann has agreed to serve as our Chief Financial Officer and Secretary for a
period of three years. The Mann Agreement provides for an initial
base salary of $4,000 per month. The base salary amount shall increase by Five
Hundred Dollars ($500) after the last day of each of our fiscal quarters during
the first fiscal year of the Mann Agreement. Mr. Mann is also
eligible to participate in benefit and incentive programs we may offer. This
brief description of the Mann Agreement is not intended to be complete and is
qualified in its entirety by reference to the full text of the Mann Agreement as
attached in Exhibit 10.2 to this report.
Item
7. Certain Relationships and Related Transactions, and Director
Independence.
There are
no material relationships between the Company and our directors and executive
officers other than the transactions and relationships described below, or
contemplated in the Asset Purchase Agreement.
Employment
Agreements. On November 19, 2009, we entered into an executive employment
agreement with Allan Millmaker, our Chief Executive Officer, President and a
director (“Millmaker Agreement”). Under the terms of the Millmaker
Agreement, Mr. Millmaker has agreed to serve as our President and Chief
Executive Officer for a period of three years. The Millmaker
Agreement provides for an initial base salary of $6,000 per month. The base
salary amount shall increase by One Thousand Dollars ($1,000) after the last day
of each of our fiscal quarters during the first fiscal year of the Millmaker
Agreement. Mr. Millmaker is also eligible to participate in
benefit and incentive programs we may offer. This brief description of the
Millmaker Agreement is not intended to be complete and is qualified in its
entirety by reference to the full text of the Millmaker Agreement as attached in
Exhibit 10.1 to this report.
19
On
November 19, 2009, we entered into an executive employment agreement with Philip
Mann (“Mann Agreement”). Under the terms of the Mann Agreement, Mr.
Mann has agreed to serve as our Chief Financial Officer and Secretary for a
period of three years. The Mann Agreement provides for an initial
base salary of $4,000 per month. The base salary amount shall increase by Five
Hundred Dollars ($500) after the last day of each of our fiscal quarters during
the first fiscal year of the Mann Agreement. Mr. Mann is also
eligible to participate in benefit and incentive programs we may offer. This
brief description of the Mann Agreement is not intended to be complete and is
qualified in its entirety by reference to the full text of the Mann Agreement as
attached in Exhibit 10.2 to this report.
Lock-Up
Agreements. We entered into lock-up
agreements (“Lock-Up Agreements”) with each of our officers and directors
pursuant to which such holders are not permitted to dispose of any of their
securities in the Company for a period of one year.
This brief description of the Lock-Up Agreements is not intended to be
complete and is qualified in its entirety by reference to the full text of the
Lock-Up Agreements as attached in Exhibit 10.3 and 10.4 to this
report.
Vesting
Agreements. We entered into vesting
agreements (“Vesting Agreements”) with each of our officers and directors
pursuant to which such holders’ shares are subject to vesting based on
milestones being completed by each of our of officers and directors. This
brief description of the Lock-Up Agreements is not intended to be complete and
is qualified in its entirety by reference to the full text of the Vesting
Agreements as attached in Exhibit 10.5 and 10.6 to this
report.
Office
Space. Our executive offices are located at 10497 Town and
Country Way, Suite 310, Houston, Texas 77024, where we occupy approximately 305
square feet of office. We sublease our offices from Allan Millmaker, our Chief
Executive Officer, President and a director, in exchange for $500 per month on a
month to month basis.
Alamo Oil
used office space provided by Michael Stott at no charge during the period from
September 1, 2009 (Inception) to September 30, 2009. The estimated fair market
value of that office space was approximately $350 and was treated as donated
capital by Mr. Stott.
Other
Transactions. Upon the closing of the Asset Purchase, Sandy
McDougall, a director and former officer of Green Irons agreed to cancel
4,616,666 shares of our common stock that he owned, in exchange for $61,073.00.
Mr. McDougall also agreed to forgive any debt due to him by the Company. The
Repurchase Agreement is attached hereto as Exhibit 10.7.
As of
April 30, 2008, we had notes payable to a former officer, Andrew Couvell,
totaling $34,413. During May 2008, we repaid Mr. Couvell $20,000,
leaving a balance of $14,413 at April 30, 2009. Mr. Couvell agreed to forgive
the remaining portion of those notes pursuant a release that he executed on
November 18, 2009.
As of
April 30, 2009, we had a note payable to our sole officer and director, Sandy
McDougall, totaling $7,100. The notes are unsecured, due upon demand and have
been imputing interest at the rate of 10% per annum. For the years
ended April 30, 2009 and 2008, the former officer and the director elected to
contribute all of the $1,672 and $3,441, respectively, of imputed interest to
additional paid in capital. Mr. McDougall agreed to forgive the remaining
portion of that note pursuant to the Repurchase Agreement and a release that he
executed on November 18, 2009.
For the
years ended April 30, 2009 and 2008, Mr. Sandy McDougall, our sole officer and
director, contributed $4,808 and $4,808, respectively, of accrued salary to
capital, which represents an annual salary based on 200 hours worked per year at
$50,000 per year.
In March,
2006, we issued a total of 5,000,000 shares of restricted common stock to Andrew
Couvell, our president at the time, in consideration of $500 cash. In May, 2006,
Andrew Couvell sold 2,500,000 of his common stock to Mr. Sandy McDougall, in
consideration for $250 cash. In August, 2006, Andrew Couvell sold his remaining
2,500,000 of common stock to Mr. Sandy McDougall, in consideration for $250
cash.
20
Director
Independence. We do not have any independent directors. The
determination of independence of directors has been made using the definition of
“independent director” contained under Rule 4200(a)(15) of the Rules of National
Association of Securities Dealers.
There
have been no other related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation
S-K.
With
regard to any future related party transactions, we plan to fully disclose any
and all related party transactions, including, but not limited to, the
following:
|
·
|
disclose
such transactions in prospectuses where required;
|
|
·
|
disclose
in any and all filings with the Securities and Exchange Commission, where
required;
|
|
·
|
obtain
disinterested directors consent; and
|
|
·
|
obtain
shareholder consent where required.
|
Item
8. Legal Proceedings.
We are
not currently a party to any legal proceedings.
Item
9. Market Price of and Dividends on the Company’s Common Equity and
Related Stockholder Matters.
Our
common shares are not listed on any stock exchange, but are quoted on the OTC
Bulletin Board under the symbol “GIHO.” We intend to file the
requisite paperwork for a new symbol, and we hope to receive the new symbol in
the next thirty days. Shares of our common stock have not been traded since
August 23, 2007, when our stock first became eligible for
quotation.
The
approximate number of stockholders of record at November 19, 2009 was
20. The number of stockholders of record does not include beneficial
owners of our common stock, whose shares are held in the names of various
dealers, clearing agencies, banks, brokers and other fiduciaries.
As of
November 19, 2009, we also had outstanding warrants that were exercisable for
approximately 334,905 shares of common stock.
We are
obligated under the Registration Rights Agreements to file, on or before January
17, 2010, a registration statement with the SEC, registering for resale 669,810
shares of common stock underlying a convertible promissory note and 334,905
shares of our common stock underlying warrants.
Dividend
Policy.
We currently anticipate that we will not declare or pay cash dividends on
our common stock in the foreseeable future. We will pay dividends on our common
stock only if and when declared by our board of directors. Our board
of directors’ ability to declare a dividend is subject to restrictions imposed
by Nevada law. In determining whether to declare dividends, the board
of directors will consider these restrictions as well as our financial
condition, results of operations, working capital requirements, future prospects
and other factors it considers relevant.
Securities
Authorized For Issuance Under Equity Compensation Plans. As of November
19, 2009, we had no compensation plans under which our equity securities were
authorized for issuance.
Item
10. Recent Sales of Unregistered Securities.
See Item
3.02 of this Form 8-K, which describes sales of unregistered securities in
connection with the Asset Purchase.
21
Item
11. Description of Securities.
Our
authorized capital stock consists of 100,000,000 common shares, par value $.001
per share. On November 19, 2009, there were 1,622,284 common shares
issued and outstanding following the issuance pursuant to the Asset Purchase and
the cancellation of the 4,616,666 shares owned by Mr. McDougall.
Our
common stock is the only class of voting securities issued and
outstanding. Holders of our common shares are entitled to one vote
for each share held of record on all matters submitted to a vote of
stockholders. Holders of our common shares do not have cumulative
voting rights.
The
holders of our common shares are entitled to dividends when and if declared by
our Board of Directors from legally available funds. The holders of
our common shares are also entitled to share pro rata in any distribution to
stockholders upon our liquidation or dissolution.
Item
12. Indemnification of Directors and Officers.
Under our
Bylaws, directors and officers will be indemnified to the fullest extent allowed
by the law against all damages and expenses suffered by a director or officer
being party to any action, suit, or proceeding, whether civil, criminal,
administrative or investigative. This same indemnification is provided pursuant
to Nevada Revised Statutes, Chapter 78, except the director or officer must have
acted in good faith and in a manner that he believed to be in our best interest,
and the stockholders or the board of directors unless ordered by a court, must
approve any discretionary indemnification.
The
general effect of the foregoing is to indemnify a control person, officer or
director from liability, thereby making the company responsible for any expenses
or damages incurred by such control person, officer or director in any action
brought against them based on their conduct in such capacity, provided they did
not engage in fraud or criminal activity.
22
Item
13. Financial Statements and Supplementary Data.
TABLE
OF CONTENTS
Report of
Independent Registered Public Accounting
Firm ..............................................................................................................................................................................24
Balance
Sheet
……………...................................................................................................................................................................................................................…… 25
Statement
of Operations
……........................................................................................................................................................................................................................ 26
Statement
of Stockholders’
Equity ..................................................................................................................................................................................................................27
Statement
of Cash
Flows ................................................................................................................................................................................................................................28
Notes to
Financial
Statements .........................................................................................................................................................................................................................29
23
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholder
Alamo Oil
Limited
We have
audited the accompanying balance sheet of Alamo Oil Limited (an exploration
stage company) as
of September 30, 2009, and the related statements of operations, stockholder’s
equity and cash flows for the period from inception (September 1, 2009) through
September 30, 2009. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We
conducted our audit 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 audits 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 includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 Alamo Oil Limited (an exploration
stage company) as of September 30, 2009, and the results of its operations and
its cash flows for the period from inception (September 1, 2009) through
September 30, 2009 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 more fully described in Note 3,
the Company has incurred an operating loss and has an accumulated
deficit. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard
to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Mendoza
Berger & Company, LLP
Irvine,
California
November
6, 2009
24
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
BALANCE
SHEET
SEPTEMBER
30, 2009
ASSETS
|
Current
assets
|
||||
|
Cash
|
$ | - | ||
|
Total
current assets
|
- | |||
|
Oil
and gas properties
|
300,000 | |||
|
Total
assets
|
$ | 300,000 | ||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
Current
liabilities
|
||||
|
Accounts
payable and accrued liabilities
|
$ | 23,365 | ||
|
Total
current liabilities
|
23,365 | |||
|
Commitments
and contingencies
|
- | |||
|
Stockholders’
equity
|
||||
|
Share
capital, 100 shares authorized; $2.00 par value (£1.00),
|
||||
|
1
share issued and outstanding at September 30, 2009
|
2 | |||
|
Additional
paid-in capital
|
300,350 | |||
|
Deficit
accumulated during the exploration stage
|
(23,717 | ) | ||
|
Total
stockholders’ equity
|
276,635 | |||
|
Total
liabilities and stockholders’ equity
|
$ | 300,000 | ||
The
accompanying notes are an integral part of these financial
statements
25
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
STATEMENT
OF OPERATIONS
FOR
THE PERIOD FROM INCEPTION (SEPTEMBER 1, 2009)
THROUGH
SEPTEMBER 30, 2009
|
Operating
expenses
|
||||
|
Professional
fees
|
$ | 23,330 | ||
|
Bank
charges
|
35 | |||
|
Rent
|
350 | |||
|
Total
operating expenses
|
23,715 | |||
|
Loss
from operations
|
(23,715 | ) | ||
|
Other
income (expense)
|
(2 | ) | ||
|
Net
loss before provision for income taxes
|
(23,717 | ) | ||
|
Provision
for income taxes
|
- | |||
|
Net
loss
|
$ | (23,717 | ) | |
|
Basic
and diluted loss per share
|
(23,717 | ) | ||
|
Basic
and diluted weighted average shares outstanding
|
1 | |||
The
accompanying notes are an integral part of these financial
statements
26
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
STATEMENT
OF STOCKHOLDERS’ EQUITY
FOR
THE PERIOD FROM INCEPTION (SEPTEMBER 1, 2009)
THROUGH
SEPTEMBER 30, 2009
|
Deficit
|
||||||||||||||||||||
|
Share
Capital
|
Accumulated
|
|||||||||||||||||||
|
Number
of
Shares
|
Amount
|
Additional
Paid-In
Capital
|
During
Exploration
Stage
|
Total
Stockholders’
Equity
|
||||||||||||||||
|
Balance,
September 1, 2009
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
|
Issuance
of founder’s share
|
1 | 2 | - | - | 2 | |||||||||||||||
|
Additional
paid-in capital for the purchase
of
oil and gas properties
|
- | - | 300,000 | - | 300,000 | |||||||||||||||
|
Additional
paid-in capital in exchange for facilities provided by
officer
|
- | - | 350 | - | 350 | |||||||||||||||
|
Net
loss
|
- | - | - | (23,717 | ) | (23,717 | ) | |||||||||||||
|
Balance,
September 30, 2009
|
1 | $ | 2 | $ | 300,350 | $ | (23,717 | ) | $ | 276,635 | ||||||||||
The
accompanying notes are an integral part of these financial
statements
27
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
STATEMENT
OF CASH FLOWS
FOR
THE PERIOD FROM INCEPTION (SEPTEMBER 1, 2009)
THROUGH
SEPTEMBER 30, 2009
|
Cash
flows used in operating activities:
|
||||
|
Net
loss
|
$ | (23,717 | ) | |
|
Adjustments
to reconcile net loss to net cash provided by (used in)
operating activities
|
||||
|
Rent
of facility provided by officer
|
350 | |||
|
Issuance
of founder’s share
|
2 | |||
|
Changes
in operating assets and liabilities:
|
||||
|
Increase
in accounts payable and accrued liabilities
|
23,365 | |||
|
Net
cash provided by operating activities
|
- | |||
|
Net
increase in cash
|
- | |||
|
Cash,
beginning of period
|
- | |||
|
Cash,
end of period
|
$ | - | ||
|
Supplemental
disclosure of cash flow information:
|
||||
|
Cash
paid during the period for:
|
||||
|
Income
taxes
|
$ | - | ||
|
Interest
|
$ | - | ||
|
Non-cash
transactions:
|
||||
|
Additional
paid in capital for the purchase of oil and gas properties
|
$ | 300,000 | ||
|
Rent
of facility provided by officer
|
$ | 350 | ||
|
Issuance
of founder’s share
|
$ | 2 | ||
The
accompanying notes are an integral part of these financial
statements
28
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
1. ORGANIZATION
AND BASIS OF PRESENTATION
Organization
Alamo Oil
Limited (Alamo) was incorporated on September 1, 2009 in the United
Kingdom. On September 1, 2009, Alamo acquired a 75% interest in three
(3) producing oil and gas leases in Frio County, Texas. Alamo is
involved in the oil and gas exploration business and also has the “First Right
of Purchase” to acquire several other oil and gas leases in the state of
Texas. In these notes, the terms “Alamo”, “Company”, “we”, “us” or
“our” mean Alamo Oil Limited.
Exploration
Stage
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States of America, and
are expressed in United States dollars. The Company has not produced
significant revenues from its principal business and is in the exploration stage
company as defined by ASC 915, Development
Stage Entities.
The
Company is in the early exploration stage. In an exploration stage
company, management devotes most of its time to the acquisition of oil and gas
leases, conducting exploratory work, and developing its
business. These financial statements have been prepared on a going
concern basis, which implies the Company will continue to realize its assets and
discharge its liabilities in the normal course of business. The
Company has never paid any dividends and is unlikely to pay dividends may not
generate any significant earnings in the immediate or foreseeable
future. The continuation of the Company as a going concern and the
ability of the Company to emerge from the exploration stage with respect to any
planned principal business activity is dependent upon the continued financial
support from its shareholder, the ability of the Company to obtain necessary
equity financing to continue operations and the attainment of profitable
operations.
29
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and 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.
The
Company’s financial statements are based on a number of significant estimates,
including the purchase price acquisition costs allocated to the oil and gas
properties and accruals for estimated professional fees.
Fair
Value of Financial Instruments
The
carrying values reflected in the balance sheet for cash, accounts payable and
accrued liabilities and advances approximate their fair values because of the
short-term nature of these instruments.
Revenue
Recognition
Oil and
gas revenue will be recognized as income when oil or gas is produced and
sold.
Long-Lived
Assets
At
September 30, 2009, the Company’s only long lived asset was its oil and gas
properties. Oil and gas properties whose costs are individually
significant are assessed individually. Where it is not practicable to
assess individually, such properties may be grouped for an assessment of
impairment. Impairment of oil and gas properties is estimated based
on primary lease terms, geologic data, average holding periods and monthly
production. The Company’s oil and gas properties are evaluated
quarterly for the possibility of potential impairment. At September
30, 2009, the Company determined that the oil and gas properties fair value
exceeded its carrying amount and therefore did not recognize an impairment
loss.
30
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income
Taxes
Income
tax expense is based on pre-tax financial accounting income. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change
during the period in the deferred tax assets and deferred tax liabilities. The
components of the deferred tax assets and liabilities are individually
classified as current and non-current based on their characteristics. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
Oil
and Gas Properties
The
Company follows the full cost method of accounting whereby all costs related to
the acquisition and development of oil and gas leases and acquisition and
development of oil and gas properties are capitalized into a single cost center
(“full cost pool”). Such costs include lease acquisition costs,
geological and geophysical expenses, overhead directly related to exploration
and development activities and costs of drilling both productive and
non-productive wells. Proceeds from property sales are generally
credited to the full cost pool without gain or loss recognition unless such a
sale would significantly alter the relationship between capitalized costs and
the proved reserves attributable to these costs. A significant
alteration would typically involve a sale of 25% or more of the proved reserves
related to a single full cost pool.
Depletion
of exploration and development costs is computed using the units of production
method based upon estimated proven oil and gas reserves. The costs of
unproved properties are withheld from the depletion base until it is determined
whether or not proved reserves can be assigned to the properties. The
properties are reviewed quarterly for impairment.
31
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Oil
and Gas Properties (continued)
Total
well costs are transferred to the depletable pool even when multiple targeted
zones have not been fully evaluated. For depletion and depreciation
purposes, relative volumes of oil and gas production and reserves are converted
at the energy equivalent rate of six thousand cubic feet of natural gas to one
barrel of crude oil.
Under the
full cost method of accounting, capitalized oil and gas property costs less
accumulated depletion and net of deferred income taxes may not exceed an amount
equal to the present value, discounted at 10%, of estimated future net revenues
from proved gas reserves plus the cost or estimated fair value, if lower, of
unproven properties. In accordance with ASC 410 and SAB 106, future
cash outflows associated with settling asset retirement obligations that have
been accrued on the balance sheet, if any, have been excluded from the present
value of estimated future net cash flows used in the ceiling test
calculation. Should capitalized costs exceed this ceiling, impairment
is recognized. The present value of estimated future net revenues is
computed by applying current prices of oil and gas to estimated future
production of proved oil and gas reserves as of period-end, less estimated
future expenditures to be incurred in developing and producing the proved
reserves assuming the continuation of existing economic conditions.
Asset
Retirement Obligations
ASC 410,
Asset
Retirement and Environmental Obligations addresses financial accounting
and reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement
costs. Specifically, ASC 410 requires that the fair value
of a liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be
made. In addition, the asset retirement cost is capitalized as part
of the asset’s carrying value and subsequently allocated to expense over the
asset’s useful life. At September 30, 2009, the Company did not have
any asset retirement obligations.
Basic
and Diluted Net Income / Loss Per Common Share (EPS)
Basic net
loss per share is computed by dividing net loss attributable to the common
stockholder by the weighted average number of shares outstanding during the
reporting period. The shares of restricted common stock granted to
certain officers, directors and employees of the Company are included in the
computation only after the shares become fully vested. Diluted net
income per common share includes the potential dilution that could occur upon
the exercise of options, warrants and the conversion of preferred shares to
acquire common stock computed using the treasury stock method which assumes
that
32
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basic
and Diluted Net Income / Loss Per Common Share (EPS)
(continued)
the
increase in the number of shares is reduced by the number of shares which could
have been repurchased by the Company with the proceeds from the exercise of the
options and warrants (which were assumed to have been made at the average market
price of the common shares during the reporting period).
As of
September 30, 2009, the Company had 1 share of its capital issued and
outstanding and no outstanding options, warrants or convertible
debt.
Comprehensive
Income / Loss
Comprehensive
income or loss reflects changes in equity that results from transactions and
economic events from non-owner sources. The Company had no other
components comprehensive loss for the period ended September 30, 2009 other than
its net loss of $23,717.
Recent
Accounting Pronouncements
On
September 1, 2009, the Company adopted the Financial Accounting Standards
Board (FASB) Accounting Standards Codification (ASC) 105-10, Generally
Accepted Accounting Principles – Overall (ASC 105-10). ASC 105-10
establishes the FASB
Accounting Standards Codification (the Codification) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America (GAAP). Rules and interpretive releases of the Securities and Exchange
Commission (SEC) under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. All guidance contained in the
Codification carries an equal level of authority. The Codification superseded
all existing non-SEC accounting and reporting standards. All other
non-grandfathered, non-SEC accounting literature not included in the
Codification is non-authoritative. The FASB will not issue new standards in the
form of Statements, FASB Staff Positions or Emerging Issues Task Force
Abstracts. Instead, it will issue Accounting Standards Updates (ASU). The FASB
will not consider an ASU as authoritative in its own right. An ASU
will serve only to update the Codification, provide background information about
the guidance and provide the bases for conclusions on the change(s) in the
Codification. ASC 105 is effective for financial statements issued
for interim and annual periods ending after September 15, 2009.
33
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent
Accounting Pronouncements (continued)
On
September 1, 2009, the Company adopted ASC 825-10-65, Financial
Instruments – Overall – Transition and Open Effective Date Information
(ASC 825-10-65). ASC 825-10-65 amends ASC 825-10 to require disclosures about
fair value of financial instruments in interim financial statements as well as
in annual financial statements and also amends ASC 270-10 to require those
disclosures in all interim financial statements. The adoption of ASC 825-10-65
did not have a material impact on the Company’s results of operations or
financial condition.
On
September 1, 2009, the Company adopted ASC 855, Subsequent
Events (ASC 855). ASC 855 establishes general standards of accounting for
and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. It requires
the disclosure of the date through which an entity has evaluated subsequent
events and the basis for that date – that is, whether that date represents the
date the financial statements were issued or were available to be
issued. This disclosure should alert all users of financial statements that
an entity has not evaluated subsequent events after that date in the set of
financial statements being presented. The adoption of ASC 855 did not have a
material impact on the Company’s results of operations or financial
condition.
On
September 1, 2009, the Company adopted ASU No. 2009-05, Fair
Value Measurements and Disclosures (Topic 820) (ASU 2009-05). ASU 2009-05
provided amendments to ASC 820-10, Fair
Value Measurements and Disclosures – Overall, for the fair value
measurement of liabilities. ASU 2009-05 provides clarification that in
circumstances in which a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair value
using certain techniques. ASU 2009-05 also clarifies that when estimating the
fair value of a liability, a reporting entity is not required to include a
separate input or adjustment to other inputs relating to the existence of a
restriction that prevents the transfer of a liability. ASU 2009-05 also
clarifies that both a quoted price in an active market for the identical
liability at the measurement date and the quoted price for the identical
liability when traded as an asset in an active market when no adjustments to the
quoted price of the asset are required are Level 1 fair value measurements. The
adoption of ASU 2009-05 did not have a material impact on the Company’s results
of operations or financial condition.
In
October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable
Revenue Arrangements, (amendments to ASC 605, Revenue
Recognition) (ASU 2009-13). ASU 2009-13 requires entities to
allocate revenue in an arrangement using estimated selling prices of the
delivered goods and services based on a selling price hierarchy. The amendments
eliminate the residual method of revenue allocation and require revenue
to
34
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent
Accounting Pronouncements (continued)
be
allocated using the relative selling price method. ASU 2009-13 should
be applied on a prospective basis for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010,
with early adoption permitted. The Company does not expect adoption of ASU
2009-13 to have a material impact on the Company’s results of operations or
financial condition.
3. GOING
CONCERN
The
Company has accumulated a deficit of $23,717 to date and additional financing
will be required by the Company to support development of its oil and gas
properties until such time as the Company achieves positive cash flow from
operations. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. The Company’s ability to
achieve and maintain profitability and positive cash flow is dependent upon its
ability to locate additional profitable oil and gas properties, generate
significant revenues from its oil and gas production and control production
costs. Based upon current plans, the Company expects to incur
operating losses in future periods. There is no assurance that the
Company will be able to generate significant revenues in the
future. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
4. OIL
AND GAS PROPERTIES
The
Company has an interest of approximately 75% in 110 gross acres in Frio County,
Texas.
The
following table presents information regarding the Company’s costs incurred for
the purchase of proved properties, in exploration and development activities and
charges for depletion, if any:
|
September
30, 2009
|
|||||
|
Property
acquisition costs:
|
|||||
|
Proved
|
|||||
|
Opening
balance
|
$ | - | |||
|
Purchase
price allocation
|
300,000 | ||||
| $ | 300,000 | ||||
35
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
4.
OIL
AND GAS PROPERTIES (Continued)
The
Company’s Texas proven properties are evaluated quarterly for the possibility of
potential impairment. Based on the current production of the proven
properties of 7-10 barrels of oil per day (bbl) and the 12-month average price
($/bbl), the Company determined that its carrying amount did not exceed its fair
value and expects to recover its capitalized cost within 12-24
months. Therefore, no impairment was recognized as of September 30,
2009.
On
September 1, 2009, Alamo entered into a letter agreement with a Texas oil and
gas company (the “Assignor”) for the assignment and acquisition of the Company’s
oil and gas properties in Texas. Under the agreement, the Company was
assigned a 75% working interest in three (3) producing wellbores described in
certain oil and gas leases covering 110 acres in Frio County, Texas for
$300,000. In addition, the Company received “First Right of Purchase”
options to acquire various other working interests in oil and gas leases in the
State of Texas from the Assignor. The options to acquire the other
working interests, ranging from 30% to 100%, expire at various dates through
March 2010 and are for the aggregate amount of $650,000. If the
Company is unable to purchase the other oil and gas interests prior to their
respective expiration dates, or prior to another purchase of the interests by a
third party, then the Company will relinquish all rights to those interests
under the agreement.
5. RELATED
PARTY TRANSACTIONS
For the
period from inception (September 1, 2009) through September 30, 2009, the
Company utilized office space of its officer and shareholder at no
charge. The Company treated the usage of the office space as
additional paid-in capital and charged the estimated fair value rent of $350 per
month to operations.
6. ACCRUED
EXPENSES
Accrued
Wages and Compensated Absences
The
Company currently does not have any employees. The majority of
organization costs and services have been provided to the Company by the founder
and outside, third-party vendors. As such, there is no accrual for
wages or compensated absences as of September 30, 2009.
|
7.
|
FAIR
VALUE MEASUREMENTS
|
On
September 1, 2009, the Company adopted ASC 820, Fair
Value Measurements and Disclosures (ASC 820) with respect to its
financial and non-financial assets and liabilities.
36
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
7. FAIR
VALUE MEASUREMENTS (Continued)
ASC 820
defines fair value, establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (GAAP),
and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair
value measurements and are to be applied prospectively with limited
exceptions.
ASC 820
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. This standard is now the single source in GAAP for the
definition of fair value, except for the fair value of leased property as
defined in ASC 840. ASC 820 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and
(2) an entity’s own assumptions, about market participant assumptions, that
are developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under ASC 820 are described below:
|
•
|
Level
1 - Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or
liabilities.
|
|
•
|
Level
2 - Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly,
including quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in
markets that are not active; inputs other than quoted prices that are
observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market
data by correlation or other means.
|
|
•
|
Level
3 - Inputs that are both significant to the fair value measurement and
unobservable. These inputs rely on management's own assumptions about the
assumptions that market participants would use in pricing the asset or
liability. (The unobservable inputs are developed based on the best
information available in the circumstances and may include the Company's
own data.)
|
37
ALAMO
OIL LIMITED
(An
Exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
7. FAIR
VALUE MEASUREMENTS (Continued)
The
following table presents the Company's fair value hierarchy for those assets and
liabilities measured at fair value on a recurring basis as of September 30,
2009:
|
|
Total
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
|
Assets
|
|||||||||||||||||
|
Oil
and gas properties
|
$ | 300,000 | $ | - | $ | - | $ | 300,000 | |||||||||
| $ | 300,000 | $ | - | $ | - | $ | 300,000 | ||||||||||
|
Liabilities
|
$ | - | $ | - | $ | - | $ | - | |||||||||
| $ | - | $ | - | $ | - | $ | - | ||||||||||
8. COMMITMENTS
AND CONTINGENCIES
Lease
Commitments
The
Company had no lease commitments at September 30, 2009.
9. PROVISION
FOR INCOME TAXES
Income
tax expense has not been recognized for the period from inception (September 1,
2009) through September 30, 2009 and no taxes were payable at September 30,
2009, because the Company has incurred losses since its inception.
The
Company is subject to the income tax laws in the United Kingdom. As
of September 30, 2009, the Company had net operating loss carry forwards for
income tax reporting purposes of approximately $24,000 that may be offset
against future taxable. However, the amount available to offset
future taxable income may be limited. No tax benefit has been
reported in the financial statements because the Company believes there is no
assurance the carry forwards will be used. Potential tax benefits of
the loss carry forwards are offset by valuation allowance of the same
amount.
10. SUBSEQUENT
EVENTS
On
October 28, 2009, the Company received cash and issued a promissory note in the
amount of $110,000 to an unrelated third party. Per the terms of the
note, interest is accrues at the rate of 8% per annum and the principal amount
plus any accrued interest from the date of the note is due upon
demand. Repayment may be made at any time without
penalty.
The
Company has evaluated its subsequent events through November 6, 2009, the date
the financial statements were issued.
38
Item
14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
On
November 19, 2009, we dismissed Malone and Bailey PC (“Malone”) as our principal
accountant effective on such date, and we appointed Mendoza Berger &
Company, LLP (“Mendoza”) as our new principal accountant. Malone’s
report on our financial statements for fiscal years 2008 and 2009 did not
contain an adverse opinion or a disclaimer of opinion, nor was it qualified or
modified as to uncertainty, audit scope, or accounting principles, with the
exception of a qualification with respect to uncertainty as to our ability to
continue as a going concern. The decision to change accountants was
recommended and approved by our Board of Directors.
During
fiscal years 2008 and 2009, and the subsequent interim period through November
19, 2009, there were no disagreements with Malone on any matter of accounting
principles or practices, financial statement disclosures, or auditing scope or
procedures, which disagreement(s), if not resolved to the satisfaction of
Malone, would have caused them to make reference to the subject matter of the
disagreement(s) in connection with their report, nor were there any reportable
events as defined in Item 304(a)(1)(iv)(B) of Regulation S-K.
We
engaged Mendoza as our new independent accountant as of November 19,
2009. During fiscal years 2008 and 2009, and the subsequent interim
period through November 19, 2009, we nor anyone on our behalf engaged Mendoza
regarding either the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on our financial statements, or any matter that was either the
subject of a “disagreement” or a “reportable event,” both as such terms are
defined in Item 304 of Regulation S-K.
We have
requested Malone to furnish us with a letter addressed to the Commission stating
whether it agrees with the statements made by us in this Current Report, and, if
not, expressing the respects in which it does not agree. A copy of
such letter is attached as Exhibit 16.1 to this current report.
Item
15. Financial Statements and Exhibits.
See Item
9.01 of this Form 8-K.
Item
3.02. Unregistered
Sales of Equity Securities.
In
connection with the Asset Purchase, on November 18, 2009, we entered into a Note
and Warrant Puchase Agreement with one investor pursaunt to which the investor
agreed to lend up to Two Million Dollars ($2,000,000) to us in multiple
installments in exchange for a senior secured convertible promissory note
(“Note”) with a conversion price of $0.50 per share and three-year warrants to
acquire shares of common stock at an exercise price of $1.00 per share (the
“Warrants”) in the amount of each installment. The first installment of Three
Hundred Thirty Four Thousand Nine Hundred Five Dollars ($334,905) (“First
Installment”) was delivered on the Closing Date and we issued 334,905 Warrants
to the in connection with the First Installment. The Note and Warrant Puchase
Agreement provides that the investor will lend additional installments to us in
amounts as requested by us; provided however, that we provide the proposed use
of proceeds for each requested amount. Each proposed use of proceeds for each
requested amount shall specify that the majority of the proceeds shall be used
for the acquisition of low risk oil and gas rights in geographic regions with
stable governments. The investor shall have sole discretion in determining
whether the proposed use of proceeds meets those requirements.
Post-delivery
of the First Installment and prior to any future installments, we intend to
effectuate a thirty-for-one split (the “Stock Split”) of the authorized number
of shares of its common stock and all of its then-issued and outstanding common
stock, par value $0.001 per share. The Note and Warrant Puchase Agreement
provides that the Note and Warrants issued in exchange for the First Installment
will not be affected by the Stock Split and any future installments shall be
treated on a post-Stock Split basis.
39
We are
obligated to register the shares of common stock undelrying the Note and the
shares of common stock underlying the Warrants for resale as described below
under the heading “Registration Rights Agreements.” A form of the
Note and Warrant Puchase Agreement is included as Exhibit 10.8 to this report. A
form of the Notes is included as Exhibit 10.9 to this report. A form
of the Warrants is included as Exhibit 10.10 to this report. The
issuance was made pursuant to Regulation S promulgated by the SEC. We
believe that exemptions were available because (iii) the sale was made to
eligible non-U.S. persons as that term is defined for purposes of Regulation S,
and with regard to all transactions, (iii) transfer was restricted in accordance
with the requirements of the Securities Act of 1933, as amended (the “Securities
Act”) (including by legending of certificates representing the
securities).
In
connection with the Private Placement, we entered registration rights agreement
with the investor (the “Registration Rights Agreement”). Under the
Registration Rights Agreement, we are obligated to register for resale an
aggregate of 1,004,715 shares of common stock, all of which underlie the Note
and the Warrants under the Securities Act. This
brief description of the Registration Rights Agreement is not intended to be
complete and is qualified in its entirety by reference to the full text of the
Registration Rights Agreement as attached in Exhibit 4.1 to this
report.
In
connection with the Private Placement, we entered security agreement with the
investor (the “Security Agreement”) to secure
the timely payment and performance in full of our obligations pursuant to the
Note. This
brief description of the Security Agreement is not intended to be complete and
is qualified in its entirety by reference to the full text of the Security
Agreement as attached in Exhibit 10.11 to this report.
Item
5.01. Changes
in Control of Registrant.
The Asset
Purchase and Repurchase Agreement resulted in a change in control of Green Irons
on November 18, 2009. See Item 2.01 “Completion of Acquisition or
Disposition of Assets” above.
Item
5.02. Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
Concurrently
with the closing of the Asset Purchase, Sandy McDougall resigned as Green Irons’
Director, Chief Executive Officer, President, Chief Financial Officer,
Secretary, and Treasurer. Also on that date, Allan Millmaker was
appointed as our President, Chief Executive Officer and a
director. See Part I, Item 5 “Directors and Executive Officers,
Promoters and Control Persons;” Part I, Item 6 “Executive Compensation;” and
Item 2.01 “Completion of Acquisition or Disposition of Assets;”
above.
Item
5.03. Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Green
Irons owned one hundred percent (100%) of a newly created Nevada corporation
called Alamo Energy Corp., which had no operations or assets (“Alamo Sub”).
Following the closing of the Asset Purchase Transaction, effective as of
November 19, 2009, Alamo Sub merged into Green Irons, resulting in Green Irons
changing its name to “Alamo Energy Corp.”
Item
5.06. Change
in Shell Company Status.
As the
result of the completion of the Asset Purchase, Green Irons is no longer a shell
company, as that term is defined in Rule 12b-2 under the Exchange
Act. See Item 2.01 “Completion of Acquisition or Disposition of
Assets” above.
40
Item
9.01. Financial
Statements and Exhibits.
(a)
Financial Statements. See page F-1.
(b) Shell
Company Transactions. See (a) above.
(c)
Exhibits.
|
Exhibit
No.
|
Description
|
|
|
2.1*
|
Asset
Purchase and Sale Agreement by and among Green Irons Holdings Corp. and
Alamo Oil Limited, dated November 18, 2009
|
|
|
2.2*
|
Agreement
and Plan of Merger between Green Irons Holdings Corp. and Alamo Energy
Corp., dated November 18, 2009
|
|
|
3.1
|
Articles
of Incorporation, incorporated by reference to Exhibit 3.1 of Green Irons’
Registration Statement on Form SB-2 filed on June 22,
2006
|
|
|
3.2
|
Certificate
of Amendment to Articles of Incorporation, incorporated
by reference to Exhibit 3.2 of Green Irons’ Registration Statement on Form
SB-2 filed on June 22, 2006
|
|
| 3.3 | Bylaws of the Company, incorporated by reference to Exhibit 3.3 of Green Irons’ Registration Statement on Form SB-2 filed on June 22, 2006 | |
|
3.3*
|
Articles
of Merger between Green Irons Holdings Corp. and Alamo Energy
Corp.
|
|
|
4.1*
|
Form
of Registration Rights Agreement
|
|
|
10.1*
|
Employment
Agreement with Allan Millmaker, dated as of November 19,
2009
|
|
|
10.2*
|
Employment
Agreement with Philip Mann, dated as of November 19,
2009
|
|
|
10.3*
|
Stock
Vesting Agreement with Allan Millmaker, dated as of November 19,
2009
|
|
|
10.4*
|
Stock
Vesting Agreement with Philip Mann, dated as of November 19,
2009
|
|
|
10.5*
|
Lock-Up
Agreement with Allan Millmaker, dated as of November 19,
2009
|
|
|
10.6*
|
Lock-Up
Agreement with Philip Mann, dated as of November 19,
2009
|
|
|
10.7*
|
Stock
Repurchase and Debt Forgiveness Agreement, by and between the Company and
Sandy McDougall, dated as of November 18, 2009
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10.8*
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Form
of Note and Warrant Purchase Agreement
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10.9*
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Form
of Convertible Promissory Note
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10.10*
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Form
of Warrant Agreement
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10.11*
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Form
of Security Agreement
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16.1*
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Letter
from Malone and Bailey
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23.1*
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Consent
of Independent Registered Accounting
Firm
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*
attached hereto
WHERE
YOU CAN FIND MORE INFORMATION
Because
we are subject to the reporting requirements of the Securities Exchange Act, we
file reports, proxy statements and other information with the
SEC. You may read and copy these reports, proxy statements and other
information at the public reference room maintained by the SEC at its Public
Reference Room, located at 100 F Street, N.E. Washington, D.C.
20549. You may obtain information on the operation of the public
reference room by calling the SEC at (800) SEC-0330. In
addition, we are required to file electronic versions of those materials with
the SEC through the SEC’s EDGAR system. The SEC also maintains a web site at
http://www.sec.gov, which contains reports, proxy statements and other
information regarding registrants that file electronically with the
SEC.
41
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report on Form 8-K to be signed on its behalf by the
undersigned, thereunto duly authorized.
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ALAMO
ENERGY CORP.
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Date:
November 24, 2009
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By:
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/s/
Allan Millmaker
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Allan
Millmaker
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Chief
Executive Officer
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42