Attached files
file | filename |
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EX-3.7 - Offshore Petroleum Corp. | v171578_ex3-7.htm |
EX-5.1 - Offshore Petroleum Corp. | v171578_ex5-1.htm |
EX-3.2 - Offshore Petroleum Corp. | v171578_ex3-2.htm |
EX-3.6 - Offshore Petroleum Corp. | v171578_ex3-6.htm |
EX-3.5 - Offshore Petroleum Corp. | v171578_ex3-5.htm |
EX-3.4 - Offshore Petroleum Corp. | v171578_ex3-4.htm |
EX-3.3 - Offshore Petroleum Corp. | v171578_ex3-3.htm |
EX-3.1 - Offshore Petroleum Corp. | v171578_ex3-1.htm |
EX-10.3 - Offshore Petroleum Corp. | v171578_ex10-3.htm |
EX-23.1 - Offshore Petroleum Corp. | v171578_ex23-1.htm |
EX-10.4 - Offshore Petroleum Corp. | v171578_ex10-4.htm |
EX-10.5 - Offshore Petroleum Corp. | v171578_ex10-5.htm |
EX-10.2 - Offshore Petroleum Corp. | v171578_ex10-2.htm |
EX-10.1 - Offshore Petroleum Corp. | v171578_ex10-1.htm |
AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
January
__, 2010
REGISTRATION
NO. 33-____________
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES
ACT OF 1933
OFFSHORE
PETROLEUM CORP.
(Name of
Registrant as specified in its charter)
DELAWARE
|
1311
|
65-0947544
|
(State
or other jurisdiction
of
incorporation or
organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
OFFSHORE
PETROLEUM CORP.
110 East
Broward Boulevard, Suite 1700
Ft.
Lauderdale, FL 33301
Telephone:
877-655-0501
FAX:
866-786-6415
(Name,
address, including zip code, and
telephone
number, including
area
code, of registrant’s principal executive offices)
Jonathan
H. Gardner
Kavinoky
Cook LLP
726
Exchange Street; Suite 800
Buffalo,
New York 14210
(Name,
address, including zip code, and
telephone
number, including
area
code, of agent for service)
Approximate
date of proposed sale to the public: As soon as practicable after the effective
date of this Registration Statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. ¨
If this
Form is filed to register additional securities pursuant to Rule 462(b) under
the Securities Act, please check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”, and
“smaller reporting company” in Ruler 12B-2 of the Exchange Act.
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
|
(do
not check if a smaller
|
Smaller
reporting company x
|
reporting
company)
|
CALCULATION
OF REGISTRATION FEE:
Title Of Each Class Of
Securities To Be Registered
|
Amount to be
Registered
|
Proposed
Maximum
offering price per
Share
|
Proposed
Maximum
Aggregate
Offering Price
|
Amount of
Registration Fee
|
||||||||||||
Common
Stock, par
value $0.0001 per Share (1)
|
17,502,500
|
$ | 0.10 | $ |
1,750,250
|
$ | 124.79 | |||||||||
Total
|
17,502,500
|
$ |
1,750,250
|
$ | 124.79 |
(1) Represents
shares of common stock which may be sold by the selling shareholders listed in
this Registration Statement.
The
offering price with respect to Shares has been estimated solely for the purpose
of calculating the registration fee pursuant to Rule 457(C). This
price is not an indication of value nor has it been established by any
recognized methodology for deriving the value of the Shares.
The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
PROSPECTUS
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION
The
information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
OFFSHORE
PETROLEUM CORP.
SHARES OF
COMMON STOCK TO BE SOLD BY THE SELLING STOCKHOLDERS
The
selling shareholders named in this prospectus (the “Selling Shareholders”) are
offering up to 17,502,500 shares of the common stock of Offshore Petroleum
Corp., a Delaware corporation (“Offshore” or the “Company”), par value $0.0001
per share (“Shares”).
No public
market exists for the Shares or any other security issued by
Offshore. Offshore will undertake to include its Shares for trading
on the Over-The-Counter Bulletin Board, however, no assurance can be given that
such market will be established. The Selling Shareholders may offer
to sell the Shares being offered in this prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or at negotiated
prices. We will not receive any of the proceeds of the sale of Shares
by the Selling Shareholders. We will pay all of the costs associated
with this registration statement and prospectus, but we will not pay any
commissions or expenses of the actual sale of the Shares. We have
limited working capital and will require additional capital to fund exploration
activities. We will use our working capital and any additional
financing we obtain in the future for operating and administrative expenses,
maintenance of our exploration rights and exploration for oil and gas in the
areas subject to our Licenses, when granted.
WE
ARE IN AN EXPLORATION STAGE ONLY AND HAVE NO RESERVES. READERS ARE
STRONGLY URGED TO READ THE “RISK FACTORS” SECTION OF THIS
PROSPECTUS.
BEFORE
BUYING THE SHARES OF COMMON STOCK, CAREFULLY READ THIS
PROSPECTUS. THE PURCHASE OF OUR SECURITIES INVOLVES A HIGH DEGREE OF
RISK.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
information in this prospectus is not complete and may be
changed. The Selling Shareholders may not sell the Shares until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell the Shares and it
is not soliciting an offer to buy the Shares in any state where the offer or
sale is not permitted.
The date
of this prospectus is _________________, 2010.
- 2
-
TABLE OF CONTENTS
|
Page
|
Prospectus
Summary
|
4
|
Summary
Financial Data
|
6
|
Risk
Factors
|
7
|
Determination
of Offering Price
|
9
|
Dilution
|
10
|
Description
of Business
|
10
|
Properties
|
11
|
Fiscal
Year
|
17
|
Transfer
Agent
|
18
|
Employees
|
18
|
Stock
Option Plan
|
18
|
Competition
|
18
|
History
|
18
|
Management's
Discussion and Analysis or Plan of Operation
|
20
|
Disclosure
Controls and Procedures
|
27
|
Market
for Common Equity and Related Stockholder Matters
|
28
|
Directors,
Executive Officers, Promoters, Control Persons
|
29
|
Executive
Compensation
|
31
|
Security
Ownership of Certain Beneficial Owners and Management
|
32
|
Certain
Relationships and Related Transactions
|
32
|
Organization
Within the Last Five Years
|
33
|
Description
of Securities
|
33
|
Use
of Proceeds
|
33
|
Determination
of Offering Price
|
33
|
Selling
Shareholders and Plan of Distribution
|
33
|
Legal
Proceedings
|
37
|
Legal
Matters
|
37
|
Experts
|
37
|
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
|
37
|
How
To Get More Information
|
38
|
Glossary
|
38
|
Index to Financial
Statements
|
|
Financial
Statements for the nine month period ended September 30, 2009 (unaudited)
and December 31, 2008 (audited)
|
F-1
|
Financial
Statements for the years ended December 31, 2008 and
2007 (audited)
|
F-15
|
Until
______________, 2010, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer’s obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
- 3
-
PROSPECTUS
SUMMARY
History and
Business. Our name is Offshore Petroleum Corp.
and we sometimes refer to ourselves in this prospectus as “Offshore Petroleum”
or “Offshore”, the “Company” or as “we,” “our,” or “us.” We are an
oil and gas exploration company. Our objective is to explore and, if
warranted, develop the area covered by eight licenses for which we have applied
to the Government of the Commonwealth of the Bahamas (the
“Licenses”). The area is located in the offshore waters controlled by
the Commonwealth of the Bahamas; as more fully described herein. We
were incorporated in the state of New York on September 8, 1999, under the name
of Enviroclens Inc. On January 23, 2007, the Company moved its
jurisdiction and was incorporated in the State of Delaware. On May 9,
2007, the Company changed its name to Offshore Petroleum Corp.
On
November 30, 2009, the Company closed in escrow a Share Exchange Agreement to
purchase two Cayman Island companies which will become wholly owned subsidiaries
of the Company (the “Share Exchange Agreement”). Pursuant to the
Share Exchange Agreement, the Cayman companies to be acquired by Offshore are
Atlantic Petroleum Ltd. (“Atlantic”) and Bahamas Exploration Limited
(“Bahamas”). Atlantic and Bahamas together are sometimes referred to
herein as our “Subsidiaries.” Pursuant to the Share Exchange
Agreement, upon the breaking of escrow and completion of the closing, Offshore
will release to the shareholders of the corporate parent of the Subsidiaries (a)
15 million common shares of Offshore and (b) a promissory note with a face
amount of $1.5 million payable over a two-year term and bearing interest at
5%. Upon such breaking of escrow and completion of the closing the
Subsidiaries will be wholly owned by Offshore. The Share Exchange
Agreement is more fully described herein in the section entitled, “PROPERTIES –
Share Exchange Agreement.” The Subsidiaries each have applied to the
Government of the Commonwealth of the Bahamas for certain rights to explore for
oil and gas in territorial waters controlled by the Commonwealth of the
Bahamas. We refer to such exploration rights as the
“Licenses.” The Subsidiaries are seeking eight Licenses that are more
fully described herein in the section herein entitled, “PROPERTIES – Licenses
for Exploration.” The geographic location and area covered by the
Licenses (the “Licensed Areas”) and a description of the work that has been
performed on the Licensed Areas is described herein in the section entitled,
“PROPERTIES – Description of Licensed Areas”. The closing of the
Share Exchange Agreement is contingent upon certain closing conditions,
including the granting of the Licenses by the Bahamian
Government. There is no assurance that the Licenses will be granted
or that the closing will be completed. We will not list our shares on
any exchange, or further pursue the effectiveness of the registration statement
of which this prospectus forms a part, unless the closing is
completed.
If the
Licenses are granted and the closing of the Share Exchange Agreement completed,
Offshore will endeavor to secure the financing to undertake exploration of the
area covered by the Licenses. Offshore may seek a joint venture
partner with exploration experience and operational capability to undertake our
exploration activities and assist with financing. Our activities are
subject to risks and uncertainties described herein under “RISK
FACTORS.” Potential investors in the Company’s shares are strongly
urged to review carefully such RISK FACTORS.
Our head
office is at 110 East Broward Boulevard, Suite 1700, Ft. Lauderdale, FL 33301
and our administration office is at 1226 White Oaks Blvd., Oakville, Ontario
Canada L6H 2B9. Our telephone numbers are 877-655-5501 and our fax
number is 866-786-6415.
WE
HAVE NO RESERVES. WE ARE IN AN EXPLORATION STAGE
ONLY. READERS ARE STRONGLY URGED TO READ THE “RISK FACTORS” SECTION
OF THIS PROSPECTUS.
Neither
the Governor-General, the Minister or any Governmental Department of the
Government of the Bahamas, or any person or body acting on their behalf, has
formed or expressed an opinion that the Licensed Areas are, from their
geological formation or otherwise, likely to contain petroleum.
- 4
-
Securities Being
Offered. We have 45,300,000 shares of common stock, par value
$0.0001 per share (“Shares”) issued and outstanding as of December 15,
2009. The Selling Shareholders are offering up to 17,502,500
Shares. No public market exists for the Shares or any other security
issued by Offshore. Offshore will undertake to include its Shares for
trading on the Over-The-Counter Bulletin Board, however, no assurance can be
given that such market will be established. Offshore will not
undertake to list, or include for quotation, any other security of the Company
on any exchange or quotation system. The Selling Shareholders may
offer to sell the Shares being offered in this prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or at negotiated
prices. There is no minimum number of shares that must be sold in
this offering.
Risk Factors. You
should read the “RISK FACTORS” section as well as the other cautionary
statements throughout this prospectus so that you understand the risks
associated with an investment in our securities. Any investment in
our common stock should be considered a high-risk investment because of the
nature of mineral exploration. Only investors who can afford to lose
their entire investment should invest in these securities.
Use of
Proceeds. The Selling Shareholders are selling shares of
common stock covered by this prospectus for their own account. We
will not receive any of the proceeds from the sale of these shares by the
Selling Shareholders. Our working capital and any additional
financing we obtain in the future will be used to fund our operations and
administrative expenses, maintain our Licenses and fund exploration for oil and
gas in the areas subject to our Licenses, when granted. See
PROPERTIES – Licenses for Exploration. We are paying all of the
expenses relating to the registration of the Selling Shareholders’ Shares, but
we will not pay any commissions or expenses of the actual sale of the
Shares.
- 5
-
SUMMARY
FINANCIAL DATA
The
following summary financial data should be read in conjunction with MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, the
audited FINANCIAL STATEMENTS OF OFFSHORE from inception to December 31, 2008 and
the internally prepared unaudited FINANCIAL STATEMENTS OF OFFSHORE for the nine
month period ended September 30, 2009, including the notes thereto, contained
elsewhere in this Prospectus.
Balance
|
As at
|
As at
|
||||||
Sheet Data
|
Sept. 30, 2009
|
Dec. 31, 2008
|
||||||
(Unaudited)
|
(Audited)
|
|||||||
Cash
|
$ | 436,564 | $ | Nil | ||||
Total
Assets
|
$ | 436,564 | $ | Nil | ||||
Liabilities
|
$ | 44,687 | $ | 10,758 | ||||
Total
Stockholders' Equity (Deficiency)
|
$ | 391,877 | $ | (10,758 | ) |
Statement of
|
For the nine-month
|
For the nine-month
|
||||||
Operations Data
|
period ended
|
period ended
|
||||||
Sept. 30, 2009
|
Sept. 30, 2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Revenue
from Operations
|
$ |
Nil
|
$ | Nil | ||||
Other
Income-Interest
|
$ | 408 | $ | Nil | ||||
Net
Loss
|
$ | 102,465 | $ | Nil |
- 6
-
RISK
FACTORS
1.
|
THE
COMPANY HAS NO SOURCE OF OPERATING REVENUE AND EXPECTS TO INCUR
SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF IT IS
ABLE TO ESTABLISH AN OPERATING COMPANY AT
ALL.
|
Currently,
the Company has no source of revenue, limited working capital and no commitments
to obtain additional financing. The Company will require significant
additional working capital to maintain its Licenses, when granted, and to carry
out its exploration programs in the Licensed Areas. Failure to raise
the necessary capital to maintain our Licenses and commence exploration could
cause the Company to go out of business.
2.
|
WE
HAVE NO TRACK RECORD
|
The
Company has no exploration track record or operating history upon which an
evaluation of its future success or failure can be made.
3.
|
OUR
DEVELOPMENT AND EXPLORATION OPERATIONS REQUIRE SUBSTANTIAL CAPITAL AND WE
MAY BE UNABLE TO OBTAIN NEEDED CAPITAL OR FINANCING ON SATISFACTORY TERMS,
WHICH COULD LEAD TO A LOSS OF OUR
LICENSES.
|
Our
Licenses with the Bahamian Government, if we are successful in obtaining them,
will require us to pay rent and meet minimum annual investment thresholds
for the exploration and, if warranted, development of the Licensed Areas, as
more fully described in the section entitled, “PROPERTIES – Licenses for
Exploration.” Rent has been prepaid for the first year. In
the second and third years of the initial term of the Licenses, our Subsidiaries
will pay an aggregate of $600,000 and $800,000 in rent respectively. In addition
to the payment of rent, with respect to each of the eight Licenses, Atlantic and
Bahamas must invest specified amounts in the exploration and development of the
Licensed Areas. Such investments must be for qualifying activities
and expenses as specified in the License. In the first year of each
License, each Subsidiary must invest an aggregate of $250,000 in its Licensed
Areas. Each Subsidiary must then invest an aggregate of $375,000 in
its Licensed Areas in the second and third years in order to maintain their
respective Licenses. Consequently, the Subsidiaries will invest in
qualifying expenditures an aggregate of $500,000 in the first year of the
Licenses and $750,000 in each of the second and third years of the
Licenses. The Company believes it has sufficient capital and
exploration credits to ensure it meets its operating requirements over the next
year. Overall, the Company believes it must raise $4 million to meet
the conditions of the initial three-year term of all eight
Licenses. If we are unable to meet such conditions, we will lose some
or all of our Licenses and cease doing business, in which case our shareholders
will lose their investment in the Company.
4.
|
IF
THE COMPANY DEVELOPS HYDROCARBON RESOURCES, THERE IS NO ASSURANCE THAT
PRODUCTION WILL BE PROFITABLE.
|
Even if
the Company finds hydrocarbon resources, there is no assurance that it will be
able to produce them or that a production operation would be profitable on any
of its Licenses.
- 7
-
5.
|
OIL
AND NATURAL GAS PRICES ARE VOLATILE AND SUBSTANTIAL DECLINES WILL
ADVERSELY AFFECT OUR FINANCIAL RESULTS AND IMPEDE OUR
GROWTH.
|
Profitability
and liquidity are substantially dependent upon prevailing prices for oil and
natural gas, which can be extremely volatile. Even relatively modest drops in
prices can significantly affect financial results. Prices for oil and natural
gas may fluctuate widely in response to relatively minor changes in the supply
of, and demand for, oil and natural gas, market uncertainty and a wide variety
of additional factors that are beyond our control, such as the domestic and
foreign supply of oil and natural gas; the price of foreign imports; the ability
of members of the Organization of Petroleum Exporting Countries to agree to and
maintain oil price and production controls; technological advances affecting
energy consumption, domestic and foreign governmental regulations, and
variations between product prices at sales points and applicable index
prices. In addition, regional oil and gas prices may vary from
national prices due to regional factors such as regional gas production being
constrained by regional gas pipeline capacity.
6.
|
OIL
AND GAS OPERATIONS ARE INHERENTLY
RISKY.
|
The
nature of the oil and gas business involves a variety of risks, particularly the
risk of drilling wells that are found to be unable to produce any oil and/or gas
or unable to produce and sell oil and/or gas at prices sufficient to repay the
costs of the wells. It is possible that we may in the future
recognize substantial impairment expenses when uneconomic wells and declines in
oil and gas prices result in impairments of the capitalized costs of our oil and
gas Licenses.
The oil
and gas business also includes operating hazards such as fires, explosions,
cratering, blow-outs and encountering formations with abnormal pressures. The
occurrence of any of these events could result in losses and, if not fully
insured against, could have a material adverse effect on our financial position
and results of operations.
We expect
to carry stated levels and types of casualty and liability insurance and
additional insurance against well blow-outs and other unusual risks in the
drilling, completion and operation of oil and gas wells at such time as we reach
this stage of development. However, there may still be fires, blow-outs and
other events that result in losses not fully covered by our
insurance.
7.
|
THE
COMPANY IS HIGHLY DEPENDENT UPON ITS OFFICERS AND
DIRECTORS. BECAUSE OF THEIR INVOLVEMENT IN OTHER SIMILAR
BUSINESSES WHICH MAY BE COMPETITORS, THEY MAY HAVE A CONFLICT OF
INTEREST.
|
None of
the Company’s officers or directors works for the Company on a full-time
basis. There are no proposals or definitive arrangements to engage
them on a full-time basis. None of the officers or directors have
employment agreements with the Company or its Subsidiaries. All of
the directors are officers or directors of other companies in similar
exploration businesses. Such business activities may be considered a
conflict of interest because these individuals must continually make decisions
on how much of their time they will allocate to the Company as against their
other business projects, which may be competitive. Also, the Company
has no key man life insurance policy on any of its senior management or
directors. The loss of one or more of these officers or directors
could adversely affect the ability of the Company to carry on
business.
8.
|
THE
COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING
DELAYS.
|
Even if
the Company is successful in obtaining the Licenses, the Company could face
delays in obtaining production leases to proceed with production on the Licensed
Areas. Such delays could jeopardize financing, if any is available,
which could result in having to delay or abandon work on some or all of the
Licensed Areas.
9.
|
WE
ARE SUBJECT TO EXTENSIVE GOVERNMENT
REGULATIONS
|
Our
business is affected by Bahamian Government laws and regulations, including
energy, environmental, conservation, tax and other laws and regulations relating
to the oil and gas development and production.
- 8
-
The areas
outlined in the Bahamian Petroleum Act of 1971 and the regulations promulgated
thereunder include: (a) the prevention of waste, (b) the discharge of materials
into the environment, (c) the conservation of oil and natural gas, (d)
pollution, (e) permits for drilling operations, (f) drilling bonds and (g)
reports concerning operations, spacing of wells, and the unitization and pooling
of properties. Failure to comply with any laws and regulations may result
in the loss of one or more Licenses, and/or assessment of administrative, civil
and criminal penalties. Moreover, changes in any of the above outlined
laws or regulations could have a material adverse effect on our business.
Concerns of global warming may result in changes to laws and regulations
that increase the cost of oil and gas operations and decrease the use and demand
for crude oil and natural gas. In view of the many uncertainties with
respect to current and future laws and regulations, including their
applicability to us, we cannot predict the overall effect of such laws and
regulations on our future operations.
10.
|
THERE
ARE PENNY STOCK SECURITIES LAW CONSIDERATIONS THAT COULD LIMIT YOUR
ABILITY TO SELL YOUR SHARES.
|
Our
common stock is considered a "penny stock" and the sale of our stock by you will
be subject to the "penny stock rules" of the Securities and Exchange
Commission. The penny stock rules require broker-dealers to take
steps before making any penny stock trades in customer accounts. As a
result, the market for our shares could be illiquid and there could be delays in
the trading of our stock which would negatively affect your ability to sell your
shares and could negatively affect the trading price of your
shares.
11.
|
SHORTAGES
OF RIGS, EQUIPMENT, SUPPLIES AND PERSONNEL COULD DELAY OR OTHERWISE
ADVERSELY AFFECT OUR COST OF
EXPLORATION.
|
We, or
our joint venture operators, may experience shortages of drilling and completion
rigs, field equipment and qualified personnel which may cause delays in our
ability to continue to drill, complete, test and connect wells to processing
facilities. Shortages of drilling and completion rigs, field equipment or
qualified personnel could delay, restrict or curtail our exploration operations,
which may materially adversely affect our business.
12.
|
SHORTAGES
OF TRANSPORTATION SERVICES AND PROCESSING FACILITIES MAY RESULT IN OUR
RECEIVING A DISCOUNT IN THE PRICE WE RECEIVE FOR OIL AND NATURAL GAS SALES
OR MAY ADVERSELY AFFECT OUR ABILITY TO SELL OUR OIL AND NATURAL
GAS.
|
We may
experience limited access to transportation used to transport our oil and
natural gas to processing facilities. We may also experience limited access to
processing facilities. If either or both of these situations arise, we may not
be able to sell our oil and natural gas at prevailing market prices, or may be
completely unable to sell our oil and/or natural gas, which would materially
adversely affect our business.
DETERMINATION
OF OFFERING PRICE
The
offering price has been estimated solely for the purpose of calculating the
registration fee payable to the Securities and Exchange Commission in connection
with this prospectus. The offering price is not an indication of
value nor has it been established by any recognized methodology for deriving the
value of the Shares.
- 9
-
DILUTION
We will
likely be required to issue more common stock from treasury in order to raise
additional capital. If common stock is issued to raise additional
capital, it will result in the dilution of the existing
shareholders.
DESCRIPTION
OF BUSINESS
We are an
oil and gas exploration company. Our objective is to explore and, if
warranted and feasible, to develop oil and/or gas production on sites covered by
our Licenses which are located in waters off the shore of the Commonwealth of
the Bahamas.
On
November 30, 2009, the Company closed in escrow a Share Exchange Agreement with
NPT Oil Corporation Ltd, a Cayman Islands company (“NPT”) to purchase from NPT
all of the equity stock of two Cayman Island companies (the “Share Exchange
Agreement”). Pursuant to the Share Exchange Agreement, the Cayman
Islands companies to be acquired by Offshore are Atlantic Petroleum Ltd.
(“Atlantic”) and Bahamas Exploration Limited (“Bahamas”). Atlantic
and Bahamas together are sometimes referred to herein as our
“Subsidiaries.” Pursuant to the Share Exchange Agreement, upon the
breaking of escrow and completion of the closing, Offshore will pay
consideration to NPT consisting of: (a) 15 million Shares of Offshore and (b) a
promissory note with a face amount of $1.5 million payable over a two-year term
and bearing interest at 5%. Concurrent with the execution of the
Share Exchange Agreement, NPT assigned to its own shareholders all of the Shares
of Offshore to be issued upon closing of the Share Exchange Agreement. Ryan
Bateman, John Rainwater and Mickey Wiesinger, principals of NPT, are
members of Offshore’s Board of Directors. Mr. Rainwater is the
President and Chairman of the Board of Offshore.
The Share
Exchange Agreement is more fully described below in “PROPERTIES – Share Exchange
Agreement.”
The
Subsidiaries each have applied to the Government of the Commonwealth of the
Bahamas for certain rights to explore for oil and gas in territorial waters
controlled by the Commonwealth of the Bahamas. We refer to such
exploration rights as the “Licenses.” The Subsidiaries are seeking
eight Licenses that are more fully described below in “PROPERTIES – Licenses for
Exploration.” The geographic location and area covered by the
Licenses (the “Licensed Areas”) and a description of the work that has been
performed on the Licensed Areas is described below in “PROPERTIES – Description
of Licensed Areas” The closing of the Share Exchange Agreement is
contingent upon certain closing conditions, including the granting of the
Licenses by the Bahamian Government. There is no assurance that the
Licenses will be granted or that the closing will be completed. We
will not list our Shares on any exchange, or further pursue the effectiveness of
the registration statement of which this prospectus forms a part, unless the
closing is completed.
In the
event that the Licenses are granted and the closing of the Share Exchange
Agreement completed, Offshore will endeavor to secure the financing to undertake
exploration of the area covered by the Licenses. Our activities are
subject to risks and uncertainties described herein under “RISK
FACTORS.” Potential investors in the Company’s Shares are strongly
urged to review carefully such RISK FACTORS. As of the date of this
prospectus, our applications for the Licenses are pending and, we believe, close
to receiving approval from the Bahamian Government.
- 10
-
PROPERTIES
Share Exchange
Agreement
On
November 30, 2009, the Company closed in escrow a Share Exchange Agreement with
NPT Oil Corporation Ltd, a Cayman Islands company (“NPT”) to purchase from NPT
all of the equity stock of two Cayman Island companies (the “Share Exchange
Agreement”). Pursuant to the Share Exchange Agreement, the Cayman
Islands companies to be acquired by Offshore are Atlantic Petroleum Ltd.
(“Atlantic”) and Bahamas Exploration Limited (“Bahamas”). Atlantic
and Bahamas together are sometimes referred to herein as the
“Subsidiaries.” Pursuant to the Share Exchange Agreement, upon the
breaking of escrow and completion of the closing, Offshore will pay
consideration to NPT consisting of: (a) 15 million common shares of Offshore and
(b) a promissory note with a face amount of $1.5 million payable over a two-year
term and bearing interest at 5%. Concurrent with the execution of the
Share Exchange Agreement, NPT assigned to its own shareholders all of the shares
of Offshore to be issued upon closing of the Share Exchange
Agreement. In connection with the Share Exchange Agreement, Ryan
Bateman, John Rainwater and Mickey Wiesinger, principals of NPT, were appointed
to Offshore’s Board of Directors.
As
further described below under “Licenses for Exploration,” the Subsidiaries each
have applied to the Government of the Commonwealth of the Bahamas for certain
rights to explore for oil and gas in territorial waters controlled by the
Commonwealth of the Bahamas. We refer to such exploration rights and
the written agreements with the Bahamian Government that specify such rights as
the “Licenses.” The Subsidiaries are seeking eight such
Licenses. The breaking of escrow and closing of the Share Exchange
Agreement is contingent upon certain closing conditions, including the granting
of the Licenses by the Bahamian Government to the Subsidiaries. The
Licenses application process began on December 12, 2008. The Company
and the Subsidiaries believe they are in the final stages of completing this
process and obtaining the Licenses. There is no assurance, however,
that the Licenses will be granted or that the escrow will be broken and the
closing completed. Offshore will not list its shares on any exchange,
or further pursue the effectiveness of the registration statement of which this
prospectus forms a part, unless the closing is completed. The parties
have agreed that the closing shall be completed on or before February 15,
2010. Such closing date may be extended by the mutual agreement of
the parties.
The Share
Exchange Agreement provides that the equity shares of the Subsidiaries must be
conveyed to Offshore free and clear of any encumbrances
whatsoever. Further, the Subsidiaries must obtain the approval of the
Bahamian Government of the sale of the Subsidiaries by NPT to Offshore and
provide evidence that the Licenses shall remain in effect following the
completion of the closing. NPT has agreed, as a condition of the
Share Exchange Agreement, to indemnify Offshore for any breach of the Share
Exchange Agreement.
The
following assets (which were held by the Subsidiaries as of the date of the
Share Exchange Agreement) form the basis of our knowledge of the Licensed
Areas.
|
·
|
a
1977 2D seismic data shoot by Tenneco
Inc.
|
|
·
|
Geophysical
analysis of a qualified engineer performed in1977 including 2D seismic
data
|
|
·
|
Geophysical
analysis of a qualified engineer regarding the 1977 seismic
data
|
|
·
|
Gravity
and magnetic data relating to the Blake Plateau,
Bahamas
|
|
·
|
an
Oil migration model relating to the Licensed
Areas
|
|
·
|
Ocean
floor seep satellite data - Bahamas
|
|
·
|
Pore
pressure analysis studies relating to the Licensed
Areas
|
|
·
|
Source
rock study and analysis of the Licensed
Areas
|
|
·
|
Analog
field analysis with volumetric
calculations
|
|
·
|
a
Logistical and marketing study –
Bahamas
|
|
·
|
Misc.
geological maps of the Bahamas including the Licensed
Areas
|
The
Subsidiaries invested approximately $500,000 to obtain the above
information. This amount is eligible to be applied against work
commitments on the Licenses in the first year of the Licenses. Such
credit for work performed and the investment of one year’s rent in each of the
eight Licenses (upon application) was a component of the valuation and resulting
consideration paid by Offshore for the Subsidiaries pursuant to the Share
Exchange Agreement.
- 11
-
Licenses for
Exploration
The
Subsidiaries’ applications for the Licenses are pending and, we believe, close
to receiving approval from the Bahamian Government. Final approval of
the Licenses has not been granted by
the Bahamian Government as of the date of this prospectus. While the
terms and conditions of the Licenses cannot be stated with certainty until the
Licenses are issued, based upon drafts of the Licenses and discussions with the
Bahamian Government, the Company anticipates that the rights to be granted to
the Subsidiaries will consist of eight separate Licenses covering geographic
areas specified in each License and described below in “Description of Licensed
Areas.” They are designated as follows.
Subsidiary
Holding License
|
Name
Assigned to Specific Licensed Area
|
Atlantic
Petroleum Ltd
|
License
No. 1 Aphrodite
|
License
No. 2 Mercury
|
|
License
No. 3 Neptune
|
|
License
No. 4 Venus
|
|
Bahamas
Exploration Limited
|
License
No. 5 Apollo
|
License
No. 6 Poseidon
|
|
License
No. 7 Hermes
|
|
License
No. 81 Zeus
|
Term
In each
case, the License will have an initial term of three (3) years with one option
to renew for another three-year term. After the second renewal term,
the Licenses can be renewed for two more three-year terms at the discretion of
the Bahamian Government as to all or a portion of the Licensed Area. At any time
during the term of the Licenses, or any renewal terms, if we drill a well that
can be developed into a producing well, the Subsidiary holding the License has a
right to convert the License into a Lease. The terms and conditions
of such a Lease are described below in “Development and Conversion Into
Lease.”
Rent
Each
License requires annual rent of $50,000 in the first year (already paid in each
case with the application for the License) and $75,000 in the second year and
$100,000. The annual rent in the third year and any subsequent renewal years
would be $100,000.
Investment in
Development
In
addition to the payment of rent, Atlantic and Bahamas must invest specified
amounts in the exploration and development of the Licensed Areas. In
the first year of each License, each of the Subsidiaries must invest an
aggregate of $250,000 in qualifying expenditures for its four Licensed
Areas. The Subsidiaries each must then invest an aggregate of
$375,000 in qualifying expenditures for its four Licensed Areas in the second
and third years in order to maintain their respective
Licenses. Consequently, the Subsidiaries will invest an aggregate of
$500,000 in the first year of the Licenses and $750,000 for each of the second
and third years of the Licenses. Of the amount due in the first year
of the Licenses, Atlantic and Bahamas will receive credit of $500,000 for work
performed and information obtained prior to the date hereof. In the
event a Subsidiary has qualifying expenditures for a given Licensed Area greater
than the amount required by the License, the surplus can be used to offset
annual expenditure obligations in subsequent years. If, at the end of
the License term or any renewal period thereafter, a Subsidiary has not met the
aggregate expenditure obligations for such term, such Subsidiary would owe a
penalty to the Bahamian Government equal to one-half of the amount
deficient.
- 12
-
Development and Conversion
Into Lease
Each
License entitles its holder to develop and operate oil and gas rigs in the
Licensed Area, subject to certain approvals of the Bahamian Government,
including approval of any and all third party operators or joint
venturers. In the event that we drill a well that can be developed
into a producing well, the Subsidiary holding the License has a right to convert
the License into a Lease which would contain substantially identical terms and
conditions. The Lease would have an initial term of ten years with
one option to renew for an additional ten-year renewal term. We would
pay royalties to the Bahamian Government as follows.
Production Levels
|
Percentage Royalty based upon fair
market value of the oil produced1
|
First
75,000 barrels/day
|
12½%
of FMV
|
75,000
– 150,000 barrels/day
|
15%
of FMV
|
150,000
– 250,000 barrels/day
|
17½
of FMV
|
All
amounts in excess of 250,000 barrels
|
20%
of FMV
|
Natural Gas |
12½%
of
FMC
|
1 All
royalty amounts are to be paid in U.S. dollars, unless an arrangement for
payment in kind has been made. The fair market value of the petroleum
shall be determined by the mutual agreement of the parties. Rent paid
by under the Lease shall be credited against royalty payments.
In the
event a producing well is drilled and commences operation during the term of a
License and such License has not been converted into a lease, the Subsidiary
would be required to pay to the Bahamian Government royalties in an amount
identical to the royalty that would be owned pursuant to a lease.
Additional
Agreements
Each
Subsidiary is required to maintain insurance issued by carriers approved by the
Bahamian Government. In addition, each of the Subsidiaries is
required to post a bond of $1 million backing funding and performance of the
investment in development to be undertaken pursuant to the Licenses, as
described above in “Investment in Development” above. Such bond must
be issued by an approved financial institution, and the amount of the bond is to
be reduced at the end of each year by an amount equal to the actual amount
expended on exploration.
The
Subsidiaries are required to have a manager that is a Bahamian resident, and a
qualified engineer must supervise any and all exploration and operation
undertaken on the Licensed Areas. The Licenses may not be assigned without the
written consent of the Bahamian Government.
We are
generally obligated to conduct our operations in a manner that prevents
contamination of the environment. The Bahamian Government is
authorized to oversee our operations and enforce these requirements pursuant to
the Bahamian Petroleum Act.
Additional Agreements under
Lease
In the
event any License is converted into a lease, as described above, the
Subsidiaries-lessee would be required to sell to refineries in the Bahamas up to
25% of the oil produced from such well. During the term of any lease
the Subsidiary-lessee would be required to indemnify the Bahamian Government
from any third party claims. In addition, the Bahamian Government
would have the right to appoint a Bahamian Governmental official to such
Subsidiary’s Board of Directors and the right to pre-empt the purchase of the
output of a producing well in the event of war.
- 13
-
Neither
the Governor-General, the Minister or any Governmental Department of the
Government of the Bahamas, or any person or body acting on their behalf, has
formed or expressed an opinion that the Licensed Areas are, from their
geological formation or otherwise, likely to contain petroleum.
Description
of Licensed Areas
The
following map shows the location of the Lincensed Area.
The
following are legal descriptions of the area covered by the
Licenses.
LICENSED
AREAS HELD BY ATLANTIC PETROLEUM LTD.
Limits of
Area Aphrodite
All those
lands or submarine areas or both situate in the Commonwealth of the Bahamas and
having an approximate area of 848,630 acres.
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 1 (Area Aphrodite).
Block
No.
|
Longitude
|
Latitude
|
||
16
|
79°
|
00'
W
|
26°
|
50'
N
|
17
|
78°
|
50'
W
|
26°
|
50'
N
|
18
|
78°
|
20'
W
|
26°
|
40'
N
|
19
|
78°
|
30'
W
|
26°
|
50'
N
|
20
|
78°
|
20'
W
|
26°
|
50'
N
|
9
|
79°
|
00'
W
|
27°
|
00'
N
|
46
|
79°
|
00'
W
|
26°
|
40'
N
|
3
|
78°
|
50'
W
|
26°
|
40'
N
|
5
|
78°
|
30'
W
|
26°
|
40'
N
|
4
|
78°
|
40'
W
|
26°
|
40'
N
|
Limits of
Area Mercury
All those
lands or submarine areas or both situate in the Commonwealth of the Bahamas and
having an approximate area of 848,630 acres.
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 2 (Area Mercury).
Block
No.
|
Longitude
|
Latitude
|
||
47
|
78°
|
20'W
|
27°
|
20'
N
|
37
|
78°
|
40'W
|
27°
|
30'
N
|
38
|
78°
|
30'W
|
27°
|
30'
N
|
39
|
78°
|
20'W
|
27°
|
30'
N
|
29
|
78°
|
20'W
|
27°
|
40'
N
|
18
|
78°
|
20'W
|
27°
|
50'
N
|
6
|
78°
|
20'W
|
28°
|
00'
N
|
7
|
78°
|
10'W
|
28°
|
00'
N
|
8
|
78°
|
00'W
|
28°
|
00'
N
|
20
|
78°
|
00'W
|
27°
|
50
N
|
- 14
-
Limits of
Area Neptune
All those
lands or submarine areas or both indicated on the attached plat situate in the
Commonwealth of the Bahamas and having an approximate area of 848,630
acres.
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 3 (Area Neptune).
Block
No.
|
Longitude
|
Latitude
|
||
40
|
78°
|
10'W
|
27°
|
30'N
|
30
|
78°
|
10'W
|
27°
|
40'N
|
31
|
78°
|
00'W
|
27°
|
40'N
|
32
|
77°
|
50'W
|
27°
|
40'N
|
19
|
78°
|
10'W
|
27°
|
50'N
|
21
|
77°
|
50'W
|
27°
|
50'N
|
22
|
77°
|
40'W
|
27°
|
50'N
|
9
|
77°
|
50'W
|
28°
|
00'N
|
10
|
77°
|
40'W
|
28°
|
00'N
|
11
|
77°
|
30'W
|
28°
|
00'N
|
Limits of
Area Venus
All those
lands or submarine areas or both indicated on the attached plat situate in the
Commonwealth of the Bahamas and having an approximate area of 848,630
acres.
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 4 (Area Venus).
Block
No.
|
Longitude
|
Latitude
|
||
11
|
78°
|
40'W
|
27°
|
00'
N
|
12
|
78°
|
30'W
|
27°
|
00'
N
|
13
|
78°
|
20'W
|
27°
|
00'
N
|
45
|
78°
|
10'W
|
27°
|
00'
N
|
10
|
78°
|
50'W
|
27°
|
00'
N
|
1
|
79°
|
00'W
|
27°
|
10'
N
|
2
|
78°
|
50'W
|
27°
|
10'
N
|
6
|
78°
|
10'W
|
27°
|
10'
N
|
43
|
79°
|
00'W
|
27°
|
20'
N
|
48
|
78°
|
10'W
|
27°
|
20'
N
|
- 15
-
LICENSED
AREAS HELD BY BAHAMAS EXPLORATION LIMITED
Limits of
Area Apollo
All those
lands or submarine areas or both situate in the Commonwealth of the Bahamas and
having an approximate area of 848,630 acres.
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 5 (Area Apollo).
Block
No.
|
Longitude
|
Latitude
|
||
1
|
79°
|
10'W
|
28°
|
00'
N
|
2
|
79°
|
00'W
|
28°
|
00'
N
|
3
|
78°
|
50'W
|
28°
|
00'
N
|
4
|
78°
|
40'W
|
28°
|
00'
N
|
16
|
78°
|
40'W
|
28°
|
00'
N
|
41
|
79°
|
20'W
|
27°
|
20'
N
|
33
|
79°
|
20'W
|
27°
|
30'
N
|
23
|
79°
|
20'W
|
27°
|
40'
N
|
12
|
79°
|
20'W
|
27°
|
50'
N
|
13
|
79°
|
10'W
|
27°
|
50'
N
|
Limits of
Area Hermes
All those
lands or submarine areas or both situate in the Commonwealth of the Bahamas and
having an approximate area of 848,630 acres.
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 6 (Area Hermes).
Block
No.
|
Longitude
|
Latitude
|
||
14
|
79°
|
20'W
|
26°
|
50'
N
|
7
|
79°
|
20'W
|
27°
|
00'
N
|
49
|
79°
|
20'W
|
27°
|
10'
N
|
50
|
79°
|
10'W
|
27°
|
10'
N
|
8
|
79°
|
10'W
|
27°
|
00'
N
|
15
|
79°
|
10'W
|
26°
|
50'N
|
42
|
79°
|
10'W
|
27°
|
20'N
|
34
|
79°
|
10'W
|
27°
|
30'
N
|
24
|
79°
|
10'W
|
27°
|
40'N
|
35
|
79°
|
00'W
|
27°
|
30'N
|
Limits of
Area Poseidon
All those
lands or submarine areas or both situate in the Commonwealth of the Bahamas and
having an approximate area of 848,630 acres.
- 16
-
The
following coordinates specify the Southwestern corner of each of the ten (10)
submarine blocks to be covered by License No. 7 (Area Poseidon).
Block
No.
|
Longitude
|
Latitude
|
||
44
|
78°
|
50'W
|
27°
|
20'N
|
36
|
78°
|
50'W
|
27°
|
30'N
|
25
|
79°
|
00'W
|
27°
|
40'N
|
26
|
78°
|
50'W
|
27°
|
40'N
|
27
|
78°
|
40'W
|
27°
|
40'N
|
28
|
78°
|
30'W
|
27°
|
40'N
|
14
|
79°
|
00'W
|
27°
|
50'N
|
15
|
78°
|
50'W
|
27°
|
50'N
|
17
|
78°
|
30'W
|
27°
|
50'N
|
5
|
78°
|
30'W
|
28°
|
00'N
|
Limits of
Area Zeus
All those
lands or submarine areas or both situate in the Commonwealth of the Bahamas and
having an approximate area of 169,726 acres.
The
following coordinates specify the Southwestern corner of each of the two (2)
submarine blocks to be covered by License No. 8 (Area Zeus).
Block
No.
|
Longitude
|
Latitude
|
4
|
78° 20'W
|
27° 20'N
|
5
|
78° 30'W
|
27° 20'N
|
Further
Exploration
The
Company has sufficient capital and exploration credits to ensure it meets its
operating requirements over the next year. The results of specific
exploration activity on the Licenses will be released as they become
available.
Regulations
Governing Gas and Oil in the Commonwealth of the Bahamas
Our
exploration activities are governed by the Government of the Bahamas, Petroleum
Act which regulates all petroleum exploration in the Bahamas and their
territorial waters. The Act covers among other things, the granting
of licenses, royalties to be paid to the government, pollution control, bonding,
exemption from customs and duties and other ancillary rights. Upon
the granting of the Licenses, the Company and its Subsidiaries will be in
compliance with all currently applicable regulations of the Bahamian
Government.
FISCAL
YEAR
Our
fiscal year end is December 31st.
- 17
-
TRANSFER
AGENT
Our
Transfer Agent and Registrar for the Common Stock is Olde Monmouth Stock
Transfer Co. Inc., 200 Memorial Parkway, Atlantic Highlands, New Jersey
07716.
EMPLOYEES
We have
no full-time employees. We rely primarily upon consultants and
contractors to accomplish our administration and exploration
activities. We are not subject to a union labor contract or
collective bargaining agreement. Management services are provided by
our executive officers on an "as-needed" basis. We have no employment
agreement with any of our officers and directors and we carry no key-man life
insurance.
STOCK
OPTION PLAN
On
September 8, 2008, we adopted the 2008 Stock Option Plan (the "Plan") under
which our officers, directors, consultants, advisors and employees may receive
stock options. The aggregate number of shares of common stock that
may be issued under the plan is 5,000,000. The purpose of the Plan is
to assist us in attracting and retaining selected individuals to serve as
directors, officers, consultants, advisors, and employees of Offshore who
contribute to our success, and to achieve long-term objectives that will inure
to the benefit of all shareholders through the additional incentive inherent in
the ownership of our common stock. Options granted under the plan
will be either "incentive stock options", intended to qualify as such under the
provisions of section 422 of the Internal Revenue Code of 1986, as from time to
time amended (the "Code") or "unqualified stock options". For the
purposes of the Plan, the term "subsidiary" shall mean “Subsidiary Corporation,”
as such term is defined in section 424(f) of the Code, and "affiliate" shall
have the meaning set forth in Rule 12b-2 of the Exchange Act.
The Plan
will be administered by the Board of Directors who will set the terms under
which options are granted. No options have been granted under the
Plan as of the date of this prospectus.
COMPETITION
There is
aggressive competition within the industry to discover and acquire properties
considered to have commercial potential. We compete for the
opportunity to participate in promising exploration projects with other
entities, many of which have much greater resources than we do. In
addition, we compete with others in efforts to obtain financing to explore and
develop oil and gas properties.
HISTORY
We were
incorporated in the State of New York on September 8, 1999 under the name
"Enviroclens Inc." as a wholly owned subsidiary of another
corporation. Our then parent-corporation formed the Company in order
to pursue a proposed business opportunity that was unrelated to its core
business. On September 30, 2002, our former parent corporation issued
shares of the Company as a dividend to its shareholders. The intended
project did not proceed. On January 23, 2007, the Company moved its
jurisdiction and was re-domiciled in the State of Delaware. On May 9,
2007, we changed our name to “Offshore Petroleum Corp.”
On
September 15, 2008, John Rainwater and Mickey Wiesinger were appointed to the
Board of Directors. At that time, Todd D. Montgomery, the then President and
sole Director of the Company, resigned. On March 12, 2009, Ryan Bateman was
appointed to the Board of Directors and on December 1, 2009, Gary Adams was
appointed to the Board of Directors. On January 14, 2010, Mr.
Rainwater was made Chairman of the Board of Directors.
- 18
-
On
November 30, 2009, the Company closed in escrow a Share Exchange Agreement with
NPT Oil Corporation Ltd, a Cayman Islands company (“NPT”) to purchase from NPT
all of the equity stock of the Subsidiaries (the “Share Exchange
Agreement”). Pursuant to the Share Exchange Agreement, upon the
breaking of escrow and completion of the closing, Offshore will pay
consideration to NPT consisting of: (a) 15 million Shares of Offshore and (b) a
promissory note with a face amount of $1.5 million payable over a two-year term
and bearing interest at 5%. Concurrent with the execution of the
Share Exchange Agreement, NPT assigned to its own shareholders all of the Shares
of Offshore to be issued upon closing of the Share Exchange
Agreement. For more information regarding the Subsidiaries and our
properties, please see the section entitled “PROPERTIES – Share Exchange
Agreement”, herein.
Prior to
entering into the Share Exchange Agreement, NPT, through the Subsidiaries,
pursued with the Bahamian Government an application for the
Licenses. NPT was aware of prior exploration that had been conducted
in the Licensed Areas by another oil and gas exploration company and was aware
that the exploration rights in the Licensed Area were available. NPT
funded the costs of forming Atlantic and Bahamas and applying for the
Licenses. Principals of NPT, Ryan Bateman, John Rainwater and Mickey
Wiesinger, are also directors of Offshore.
Private
Placements
The
Company completed private placements of 9,350,000 shares of its common stock at
$0.10 per share on the following dates with the following
investors. These private placements were exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to
an exemption provided by Regulation D promulgated thereunder (“Regulation
D”).
Name
|
Date
Issued
|
Shares
|
$
|
|||||||
Sirius
Intervest Ltd.
|
April
14, 2009
|
1,000,000 | 100,000 | |||||||
Allentown
Consulting Corp.
|
June
25, 2009
|
1,500,000 | 150,000 | |||||||
Catalyst
Trading Inc
|
April
28, 2009
|
750,000 | 75,000 | |||||||
Steven
Pearce
|
April
28, 2009
|
500,000 | 50,000 | |||||||
Zul
Rashid
|
May
1, 2009
|
200,000 | 20,000 | |||||||
Sirius
Intervest Ltd.
|
May
8, 2009
|
1,000,000 | 100,000 | |||||||
Zul
Rashid
|
Sept
29, 2009
|
150,000 | 15,000 | |||||||
Benjamin
Marler
|
Sept
30, 2009
|
50,000 | 5,000 | |||||||
Shane
Manning
|
October
14, 2009
|
100,000 | 10,000 | |||||||
Hubert
Manning
|
October
15, 2009
|
100,000 | 10,000 | |||||||
Wade
Alexander
|
October
27, 2009
|
250,000 | 25,000 | |||||||
Cottonwood
Investments, LLC
|
November
16, 2009
|
2,000,000 | 200,000 | |||||||
Ray
Westall
|
November
16, 2009
|
250,000 | 25,000 | |||||||
J.
L. Guerra, Jr.
|
November
25, 2009
|
500,000 | 50,000 | |||||||
Pineview
Worldwide Corp.
|
December
4, 2009
|
1,000,000 | 100,000 | |||||||
Total
|
9,350,000 | 935,000 |
- 19
-
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF
OPERATIONS
In the
event that we are successful in Closing the Share Exchange Agreement and
obtaining the Licenses from the Bahamian Government through our then newly
acquired Subsidiaries, our main focus will be raising the additional financing
necessary to pay rent owed under the Licenses for their initial three-year term
and meet our exploration expenditure obligations. For more information regarding
the Licenses please see “PROPERTIES” – Share Exchange Agreement and PROPERTIES -
Licenses for Exploration, herein. We may seek a joint venture partner
with exploration experience and operational capability to undertake our
exploration activities and assist with financing. We will require
substantial additional capital to implement this plan and additional financing
to bring any one or more sites in the Licensed Area to production, if production
is warranted and feasible. We may raise additional capital through a
public offering, private placements of our securities, a joint venture or
through loans or some combination of the foregoing. We estimate that
we will have to raise approximately $4 million to fulfill the terms of the
initial three years of the eight Licenses. If, following exploration,
we believe that any one or more sites in the Licensed Area warrants development,
we will engage a third party to undertake a feasibility study to asses whether a
reserve exists. If a reserve is found to exist, we will consider
options for development, including a joint venture with a significant producing
company or obtaining further financing and contracting for development and
production.
Discussion
of Operations & Financial Condition from inception to December 31, 2008 and
Nine months ended September 30, 2009
Offshore
has no source of revenue and we continue to operate at a loss. We
have no oil or gas reserves of any kind. We expect our operating
losses to continue for so long as we remain in an exploration stage and perhaps
thereafter. As at December 31, 2008, we had accumulated losses of
$23,516. As at September 30, 2009, we had accumulated losses of
$125,981. Our ability to emerge from the exploration stage and
conduct production operations is dependent, in large part, upon our ability to
raise additional financing.
As
described in greater detail below, the Company’s major endeavor for the year
ended December 31, 2008 and the nine month period ended September 30, 2009 has
been its effort to complete the acquisition of Atlantic and Bahamas and to raise
additional working capital. We are continuing our efforts to raise
additional capital to pursue exploration activities.
The
contract for the acquisition of Atlantic and Bahamas has been closed in escrow
subject to the final delivery of the Licenses from the Bahamian Government and
satisfaction of other conditions.
- 20
-
SELECTED FINANCIAL
INFORMATION
Sept.
30, 2009
|
Dec.
31, 2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Revenues
|
Nil
|
Nil
|
||||||
Net
Loss
|
$ | 102,465 | $ | 10,862 | ||||
Loss
per share-basic and diluted
|
$ | 0.01 | $ | 0.00 | ||||
Total
Assets
|
$ | 436,564 |
Nil
|
|||||
Total
Liabilities
|
$ | 44,687 | $ | 10,758 | ||||
Cash
dividends declared per share
|
Nil
|
Nil
|
There
were no assets for the year ended December 31, 2008. For the nine
month period ended September 30, 2009, total assets included cash and cash
equivalents of $436,564. The current assets increased to $436,564 on September
30, 2009 as a result of subscriptions received during the nine month period. For
more information regarding capital raises please see “Private
Placements”.
Revenues
No
revenue was generated by the Company’s operations during the year ended December
31, 2008 and the nine month period ended September 30, 2009.
Net
Loss
The
significant components of expense that have contributed to the total net loss
are discussed as follows:
Years ended December 31,
2008 and 2007 (Audited)
(a) General and Administrative
Expense
Included
in operating expenses for the year ended December 31, 2008 are general and
administrative expenses of $10,862, as compared with $3,285 for the year ended
December 31, 2007. General and administrative expense represented
100% of the total operating expense for the year ended December 31, 2008 and
100% of the total operating expense for the year ended December 31,
2007. General and administrative expense increased by $7,577 in the
current year, compared to the prior year. The increase in this
expense is mainly due to the professional fees and costs, consulting fees,
office expense and general and other miscellaneous costs incurred during the
year ended December 31, 2008.
Nine month periods ended
September 30, 2009 and 2008 (Unaudited)
(a) General and Administrative
Expense
Included
in operating expenses for the nine month period ended September 30, 2009 are
general and administrative expenses of $102,873 as compared with $nil for the
nine month period ended September 30, 2008. General and
administrative expense represents 100% of the total operating expense for the
nine month period ended September 30, 2009. General and administrative expense
represents professional fees, consulting fees, office expense and general and
other miscellaneous costs incurred during the nine month period ended September
30, 2009.
(b) Project
Expense
The
Company had limited operation activity prior to September 30, 2009 and as a
result there were no project expenses for the nine month periods ended September
30, 2009 and 2008.
- 21
-
Liquidity
and Capital Resources
The
following table summarizes the company’s cash flows and cash in
hand:
Year
ended
|
Year
ended
|
|||||||
Dec.
31, 2008
|
Dec.
31, 2007
|
|||||||
Cash
and cash equivalent
|
$ | Nil | $ | Nil | ||||
Working
capital deficiency
|
$ | 10,758 | $ | Nil | ||||
Cash
used in operating activities
|
$ | 104 | $ | 3,285 | ||||
Cash
used in investing activities
|
$ | Nil | $ | Nil | ||||
Cash
provided by financing activities
|
$ | 104 | $ | 3,285 |
Nine
month
|
Nine
month
|
|||||||
period
ended
|
period
ended
|
|||||||
Sept.
30, 2009
(Unaudited)
|
Sept.
30, 2008
(Unaudited)
|
|||||||
Cash
and cash equivalent
|
$ | 436,564 | $ | Nil | ||||
Working
capital
|
$ | 391,877 | $ | Nil | ||||
Cash
used in operating activities
|
$ | 68,536 | $ | Nil | ||||
Cash
used in investing activities
|
$ | Nil | $ | Nil | ||||
Cash
provided by financing activities
|
$ | 505,100 | $ | Nil |
As at
December 31, 2008, the Company had a working capital deficiency of $10,758 as
compared to $Nil as of December 31, 2007.
As at
September 30, 2009 the Company had working capital of $391,877 as compared to
$Nil as of September 30, 2008. During the nine month period ended
September 30, 2009 the Company raised (gross) $515,000 by issuing common shares
for cash. Subsequent to September 30, 2009 and prior to the Securities
Registration, the Company raised an additional $420,000.
Recent
Accounting Pronouncements
FASB ASC
TOPIC 805 – “Business Combinations.” The objective of this topic is to
enhance the information that an entity provides in its financial reports about a
business combination and its effects. The Topic mandates: (i) how the
acquirer recognizes and measures the assets acquired, liabilities assumed and
any non-controlling interest in the acquiree; (ii) what information to disclose
in its financial reports and; (iii) recognition and measurement criteria for
goodwill acquired. This Topic is effective for any acquisitions made on or
after December 15, 2008. The adoption of this Topic did not have a
material impact on the Company’s financial statements and
disclosures.
FASB ASC
TOPIC 810 – “Noncontrolling Interests.” The objective of this Topic
is to improve the relevance, comparability, and transparency of the financial
information that a reporting entity provides in its consolidated financial
statements by establishing accounting and reporting standards that require: (i)
the ownership interests in subsidiaries held by parties other than the parent be
clearly identified, labeled, and presented in the consolidated statement of
financial position within equity, but separate from the parent's equity; (ii)
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest be clearly identified and presented on the face of the
consolidated statement of income; (iii) changes in a parent's ownership interest
while the parent retains its controlling financial interest in its subsidiary be
accounted for consistently; (iv) when a subsidiary is deconsolidated, any
retained noncontrolling equity investment in the former subsidiary be initially
measured at fair value. The gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any noncontrolling equity
investment rather than the carrying amount of that retained investment and; (v)
entities provide sufficient disclosures that clearly identify and distinguish
between the interests of the parent and the interests of the non-controlling
owners. This Topic is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. Earlier
adoption is prohibited. The adoption of this Topic did not have a
material impact on the Company’s financial statements and
disclosures.
- 22
-
FASB ASC
TOPIC 815 – “Derivatives and Hedging.” The use and complexity of derivative
instruments and hedging activities have increased significantly over the past
several years. This Topic requires enhanced disclosures about an
entity's derivative and hedging activities and thereby improves the transparency
of financial reporting. This Topic is effective for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008, with
early application encouraged. The adoption of this Topic did
not have a material impact on the Company’s financial statements and
disclosures.
FASB ASC
TOPIC 944 – “Financial Services – Insurance.” Diversity exists in
practice in accounting for financial guarantee insurance contracts by insurance
enterprises. That diversity results in inconsistencies in the recognition and
measurement of claim liabilities because of differing views about when a loss
has been incurred. This Topic requires that an insurance enterprise recognize a
claim liability prior to an event of default (insured event) when there is
evidence that credit deterioration has occurred in an insured financial
obligation. This Topic is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and all interim periods within those
fiscal years, except for some disclosures about the insurance enterprise's
risk-management activities. The adoption of this Topic did not have a
material impact on the Company’s financial statements and
disclosures.
FASB ASC
TOPIC 855 - “Subsequent Events.” In May 2009, the FASB issued Topic
855, which establish general standards of accounting and disclosure of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. In particular, this Topic sets forth : (i)
the period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, (ii) the circumstances
under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements, (iii) the disclosures that
an entity should make about events or transactions that occurred after the
balance sheet date. This Topic should be applied to the accounting and
disclosure of subsequent events. This Topic does not apply to subsequent events
or transactions that are within the scope of other applicable accounting
standards that provide different guidance on the accounting treatment for
subsequent events or transactions. This Topic was effective for interim and
annual periods ending after June 15, 2009. The adoption of this Topic did not
have a material impact on the Company’s financial statements and
disclosures.
FASB ASC
TOPIC 105 - “The FASB Accounting Standard Codification and the Hierarchy of
Generally Accepted Accounting Principles.” In June 2009, the FASB issued Topic
105, which became the source of authoritative GAAP recognized by the FASB to be
applied by nongovernmental entities. Rules and interpretive releases of the SEC
under authority of federal securities laws are also sources of authoritative
GAAP for SEC registrants. On the effective date of this Topic, the Codification
will supersede all then-existing non-SEC accounting and reporting standards. All
other non-SEC accounting literature not included in the Codification will become
non-authoritative. This Topic identifies the sources of accounting principles
and the framework for selecting the principles used in preparing the financial
statements of nongovernmental entities that are presented in conformity with
GAAP and arranged these sources of GAAP in a hierarchy for users to apply
accordingly. This Topic is effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The adoption of this topic
did not have a material impact on the Company’s disclosure of the financial
statements.
- 23
-
FASB ASC
TOPIC 320 - “Recognition and Presentation of Other-Than-Temporary
Impairments.” In April 2009, the FASB issued Topic 320 amends
the other-than-temporary impairment guidance in GAAP for debt securities to make
the guidance more operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. This Topic does not amend existing recognition and measurement
guidance related to other-than-temporary impairments of equity securities. The
Topic is effective for interim and annual reporting periods ending after June
15, 2009, with early adoption permitted for periods ending after March 15, 2009.
Earlier adoption for periods ending before March 15, 2009, is not permitted.
This Topic does not require disclosures for earlier periods presented for
comparative purposes at initial adoption. In periods after initial adoption,
this Topic requires comparative disclosures only for periods ending after
initial adoption. The adoption of this Topic did not have a material impact on
the Company’s financial statements and disclosures.
FASB ASC
TOPIC 860 - “Accounting for Transfer of Financial Assets and Extinguishment of
Liabilities.” In June 2009, the FASB issued additional guidance under
Topic 860 which improves the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows; and a
transferor’s continuing involvement, if any, in transferred financial assets.
This additional guidance requires that a transferor recognize and initially
measure at fair value all assets obtained (including a transferor’s beneficial
interest) and liabilities incurred as a result of a transfer of financial assets
accounted for as a sale. Enhanced disclosures are required to provide financial
statement users with greater transparency about transfers of financial assets
and a transferor’s continuing involvement with transferred financial assets.
This additional guidance must be applied as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period and for interim and
annual reporting periods thereafter. Earlier application is prohibited. This
additional guidance must be applied to transfers occurring on or after the
effective date. The adoption of this Topic is not expected to have a
material impact on the Company’s financial statements and
disclosures.
FASB ASC
TOPIC 810 - “Consolidation of Variables Interest and Special Purpose
Entities.” In June 2009, the FASB issued Topic 810, which requires an
enterprise to perform an analysis to determine whether the enterprise’s variable
interest or interests give it a controlling financial interest in a variable
interest entity. This analysis identifies the primary beneficiary of a variable
interest entity as the enterprise that has both of the following
characteristics: (i) The power to direct the activities of a variable interest
entity that most significantly impact the entity’s economic performance and (ii)
The obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits
from the entity that could potentially be significant to the variable interest
entity. Additionally, an enterprise is required to assess whether it has an
implicit financial responsibility to ensure that a variable interest entity
operates as designed when determining whether it has the power to direct the
activities of the variable interest entity that most significantly impact the
entity’s economic performance. This Topic requires ongoing reassessments of
whether an enterprise is the primary beneficiary of a variable interest entity
and eliminate the quantitative approach previously required for determining the
primary beneficiary of a variable interest entity, which was based on
determining which enterprise absorbs the majority of the entity’s expected
losses, receives a majority of the entity’s expected residual returns, or both.
This Topic is effective as of the beginning of each reporting entity’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period, and for interim and annual reporting
periods thereafter. Earlier application is prohibited. The adoption
of this Topic is not expected to have a material impact on the Company’s
financial statements and disclosures.
- 24
-
FASB ASC
TOPIC 820 - “Fair Value measurement and Disclosures”, an Accounting Standard
Update. In September 2009, the FASB issued this Update to amendments to Subtopic
82010, “Fair Value Measurements and Disclosures”. Overall, for the fair value
measurement of investments in certain entities that calculates net asset value
per share (or its equivalent). The amendments in this Update permit, as a
practical expedient, a reporting entity to measure the fair value of an
investment that is within the scope of the amendments in this Update on the
basis of the net asset value per share of the investment (or its equivalent) if
the net asset value of the investment (or its equivalent) is calculated in a
manner consistent with the measurement principles of Topic 946 as of the
reporting entity’s measurement date, including measurement of all or
substantially all of the underlying investments of the investee in accordance
with Topic 820. The amendments in this Update also require disclosures by major
category of investment about the attributes of investments within the scope of
the amendments in this Update, such as the nature of any restrictions on the
investor’s ability to redeem its investments at the measurement date, any
unfunded commitment, and the investment strategies of the investees. The major
category of investment is required to be determined on the basis of the nature
and risks of the investment in a manner consistent with the guidance for major
security types in GAAP on investments in debt and equity securities in paragraph
320-10-50-lB. The disclosures are required for all investments within the scope
of the amendments in this Update regardless of whether the fair value of the
investment is measured using the practical expedient. The amendments in this
Update apply to all reporting entities that hold an investment that is required
or permitted to be measured or disclosed at fair value on a recurring or non
recurring basis and, as of the reporting entity’s measurement date, if the
investment meets certain criteria The amendments in this Update are effective
for the interim and annual periods ending after December 15, 2009. Early
application is permitted in financial statements for earlier interim and annual
periods that have not been issued. The adoption of this Topic did not
have a material impact on the Company’s financial statements and
disclosures.
FASB ASC
TOPIC 740 - “Income Taxes”, an Accounting Standard Update. In September 2009,
the FASB issued this Update to address the need for additional implementation
guidance on accounting for uncertainty in income taxes. For entities that are
currently applying the standards for accounting for uncertainty in income taxes,
the guidance and disclosure amendments are effective for financial statements
issued for interim and annual periods ending after September 15,
2009. The adoption of this Update did not have a material impact on
the Company’s financial statements and disclosures.
Critical
Accounting Policies
The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions that affect reported amounts of assets and liabilities at the
date of the financial statements, the reported amount of revenues and expenses
during the reporting period and related disclosure of contingent assets and
liabilities. On an ongoing basis, we evaluate our estimates and
judgments. To the extent actual results differ from those estimates,
our future results of operations may be affected. Going forward, once
the Company begins exploration and production of its oil and gas reserves, we
anticipate that the following accounting policies will become critical to the
preparation of our financial statement:
Full
Cost Accounting Method
We intend
to use the full cost method of accounting for our oil and gas properties. Under
this method, all acquisition, exploration, development and estimated abandonment
costs, including certain related employee costs and general and administrative
costs (less any reimbursements for such costs), incurred for the purpose of
acquiring and finding oil and gas will be capitalized.
Capitalized
costs of oil and gas properties evaluated as having, or not having, proved
reserves will be amortized using the unit-of-production method based upon
estimated proved oil and gas reserves.
Estimates
of Proved Oil and Gas Reserves
Estimates
of proved oil and gas reserves will have a significant impact on the carrying
value of our oil and gas properties, the related property amortization expense
and related property impairment expense. Volumes of reserves actually recovered
and cash flows actually received from actual production may differ significantly
from the proved reserve estimates and the related projected cash flows,
respectively.
Asset
Retirement Obligation
Accounting
for asset retirement obligations is governed by FASB ASC TOPIC 410,
“Accounting for Asset Retirement Obligations”. This statement requires us to
record our estimate of the fair value of liabilities related to future asset
retirement obligations in the period the obligation is incurred. Asset
retirement obligations relate to the removal of facilities and tangible
equipment at the end of an oil and gas property’s useful life. The adoption of
- FASB ASC TOPIC 410 requires the use of management’s estimates with
respect to future abandonment costs, inflation, market risk premiums, useful
life and cost of capital. FASB ASC TOPIC 410 requires that our
estimate of our asset retirement obligations will not give consideration to the
value the related assets may have to other parties.
- 25
-
Income
Taxes
The
Company accounts for income taxes under the provisions of - FASB ASC TOPIC 740,
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred income taxes are
provided using the liability method. Under the liability method,
deferred income taxes are recognized for all significant temporary differences
between the tax and financial statement bases of assets and
liabilities.
Off-Balance
Sheet Arrangement
The
Company had no off balance sheet transactions.
Contractual
Obligations and Commercial Commitments
As of
January 1, 2009, the Company entered into a one year consulting services
contract with Lance Capital Corp. (“Lance”) pursuant to which Lance will
administer the Company’s daily corporate operations. Under the consulting
services contract the Company is required to pay Lance $7,500 per month as
consideration for such services.
On
October 20, 2009, the Company entered into a Consulting Agreement with Pembroke
Communications Corp. (“Pembroke”) for certain consulting services for a term of
expiring September 20, 2011. The Company shall issue 1,500,000 Shares
of the Company which shall be earned in the following
manner: 1,500,000 shares will be earned by Pembroke in equal
installments of 500,000 shares on April 1, 2010, October 1, 2010 and April 1,
2011. The Consultant must return any unearned shares upon termination
of the Consulting Agreement.
On
October 20, 2009, the Company entered into a Consulting Agreement with Power One
Capital Corp. (“Power One”) for certain consulting services for a term of
expiring September 20, 2011. The Company shall issue 1,500,000 Shares
of the Company which shall be earned in the following
manner: 1,500,000 shares will be earned by Power One in equal
installments of 500,000 shares on April 1, 2010, October 1, 2010 and April 1,
2011. The Consultant must return any unearned shares upon termination
of the Consulting Agreement.
On
November 30, 2009, the Company closed in escrow a Share Exchange Agreement with
NPT Oil Corporation Ltd, a Cayman Islands company (“NPT”) to purchase from NPT
all of the equity stock of two Cayman Island companies (the “Share Exchange
Agreement”). Pursuant to the Share Exchange Agreement, the Cayman
Islands companies to be acquired by Offshore are Atlantic Petroleum Ltd.
(“Atlantic”) and Bahamas Exploration Limited (“Bahamas”). Atlantic
and Bahamas together are sometimes referred to herein as the
“Subsidiaries.” Pursuant to the Share Exchange Agreement, upon the
breaking of escrow and completion of the closing, Offshore will pay
consideration to NPT consisting of: (a) 15 million Shares of Offshore and (b) a
promissory note with a face amount of $1.5 million payable over a two-year term
and bearing interest at 5%.
Each of
the eight Licenses to be issued to Atlantic and Bahamas will have an initial
three-year term and require advance annual rental payments of $50,000 per
License in the first year (already paid upon application for the Licenses),
$75,000 in the second year and $100,000 in the third year. Atlantic
and Bahamas each are required to spend an aggregate of $250,000 on qualifying
exploration and/or development expenditures in the first year
on their four respective Licensed Areas and an aggregate of $375,000
in each of the two following years. Each of Atlantic and Bahamas are
required to post a $1,000,000 bond for performance of the work
commitments. See the section entitled “PROPERTIES – Licenses for
Exploration” for more information.
- 26
-
DISCLOSURE
CONTROLS AND PROCEDURES
In
connection with our compliance with securities laws and rules, our Chief
Financial Officer evaluated our disclosure controls and procedures on September
30h,
2009. He has concluded that our disclosure controls and procedures
are effective. There have been no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO) evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures, as required by Exchange Act Rule 13a-15(e). Based on that
evaluation, our CEO and CFO concluded that our disclosure controls and
procedures were effective.
Management
of Offshore is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company's principal executive and principal financial
officers and effected by the company's board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States and includes those policies and procedures that:
* Pertain
to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the
company;
* Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States and that receipts and expenditures of
the company are being made only in accordance with authorizations of management
and directors of the company; and
* Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company's assets that could have a
material effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Because of the inherent
limitations of internal control, there is a risk that material misstatements may
not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is
possible to design into the process safeguards to reduce this risk.
In making
this assessment, management, used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission in the Internal
Control-Integrated Framework.
Inherent
in small business is the pervasive problem of segregation of
duties. Given that the Company has a small accounting department,
segregation of duties cannot be completely accomplished at this stage in the
corporate lifecycle. Management has added many compensating controls
to effectively reduce and minimize the risk of a material misstatement in the
Company’s financial statements.
- 27
-
Based on
its assessment, management has concluded that the Company's disclosure controls
and procedures and internal control over financial reporting is effective based
on those criteria.
For the
period ended September 30, 2009, there have been no changes to the Company’s
internal controls over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of the
date of this prospectus, there are 45,300,000 shares of common stock
outstanding, held by 562 shareholders of record. We are registering a
total of 17,502,500 Shares in this prospectus, which will be available for
re-sale when this prospectus becomes effective.
We have
outstanding 27,797,500 Shares not covered by this prospectus. Such
shares are considered “restricted shares” under applicable U.S. securities
regulations and cannot be re-sold unless an exemption from registration under
the Securities Act is available. Other than the Shares covered by this
prospectus, we have not agreed to register any of our securities under the
Securities Act for sale by shareholders.
To date
we have not paid any dividends on our common stock and we do not expect to
declare or pay any dividends on our common stock in the foreseeable
future. Payment of any dividends will depend upon our future
earnings, if any, our financial condition, and other factors deemed relevant by
the Board of Directors.
- 28
-
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS
Board
of Directors
The
following persons are Directors of Offshore Petroleum as of the date of this
prospectus. Each Director will serve until the next meeting of
shareholders or until replaced.
Name
|
Position Held with the
Company
|
Date First Elected or
Appointed
|
Age
|
|||
John
Rainwater
|
Director
and Chairman of the Board, President and Chief Executive
Officer
|
September
15, 2008
|
62
|
|||
Mickey
Wiesinger
|
Director,
Chief Financial Officer and Secretary
|
September
15, 2008
|
60
|
|||
Ryan
Bateman
|
Director
|
March
12, 2009
|
36
|
|||
Gary
Adams
|
Director
|
December
1, 2009
|
59
|
|||
Howard
Barth
|
|
Director
|
|
December 16,
2009
|
|
57
|
Business
Experience
John Rainwater – Mr. Rainwater
has over thirty years experience as an executive in the public and private oil
and gas industry, both domestically and internationally. He as served
as the Chief Executive Officer of Energy Exchange Corporation (NYSE), Integrated
Petroleum Corporation, and Carneros Energy Corporation (a Warburg Pincus
portfolio company). He co-founded and served as an officer and
director of Gothic Energy Corporation (NASDAQ) and has been the Managing
Director of R&R Offshore Resources as well as the Bahamas Exploration
Company since their inception. In 1986 Mr. Rainwater served as the
financial advisor to Sol Petroleum of Argentina in connection with Sol
Petroleum’s acquisition of OXY’s Bolivia production and
acreage. Companies that he has founded and/or managed have drilled
more than 1,000 oil and gas wells in the U.S., Canada, Bolivia, and
international waters. Mr. Rainwater holds a Bachelor of Science in
economics/finance magna cum laude and a MBA in management magna cum laude from
the University of Tulsa. He also serves as a Board Member of the
California Independent Producers Association and the Board of Petroleum Industry
Advisors to Gerson Lehman Partners of New York.
Mickey Wiesinger – Mr.
Wiesinger is a certified public accountant. He earned a Bachelor of Business
Administration degree from Texas A&M University and a Masters of Business
Administration degree from the University of Phoenix. Mr. Wiesinger
served as Accounting Manager of Superior Oil Company from 1972 until
1982, in both the Philippine Islands and in the U.S. Mr. Wiesinger
has also served as Vice President and Chief Financial Officer of Ferguson
Energy, a California Independent producer, Carneros Energy Corporation (a
Warburg Pincus portfolio company) and Pacific Energy Resources Ltd
(aTSX).
Ryan Bateman – Mr. Bateman has
15 years of experience in the investment industry. Mr. Bateman is
chairman and founder of Bateman Financial, an international financial firm
specializing in asset management, trading and advisory. Prior to
forming Bateman Financial, Mr. Bateman was in the asset management department of
the LOM Group where he concentrated on public and private financings for six
years. From 1997 to 1999, Mr. Bateman worked at Emerging Equities
Inc., specializing in venture capital financing. Prior to 1997, Mr.
Bateman was employed with Citibank NA London, Manager of Special Situations for
the European debt derivatives group.
- 29
-
Gary Adams - Mr. Adams has
over thirty years experience as an executive in the public and private oil and
gas industry, both domestically and internationally. He is President
of Adams Affiliates, Inc. located in Tulsa, Oklahoma. He founded and
served as President of CNG, a company focused on the mid-stream business of
gathering, processing, treating and marketing of natural gas and natural gas
liquids. Mr. Adams was also involved in the oilfield supply business
in the ownership of two companies that operated in the US, SE Asia and
Canada. He served as Executive Vice President of OKC Corporation,
Dallas. Mr. Adams was Assistant to the President of a large savings
and loan business. He holds a Bachelors Degree from the University of
Kansas.
Howard Barth – Mr. Barth has
operated his own public accounting firm in Toronto since 1985 and has over 30
years experience as a public accountant serving a wide variety of
clientele. He serves as a director and Chairman of the Audit
Committee for New Oriental Energy & Chemical Corporation (a Nasdaq listed
company), China Auto Logistics Inc. (a Nasdaq listed company), MDHO Holdings
Inc. (an OTCBB listed company). Previously he has served as director
and Chairman of the Audit Committee for Nuinsco Resources Limited (a TSX listed
company), Yukon Gold Corporation (dual listed on the OTCBB and TSX), Orsus
Xelent Technologies Inc. (an Amex listed company) and as a director of Uranium
Hunter Corporation (an OTCBB listed company). Mr. Barth is a member
of the Canadian Institute of Chartered Accountants and the Ontario Institute of
Chartered Accountants.
Family
Relationships
There are
no family relationships between any Director, executive officer or significant
employee of the Company.
Committees
of the Board
Our Board
of Directors has the authority to appoint committees to perform certain
management and administrative functions. Currently, we have an Audit
Committee with a financial expert. We do not have any other
committees.
Audit
Committee
The Audit
Committee is comprised of three directors: Mickey Wiesinger, Gary Adams and
Howard Barth. Mr. Adams and Mr. Barth are independent
directors. The Audit Committee assists the Board of Directors in its
oversight of the quality and accuracy of the Company’s financial statements and
in assessing the effectiveness of the Company’s internal
controls. The Audit Committee also oversees the work of the Company’s
independent auditor. The Audit Committee has reviewed the financial
statements of the Company included with this prospectus.
Pursuant to the Audit Committee’s
charter, the Audit Committee must consist of at least two members of the Board
of Director and not less than two members of the Audit Committee must be
independent directors. At least one member of the Audit Committee shall have
financial expertise, in the judgment of the Board, including accounting or
related financial management expertise. The Audit Committee must meet at least
four times per year. The Audit Committee also must meet separately with the
Chief Executive Officer and with the Chief Financial Officer of the Company at
least annually.
In addition to overseeing financial and reporting compliance, the
Audit Committee is authorized to establish “whistler
blower”
procedures and is empowered, in its charter, to conduct any special
investigation and/or engage expert assistance to conduct an investigation, in
the discretion of the Audit Committee.
The Audit Committee must report to the Board no less than
annually with respect to its examinations and recommendations.
Involvement
in Certain Legal Proceedings
Our
Directors, officers and control persons have not been involved in any of the
following events during the past five years:
any
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time,
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses,
- 30
-
being
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type
of business, securities or banking activities, or
being
found by a court of competent jurisdiction (in a civil action), the Commission
[the SEC] or the Commodity Futures Trading Commission to have violated a federal
or state securities or commodities law, and the judgment has not been reversed,
suspended or vacated.
Code
of Ethics
On June
15, 2009, our Board of Directors adopted a code of business conduct and ethics
policy, referred to herein as the “Code of Ethics.” The adoption of
the Code of Ethics allows us to focus our Board of Directors on areas of ethical
risk, provide guidance to Directors and officers to help them recognize and deal
with ethical issues, provide mechanisms to report unethical conduct and help
foster a culture of honesty and accountability.
EXECUTIVE
COMPENSATION
Except
for compensation paid for services provided by entities owned by some of our
officers and Directors, as more particularly described in CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, no officer or Director has received any remuneration
from us, directly or indirectly, since our inception. Although we
have no compensation plan currently, it is possible that we will adopt such a
plan in the future to pay or accrue compensation for our officers and Directors
for services related to the operation of our business. Although we
have no retirement, incentive, defined benefit, actuarial, pension or
profit-sharing programs for the benefit of Directors, officers or other
employees currently, it is possible that we will adopt such plans in the future.
We have no employment contract or compensatory plan or arrangement with any of
our Directors or officers. We have a Stock Option Plan that is
described in STOCK OPTION PLAN.
- 31
-
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
We have
45,300,000 shares of common stock issued and outstanding. For
purposes of preparing the following table, we have included in the table the
number of common shares of Offshore to be issued to officers and directors of
Offshore upon completion of the closing of the Share Exchange
Agreement. The last column of the table below reflects the voting
rights of each officer and/or director as a percentage of the total voting
shares outstanding as of January 7, 2010.
Name and Address
Of Beneficial Owner
|
Number of Shares of
Common Stock
|
Percentage of Class
Held
|
|||
John
Rainwater
|
3,806,000 |
8.2%
of Common Shares
|
|||
Mickey
Wiesinger
|
672,000 |
1.5%
of Common Shares
|
|||
Ryan
Bateman
|
6,940,000 | (1) |
15%
of Common Shares
|
||
Gary
Adams
|
2,000,000 | (2) |
4.3%
of Common Shares
|
||
TOTAL
|
13,418,000 |
29%
|
(1)
|
4,477,000
of Ryan Bateman’s shares are held by Milo Holdings Ltd., a corporation
controlled by Mr. Bateman.
|
(2)
|
2,000,000
shares held by Cottonwood Investments, LLC are 50% owned by Adams
Affiliates, Inc., which is controlled by family members of Gary Adams and
50% owned by Melissa Nolley Adams, wife of Gary
Adams.
|
As a
group, management and the directors own or control 29% of the issued and
outstanding shares of the Company.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The
Officers and Directors have received no compensation for their services to the
Company as of the date of this report.
Ryan
Bateman, John Rainwater and Mickey Wiesinger are all shareholders of NPT Oil
Corporation Ltd. (NPT), the other party to the Share Exchange
Agreement. See PROPERTIES – Share Exchange
Agreement. Messrs. Bateman, Rainwater and Wiesinger are Directors of
the Company and Mr. Rainwater is also the Chairman of the Board. Mr.
Rainwater is the Company’s Chief Executive Officer and Mr. Wiesinger is the
Company’s Chief Financial Officer and Secretary. They will receive
common stock of the Company in connection with the completion of the closing of
the Share Exchange Agreement. Mr. Bateman will receive 2,463,000
shares, Mr. Rainwater will receive 3,806,000 shares and Mr. Wiesinger will
receive 672,000 shares. Mr. Bateman will control an additional 4,477,000 shares
that are held by Milo Holdings Ltd., a corporation controlled by Mr.
Bateman. Also in connection with the Share Exchange Agreement, the
Company issued to NPT a promissory note for $1,500,000, bearing interest at
5%. Mr. Bateman owns 46.3% of the equity of NPT, Mr. Rainwater own
25.4% of the equity of NPT and Mr. Wiesinger owns 0.45% of the equity of
NPT.
- 32
-
Gary
Adams purchased shares held by Cottonwood Investments, LLC, a company that is
owned 50% by Adams Affiliates, Inc., which is controlled by family members of
Gary Adams and 50% by Melissa Nolley, Mr. Adams’ wife.
ORGANIZATION
WITHIN THE LAST FIVE YEARS
We were
incorporated in the State of New York on September 8, 1999 under the name
"Enviroclens Inc." as a wholly owned subsidiary of another
corporation. Our then parent-corporation formed the Company in order
to pursue a proposed business opportunity that was unrelated to its core
business. On September 30, 2002, our former parent corporation issued
shares of the Company as a dividend to its shareholders. The intended project
did not proceed. On January 23, 2007, the Company moved its
jurisdiction and was re-domiciled in the State of Delaware. On May 9,
2007, we changed our name to “Offshore Petroleum Corp.”
All
transactions among the Company and related parties are described in “CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS” above.
DESCRIPTION
OF SECURITIES
The
following description is a summary of the material terms of our common
stock. This summary is subject to and qualified in its entirety by
our Articles of Incorporation as amended, our Bylaws and by the applicable
provisions of the State of Delaware law. Our authorized capital stock
consists of 200,000,000 shares of Common Stock having a par value of $0.0001 per
share. There is no cumulative voting for the election of directors.
There are no preemptive rights to purchase shares. The holders of shares of
common stock are entitled to dividends, out of funds legally available
therefore, when and as declared by the Board of Directors. The Board of
Directors has never declared a dividend and does not anticipate declaring a
dividend in the future. Each outstanding share of common stock entitles the
holder thereof to one vote per share on all matters presented to the
shareholders for a vote. In the event of liquidation, dissolution or winding up
of our affairs, holders are entitled to receive, ratably, our net assets
available to shareholders after payment of all creditors. All of our issued and
outstanding shares of common stock are duly authorized, validly issued, fully
paid, and non-assessable. To the extent that our unissued shares of
common stock are subsequently issued, the relative interests of existing
shareholders will be diluted.
USE
OF PROCEEDS
We will
not receive any of the proceeds from the sale of the shares of common stock
offered hereunder by the selling shareholders. We will not pay any
commissions or any of the expenses of the selling shareholders related to the
sale of these shares.
DETERMINATION
OF OFFERING PRICE
The
offering price has been estimated solely for the purpose of calculating the
registration fee payable to the Securities and Exchange Commission in connection
with this prospectus. The offering price is not an indication of
value nor has it been established by any recognized methodology for deriving the
value of the Shares.
SELLING
SHAREHOLDERS AND PLAN OF DISTRIBUTION
The
registration statement, of which this prospectus forms a part, relates to our
registration, for the account of the Selling Shareholders listed below, of an
aggregate of 17,502,500 shares of common stock.
- 33
-
The sale
of the Selling Shareholders' Shares by the Selling Shareholders may be effected
from time to time in transactions, which may include block transactions by or
for the account of the selling shareholders, in the over-the-counter market or
in negotiated transactions, or through the writing of options on the selling
shareholders' shares, a combination of these methods of sale, or otherwise.
Sales may be made at market prices prevailing at the time of sale, or at
negotiated prices. We are not aware of any underwriting arrangements that have
been entered into by the selling shareholders. We will file a
post-effective amendment to our registration statement with the SEC if any
selling shareholder enters into an agreement to sell shares through
broker-dealers acting as principals after the date of this
prospectus.
The
Selling Shareholders, during the time each is engaged in distributing shares
covered by this prospectus, must comply with the requirements of Regulation M
under the Exchange Act. Generally, under those rules and regulations
they may not: (i) engage in any stabilization activity in connection with our
securities, and (ii) bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other than as permitted
under the Exchange Act.
The
Selling Shareholders and broker-dealers, if any, acting in connection with these
sales might be deemed to be "underwriters" within the meaning of Section 2(11)
of the Securities Act. Any commission they receive and any profit upon the
resale of the securities might be deemed to be underwriting discounts and
commissions under the Securities Act.
Rules 15g-1
through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended,
impose sales practice and disclosure requirements on FINRA broker-dealers who
make a market in "a penny stock". A penny stock generally includes
any non-FINRA equity security that has a market price of less than $5.00 per
share. Our shares may be quoted on the OTC Bulletin Board, and the price of our
shares may fall within a range which would cause our shares to be considered a
“penny stock”. The additional sales practice and disclosure
requirements imposed upon broker-dealers handling “penny stocks” may discourage
broker-dealers from effecting transactions in our shares, which could severely
limit the market liquidity of the shares and impede the sale of our shares in
the market.
Under the
“penny stock” regulations, a broker-dealer selling “penny stocks” to anyone
other than an established customer or "accredited investor" (generally, an
individual with net worth in excess of $1,000,000 or an annual income exceeding
$200,000, or $300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to purchase, unless the broker-dealer
or the transaction is otherwise exempt.
In
addition, the “penny stock” regulations require the broker-dealer to deliver,
prior to any transaction involving a “penny stock,” a disclosure schedule
prepared by the Commission relating to the “penny stock” market, unless the
broker-dealer or the transaction is otherwise exempt. A broker-dealer is also
required to disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the “penny stock” held in a customer's account and
information with respect to the limited market in “penny stocks.” All
of the foregoing may affect the marketability of the securities.
Sales of
any shares of common stock by the Selling Shareholders may depress the price of
the common stock in any market that may develop for the common
stock.
At the
time a particular offer of the shares is made by or on behalf of a selling
stockholder, to the extent required, a prospectus supplement will be distributed
which will set forth the number of shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers, or agents,
the purchase price paid by any underwriter for shares purchased from the selling
stockholder and any discounts commissions, or concessions allowed or re-allowed
or paid to dealers, and the proposed selling price to the
public.
- 34
-
Under the
Securities Exchange Act of 1934, as amended, and its regulations, any person
engaged in the distribution of shares of common stock offered by this prospectus
may not simultaneously engage in market-making activities with respect to the
common stock during the applicable "cooling off" period prior to the
commencement of this distribution. In addition, and without limiting
the foregoing, the Selling Shareholders will be subject to applicable provisions
of the Exchange Act and its rules and regulations, including without limitation
Regulation M promulgated under the Exchange Act, in connection with transactions
in the shares, which provisions may limit the timing of purchases and sales of
shares of common stock by the Selling Shareholders.
The
following table sets forth information known to us regarding ownership of our
common stock by each of the selling shareholders as of the date hereof and as
adjusted to reflect the sale of shares offered by this
prospectus. None of the Selling Shareholders has had any position
with, held any office of, or had any other material relationship with us during
the past three years,
We
believe, based on information supplied by the following persons that the persons
named in this table have sole voting and investment power with respect to all
shares of common stock which they beneficially own. Because the
Selling Shareholders may sell all or only a portion of the 17,502,500 shares of
common stock registered hereby, we cannot estimate the number of these shares
that will be held by the Selling Shareholders upon termination of the
offering. The information in the last column of the table below
assumes that the Selling Shareholders sell all of their shares offered in this
prospectus.
- 35
-
SELLING
SHAREHOLDERS
Shareholder
|
No.
of
Shares
Owned
|
Relationship
with
Issuer
|
Shares
Owned
After
Offering
|
||||
Robert
Lush
|
450,000 |
None
|
None
|
||||
Pippin
Investments (1)
|
2,140,000 |
None
|
None
|
||||
Sunny
Ventures Co. Ltd. (2)
|
2,140,000 |
None
|
None
|
||||
Atlantic
Power Co. (3)
|
2,140,000 |
None
|
None
|
||||
Darion
Investments Inc. (4)
|
2,140,000 |
None
|
None
|
||||
Liberty
Point Investments SA (5)
|
2,140,000 |
None
|
None
|
||||
Republic
Asset Management Corp. (6)
|
2,140,000 |
None
|
None
|
||||
S.
K. Kelley & Associates Inc. (7)
|
2,140,000 |
None
|
None
|
||||
Three
Eff Corporation (8)
|
2,072,500 |
None
|
None
|
||||
17,502,500 |
(1)
|
Pippin
Investments is controlled by Kevin Bell, Belize City,
Belize.
|
(2)
|
Sunny
Ventures Co. Ltd. is controlled by Theodore Blackmore, Belize
City, Belize.
|
(3)
|
Atlantic
Power Co. is controlled by Daniel Leinweber, Republic of
Panama.
|
(4)
|
Darion
Investments Inc. is controlled by Philip Young, Republic of
Panama.
|
(5)
|
Liberty
Point Investments SA David Faulkner, Republic of
Panama.
|
(6)
|
Republic
Asset Management Corp. is controlled by Code Bateman, Republic of
Panama.
|
(7)
|
S.
K. Kelley & Associates Inc. is controlled by Patricia Kelley,
Oakville, Ontario, Canada.
|
(8)
|
Three
Eff Corporation is controlled by Habsburg Foundation, Willemstad, Curacao
Netherlands Antilles.
|
We intend
to keep this prospectus effective for one year from the date of this prospectus,
although we reserve the right to terminate the distribution under this
prospectus prior to that time.
State
Blue Sky Information Relating to the Shares
The
Selling Shareholders may offer and sell their Shares only in States in the
United States where exemptions from registration under State securities laws are
available. The Company intends to obtain an exemption, known as the
“manual exemption,” in approximately 38 States where such exemption is
available. Generally, the manual exemption is available to issuers
that maintain an up-to-date listing that includes certain information about the
issuer in a recognized securities manual. The Company intends to
obtain a listing in “Standard & Poor’s Corporation Records,” or Mergent’s
(formerly Moody’s) Manuals and News Reports, both recognized
securities manuals The States that provide the manual exemption
include: Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, the
District of Columbia, Florida, Guam, Hawaii, Idaho, Indiana, Iowa, Kansas,
Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode
Island, South Carolina, South Dakota, Texas, U.S. Virgin Islands, Utah,
Washington, West Virginia, and Wyoming. Each State’s law is
different. Some of the States provide a general exemption for
issuers’ securities that are listed in a “recognized securities manual” (or
similar language) while other States have provisions that name the recognized
securities manuals that qualify an issuer for the exemption in that
State. Investors, Selling Shareholders and securities professionals
are advised to check each State’s securities laws and regulations (known as
“Blue Sky” laws) to ascertain whether an exemption exists for the Company’s
shares in a particular state. When our registration statement (of
which this prospectus forms a part) becomes effective, and a selling security
holder indicates in which state(s) he desires to sell his shares, the Company
will be able to identify whether it will need to register or will rely on an
exemption there from.
- 36
-
LEGAL
PROCEEDINGS
We are
not a party to any existing or pending legal proceeding and none of our property
is the subject of a pending legal proceeding.
LEGAL
MATTERS
The
validity of the issuance of the common stock offered in this prospectus has been
passed upon by Kavinoky Cook LLP, Buffalo, New York.
EXPERTS
The
financial statements for the period from the date of inception (September 8,
1999) through December 31, 2008 were audited by Schwartz Levitsky Feldman LLP,
independent auditors, as set forth in their report thereon appearing in this
prospectus, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and
auditing. Information regarding the Licenses was prepared by the
Company.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
The
Delaware Business Corporation Act and our by-laws, provide that we shall
indemnify our officers and directors and hold harmless each person who was, is
or is threatened to be made a party to or is otherwise involved in any
threatened proceedings by reason of the fact that he or she is or was our
director or officer, against losses, claims, damages, liabilities and expenses
actually and reasonably incurred or suffered in connection with such proceeding.
However, the statutory indemnity does not apply to: (a) acts or omissions of the
director finally adjudged to be intentional misconduct or a knowing violation of
law; (b) unlawful distributions; or (c) any transaction with respect to which it
was finally adjudged that such director personally received a benefit in money,
property, or services to which the director was not legally
entitled. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the forgoing provisions or otherwise, we have
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.
- 37
-
HOW
TO GET MORE INFORMATION
We have
filed with the Securities and Exchange Commission a registration statement on
Form S-1 under the Securities Act with respect to the securities offered by this
prospectus. This prospectus, which forms a part of the registration
statement, does not contain all the information set forth in the registration
statement, as permitted by the rules and regulations of the
Commission. For further information with respect to us and the
securities offered by this prospectus, reference is made to the registration
statement. The material terms of all exhibits have been expressed in
this prospectus. Statements contained in this prospectus as to the
contents of any contract or other document that we have filed as an exhibit to
the registration statement are qualified in their entirety by reference to the
exhibits for a complete statement of their terms and conditions. The
registration statement and other information may be read and copied at the
Commission's Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the Commission
and you can reach us at info@offshorepetroleumcorp.com. Stafford
Kelley acts as the Information Officer for the Company and can be reached at
905-845-8168.
Upon
effectiveness of the registration statement, we will be subject to the reporting
and other requirements of the Exchange Act and we intend to furnish our
stockholders annual reports containing financial statements audited by our
independent auditors and to make available quarterly reports containing
unaudited financial statements for each of the first three quarters of each
year.
GLOSSARY
OF TERMS
Appraisal
Well
|
A
well drilled several spacing locations away from a producing well to
determine the boundaries or extent of a productive formation and to
establish the existence of additional
reserves.
|
Productive
Well
|
A
well that is found to be capable of producing either oil or gas in
sufficient quantities to justify completion as an oil or gas
well.
|
Proved
reserves
|
The
estimated quantities of oil, natural gas and natural gas liquids which
geological and engineering data demonstrate with reasonable certainty to
be commercially recoverable from known reservoirs under current economic
and operating conditions, operating methods, and government
regulations.
|
Structure
|
A
geological feature produced by deformation of the Earth’s crust, such as a
fold or a fault; a feature within a rock, such as a fracture or bedding
surface; or, more generally, the spatial arrangement of
rocks.
|
Seismic
|
Geophysical
prospecting using the generation and propagation of elastic waves at the
earth’s surface, reflecting from the subsurface strata, detection,
measurement and recording back at the earth’s surface and subsequent
analysis of the data. A trace is the data recorded at a single
station. A series of traces comprises a line. The
subsurface structure may be identified by a consistent pattern on each
trace along a section of the line. A grid of lines is acquired
to define potential traps from hydrocarbon accumulation. 2D
seismic is the conventional technique, as distinct from 3D seismic in
which investigations are sufficiently closely spaced to allow a three
dimensional picture of the subsurface to be
obtained.
|
Stratigraphic
|
Pertaining
to the study of rock strata, especially of their distribution, deposition
and age.
|
- 38
-
INDEX
TO FINANCIAL STATEMENTS
OFFSHORE
PETROLEUM CORP.
(A
Delaware Corporation)
Financial
Statements of Offshore Petroleum Corp. for the periods ended September
30, 2009 unaudited and the year ended December 31, 2008
(audited)
Balance
Sheets as of September 30, 2009 (unaudited) and December 31, 2008
(audited)
Statements
of Operations and Comprehensive loss for the nine month periods ended September
30, 2009 and 2008 (unaudited) and for the period from inception (September 8,
1999) to September 30, 2009
Statements
of Changes in Stockholders’ Equity (Deficiency) for the period ended September
30, 2009 (unaudited) and the year ended December 31, 2008 and for the period
from inception (September 8, 1999) to September 30, 2009
(unaudited)
Statements
of Cash Flows for the period ended September 30, 2009 and September 30, 2008
(unaudited) and for the period from inception (September 8, 1999) to September
30, 2009 (unaudited)
Notes to
Interim Financial Statements
Audited
Financial Statements of Offshore Petroleum Corp. for the Years Ended
December
31, 2008 and 2007
Report of
Independent Registered Public Accounting Firm
Balance
Sheets as of December 31, 2008 and 2007
Statements
of Operations and Comprehensive Loss for the Years Ended December 31, 2008 and
December 31, 2007and for the period from inception (September 8, 1999) to
December 31, 2008
Statements
of Changes in Stockholders' Deficiency for the Years Ended December 31, 2008 and
December 31, 2007and for the period from inception (September 8, 1999) to
December 31, 2008
Statements
of Cash Flows for the Years Ended December 31, 2008 and December 31, 2007 and
for the period from inception (September 8, 1999) to December 31,
2008
Notes to
Financial Statements
- 39
-
OFFSHORE PETROLEUM
CORP.
(FORMERLY ENVIROCLENS
INC.)
(AN EXPLORATION STAGE
COMPANY)
INTERIM FINANCIAL
STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2009
AND THE YEAR ENDED DECEMBER 31, 2008
(Amounts expressed in US
Dollars)
CONTENTS
Balance Sheets as of September 30,
2009 (unaudited) and December 31, 2008 (audited)
|
F-2
|
Statements of Operations and
Comprehensive Loss for the nine month period ended September 30, 2009 and
2008 (unaudited) and for the period from inception (September 8, 1999) to
September 30, 2009
|
F-3
|
Statements of Changes in
Stockholders' Equity/(Deficiency) for the period ended September 30, 2009
(unaudited) and the year ended December 31, 2008 and for the period from
inception (September 8, 1999) to September 30, 2009
(unaudited)
|
F-4
|
Statements of Cash Flows for the
period ended September 30, 2009 and September 30, 2008 (unaudited) and for
the period from inception (September 8, 1999) to September 30, 2009
(unaudited)
|
F-5
|
Notes to the Interim Financial
Statements
|
F-6 - F-14
|
F-1
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Interim Balance Sheets as at
September 30, 2009 and December 31, 2008
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
Sept. 30,
|
Dec. 31,
|
|||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current
|
||||||||
Cash
|
436,564 | - | ||||||
Total Current
Assets
|
436,564 | - | ||||||
Total
Assets
|
436,564 | |||||||
LIABILITIES
|
||||||||
Current
|
||||||||
Accounts
payable
|
38,119 | - | ||||||
Accrued professional
fees
|
6,568 | 10,758 | ||||||
Total Current
Liabilities
|
44,687 | 10,758 | ||||||
Total
Liabilities
|
44,687 | 10,758 | ||||||
Going Concern
(note
2)
|
||||||||
Commitments and
Contingencies (note
7)
|
||||||||
Subsequent
Events (note
8)
|
||||||||
STOCKHOLDERS'
DEFICIENCY
|
||||||||
Capital Stock
(note
4)
|
||||||||
Common stock, $0.0001 par value,
200,000,000 shares authorized, 23,100,000 issued and
outstanding (December 31, 2008
-17,950,000)
|
2,310 | 1,795 | ||||||
Additional Paid-in
Capital
|
525,548 | 10,963 | ||||||
Subscriptions
Receivable
|
(10,000 | ) | - | |||||
Deficit Accumulated During the
Exploration Stage
|
(125,981 | ) | (23,516 | ) | ||||
Total Stockholders'
Equity/(Deficiency)
|
391,877 | (10,758 | ) | |||||
Total Liabilities and
Stockholders' Equity/(Deficiency)
|
436,564 | - |
(The
accompanying notes are an integral part of these financial
statements.)
F-2
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Interim Statements of Operations and
Comprehensive Loss
For The Nine Month Period Ended
September 30, 2009 and 2008
And for the period from inception
(September 8, 1999) to September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
Cumulative
|
||||||||||||
Since
|
Sept.
30,
|
Sept.
30,
|
||||||||||
Inception
|
2009
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Operating
Expenses
|
||||||||||||
General
and administrative
|
126,389 | 102,873 | - | |||||||||
Total
Operating Expenses
|
126,389 | 102,873 | - | |||||||||
Loss
from Operations
|
(126,389 | ) | (102,873 | ) | - | |||||||
Other
income – interest
|
408 | 408 | - | |||||||||
Loss
Before Income Taxes
|
(125,981 | ) | (102,465 | ) | - | |||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
Loss and Comprehensive Loss
|
(125,981 | ) | (102,465 | ) | - | |||||||
Loss
per Weighted Average Number of Shares Outstanding- Basic and
Diluted
|
(0.01 | ) | (0.00 | ) | ||||||||
Basic
Weighted Average Number of Shares Outstanding During the
Periods
|
||||||||||||
-
Basic and Diluted
|
20,875,275 | 17,950,000 |
(The
accompanying notes are an integral part of these financial
statements.)
F-3
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Interim Statements of Stockholders'
Equity/(Deficiency) for the period ended
September 30, 2009 and for the period
from inception (September 8, 1999) to September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
Deficit
|
|
|||||||||||||||||||||||
Common
Stock
|
Accumulated
|
Total
|
||||||||||||||||||||||
Paid-in
|
during
the
|
Stockholders'
|
||||||||||||||||||||||
Number
|
Additional
|
Subscriptions
|
Exploration
|
Equity/
|
||||||||||||||||||||
of
Shares
|
Amount
|
Capital
|
Receivable
|
Stage
|
(Deficiency)
|
|||||||||||||||||||
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||
For the period from inception
(September 8, 1999) through January 1, 2006
|
17,950,000 | 1,795 | 7,574 | 9,369 | ||||||||||||||||||||
Net loss
|
- | - | - | (9,369 | ) | (9,369 | ) | |||||||||||||||||
Balance, December 31,
2006
|
17,950,000 | 1,795 | 7,574 | (9,369 | ) | - | ||||||||||||||||||
Contribution to additional paid-in
capital
|
- | - | 3,285 | 3,285 | ||||||||||||||||||||
Net loss
|
- | - | - | (3,285 | ) | (3,285 | ) | |||||||||||||||||
Balance, December 31,
2007
|
17,950,000 | 1,795 | 10,859 | (12,654 | ) | - | ||||||||||||||||||
Contribution to additional paid-in
capital
|
104 | 104 | ||||||||||||||||||||||
Net loss
|
- | - | - | (10,862 | ) | (10,862 | ) | |||||||||||||||||
Balance December 31,
2008
|
17,950,000 | 1,795 | 10,963 | (23,516 | ) | (10,758 | ) | |||||||||||||||||
Common stock issued for
cash
|
5,150,000 | 515 | 514,485 | 515,000 | ||||||||||||||||||||
Contribution
receivable
|
(10,000 | ) | (10,000 | ) | ||||||||||||||||||||
Contribution to
capital
|
100 | 100 | ||||||||||||||||||||||
Net loss
|
- | - | - | (102,465 | ) | (102,465 | ) | |||||||||||||||||
Balance September 30,
2009
|
23,100,000 | 2,310 | 525,548 | (10,000 | ) | (125,981 | ) | 391,877 |
(The accompanying
notes are an integral part of these financial statements.)
F-4
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Interim Statements of Cash Flows for the
periods ended
September 30, 2009 and September 30,
2008
And for the period from inception
(September 8, 1999) to September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
Cumulative
|
||||||||||||
Since
|
Sept. 30,
|
Sept. 30
|
||||||||||
Inception
|
2009
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Cash Flows from Operating
Activities
|
||||||||||||
Net loss
|
(125,981 | ) | (102,465 | ) | ||||||||
Changes in non-cash working
capital
|
||||||||||||
Accounts
payable
|
38,119 | 38,119 | - | |||||||||
Accrued professional
fees
|
6,568 | (4,190 | ) | - | ||||||||
Net cash used in operating
activities
|
(81,294 | ) | (68,536 | ) | - | |||||||
Cash Flows from Financing
Activities
|
||||||||||||
Issuance of common shares for
cash
|
516,795 | 515,000 | ||||||||||
Subscriptions
receivable
|
(10,000 | ) | (10,000 | ) | ||||||||
Contribution to
capital
|
11,063 | 100 | - | |||||||||
Net cash provided by financing
activities
|
517,858 | 505,100 | - | |||||||||
Net Change in
Cash
|
436,564 | 436,564 | - | |||||||||
Cash- beginning of
period
|
- | - | - | |||||||||
Cash - end of
period
|
436,564 | 436,564 | - | |||||||||
Supplemental Cash Flow
Information
|
||||||||||||
Interest
paid
|
- | - | - | |||||||||
Income taxes
paid
|
- | - | - |
(The accompanying notes are an integral part of
these financial statements.)
F-5
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
1.
|
Nature of Business and
Operations
|
Offshore Petroleum Corp. (the
"Company"), was originally incorporated on September 8, 1999 as Enviroclens Inc.
under the laws of the State of New York. On December 13, 2006, Enviroclens
ceased doing business in the State of New York and
was re-domiciled in the State of Delaware on January 23,
2007. On May 9, 2007 the Company changed its name to Offshore Petroleum
Corp. The Company has the authority to issue 200,000,000 shares
of common stock, par value $.0001 per share.
The accompanying unaudited interim
financial statements have been prepared in accordance with the instructions to
Form 10Q and do not include all the information and footnotes required by
complete financial statements. In the opinion of management all adjustments
considered necessary for fair presentation have been
included.
Unaudited interim financial statements
should be read in conjunction with the Company’s audited annual financial
statements. Operating results for the interim periods are not necessarily
indicative of the results that may be expected for the year ended December 31,
2009.
2.
|
Going
Concern
|
The Company's financial statements are
presented on a going concern basis, which contemplates the realization of assets
and satisfaction of liabilities in the normal course of
business.
The Company is in the development stage
and has not yet realized revenues from its planned operations. The
Company has incurred a cumulative loss of $125,981 from inception to September
30, 2009 and has funded operations through the sale of capital stock and
additional paid-in capital.
The Company raised $515,000 through the
issuance of capital stock. Management’s plan is to raise additional funds
through future equity financing until it achieves profitable operations from its
activities.
3.
|
Summary of Significant Accounting
Policies
|
The accounting policies of the Company
are in accordance with accounting principles generally accepted in the United
States of America and their basis of application is consistent with that of the
previous year. Outlined below are the significant accounting
policies:
Basis of
Presentation
a)
|
Cash and Cash
Equivalents
|
Cash consists of cash and cash
equivalents, which are short-term, highly liquid investments with original terms
to maturity of 90 days or less.
b)
|
Short-Term
Investments
|
Short-term investments include money
market instruments and commercial paper carried at the lower of cost or market
value.
F-6
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
3.
|
Summary of Significant Accounting
Policies, cont.
|
c) Stock Based
Compensation
All awards granted to employees and
non-employees are valued at fair value using the Black-Scholes option pricing
model and recognized on a straight line basis over the service periods of each
award. Equity instruments issued in exchange for the receipt of goods or
services from other than employees. Costs are measured at the
estimated fair market value of the consideration received or the estimated fair
value of the equity instruments issued, whichever is more reliably
measurable. The value of equity instruments issued for consideration
other than employee services is determined on the earlier of a performance
commitment or completion of performance by the provider of goods or
services.
There was no stock-based compensation
expense relating to employees and non employees for the periods
presented.
d) Use of Estimates
Preparation of financial statements in
accordance with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and related notes to financial
statements.
These estimates are based on
management's best knowledge of current events and actions the Company may
undertake in the future. Actual results may ultimately differ from such
estimates. Significant estimates include accruals.
e) Income taxes
The Company recognizes deferred tax
assets and liabilities for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Deferred income
taxes are provided using the liability method. Under the liability method,
deferred income taxes are recognized for all significant temporary differences
between the tax and financial statement bases of assets and
liabilities.
Current income tax expense (recovery) is
the amount of income taxes expected to be payable (recoverable) for the current
period. A deferred tax asset and/or liability is computed for both the expected
future impact of differences between the financial statement and tax bases of
assets and liabilities and for the expected future tax benefit to be derived
from tax losses. Valuation allowances are established when necessary to reduce
deferred tax asset to the amount expected to be “more likely than not” realized
in future tax returns. Tax law and rate changes are reflected in income in the
period such changes are enacted.
f)
Comprehensive
Income
In addition to items included in net
income, comprehensive income includes items currently charged or credited
directly to stockholders’ equity, such as foreign currency translation
adjustments.
F-7
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
3.
|
Summary of Significant Accounting
Policies (cont’d.)
|
g)
Recent Accounting
Pronouncements
FASB ASC TOPIC 805 – “Business
Combinations.” The objective of this topic is to enhance the information
that an entity provides in its financial reports about a business combination
and its effects. The Topic mandates: (i) how the acquirer recognizes and
measures the assets acquired, liabilities assumed and any non-controlling
interest in the acquiree; (ii) what information to disclose in its financial
reports and; (iii) recognition and measurement criteria for goodwill acquired.
This Topic is effective for any acquisitions made on or after December 15,
2008. The adoption of this Topic did not have a material impact on
the Company’s financial statements and disclosures.
FASB ASC TOPIC 810 – “Noncontrolling
Interests.” The objective of this Topic is to improve the relevance,
comparability, and transparency of the financial information that a reporting
entity provides in its consolidated financial statements by establishing
accounting and reporting standards that require: (i) the ownership interests in
subsidiaries held by parties other than the parent be clearly identified,
labeled, and presented in the consolidated statement of financial position
within equity, but separate from the parent's equity; (ii) the amount of
consolidated net income attributable to the parent and to the noncontrolling
interest be clearly identified and presented on the face of the consolidated
statement of income; (iii) changes in a parent's ownership interest while the
parent retains its controlling financial interest in its subsidiary be accounted
for consistently; (iv) when a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. The gain or loss on the deconsolidation of the subsidiary is
measured using the fair value of any noncontrolling equity investment rather
than the carrying amount of that retained investment and; (v) entities provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling
owners. This Topic is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. Earlier
adoption is prohibited. The adoption of this Topic did not have a
material impact on the Company’s financial statements and
disclosures.
FASB ASC TOPIC 815 – “Derivatives and
Hedging.” The use and complexity of derivative instruments and hedging
activities have increased significantly over the past several
years. This Topic requires enhanced disclosures about an entity's
derivative and hedging activities and thereby improves the transparency of
financial reporting. This Topic is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged. The adoption of this Topic did not have
a material impact on the Company’s financial statements and
disclosures.
FASB ASC TOPIC 944 – “Financial Services
– Insurance.” Diversity exists in practice in accounting for
financial guarantee insurance contracts by insurance enterprises. That diversity
results in inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been incurred. This
Topic requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Topic is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and all interim periods within those fiscal years, except for
some disclosures about the insurance enterprise's risk-management
activities. The adoption of this Topic did not have a material impact
on the Company’s financial statements and disclosures.
F-8
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
3.
|
Summary of Significant Accounting
Policies (cont’d.)
|
FASB ASC TOPIC 855 -
“Subsequent Events.” In May 2009, the FASB issued Topic 855, which establish
general standards of accounting and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. In particular, this Topic sets forth : (i) the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, (ii) the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, (iii) the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This Topic
should be applied to the accounting and disclosure of subsequent events. This
Topic does not apply to subsequent events or transactions that are within the
scope of other applicable accounting standards that provide different guidance
on the accounting treatment for subsequent events or transactions. This Topic
was effective for interim and annual periods ending after June 15, 2009. The
adoption of this Topic did not have a material impact on the Company’s financial
statements and disclosures.
FASB ASC TOPIC 105 - “The FASB
Accounting Standard Codification and the Hierarchy of Generally Accepted
Accounting Principles.” In June 2009, the FASB issued Topic 105, which became
the source of authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. On the effective date of this Topic, the Codification will
supersede all then-existing non-SEC accounting and reporting standards. All
other non-SEC accounting literature not included in the Codification will become
non-authoritative. This Topic identifies the sources of accounting principles
and the framework for selecting the principles used in preparing the financial
statements of nongovernmental entities that are presented in conformity with
GAAP and arranged these sources of GAAP in a hierarchy for users to apply
accordingly. This Topic is effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The adoption of this topic
did not have a material impact on the Company’s disclosure of the financial
statements.
FASB ASC TOPIC 320 - “Recognition and
Presentation of Other-Than-Temporary Impairments.” In April
2009, the FASB issued Topic 320 amends the other-than-temporary impairment
guidance in GAAP for debt securities to make the guidance more operational and
to improve the presentation and disclosure of other-than-temporary impairments
on debt and equity securities in the financial statements. This Topic does not
amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities. The Topic is effective
for interim and annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. Earlier adoption for
periods ending before March 15, 2009, is not permitted. This Topic does not
require disclosures for earlier periods presented for comparative purposes at
initial adoption. In periods after initial adoption, this Topic requires
comparative disclosures only for periods ending after initial adoption. The
adoption of this Topic did not have a material impact on the Company’s financial
statements and disclosures.
FASB ASC TOPIC 860 - “Accounting for
Transfer of Financial Assets and Extinguishment of Liabilities.” In
June 2009, the FASB issued additional guidance under Topic 860 which improves
the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred
F-9
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
3.
|
Summary of Significant Accounting
Policies (cont’d.)
|
financial assets. This additional
guidance requires that a transferor recognize and initially measure at fair
value all assets obtained (including a transferor’s beneficial interest) and
liabilities incurred as a result of a transfer of financial assets accounted for
as a sale. Enhanced disclosures are required to provide financial statement
users with greater transparency about transfers of financial assets and a
transferor’s continuing involvement with transferred financial assets. This
additional guidance must be applied as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period and for interim and
annual reporting periods thereafter. Earlier application is prohibited. This
additional guidance must be applied to transfers occurring on or after the
effective date. The adoption of this Topic is not expected to have a
material impact on the Company’s financial statements and
disclosures.
FASB ASC TOPIC 810 - “Consolidation of
Variables Interest and Special Purpose Entities.” In June 2009, the
FASB issued Topic 810, which requires an enterprise to perform an analysis to
determine whether the enterprise’s variable interest or interests give it a
controlling financial interest in a variable interest entity. This analysis
identifies the primary beneficiary of a variable interest entity as the
enterprise that has both of the following characteristics: (i)The power to
direct the activities of a variable interest entity that most significantly
impact the entity’s economic performance and (ii)The obligation to absorb losses
of the entity that could potentially be significant to the variable interest
entity or the right to receive benefits from the entity that could potentially
be significant to the variable interest entity. Additionally, an enterprise is
required to assess whether it has an implicit financial responsibility to ensure
that a variable interest entity operates as designed when determining whether it
has the power to direct the activities of the variable interest entity that most
significantly impact the entity’s economic performance. This Topic requires
ongoing reassessments of whether an enterprise is the primary beneficiary of a
variable interest entity and eliminate the quantitative approach previously
required for determining the primary beneficiary of a variable interest entity,
which was based on determining which enterprise absorbs the majority of the
entity’s expected losses, receives a majority of the entity’s expected residual
returns, or both. This Topic is effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and
annual reporting periods thereafter. Earlier application is
prohibited. The adoption of this Topic is not expected to have a
material impact on the Company’s financial statements and
disclosures.
FASB ASC TOPIC 820 - “Fair Value
measurement and Disclosures”, an Accounting Standard Update. In September 2009,
the FASB issued this Update to amendments to Subtopic 82010, “Fair Value
Measurements and Disclosures”. Overall, for the fair value measurement of
investments in certain entities that calculates net asset value per share (or
its equivalent). The amendments in this Update permit, as a practical expedient,
a reporting entity to measure the fair value of an investment that is within the
scope of the amendments in this Update on the basis of the net asset value per
share of the investment (or its equivalent) if the net asset value of the
investment (or its equivalent) is calculated in a manner consistent with the
measurement principles of Topic 946 as of the reporting entity’s measurement
date, including measurement of all or substantially all of the underlying
investments of the investee in accordance with Topic 820. The amendments in this
Update also require disclosures by major category of investment about the
attributes of investments within the scope of the amendments in this Update,
such as the nature of any restrictions on the investor’s ability to redeem its
investments at the measurement date, any unfunded commitment, and the investment
strategies of the investees. The major category of investment is required to be
determined on the basis of the nature and risks of the investment in a manner
consistent with the guidance for major security types in GAAP on investments in
debt and equity securities in paragraph 320-10-50-lB. The disclosures are
required for all investments within the scope of the amendments in this Update
regardless of whether the fair value of the investment is measured using the
practical expedient. The amendments in this Update apply to all reporting
entities that hold an investment that is required or permitted to be
measured or disclosed at fair value on a recurring or non recurring basis and,
as of the reporting entity’s measurement date, if the investment meets certain
criteria The amendments in this Update are effective for the interim and annual
periods ending after December 15, 2009. Early application is permitted in
financial statements for earlier interim and annual periods that have not been
issued. The adoption of this Topic did not have a material impact on
the Company’s financial statements and
disclosures.
F-10
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
3.
|
Summary of Significant Accounting
Policies (cont’d.)
|
FASB ASC TOPIC 740 - “Income Taxes”, an
Accounting Standard Update. In September 2009, the FASB issued this Update to
address the need for additional implementation guidance on accounting for
uncertainty in income taxes. For entities that are currently applying the
standards for accounting for uncertainty in income taxes, the guidance and
disclosure amendments are effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The adoption of
this Update did not have a material impact on the Company’s financial statements
and disclosures.
4.
|
Capital
Stock
|
Year ended
December 31, 1999
In August 1999, NatQuote Financial Inc.
was presented with a business opportunity in the bottle cleaning and
sterilization industry. The
then proposed the bottle cleaning business did not fit with Natquote’s
core business. However, Natquote’s major shareholder requested that the
opportunity be pursued on behalf of Natquote and its
shareholders.
Natquote formed a new corporation, Enviroclens Inc.,
incorporated in the State of New York, on September 8, 1999, to pursue the bottle cleaning
business. In consideration for the assignment
of the business opportunity
from Natquote, it was
agreed that NatQuote would be issued 1,795,000 common shares of Enviroclens Inc.
at par value.
Year ended
December 31, 2002
In September 2002, NatQuote Financial Inc. Natquote assigned its right to receive shares of Enviroclens
Inc. to their shareholders as a stock dividend. To effect this assignment NatQuote
effected a 10:1 stock split for a total of 17,950,000 common
shares.
Year ended
December 31, 2005
In November 2005, the Board of Directors
of the Company resolved to terminate the bottle
sanitization business .
F-11
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
Year ended
December 31, 2007
In February 2007 the Board of Directors
approved the sale of 17,052,500 of the Company’s common shares to Roman Marble
Marketing Company. Of the 17,052,500 common shares sold in the transaction, 16,525,200 were held by J. Paul Hines
and 527,300 were held by his company, Ship Island Investments
Ltd.
In May 2007 the Board of Directors of
the Company resolved to change the Company name to
Offshore Petroleum Corp. The Company also was
re-domiciled in Delaware.
4.
|
Capital
Stock
|
Year ended
December 31, 2008
In September 2008, the Board of
Directors approved the sale of 17,052,500 common shares of the Company by Roman
Marble Marketing Company to an investment group.
Period ended
September 30, 2009
The Company raised $515,000 through the
issuance of 5,150,000 capital stock at a share price of $0.10 per
share.
5.
|
Employee Stock Option
Plan
|
In September 2008, the Company approved an employee stock option plan
("2008 Stock Option Plan"), the purpose of which is to enhance the
Company's stockholder value and financial performance by attracting, retaining
and motivating the Company's directors, key employees, consultants and to
encourage stock ownership by such individuals by providing them with a means to
acquire a proprietary interest in the Company's success through stock ownership.
Under the 2008 Stock Option Plan, directors, employees and consultants who
provide services to the Company may be granted incentive options and
non-statutory Stock Options to acquire
common shares of the Company at not less than 110 percent of the fair market
value of the stock on the date of grant. Options will have a term of
5 years. The total number of shares reserved for issuance under the
2008 Stock Option Plan is 5,000,000. As of September 30, 2009, no
options were granted under the 2008 Stock Option Plan.
6.
|
Changes in Directors and
Management
|
|
a)
|
Mr. J. Paul Hines was appointed
the sole director of the Company, then known as
“Enviroclens
Inc.” as part of its incorporation and
organization. He resigned on February 24,
2007.
|
|
b)
|
On February 23, 2007, Todd Montgomery was appointed the
sole director of the
Company, then known as “Enviroclens Inc.” and on May 9, 2007 the
Company’s name was changed to
Offshore Petroleum Corp. Todd Montgomery subsequently
resigned on September 16,
2008.
|
|
c)
|
On September 15, 2008 John
Rainwater and Mickey Wiesinger were appointed directors of the Company.
On March 12, 2009 Ryan Bateman was
appointed a director of the
Company.
|
F-12
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
7.
|
Commitments and
Contingencies
|
The Company has entered into a one year
renewable contract with Lance Capital Corp. for consulting services commencing
January 1, 2009, at a rate of $7,500 per month.
The Company resolved to issue through a
private placement 30,000,000 common shares for total cash consideration of
$3,000,000. These common shares are to be issued at $0.10 per share. As of
September 30, 2009, 5,150,000 common shares for $515,000 had been
issued.
F-13
OFFSHORE PETROLEUM
CORP.
(Formerly Enviroclens
Inc.)
(An Exploration Stage
Company)
Notes to the interim financial
statements
September 30, 2009
(Amounts expressed in US
Dollars)
(Unaudited – Prepared by
Management)
8.
|
Subsequent
Events
|
The Company has reviewed subsequent
events up to November 30, 2009.
The Company operates with the intent of
acquiring oil and gas offshore exploration rights from the Commonwealth of the
Bahamas.
On October 20, 2009, the Company entered
into a Consulting Agreement with Pembroke Communications Corp. (“Pembroke”) for certain consulting services for a
term of expiring September 20, 2011. The Company shall issue 1,500,000 shares of
restricted common stock of the Company which shall be earned in the following
manner: 1,500,000 shares will be earned by Pembroke in equal
installments of 500,000 shares on April 1, 2010, October 1, 2010 and April 1,
2011. The Consultant must return any unearned shares upon termination
of the Consulting Agreement.
On October 20, 2009, the Company entered
into a Consulting Agreement with Power One Capital Corp. (“Power One”) for certain consulting services for a
term of expiring September 20, 2011. The Company shall issue 1,500,000 shares of
restricted common stock of the Company which shall be earned in the following
manner: 1,500,000 shares will be earned by Power One in equal
installments of 500,000 shares on April 1, 2010, October 1, 2010 and April 1,
2011. The Consultant must return any unearned shares upon termination
of the Consulting Agreement.
On
November 30, 2009, the Company closed in escrow a Share Exchange Agreement with
NPT Oil Corporation Ltd, a Cayman Islands company (“NPT”) to purchase from NPT
all of the equity stock of the Subsidiaries (the “Share Exchange
Agreement”). Pursuant to the Share Exchange Agreement, upon the
breaking of escrow and completion of the closing, Offshore will pay
consideration to NPT consisting of: (a) 15 million common shares of
Offshore and (b) a promissory note with a face amount of $1.5 million payable
over a two-year term and bearing interest at 5%. Concurrent with the
execution of the Share Exchange Agreement, NPT assigned to its own shareholders
all of the shares of Offshore to be issued upon closing of the Share Exchange
Agreement. The breaking of escrow and closing of the Share Exchange
Agreement is contingent upon certain closing conditions, including the granting
of the Licenses by the Bahamian Government.
F-14
OFFSHORE
PETROLEUM CORPORATION
(FORMERLY
ENVIROCLENS INC.)
(AN
EXPLORATION STAGE COMPANY)
FINANCIAL
STATEMENTS
YEARS
ENDED DECEMBER 31, 2008 AND 2007
(Amounts
expressed in US Dollars)
CONTENTS
Report
of Independent Registered Public Accounting Firm
|
F-16
|
Balance
Sheets as of December 31, 2008 and December 31, 2007
|
F-17
|
Statements
of Operations and Comprehensive Loss for the years ended
|
|
December
31, 2008 and December 31, 2007 and for the period from
inception
|
|
(September
8, 1999) to December 31, 2008
|
F-18
|
Statements
of Changes in Stockholders' Deficiency for the years ended
|
|
December
31, 2008 and December 31, 2007 and for the period from
inception
|
|
(September
8, 1999) to December 31, 2008
|
F-19
|
Statements
of Cash Flows for the years ended December 31, 2008 and
|
|
December
31, 2007 and for the period from inception (September 8,
1999)
|
|
to
December 31, 2008
|
F-20
|
Notes
to Financial Statements
|
F-21 -
F-28
|
F-15
Schwartz
Levitsky Feldman llp
CHARTERED
ACCOUNTANTS
LICENSED
PUBLIC ACCOUNTANTS
TORONTO
· MONTREAL
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Offshore
Petroleum Corp.
(An
Exploration Stage Company)
We have
audited the accompanying balance sheets of Offshore Petroleum Corp.
(an Exploration Stage Company) as at December 31, 2008 and 2007 and
the related statements of operations and comprehensive loss, cash
flows and stockholders’ deficiency for the years ended December 31, 2008 and
2007 and for the period from inception (September 8, 1999) to December 31, 2008.
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Offshore Petroleum Corp. as at
December 31, 2008 and 2007 and the results of its operations and its cash flows
for the years ended December 31, 2008 and 2007 and for the period from inception
(September 8, 1999) to December 31, 2008 in conformity with United States
generally accepted accounting principles.
The
company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company’s internal controls
over financial reporting. Accordingly, we express no such opinion.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is an exploration stage company and has no
established source of revenues. These conditions raise substantial doubt about
its ability to continue as a going concern. Management’s plans
regarding these matters are also described in the notes to the financial
statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
SCHWARTZ
LEVITSKY FELDMAN LLP
|
|
Toronto,
Ontario, Canada
|
Chartered
Accountants
|
June
19, 2009
|
Licensed
Public Accountants
|
1167
Caledonia Road
Toronto,
Ontario M6A 2X1
Tel: 416
785 5353
Fax: 416
785 5663
F-16
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Balance
Sheets as at
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
2008
|
2007
|
|||||||
$
|
$
|
|||||||
LIABILITIES
|
||||||||
Current
|
||||||||
Accounts
payable
|
- | - | ||||||
Accrued
professional fees
|
10,758 | |||||||
Total
Current Liabilities
|
10,758 | - | ||||||
Total
Liabilities
|
10,758 | - | ||||||
Going Concern (note
2)
|
||||||||
Related Party Transactions
(note 6)
|
||||||||
Subsequent Events (note
9)
|
||||||||
STOCKHOLDERS'
DEFICIENCY
|
||||||||
Capital Stock (note
4)
|
||||||||
Common
stock, $0.0001 par value, 200,000,000 shares authorized, 17,950,000 issued
and outstanding (2007 -17,950,000)
|
1,795 | 1,795 | ||||||
Additional
Paid-in Capital
|
10,963 | 10,859 | ||||||
Deficit
Accumulated During the Exploration Stage
|
(23,516 | ) | (12,654 | ) | ||||
Total
Stockholders' Deficiency
|
(10,758 | ) | - | |||||
Total
Liabilities and Stockholders' Deficiency
|
- | - |
(The
accompanying notes are an integral part of these financial
statements.)
F-17
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Statements
of Operations and Comprehensive Loss
For The
Years Ended December 31, 2008 and 2007
And for
the period from inception (September 8, 1999)
to
December 31, 2008
(Amounts
expressed in US Dollars)
Cumulative
|
||||||||||||
Since
|
||||||||||||
Inception
|
2008
|
2007
|
||||||||||
$
|
$
|
$
|
||||||||||
Expenses
|
||||||||||||
General
and administrative
|
23,516 | 10,862 | 3,285 | |||||||||
Total
Expenses
|
23,516 | 10,862 | 3,285 | |||||||||
Loss
Before Income Taxes
|
(23,516 | ) | (10,862 | ) | (3,285 | ) | ||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
Loss and Comprehensive Loss
|
(23,516 | ) | (10,862 | ) | (3,285 | ) | ||||||
Loss
per Weighted Average Number of Shares Outstanding- Basic and
Diluted
|
(0.00 | ) | (0.00 | ) | ||||||||
Basic
Weighted Average Number of Shares Outstanding During the
Years
|
||||||||||||
-
Basic and Diluted
|
17,950,000 | 17,950,000 |
(The
accompanying notes are an integral part of these financial
statements.)
F-18
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Statements
of Stockholders' Deficiency for the years ended
December
31, 2008 and December 2007
And for
the period from inception (September 8, 1999)
to
December 31, 2008
(Amounts
expressed in US Dollars)
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Common Stock
|
Additional
|
during
the
|
Total
|
|||||||||||||||||
Number
|
Paid-in
|
Exploration
|
Stockholders'
|
|||||||||||||||||
of
Shares
|
Amount
|
Capital
|
Stage
|
Deficiency
|
||||||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||||||
For
the period from inception (September 8, 1999) through January 1,
2006
|
17,950,000 | 1,795 | 7,574 | 9,369 | ||||||||||||||||
Net
loss
|
- | - | - | (9,369 | ) | (9,369 | ) | |||||||||||||
Balance,
December 31, 2006
|
17,950,000 | 1,795 | 7,574 | (9,369 | ) | - | ||||||||||||||
Contribution
to additional paid-in capital
|
- | - | 3,285 | 3,285 | ||||||||||||||||
Net
loss
|
- | - | - | (3,285 | ) | (3,285 | ) | |||||||||||||
Balance,
December 31, 2007
|
17,950,000 | 1,795 | 10,859 | (12,654 | ) | - | ||||||||||||||
Contribution
to additional paid-in capital
|
104 | 104 | ||||||||||||||||||
Net
loss
|
- | - | - | (10,862 | ) | (10,862 | ) | |||||||||||||
Balance
December 31, 2008
|
17,950,000 | 1,795 | 10,963 | (23,516 | ) | (10,758 | ) |
F-19
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Statements
of Cash Flows for the years
December
31, 2008 and 2007
And for
the period from inception (September 8, 1999)
to
December 31, 2008
(Amounts
expressed in US Dollars)
Cumulative
|
||||||||||||
Since
|
||||||||||||
Inception
|
|
2008
|
2007
|
|||||||||
$
|
$
|
$
|
||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
loss
|
(23,516 | ) | (10,862 | ) | (3,285 | ) | ||||||
Changes
in non-cash working capital
|
||||||||||||
Accrued
professional fees
|
10,758 | 10,758 | - | |||||||||
Net
cash used in operating activities
|
(12,758 | ) | (104 | ) | (3,285 | ) | ||||||
Cash
Flows from Financing Activities
|
||||||||||||
Issuance
of common shares for cash
|
1,795 | |||||||||||
Additional
Paid In Capital
|
10,963 | 104 | 3,285 | |||||||||
Net
cash provided by financing activities
|
12,758 | 104 | 3,285 | |||||||||
Net
Change in Cash
|
- | - | - | |||||||||
Cash-
beginning of year
|
- | - | - | |||||||||
Cash
- end of year
|
- | - | - | |||||||||
Supplemental
Cash Flow Information
|
||||||||||||
Interest
paid
|
- | - | - | |||||||||
Income
taxes paid
|
- | - | - |
F-20
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
1. Nature
of Business and Operations
Offshore
Petroleum Corp. (the "Company"), was originally incorporated on September 8,
1999 as Enviroclens Inc. under the laws of the State of New York. On
December 13, 2006, Enviroclens ceased doing business in the State of New York
and was re-domiciled in the State of Delaware on January 23, 2007. On May
9, 2007 the Company changed its name to Offshore Petroleum Corp. The
Company has the authority to issue 200,000,000 shares of common stock, par value
$.0001 per share.
2.
|
Going
Concern
|
The
Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The
Company is in the development stage and has not yet realized revenues from its
planned operations. The Company has incurred a cumulative loss of
$23,516 from inception to December 31, 2008 and has funded operations through
additional paid-in capital.
Subsequent
to year end the Company raised $495,000 through the issuance of capital stock.
Management’s plan is to raise additional funds through future equity financing
until it achieves profitable operations from its activities.
F-21
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
3.
|
Summary
of Significant Accounting Policies
|
The
accounting policies of the Company are in accordance with accounting principles
generally accepted in the United States of America and their basis of
application is consistent with that of the previous year. Outlined
below are the significant accounting policies:
Basis of
Presentation
a)
|
Stock
Based Compensation
|
In
December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued FASB
Statement No.123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”), which is
a revision of FASB Statement No.123, Accounting for Stock-Based
Compensation. SFAS 123(R) requires expense for all share-based
payments to employees, including grants of employee stock options, to be
recognized in the income statement based on their fair values. Pro
forma disclosure is no longer an alternative. The Company had adopted
the provisions of SFAS 123 (R) on July 1, 2005. All awards granted to employees
and non-employees after June 30, 2005 are valued at fair value in accordance
with the provisions of SFAS 123 (R) by using the Black-Scholes option pricing
model and recognized on a straight line basis over the service periods of each
award. The Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance with SFAS
No. 123 and the conclusions reached by the Emerging Issues Task Force (“EITF”)
in Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring or in Conjunction with Selling Goods or
Services”. Costs are measured at the estimated fair market value of
the consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined
on the earlier of a performance commitment or completion of performance by the
provider of goods or services as defined by EITF No. 96-18.
There was
no stock-based compensation expense relating to employees and non employees for
the years ended December 31, 2008 and 2007.
b)
|
Use
of Estimates
|
Preparation
of financial statements in accordance with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
related notes to financial statements. These estimates are based on management's
best knowledge of current events and actions the Company may undertake in the
future. Actual results may ultimately differ from such estimates. Significant
estimates include accruals.
F-22
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
3.
|
Summary
of Significant Accounting Policies
(cont’d.)
|
c)
|
Income
taxes
|
|
The
Company accounts for income taxes under the provisions of SFAS No. 109,
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred income taxes are provided
using the liability method. Under the liability method, deferred income
taxes are recognized for all significant temporary differences between the
tax and financial statement bases of assets and
liabilities.
|
|
Current
income tax expense (recovery) is the amount of income taxes expected to be
payable (recoverable) for the current period. A deferred tax asset and/or
liability is computed for both the expected future impact of differences
between the financial statement and tax bases of assets and liabilities
and for the expected future tax benefit to be derived from tax losses.
Valuation allowances are established when necessary to reduce deferred tax
asset to the amount expected to be “more likely than not” realized in
future tax returns. Tax law and rate changes are reflected in income in
the period such changes are
enacted.
|
d)
|
Comprehensive
Income
|
|
The
Company has adopted SFAS No. 130 Reporting Comprehensive Income. This
standard requires companies to disclose comprehensive income in their
consolidated financial statements. In addition to items included in net
income, comprehensive income includes items currently charged or credited
directly to stockholders’ equity, such as foreign currency translation
adjustments.
|
e)
|
Recent
Accounting Pronouncements
|
In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) – the fair value option
for financial assets and liabilities including in amendment of SFAS 115. This
Statement permits entities to choose to measure many financial instruments and
certain other items at fair value. The objective is to
improve financial reporting
by providing entities with the
opportunity to mitigate volatility in
reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair
value measurement objectives for accounting for financial instruments. This
Statement is effective as of the beginning of an entity’s first fiscal year that
begins after November15, 2007, and interim periods within those fiscal
years. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FASB Statement No. 157, Fair value
measurements. The Company is currently evaluating the impact of SFAS
No. 159 on its financial statements.
F-23
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
3.
|
Summary
of Significant Accounting Policies
(cont’d.)
|
In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the fundamental requirements in Statement 141 that the acquisition method of
accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and requirements for how
the acquirer: a) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree; b) recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase and c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) will apply prospectively to business combinations for which the
acquisition date is on or after Company’s fiscal year beginning May 1, 2009. The
Company is currently assessing the impact of FAS 141 (R).
In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the deconsolidation of a Subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company’s fiscal year
beginning May 1, 2009. The Company is currently assessing the impact of FAS
160.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities—an amendment of FASB Statement No. 133” (“FAS 161”). FAS
161 changes the disclosure requirements for derivative instruments and hedging
activities. Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under Statement 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity’s financial position, financial performance, and cash flows.
The guidance in FAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged. This Statement encourages, but does not require,
comparative disclosures for earlier periods at initial adoption. The Company is
currently assessing the impact of FAS 161.
In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("SFAS 162"). SFAS 162 is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. GAAP for nongovernmental entities. SFAS 162 is
effective 60 days following the Securities and Exchange Commission's approval of
the Public Company Accounting Oversight Board auditing amendments to AU Section
411, "The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles." The Company does not expect SFAS 162 to have a material
effect on its consolidated financial statements.
F-24
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
3.
|
Summary
of Significant Accounting Policies
(cont’d.)
|
In May
2008, the FASB issued Statement of Financial Accounting Standards No. 163 ("SFAS
163"), "Accounting for Financial Guarantee Insurance Contracts – an
interpretation of FASB Statement No. 60." SFAS 163 prescribes accounting for
insures of financial obligations, bringing consistency to recognizing and
recording premiums and to loss recognition. SFAS 163 also requires expanded
disclosures about financial guarantee insurance contracts. Except for some
disclosures, SFAS 163 is effective for financial statements issued for fiscal
years beginning after December 15, 2008. The adoption of SFAS 163 will not have
an impact on the results of operations or financial position of the
Company.
4.
|
Capital
Stock
|
Year ended December 31,
1999
In August
1999, NatQuote Financial Inc. was presented with a business opportunity in the
bottle cleaning and sterilization industry. The then proposed the bottle
cleaning business did not fit with Natquote’s core business. However,
Natquote’s major shareholder requested that the opportunity be pursued on behalf
of Natquote and its shareholders.
Natquote
formed a new corporation, Enviroclens Inc., incorporated in the State of New
York, on September 8, 1999, to pursue the bottle cleaning
business. In consideration for the assignment of the business
opportunity from Natquote, it was agreed that NatQuote would be issued 1,795,000
common shares of Enviroclens Inc. at par value.
Year ended December 31,
2002
In
September 2002, NatQuote Financial Inc. Natquote assigned its right to receive
shares of Enviroclens Inc. to their shareholders as a stock
dividend. To effect this assignment NatQuote effected a 10:1 stock
split for a total of 17,950,000 common shares.
Year ended December 31,
2005
In
November 2005, the Board of Directors of the Company resolved to terminate the
bottle sanitization business.
Year ended December 31,
2007
In
February 2007 the Board of Directors approved the sale of 17,052,500 of the
Company’s common shares to Roman Marble Marketing Company. Of the
17,052,500 common shares sold in the transaction, 16,525,200 were held by J.
Paul Hines and 527,300 were held by his company, Ship Island Investments
Ltd.
F-25
In May
2007 the Board of Directors of the Company resolved to change the Company name
to Offshore Petroleum Corp. The Company also was re-domiciled in
Delaware.
5.
|
Employee
Stock Option Plan
|
In
September 2008, the Board of Directors approved an employee stock option plan
("2008 Stock Option Plan"), the purpose of which is to enhance the Company's
stockholder value and financial performance by attracting, retaining and
motivating the Company's directors, key employees, consultants and to encourage
stock ownership by such individuals by providing them with a means to acquire a
proprietary interest in the Company's success through stock ownership. Under the
2008 Stock Option Plan, directors, employees and consultants who provide
services to the Company may be granted incentive options and non statutory
Stock Options to acquire common shares of the Company at not less than 110
percent of the fair market value of the stock on the date of
grant. Options will have a term of 5 years. The total
number of shares reserved for issuance under the 2008 Stock Option Plan is
5,000,000. As of December 31, 2008, no options were granted under the
2008 Stock Option Plan.
F-26
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
6.
|
Related
Party Transactions
|
From
inception to the year ended December, 2007, the Company expensed $12,654 to Ship
Island Investments Ltd., a private corporation owned by a director of the
Company for consulting services. Ship Island Investments Ltd. accepted payment
for these expenses in a combination of cash and additional paid in capital. This
transaction was measured at the exchange amount, which is the amount of
consideration established and agreed to by the related parties.
During
the year ended December 31, 2008 there were no related party
transactions.
7.
|
Changes
in Directors and Management
|
|
a)
|
Mr.
J. Paul Hines was appointed the sole director of the Company, then known
as “Enviroclens Inc.” on its incorporation and organization. He resigned
on February 24, 2007.
|
|
b)
|
On
February 23, 2007, Todd Montgomery was appointed the sole director of the
Company, then known as “Enviroclens Inc.” and on May 9, 2007 the Company’s
name was changed to Offshore Petroleum Corp. Todd Montgomery
subsequently resigned on September 16,
2008.
|
|
c)
|
On
September 15, 2008 John Rainwater and Mickey Wiesinger were appointed
directors of the Company.
|
F-27
OFFSHORE
PETROLEUM CORP.
(Formerly
Enviroclens Inc.)
(An
Exploration Stage Company)
Notes to
the financial statements
December
31, 2008 and 2007
(Amounts
expressed in US Dollars)
8.
|
Income
Taxes
|
a)
|
Deferred
Income Taxes
|
The
Company has deferred income tax assets as follows:
2008
|
2007
|
|||||||
$
|
$
|
|||||||
Net
operating loss carried forward
|
23,516 | 12,654 | ||||||
Deferred
Income tax on loss carried forward
|
8,113 | 4,366 | ||||||
Valuation
allowance
|
(8,113 | ) | (4,366 | ) | ||||
Deferred
income taxes
|
- | - |
Reconciliation
between the statutory federal income tax rate and the effective income tax rate
of income tax expense for the period ended December 31, 2008 and 2007 is as
follows:
2008
|
2007
|
|||||||
%
|
%
|
|||||||
Statutory
Federal income tax rate
|
34.5 | 34.5 | ||||||
Valuation
allowance
|
(34.5 | ) | (34.5 | ) |
The
Company has determined that realization of a deferred tax asset is not likely
and therefore a valuation allowance has been recorded against this deferred
income tax asset.
b)
|
Current
Income Taxes
|
As of
December 31, 2008 the Company has non-capital losses of approximately
$23,516 available to offset future taxable incomes which expire as
follows:
2026
|
$ | 9,369 | ||
2027
|
$ | 3,285 | ||
2028
|
$ | 10,862 |
9.
|
Subsequent
events
|
The
Company operates with the intent of acquiring oil and gas offshore exploration
rights.
The
Company has entered into a one year renewable contract with Lance Capital Corp.
for consulting services commencing January 1, 2009, at a rate of $7,500 per
month.
The
Company resolved to issue through a private placement 30,000,000 common shares
for total cash consideration of $3,000,000. These common shares are to be issued
at $0.10 per share. As of May 3, 2009, 4,950,000 common shares for $495,000 had
been issued.
F-28
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF DIRECTORS
Our
by-laws indemnify each person (including the heirs, executors, administrators,
or estate of such person) who is or was a director or officer of Offshore
Petroleum to the fullest extent permitted or authorized by current or future
legislation or judicial or administrative decision against all fines,
liabilities, costs and expenses, including attorney’s fees, arising out of his
or her status as a director, officer, agent, employee or
representative. The foregoing right of indemnification shall not be
exclusive of other rights to which those seeking an indemnification may be
entitled. Offshore Petroleum may maintain insurance, at its expense,
to protect itself and all officers and directors against fines, liabilities,
costs and expenses, whether or not Offshore Petroleum would have the legal power
to indemnify them directly against such liability.
Costs,
charges, and expenses (including attorney’s fees) incurred by a person referred
to above in defending a civil or criminal proceeding shall be paid by Offshore
Petroleum in advance of the final disposition thereof upon receipt of any
undertaking to repay all amounts advanced if it is ultimately determined that
the person is not entitled to be indemnified by Offshore Petroleum and upon
satisfaction of other conditions required by current or future
legislation.
If this
indemnification or any portion of it is invalidated on any ground by a court of
competent jurisdiction, Offshore Petroleum nevertheless indemnifies each person
described above to the fullest extent permitted by all portions of this
indemnification that have not been invalidated and to the fullest extent
permitted by law.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of Offshore
Petroleum pursuant to the foregoing provisions, or otherwise, be advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is therefore
unenforceable.
EXHIBITS
INDEX
The
following exhibits are filed as part of this registration
statement.
Exhibit
No.
|
Description
|
|
3.1
|
Certificate
of Incorporation of the Company filed on September 7, 1999 with the New
York Secretary of State
|
|
3.2
|
By
Laws of the Company
|
|
3.3
|
Certificate
of Conversion from a Non-Delaware Corporation to a Delaware Corporation
dated January 22, 2007
|
|
3.4
|
Certificate
of Amendment of the Certificate of Incorporation of the Company dated May
9, 2007 and filed with the Delaware Secretary of State on May 18,
2007
|
|
3.5
|
Certificate
of Amendment of the Certificate of Incorporation of the Company dated
September 8, 2008 and filed with the Delaware Secretary of State on
February 18, 2009
|
|
3.6
|
Code
of Ethics adopted as of June 15, 2009
|
|
3.7 |
Audit
Committee Charter
|
|
5.1
|
Legal
Opinion dated January 20, 2010 of Kavinoky Cook
LLP
|
- 41
-
10.1
|
Consulting
Services Agreement between the Company and Lance Capital Ltd. dated
January 1, 2009
|
|
10.2
|
2008
Stock Option Plan
|
|
10.3
|
Consulting
Agreement between the Company and Power One Capital Corp. dated
as of October 20, 2009
|
|
10.4
|
Consulting
Agreement between the Company and Pembroke Communications Corp. dated as
of October 20, 2009
|
|
10.5
|
Share
Exchange Agreement with NPT Oil Corporation Ltd.
|
|
Consent
of Schwartz Levitsky Feldman LLP dated January 25,
2010
|
||
23.2
|
Consent
of Kavinoky Cook LLP (included in Exhibit
5.1)
|
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table sets forth expenses, incurred or expected to be incurred by
Offshore Petroleum in connect with the registration of the securities being
offered by the selling shareholders. Items marked with an asterisk
(*) represent estimated expenses. We have agreed to pay all the costs
and expenses of this registration. Selling security holders will not
pay any part of these expenses.
SEC
Registration Fee
|
$ | 124.79 | ||
Legal
Fees and Expenses*
|
$ | 80,000.00 | ||
Accounting
Fees and Expenses*
|
$ | 30,000.00 | ||
Printing
|
$ | 1,000.00 | ||
Miscellaneous*
|
$ | 2,000.00 | ||
TOTAL*
|
$ | 113,124.79 |
RECENT
SALE OF UNREGISTERED SECURITIES
The
Company completed private placements of common stock at $0.10 per share from the
following accredited investors in the number of shares and on the dates set out
opposite their names:
Name
|
Shares
|
Date
Issued
|
|||
Sirius
Intervest Ltd.
|
1,000,000 |
April
14, 2009
|
|||
Allentown
Consulting Corp.
|
1,500,000 |
June
25, 2009
|
|||
Catalyst
Trading Inc.
|
750,000 |
April
28, 2009
|
|||
Steven
Pearce
|
500,000 |
April
28, 2009
|
|||
Zul
Rashid
|
200,000 |
May
1, 2009
|
|||
Sirius
Intervest Ltd.
|
1,000,000 |
May
8, 2009
|
|||
Zulfikar
Rashid
|
150,000 |
September
29, 2009
|
|||
Benjamin
Marler
|
50,000 |
September
30, 2009
|
|||
Shane
Manning
|
100,000 |
October
26, 2009
|
|||
Hubert
Manning
|
100,000 |
October
26, 2009
|
|||
Wade
Alexander
|
250,000 |
October
27, 2009
|
|||
Cottonwood
Investments
|
2,000,000 |
November
16, 2009
|
|||
Ray
Westall
|
250,000 |
November
16, 2009
|
|||
J.L.
Guerra, Jr.
|
500,000 |
November
25, 2009
|
|||
Pineview
Worldwide Corp.
|
1,000,000 |
December
4, 2009
|
- 42
-
The
Company entered into a Consulting Agreement with Pembroke Communications Corp.
(“Pembroke”) for certain consulting services for a term expiring September 20,
2011. The Company shall issue 1,500,000 shares of restricted common
stock of the Company which shall be earned in the following
manner: 1,500,000 shares will be earned by Pembroke in equal
installments of 500,000 shares on April 1, 2010, October 1, 2010 and April 1,
2011.
The
Company entered into a Consulting Agreement with Power One Capital Corp. (“Power
One”) for certain consulting services for a term expiring September 20,
2011. The Company shall issue 1,500,000 shares of restricted common
stock of the Company which shall be earned in the following
manner: 1,500,000 shares will be earned by Power One in equal
installments of 500,000 shares on April 1, 2010, October 1, 2010 and April 1,
2011.
The
Company completed a Share Exchange Agreement to acquire certain properties, and
the following shares were issued to the following, in the number of shares and
on the dates set out opposite their names:
Name
|
Shares
|
Date
Issued
|
|||
Ryan
Bateman
|
2,463,000 |
November
30, 2009
|
|||
John
Lowell Rainwater
|
3,806,000 |
November
30, 2009
|
|||
NPT
Fund
|
2,238,000 |
November
30, 2009
|
|||
Milo
Holdings Ltd.
|
4,477,000 |
November
30, 2009
|
|||
Mickey
W. Wiesinger
|
672,000 |
November
30, 2009
|
|||
Kevin
Gottshall
|
1,344,000 |
November
30, 2009
|
UNDERTAKINGS
The
undersigned Registrant hereby undertakes:
To file,
during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to:
(i)
|
Include
any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
|
(ii)
|
Reflect
in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration
statement;
|
(iii)
|
Include
any additional or changed material information on the plan of
distribution; and
|
(iv)
|
Remove
from registration any of the securities that remain unsold at the end of
the offering.
|
- 43
-
That, for
determining liability under the Securities Act, the Registrant shall treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
In the
event that a claim for indemnification against such liabilities, (other than the
payment by the Registrant of expenses incurred and paid by a director, officer
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding), is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
- 44
-
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-1 and authorized this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Bakersfield, California on January 26, 2010.
OFFSHORE
PETROLEUM CORP.
|
||
By:
|
/s/ John Rainwater
|
|
Name:
|
John
Rainwater
|
|
Chairman
of the Board, President and Chief
|
||
Executive
Officer
|
In
accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
SIGNATURE
|
TITLE
|
DATE
|
||
/s/ John
Rainwater
|
Director,
Chairman of the Board of
|
January
26, 2010
|
||
John
Rainwater
|
Directors,
President and Chief
Executive
Officer
|
|||
/s/ Mickey
Wiesinger
|
Director,
Chief Financial Officer
|
January
26, 2010
|
||
Mickey
Wiesinger
|
and Secretary | |||
/s/ Ryan
Bateman
|
Director
|
January
26, 2010
|
||
Ryan
Bateman
|
||||
/s/ Gary
Adams
|
Director
|
|||
Gary
Adams
|
January
26, 2010
|
|||
/s/ Howard
Barth
|
Director
|
January
26, 2010
|
||
Howard
Barth
|
- 45
-