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EX-32.1 - CERTIFICATION - GAZOO ENERGY GROUP, INC.geg_ex321-100131.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
[ X ]    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended January 31, 2010
 
[     ]    Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
 
 
For the transition period __________to __________
 
Commission File Number: 000-49995
 
GAZOO ENERGY GROUP, INC.
(Exact name of small business Issuer as specified in its charter)
 
Nevada
98-0389183
(State or other jurisdiction of
(IRS Employer Identification No.)
incorporation or organization)
 

2569 McCabe Way
 
Irvine CA 92614-6243
92614-6243
(Address of principal executive offices)
(Zip Code)

 
Registrant’s telephone number, including area code:
949 379 1210

 (former name, if changed since since last report)
 
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[ X ]  Yes   [     ]  No
 
 
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
[     ]  Yes   [ X ]  No
 
 
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
48,539,234 outstanding common shares as of  March 18, 2010
 
 
Transitional Small Business Disclosure Format (Check one):   Yes  [     ]   No [ X ]
 
 
1

 

INDEX
 
     
Page
PART I.
FINANCIAL INFORMATION
 
       
 
ITEM 1.
Financial Statements
F-1
       
   
Interim Consolidated Balance Sheets as at January 31, 2010 with comparative figures as at October 31, 2009
F-2
   
Interim Consolidated Statement of Operations For the three  months ended January 31, 2010 and 2009
F-3
   
Interim Consolidated Statement of Cash Flows For the three months ended January  31 2010 and 2009
F-4
   
Statement of Stockholders’ Equity For the period March 14, 2002 (date of inception) to January 31, 2010
F-6
   
Notes to the Financial Statements
F-8
       
 
ITEM 2.
Management’s Discussion and Analysis or Plan of Operation
14
       
 
ITEM 3.
Controls and Procedures
18
       
PART II.
OTHER INFORMATION
18
       
 
ITEM 1.
Legal Proceedings
18
       
 
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
18
       
 
ITEM 3.
Defaults Upon Senior Securities
18
       
 
ITEM 4.
Submission of Matters to a Vote of Security Holders
18
       
 
ITEM 5.
Other Information
18
       
 
ITEM 6.
Exhibits
19
       
SIGNATURES
20
 
 

 
 
 
2

 
 

PART I - FINANCIAL STATEMENTS
 
FINANCIAL STATEMENTS.

Certain statements contained in this Form 10-Q constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements, identified by words such as “plan”, "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Management's Discussion and Analysis or Plan of Operation" and elsewhere in this Form 10-Q. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. As used in this interim report, the terms "we", "us", "our", and “our company” mean Gazoo Energy Group, Inc. and its wholly owned subsidiaries, Fortuna Gaming (UK) Limited and Fortuna Gamining Corp. Lrd., unless otherwise indicated. All dollar amounts in this annual report are in U.S. dollars unless otherwise stated.
 
 
 
 
 
 
 
 
 
 
 
 















 
 
F-1

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
(A Development Stage Company)
 
Consolidated Balance Sheets
 
 
   
January 31,
   
October 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
ASSETS
           
             
CURRENT ASSETS
           
             
Cash
  $ -     $ -  
                 
Total Current Assets
    -       -  
                 
TOTAL ASSETS
  $ -     $ -  
                 
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
CURRENT LIABILITIES
               
                 
Accounts payable and accrued expenses
  $ 170,137     $ 167,637  
Accounts payable - related parties
    142,484       142,484  
Accrued interest payable
    251,923       250,522  
Convertible promissory notes payable, less
               
unamortized discount
    1,096,593       1,096,593  
Promissory note
    56,055       56,055  
                 
Total Current Liabilities
    1,717,192       1,713,291  
                 
                 
STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Preferred stock; 100,000,000 shares authorized,
               
at $0.001 par value, 100,000,000 shares issued
               
and outstanding
    100,000       100,000  
Common stock; 100,000,000 shares authorized,
               
at $0.001 par value, 48,539,234 and 44,539,234
               
shares issued and outstanding, respectively
    48,539       44,539  
Additional paid-in capital
    4,269,003       4,269,003  
Treasury stock
    (34,000 )     (30,000 )
Accumulated deficit
    (6,100,734 )     (6,096,833 )
                 
Total Stockholders' Equity (Deficit)
    (1,717,192 )     (1,713,291 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS'
               
EQUITY (DEFICIT)
  $ -     $ -  
 
 
The accompanying notes are an integral part of these financial statements.
F-2

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
 
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
 
               
From Inception
 
   
For the Three
   
on March 14,
 
   
Months Ended
   
2002 through
 
   
January 31,
   
January 31,
 
   
2010
   
2009
   
2010
 
                   
                   
REVENUES
  $ -     $ -     $ -  
                         
COST OF SALES
    -       -       -  
                         
GROSS PROFIT
    -       -       -  
                         
EXPENSES
                       
                         
General and Administrative
    2,500       13,000       3,334,169  
                         
Total Expenses
    2,500       13,000       3,334,169  
                         
OPERATING LOSS
    (2,500 )     (13,000 )     (3,334,169 )
                         
OTHER INCOME (EXPENSES)
                       
                         
Interest expense
    (1,401 )     (508,540 )     (759,189 )
                         
Total Other Income (Expense)
    (1,401 )     (508,540 )     (759,189 )
                         
LOSS BEFORE DISCONTINUED
                       
  OPERATIONS
    (3,901 )     (521,540 )     (4,093,358 )
                         
DISCONTINUED OPERATIONS
    -       -       (2,007,376 )
                         
NET LOSS
  $ (3,901 )   $ (521,540 )   $ (6,100,734 )
                         
BASIC LOSS PER SHARE
  $ (0.00 )   $ (0.81 )        
                         
WEIGHTED AVERAGE NUMBER
                       
 OF SHARES OUTSTANDING
    44,539,234       640,745          
 
 
The accompanying notes are an integral part of these financial statements.
F-3

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
 
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
 
   
For the Three
Months Ended
January 31,
   
From Inception
on March 14,
2002 through
January 31,
 
   
2010
   
2009
   
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
                   
Net loss
  $ (3,901 )   $ (521,540 )   $ (6,100,734 )
Adjustments to reconcile net loss to
                       
net cash used by operating activities:
                       
Write-down of abandoned software investment
    -       0       1,515,694  
Write-down of web development costs
                    418  
Write-down of capital assets
                    55,272  
Write-down of license fee and related hardware
                    57,911  
Depreciation
                    38,042  
Amortization of debt discount
            508,540       508,540  
Changes in operating assets and liabilities:
                       
Change in accounts payable and
                       
accrued liabilities
    2,500       (47,000 )     380,989  
Change in accrued interest payable
    1,401       -       251,923  
                         
Net Cash Used by Operating Activities
    -       (60,000 )     (3,291,945 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
                         
Purchase of hardware
    -       -       (38,400 )
Software license fee
    -       -       (95,000 )
Purchase of domain names
    -       -       (10,175 )
Assets purchased from discontinued business
    -       -       (1,515,694 )
Website development costs
    -       -       (1,000 )
Purchase of office equipment
    -       -       (6,519 )
                         
Net Cash Used by Investing Activities
    -       -       (1,666,788 )
                         
CASH FLOWS FROM FINIANCING ACTIVITIES
                       
                         
Change in notes payable
    -       -       56,055  
Increase in demand loans
                    918,853  
Acquisition deposit loan
                    267,740  
Increase in related-party payables
                    51,084  
Sale of common stock for cash
    -       60,000       3,665,001  
                         
Net Cash Provided by Financing Activities
    -       60,000       4,958,733  
                         
                         
NET DECREASE IN CASH
    -       -       -  
                         
CASH AT BEGINNING OF PERIOD
    -       -       -  
                         
CASH AT END OF PERIOD
  $ -     $ -     $ -  
 
 
The accompanying notes are an integral part of these financial statements.
F-4

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
 
(A Development Stage Company)
Consolidated Statements of Cash Flows (Unaudited)
 
   
For the Three
Months Ended
January 31,
   
From Inception
on March 14,
2002 through
January 31,
 
   
2010
   
2009
   
2010
 
                   
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
                 
    INFORMATION                  
                   
    CASH PAID FOR:                  
                   
       Interest   $ -     $ -          
       Income Taxes   $ -     $ -          
                         
                         
                         
SUPPLEMENTAL DISCLOSURES OF NON-CASH
                       
    FINANCING ACTIVITIES:                        
                         
       Common stock issued as payment of debt   $ -     $ 60,000          
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements.
F-5

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
 
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
 
   
Preferred Stock
   
Common Stock
   
Treasury Stock
   
Additional
Paid-In
   
Subscriptions
   
Accumulated
       
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Receivable
   
Deficit
   
TOTAL
 
                                                             
Common shares issued for cash at
                                                           
  $0.001 per share
    -     $ -       19     $ -       -     $ -     $ 6,000     $ -     $ -     $ 6,000  
                                                                                 
Common shares issued to acquire
                                                                               
  mineral property interest at
                                                                               
  $0.001 per share
    -       -       1       -       -       -       20       -       -       20  
                                                                                 
Common shares issued for cash at
                                                                               
  $0.01 per share
    -       -       23       -       -       -       73,003       -       -       73,003  
                                                                                 
Common shares issued for cash at
                                                                               
  $0.15 per share
    -       -       2       -       -       -       105,493       (19,602 )     -       85,891  
                                                                                 
Net loss for the period from inception
                                                                               
  on March 14, 2002 through
                                                                               
  October 31, 2002
    -       -       -       -       -       -       -       -       (79,386 )     (79,386 )
                                                                                 
Balance, October 31, 2002
    -       -       45       -       -       -       184,516       (19,602 )     (79,386 )     85,528  
                                                                                 
Cash received on subscriptions
                                                                               
  receivable
    -       -       -       -       -       -       -       19,602       -       19,602  
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2003
    -       -       -       -       -       -       -       -       (90,687 )     (90,687 )
                                                                                 
Balance, October 31, 2003
    -       -       45       -       -       -       184,516       -       (170,073 )     14,443  
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2004
    -       -       -       -       -       -       -       -       (29,298 )     (29,298 )
                                                                                 
Balance, October 31, 2004
    -       -       45       -       -       -       184,516       -       (199,371 )     (14,855 )
                                                                                 
Common shares issued pursuant to
                                                                               
  private placement agreement at
                                                                               
  $6,250 per share
    -       -       240       -       -       -       1,500,000       -       -       1,500,000  
                                                                                 
Common shares issued pursuant to
                                                                               
  share exchange agreement at
                                                                               
  $1.25 per share
    -       -       12,000       12       -       -       14,988       -       -       15,000  
                                                                                 
Common shares issued for cash
                                                                               
  and consultant's fees at $19.08
    -       -                                                                  
  per share
                    14,273       14       -       -       272,269       -       -       272,283  
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2005
    -       -       -       -       -       -       -       -       (3,021,657 )     (3,021,657 )
                                                                                 
Balance, October 31, 2005
    -     $ -       26,558     $ 26       -     $ -     $ 1,971,773     $ -     $ (3,221,028 )   $ (1,249,229 )
 
 
The accompanying notes are an integral part of these financial statements.
F-6

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
 
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
 
   
Preferred Stock
   
Common Stock
   
Treasury Stock
   
Additional
Paid-In
     
Subscriptions
     
Accumulated
       
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Receivable
   
Deficit
   
TOTAL
 
                                                                                 
Balance, October 31, 2005
    -     $ -       26,558     $ 26       -     $ -     $ 1,971,773     $ -     $ (3,221,028 )   $ (1,249,229 )
                                                                                 
Common shares issued for cash at
                                                                               
  $1.00 per share
    -       -       676       1       -       -       1,693,202       -       -       1,693,203  
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2006
    -       -       -       -       -       -       -       -       (1,975,553 )     (1,975,553 )
                                                                                 
Balance, October 31, 2006
    -       -       27,234       27       -       -       3,664,975       0       (5,196,581 )     (1,531,579 )
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2007
    -       -       -       -       -       -       -       -       (243,950 )     (243,950 )
                                                                                 
Balance, October 31, 2007
    -       -       27,234       27       -       -       3,664,975       -       (5,440,531 )     (1,775,529 )
                                                                                 
Common shares issued for debt at
                                                                               
  $2.50 per share
    -       -       12,000       12       -       -       29,988       -       -       30,000  
                                                                                 
Beneficial conversion of notes payable
    -       -       -       -       -       -       508,540       -       -       508,540  
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2008
    -       -       -       -       -       -       -       -       (105,388 )     (105,388 )
                                                                                 
Balance, October 31, 2008
    -       -       39,234       39       -       -       4,203,503       -       (5,545,919 )     (1,342,377 )
                                                                                 
Common shares issued for debt at
                                                                               
  $0.01 per share
    -       -       5,500,000       5,500       -       -       54,500       -       -       60,000  
                                                                                 
Common shares issued and held in
                                                                               
  treasury pusuant to Acquisition
                                                                               
  Agreement
    -       -       30,000,000       30,000       (30,000,000 )     (30,000 )     -       -       -       -  
                                                                                 
Demand loan converted to common
                                                                               
  stock at $0.01 per share
    -       -       9,000,000       9,000       -       -       81,000       -       -       90,000  
                                                                                 
Preferred shares issued for services
                                                                               
  rendered at $0.0003 per share
    100,000,000       100,000       -       -       -       -       (70,000 )     -       -       30,000  
                                                                                 
Net loss for the year ended
                                                                               
  October 31, 2009
    -       -       -       -       -       -       -       -       (550,914 )     (550,914 )
                                                                                 
Balance, October 31, 2009
    100,000,000       100,000       44,539,234       44,539       (30,000,000 )     (30,000 )     4,269,003       -       (6,096,833 )     (1,713,291 )
                                                                                 
Common shares issued and held in
                                                                               
  treasury pursuant to Acquisition
                                                                               
  Agreement (unaudited)
    -       -       4,000,000       4,000       (4,000,000 )     (4,000 )     -       -       -       -  
                                                                                 
Net loss for the three months ended
                                                                               
  January 31, 2010 (unaudited)
    -       -       -       -       -       -       -       -       (3,901 )     (3,901 )
                                                                                 
Balance, January 31, 2010 (unaudited)
    100,000,000     $ 100,000       48,539,234     $ 48,539       (34,000,000 )   $ (34,000 )   $ 4,269,003     $ -     $ (6,100,734 )   $ (1,717,192 )
 
 
The accompanying notes are an integral part of these financial statements.
F-7

(Formerly Principal Capital Group, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
January 31, 2010 and October 31, 2009
 
Note 1
INTERIM FINANCIAL STATEMENTS

While the information presented in the accompanying interim consolidated financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with the accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the Company’s October 31, 2009 annual consolidated financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s October 31, 2009 annual audited financial statements.
 
Operating results for the three months ended January 31, 2010 are not necessarily indicative of the results that can be expected for the year ended October 31, 2010.
 
 
Note 2
NATURE OF OPERATIONS

a)
Organization

The Company is a public company whose common shares are listed for trading on the United States Over-the-Counter Bulletin Board.
 
The Company complies with the Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises” for its characterization of the Company as a development stage company. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. For the purpose of providing cumulative amounts for the statement of operations and cash flows, these amounts consider only those losses for the period from the Company’s development stage activity effective March 14, 2002 to January 31, 2010.
 
The Company was incorporated on March 14, 2002 under the laws of the State of Nevada as North American General Resources Corporation and was primarily engaged in the acquisition and exploration of mining properties until November 2004.
 
On November 29, 2004 the Company’s board of directors filed a Certificate of Amendment with the Secretary of State in Nevada to change the name of the Company from North American General Resources Corporation to MoneyFlow Capital Corporation.  At this time the primary business focus of the Company was changed to providing financial services including operating a foreign exchange service and providing short-term loans and check cashing from retail premises.
 
On June 28, 2005 the Company’s board of directors filed a Certificate of Amendment with the Secretary of State in Nevada to change its corporate name from MoneyFlow Capital Corporation to Fortuna Gaming Corp.  At this time the Company underwent a change in management and primary business focus and became involved in the acquisition and licensing of on-line and mobile gaming technologies.
 
On November 7, 2008 the Company’s board of directors resolved to change the name of the company to Gazoo Energy Group, Inc. and undertook the search of new business opportunities for the Company.  The change of name became effective on September 11, 2009 and a new symbol GAZU was issued.

 
F-8

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
January 31, 2010 and October 31, 2009
 
 
Note 2
NATURE OF OPERATIONS (Continued)
 
b)
Change of Business and Use of Consultants During Re-organization and Start Up Stage

 As the Company is in the start-up stage, Gazoo Energy Group, Inc. and its subsidiaries engage the services of various consultants possessing critical knowledge and experience in the legal and financial services sector. The services performed by consultants from June 28, 2005 to January 31, 2010 include legal services, due diligence and accounting services associated with planned acquisitions of operating business entities, raising equity and debt financing, developing the Company’s overall business plan and strategies, identifying, selecting and negotiating intellectual property licensing agreements, developing operational plans covering domestic and international operations, seeking out and hiring professional management, developing marketing and promotion plans including setting up an investor relations program, developing a merger and acquisition strategy and policy and developing corporate and potential acquisition candidates and establishing corporate governance policies.

Concurrent with the name change to Gazoo Energy Group, Inc. the Company commenced a new business plan based on the generation of revenue from green energy sources.  New management has several targets in various stages of development to implement this new business plan.
 
c)
Going Concern

These financial statements have been prepared in accordance with accounting principles generally accepted in the Unites States of America applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. To date, the Company has earned no revenues. At January 31, 2010, the Company had not yet achieved profitable operations, has accumulated losses of $6,100,734 since its inception, and has a working capital deficiency of $1,717,192 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.
 
The future of the Company is dependent upon the continued support of its lenders, its ability to obtain financing and upon future profitable operations from the development of acquisitions. Management has plans to seek additional capital through a private placement and public offering of its common stock. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
 
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.
 
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
 
 
F-9

GAZOO ENERGY GROUP, INC.
(Formerly Principal Capital Group, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
January 31, 2010 and October 31, 2009
 
 
Note 3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consists of outstanding fees relating to unpaid consulting services provided to the company during the 2006-2009 fiscal years, and for the three months ended January 31, 2010.
 
 
Note 4
LOANS PAYABLE AND PROMISSORY NOTE

(a)     
At January 31, 2010 and October 31, 2009, the Company holds a promissory note payable to an unrelated third-party entity