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EX-32.2 - EXHIBIT 32.2 CERTIFICATION - LIBERTY ENERGY CORP.ex322apg.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q/A

Amendment No. 1


(Mark One)

[X]

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended October 31, 2011.

 

 

[  ]

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _______ to _______.


333-138107

(Commission file number)


[lbye10qa1_103111apg001.jpg]


LIBERTY ENERGY CORP.

(Exact name of small business issuer as specified in its charter)


Nevada

 

205024859

 

713.353.4700

(State or other jurisdiction

 

(IRS Employer

 

(Registrant’s telephone number)

of incorporation or organization)

 

Identification No.)

 

 


Two Allen Center, Suite 1600, 1200 Smith Street, Houston, TX

(Address of principal executive offices)

 

N/A

(Former name, former address and former fiscal year,

if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X]  YES [  ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X]  YES [  ] NO






Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[  ]

(Do not check if a smaller reporting company)

Smaller reporting company

[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act

[  ]  YES [X] NO


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

[  ]  YES [  ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

62,895,399 common shares issued and outstanding as of December 13, 2011.



2



TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

 

4

Item 1.

Financial Statements

 

4

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

12

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

15

Item 4.

Controls and Procedures

 

15

PART II – OTHER INFORMATION

 

16

Item 1.

Legal Proceedings

 

16

Item 1A.

Risk Factors

 

16

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

16

Item 3.

Defaults Upon Senior Securities

 

16

Item 4.

[Removed and Reserved]

 

16

Item 5.

Other Information

 

16

Item 6.

Exhibits

 

17

SIGNATURES

 

 

18




3



Explanatory Note:   Our company is filing this Form 10-Q/A for the period ended October 31, 2011 to include a revision to the cover page of the Form 10-Q to indicate that our company is not a “Shell Company” and was a not a “Shell Company” at the date of filing the Form 10-Q. The above described changes had no affect on our company’s financial position or results of operations. This amended report does not reflect events occurring after the filing of the Form 10-Q on December 13, 2011, nor does it modify or update those disclosures presented therein, expect with regard to the modifications described in this Explanatory Note. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as a result of this amended report, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, filed and furnished, respectively, as exhibits to the Form 10-Q have been re-executed and re-filed as of the date of this amended report and are included as exhibits hereto.


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


Our unaudited interim financial statements for the three month period ended October 31, 2011 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.



4





LIBERTY ENERGY CORP.

(An Exploration Stage Company)

Balance Sheet

 

 

 

 

As of

 

 

As of

 

 

 

October 31,

 

 

July 31,

 

 

 

2011 

 

 

2011 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

      Cash

 

$

10,938 

 

$

154,557 

Total Current Assets

 

 

10,938 

 

 

154,557 

 

 

 

 

 

 

 

Oil and Gas Properties, full cost method

 

 

 

 

 

 

      Costs not subject to amortization

 

 

782,964 

 

 

793,910 

      Accumulated depletion

 

 

(3,512)

 

 

(3,512)

Oil and Gas Properties, net

 

 

779,452 

 

 

790,398 

 

 

 

 

 

 

 

Total Assets

 

$

790,389 

 

$

944,955 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

      Accounts Payable  

 

 

47,382 

 

 

155,673 

      Loan Payable - related party

 

 

 

 

25,000 

Total Current Liabilities

 

 

47,382 

 

 

180,673 

 

 

 

 

 

 

 

Long Term Liabilities

 

 

 

 

 

 

      Asset Retirement Obligations

 

 

56,328 

 

 

56,328 

 

 

 

 

 

 

 

Total Long Term Liabilities

 

 

56,328 

 

 

56,328 

Stockholders' Equity

 

 

 

 

 

 

Common stock, $0.001 par value, 150,000,000 shares authorized;

 

 

 

 

 

 

  62,114,677 and 62,064,677 shares issued and outstanding

 

 

 

 

 

 

  as of October 31, 2011 and July 31, 2011 respectively

 

 

62,115 

 

 

62,064 

Additional paid-in capital

 

 

1,178,885 

 

 

1,128,936 

Deficit accumulated during exploration stage

 

 

(554,320)

 

 

(483,046)

 

 

 

 

 

 

 

Total Stockholders' Equity

 

 

686,680 

 

 

707,954 

 

 

 

 

 

 

 

       TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

 

$

790,389 

 

$

944,955 

 

 

 

 

 

 

 

See Notes to Financial Statements



5




LIBERTY ENERGY CORP.

(An Exploration Stage Company)

Statement of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 6, 2006

 

 

 

 

Three Months

 

 

Three Months

 

 

(inception)

 

 

 

 

Ended

 

 

Ended

 

 

through

 

 

 

 

October 31,

 

 

October 31,

 

 

October 31,

 

 

 

 

2011

 

 

2010

 

 

2011

 

Revenues

 

 

 

 

 

 

 

 

 

 

Revenues

$

 

$

 

$

26,778 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Costs

 

 

 

 

 

 

 

 

 

 

Operating Costs

 

6,286 

 

 

 

 

22,320 

 

 

Impairment Expense

 

 

 

 

 

 

3,512 

 

Gross Profit

 

(6,286)

 

 

 

 

946 

 

 

 

 

 

 

 

 

 

 

 

 

General & Administrative Expenses

 

 

 

 

 

 

 

 

 

 

Professional Fees

 

10,579 

 

 

5,750 

 

 

80,357 

 

 

 

 

 

 

 

 

 

 

 

 

 

General & Administrative

 

54,409 

 

 

75,406 

 

 

475,009 

 

 

 

 

 

 

 

 

 

 

 

 

Total General & Administrative Expenses

 

64,988 

 

 

81,156 

 

 

555,366 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income/Expense

 

 

 

 

 

 

 

 

 

 

Gain from currency exchange

 

 

 

 

 

 

 

100 

 

Net Income (Loss)

$

(71,274)

 

$

(81,156)

 

$

(554,320)

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

(0.00)

 

$

(0.00)

 

$

0.00 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of

 

 

 

 

 

 

 

 

 

  common shares outstanding

 

62,083,358 

 

 

60,870,247 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Notes to Financial Statements



6




LIBERTY ENERGY CORP.

(An Exploration Stage Company)

Statement of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 6, 2006

 

 

 

 Three Months

 

 

 Three Months

 

 

 (inception)  

 

 

 

 Ended

 

 

 Ended

 

 

 through

 

 

 

October 31,

 

 

October 31,

 

 

October 31,

 

 

 

2011

 

 

2010

 

 

2011

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

    Net income (loss)

$

(71,274)

 

$

(81,156)

 

$

(554,320)

 

    Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

 

 

 

      provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

        Impairment Expense

 

 

 

 

 

 

3,512 

 

 

 

 

 

 

 

 

 

 

 

    Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

        Accounts Receivable

 

 

 

342 

 

 

 

        Deposit

 

 

 

1,250 

 

 

 

        Accounts Payable

 

(108,291)

 

 

14,108 

 

 

47,382 

 

     Net cash provided by (used in) operating activities

 

(179,565)

 

 

(65,457)

 

 

(503,427)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

    Addition of Oil and Gas Properties

 

10,946 

 

 

(209,985)

 

 

(726,635)

 

    Acquisition of equipment

 

 

 

 

 

 

     Net cash provided by (used in) investing activities

 

10,946 

 

 

(209,985)

 

   

(726,635)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

    Proceeds from sale of common stock

 

25,000 

 

 

250,000 

 

 

1,241,000 

 

    Loan Payable - related party

 

 

 

 

 

 

 

 

     Net cash provided by (used in) financing activities

 

25,000 

 

 

250,000 

 

 

1,241,000 

 

 

 

 

 

 

 

 

 

 

 

    Net increase (decrease) in cash

 

(143,619)

 

 

(25,442)

 

 

10,938 

 

    Cash at beginning of period

 

154,557 

 

 

75,764 

 

 

 

    Cash at end of period

$

10,938 

 

$

50,323 

 

$

10,938 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

Cash paid during period for :

 

 

 

 

 

 

 

 

 

     Interest

$

-

 

$

 

$

 

     Income Taxes

$

-

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

Non Cash Activity

 

 

 

 

 

 

 

 

 

Related Party Debt Forgiven

 

25,000

 

 

 

 

 

25,000 

 

 

 

 

 

 

 

 

 

 

 

ARO Assets

 

 

 

$

 

 

56,328 

 

Addition (Reversal) of Oil and Gas Assets through Notes

 

 

 

 

 

 

(300,000)

 

Total Non Cash Activity

$

25,000

 

$

 

 

(218,672)

 

 

 

 

 

 

 

 

 

 

See Notes to Financial Statements




7



LIBERTY ENERGY CORP.

(f/k/a DMA MINERALS INC.)

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

October 31, 2011




NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS


Liberty Energy Corp. (f/k/a DMA Minerals Inc., the “Company”) was incorporated on June 6, 2006 under the laws of the State of Nevada. The Company is currently an exploration stage company under the provisions of Accounting Standards Codification (ASC) No. 915, Development Stage Entities. Since inception, the Company has produced almost no revenues and will continue to report as an exploration stage company until significant revenues are produced. The Company’s principal activity is the exploration and development of oil and gas properties. Properties are located in the United States of America and Bulgaria.


The Company’s success will depend in large part on its ability to obtain and develop oil and gas interests within the United States. There can be no assurance that oil and gas properties obtained by the Company will contain reserves or that properties with reserves will be profitable to extract. The Company will be subject to local and national laws and regulations which could impact the Company’s ability to execute its business plan.


As discussed in Note 2 the accompanying financial statements have been prepared assuming the Company will continue as a going concern.


NOTE 2 – GOING CONCERN


The financial statements of the Company have been prepared assuming that future issuances of the Company’s equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company’s present revenues are insufficient to meet operating expenses. Continuing as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses since its inception and requires capital for its future operational activities. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s plan of operations, and its transition to profitable operations is necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.


Recent Accounting Pronouncements


Recently issued accounting pronouncements will have no significant impact on the Company and its reporting methods.


Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Net Loss per Share


Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. As the Company is in a net loss position, there are no outstanding potentially dilutive securities that would cause diluted earnings per share to differ from basic earnings per share.




8



LIBERTY ENERGY CORP.

(f/k/a DMA MINERALS INC.)

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

October 31, 2011




Oil and gas properties


The Company follows the full-cost method of accounting for oil and natural gas properties.  Under this method, all costs incurred in the exploration, acquisition and development, including unproductive wells, are capitalized in separate cost centers for each country.  Such capitalized costs include contract and concessions acquisition, geological, geophysical, and other exploration work, drilling, completing and equipping oil and gas wells, constructing production facilities and pipelines, and other related costs.


The capitalized costs of oil and gas properties in each cost center are amortized on a composite units of production method based on future gross revenues from proved reserves.  Sales or other dispositions of oil and gas properties are normally accounted for as adjustments of capitalized costs.  Gain or loss is not recognized in income unless a significant portion of a cost center’s reserves is involved.  Capitalized costs associated with acquisition and evaluation of unproved properties are excluded from amortization until it is determined whether proved reserves can be assigned to such properties or until the value of the properties is impaired.  If the net capitalized costs of oil and gas properties in a cost center exceed an amount equal to the sum of the present value of estimated future net revenues from proved oil and gas reserves in the cost center and the lower of cost or fair value of properties not being amortized, both adjusted for income tax effects, such excess is charged to expense.


Asset Retirement Obligation


The Company accounts for its future asset retirement obligations by recording the fair value of the liability during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The increase in carrying value of a property associated with the capitalization of an asset retirement cost is included in proved oil and gas properties within the Company’s balance sheets.


The Company’s asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties and gathering assets. The asset retirement liability, if any, will be allocated to operating expense using a systematic and rational method.


Revenue and cost recognition


The Company uses the sales method of accounting for natural gas and oil revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes to which the Company is entitled based on our interest in the properties. Costs associated with production are expensed in the period incurred.


Income Taxes


The Company accounts for its income taxes in accordance with ASC No. 740, "Income Taxes". Under Statement 740, a liability method is used whereby deferred tax assets and liabilities are determined based on temporary differences between basis used for financial reporting and income tax reporting purposes. Income taxes are provided based on tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not, that the Company will not realize the tax assets through future operations.


Fair Value of Financial Instruments


ASC No. 825-50-10-1, "Financial Instruments – Overall Disclosure", requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The Company's financial instruments consist primarily of cash and account payable which due to their short term nature approximate fair value.


NOTE 4 - UNEVALUATED OIL AND GAS PROPERTIES


On October 1, 2009, we entered into a lease purchase and sale agreement with Trius Energy LLC, a Texas corporation, to acquire four oil and gas leases in Texas for $125,000. The interests consist of a 100% WI (Working Interest) at a 75% NRI (Net revenue



9



LIBERTY ENERGY CORP.

(f/k/a DMA MINERALS INC.)

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

October 31, 2011




Interest) in the Dahlstrom Lease, 2% WI at 75%NRI in the Ratliff lease and 100% WI at a 70% NRI in the Lockhart Project, consisting of two leases, the Anton lease (1 tract) and Alexander Lease (3 tracts).


Ratliff Lease


The Ratliff lease in Jackson County, Texas currently has four wells on it, and has spacing to drill another well. We will conduct geological studies to ascertain the risk and worth of such expenditure. We are also interested in the redevelopment of the four existing wells. Three of the wells are expected to be viable for economic production of oil and gas, and the 4th is also permitted to facilitate a commercial disposal facility. The three wells expected to produce oil and gas, and the disposal well require various work to be completed.


Lockhart Northeast Project


Lockhart Northeast Project in Caldwell County, Texas (two leases) consists of four land tracts containing eight wells, spread over roughly 848 acres. Five of the wells are re-entry wells, and there are three shut in wells. With the amount of acreage held, the operator has informed the Company that we are able to space a further 282 new wells.


Anton lease lapsed on January 9, 2011 this tract had 1 shut-in well. It was determined by the company after discussions with their operators, geologists and based on historical data it would not be cost effective to pursue the well therefore the lease was allowed to lapse.  In connection with the lapse $3,512 of leasehold cost were written off.


Bulgaria Project


On September 22, 2009, we entered into a purchase and sales agreement with William C. Athens, of Tulsa, Oklahoma. We agreed to acquire a total of 1/16th of 1% of 8/8ths ORRI (overriding royalty interest) in the A-Lovech exploration black in Bulgaria for a total price of $400,000. The payments and assignments are payable in four separate $100,000 closings to take place approximately 30 days apart, from the date of execution of the agreement.


Mr. Athens passed away between the date the contract was executed and full payment was made, completion of the contract was delayed pending notification from his estate. On April 28, 2011, Ms. Susan W. Athens, the executor for the estate of Mr. William C. Athens, executed an agreement to terminate the purchase and sale agreement between Liberty Energy Corp. and William C. Athens. Under the terms of the agreement Liberty Energy Corp. shall retain the 1/64th of the 1% interest in the A-Lovech exploration block and Mr. Athens’ estate shall retain the $100,000 which was forwarded to Mr. Athens for this acquisition. Oil and gas properties and notes payable were both reduced by $300,000 in accordance with the revised agreement.


NOTE 5 - COMMITMENTS AND CONTINGENCIES


The Company may from time to time be involved in legal proceedings arising from the normal course of business. There are no pending or threatened legal proceedings as of October 31, 2011.


NOTE 6 – RELATED PARTY TRANSACTIONS


On October 27, 2011, Ian A. Spowart agreed to forgive debts outstanding to him totalling $25,000, which has been recorded as contributed capital.


Daniel Martinez-Atkinson and Ian A. Spowart, the officers and directors of the Company may, in the future, become involved in other business opportunities as they become available, thus they may face a conflict in selecting between the Company and their other business opportunities.  The Company has not formulated a policy for the resolution of such conflicts.


NOTE 7 – STOCK TRANSACTIONS


Transactions, other than employees’ stock issuance, are in accordance with ASC No. 505. Thus issuances shall be accounted for based on the fair value of the consideration received.  Transactions with employees’ stock issuance are in accordance with ASC No.



10



LIBERTY ENERGY CORP.

(f/k/a DMA MINERALS INC.)

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

October 31, 2011




718. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable.  


On July 19, 2010, we entered into a stock and warrant purchase agreement with Asia-Pacific Capital Ltd. Pursuant to which the investor agreed to lend up to $4,000,000 to us in multiple installments in exchange for units of the company at unit price. The unit price means a price equal to the higher of either $ 0.50, or 90% of the volume-weighted average of the closing price of Common Stock, for the five days immediately preceding the date of the Notice. Each unit shall consist of one share (restricted) of the common stock of the Company and one and a half share purchase warrant. Each Warrant shall entitle the Subscriber to purchase one additional share of Common Stock, at an exercise price equal to 125% of the Unit Price at which the Unit containing the Warrant being exercised was issued, for a period of three (3) years from the date such Warrant is issued.


On March 8, 2011, we entered into a letter agreement to amend the share issuance agreement we entered into with Asia-Pacific Capital Ltd. on July 19, 2010. Pursuant to the terms of the share issuance agreement Asia-Pacific agreed to advance $4,000,000 to us and had the option to advance a further $4,000,000 once the initial amount had been exhausted. Pursuant to the terms of the letter agreement amending the original share issuance agreement Asia-Pacific has now committed to providing us with a total of $8,000,000 in advances despite the fact that the initial $4,000,000 has not yet been fully advanced. As of October 31, 2011 we have issued a total of 1,589,677 shares of our company to Asia Pacific for a total cash amount of $850,000 under the terms of the above mentioned agreement.


On September 27, 2011 the Company issued a total of 50,000 shares of common stock to a private investor for cash in the amount of $0.50 per share for a total of $25,000


As of October 31, 2011 and as part of the agreement with our main investor, the Company has issued 2,459,516 warrants. The warrants issued have an exercise price of $1.25 and are fully vested at the date of grant. The warrants have a term of three years and have a remaining contractual life of 2.91 years as of October 31, 2011. As of October 31, 2011 no warrants had been exercised.


NOTE 8 – SUBSEQUENT EVENTS


On November 23, 2011, the Company entered into an amending agreement to the share issuance agreement (the “Amending Agreement”) to modify the share issuance agreement originally entered into with Asia Pacific Capital Ltd. on July 19, 2010. The parties have agreed to amend the pricing mechanisms (the “Unit Price”) within the original agreement. The definition of the Unit Price in of the original agreement is deleted and replaced with the following:


“UNIT PRICE” means a price equal 95% of the volume weighted average of the closing price (the “VWAP”) of Common Stock for the ten (10) Banking Days immediately preceding the date of the Notice, as quoted on Google Finance or other source of stock quotes as agreed to by the parties, but at no time less than $0.05 per share.


Excluding the modifications to the Unit Price, the original agreement remains in full force and effect.


On November 28, 2011 the Company issued a total of 830,722 shares of common stock to a private investor for cash in the amount of $0.50 per share for a total of $45,000.




11





Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations


FORWARD-LOOKING STATEMENTS


This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.


Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.


In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common shares" refer to the common shares in our capital stock.


As used in this quarterly report, the terms “we”, “us”, “our” and “our company” refer to Liberty Energy Corp., unless otherwise indicated.


General Overview


We are an exploration stage company with nominal revenues and a limited operating history.


Our company was incorporated in the State of Nevada on June 6, 2006 under the name “DMA Minerals Inc.” to engage in the acquisition, exploration and development of natural resource properties. Our principal executive offices are located at Two Allen Center, Suite 1600, 1200 Smith Street, Houston, TX 77002. The U.S. telephone and fax numbers are (713) 353-4700 and (713) 353 4701 respectively.


On June 11, 2008, we affected a 25 for one forward stock split of our issued and outstanding common stock. As a result, our authorized capital increased to 1,875,000,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares increased from 2,400,000 shares of common stock to 60,000,000 shares of common stock. Effective June 11, 2008, as approved by our board of directors and a majority of our shareholders, we reduced our authorized capital from 1,875,000,000 shares of common stock to 150,000,000 shares of common stock. Also effective June 11, 2008, we have changed our name from “DMA Minerals Inc.” to “Liberty Energy Corp.”. The change of name was approved by our directors and a majority of our shareholders.


Our stock is listed on the OTC Bulletin Board under the symbol "LBYE", active trading of the stock began on March 15, 2010.


On September 22, 2009 we entered into a purchase and sales agreement with William C. Athens pursuant to which we agreed to acquire a total of 1/16th of 1% of 8/8ths ORRI (overriding royalty interest) interest in the A-Lovech exploration block in Bulgaria. On October 1, 2009, we entered into an asset purchase and sale agreement with Trius Energy LLC, pursuant to which we acquired certain oil and gas assets from Trius Energy LLC in Jackson County, Texas.


In concurrence with these agreements, we changed management, entered the oil and gas business, and ceased all activity in our former business of mineral exploration. Our focus is now on the exploration, acquisition, development, production and sale of crude oil and natural gas. We are qualified to do business in the State of Texas under the name “Liberty Energy Corp.”. We have not undergone bankruptcy, receivership, or any similar proceeding.





12






On July 19, 2010, we entered into a share issuance agreement with Asia Pacific Capital Ltd. whereby Asia Pacific shall make available of up to $4,000,000 by way of advances until July 18, 2014, in accordance with the terms of the agreement. The completion date may be extended for an additional term of up to twelve months at the option of our company or Asia Pacific upon written notice on or before the completion date in accordance with the notice provisions of the agreement. Upon receipt of an advance from Asia Pacific under the terms of the agreement, we will issue to Asia Pacific units. Each unit shall consist of one share of the common stock of the Company and one and a half share purchase warrants. The number of units of our Company are determined at a price that is the higher of either: (a) $0.50,  or  (b) 90% of the volume weighted average of the closing price of our company’s common stock, for the five (5) banking days immediately preceding the date of the advance, as quoted on Google Finance, or other source of stock quotes as agreed to by our company and Asia Pacific. Each warrant shall entitle the holder to purchase one additional share of common stock at an exercise price of 125% of the unit price upon  issue and for a period of three years.


On March 8, 2011, we entered into a letter agreement to amend the share issuance agreement we entered into with Asia-Pacific Capital Ltd. on July 19, 2010. Pursuant to the terms of the share issuance agreement Asia-Pacific agreed to advance $4,000,000 to us and had the option to advance a further $4,000,000 once the initial amount had been exhausted. Pursuant to the terms of the letter agreement amending the original share issuance agreement Asia-Pacific has now committed to providing us with a total of $8,000,000 in advances despite the fact that the initial $4,000,000 has not yet been fully advanced. As of October 31, 2011 we have issued a total of 1,591,080 shares of our company to Asia Pacific for a total cash amount of $850,000 under the terms of the above mentioned agreement.


On November 23, 2011, the Company entered into an amending agreement to the share issuance agreement (the “Amending Agreement”) to modify the share issuance agreement originally entered into with Asia Pacific Capital Ltd. on July 19, 2010. The parties have agreed to amend the pricing mechanisms (the “Unit Price”) within the original agreement.


Our Current Business


We are an oil and gas exploration company with interests in properties in Bulgaria and Texas.


Our business plan is to acquire oil and gas properties for exploration, appraisal and development with the intent to bring the projects to feasibility at which time we will either contract out the operations or joint venture the project to qualified interested parties. Our main priority will be given to projects with near term cash flow potential, although consideration will be given to projects that may not be as advanced from a technical standpoint but demonstrate the potential for significant upside.


Results of Operations


The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended October 31, 2011 which are included herein.


Three month period ending October 31, 2011 and 2010 and inception (June 6, 2006) to October 31, 2011


  

 

Three

 

 

Three

 

 

June 6, 2006

 

  

 

Months

 

 

Months

 

 

(Inception)

 

  

 

Ended

 

 

Ended

 

 

through

 

  

 

October 31,

 

 

October 31,

 

 

October 31,

 

  

 

2011

 

 

2010

 

 

2011

 

Revenues

$

Nil

 

$

Nil

 

$

26,778

 

Expenses

$

 (64,988

)

$

 (81,156

)

$

 (558,878

)

Net Loss

$

 (60,328

)

$

 (81,156

)

$

 (543,374

)



Expenses


Our total expenses for the three month period ended October 31, 2011 and 2010 and inception (June 6, 2006) to October 31, 2011 are outlined in the table below:



13






  

 

Three

 

 

Three

 

 

June 6, 2006

 

  

 

Months

 

 

Months

 

 

(Inception)

 

  

 

Ended

 

 

Ended

 

 

through

 

  

 

October 31,

 

 

October 31,

 

 

October 31,

 

  

 

2011

 

 

2010

 

 

2011

 

Operating Costs

$

6,286

 

$

Nil

 

$

22,320

 

Professional fees

$

10,579

 

$

5,750

 

$

80,357

 

General and administrative

$

54,409

 

$

75,406

 

$

478,521

 



Total expenses for the three months ended October 31, 2011, decreased by $9,882 as compared to 2010. The decrease was primarily as a result of a decrease in general and administrative expenses.


Equity Compensation


We currently do not have any stock option or equity compensation plans or arrangements.


Liquidity and Financial Condition


Working Capital

 

  

 

 

  

 

 

  

 

  

 

At October 31,

 

 

At July 31,

 

 

Percentage

 

  

 

2011

 

 

2011

 

 

Increase(Decrease)

 

Current Assets

$

10,938

 

$

154,557

 

 

(92.92)%

 

Current Liabilities

$

47,382

 

$

180,673

 

 

(73.75)%

 

Negative Working Capital

$

(36,444

)

$

(26,116

)

 

28.34%

 



Cash Flows

 

Three

 

 

Three

 

  

 

Months

 

 

Months

 

  

 

Ended

 

 

Ended

 

  

 

October 31,

 

 

October 31,

 

  

 

2011

 

 

2010

 

Net Cash Provided by (Used in) Operating Activities

$

 (179,565

)

$

 (66,457 )

 

Net Cash Provided by (Used In) Investing Activities

$

10,946

 

$

 (209,985

)

Net Cash Provided by Financing Activities

$

25,000

 

$

 250,000

 

Net Increase In Cash During The Period

$

(143,619

$

(25,442



Changes in cash flow reflect a decrease in accounts payable, no current capital outlays this fiscal year and a decrease in the amount of capital raised.


Going Concern


We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.


Contractual Obligations


As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.



14






Application of Critical Accounting Policies


Basis of Presentation


The financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States of America.


Recent Accounting Pronouncements


Recently issued accounting pronouncements will have no significant impact on our company and its reporting methods.


Item 3. Quantitative and Qualitative Disclosures about Market Risks


As a “smaller reporting company”, we are not required to provide the information required by this Item.


Item 4. Controls and Procedures


Management’s Report on Disclosure Controls and Procedures


We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.


As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.


Changes in Internal Control over Financial Reporting


There have been no changes in our internal controls over financial reporting that occurred during our quarter ended October 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.



15






PART II - OTHER INFORMATION


Item 1. Legal Proceedings


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


Item 1A. Risk Factors


As a “smaller reporting company”, we are not required to provide the information required by this Item.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


On September 27, 2011 we issued a total of 50,000 shares of common stock to a private investor for cash in the amount of $0.50 per share for a total of $25,000. We have issued all of these shares to one non-US person (as that term is defined in Regulation S of the Securities Act of 1933) relying on Regulation S of the Securities Act of 1933.


As at October 31, 2011 and as part of the agreement with our main investor, we issued 2,459,516 warrants. The warrants issued have an exercise price of $1.25 and are fully vested at the date of grant. The warrants have a term of three years. We have issued all of these securities to one non-US person (as that term is defined in Regulation S of the Securities Act of 1933) relying on Regulation S of the Securities Act of 1933.


Item 3. Defaults Upon Senior Securities


None.


Item 4. [Removed and Reserved]


Item 5. Other Information


None.



16





Item 6. Exhibits


Exhibit No.

Description

(3)

Articles of Incorporation and Bylaws

3.1

Articles of Incorporation (Incorporated by reference from our Registration Statement on Form SB-2 filed on October 20, 2006).

3.2

By-laws (Incorporated by reference from our Registration Statement on Form SB-2 filed on October 20, 2006).

3.3

Certificate of Change with respect to the forward stock split (Incorporated by reference from our Current Report on Form 8-K filed on June 11, 2008).

3.4

Certificate of Amendment with respect to the change of name (Incorporated by reference from our Current Report on Form 8-K filed on June 11, 2008).

3.5

Certificate of Change with respect to the reduction of authorized capital (Incorporated by reference from our Current Report on Form 8-K filed on June 11, 2008).

(10)

Material Contracts

10.1

Consulting Agreement between our company and Daniel Martinez-Atkinson dated February 11, 2010. (Incorporated by reference from our Current Report on Form 8-K filed on February 16, 2010).

10.2

Consulting Agreement between our company and Ian Spowart, dated February 11, 2010. (Incorporated by reference from our Current Report on Form 8-K filed on February 16, 2010).

10.3

Assignment and Bill of Sale with Phoenix Oil & Gas LLC dated March 30, 2010. (Incorporated by reference from our Current Report on Form 8-K filed on April 14, 2010).

10.4

Assignment and Bill of Sale with Trius Operations LLC dated March 30, 2010. (Incorporated by reference from our Current Report on Form 8-K filed on April 14, 2010).

10.5

Assignment and Bill of Sale with Trius Energy LLC dated March 30, 2010. (Incorporated by reference from our Current Report on Form 8-K filed on April 14, 2010).

10.6

Purchase and Sale Agreement with William C. Athens dated March 30, 2010. (Incorporated by reference from our Current Report on Form 8-K filed on April 14, 2010).

10.7

Share Issuance Agreement between Asia Pacific Capital Ltd. and our company dated July 19, 2010 (Incorporated by reference from our Current Report on Form 8-K filed on August 18, 2010).

10.8

Letter Agreement to amend Share Issuance Agreement between Asia Pacific Capital Ltd. and our company dated March 8, 2011 (Incorporated by reference from our Current Report on Form 8-K filed on March 11, 2011).

(31)

Rule 13a-14(a) / 15d-14(a) Certifications

31.1*

Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer.

31.2*

Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer.

(32)

Section 1350 Certifications

32.1*

Certification filed pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer.

32.2*

Certification filed pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer.

101**

Interactive Data File (Form 10-Q for the quarterly period ended October 31, 2011 furnished in XBRL).

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

*

Filed herewith


**

Previously filed on Form 10-Q, filed on December 13, 2011.   Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.



17






SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

LIBERTY ENERGY CORP.

 

(Registrant)

 

 

 

 

Dated:   January 26, 2012

/s/ Ian A. Spowart

 

Ian A. Spowart

 

President, Chief Executive Officer and Director

 

(Principal Executive Officer)

 

 

 

 

Dated:   January 26, 2012

/s/ Daniel Martinez-Atkinson

 

Daniel Martinez-Atkinson

 

Chief Financial Officer, Secretary, Treasurer and Director

 

(Principal Financial Officer and Principal Accounting Officer )




18