UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

 

FORM 10-Q

  

(Mark One)

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2013

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from                 to

 

Commission file number 333-141875

 

TIGER OIL AND ENERGY, INC.

(Exact name of Registrant as specified in its charter)

 

NEVADA	20-5936198
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

7230 Indian Creek Ln., Ste 201

Las Vegas, NV 89149

(Address of principal executive offices)

 

(702) 839-4029

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by checkmark 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

[X] Yes [  ] No (Not Required)

 

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

 

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of October 15, 2013,, the Company had 42,728,159 issued and outstanding shares of its common stock.

 

  

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

 

INDEX

 

		Page
PART I - FINANCIAL INFORMATION:		2
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4
Item 4.	Controls and Procedures	4
PART II - OTHER INFORMATION		6
Item 1.	Legal Proceedings	6
Item 1A.	Risk Factors	6
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3.	Defaults Upon Senior Securities	6
Item 4.	Mine Safety Disclosures	6
Item 5.	Other Information	7
Item 6.	Exhibits	7
Signatures		7

 

 

PART I — FINANCIAL INFORMATION

 

The accompanying interim unaudited financial statements of Tiger Oil and Energy, Inc. (a Nevada corporation) are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company’s most recent annual financial statements for the year ended December 31, 2012 included in a 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on April 10, 2013. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying interim financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying interim financial statements for the nine months ended September 30, 2013 are not necessarily indicative of the operating results that may be expected for the full year ending December 31, 2013.

  

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

 

FINANCIAL STATEMENTS

September 30, 2013

  

		Page(s)
Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012			F-2
Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2013 and from the Period of April 30, 2009 (Inception) to September 30, 2013			F-3
Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and from the Period of April 30, 2009 (Inception) to September 30, 2013			F-4
Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and from the Period of April 30, 2009 (Inception) to September 30, 2013			F-5
Notes to the Unaudited Financial Statements			F-6

 

 

TIGER OIL AND ENERGY, INC.
(An Exploration Stage Company)
Condensed Consolidated Balance Sheets
		September 30,				December 31,
		2013				2012
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	1,527			$	136
Deposit			200				200
Total Current Assets			1,727				336
OTHER ASSETS
Oil and gas properties, net (full cost method)			—				—
TOTAL ASSETS		$	1,727			$	336
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	9,702			$	12,895
Notes payable			107,740				109,640
Derivative liability			—				3,304
Total Current Liabilities			117,442				125,839
LONG-TERM LIABILITIES
Asset retirement obligations			13,877				48,957
Total Long-Term Liabilities			13,877				48,957
TOTAL LIABILITIES			131,319				174,796
STOCKHOLDERS' DEFICIT
Preferred stock - 1,000,000 shares authorized,
$0.001 par value; 42,013 issued and outstanding			42				42
Common stock - 74,000,000 shares authorized,
$0.001 par value; 42,728,159 and 42,728,159
issued and outstanding, respectively			42,728				42,728
Additional paid-in capital			4,264,813				4,222,139
Deficit accumulated incurred prior to the exploration stage			(524,202	)			(524,202	)
Deficit accumulated during the exploration stage			(3,912,973	)			(3,915,167	)
Total Stockholders' Deficit			(129,592	)			(174,460	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	1,727			$	336
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

  

																		From Inception
																		on April 30 2009
		For the Three Months Ended								For the Nine Months Ended								through
		September 30,								September 30,								September 30,
		2013				2012				2013				2012				2013
REVENUES		$	—			$	—			$	—			$	—			$	—
OPERATING EXPENSES
Accretion expense			151				3,709				2,337				5,634				16,755
Amortization of deferred tax benefit			—				—				—				—				170,800
Impairment of assets			—				—				—				—				1,030,673
Management fees			—				2,491				—				300				1,112,724
General and administrative			4,650				7,729				28,213				28,622				328,849
Total Operating Expenses			4,801				13,929				30,550				34,556				2,659,801
LOSS FROM OPERATIONS			(4,801	)			(13,929	)			(30,550	)			(34,556	)			(2,659,801	)
OTHER  INCOME (EXPENSE)
Interest expense			(268	)			(492	)			(1,757	)			(1,135	)			(5,399	)
Other income			—				—				—				—				40,000
Gain on forgiveness of debt			—				—				—				2,272				113,946
Gain (loss) on derivative liability			—				(1,512	)			2,635				(21	)			(669	)
Gain on sale of oil and gas leases			31,866				—				31,866				—				20,042
Total Other Income (Expense)			31,598				(2,004	)			32,744				1,116				167,920
LOSS BEFORE TAXES			26,797				(15,933	)			2,194				(33,440	)			(2,491,881	)
Provision for income taxes			—				—				—				—				—
NET LOSS FROM CONTINUING OPERATIONS			26,797				(15,933	)			2,194				(33,440	)			(2,491,881	)
Net income from discontinued operations			—				—				—				—				309,650
Loss on disposal of discontinued operations			—				—				—				—				(1,730,742	)
Loss from Discontinued Operations,
Net of Income Taxes			—				—				—				—				(1,421,092	)
NET INCOME (LOSS)		$	26,797			$	(15,933	)		$	2,194			$	(33,440	)		$	(3,912,973	)
BASIC AND DILUTED INCOME (LOSS) PER
SHARE FROM CONTINUING OPERATIONS		$	0.00			$	(0.00	)		$	0.00			$	(0.00	)
BASIC AND DILUTED INCOME (LOSS) PER
SHARE FROM DISCONTINUED OPERATIONS		$	—			$	—			$	—			$	—
TOTAL BASIC AND DILUTED INCOME (LOSS)
PER SHARE		$	0.00			$	(0.00	)		$	0.00			$	(0.00	)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING			42,728,159				42,728,159				42,728,159				48,677,064
The accompanying notes are a integral part of these condensed consolidated financials statements.

  

 

 

TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
										From Inception
										on April 30 2009
		For the Nine Months Ended								through
		September 30,								September 30 ,
		2013				2012				2013
OPERATING ACTIVITIES
Net (loss) income		$	2,194			$	(33,440	)		$	(3,912,973	)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities:
Depreciation, amortization and accretion expense			2,337				5,634				20,284
Impairment of assets			—				—				909,431
Change in derivative liability			(2,635	)			21				669
Employee option grants issued			—				—				46,500
Cancellation of employee stock option shares			—				—				354,750
Impairment of intangible assets			—				—				121,242
Common stock issued for services			—				—				457,600
Gain on settlement of debt			—				—				(111,457	)
Deferred tax asset			—				—				170,800
Gain on sale of oil and gas leases			(31,866	)			—				(20,042	)
Changes in operating assets and liabilities:
Deposits			—				(200	)			(200	)
Accounts receivable			—				42,000				42,000
Related-party payables			—				(269	)			299,002
Accounts payable and accrued liabilities			(1,139	)			(7,505	)			(28,769	)
Accrued salaries			—				—				83,333
Net Cash Provided by (Used in) Continuing
Operating Activities			(31,109	)			6,241				(1,567,830	)
Net Cash Provided by Discontinued Operating Activities			—				—				1,678,016
Net Cash Provided by (Used in) Operating Activities			(31,109	)			6,241				110,186
INVESTING ACTIVITIES
Purchase of oil and gas leases			—				—				(217,556	)
Capitalized exploration and development costs			—				(1,581	)			(9,703	)
Net Cash Used in Continuing Investing Activities			—				(1,581	)			(227,259	)
Net Cash Used in Discontinued Investing Activities			—				—				—
Net Cash Used in Investing Activities			—				(1,581	)			(227,259	)
FINANCING ACTIVITIES
Proceeds from related party payable			—				30,000				76,000
Repayments on related-party payables			—				(35,000	)			(35,000	)
Proceeds from note payable			32,500				—				47,500
Proceeds from the sale of common stock			—				—				30,000
Net Cash Provided by (Used in) Continuing
Financing Activities			32,500				(5,000	)			118,500
Net Cash Used in Discontinued Financing Activities			—				—				—
Net Cash Provided by (Used in) Financing Activities			32,500				(5,000	)			118,500
NET INCREASE (DECREASE) IN CASH		$	1,391			$	(340	)		$	1,427
CASH AT BEGINNING OF PERIOD			136				2,742				100
CASH AT END OF PERIOD		$	1,527			$	2,402			$	1,527
The accompanying notes are an integral part of these condensed consolidated financial statements.

  

 

TIGER OIL AND ENERGY, INC.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
										From Inception
										on April 30,
		For the Nine Months Ended								2009 through
		September 30,								September 30,
		2013				2012				2013
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Income taxes		$	—			$	—			$	—
Interest			—				—				—
NON CASH FINANCING ACTIVITIES:
Common stock issued in purchases
of subsidiaries		$	—			$	—			$	550,500
Common stock and note issued for oil
and gas leases			—				—				80,000
Common stock cancelled			—				—				20,500
Contributed capital from forgiveness
of debt of a related-party			—				—				579,034
Sale of oil and gas leases to related
party for note receivable			—				—				42,000
Sale of oil and gas leases to related
party in exchange for forgiveness of debt			42,674				—				42,674
Increase in asset retirement obligations			—				—				15,933

 

The accompanying notes are an integral part of these condensed consolidated financial statements. 

  

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Notes to Condensed Consolidated Financial Statements

September 30, 2013 and December 31, 2012

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2013, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2012 audited financial statements. The results of operations for the periods ended September 30, 2013 and 2012 are not necessarily indicative of the operating results for the full year.

 

NOTE 2 - GOING CONCERN

 

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

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

 

Consolidation

 

The accompanying consolidated financial statements included all of the accounts of the Company and its wholly-owned subsidiaries, C2R, Inc., a Nevada Corporation, and Jett Rink Oil, LLC, a Kansas Limited Liability Company. All intercompany transactions have been eliminated.

 

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks and financial instruments which mature within six months of the date of purchase.

 

Fair Value of Financial Instruments

 

As at September 30, 2013, the fair value of cash, accounts receivable, accounts payable and notes payable approximate carrying values because of the short-term maturity of these instruments.

 

Oil and Gas Properties

 

The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including certain payroll, asset retirement costs, other internal costs, and interest incurred for the purpose of finding oil and natural gas reserves, are capitalized. Internal costs that are capitalized are directly attributable to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred. Proceeds from the sale of oil and natural gas properties are applied to reduce the capitalized costs of oil and natural gas properties unless the sale would significantly alter the relationship between capitalized costs and proved reserves, in which case a gain or loss is recognized.

 

Capitalized costs associated with impaired properties and capitalized costs related to properties having proved reserves, plus the estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 410 “Asset Retirement and Environmental Obligations” (FASB ASC 410), are amortized using the unit-of-production method based on proved reserves. Capitalized costs of oil and natural gas properties, net of accumulated amortization and deferred income taxes, are limited to the total of estimated future net cash flows from proved oil and natural gas reserves, discounted at ten percent, plus the cost of unevaluated properties.  Under certain specific conditions, companies could elect to use subsequent prices for determining the estimated future net cash flows. The use of subsequent pricing is no longer allowed. There are many factors, including global events that may influence the production, processing, marketing and price of oil and natural gas. A reduction in the valuation of oil and natural gas properties resulting from declining prices or production could adversely impact depletion rates and capitalized cost limitations. Capitalized costs associated with properties that have not been evaluated through drilling or seismic analysis, including exploration wells in progress at September 30, 2013, are excluded from the unit-of-production amortization. Exclusions are adjusted annually based on drilling results and interpretative analysis. 

 

Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the statements of operations.

  

Costs of oil and gas properties are depleted using the unit-of-production method. For the nine months ended September 30, 2012 and September 30, 2013, the Company recognized $-0- of depletion expense related to oil and gas production during the periods.

 

 

Ceiling Test

 

In applying the full cost method, the Company performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of property and equipment is compared to the value of its proved reserves discounted at a ten percent interest rate of future net revenues, based on current economic and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties.  During the nine months ended September 30, 2013 and the nine months ended September 30, 2012, the Company had recorded $-0- and $-0- of impairment expense, respectively, in connection with the full cost ceiling test calculation.

 

Revenue Recognition

 

Revenues from the sale of oil and natural gas are recognized when the product is delivered at a fixed or determinable price, title has transferred, and collectability is reasonably assured.  For oil sales, this occurs when the customer takes delivery of oil from the operators’ storage tanks.

 

Earnings (Loss) per Share

 

The Company has adopted ASC 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.

 

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Reclassification of Financial Statement Accounts

 

Certain amounts in the December 31, 2012 financial statements have been reclassified to conform to the presentation in the September 30, 2013 financial statements.

 

NOTE 4 – NOTES PAYABLE

 

During the nine months ended September 30, 2013 the Company borrowed $32,500 in the form of notes payable. The notes bear interest at 6 percent per annum and are due 12 months from the time of issuance. During the nine months ended September 30, 2013 a related party of the Company purchased $34,400 of the Company’s notes payable and $2,054 of accrued interest. This amount was forgiven on June 1, 2013 in exchange for the Company’s 30% interest in certain oil and gas leases in Cowley County, Kansas (see Note 5). As of September 30, 2013 and December 31, 2012 the total outstanding notes payable balance is $107,640 and $109,640, respectively.

 

NOTE 5 – OIL AND GAS PROPERTIES

 

On February 1, 2011, the Company entered into an agreement with a related party to purchase a 100 percent working interest (80 percent net revenue interest) in certain of its oil and gas leases in Cowley County, Kansas.  As consideration for the purchase, the Company issued a non-interest bearing note for $35,000, and 250,000 shares of its common stock valued at the market rate of $0.18 per share.  The total consideration paid for the leases was $80,000.  The property is being accounted for under the full cost method of accounting.

 

On April 1, 2011, the Company acquired a 100 percent working interest and an 80 percent net revenue interest in two oil and gas wells located in Ness County, Kansas. The Company acquired interests in two oil wells located on approximately 240 leased acres.  The wells had been shut down in previous years and are not producing as of the date of this report.  The effective date of the purchase and sale was April 1, 2011. The purchase price paid for the acquisition was $1,000 at auction and the properties carry a $2,109 aggregate annual surface lease agreement payment.  The property is being accounted for under the full cost method of accounting. On September 13, 2013 these leases were terminated and the plugging responsibilities were assigned to an unrelated third party. As a result the Company wrote down the asset retirement obligation for these leases which resulted in a gain of $31,866.

 

 

On October 20, 2011 the Company sold a 70 percent working interest in certain of its oil and gas leases in Cowley County, Kansas. As consideration for this purchase, the Company received a note receivable in the amount of $42,000. Pursuant to this transaction the Company recorded a 70 percent decrease in its cost basis on these properties, totaling $56,000. The $14,000 difference between the $56,000 decrease in cost basis and the $42,000 consideration received in the sale has been recorded as a loss on sale of oil and gas leases.

 

On June 1, 2013 the Company sold its 30 percent interest in certain of its oil and gas leases in Cowley County, Kansas to a related party. As consideration for the oil and gas leases a related party forgave $34,400 of the Company’s notes payable and $2,054 of accrued interest that was owed to the related party (see Note 4). Pursuant to this purchase the Company wrote down the asset retirement obligation associated with these leases of $5,551 to additional paid in capital.

 

Oil and gas properties are stated at cost. The Company recognized impairment expense totaling $65,540 during the year ended December 31, 2012 and $-0- during the nine months ended September 30, 2013. As of September 30, 2013 and December 31, 2012 oil and gas properties consisted of the following:

 

		September 30, 2013				December 31, 2012
Unproved properties		$	29,086			$	65,540
Impairment of oil and gas leases			(29,086	)			(65,540	)
Net oil and gas properties		$	—			$	—

 

NOTE 6 – CONVERTIBLE NOTES PAYABLE

 

On September 20, 2010 the Company borrowed a total of $15,000 from an unrelated third-party entity. The note bears interest at a rate of six percent per annum and is convertible at the option of the lender into common shares of the Company at the average bid quote for a period of five days prior to conversion. The note has no formal payment terms or due date, other than being due one demand.

 

Pursuant to this conversion feature, the Company recognized a discount on convertible debt on the note date. As of December 31, 2012 the Company had amortized the entire debt discount to interest expense, leaving $-0- and $-0- in unamortized debt discount at December 31, 2012, and September 30, 2013, respectively.

 

On June 1, 2013, this note was purchased by a related party and forgiven as part of the related party’s purchase of the oil and gas properties. 

 

NOTE 7 – DERIVATIVE LIABILITY 

 

On September 20, 2010 the Company executed a convertible note payable in the amount of $15,000 which is convertible at the option of the lender into common shares of the Company at the average bid quote for a period of five days prior to conversion. The note has no formal payment terms or due date, other than being due one demand.

 

The fair value of the conversion option of the convertible note has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

 

The Company uses the Black-Scholes options pricing model to value the derivative liability and subsequent re-measurement. Included in the model for the re-measurement are the following assumptions: risk free rate of between 0.01 and 0.02 percent, and annual volatility of between 218 and 235 percent.

 

  

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements. The Company recorded a loss on the derivative liability in the amount of $1,491 for the six months ended June 30, 2012. On June 1, 2013 the derivative liability was revalued and written off in connection with the forgiveness of debt in exchange for the certain oil and gas leases of the Company (see Note 5), which led to the Company recording a gain on the derivative liability in the amount of $2,635 for the six months ended September 30, 2013. The Company wrote off the remaining derivative liability in the amount of $699 corresponding to the debt forgiven. At September 30, 2013 and December 31, 2012, the derivative liability balance was $-0- and $3,304.

 

NOTE 8 – STOCKHOLDERS’ DEFICIT

 

The Company has 1,000,000 preferred shares authorized at a par value of $0.001 and 74,000,000 common shares authorized at par value of $0.001. As of September 30, 2013 and December 31, 2012 the Company has 42,013 shares of preferred stock and 42,728,159 shares of common stock issued and outstanding. The following is a list of the Company’s common stock issuances for the six months ended September 30, 2013 and for the years ended December 31, 2012 and 2011:

 

On June 12, 2012, the Company cancelled 10,000,000 shares of common stock held by a corporate officer, due to his resignation from his position with the Company.

 

On February 1, 2011 the Company issued 250,000 common shares as part of a lease purchase agreement. The shares were valued at $0.18 per share based upon the closing share price on the date of issuance, resulting in an aggregate share value of $45,000.

  

NOTE 9 – SUBSEQUENT EVENTS

 

In accordance with ASC 855, Company management reviewed all material events through the date of this report and there are no other material subsequent events to report.

 

  

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

  

On July 29, 2010, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with Jett Rink Oil, LLC, a Kansas limited liability company (“Jett Rink”) and Bill Herndon, the sole member of Jett Rink, pursuant to which the Company agreed to acquire from Bill Herndon all of the membership interest in Jett Rink in exchange for approximately 10,000,000 shares of the Company’s Common Stock. Jett Rink is involved in the business relating to the exploration, development and production of oil and gas in the United States.

 

The Exchange Agreement contained customary representations, warranties, and conditions to closing. The closing of the Exchange Agreement was subject to the satisfaction of certain pre-closing conditions, including (i) changing the name of the Company to “Tiger Oil and Energy, Inc.,” (ii) the cancellation of all of the 4,650,000 outstanding options that have been granted to the Company’s key employees, consultants, officers and directors pursuant to the Company’s non-qualified stock option plan, and (iii) completion of audited financial statements of Jett Rink, among others. These closing conditions were satisfied and the Exchange Agreement was consummated on October 29, 2010. Accordingly, the Company changed its corporate name to Tiger Oil and Energy, Inc.

 

As part of the Jett Rink LLC acquisition, the Company owns interests in two oil and gas wells on approximately 50 acres located in Creek County, State of Oklahoma, together with any personal property and lease equipment located thereon. These wells are shut-in and not producing at this time.

  

On February 4, 2011, Tiger Oil and Energy, Inc. retained International IR Inc. (IRR) to provide media services. IIR is a strategic consulting firm that works primarily with emerging growth companies in the resource sector. IIR will focus on providing multiple information platforms to share TGRO’s negotiate on behalf of the Company acquisition, exploration and joint venture strategies.

 

On February 9, 2011, - Tiger Oil and Energy, acquired a 100% interest in three oil and gas leases totaling 400 acres in southern Kansas, comprised of three historically productive properties. Tiger’s geologist has reviewed the Holman #2, #3, #4, and #5; the Adams #1 and the Glasse wells commonly known as the Wise #1 and Roberts #1 and have recommended a 7 well exploration and production study. All the leases acquired by the parties covering lands within the prospect area are owned 100% by TGRO with an undivided eighty-one and one-half percent (81.5%) working interest in the oil and gas leases described. The Company issued a Note and 250,000 shares of its common stock in the acquisition.

  

On March 31, 2011, we purchased, at auction, two shut-in oil wells located in Ness County KS, for cash.

 

On June 1, 2013 the Company sold its interest in 400 acres in southern Kansas.

 

On September 13, 2013 the Company received written notice from the owner of the two shut-in wells in Ness County KS, that the leases had been cancelled due to non-production. The Company has an asset on the lease consisting of oil tank batteries and infrastructure valued at approximately $0 net, after dismantling and transportation costs. The State of Kansas (KCC) has determined that the responsibility for plugging the Whitley #1 and #2 is the Company’s and the cost for plugging has been estimated to be a total of $32,000.An agreement was reached with DK Operating Inc. (DK) to exchange the surface battery tanks and infrastructure to DK for assumption of the Company’s plugging responsibilities to KCC.

 

For the Three Months Ended September 30, 2013 and 2012

 

Revenues

 

Revenues from continuing operations for the three month periods ended September 30, 2013 and 2012 were zero. 

 

 

Operating Expenses

 

Operating expenses from continuing operations for the three month periods ended September 30, 2013 and 2012 were $4,801 and $13,929, respectively. Additionally, we recognized a gain on derivative liability in the amount of $-0- during the three months ended September 30, 2013, interest expense in the amount of $268, and a gain on sale of oil and gas leases in the amount of $31,866 compared to a loss on derivative liability of $1,512, interest expense of $492, and a gain of $-0- on sale of oil and gas leases during the three months ended September 30, 2012.

 

Net Loss

 

During the three months ended September 30, 2013 and 2012 the Company recognized net income of $26,797compared to a net loss of $15,933, respectively.

 

For the Nine Months Ended September 30, 2013 and 2012

 

Revenues

 

Revenues from continuing operations for the nine month periods ended September 30, 2013 and 2012 were zero. 

 

Operating Expenses

 

Operating expenses from continuing operations for the nine month periods ended September 30, 2013 and 2012 were $30,550 and $34,556, respectively. Additionally, we recognized a gain on derivative liability in the amount of $2,635 and a gain on forgiveness of debt of $-0-, and interest expense in the amount of $1,757, and a gain on sale of oil and gas leases in the amount of $31,866 during the nine months ended September 30, 2013, compared to a loss on derivative liability of $21, gain on forgiveness of debt of $2,272, and interest expense of $1,135, and a gain of $-0- on sale of oil and gas leases during the nine months ended September 30, 2012.

 

Net Loss

 

During the nine months ended September 30, 2013 and 2012 the Company recognized net income of $2,194 and compared to a net loss of $33,440, respectively.

 

Liquidity and Capital Resources

 

As of September 30, 2013, we had $1,527 cash on hand.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not Applicable.

 

Item 4. Controls and Procedures

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

As of September 30, 2013, under the direction of the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a — 15(e) under the Securities Exchange Act of 1934, as amended. Based on the evaluation of these controls and procedures required by paragraph (b) of Sec. 240.13a-15 or 240.15d-15 the disclosure controls and procedures have been found to be ineffective.

 

 

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Evaluation of Internal Control Over Financial Reporting

 

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2013. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of the end of the fiscal year covered by this Quarterly Report on Form 10-Q that our internal control over financial reporting has not been effective.

  

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of September 30, 2013:

 

i)

Lack of segregation of duties. At this time, our resources and size prevent us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management will periodically reevaluate this situation.

 

ii)

Lack of an independent audit committee. Although we have an audit committee it is not comprised solely of independent directors. We may establish an audit committee comprised solely of independent directors when we have sufficient capital resources and working capital to attract qualified independent directors and to maintain such a committee.

 

iii)

Insufficient number of independent directors. At the present time, our Board of Directors does not consist of a majority of independent directors, a factor that is counter to corporate governance practices as set forth by the rules of various stock exchanges.

 

Our management determined that these deficiencies constituted material weaknesses. Due to a lack of financial resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses. We will not be able to do so until we acquire sufficient financing to do so. We will implement further controls as circumstances, cash flow, and working capital permit. Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

 

CHANGES IN INTERNAL CONTROLS.

 

There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

 

The Company has not taken any steps at this time to address these weaknesses but will formulate a plan before fiscal year ending December 31, 2013.

 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None. 

 

Item 1A. Risk Factors

 

None. 

 

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

 

On July 29, 2010, UTEC, Inc., a Nevada corporation (the “Company”), entered into an Exchange Agreement (the “Exchange Agreement”) with Jett Rink Oil, LLC, a Kansas limited liability company (“Jett Rink”) and Bill Herndon, the sole member of Jett Rink, pursuant to which the Company agreed to acquire from Bill Herndon all of the membership interest in Jett Rink in exchange for 10,000,000 shares of the Company’s Common Stock. Jett Rink is involved in the business relating to the exploration, development and production of oil and gas in the United States.

 

On October 19, 2009 the Company issued 600,000 shares of common stock to a private investor for cash consideration of $60,000

 

In October, 2010, the Company issued 8,000,000 shares of its common stock to officers of the Company for services provided. The fair value of the shares was determined based on the market price of $0.16 per share on the date of issuance.

 

On February 9, 2011, - Tiger Oil and Energy, acquired a 100% interest in three Oil and Gas leases totaling 400 acres in southern Kansas, comprised of three historically productive properties. The Company issued a note and 250,000 shares of its common stock in the acquisition.

 

On June 12, 2012, the Company cancelled 10,000,000 shares of common stock held by a corporate officer, due to his resignation from his position with the Company.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

None.

 

Item 5. Other Information

 

On May 26, 2010 the Board of Directors elected Kenneth B. Liebscher as President/CEO and Howard Bouch as Secretary/CFO.

 

On August 6, 2010 the Board of Directors appointed Ryan Kerr to serve on the Board of Directors of the Company.

  

On July 29, 2010, UTEC, Inc., a Nevada corporation (the “Company”), entered into an Exchange Agreement (the “Exchange Agreement”) with Jett Rink Oil, LLC, a Kansas limited liability company (“Jett Rink”) and Bill Herndon, the sole member of Jett Rink, pursuant to which the Company agreed to acquire from Bill Herndon all of the membership interest in Jett Rink in exchange for 10,000,000 shares of the Company’s Common Stock. Jett Rink is involved in the business relating to the exploration, development and production of oil and gas in the United States. On June 12, 2012 Mr. Herndon resigned from the Board of Directors of the Company and the 10,000,000 shares were cancelled.

  

The Exchange Agreement contained customary representations, warranties, and conditions to closing. The closing of the Exchange Agreement was subject to the satisfaction of certain pre-closing conditions, including (i) changing the name of the Company to “Tiger Oil and Energy, Inc.,” (ii) the cancellation of all of the 4,650,000 outstanding options that have been granted to the Company’s key employees, consultants, officers and directors pursuant to the Company’s non-qualified stock option plan, and (iii) completion of audited financial statements of Jett Rink, among others. These closing conditions were satisfied and the Exchange Agreement was consummated on October 29, 2010. Accordingly, the Company changed its corporate name to Tiger Oil and Energy, Inc.

 

On August 12, 2013, Ryan Kerr submitted his resignation to the Board of Directors.

 

Item 6. Exhibits

 

Exhibits:

 

Exhibit No.		Document		Location
31.1		Rule 13a-41(a)/15d-14(a) Certificates		Included
31.2		Rule 13a-41(a)/15d-14(a) Certificates		Included
32.1		Section 1350 Certifications		Included

 

 

SIGNATURES

 

Pursuant to the requirements 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.

 

TIGER OIL AND ENERGY, INC.

 

November 11, 2013

 

/s/ Kenneth B. Liebscher
Kenneth B. Liebscher, Director & CEO