SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

 

OR

 

£   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from       to

 

Commission File number 000-54834

 

WOODGATE ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware	46-1874004
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

 

2500 Tanglewilde

Suite 260

Houston, Texas 77063

(Address of principal executive offices) (zip code)

 

713-978-6551

(Registrant's telephone number, including area code)

 

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 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", "non-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 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    x No                   

 

Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.

Class	Outstanding at September 30, 2013
Common Stock, par value $0.0001	47,295,000

 

Documents incorporated by reference:                                          None

 

 

PART I

 

ITEM 1. FINANCIAL STATEMENTS

 

		Woodgate Energy Corporation Development Stage Company Statement of Financial Position
		30-Sep-13				31-Dec-12
ASSETS
Current Assets
Cash and Cash Equivalents			1,044,270				2,000.00
Accounts Receivable			337,481				-
Accrued Gas Sales			715				-
Prepaid Expense			12,500				-
Refundable Deposits			11,204				-
			1,406,170				2,000.00
Fixed Assets
Property and Equipment			33,403				-
Furniture and Fixtures			39,236				-
Project Under Development			19,282,703				-
Intangibles			8,157,352				-
Less accumulated DD&A			69,276				-
Total Assets			28,849,588				2,000.00
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable			599,654				-
Accrued Expense			366,084				350.00
Payroll Tax Liabilities			4,817				-
Direct Deposit Liabilities			13,553				-
Notes Payable			452,655				-
			1,436,763				350.00
Long-term Debt
Notes Payable			-				-
Total			1,436,763				350.00
Equity
Common Stock  (100,000,000 Common Shares and 20,000,000 Preference shares Authorized. 47,295,000 Common shares and 20,000,000 Common shares issued at par value (0.0001) and outstanding as of Sept 30, 2013 and Dec 31, 2012 respectively)			4,730				2,000.00
Additional Paid-in Capital			27,408,095				(350.00	)
Total Equity			27,412,825				1,650.00
Total Liabilities and Stockholders' Equity			28,849,588				2,000.00

 

 

		Woodgate Energy Corporation Development Stage Company Statement of Operations
		30-Sep-13				31-Dec-12				July 23, 2012 (Inception) to Sep 30, 2013
Revenues
Gas Sales			2,968				-				2,968
Total			2,968				-				2,968
Costs and Expenses
Direct operating costs			2,951				-				2,951
General and administrative costs
Bad Debt			107,302				-				107,302
Adv. & Marketing Expenses			820				-				820
Bank charges			539				-				539
Communication			423				-				423
Depreciation, depletion and amortization			(470	)			-				(470	)
Employee insurance			6,862				-				6,862
Insurance			16,813				-				16,813
Legal			294				-				294
License Fees			378				-				378
Miscellaneous			1,319				1357				2,676
Office equipment			2,455				-				2,455
Payroll			341,407				-				341,407
Professional Fees			454,303				-				454,303
Rent			36,791				-				36,791
Stationery			2,146				-				2,146
Taxes			4,028				-				4,028
Travel			33,600				-				33,600
Utilities			2,840				-				2,840
Total			1,011,850				1,357				1,013,207
Operating Income			(1,011,833	)			(1,357	)			(1,013,190	)
Interest, Expense and Other Income
Other Income			163,127				-				163,127
Net unrealized gains (losses) on investments			(271,317	)			-				(271,317	)
Income from Continuing Operations			(1,120,023	)			(1,357	)			(1,121,380	)
Earnings per share			(0.06	)			0.00				(0.06	)

 

 

		Woodgate Energy Corporation Development Stage Company Statement of Cash Flows
		30-Sep-13				31-Dec-12				July 23, 2012 (Inception) to Sep 30, 2013
Operating Activities
Net Income			(1,120,023	)			(1,357	)			(1,121,380	)
Adjustments to reconcile Net Income to net Cash provided by Operations
Accounts Payable			(280,408	)			-				(280,408	)
Accounts Receivable			702,869				-				702,869
Accrued Sale of Gas Income			218				-				218
Prepaid Expense			1,309				-				1,309
Credit Cards			200				-				200
Depreciation			(470	)			-				(470	)
Direct Deposit Liabilities			13,553				-				13,553
Payroll Tax Liabilities			(3,457	)			-				(3,457	)
Accrued Expense			233,272				350				233,622
Net Cash Provided/(used) by Operating Activities			(452,937	)			(1,007	)			(453,944	)
Investing Activities
Intangible Assets			(8,157,352	)			-				(8,157,352	)
Projects Under Development			(613,743	)			-				(613,743	)
Investment in EPCO			18,960,845				-				18,960,845
Debt Support to EPCO			(289,119	)			-				(289,119	)
			9,900,631				0				9,900,631
Financing Activities
Cash Balances from Subsidiaries			53,100				-				53,100
Notes Payables			(13,199,772	)			-				(13,199,772	)
Proceeds from Issuance of Stock			1,293,066				2,000				1,295,066
Proceeds from Stock Sale			875				-				875
Proceeds from Members/Stockholder's Contribution			3,447,307				1,007				3,446,314
Net Cash Provided by Financing Activities			(8,405,424	)			3,007				(8,404,417	)
Net Cash increase for period			1,042,270				2,000				1,042,270
Cash at Beginning of Period			2,000				0				2,000
Cash at end of Period			1,044,270				2,000				1,044,270

 

 

		Woodgate Energy Corporation Development Stage Company Statement of Stockholders' Equity For the period ending Sep 30, 2013
		Shares				Members' Capital				Additional Paid-in Capital				Accumulated Earnings				Total Members Equity
Balance July 23, 2012 Inception			0				0				0				0				0
Issuance of Common Stock			20,000,000				2,000												2,000
Additional Paid-in-Capital			0				0				1,007				0				1,007
Net Income/loss			0				0				0				(1,357	)			(1,357	)
Balance December 31, 2012			20,000,000				2,000				1,007				(1,357	)			1,650
Redemption of Common Stock			(10,750,000	)			(1,075	)			0				0				(1,075	)
Issuance of Common Stock			38,045,000				3,805				28,528,469				0				28,532,273
Net Income/loss			0				0				0				(1,120,023	)			(1,120,023	)
Balance September 30, 2013			47,295,000				4,730				28,529,476				(1,121,380	)			27,412,825

 

  

		WOODGATE ENERGY CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2013
		Woodgate				E & P Co				Prestige O & G				Pro Forma Adjustments				Pro Forma Combined
ASSETS
Current Assets
Cash and Cash Equivalents			1,000,611				40,833				2,826				-				1,044,270
Accounts Receivable			289,119				47,931				431				(337,481	)e			0
Accrued Gas Sales			-				715				-				-				715
Prepaid Expense			-				12,500				-				-				12,500
Refundable Deposits			-				11,204				-				-				11,204
			1,289,730				113,183				3,257				(337,481	)			1,068,689
Fixed Assets
Property and Equipment			-				33,403				-				-				33,403
Furniture and Fixtures			-				39,236				-				-				39,236
Project Under Development			-				9,185,255				10,097,448				112,504	c			19,395,207
Intangibles			-				8,157,352				-				-				8,157,352
Less accumulated DD&A			-				69,276				-				-				69,276
Total Assets			1,289,730				17,459,153				10,100,705				(224,977	)			28,624,611
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable			872				550,851				47,931				(337,481	)e			262,173
Accrued Expense			-				364,084				2,000				-				366,084
Payroll Tax Liabilities			-				4,817				-				-				4,817
Direct Deposit Liabilities			-				13,553				-				-				13,553
Notes Payable			-				452,655				-				-				452,655
			872				1,385,960				49,931				(337,481	)			1,099,282
Long-term Debt
Notes Payable			-				-				-				-				-
Total			872				1,385,960				49,931				(337,481	)			1,099,282
Stockholder's Equity			1,288,858				16,073,193				10,050,774				112,504	d			27,525,329
Total Liabilities and Stockholders' Equity			1,289,730				17,459,153				10,100,705				(224,977	)			28,624,611

 

  

		WOODGATE ENERGY CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS AS OF SEPTEMBER 30, 2013
		Woodgate				E & P Co				Prestige O & G				Pro Forma Adjustments				Pro Forma Combined
Revenues
Gas Sales			-				2,537				431				-				2,968
Total			-				2,537				431				-				2,968
Costs and Expenses
Direct operating costs			-				2,951				-				-				2,951
General and administrative costs
Bad Debt			-				107,302				-				-				107,302
Adv. & Marketing Expenses			325				495				-				-				820
Bank charges			-				527				12				-				539
Communication			-				423				-				-				423
Depreciation, depletion and amortization			-				(470	)			-				-				(470	)
Employee insurance			-				6,862				-				-				6,862
Insurance			-				16,813				-				-				16,813
Legal			294				-				-				-				294
License Fees			-				378				-				-				378
Miscellaneous			973				346				-				-				1,319
Office equipment			-				2,455				-				-				2,455
Payroll			-				341,407				-				-				341,407
Professional Fees			8,578				441,225				4,500				-				454,303
Rent			-				31,554				5,237				-				36,791
Stationery			-				2,146				-				-				2,146
Taxes			-				4,028				-				-				4,028
Travel			-				33,600				-				-				33,600
Utilities			-				2,840				-				-				2,840
Total			10,170				991,931				9,749				-				1,011,850
Operating Income			(10,170	)			(992,345	)			(9,318	)			-				(1,011,833	)
Interest, Expense and Other Income
Other Income			2,286				2,028				158,813				(158,813	)a			4,314
Net unrealized gains (losses) on investments			-				-				(271,317	)			271,317	b			-
Income from Continuing Operations			(7,884	)			(990,317	)			(121,822	)			112,504				(1,007,519	)

 

 

WOODGATE ENERGY CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

AS OF SEP 30, 2013

 

Pro Forma Income Statement Adjustments

 

(a)

Elimination of interest earned on loans extended to E & P Co., LLC.

 

(b)

Elimination of loss resulting from investment in E & P Co., LLC.

 

Pro Forma Balance Sheet Adjustments

 

(c)

To eliminate the capitalization of interest in accordance to successful efforts treatment.

 

(d)

To eliminate Prestige O & G, LLC’s investment in E & P Co., LLC.

 

(e)

To eliminate inter-company receivables for Woodgate Energy Corporation, E & P Co., LLC and Prestige O&G, LLC.

 

 

WOODGATE ENERGY CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

NATURE OF OPERATIONS

 

Woodgate Energy Corporation ("Woodgate" or "the Company") was incorporated on July 23, 2012 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On September 6, 2013, Woodgate entered into a business combination with Prestige O&G, LLC and E&P Co., LLC. This combination took the form of stock-for-stock acquisition and Prestige O&G, LLC and E&P Co., LLC became fully owned subsidiaries of the Company. Woodgate has been in the developmental stage since inception and its operations to date have been limited to identifying potential Oil & Gas Project companies and entering into a business transaction with them.

 

E&P Co, LLC (EPCO) was formed in June 2005 in the State of Texas, and is engaged in the development, drilling and production of coal bed methane (CBM) gas on a concession located in the State of Louisiana. EPCO is engaged in the exploration and development of CBM wells, and it currently holds three producing wells and one salt water disposal well, and is in the process of developing additional wells. The main source of revenue for the Company is sale of CBM gas to Regency Gas Services, LLC. EPCO currently has access to about 10,000 net mineral acres of land (through a lease) which has the potential of developing additional CBM wells.

 

Prestige O&G, LLC (Prestige) was formed in June 2009 in the State of Texas, and invests in and develops oil and gas exploration and production projects in the United States and other countries. As one of its major investments, Prestige formerly held an interest in EPCO (which interest was withdrawn on June 30, 2013 in preparation for the Acquisitions) and is currently a partner with EPCO in its CBM Gas Project in the State of Louisiana.

 

The Exchange Closing took place on September 25, 2013 and the Company allotted a new issue of 23,453,050 Common Shares to be given to the members of Prestige O&G, LLC and E&P Co., LLC for the purpose of acquiring the LLCs by the Company. Additionally, the Company also allotted the aggregate of 13,296,950 Common shares to the current against the outstanding Debt balances in the books of LLCs as it appeared on the day of business combination. In sum, a total of 36,750,000 shares of common stock of the Company were issued in the Acquisitions.

 

BASIS OF PRESENTATION

 

The accompanying unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state our results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.

 

USE OF ESTIMATES

 

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

 

 

CONCENTRATION OF CREDIT RISK

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains its cash and cash equivalents with major financial institutions selected upon management’s assessment of the bank’s financial stability. Balances have not exceeded the $250,000 federal depository insurance limit. The Company has not experienced any losses on deposits. Collateral is generally not required for credit granted. The Company will provide allowances for potential credit losses when necessary.

 

INCOME TAXES

 

Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.

 

EARNINGS PER COMMON SHARE

 

Earnings per common share are computed by dividing net loss by the weighted average number of common shares outstanding during the period. For the period ending September 30, 2013, the company has recorded a loss of $1,120,023 resulting in Earnings per share of ($0.06).

 

Diluted loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of September 30, 2013, there are no outstanding dilutive securities.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

 

   Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

   Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

   Level 3 inputs are unobservable inputs for the asset or liability.

 

The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company elects to disclose the fair value measurement at the beginning of the reporting period during which the transfer occurred.

 

NOTE 2 - GOING CONCERN

 

The Company has sustained operating losses since inception. It has an accumulated deficit of $1,121,380 as of September 30, 2013. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.

 

 

These financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiate with a business entity for the combination of that target company with the Company.

 

There is no assurance that the Company will ever be profitable. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

Management has developed specific current and long-term plans to address its viability as a going concern as follows:

·

Upon registration, the Company will attempt to raise funds through equity offerings. If successful, these funds will be used to provide working capital.

·

In the long term, the Company believes that cash flows from growth in its operations will provide the resources for continued operations.

 

There can be no assurance the Company will have the ability to implement its business plan and to ultimately attain profitability. The Company’s long-term viability as a going concern is dependent upon three key factors:

 

·

The Company’s ability to obtain adequate sources of equity funding to meet current commitments and fund the continuation of its business operation in the near term.

 

·

The ability of the Company to control costs and expand revenues.

 

·

The ability of the Company to ultimately achieve adequate profitability and cash flows from operations to sustain its operations.

 

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

 

Adopted

 

In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS) of Fair Value Measurement Topic 820." ASU 2011-04 is intended to provide a consistent definition of fair value and improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The amendments include those that clarify the FASB's intent about the application of existing fair value measurement and disclosure requirements, as well as those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This update is effective for annual and interim periods beginning after December 15, 2011. The adoption of this ASU did not have a material impact on the company's financial statements.

 

Not Adopted

 

In December 2011, the FASB issued ASU No. 2011-11: Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities, which requires new disclosure requirements mandating that entities disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. This ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim period within those annual periods. Entities should provide the disclosures required retrospectively for all comparative periods presented. We are currently evaluating the impact of adopting ASU 2011-11 on the consolidated financial statements.

 

 

The FASB issued Accounting Standards Update (ASU) No. 2012-02— Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, on July 27, 2012, to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. Early adoption is permitted. The company does not expect the adoption of this ASU inconsistent have a material impact on the company's financial statements.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

NOTE 4   STOCKHOLDER'S EQUITY

 

The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock.

 

In July, 2012, the Company issued 20,000,000 common shares to two directors and officers for an aggregated amount of $2,000 in cash.

 

In August, 2012, the stockholders made a capital contribution in the amount of $1,007 to pay the operating expenses incurred by the Company. In March 2013, the stockholders again made a capital contribution in the amount of $1,150 to pay the operating expenses incurred by the Company.

 

On May 16, 2013, the Company redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share for an aggregate redemption price of $1,950.

 

On May 17, 2013, the Company issued 8,750,000 shares of its common stock pursuant to Section 4(2) of the securities Act of 1933 at par representing 94.5% of the total outstanding 9,250,000 shares of the common stock.

 

In July 2013, the Company began to offer its common shares through private placement. The first sale was registered on July 30, 2013. By September 30, 2013, the Company had issued 1,295,000 shares of its common stock through private placement.

 

On September 6, 2013, the Company entered into a Business Combination with two LLCs – Prestige O&G, LLC and E&P Co, LLC and the combination took the form of Stock-for-Stock acquisition.

 

The Exchange Closing took place on September 25, 2013 and the Company allotted a new issue of 23,453,050 Common Shares to be given to the members of Prestige O&G, LLC and E&P Co., LLC for the purpose of acquiring the LLCs by the Company. Additionally, the Company also allotted the aggregate of 13,296,950 Common shares to the current against the outstanding Debt balances in the books of LLCs as it appeared on the day of business combination.

 

As of September 30, 2013, 47,295,000 shares of common stock and no preferred stock were issued and outstanding.

 

 

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Woodgate Energy Corporation (formerly Woodgate Acquisition Corporation) was incorporated on July 23, 2012 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. Woodgate was formed to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.

 

Woodgate has filed with the Securities and Exchange Commission a registration statement on Form 10 and has effected a change in control in May, 2013. The Company has filed a Form 8-K noticing the change of its name and a subsequent Form 8-K notifying the change in control.

 

On September 6, 2013, Woodgate entered into a business combination with Prestige O&G, LLC and E&P Co., LLC. The combination took the form of stock-for-stock acquisition and Prestige O&G, LLC and E&P Co., LLC became fully owned subsidiaries of the Company. Following the business combination the Company filed a Form 8-K with the Securities and Exchange Commission.

 

Following the business combination of Woodgate with Prestige O&G, LLC and E&P Co., LLC, the Company allotted a new issue of 23,453,050 Common Shares to be given to the members of Prestige O&G, LLC and E&P Co., LLC for the purpose of acquiring the LLCs by the Company. Additionally, the Company also allotted the aggregate of 13,296,950 Common shares against the outstanding Debt balances in the books of LLCs as it appeared on the day of business combination. The Company also issued 1,295,000 shares of its common stock through private placement through September 30, 2013.

 

The presented financials for Woodgate for September 30, 2013 are the consolidated financials for Woodgate Energy Corporation and its subsidiaries, Prestige O&G, LLC and E&P Co., LLC.

 

Cash & Cash Equivalents

 

At September 30, 2013 and December 31, 2012, Cash and Cash Equivalents consisted of $1,044,270 and $2,000, respectively.

 

Name of the Entity		As of September 30, 2013
Woodgate Energy Corporation (Parent Company)			1,000,611
E&P Co., LLC (Subsidiary Company)			40,833
Prestige O&G, LLC (Subsidiary Company)			2,826
TOTAL			1,044,270

 

Accounts Receivable

 

Woodgate had an Accounts Receivable of $337,481 at September 30, 2013.

 

Name of the Entity		As of September 30, 2013
Woodgate Energy Corporation (Parent Company)			289,119
E&P Co., LLC (Subsidiary Company)			47,931
Prestige O&G, LLC (Subsidiary Company)			431
			337,481

 

Projects Under Development

 

At September 30, 2013, the Company has $19,282,703 recorded as Projects Under Development. This includes $18,932,703 for the CBM project held jointly by its subsidiaries E&P Co., LLC and Prestige O&G, LLC and $350,000 for the Washington project held by Prestige O&G, LLC.

 

 

Name of the Entity		As of September 30, 2013
Woodgate Energy Corporation (Parent Company)			0
E&P Co., LLC (Subsidiary Company)			9,185,255
Prestige O&G, LLC (Subsidiary Company)			10,097,448
			19,282,703

 

Intangibles

 

The Company also records $8,157,352 as an Intangible asset as identified by its subsidiaries to recognize the value of the proprietary well completion processes developed by the engineers of the subsidiary company.

 

Name of the Entity		As of September 30, 2013
Woodgate Energy Corporation (Parent Company)			0
E&P Co., LLC (Subsidiary Company)			8,157,352
Prestige O&G, LLC (Subsidiary Company)			0
			8,157,352

 

Notes Payables

 

At September 30, 2013, the Company had Notes Payables for $452,655.

 

Name of the Entity		As of September 30, 2013
Woodgate Energy Corporation (Parent Company)			0
E&P Co., LLC (Subsidiary Company)			452,655
Prestige O&G, LLC (Subsidiary Company)			0
			452,655

 

Accounts Payable

 

At September 30, 2013, the Company had Accounts Payables for $599,654

 

Name of the Entity		As of September 30, 2013
Woodgate Energy Corporation (Parent Company)			872
E&P Co., LLC (Subsidiary Company)			550,851
Prestige O&G, LLC (Subsidiary Company)			47,931
			599,654

 

Revenues

 

As of September 30, 2013, Woodgate had generated limited revenues (Gas Sales for $2,928) for the reported period and had limited income or cash flows from operations . The continuation of Woodgate as a going concern is dependent upon financial support from its stockholders or its ability to obtain necessary equity financing to continue operations.

 

 

Earnings Per Share

 

For the period ending September 30, 2013, the company has recorded a loss of $1,120,023 resulting in Earning per share of ($0.06) per share. Majority of this loss has been contributed by the operational expenses incurred by the subsidiaries of the Company and hence consolidated.

 

Subsequent Events

 

Subsequent to the date of this Report, commencing in October, 2013, the Company has been in process of identifying a market maker for achieving the trading status for its shares. The Company expects its share to be traded by the end of 2013 or early 2014.

 

On October 2, 2013, Osman Kaldirim, Jr. resigned as President and Mr. Fuad Al Humoud was appointed President of the Company. On October 2, 2013, Dr. Osman Kaldirim (Age 61 years) and Mel Bernstein (Age 42 years) were named as directors of the Company which made the total number of directors to Four. The Company has filed a form 8-k to this effect.

 

On October 25, 2013, the Company repealed existing Bylaws and adopted new Bylaws following which the 8-k filing was made with the SEC.

 

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Information not required to be filed by Smaller reporting companies.

 

ITEM 4. Controls and Procedures.

 

Disclosures and Procedures

 

Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report under the supervision and with the participation of the Company's principal executive officer and the principal financial officer.

 

Based upon that evaluation, they concluded that, as of June 30, 2013 that the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

This Quarterly Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Quarterly Report.

 

Changes in Internal Control Over Financial Reporting

 

Notwithstanding the change in control of management and shareholders, there was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 

PART II — OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the past three years, Woodgate has issued 47,295,000 common shares pursuant to Section 4(2) of the Securities Act of 1933 for an aggregate purchase price of $4,729.50 as follows:

 

On July 31, 2012, Woodgate issued the following shares of its common stock:

 

Name		Number of Shares				Consideration
Tiber Creek Corporation			10,000,000			$	1,000
MB Americus LLC			10,000,000			$	1,000

 

On May 16, 2013, the Company redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share for an aggregate redemption price of $1,950.

 

On May 17, 2013, the Company issued 8,750,000 shares of its common stock pursuant to Section 4(2) of the securities Act of 1933 at par representing 94.5% of the total outstanding 9,250,000 shares of the common stock.

 

In July 2013, the Company began to offer its common shares through private placement. The first sale was registered on July 30, 2013. By September 30, 2013, the Company had issued 1,295,000 shares of its common stock through private placement.

 

On September 6, 2013, the Company entered into a Business Combination with two LLCs – Prestige O&G, LLC and E&P Co, LLC and the combination took the form of Stock-for-Stock acquisition.

 

The Exchange Closing took place on September 25, 2013 and the Company allotted a new issue of 23,453,050 Common Shares to be given to the members of Prestige O&G, LLC and E&P Co., LLC for the purpose of acquiring the LLCs by the Company. Additionally, the Company also allotted the aggregate of 13,296,950 Common shares against the outstanding Debt balances in the books of LLCs as it appeared on the day of business combination. In sum, a total of 36,750,000 shares of common stock of the Company were issued in the Acquisitions.

 

As of September 30, 2013, 47,295,000 shares of common stock and no preferred stock were issued and outstanding.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

Not applicable.

 

 

ITEM 5. OTHER INFORMATION

 

(a)   Not applicable.

(b)  Item 407(c)(3) of Regulation S-K:

 

During the quarter covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

 

ITEM 6. EXHIBITS

 

	(a)	Exhibits
	31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

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.

 

WOODGATE ENERGY CORPORATION
By:    /s/ Fuad Al-Humoud.
	President
	Chief Financial Officer
Dated:	November 15, 2013