Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - Virtus Oil & Gas Corp.Financial_Report.xls
EX-32.2 - CERTIFICATION - Virtus Oil & Gas Corp.virtus_10k-ex3202.htm
EX-32.1 - CERTIFICATION - Virtus Oil & Gas Corp.virtus_10k-ex3201.htm
EX-31.2 - CERTIFICATION - Virtus Oil & Gas Corp.virtus_10k-ex3102.htm
EX-31.1 - CERTIFICATION - Virtus Oil & Gas Corp.virtus_10k-ex3101.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the fiscal year ended November 30, 2013

 

Commission File No. 001478725

 

VIRTUS OIL AND GAS CORP.

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

 

Nevada   46-0524121
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)

 

The Gas Tower, 555 West 5th Street, 31st Floor, Los Angeles, California 90013

(Address of Principal Executive Offices)

 

(213) 533-4122

(Issuer’s telephone number)

 

Curry Gold Corp.

29 Farmington, Nr Cheltenham, Gloucestershire, GL54 3ND, UK

(Former name, former address and former

fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(g) of the Act:

 

Title of Each Class Name of Each Exchange on which Registered
COMMON STOCK OTC

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o  No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x  No o

 

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 twelve months (or for such shorter periods 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 o

 

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). Yes x  No o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o   Accelerated filer o
Non-accelerated filer o   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 o

 

Aggregate market value of the voting and non-voting Common Stock held by non-affiliates of the registrant as of May 31, 2013 was $325,000, based on 1,300,000 shares at $0.25 per share. For purposes of this computation, all executive officers, directors and 10% shareholders were deemed affiliates of the registrant. Such a determination should not be construed as an admission that such 10% shareholders are affiliates.

 

As of March 4, 2014, the issuer had 49,050,000 shares of $0.001 par value Common Stock issued and outstanding.

 


 
 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains “forward-looking” statements including statements regarding our expectations of our future operations. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate," or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include, but are not limited to, economic conditions generally and in the industries in which we may participate and competition within our chosen industry. In light of these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly announce revisions we make to these forward-looking statements to reflect the effect of events or circumstances that may arise after the date of this report. All written and oral forward-looking statements made subsequent to the date of this report and attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section.

 

For a detailed description of factors that could cause actual results to differ materially from those expressed in any “forward-looking” statement, please see “Risk Factors” in this document.

 

In this Form 10-K references to “the Company”, “we,” “us,” and “our” refer to VIRTUS OIL AND GAS CORP.

 

 

 

 

 

 

 

 

 

 

2
 

 

TABLE OF CONTENTS

 

    PAGE
PART 1    
ITEM 1 Business 4
ITEM 1A Risk Factors 4
ITEM 1B Unresolved Staff Comments 7
ITEM 2 Properties 7
ITEM 3 Legal Proceedings 7
ITEM 4 Mine Safety Disclosures 7
     
PART II    
ITEM 5 Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 8
ITEM 6 Selected Financial Data 9
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
ITEM 7A Quantitative and Qualitative Disclosures About Market Risk 13
ITEM 8 Financial Statements and Supplementary Data 14
ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 15
ITEM 9A Controls and Procedures 15
ITEM 9B Other Information 16
     
PART III    
ITEM 10 Directors, Executive Officers, and Corporate Governance 17
ITEM 11 Executive Compensation 19
ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 20
ITEM 13 Certain Relationships and Related Transactions, and Director Independence 21
ITEM 14 Principal Accounting Fees and Services 21
     
PART IV    
ITEM 15 Exhibits, Financial Statement Schedules 22
     
  SIGNATURES 23
  EXHIBIT INDEX  

 

 

3
 

 

PART I

 

ITEM 1. BUSINESS

 

Virtus Oil & Gas Corp. (“the Company”, “we”, “us” or “our”), formerly known as Curry Gold Corp., was incorporated in the state of Nevada on September 30, 2009 (“Inception”). The Company was originally formed to become an operator and franchisor of fast-casual food catering vans that capitalize on the growing trend of food to go (convenience food) with its Currywurst product, a product native to Germany, that we would market through Switzerland and into major metropolitan US cities. On July 17, 2012, however, the Company abandoned its plans to enter into the catering van business and, in August 2013, the Company began seeking opportunities in the oil and gas exploration business, but the Company has not entered into any agreements regarding any such business opportunities.

 

Effective August 30, 2013, the shareholders of the Company approved (i) a forward stock split (the “Stock Split”) of the issued and outstanding shares of the common stock, $0.001 par value (“Common Stock”), in which each outstanding share of Common Stock would be exchanged for fourteen (14) new shares of Common Stock, and (ii) the change of the Company’s name to “Virtus Oil and Gas Corp.,” as reflected in the Amended and Restated Articles of Incorporation filed with the Secretary of State of Nevada on July 25, 2013 (as amended, the “Restated Articles”). The Restated Articles also increased the number of authorized shares of the Company’s Common Stock from 75,000,000 to 150,000,000.

 

Since the Company’s inception on September 30, 2009 to November 30, 2013, we have not generated any substantive revenues and have incurred a cumulative net loss of $383,471.

 

Our fiscal year end is November 30.

 

EMPLOYEES

 

We have no full time employees. Daniel M. Ferris, our President and director, and Steven Plumb, our Chief Financial Officer have agreed to serve in those capacities on a part-time basis. See Item 10, Directors, Executive Officers and Corporate Governance.

 

AVAILABLE INFORMATION - REPORTS TO SECURITY HOLDERS

 

Our website address is www.virtusoilandgas.com. Except as otherwise provided herein, the contents of our website are not a part of this report. We make available on this website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports after we electronically file those materials with, or furnish those materials to, the SEC. These filings are also available to the public at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Electronic filings with the SEC are also available on the SEC internet website at www.sec.gov.

 

ITEM 1A. RISK FACTORS

 

An investment in our Common Stock involves a high degree of risk. In addition to the other information in this Report, the following risk factors should be considered carefully in evaluating the Company and our business. We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock. If you decide to buy our Common Stock, you should be able to afford a complete loss of your investment.

 

4
 

 

RISKS RELATED TO OUR BUSINESS:

 

There is substantial doubt as to whether we will continue operations. If we discontinue operations, we will go out of business, and you could lose your investment.

 

Our independent accountant's report to our audited financial statements for the period ended November 30, 2013 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon obtaining adequate financing to pay our liabilities. If we are not able to continue as a going concern, it is likely investors will lose their investments.

 

The Company is a start-up or development stage company with a history of operating losses, and we expect to continue to realize losses in the near future, so an investment in Virtus Oil and Gas Corp. is considered a high risk investment whereby you could lose your entire investment. The Company currently has no operations that are producing revenue, and currently relies on investments by third parties to fund its business.  Even when the Company begins to generate revenues from operations, the Company may not become profitable or be able to sustain profitability.

 

We have not yet commenced operations and, therefore, we are considered a "start-up" or "development stage" company. We will incur significant expenses in order to implement our business plan. As an investor, you should be aware of the difficulties, delays and expenses normally encountered by an enterprise in its development stage, many of which are beyond our control, including unanticipated developmental expenses, inventory costs, employment costs, and advertising and marketing expenses. We cannot assure you that our business will prove successful, or that we will ever be able to operate profitably. If we cannot operate profitably, you could lose your entire investment.

 

Our lack of any operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance.

 

We do not have any material operating history, which makes it impossible to evaluate our business on the basis of historical operations.  Furthermore, the Company has abandoned its original business plan and is still in the process of selecting a new direction for the Company’s business. Therefore, our business carries both known and unknown risks. As a consequence, our past results may not be indicative of future results. Although this is true for any business, it is particularly true for us because of our lacking any material operating history.

 

If we do not obtain additional financing, our business will fail.

 

Our current operating funds are less than necessary to complete all intended objectives and therefore we will need to obtain additional financing in order to continue our business. We currently do not have any operations and we have no income.

 

We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor acceptance of our business model and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.

 

The most likely source of future funds presently available to us is through the sale of equity capital in one or more negotiated private sale transactions. Any sale of share capital will result in dilution to existing shareholders.

 

Our business will rely heavily upon our President and founder, Mr. Daniel M. Ferris.

 

We have been heavily dependent upon the expertise and management of Mr. Daniel M. Ferris, our Chief Executive Officer and President, and our future performance will depend upon his continued services. The loss of the services of Mr. Ferris’ services could seriously interrupt our business operations, and could have a very negative impact on our ability to fulfill our business plan and to carry out our existing operations. We currently do not maintain key man life insurance on this individual. There can be no assurance that a suitable replacement could be found for him upon retirement, resignation, inability to act on our behalf, or death.

 

The Company recently underwent a change in management.

 

The Company underwent a change in control, and Soenke Timm, our founder and prior sole executive officer, resigned from his position as an executive officer and director. Daniel M. Ferris, who replaced Mr. Timm as chief executive officer and director of the Company, was not previously an employee of or otherwise involved in the management of the Company.

 

5
 

 

Our future growth may require recruitment of qualified employees.

 

In the event of our future growth, we may have to increase the depth and experience of our management team by adding new members. Our future success will depend to a large degree upon the active participation of our sole officer. There is no assurance that we will be able to employ qualified persons on acceptable terms. Lack of qualified employees may adversely affect our business development.

 

The possibility of a global financial crisis may significantly impact our business and financial condition for the foreseeable future.

 

The credit crisis and related turmoil in the global financial system may adversely impact our business and our financial condition, and we may face challenges if conditions in the financial markets do not improve. Our ability to access the capital markets may be restricted at a time when we would like, or need, to raise financing, which could have a material negative impact on our flexibility to react to changing economic and business conditions. The economic situation could have a material negative impact on our lenders or customers, causing them to fail to meet their obligations to us. We will need additional capital and financing to fund our fiscal 2013 operating forecast. There is no assurance that additional capital or financing will be available to us on terms that are acceptable to us or at all.

 

Our majority shareholder has the ability to significantly influence any matters to be decided by the shareholders.

 

Mr. Ferris currently owns approximately 60% of our Common Stock.  As a result, he can determine the outcome of any corporate matter that requires the approval of the holders of a majority of the shares of our Common Stock, including the election of directors, a merger or acquisition.

 

RISKS RELATED TO OUR COMMON STOCK

 

The market price of our Common Stock is, and is likely to continue to be, highly volatile and subject to wide fluctuations.

 

The market price of our Common Stock is likely to continue to be highly volatile and could be subject to wide fluctuations in response to a number of factors, some of which are beyond our control, including but not limited to:

 

·dilution caused by our issuance of additional shares of Common Stock and other forms of equity securities;
·announcements of new acquisitions, expansions or other business initiatives by us or our potential competitors;
·our ability to take advantage of new acquisitions, expansions or other business initiatives;
·quarterly variations in our revenues and operating expenses;
·changes in the valuation of similarly situated companies, both in our industry and in other industries;
·challenges associated with timely SEC filings;
·illiquidity and lack of marketability by being an OTC quoted stock;
·changes in analysts’ estimates affecting our company, our competitors and/or our industry;
·changes in the accounting methods used in or otherwise affecting our industry;
·additions and departures of key personnel;
·announcements of technological innovations or new products;
·fluctuations in interest rates and the availability of capital in the capital markets; and
·significant sales of our Common Stock, including sales by selling shareholders following the registration of shares under a prospectus.

 

These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our Common Stock and our results of operations and financial condition.

 

Because the SEC imposes additional sales practice requirements on brokers who deal in our shares which are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty reselling your shares and this may cause the price of the shares to decline.

 

A penny stock is generally a stock that is not listed on a national securities exchange or NASDAQ, is listed in the "pink sheets" or on the OTC Bulletin Board, has a price per share of less than $5.00, and is issued by a company with net tangible assets less than $5 million.

 

6
 

 

The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in Common Stock and other equity securities, including determination of the purchaser's investment suitability, delivery of certain information and disclosures to the purchaser, and receipt of a specific purchase agreement before effecting the purchase transaction.

 

Many broker-dealers will not affect transactions in penny stocks, except on an unsolicited basis, in order to avoid compliance with the penny stock trading rules. In the event our Common Stock becomes subject to the penny stock trading rules:

 

·such rules may materially limit or restrict the ability to resell our Common Stock, and
·the liquidity typically associated with other publicly traded equity securities may not exist.

 

Because of the significant restrictions on trading penny stocks, a public market may never emerge for our securities. If this happens, you may never be able to publicly sell your shares.

 

Our operating results will fluctuate significantly, and these fluctuations may cause the price of our Common Stock to decline.

 

Our operating results will likely vary in the future primarily as the result of fluctuations in our revenues and operating expenses, including the expansion of our operations, capital expenditures that we expect to incur, the prices of products and services, and other factors. If our results of operations do not meet the expectations of current or potential investors, the price of our Common Stock may decline.

 

We do not expect to pay dividends in the foreseeable future.

 

We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their Common Stock, and shareholders may be unable to sell their shares on favorable terms or at all. Investors cannot be assured of a positive return on investment or that they will not lose the entire amount of their investment in our Common Stock.

 

We may issue additional stock without shareholder consent.

 

Our board of directors, consisting solely of our CEO, Mr. Daniel M. Ferris, has authority, without action or vote of the shareholders, to issue all or part of our authorized but unissued shares. Additional shares may be issued in connection with future financing, acquisitions, employee stock plans, or otherwise. Any such issuance will dilute the percentage ownership of existing shareholders.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2. PROPERTIES

 

Our principal administrative office is located at The Gas Tower, 555 West 5th Street, 31st Floor, Los Angeles, California 90013. The Company does not currently have any other physical office location, or lease property of any kind. The Company owns the domain www.virtusoilandgas.com.

 

ITEM 3. LEGAL PROCEEDINGS

 

There is no pending or threatened litigation against the Company.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

7
 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Common Stock

 

Since October 18, 2011, shares of our Common Stock have been quoted on the OTC QB under the symbol “VOIL.” Our stock began trading on October 18, 2011 at $0.80 and the stock price has not changed since that date. Accordingly, there are no high and low bids for the Common Stock.

 

Effective August 30, 2013, the shareholders of the Company approved (i) a forward stock split (the “Stock Split”) of the issued and outstanding shares of the common stock, $0.001 par value (“Common Stock”), in which each outstanding share of Common Stock would be exchanged for fourteen (14) new shares of Common Stock, and (ii) the change of the Company’s name to “Virtus Oil and Gas Corp.,” as reflected in the Amended and Restated Articles of Incorporation filed with the Secretary of State of Nevada on July 25, 2013 (as amended, the “Restated Articles”). The Restated Articles also increased the number of authorized shares of the Company’s Common Stock from 75,000,000 to 150,000,000.

 

As of March 4, 2014, there were approximately 27 record holders of our Common Stock, according to the books of our transfer agent. A number of shares are held in street name, so the Company believes that the number of beneficial owners is significantly higher. As of March 4, 2014, there were 49,050,000 shares of Common Stock outstanding on record.

 

Dividends

 

There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

 

  1. we would not be able to pay our debts as they become due in the usual course of business; or
  2. our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

 

We have not declared any dividends. We do not plan to declare any dividends in the foreseeable future.

 

Equity Compensation Plans

 

We have no equity compensation program, including no stock option plan, and none are planned for the foreseeable future.

 

Warrants and Options

 

None.

 

Unregistered Issuance of Equity Securities

 

On July 19, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 150,000 shares of Common Stock to the investor for an aggregate purchase price of $50,000, or $0.3333 per share. The proceeds were received on July 19, 2013, but the shares have not yet been issued as of the date of this report and recorded as a stock payable.

 

On August 20, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 150,000 shares of Common Stock to the investor for an aggregate purchase price of $50,000, or $0.3333 per share. The proceeds were received on August 20, 2013, but the shares have not yet been issued as of the date of this report and recorded as a stock payable.

 

On October 7, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 300,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.3333 per share.

 

On December 10, 2013, the Company entered into a a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

On January 9, 2014, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

On February 6, 2014, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

All of the Equity Securities noted above were exempt from registration under Regulation S.  

 

8
 

 

ITEM 6. SELECTED FINANCIAL DATA

 

Since we are “a smaller reporting company,” as defined by SEC regulation, we are not required to provide the information required by this item.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our financial statements and notes to those statements. In addition to historical information, the following discussion and other parts of this annual report contain forward-looking information that involves risks and uncertainties.

 

OVERVIEW AND OUTLOOK

 

We are currently a development stage company evaluating alternative business opportunities. The Company is in the process of identifying alternatives in several industries, but the Company has not entered into any agreements regarding any such business opportunities.

 

We were incorporated in the State of Nevada on September 30, 2009. Our principal administrative office is located at The Gas Tower, 555 West 5th Street, 31st Floor, Los Angeles, California 90013. Our telephone number is (213) 533-4122. Our fiscal year end is November 30.

 

We are a development stage company and have not significantly commenced our planned principal operations. Our operations to date have been devoted primarily to startup and development activities, which include forming our entity, developing our business plan, registering with the SEC and listing our Common Stock on the OTCBB exchange under the symbol, “VOIL”. The Company is engaged in the exploration and production of oil and gas.

 

In order for us to commence substantive operations, we will require additional capital. It was our expectation that registration with the SEC and subsequent public listing of our Common Stock might facilitate our efforts in attracting additional capital. Thus far we have been unsuccessful in identifying credible sources of financing despite our efforts.

 

Since the Company’s inception on September 30, 2009 to November 30, 2013, we have not generated any substantive revenues and have incurred a cumulative net loss of $383,471.

 

Application of Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our Common Stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that our estimates, including those for the above-described items, are reasonable.

 

Accounting Policies

 

Our financial statements are presented in conformity with accounting principles generally accepted in the United States of America, as reported on our fiscal years ending on November 30, 2013 and 2012. We have summarized our most significant accounting policies.

 

Use of Estimates

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

 

Development Stage Policy

The Company has not earned revenue from planned principal operations since inception (September 30, 2009). Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth by current authoritative account literature. Among the disclosures required by current accounting literature are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.

 

9
 

 

Stock Based Compensation

Stock-based awards to non-employees are accounted for using the fair value method.

 

The Company adopted provisions which require that we measure and recognize compensation expense at an amount equal to the fair value of share-based payments granted under compensation arrangements.

 

The Company has adopted the “modified prospective” method, which results in no restatement of prior period amounts. This method would apply to all awards granted or modified after the date of adoption. In addition, compensation expense must be recognized for any unvested stock option awards outstanding as of the date of adoption on a straight-line basis over the remaining vesting period. The Company will calculate the fair value of options using a Black-Scholes option pricing model. The Company does not currently have any outstanding options subject to future vesting therefore no charge is required for the periods presented. Our method also requires the benefits of tax deductions in excess of recognized compensation expense to be reported in the Statement of Cash Flows as a financing cash inflow rather than an operating cash inflow. In addition, our method required a modification to the Company’s calculation of the dilutive effect of stock option awards on earnings per share. For companies that are using the “modified prospective” method, disclosure of pro forma information for periods prior to adoption must continue to be made.

 

Fair Value of Financial Instruments

Financial instruments consist principally of cash, trade and notes receivables, trade and related party payables and accrued liabilities. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is management’s opinion that the Company is not exposed to significant currency or credit risks arising from these financial instruments.

 

Revenue Recognition

Revenue is recognized at the time of sale if collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Basic and Diluted Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

 

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carryforwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.

 

In February 2013, FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

 

-Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
-Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

 

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

 

10
 

 

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

 

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

 

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

 

In July 2012, the FASB issued ASU 2012-02, “Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

 

RESULTS OF OPERATIONS FOR THE YEARS ENDED NOVEMBER 30, 2013 AND 2012:

 

   For the Years Ended     
   November 30,   Increase / 
   2013   2012   (Decrease) 
Revenues  $   $   $ 
                
General and administrative   139,842    7,280    132,562 
Professional fees   97,533    40,188    57,345 
                
Total Operating Expenses   237,375    47,468    189,907 
                
Net Operating (Loss)   (237,375)   (47,468)   (189,907)
                
Total other income (expense)   (34,529)   (2,894)   (31,635)
                
Net (Loss)  $(271,904)  $(50,362)  $(221,542)

 

Revenues:

 

The Company was established on September 30, 2009 and is in the development stage and had no operations during the years ended November 30, 2013 and 2012, as such there were no revenues.

 

General and Administrative:

 

General and administrative expense was $139,842 for the year ended November 30, 2013 compared to $7,280 for the year ended November 30, 2012, an increase of $132,562 or approximately 1,821%. General and administrative expenses consisted of bank fees of $700, SEC filing costs of $10,820, website development costs of $5,521, officer’s salary of $85,180, rent of $12,713, travel of $19,194, telephone of $1,693 and other expenses of $4,018. The increase in general and administrative expense for the year ended November 30, 2013 compared to 2012 was primarily due increased officer salary, rent and regulatory costs.

 

11
 

 

 

Professional Fees:

 

Professional fees expense was $97,533 for the year ended November 30, 2013 compared to $40,188 for the year ended November 30, 2012, an increase of $57,345, or approximately 143%. Professional fees consisted of legal, accounting and auditing costs necessary to prepare our public filings. The increase in professional fees expense for the year ended November 30, 2013 compared to 2012 was primarily due to increased accounting fees paid to our chief financial officer of $18,000, oil and gas consulting fees of $4,500, and legal fees of $34,845 due to costs associated with private placements, oil and gas leases and general corporate matters.

 

Net Operating Loss:

 

Net operating loss for the year ended November 30, 2013 was $237,375, or ($0.00) per share, compared to a net operating loss of $47,468, or ($0.00) per share, for the year ended November 30, 2012, an increase of $189,907 or 400%. Net operating loss increased primarily due to the increased general and administrative expenses and increased legal fees.

 

Other Expense:

 

Other expense was $34,529 for the year ended November 30, 2013 compared to $2,894 for the year ended November 30, 2012, an increase of $31,635, or approximately 1093%. Other expenses consisted of interest expense and impairment of oil and gas asset. The increase in other expense for the year ended November 30, 2013 compared to 2013 was primarily due to increased interest expense on short term debt financing as a result of having increased borrowing from related parties during the year ended November 30, 2013 than during the year ended November 30, 2012. The impairment of oil and gas asset of $30,000 resulted from our entering into an oil and gas mineral lease and subsequently canceling the lease. The original lease was capitalized and subsequently impaired as it was our only oil and gas mineral lease at the time and we would not be participating in the drilling on the property, and, therefore, would be unable to realize any revenue from the investment.

 

Net Loss:

 

Net operating loss for the year ended November 30, 2013 was $271,904, or ($0.01) per share, compared to a net operating loss of $50,362, or ($0.00) per share, for the year ended November 30, 2012, an increase of $221,542 or 440%. Net operating loss increased primarily due to the increased general and administrative expenses and increased legal fees.

 

LIQUIDITY AND CAPITAL RESOURCES

 

The following table summarizes total assets, accumulated deficit, stockholders’ equity (deficit) and working capital at November 30, 2013 compared to November 30, 2012.

 

   November 30, 2013   November 30, 2012 
Total Assets  $2,718   $625 
           
Accumulated (Deficit)  $(383,471)  $(111,567)
           
Stockholders’ Equity (Deficit)  $(104,992)  $(33,088)
           
Working Capital (Deficit)  $(106,287)  $(33,088)

 

Our principal source of operating capital has been provided from private sales of our Common Stock and debt financing. At November 30, 2013, we had a negative working capital position of $(106,287). As we continue to develop our business and attempt to expand operational activities, we expect to continue to experience net negative cash flows from operations in amounts not now determinable, and will be required to obtain additional financing to fund operations through Common Stock offerings and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next twelve months. We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an on-going effort to locate sources of additional funding, without which we will not be able to remain a viable entity. No financing arrangements are currently under contract, and there are no assurances that we will be able to obtain adequate financing. If we are able to obtain the financing required to remain in business, eventually achieving operating profits will require substantially increasing revenues or drastically reducing expenses from their current levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number of factors that are outside of our control. Our funding sources to date have been as follows:

 

12
 

 

On December 17, 2012 the Company received $34,944 from Daniel M. Ferris, our sole officer and director, in exchange for an unsecured promissory note, which carries a 10% interest rate and is due on demand.

 

On July 19, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 150,000 shares of Common Stock to the investor for an aggregate purchase price of $50,000, or $0.3333 per share. The proceeds were received on July 19, 2013, but the shares have not yet been issued as of the date of this report and recorded as a stock payable.

 

On August 20, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 150,000 shares of Common Stock to the investor for an aggregate purchase price of $50,000, or $0.3333 per share. The proceeds were received on August 20, 2013, but the shares have not yet been issued as of the date of this report and recorded as a stock payable.

 

On October 7, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 300,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.3333 per share.

 

On December 10, 2013, the Company entered into a a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

On January 9, 2014, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

On February 6, 2014, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

We anticipate that we may incur operating losses in the next twelve months. Our revenues are not expected to exceed our investment and operating costs in the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of operations. To address these risks, we must, among other things, seek growth opportunities through investment, implement and successfully execute our business strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot assure that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

 

Satisfaction of our cash obligations for the next 12 months.

 

As of November 30, 2013, our balance of cash on hand was $486. Our plan for satisfying our cash requirements for the next twelve months is through sale of shares of our Common Stock, third party debt financing, and/or traditional bank financing.

 

Contractual obligations and commitments.

 

As of November 30, 2013, we leased a virtual office for $1,919 per month. The lease terms are on a month to month basis.

 

Summary of product and research and development that we will perform for the term of our plan.

 

We are not anticipating significant research and development expenditures in the near future.

 

Expected purchase or sale of plant and significant equipment.

 

We do not anticipate the purchase of significant property and equipment in the near future.

 

Off-balance sheet arrangements.

 

None.

  

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required.

 

13
 

 

ITEM 8. FINANCIAL STATEMENTS

 

Index to Financial Statements

 

Report of Independent Registered Public Accounting Firm F-1
   
Balance Sheets as of November 30, 2013 and 2012 F-2
   
Statements of Operations for the years ended November 30, 2013 and 2012, and the period from September 30, 2009 (inception) to November 30, 2013 F-3
   
Statement of Stockholders' Equity (Deficit) for the period from September 30, 2009 (inception) to November 30, 2013 F-4
   
Statements of Cash Flow for the years ended November 30, 2013 and 2012, and the period from September 30, 2009 (inception) to November 30, 2013. F-5
   
Notes to Financial Statements F-6

 

 

 

 

 

 

 

 

 

 

 

 

 

14
 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors

Virtus Oil and Gas Corp

(formerly known as Curry Gold Corp.)

(A Development Stage Company)

 

We have audited the accompanying balance sheets of Vitus Oil and Gas Corp (formerly known as Curry Gold Corp., A Development Stage Company) as of November 30, 2013 and 2012 and the related statements of operations, changes in shareholders' equity (deficit) and cash flows for the periods ended November 30, 2013 and 2012 and from inception (September 30, 2009) through November 30, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Virtus Oil and Gas Corp as of November 30, 2013 and 2012, and the results of its operations and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statement, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ M&K CPAS, PLLC

 

www.mkacpas.com

Houston, Texas

March 7, 2014

 

F-1
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

 

   November 30,   November 30, 
   2013   2012 
           
Current assets:          
Cash  $486   $ 
Prepaid expenses   937    625 
Total current assets   1,423    625 
           
Property and equipment, net   1,295     
           
Total assets  $2,718   $625 
           
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
           
Current liabilities:          
Accounts payable and accrued expenses  $55,432   $18,795 
Accounts payable, related party       14,918 
Accrued interest, related party   4,529     
Note payable, related party   47,749     
Total current liabilities   107,710    33,713 
           
Stockholders' equity (deficit):          
Common stock, $0.001 par value, 150,000,000 shares authorized 47,300,000 and 46,900,000 shares issued and outstanding at November 30, 2013 and 2012, respectively   47,300    46,900 
Additional paid-in capital   171,179    31,579 
Stock subscription payable   60,000     
(Deficit) accumulated during development stage   (383,471)   (111,567)
Total stockholders' equity (deficit)   (104,992)   (33,088)
           
Total liabilities and stockholders' equity (deficit)  $2,718   $625 

 

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

 

F-2
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

 

   For the Year Ended   September 30, 2009 
   November 30,   (inception) to 
   2013   2012   November 30, 2013 
             
Revenue  $   $   $ 
                
Operating expenses:               
General and administrative   139,842    7,280    159,582 
Professional fees   97,533    40,188    181,115 
Total operating expenses   237,375    47,468    340,697 
                
Net operating (loss)   (237,375)   (47,468)   (340,697)
                
Other income (expense):               
Foreign currency gain (loss)           (1,055)
Impairment of oil and gas asset   (30,000)       (30,000)
Interest expense   (4,529)   (2,894)   (11,719)
Total other income (expense)   (34,529)   (2,894)   (42,774)
                
                
Net (loss)  $(271,904)  $(50,362)  $(383,471)
                
                
Weighted average number of common shares outstanding - basic and fully diluted   47,007,418    46,900,000    

 
                
Net (loss) per share - basic and fully diluted  $(0.01)  $(0.00)     

 

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

 

F-3
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

 

   Common stock   Additional Paid-In   Stock Subscription   (Deficit) Accumulated Development   Total Stockholders' Equity 
   Shares   Amount   Capital   Payable   Stage   (Deficit) 
                               
Common stock issued to founder for cash at $0.001 per share   28,000,000   $28,000   $(26,000)  $   $   $2,000 
                               
Common stock issued to founders for cash at $0.01 per share   18,900,000    18,900    (5,400)           13,500 
                               
Net loss for the year ended November 30, 2009                    (745)   (745)
                               
Balance, November 30, 2009   46,900,000    46,900    (31,400)       (745)   14,755 
                               
Net loss for the year ended November 30, 2010                   (33,941)   (33,941)
                               
Balance, November 30, 2010   46,900,000    46,900    (31,400)       (34,686)   (19,186)
                               
Net loss for the year ended November 30, 2011                   (26,519)   (26,519)
                               
Balance, November 30, 2011   46,900,000    46,900    (31,400)       (61,205)   (45,705)
                               
Contributed capital from debt forgiveness           62,979            62,979 
                               
Net loss for the year ended November 30, 2012                   (50,362)   (50,362)
                               
Balance, November 30, 2012   46,900,000    46,900   $31,579       $(111,567)  $(33,088)
Common stock sold for cash at $0.33 per share   300,000    300    99,700            100,000 
Common stock sold for cash at $0.40 per share   100,000    100    39,900    60,000        100,000 
Net loss for the year ended November 30, 2013                       (271,904)   (271,904)
                               
Balance, November 30, 2013   47,300,000   $47,300   $171,179   $60,000   $(383,471)  $(104,992)

 

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

 

F-4
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

 

   For the Year Ended   September 30, 2009 
   November 30,   (inception) to 
   2013   2012   November 30, 2013 
             
CASH FLOWS FROM OPERATING ACTIVITIES               
Net (loss)  $(271,904)  $(50,362)  $(383,471)
Adjustments to reconcile net (loss) to net cash used in operating activities:               
Depreciation expense   144        144 
Impairment of oil and gas assets   30,000        30,000 
Decrease (increase) in assets:               
Prepaid expenses   (312)   (507)   (937)
Increase (decrease) in liabilities:               
Accounts payable   16,637    17,955    35,432 
Accounts payable, related party   (14,918)   14,918     
Accrued expenses   20,000    930    21,237 
Accrued expenses, related party   4,529    1,964   10,483 
Net cash used in operating activities   (215,824)   (15,102)   (287,112)
                
CASH FLOWS FROM INVESTING ACTIVITIES               
Purchase of oil and gas assets   (30,000)       (30,000)
Purchase of equipment   (1,439)       (1,439)
Net cash used in investing activities   (31,439)       (31,439)
                
CASH FLOWS FROM FINANCING ACTIVITIES               
Proceeds from sale of common stock   200,000        215,500 
Proceeds from notes payable       15,000    21,435 
Repayment of note payable, related party   (2,133)       (2,133)
Proceeds from note payable, related party   49,882        84,235 
Net cash provided by financing activities   247,749    15,000    319,037 
                
NET CHANGE IN CASH   486    (102)   486 
                
CASH AT BEGINNING OF PERIOD       102     
                
CASH AT END OF PERIOD  $486   $   $486 
                
SUPPLEMENTAL INFORMATION:               
Interest paid  $   $      
Income taxes paid  $   $     
                
NON-CASH INVESTING AND FINANCING ACTIVITIES:               
Contributed capital from debt forgiveness  $   $62,979      

 

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

 

F-5
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 1 – Nature of Business and Significant Accounting Policies

 

Nature of Business

Virtus Oil and Gas Corp. (“the Company”) was incorporated in the state of Nevada on September 30, 2009 (“Inception”). The Company was originally formed as Curry Gold Corp to become an operator and franchisor of fast-casual food catering vans that capitalize on the growing trend of food to go (convenience food) with its Currywurst product, a product native to Germany, and market it through Switzerland and into major metropolitan US cities. On July 17, 2012, however, the Company abandoned its plans to enter into the catering van business and is now an oil and gas exploration and production company.

 

Basis of Presentation

The financial statements included herein, presented in accordance with United States generally accepted accounting principles and is stated in US currency have been prepared by the Company pursuant to the rules and regulations of the SEC.

 

The Company is considered to be in the development stage as defined by FASB ASC 915-10-05. This standard requires companies to report their operations, shareholders equity and cash flows from inception through the reporting date. The Company will continue to be reported as a development stage entity until, among other factors, revenues are generated from management’s intended operations. Management has provided financial data since inception (September 30, 2009).

 

The Company has adopted a fiscal year end of November 30.

 

Use of Estimates

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

 

Cash and Cash Equivalents

We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

 

Start-Up Costs

The Company accounts for start-up costs, including organization costs, whereby such costs are expensed as incurred.

 

Development Stage Policy

The Company has not earned revenue from planned principal operations since inception (September 30, 2009). Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth by current authoritative account literature. Among the disclosures required by current accounting literature are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.

 

Stock Based Compensation

Stock-based awards to non-employees are accounted for using the fair value method.

 

The Company adopted provisions which require that we measure and recognize compensation expense at an amount equal to the fair value of share-based payments granted under compensation arrangements.

 

The Company has adopted the “modified prospective” method, which results in no restatement of prior period amounts. This method would apply to all awards granted or modified after the date of adoption. In addition, compensation expense must be recognized for any unvested stock option awards outstanding as of the date of adoption on a straight-line basis over the remaining vesting period. The Company will calculate the fair value of options using a Black-Scholes option pricing model. The Company does not currently have any outstanding options subject to future vesting therefore no charge is required for the periods presented. Our method also requires the benefits of tax deductions in excess of recognized compensation expense to be reported in the Statement of Cash Flows as a financing cash inflow rather than an operating cash inflow. In addition, our method required a modification to the Company’s calculation of the dilutive effect of stock option awards on earnings per share. For companies that are using the “modified prospective” method, disclosure of pro forma information for periods prior to adoption must continue to be made.

 

F-6
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 1 – Nature of Business and Significant Accounting Policies (cont’d)

 

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to 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. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.

 

Fair Value of Financial Instruments

Financial instruments consist principally of cash, trade and notes receivables, trade and related party payables and accrued liabilities. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is management’s opinion that the Company is not exposed to significant currency or credit risks arising from these financial instruments.

 

Revenue Recognition

Revenue is recognized at the time of sale if collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Basic and Diluted Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

 

Recent Accounting Pronouncements

 

In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carryforwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.

 

In February 2013, FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

 

-Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
-Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

 

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

 

F-7
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

 

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

 

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

 

In July 2012, the FASB issued ASU 2012-02, “Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

 

Note 2 – Going Concern

 

As shown in the accompanying financial statements, the Company has no revenues and has incurred continuous losses from operations, had an accumulated deficit of $383,471 and $111,567 at November 30, 2013 and 2012, respectively, and a working capital deficit of $106,287 and $33,088 at November 30, 2013 and 2012, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

F-8
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 3 – Related Party

 

From time to time the Company’s CEO, Daniel M. Ferris has paid invoices on behalf of the Company. As of November 30, 2012, the Company owed Mr. Ferris a total of $14,918 as presented within accounts payable, related parties on the Company’s balance sheet. During the fiscal year ending November 30, 2013, Mr. Ferris advanced the Company $32,831 and the balance due to Mr. Ferris at November 30, 2012 was reclassified and included in note payable, related party at November 30, 2013. The note bears interest at 10%. The total amount due to Mr. Ferris at November 30, 2013 was $52,278, including principal and accrued interest.

 

On July 5, 2012, the Company’s former CEO, Soenke Timm sold 2,000,000 shares of the Company’s $0.001 par value Common Stock, representing sixty percent (60%) of the issued and outstanding shares of Common Stock, to Daniel M. Ferris. Mr. Timm owned no shares of Common Stock of the Company after the sale to Mr. Ferris. At the time of the sale of the Shares, Mr. Timm was the sole director and officer of the Company. Mr. Timm subsequently resigned as an officer of the Company effective July 6, 2012. Also effective July 6, 2012, Mr. Timm, as sole director acting by written consent without a special meeting, appointed Mr. Ferris to serve as President, Treasurer and Secretary of the Company.

 

On October 12, 2009, the Company issued 2,000,000 founder’s shares to the Company’s former President at the par value of $0.001 in exchange for proceeds of $2,000.

 

On October 12, 2009, the Company issued 50,000 founder’s shares to a former Director of the Company at $0.01 per share in exchange for proceeds of $500.

 

During the month of October, 2009, the Company issued 1,300,000 founder’s shares at $0.01 per share in exchange for proceeds of $13,000.

 

From time to time the former members of management and certain parties related to them loaned the Company money to fund operations. Those former management parties advanced the following unsecured demand loans, bearing interest at 10%, to fund operations:

 

-On March 26, 2012, the Company received a loan of $5,000
-On January 17, 2012, the Company received a loan of $10,000
-On June 9, 2011, the Company received a loan of $6,435
-On April 8, 2011, the Company received a loan of $4,800
-On September 30, 2010, the Company received a loan of $15,000
-On September 15, 2010, the Company received a loan of $553
-On August 11, 2010, the Company received a loan of $11,000
-On June 28, 2010, the Company received a loan of $3,000                          

 

On July 6, 2012, these loans totaling $62,979, consisting of $55,788 of principal and $7,191 of accrued interest was forgiven and contributed as capital by the lenders.

 

On August 1, 2013, the Company, entered into an engagement letter with Clear Financial Solutions, Inc., a Texas corporation (Clear Financial). On December 5, 2013, the Company and Clear Financial entered into Amendment No.1 to Engagement Letter. Under the engagement letter and the amendment (collectively, the “Engagement Letter”) Clear Financial will provide certain financial consulting services to the Company and Mr. Steven M. Plumb, founder and President of Clear Financial, will serve as the Chief Financial Officer of the Company. Clear Financial will, among other things, prepare and review the Company’s financial statements, oversee internal accounting controls and provide advice on generally accepted accounting principles. In addition, As compensation for the services provided, the Company will pay Clear Financial a fee of $4,500 per month and has agreed to issue up to 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), to Mr. Plumb. The Engagement Letter has an initial term of one year and will automatically renew for successive one-year periods until terminated by either party upon 60 days’ written notice prior to the end of the then current term. Clear Financial was paid $18,000 for Mr. Plumb’s services during the fiscal year ended November 30, 2013.

 

The Engagement Letter further provides that Clear Financial may from time to time bring oil and gas investment opportunities to the Company’s attention. Pursuant to the Engagement Letter, the Company will assign a 1% carried interest to each of Mr. Plumb and/or Mr. Jerry Walters, a principal of Clear Financial, with respect to each oil and gas investment opportunity that Messrs. Plumb and/or Walters bring to the Company’s attention and in which the Company invests.

 

F-9
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 4 – Fair Value of Financial Instruments

 

The Company adopted FASB ASC 820-10 upon inception at September 30, 2009. Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

The Company doesn’t have any financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

 

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

The following schedule summarizes the valuation of financial instruments at fair value on a non-recurring basis in the balance sheets as of November 30, 2013 and 2012, respectively:

 

   Fair Value Measurements at November 30, 2013 
   Level 1   Level 2   Level 3 
Assets               
Cash  $   $   $ 
Total assets            
Liabilities               
Note payable, related party            
Total liabilities            
   $   $   $ 

 

   Fair Value Measurements at November 30, 2012 
   Level 1   Level 2   Level 3 
Assets               
None  $   $   $ 
Total assets            
Liabilities               
None            
Total liabilities            
   $   $   $ 

 

There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the years ended November 30, 2013 and 2012.

 

Level 2 liabilities consist of a short term, unsecured, related party promissory note. No fair value adjustment was necessary during the years ended November 30, 2013 and 2012.

 

F-10
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 5 – Fixed Assets

 

Fixed assets consist of the following at November 30, 2013 and 2012, respectively:

 

   November 30,   November 30, 
   2013   2012 
Office equipment  $1,439   $ 
Less accumulated depreciation   (144)    
   $1,295   $ 

 

Depreciation and amortization expense totaled $144 and $-0- for the years ended November 30, 2013 and 2012, respectively.

 

Tidewater Agreement

 

On November 14, 2013, the Company, entered into a purchase agreement (the “Tidewater Agreement”) with Tidewater Oil & Gas Company LLC (“Tidewater”) pursuant to which the Company agreed to purchase an 87.5% working interest in oil and gas leases covering approximately 36,787 acres in Iron County, Utah. Tidewater has agreed to deliver the leases to the Company with an 80% net revenue interest. Tidewater’s sale of the leases was subject to the approval of the U.S. District Court for the District of Colorado (the “Bankruptcy Court”), which is presiding over Tidewater’s Chapter 11 bankruptcy proceedings. The Bankruptcy Court approved the sale of the leases on December 11, 2013.

 

Pursuant to the Tidewater Agreement, the purchase price for the leases is $290,000 and is payable by the Company as follows: $45,000 on or before December 21, 2013, $45,000 on or before February 4, 2014, $100,000 on or before May 5, 2014 and $100,000 on or before August 3, 2014. The Company made the initial $45,000 payment on December 17, 2013. The leases will not be transferred to the Company until the purchase price has been paid in full. The Company has also agreed to assume its proportionate share of all rental payments due on the leases, beginning immediately. If the Company fails to pay timely any rental payment, it will lose its interest in the underlying lease.

 

The Tidewater Agreement contemplates the drilling of an initial 12,000 foot vertical test well in the Jurassic-Navajo, Permian-Kaibab formation on the leases. Although Tidewater will retain a 12.5% working interest in the leases, the Company has agreed to pay 100% of the cost of drilling and completing this test well, which is estimated to be approximately $2.5 million. The Company has agreed to pre-pay such costs at least 30 days prior to the spud date, which is expected to be no later than February 3, 2015. If the Company fails to prepay such costs, it will forfeit its interests in the oil and gas leases and Tidewater will retain the purchase price. On January 30, 2014, the Company paid $52,734 to Tidewater, for reimbursement for costs of $7,734 and the second installment of the purchase price of $45,000.

 

Pioneer Agreement

 

On October 19, 2013, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Pioneer Oil and Gas (the “Seller”) pursuant to which the Company has agreed to purchase the Seller’s interest in two separate oil and gas leases issued by the Bureau of Land Management for the United States (the “BLM”), comprising 4,150 acres in Beaver County, Utah, for an aggregate purchase price of $460,000 (the “Purchase Price”). The Company has also agreed to assume all rental payments due on the leases. The Seller intends to convey to the Company a 100% working interest and an 80% net revenue interest in the leases. The Seller and certain other parties have retained an aggregate 20% overriding royalty interest in the leases. Both leases expire on January 1, 2017.

 

The Purchase Price is payable by the Company as follows: $30,000 on or before October 25, 2013, $30,000 on or before December 25, 2013, $100,000 on or before February 25, 2014, $100,000 on or before April 25, 2014, $100,000 on or before June 25, 2014 and $100,000 on or before August 25, 2014. If the Company fails to make a payment on time, the Purchase Agreement will terminate. The Company made the initial $30,000 payment on October 25, 2013. The leases will not be transferred to the Company until the Purchase Price has been paid in full; however, the Company is responsible for all lease payments beginning immediately. All payments made by the Company are non-refundable and will be forfeited to the Seller as liquidated damages if the Company does not pay the full purchase price to acquire the Leases.

 

F-11
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 5 – Fixed Assets (cont’d)

 

Upon payment of the final installment of the Purchase Price and no later than September 15, 2014, the Company will file and record with the BLM and relevant county recorder office all of the paperwork necessary to assign the leases to the Company. The Seller represents and warrants that title to the leases will be free and clear of all liens, mortgages, encumbrances and other claims and further represents and warrants title to the leases against the claims of all persons claiming by or through the Seller.

 

In the event that the 1 Falcon Well currently being drilled by Falcon Exploration Company near the acreage subject to these leases is deemed a commercial well producing oil or natural gas in commercial quantities, the Purchase Agreement will automatically terminate and be rendered null and void. The Seller will retain the leases and will return all of the funds previously paid to the Company.

 

On December 23, 2013, the Company delivered written notice to Seller of the Company’s intention to terminate the purchase agreement with Seller dated October 19, 2013 (the “Hinge Line Agreement”).

 

Pursuant to the Hinge Line Agreement, the Company agreed to purchase Seller’s interest in two oil and gas leases comprising 4,150 acres in Beaver County, Utah, for an aggregate purchase price of $460,000. The Company made an initial payment of $30,000 to Seller on October 25, 2013, but has not made any subsequent payments. Under the Hinge Line Agreement, title to the oil and gas leases would not be transferred to the Company until the full $460,000 purchase price had been paid to Seller. Accordingly, Seller will retain all rights to the oil and gas leases that are the subject of the Hinge Line Agreement, and Seller is entitled to retain the initial $30,000 payment as liquidated damages in accordance with the terms of the Hinge Line Agreement. The initial payment was capitalized and impaired in October 2013.

 

Note 6 – Note Payable, Related Party

 

Note payable, related party consists of the following at November 30, 2013 and 2012, respectively:

 

   November 30,   November 30, 
   2013   2012 
           
10% unsecured demand loan from the CEO in the amount of $47,749.  $47,749   $ 

 

The Company had accrued interest of $4,529 and $-0- owed to the Company’s CEO as of November 30, 2013 and 2012, respectively.

  

Note 7 – Stockholders’ Equity

 

Common Stock

On October 12, 2009, the Company issued 2,000,000 founder’s shares to the Company’s former CEO at the par value of $0.001 in exchange for proceeds of $2,000.

 

On October 12, 2009, the Company issued 50,000 founder’s shares to a former Director of the Company at $0.01 in exchange for proceeds of $500.

 

During the month of October, 2009, the Company issued 1,300,000 founder’s shares at the $0.01 in exchange for proceeds of $13,000.

 

As a result of the forward stock split, 33,550,000 additional shares were issued. The interim consolidated financial statements contained herein reflect the appropriate values for capital stock and accumulated deficit. Unless otherwise noted, all references in the accompanying interim consolidated financial statements to the number of common shares and per share amounts have been retroactively restated to reflect the forward stock split.

 

On July 19, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 150,000 shares of Common Stock to the investor for an aggregate purchase price of $50,000, or $0.3333 per share. The proceeds were received on July 19, 2013, but the shares have not yet been issued as of the date of this report and recorded as a stock payable.

 

F-12
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 7 – Stockholders’ Equity (cont’d)

 

On August 20, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 150,000 shares of Common Stock to the investor for an aggregate purchase price of $50,000, or $0.3333 per share. The proceeds were received on August 20, 2013, but the shares have not yet been issued as of the date of this report and recorded as a stock payable.

 

On October 7, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 300,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.3333 per share.

 

On December 10, 2013, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

Contributed Capital

On July 6, 2012, a total of $40,307 of debts, including accrued interest of $5,954, owed to the former CEO were forgiven and contributed to capital.

 

On June 26, 2012, a total of $22,672 of debt, including accrued interest of $1,237 was forgiven and contributed to capital.

 

Note 8 – Income Taxes

 

The Company accounts for income taxes under FASB ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.

 

For the years ended November 30, 2013 and 2012, respectively, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. The Company had approximately $383,471 and $111,570 of federal net operating losses at November 30, 2013 and 2012, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2030.

 

The components of the Company’s deferred tax asset are as follows:

 

   November 30,   November 30, 
   2013   2012 
Deferred tax assets:        
Net operating loss carry forwards  $383,471   $111,570 
           
Net deferred tax assets before valuation allowance   134,200    39,050 
Less: Valuation allowance   (134,200)   (39,050)
Net deferred tax assets  $   $ 

 

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at November 30, 2013 and 2012, respectively.

 

F-13
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 8 – Income Taxes (cont’d)

 

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

 

   November 30,   November 30, 
   2013   2012 
           
Federal and state statutory rate   35%   35%
Change in valuation allowance on deferred tax assets   (35%)   (35%)

 

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions as of any date on or before November 30, 2013.

 

Note 9 – Commitments

 

From time to time the Company’s CEO, Daniel M. Ferris has paid invoices on behalf of the Company. As of November 30, 2012, the Company owed Mr. Ferris a total of $14,918 as presented within accounts payable, related parties on the Company’s balance sheet. During the fiscal year ending November 30, 2013, Mr. Ferris advanced the Company $32,831 and the balance due to Mr. Ferris at November 30, 2012 was reclassified and included in note payable, related party at November 30, 2013. The note bears interest at 10%. The total amount due to Mr. Ferris at November 30, 2013 was $52,278, including principal and accrued interest.

 

On August 1, 2013, the Company entered into an engagement letter with Clear Financial Solutions, Inc., (“Clear Financial”). On December 5, 2013, the Company and Clear Financial entered into Amendment No.1 to the Engagement Letter.

 

Under the Engagement Letter, Clear Financial will provide certain financial consulting services to the Company and Mr. Steven M. Plumb, founder and President of Clear Financial, will serve as the Chief Financial Officer of the Company. As compensation for the services provided, the Company will pay Clear Financial a fee of $4,500 per month and has agreed to issue up to 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), to Mr. Plumb. The Engagement Letter has an initial term of one year and will automatically renew for successive one-year periods until terminated by either party upon 60 days’ written notice prior to the end of the then current term. Mr. Plumb has been paid $18,000 under the agreement during the year ended November 30, 2013. In February 2014, the Company issued Mr. Plumb 500,000 shares of restricted common stock of the Company.

 

The Engagement Letter further provides that Clear Financial may from time to time bring oil and gas investment opportunities to the Company’s attention. Pursuant to the Engagement Letter, the Company will assign a 1% carried interest to each of Mr. Plumb and/or Mr. Jerry Walters, a principal of Clear Financial, with respect to each oil and gas investment opportunity that Messrs. Plumb and/or Walters bring to the Company’s attention and in which the Company invests.

 

On November 14, 2013, the Company, entered into a purchase agreement (the “Tidewater Agreement”) with Tidewater Oil & Gas Company LLC (“Tidewater”) pursuant to which the Company agreed to purchase an 87.5% working interest in oil and gas leases covering approximately 36,787 acres in Iron County, Utah. Tidewater has agreed to deliver the leases to the Company with an 80% net revenue interest. Tidewater’s sale of the leases was subject to the approval of the U.S. District Court for the District of Colorado (the “Bankruptcy Court”), which is presiding over Tidewater’s Chapter 11 bankruptcy proceedings. The Bankruptcy Court approved the sale of the leases on December 11, 2013.

 

Pursuant to the Tidewater Agreement, the purchase price for the leases is $290,000 and is payable by the Company as follows: $45,000 on or before December 21, 2013, $45,000 on or before February 4, 2014, $100,000 on or before May 5, 2014 and $100,000 on or before August 3, 2014. The Company made the initial $45,000 payment on December 17, 2013. The leases will not be transferred to the Company until the purchase price has been paid in full. The Company has also agreed to assume its proportionate share of all rental payments due on the leases, beginning immediately. If the Company fails to pay timely any rental payment, it will lose its interest in the underlying lease.

 

F-14
 

 

VIRTUS OIL AND GAS CORP

(FORMERLY CURRY GOLD CORP.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

Note 9 – Commitments (cont’d)

 

The Tidewater Agreement contemplates the drilling of an initial 12,000 foot vertical test well in the Jurassic-Navajo, Permian-Kaibab formation on the leases. Although Tidewater will retain a 12.5% working interest in the leases, the Company has agreed to pay 100% of the cost of drilling and completing this test well, which is estimated to be approximately $2.5 million. The Company has agreed to pre-pay such costs at least 30 days prior to the spud date, which is expected to be no later than February 3, 2015. If the Company fails to prepay such costs, it will forfeit its interests in the oil and gas leases and Tidewater will retain the purchase price. On January 30, 2014, the Company paid $52,734 to Tidewater, for reimbursement for costs of $7,734 and the second installment of the purchase price of $45,000.

 

On December 5, 2013, the Company entered into an Employment Agreement with Daniel M. Ferris regarding his position as President and Chief Executive Officer of the Company. Mr. Ferris will be paid a base salary of $120,000 per year. Mr. Ferris will also be entitled to receive up to 1,500,000 shares of Common Stock to be issued in increments of 500,000 shares on December 5 in 2014, 2015 and 2016. The Employment Agreement has an initial term of three years and will automatically renew for successive one-year periods until earlier terminated. The Employment Agreement may be terminated (i) at any time by the Company for “cause”, (ii) upon 90 days’ written notice by either party for any reason, or (iii) upon 30 days’ written notice by either party at the end of any term. The Employment Agreement also terminates immediately upon Mr. Ferris’ death or disability.

 

If Mr. Ferris’ employment is terminated for “cause” by the Company, or if he voluntarily resigns, then he will forfeit any shares of Common Stock that have not yet been issued by the Company as of the date of such termination or resignation. If Mr. Ferris’ employment is terminated for any other reason, he will be entitled to receive the full 1,500,000 shares of Common Stock. The Employment Agreement defines “cause” as the willful and continued failure by Mr. Ferris to perform his duties, the conviction of a felony, or any other material conduct that is contrary to the best interests of the Company or adversely affects the reputation of the Company.

 

Note 10 – Subsequent Events

 

On December 5, 2013, the Company entered into an Employment Agreement with Daniel M. Ferris regarding his position as President and Chief Executive Officer of the Company. Mr. Ferris will be paid a base salary of $120,000 per year. Mr. Ferris will also be entitled to receive up to 1,500,000 shares of Common Stock to be issued in increments of 500,000 shares on December 5 in 2014, 2015 and 2016. The Employment Agreement has an initial term of three years and will automatically renew for successive one-year periods until earlier terminated. The Employment Agreement may be terminated (i) at any time by the Company for “cause”, (ii) upon 90 days’ written notice by either party for any reason, or (iii) upon 30 days’ written notice by either party at the end of any term. The Employment Agreement also terminates immediately upon Mr. Ferris’ death or disability.

 

If Mr. Ferris’ employment is terminated for “cause” by the Company, or if he voluntarily resigns, then he will forfeit any shares of Common Stock that have not yet been issued by the Company as of the date of such termination or resignation. If Mr. Ferris’ employment is terminated for any other reason, he will be entitled to receive the full 1,500,000 shares of Common Stock. The Employment Agreement defines “cause” as the willful and continued failure by Mr. Ferris to perform his duties, the conviction of a felony, or any other material conduct that is contrary to the best interests of the Company or adversely affects the reputation of the Company.

 

On January 9, 2014, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

On January 30, 2014, the Company paid $52,734 to Tidewater, for reimbursement for costs of $7,734 and the second installment of the purchase price of $45,000.

 

On February 6, 2014, the Company entered into a Securities Purchase Agreement with Fieldstone Industries, Inc., pursuant to which the Company agreed to issue 250,000 shares of Common Stock to the investor for an aggregate purchase price of $100,000, or $0.40 per share.

 

On February 27, 2014, the Company issued 500,000 shares of Common Stock to Mr. Plumb under the terms of his Engagement Letter. The fair market value of the Common Stock was $400,000 on the date of grant.

 

F-15
 

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

The Company has had no disagreements with its certified public accountants with respect to accounting practices or procedures or financial disclosure.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined) in Exchange Act Rules 13a - 15(e). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.

 

Our principal executive officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officer has determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Management’s Annual Report on Internal Control over Financial Reporting.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a- 15(f) under the Securities Exchange Act, as amended. Management, being our sole executive officer, Mr. Ferris, evaluated the effectiveness of our internal control over financial reporting as of November 30, 2013. In making this assessment, management used the criteria set forth by the committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:

 

·As of November 30, 2013, we did not maintain effective controls over financial reporting. Specifically segregation of duty controls were not designed and in place to ensure that the financial impact of certain transactions were accounted for properly.

 

·As of November 30, 2013, we did not maintain effective controls over financial reporting. Specifically, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert. As these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

 

15
 

 

Because of these material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting as of November 30, 2013 based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.

 

We intend to take measures to cure the aforementioned material weaknesses as resources become available, including, but not limited to, the following:

 

·We intend to hire additional staff as resources become available to maintain proper segregation of duty; and
·We intend to expand our Board of Directors and establish and audit committee as resources become available.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting through the date of this report or during the quarter ended November 30, 2013, that materially affected, or is reasonably likely to materially affect, the our internal control over financial reporting.

 

Independent Registered Accountant’s Internal Control Attestation

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.

 

ITEM 9B. OTHER INFORMATION

 

There are no further disclosures.

 

 

 

 

 

 

 

 

 

16
 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The directors and officers as of November 30, 2013, are set forth below. The directors hold office for their respective term and until their successors are duly elected and qualified. Vacancies in the existing Board of Directors are filled by a majority vote of the remaining directors. The officers serve at the will of our Board of Directors

 

Name   Positions   Age
Daniel M. Ferris   President and Chief Executive Officer, Secretary, Treasurer and Director   32
Steven M. Plumb, CPA   Chief Financial Officer   54

 

Background of Officer and Directors

 

Set forth below are the names of our directors and officers, all positions and offices held, the period during which they have served as such, and the business experience during at least the last five years:

 

Daniel M. Ferris:

 

Daniel M. Ferris has been our President and Chief Executive Officer and a member of our Board of Directors since July 6, 2012. Mr. Ferris has devoted approximately 95% of his professional time to our business and intends to continue to devote such time and efforts as may be appropriate in the future. Since March 29, 2011, Mr. Ferris was a senior publicist at Freud Communications. After leaving Freud Communications, he began his own public relations and corporate strategy firm, Magnum Communications. Magnum Communications assisted clients in Europe with public relations, financing arrangements, and recruitment. Mr. Ferris’ association with Magnum Communications ended in January 2009. Recently, Mr. Ferris has assisted fund managers with raising funds for a diamond project in the Democratic Republic of Congo. He also serves as a consultant for LCI, which is affiliated with Caesar’s Palace Group and held the role of CEO at a Gold Exploration firm for 4 years before stepping down to fully devote all his time to Virtus Oil & Gas. Mr. Ferris’ position at the Company represents his primary business activity.

 

Steven M. Plumb:

 

Steven M. Plumb, age 54, is a certified public accountant licensed in the State of Texas. Mr. Plumb is the President of Clear Financial, an accounting and consulting firm based in Houston, Texas. Mr. Plumb has over 25 years of experience in accounting, operations, finance and marketing. Prior to forming Clear Financial in 2001, Mr. Plumb was the Chief Financial Officer of ADVENTRX Pharmaceuticals Inc. He also held various roles with the “Big 4” accounting firms and was the Chief Financial Officer for DePelchin Children’s Center, a Houston-based nonprofit organization that offers mental health, foster care and adoption services in Texas. Mr. Plumb earned his Bachelor’s Degree in Business Administration in Accounting from the University of Texas at Austin in 1981.

 

Employment Agreements

 

Mr. Ferris

Mr. Ferris acts as our sole officer and is our only employee.

 

On December 5, 2013, the Company entered into an Employment Agreement with Daniel M. Ferris regarding his position as President and Chief Executive Officer of the Company. Mr. Ferris will be paid a base salary of $120,000 per year. Mr. Ferris will also be entitled to receive up to 1,500,000 shares of Common Stock to be issued in increments of 500,000 shares on December 5 in 2014, 2015 and 2016. The Employment Agreement has an initial term of three years and will automatically renew for successive one-year periods until earlier terminated. The Employment Agreement may be terminated (i) at any time by the Company for “cause”, (ii) upon 90 days’ written notice by either party for any reason, or (iii) upon 30 days’ written notice by either party at the end of any term. The Employment Agreement also terminates immediately upon Mr. Ferris’ death or disability.

 

17
 

 

If Mr. Ferris’ employment is terminated for “cause” by the Company, or if he voluntarily resigns, then he will forfeit any shares of Common Stock that have not yet been issued by the Company as of the date of such termination or resignation. If Mr. Ferris’ employment is terminated for any other reason, he will be entitled to receive the full 1,500,000 shares of Common Stock. The Employment Agreement defines “cause” as the willful and continued failure by Mr. Ferris to perform his duties, the conviction of a felony, or any other material conduct that is contrary to the best interests of the Company or adversely affects the reputation of the Company.

 

Mr. Plumb

On August 1, 2013, the Company, entered into an engagement letter with Clear Financial Solutions, Inc., a Texas corporation (“Clear Financial”). On December 5, 2013, the Company and Clear Financial entered into Amendment No.1 to Engagement Letter. The engagement letter and the amendment (collectively, the “Engagement Letter”) are attached as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

Under the Engagement Letter, Clear Financial will provide certain financial consulting services to the Company and Mr. Steven M. Plumb, founder and President of Clear Financial, will serve as the Chief Financial Officer of the Company. Clear Financial will, among other things, prepare and review the Company’s financial statements, oversee internal accounting controls and provide advice on generally accepted accounting principles. In addition, Mr. Plumb will execute the certifications required by Form 10-K and Form 10-Q pursuant to the requirements of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002. As compensation for the services provided, the Company will pay Clear Financial a fee of $4,500 per month and has agreed to issue up to 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), to Mr. Plumb. The Engagement Letter has an initial term of one year and will automatically renew for successive one-year periods until terminated by either party upon 60 days’ written notice prior to the end of the then current term.

 

The Engagement Letter further provides that Clear Financial may from time to time bring oil and gas investment opportunities to the Company’s attention. Pursuant to the Engagement Letter, the Company will assign a 1% carried interest to each of Mr. Plumb and/or Mr. Jerry Walters, a principal of Clear Financial, with respect to each oil and gas investment opportunity that Messrs. Plumb and/or Walters bring to the Company’s attention and in which the Company invests.

 

Term of Office

 

All directors have a term of office expiring at the next annual general meeting of the Company, unless reelected or earlier vacated in accordance with our bylaws. All officers have a term of office lasting until their removal or replacement by the board of directors.

 

Code of Ethics

 

The Company has not yet adopted a Code of Ethics as defined by applicable rules of the SEC. The Company only has one director and officer, and no employees. The Company anticipates that it will adopt a Code of Ethics when appropriate as it hires additional employees, obtains additional officers and directors, and begins operations.

 

Board Committees

 

The Company does not presently have a separately designated audit committee, compensation committee, nominating committee, executive committee or any other committees of its Board of Directors. As such, the sole director acts in those capacities. The Company believes that committees of the Board are not necessary at this time given that the Company is in its exploration stage. However, the sole director will continue to study this matter, and the Company plans to add Board members and/or committees of the Board as its business develops.

 

Audit Committee Financial Expert

 

Mr. Ferris does not qualify as an audit committee financial expert. The Company believes that the cost related to retaining such a financial expert at this time is prohibitive, given its current operating and financial condition. Further, because the Company is in the development stage of its business operations, it believes the services of an audit committee financial expert are not warranted at this time.

 

18
 

 

Legal Proceedings

 

No director, nominee for director, or executive officer has appeared as a party in any legal proceeding material to an evaluation of his or ability or integrity during the past five years.

 

Compliance with Section 16(a) Of the Exchange Act

 

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than ten percent of our Common Stock to file reports of ownership and change in ownership with the Securities and Exchange Commission and the exchange on which the Common Stock is listed for trading. Executive officers, directors and more than ten percent stockholders are required by regulations promulgated under the Exchange Act to furnish us with copies of all Section 16(a) reports filed. Based solely on our review of copies of the Section 16(a) reports filed for the fiscal year ended November 30, 2012, we believe that our executive officers, directors and ten percent stockholders complied with all reporting requirements applicable to them, except that it appears that Soenke Timm, a former CEO and President and Director of the Company, did not file a Form 3 with respect to his initial appointment, a Form 4 with respect to the 2,000,000 shares of Common Stock issued to him in October 2009, or a Form 5 for the 2011 or 2012 fiscal years.

 

ITEM 11. EXECUTIVE COMPENSATION

 

Since inception, we have paid no cash or non-cash executive compensation (including stock options or awards, perquisites, or deferred compensation plans), whatsoever, to the officers or directors. Following the date of this prospectus, our officers and directors will also continue not to receive any form of cash compensation from the Company until at least such time as we commence operations.

 

The following tables set forth certain summary information concerning all plan and non-plan compensation awarded to, earned by, or paid to the named executive officers and directors by any person for all services rendered in all capacities to the Company since inception until the date of this amended filing:

 

Summary Compensation Table

 

                                        Nonqualified              
                                  Nonequity     Deferred     All        
                      Stock     Stock     Incentive     Compensation     Other        
Name and Principal         Salary     Bonus     Awards     Options     Plan     Earnings     Compensation     Total  
Position   Year     ($)     ($)     ($)     ($)     ($)     ($)     ($)     ($)  
Dan Ferris-President, Treasurer, Secretary and sole Director     2013     $ 65,180     $ 0     $ 0     $ 0     $ 0     $ 0     $ 65,180     $ 65,180  
Steven Plumb –Chief Financial Officer     2013     $ 18,000     $ 0     $ 0     $ 0     $ 0     $ 0     $ 18,000     $ 18,000  

Soenke Timm - (1)

President, Treasurer, Secretary and sole Director

    2012     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 102,000  
Soenke Timm – (1) President, Treasurer, Secretary and sole Director     2011     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  

 

  (1) Mr. Timm resigned from his positions as President, Chief Executive Officer and Director on July 6, 2012, which he had held since the Company’s inception in September 2009.

 

Option Grants Since Inception Until The Date of This Filing

 

We do not currently have a stock option plan. No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to any executive officer or director since our inception; accordingly, no stock options have been granted or exercised by any of the officers or directors since we were founded.

 

Long-Tem Incentive Plans and Awards

 

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance. No individual grants or agreements regarding future payouts under non-stock price-based plans have been made to any executive officer or any director or any employee or consultant since our inception; accordingly, no future payouts under non-stock price-based plans or agreements have been granted or entered into or exercised by any of the officers or directors or employees or consultants since we were founded.

 

19
 

 

Compensation of Directors

 

The members of the Board of Directors are not compensated by us for acting as such. Directors are reimbursed for reasonable out-of-pocket expenses incurred. There are no arrangements pursuant to which directors are or will be compensated in the future for any services provided as a director.

 

Employment Contracts, Termination of Employment, Change-in-Control Arrangements

 

There are no employment agreements, or other contracts or arrangements with our officers or directors. There are no compensation plans or arrangements, including payments to be made by the Company, with respect to the officers, directors, employees or consultants of the Company that would result from the resignation, retirement or any other termination of such directors, officers, employees or consultants. There are no arrangements for directors, officers or employees that would result from a change-in-control.

 

Indemnification

 

We may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

 

Regarding indemnification for liabilities arising under the Securities Act, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the SEC, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

 

The following table sets forth certain information concerning the number of shares of our Common Stock owned beneficially as of the date of this filing by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities; (ii) each of our directors; (iii) each of our named executive officers; and (iv) officers and directors as a group. Unless otherwise indicated, the shareholder listed possesses sole voting and investment power with respect to the shares shown.

 

Title of Class   Name and Address of Beneficial Owner  

Amount and Nature of

Beneficial Ownership

  Percentage of
Common Stock (1)

 

DIRECTORS AND EXECUTIVE OFFICERS

 

Common Stock  

Daniel M. Ferris

Chief Executive Officer and Sole Director

 

28,000,000 Shares

 

 

59.7%

 

   

Steven M. Plumb

Chief Financial Officer

   

 

5% STOCKHOLDERS

 

Common Stock  

Daniel M. Ferris

  28,000,000 Shares   59.7%

 

Notes:

 

(1) Based on 46,900,000 shares of our Common Stock issued and outstanding as of July 6, 2013.

 

Equity Compensation Plans

 

We have no equity compensation program, including no stock option plan, and none are planned for the foreseeable future.

 

20
 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

Our officers and directors are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, they may face a conflict in selecting between our interests and these other business interests.

 

Except as described below, there are no transactions since the inception of the Company, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

 

From time to time Mr. Timm has loaned the Company money to fund operations. Mr. Timm has advanced the following unsecured demand loans, bearing interest at 10%, to fund operations: on April 8, 2011, the Company received a loan of $4,800; on September 30, 2010, the Company received a loan of $15,000; on September 15, 2010, the Company received a loan of $553; on August 11, 2010, the Company received a loan of $11,000; and on June 28, 2010, the Company received a loan of $3,000. On June 6, 2012, Mr. Timm, the sole director and officer of the Company, forgave the debt owed to him by the Company in the amount of $40,062.76 (including principal of $34,353.00 and interest of $5,709.76), plus any additional accrued but unpaid interest on the principal advanced to the Company.

 

On October 12, 2009, the Company issued 28,000,000 founder’s shares to Mr. Timm at the par value of $0.001 in exchange for proceeds of $2,000. On October 12, 2009, the Company issued 700,000 founder’s shares to Chris Pollmann, who was an officer and director of the Company until April 2011, at $0.01 in exchange for proceeds of $500. During the month of October, 2009, the Company issued 18,200,000 founder’s shares at the $0.01 in exchange for proceeds of $13,000.

 

On July 5, 2012, the Company’s former CEO, Soenke Timm sold 28,000,000 shares of the Company’s $0.001 par value common stock, representing sixty percent (59.7%) of the issued and outstanding shares of common stock, to Daniel M. Ferris. Mr. Timm owned no shares of common stock of the Company after the sale to Mr. Ferris. At the time of the sale of the Shares, Mr. Timm was the sole director and officer of the Company. Mr. Timm subsequently resigned as an officer of the Company effective July 6, 2012. Also effective July 6, 2012, Mr. Timm, as sole director acting by written consent without a special meeting, appointed Mr. Ferris to serve as President, Treasurer and Secretary of the Company.

 

Mr. Ferris, the CEO, has lent the Company $47,749 in the form of an unsecured note payable bearing interest at 10% and due upon demand. The Company has accrued $4,529 in interest on the loan as of November 30, 2013.

 

Director Independence

 

Quotations for the Company’s Common Stock are entered on the Over-the-Counter Bulletin Board inter-dealer quotation system, which does not have director independence requirements. For purposes of determining director independence, the Company applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. As a result, the Company does not have any independent directors. Our sole director, Daniel M. Ferris, is also the Company’s principal executive officer. Mr. Timm, our former director, was also our sole executive officer until July 6, 2012.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended November 30, 2012 and 2011 are set forth in the table below:

 

   For the year ended   For the year ended 
Fee Category  November 30, 2012   November 30, 2012 
Audit Fees (1)  $7,500   $8,400 
Tax Fees (2)  $   $ 
Tax Compliance Services  $   $ 
All Other Fees (3)  $   $ 

 

  (1) Audit fees consist of fees for professional services rendered in connection with or related to the audit of our consolidated annual financial statement, for the review of interim consolidated financial statements in Form 10-Qs and for services normally provided in connection with statutory and regulatory filings or engagements, including registration statements.
  (2) Tax fees consist of fees billed for professional services rendered for tax compliance and tax advice.
  (3) All other fees consist of fees billed for assistance with assessment for Sarbanes-Oxley, SEC correspondence and services other than the services reported in other categories.

 

Audit Committee’s Pre-Approval Practice.

 

We do not have an audit committee. Our board of directors performs the function of an audit committee. Section 10A(i) of the Securities Exchange Act of 1934, as amended, prohibits our auditors from performing audit services for us as well as any services not considered to be audit services unless such services are pre-approved by our audit committee or, in cases where no such committee exists, by our board of directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.

 

21
 

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 

 

The following exhibits are filed as part of, or are incorporated by reference into, this report on Form 10-K:

 

Exhibit No.   Description
     
3.1(a)   Articles of Incorporation of The Company.
3.2(a)   Bylaws of The Company.
10.1(b)   Stock Purchase Agreement
10.2(b)   First Amendment to Stock Purchase Agreement
10.3(c)   Purchase Agreement dated October 19, 2013 by and between Virtus Oil & Gas Corp. and Pioneer Oil and Gas.
10.4 (d)   Purchase Agreement dated November 14, 2013 by and between Virtus Oil & Gas Corp. and Tidewater Oil & Gas Company LLC
10.5 (e)   Engagement Letter dated August 1, 2013 between Clear Financial Solutions, Inc. and Virtus Oil and Gas Corp.
10.6 (e)   Amendment No. 1 to Engagement Letter dated as of December 5, 2013 between Clear Financial Solutions, Inc. and Virtus Oil and Gas Corp.
10.7 (e)   Employment Agreement dated as of December 5, 2013 by and between Virtus Oil and Gas Corp. and Daniel M. Ferris
31.1   Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a). promulgated under the Securities and Exchange Act of 1934, as amended (filed herewith).
31.2   Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a). promulgated under the Securities and Exchange Act of 1934, as amended (filed herewith).
32.1   Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2   Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS   XBRL Instance Document (filed herewith).
101.SCH   XBRL Schema Document (filed herewith).
101.CAL   XBRL Calculation Linkbase Document (filed herewith).
101.DEF   XBRL Definition Linkbase Document (filed herewith).
101.LAB   XBRL Labels Linkbase Document (filed herewith).
101.PRE   XBRL Presentation Linkbase Document (filed herewith).

 

  (a) Incorporated by reference to our Registration Statement on Form S-1, filed on January 10, 2009 (File No. 333-164222)
  (b) Incorporated by reference to our Form SC 13D, filed on July16, 2012 (File No. 005-86896)
  (c) Incorporated by reference to our Form 8-K, filed on October 19, 2013 (File No. 000-54526)
  (d) Incorporated by reference to our Form 8-K, filed on November 14, 2013 (File No. 000-54526)
  (e) Incorporated by reference to our Form 8-K, filed on December 9, 2013 (File No. 000-54526)

 

22
 

 

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.

 

  THE COMPANY
     
  By: /s/ Daniel M. Ferris
   

Daniel M. Ferris

President and Chief Executive Officer,

Treasurer and Secretary

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature   Title   Date
         

/s/ Daniel M. Ferris

 

President and Chief Executive Officer

  March 11, 2014
Daniel M. Ferris   (Principal Executive Officer)    
         
         
Signature   Title   Date
         

/s/ Steven M. Plumb

  Chief Financial Officer     March 11, 2014
Steven M. Plumb    (Principal Accounting Officer)    

 

 

 

23