FORMCAP CORP. - FORM 10-K - April 15, 2014

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - FORMCAP CORP.	Financial_Report.xls
EX-31.2 - EXHIBIT 31.2 - FORMCAP CORP.	exhibit31-2.htm
EX-32.2 - EXHIBIT 32.2 - FORMCAP CORP.	exhibit32-2.htm
EX-31.1 - EXHIBIT 31.1 - FORMCAP CORP.	exhibit31-1.htm
EX-32.1 - EXHIBIT 32.1 - FORMCAP CORP.	exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number : 0-28847

FORMCAP CORP.
(formerly Gravitas International, Inc.)
(Exact name of registrant as specified in its charter)

Nevada	1006772219
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)

50 West Liberty Street, Suite 880, Reno, NV 89501
(Address of principal executive offices, including zip code)

775-285-5775
(Registrant’s telephone number, including area code)

Title of Each Class	Name of Exchange on which Registered
Preferred Stock ($0.001 par value)	NASDAQ OTCBB
Common Stock ($0.001 par value)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]

Indicate by check 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. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a not-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of April 11, 2014 was $3,929,529 based upon the closing sales price of the Registrant’s Common Stock as reported on the Over-the-Counter Bulletin Board of $0.04

At April 11, 2014 the Company had outstanding 102,238,238 shares of Common Stock, of $0.001 par value per share.

TABLE OF CONTENTS

PART I	1

Item 1. Business	1

Item 1A. Risk Factors	2

Item 1B. Unresolved Staff Comments	4

Item 3. Legal Proceedings	4

Item 4. Submission of Matters to a Vote of Security Holders	4

PART II	5

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	5

Item 6. Selected Financial Data.	6

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	6

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.	8

Item 8. Financial Statements and Supplementary Data	9

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	9

Item 9A (T). Controls and Procedures.	9

Item 9B. Other Information.	9

PART III	9

Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance	9

Item 11. Executive Compensation	10

Item 13. Certain Relationships and Related Transactions, and Director Independence.	10

Item 14. Principal Accountant Fees and Services	10

PART IV	11

Item 15. Exhibits and Financial Statement Schedules	11

PART I

This Annual Report on Form 10-K contains forward-looking statements that have been made pursuant to the provisions of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995 and concern matters that involve risks and uncertainties that could cause actual results to differ materially from historical results or from those projected in the forward-looking statements. Discussions containing forward-looking statements may be found in the material set forth under “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Form 10-K. Words such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this Report, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this Annual Report on Form 10-K. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations.

Readers should carefully review and consider the various disclosures made by us in this Report, set forth in detail in Part I, under the heading “Risk Factors,” as well as those additional risks described in other documents we file from time to time with the Securities and Exchange Commission, which attempt to advise interested parties of the risks, uncertainties, and other factors that affect our business. We undertake no obligation to publicly release the results of any revisions to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

Item 1. Business

General

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2013, the Company had not yet achieved profitable operations, has accumulated losses of $14,355,874 since inception and expects to incur further losses in the development of its business, of which cast substantial doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon future profitable operations and/or the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Management has obtained additional funds by related party’s advances and loans from third parties; however there is no assurance that this additional funding is adequate and further funding may be necessary.

On March 16, 2011, the Company signed a Farm-Out Agreement for oil and gas exploration in the Peco Area of Alberta. The Farm-Out Agreement between FormCap Corp. and a private Alberta Corporation is comprised of a Seismic Option, a Farm-Out and a Participation clause. The Agreement stipulated a commencement date for the shooting of a 3D seismic program on the Farm-Out Lands not later than June 1, 2011 and a Commencement Date of November 1, 2011 for spudding and continuous drilling of a Test Well. Due to conditions in the oil and gas industry these dates were amended to October 1, 2011 for commencement of seismic program and February 1, 2012 for the spudding of a Test Well. The Agreement provides FormCap 60 days following completion of the seismic program to elect to drill the Test Well. Upon completion of the Test Well FormCap shall have earned a 40% working interest in the well subject to a 10% Gross Overriding Royalty payable to the Farmor. The Farmor may elect to convert the Gross Overiding Royalty to a 50% interest in FormCap’s working interest (i.e.: a 20% working interest). During the second quarter of 2012 The Company decided to discontinue activities on this project.

On November 19, 2013 the Company executed a Definitive Agreement with: Kerr Energy Group and Keta Oil & Gas LLC (Kerr and Keta) both incorporated in Wichita, Kansas. Pursuant to the terms of the Agreement the Company paid Kerr and Keta a non-refundable deposit in the amount of $25,000 (the “Deposit”) to be applied to the purchase price of oil leases to be purchased by Formcap, in Cowley County Kansas. The Company also agreed to issue Kerr and Keta a total of 200,000 Rule 144 shares of common stock of FormCap.

In addition, the Company will pay Kerr and Keta two hundred dollars ($200.00) per acre for up to 2,400 acres of Leases, at total cost not to exceed $480,000 within 30 days of execution of the Agreement, subject to final due diligence by the Company. The Company will own 100% of the Leases (80% net revenue to FormCap; 20% freehold royalty), and will be the operator. The Company will have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest, the terms of which are set forth in the Agreement. FormCap is required to drill one well in each of the first two years of the lease term to maintain its interest in the Leases.

The Company will also have the option to participate in the drilling of up to six exploration or development wells on lands currently owned by Keta and Kerr under terms set out in the agreement.

On November 7, 2013 the Board of Directors approved the issuance of 200,000 Rule 144 shares of common stock to Kerr and Keta.

Item 1A. Risk Factors

AN INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE IN NATURE AND INVOLVES AN EXTREMELY HIGH DEGREE OF RISK.

There may be conflicts of interest between our management and our non-management stockholders.

Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of other investors. A conflict of interest may arise between our management’s own pecuniary interests and may at some point compromise its fiduciary duty to our stockholders. In addition, our officers and directors are currently involved with other blank check companies and conflicts in the pursuit of business combinations with such other blank check companies with which they and other members of our management are, and may in the future be affiliated with, may arise. If we and the other blank check companies that our officers and directors are affiliated with desire to take advantage of the same opportunity, then those officers and directors that are affiliated with both companies would abstain from voting upon the opportunity. In the event of identical officers and directors, the officers and directors will arbitrarily determine the company that will be entitled to proceed with the proposed transaction.

As the Company has no recent operating history or revenue and there is a risk that we will be unable to continue as a going concern and consummate a business combination. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.

THERE IS COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER TRANSACTION OF THE TYPE CONTEMPLATED BY MANAGEMENT.

The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do, consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND ATTRACT A SUITABLE ACQUISITION.

The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.

OUR BUSINESS WILL HAVE NO REVENUES UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN OPERATING BUSINESS.

We are a development stage company and have had no revenues from operations. We may not realized any revenues unless and until we successfully merge with or acquire an operating business.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

None

Item 3. Legal Proceedings

None

See Subsequent Events

Item 4. Submission of Matters to a Vote of Security Holders

On October 1, 2012 the Company effected a reverse stock split in the ratio of 50 old shares for one new share. The consent resolution approving the Reverse Split was signed by 5 shareholders representing more than 50% of the issued and outstanding Common Stock of the Company. As the consent resolution satisfied the requirements of the Nevada Revised Statutes the Company did not solicit the proxies or consent of the remaining shareholders.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s Common Stock is presently quoted on the National Association of Securities Dealers’ Over-the-Counter Bulletin Board and on the “Pink Sheets” under the symbol “FRMC”.

The table below reflects the high and low “bid” and “ask” quotations for the Company’s Common Stock for each of the calendar years covered by this report, as reported by the National Association of Securities Dealers Over the Counter Bulletin Board National Quotation System. The prices reflect inter-dealer prices, without retail mark-up, markdown or commission and do not necessarily represent actual transactions.

2013	High	Low
1^stQuarter	0.510	0.008
2^ndQuarter	0.105	0.012
3^rdQuarter	0.200	0.085
4^thQuarter	1.920	0.200

2012	High	Low
1^stQuarter	0.119	0.003
2^ndQuarter	0.180	0.003
3^rdQuarter	0.050	0.003
4^thQuarter	0.499	0.004

As of December 31, 2013, there were 92,238,238 common shares issued and approximately 98 shareholders on record. The Company believes that an undefined number of shares of its common stock are held in either nominee name or street name brokerage accounts. Consequently, the Company is unable to determine the exact number of beneficial owners of its common stock.

The Company has not paid cash dividends on its common stock. The Company anticipates that for the foreseeable future any earnings will be retained for use in its business, and no cash dividends will be paid on the common stock. Declaration of common stock dividends will remain within the discretion of the Company’s Board of Directors and will depend upon the Company’s growth, profitability, financial condition and other relevant factors.

The Transfer Agent for the Company's Common Stock is Presidents Stock Transfer, located at 215 - 515 West Hastings Street, Vancouver, B.C. V6B-6H5 Canada.

Section 15(g) of the Securities Exchange Act of 1934:

The Company’s shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by this Section 15(g), the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, Section 15(g) may affect the ability of broker/dealers to sell the Company’s securities and also may affect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to an understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

RECENT SALES OF RESTRICTED SECURITIES

The Company did not issue any additional shares during the year ended December 31, 2012.

On May 16, 2013, 50,000,000 common shares were issued under a debt settlement agreement with a related Party.

On May 20, 2013, 39,999,998 common shares were issued under a debt settlement agreement with a related Party.

On November 7, 2013, 200,000 common shares were issued in connection with the acquisition of exploration property leases.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and words of similar import, constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

The Company does not currently engage in any business activities that provide cash flow. The Company is currently in the development stage.

On November 19, 2013 the Company executed a Definitive Agreement with: Kerr Energy Group and Keta Oil & Gas LLC (Kerr and Keta) both incorporated in Wichita, Kansas. Pursuant to the terms of the Agreement the Company paid Kerr and Keta a non-refundable deposit in the amount of $25,000 (the “Deposit”) to be applied to the purchase price of oil leases to be purchased by Formcap, in Cowley County, Kansas. The Company also agreed to issue Kerr and Keta a total of 200,000 Rule 144 shares of FormCap.

Going Concern

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Results of Operations for the Fiscal Years Ended December 31, 2013 and 2012

The audited operating results and cash flows are presented for the years ended December 31, 2013 and 2012 and for the period since inception to December 31, 2013.

We did not earn any revenues for the years ended December 31, 2013 and 2012.

Net Loss: For the year ended December 31, 2013 we had a net loss of $2,386,213 as compared with a net loss of $109,440 for the year ended December 31, 2012.

Operating Expenses. For the year ended December 31, 2013, we had total operating expenses of $112,203 as compared to $109,397 for the year ended December 31, 2012. The reduction is due to a decrease of $50,145 in consulting services and an increase in General and administrative expenses of $52,951.

Consulting Fees. For the year ended December 31, 2012, we had consulting fees of $14,022 as compared to $64,167 for the previous year. The decrease was attributable to the reduced use of consulting services as compared with the previous year.

General and administrative expenses: For the year ended December 31, 2013 we had general and administrative expenses of $98,181, an increase of $52,951 as compared with $45,230 for the year ended December 31, 2012.

Filing, Transfer agents’ expenses increased by $2,694 from $6,037 during the year ended December 31, 2012 to $8,731 during the year ended December 31, 2013 as a result of corporate activity.

Investor and public relations expenses increased by $56,328 from $2,413 for the year ended December 31, 2012 to $58,741 for the year ended December 31, 2013 as the Company engaged a specialist to develop a corporate branding strategy and a new website.

Audit and accounting expenses for the year ended December 31, 2013 amounted to $26,167, a decrease of $415 as compared with $26,582 incurred during the year ended December 31, 2012. The increase in expenditure in this category resulted from a correction to the accruals for this category of professional services.

The Company did not incur legal expenses for the year ended December 31, 2013. Legal expenses for the year ended December 31, 2012 was $3,273. The decrease resulted from reduced corporate activity during the year ended December 31, 2013 as compared with the year ended December 31, 2012.

Losses on foreign exchange transactions amounted to $1,580 in the year ended December 31, 2013, as compared with a loss of $146 in the year ended December 31, 2012. These losses arose as a result of fluctuations in the exchange rates between the US Dollar and foreign currencies.

Loss on impairment of assets: We did not incur a Loss on impairment of assets during the years ended December 31, 2013 and 2012, respectively

Financing expenses: We did not incur Financing expenses during the years ended December 31, 2013 and 2012, respectively

Interest Expense. The Company incurred insignificant interest expense charges during the years ended December 31, 2013 and 2012, respectively.

Loss on settlement of debt: During the year ended December 31, 2013 we incurred a loss of $2,274,000 on the settlement of debts owed to related parties.

Liquidity and Capital Resources: During the year ended December 31, 2013 our operating activities consumed cash in the amount of $78,126, an increase of $66,253 as compared to cash consumed by operations of $11,873 during the year ended December 31, 2012. During the year ended December 31, 2013 we invested $6,802 in the purchase of oil and gas leases and advanced $9,266 to an unrelated Canadian company (year ended December 31, 2012 - $Nil). During the year ended December 31, 2013, we obtained financing in the amount of $85,790 in the form of convertible notes as compared with $6,417 and $5,000 in proceeds from related party payables and proceeds from notes payable, respectively, during the year ended December 31, 2012.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

The Company does not hold any derivatives or investments that are subject to market risk. The carrying values of any financial instruments, approximate fair value as of those dates because of relatively short-term maturity of these instruments which eliminates any potential market risk associated with such instruments.

Item 8. Financial Statements and Supplementary Data

See Item 15

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable

Item 9A (T). Controls and Procedures.

As supervised by our board of directors and our principal executive and principal financial officers, management has established a system of disclosure controls and procedures and has evaluated the effectiveness of that system. The system and its evaluation are reported on in the below Management's Annual Report on Internal Control over Financial Reporting. Our principal executive and financial officer has concluded that our disclosure controls and procedures (as defined in the 1934 Securities Exchange Act Rule 13a-15(e)) as of December 31, 2013, are not effective, based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15.

Management's Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934 (the "Exchange Act"). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Management assessed the effectiveness of internal control over financial reporting as of December 31, 2013. We carried out this assessment using the criteria of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. 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 temporary rules of the Securities and Exchange Commission that permits us to provide only management's report in this annual report. Management concluded in this assessment that as of December 31, 2013, our internal control over financial reporting is not effective.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of our 2013 fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance.

Directors and Executive Officers

The following table furnishes the information concerning Company directors and officers as of the date of this report. The directors of the Registrant are elected every year and serve until their successors are elected and qualify. They are:

Name	Title
Graham Douglas	President, Secretary, Treasurer and Director

Notes:

On January 28, 2011, Terry R. Fields resigned the positions of President, Treasurer, Secretary and Director and Graham Douglas was re-appointed to the same positions.

Item 11. Executive Compensation

None

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

As of December 31, 2013, there were 98,238,236 shares of common stock outstanding.

The following table sets forth, as of December 31, 2013, the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who holds 5% or more of the outstanding Common Stock of the company.

Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial	Percentage of
		Ownership	Class
Common Stock	Graham Douglas Condo 6 – 118 Calle Hortencia Col Amapas, Puerto Vallarta, 48380 Mexico	50,219,778 – Director	54.45%

As of December 31, 2013 the Directors and Officers of the Company as a group held 50,219,778 shares (54.45%

Item 13. Certain Relationships and Related Transactions, and Director Independence. None

Item 14. Principal Accountant Fees and Services.

Audit Fees. Audit fees for the audits of our Annual Reports on Forms 10-K for the years ended December 31, 2013 and 2012 were $7,500 and $6,000 respectively.

PART IV

Item 15. Exhibits and Financial Statement Schedule

(a) Index to the Financial Statements

FORMCAP CORP.
(A Development Stage Company)

AND
FINANCIAL STATEMENTS

December 31, 2013 and 2012

Contents

Audit Report Of Independent Accountants	12

Balance Sheets – December 31, 2012 And 2011	13

Statements Of Operations For The Years Ended December 31, 2012 And 2011 And For The Period Since April 10, 1991 (Inception) To December 31, 2011	14

Statements Of Stockholder’s Deficit For The Years Ended December 31, 2012 And 2011 And For The Period Since April 10, 1991 (Inception) To December 31, 2012	15

Statements Of Cash Flows For The Years Ended December 31, 2012 And 2011 And For The Period Since April 10, 1991 (Inception) To December 31, 2012	24

Notes To Financial Statements December 31, 2012 And 2011	29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
FormCap Corp.

We have audited the accompanying balance sheets of FormCap Corp. (the Company) as of December 31, 2013 and 2012 and the related statements of operations, stockholders’ deficit and cash flows for the years then ended and for the cumulative period from April 10, 1991 (date of inception) through December 31, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 FormCap Corp. as of December 31, 2013 and 2012, and the results of their operations and cash flows for the years then ended and for the cumulative period from April 10, 1991 (date of inception) through December 31, 2013, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements the Company has not yet established an ongoing source of revenue sufficient to cover its operating cost which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Sadler, Gibb & Associates, LLC

Salt Lake City, UT
April 15, 2014

FORMCAP CORP.
(A Development Stage Company)

Balance Sheets – December 31, 2013 and 2012

		December 31,			December 31,
		2013			2012

ASSETS

CURRENT ASSETS
Cash	$	910		$	48
Promissory Note Receivable		9,266			-

Total Current Assets		10,176			48

OIL AND GAS LEASE RIGHTS		101,802

TOTAL ASSETS	$	111,978		$	48

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable and accrued liabilities	$	101,297		$	432,944
Notes payable		78,653			78,653
Notes payable – related parties		126,500			161,500
Convertible notes payable		145,790			-
Royalty and license fee payable		135,000			135,000

Total Current Liabilities		587,240			808,097

TOTAL LIABILITIES		587,240			808,097

STOCKHOLDERS' DEFICIT

Preferred stock, 50,000,000 shares authorized at par value of $0.001, no shares issued and outstanding		-			-
Common stock, 200,000,000 shares authorized at par value of $0.001; 98,238,238 and 2,038,240 shares issued and outstanding, respectively		92,238			2,038
Stock subscription receivable		(17,000	)		(17,000	)
Additional paid-in capital		13,805,374			11,176,574
Deficit accumulated during the development stage		(14,355,874	)		(11,969,661	)

Total Stockholders' Deficit		(475,262	)		(808,049	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	111,978		$	48

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Operations for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2013

								From Inception on
		For the Year ended						April 10, 1991 to
		December 31,						December 31,
		2013			2012			2013

REVENUES	$	-		$	-		$	321,889
COST OF SALES		-			-			352,683

GROSS MARGIN					-			(30,794	)

OPERATING EXPENSES

Consulting fees		14,022			64,167			1,056,889
Loss on impairment of assets		-			-			1,146,206
Financing expenses		-			-			778,946
General and administrative expenses		98,181			45,230			5,662,353

Total Operating Expenses		112,203			109,397			8,644,394

LOSS FROM OPERATIONS		(112,203	)		(109,397	)		(8,675,188	)

OTHER EXPENSE

Interest expense		(10	)		(43	)		(864,263	)
Gain on forgiveness of debt		-			-			286,855
Loss on settlement of debt		(2,274,000	)		-			(5,103,311	)

Total Other Expense		(2,274,010	)		(43	)		(5,680,719	)

LOSS BEFORE INCOME TAXES		(2,386,213	)		(109,440	)		(14,355,874	)
PROVISION FOR INCOME TAXES					-

NET LOSS	$	(2,386,213	)	$	(109,440	)	$	(14,355,907	)

BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE	$	(0.04	)	$	(0.05	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		59,612,486			2,038,240

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012

							Deficit
							Accumulated
					Stock	Additional	During the		Total
					Subscription	Paid-In	Development		Stockholder
	Preferred Stock		Common Stock		Receivable	Capital	Stage		(Deficit)
	Shares	$	Shares	$	$	$	$		$

Inception, April 10, 1991	-	-	-	-	-	-	-		-

Balance, December 31, 1991	-	-	-	-	-	-	-		-

Balance, December 31, 1992	-	-	-	-	-	-	-		-

Balance, December 31, 1993	-	-	-	-	-	-	-		-

Net loss for the year ended December 31, 1994	-	-	-	-	-	-	(5,000	)	(5,000	)

Balance, December 31, 1994	-	-	-	-	-	-	(5,000	)	(5,000	)

Balance, December 31, 1995	-	-	-	-	-	-	(5,000	)	(5,000	)

Balance, December 31, 1996	-	-	-	-	-	-	(5,000	)	(5,000	)

Balance, December 31, 1997	-	-	-	-	-	-	(5,000	)	(5,000	)

Common stock issued for services	-	-	7	-	-	5,000	-		5,000

Net loss for the year ended December 31, 1998	-	-	-	-	-	-	(33,441	)	(33,441	)

Balance, December 31, 1998	-	-	7	-	-	5,000	(38,441	)	(33,441	)

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

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

							Deficit
							Accumulated
					Stock	Additional	During the		Total
					Subscription	Paid-In	Development		Stockholder
	Preferred Stock		Common stock		Receivable	Capital	Stage		(Deficit)
	Shares	$	Shares	$	$	$	$		$

Balance, December 31, 1998	-	-	7	-	-	5,000	(38,441	)	(33,441	)

Preferred stock issued for cash at $0.01 per share	300,000	300	-	-	-	2,700	-		3,000

Common stock issued for cash	-	-	62	-	-	720,574	-		720,574

Net loss for the year ended December 31, 1999	-	-	-	-	-	-	(705,213	)	(705,213	)

Balance, December 31, 1999	300,000	300	69	-	-	728,274	(743,654	)	(15,080	)

Common stock issued for cash	-	-	54	-	-	780,194	-		780,194

Common stock issued for debt settlement	-	-	16	-	-	735,629	-		735,629

Common stock issued for services	-	-	2	-	-	115,000	-		115,000

Common shares subscribed	-	-	-	-	-	-	-		-

Net loss for the year ended December 31, 2000	-	-	-	-	-	-	(1,362,045	)	(1,362,045	)

Balance, December 31, 2000	300,000	300	141	-	-	2,359,097	(2,105,699	)	253,698

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

									Deficit
									Accumulated
							Stock	Additional	During the		Total
							Subscription	Paid-In	Development		Stockholder
	Preferred Stock				Common Stock		Receivable	Capital	Stage		(Deficit)
	Shares		$		Shares	$	$	$	$		$

Balance, December 31, 2000	300,000		300		141	-	-	2,359,097	(2,105,699	)	253,698

Common stock issued for cash	-		-		1,301	1	-	1,300,999	-		1,301,000

Common shares issued through preferred stock conversion	(300,000	)	(300	)	20	-	-	300	-		-

Common stock issued for services	-		-		-	-	-	47,269	-		47,269

Common stock issued in acquisition	-		-		50	-	-	185,000	-		185,000

Net loss for the year ended December 31, 2001	-		-		-	-	-	-	(1,980,176	)	(1,980,176	)

Balance, December 31, 2001	-		-		1,512	1	-	3,892,665	(4,085,875	)	(193,209	)

Shares issued for private placement	-		-		87	-	-	236,000	-		236,000

Shares issued for exercise of options	-		-		50	-	-	245,000	-		250,000

Stock option compensation	-		-		-	-	-	305,788	-		305,788

Net loss for the year ended December 31, 2002	-		-		-	-	-	-	(1,599,462	)	(1,599,462	)

Balance, December 31, 2002	-		-		1,649	1	-	4,684,453	(5,685,337	)	(1,000,883	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

							Deficit
							Accumulated
					Stock	Additional	During the		Total
					Subscription	Paid-In	Development		Stockholder
	Preferred		Common		Receivable	Capital	Stage		(Deficit)
	Shares	$	Shares	$	$	$	$		$

Balance, December 31, 2002	-	-	1,649	1	-	4,684,453	(5,685,337	)	(1,000,883	)

Shares issued for private placement	-	-	11	-	-	16,330	-		16,330

Shares issued for services	-	-	20	-	-	32,000	-		32,000

Shares issued for debt settlement	-	-	729	1	-	728,666	-		728,667

Stock options granted for services	-	-	-	-	-	9,897	-		9,897

Stock options granted for debt settlement	-	-	-	-	-	421,417	-		421,417

Stock option compensation	-	-	-	-	-	134,167	-		134,167

Net loss for the year ended December 31, 2003	-	-	-	-	-	-	(1,294,174	)	(1,294,174	)

Balance, December 31, 2003	-	-	2,409	2	-	6,026,930	(6,979,511	)	(952,579	)

Shares issued for debt settlement	-	-	15	-	-	50,000	-		50,000

Shares issued for professional fees	-	-	82	-	-	1,220	-		1,220

Net loss for the year ended December 31, 2004	-	-	-	-	-	-	(86,485	)	(86,485	)

Balance, December 31, 2004	-	-	2,507	2	-	6,078,150	(7,065,996	)	(987,844	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

									Deficit
									Accumulated
					Stock		Additional		During the		Total
					Subscription		Paid-In		Development		Stockholder
	Preferred		Common		Receivable		Capital		Stage		(Deficit)
	Shares	$	Shares	$	$		$		$		$

Balance, December 31, 2004	-	-	2,507	2	-		6,078,150		(7,065,996	)	(987,844	)

Stock options exercised	-	-	766	1	-		(1	)	-

Shares issued for debt settlement	-	-	1,000	1	-		99,999		-		100,000

Net loss for the year ended December 31, 2005	-	-	-	-	-		-		(12,197	)	(12,197	)

Balance, December 31, 2005	-	-	4,273	4	-		6,178,148		(7,078,193	)	(900,041	)

Net loss for the year ended December 31, 2006	-	-	-	-	-		-		(7,428	)	(7,428	)

Balance, December 31, 2006	-	-	4,273	4	-		6,178,148		(7,085,621	)	(907,469	)

Shares issued for debt settlement at $0.001 to $0.01 per share	-	-	205,700	206	-		156,794		-		157,000

Shares issued for cash at $0.001 per share	-	-	3,000,000	3,000	(150,000	)	147,000		-

Net loss for the year ended December 31, 2007	-	-	-	-	-		-		(37,595	)	(37,595	)

Balance, December 31, 2007	-	-	3,209,973	3,210	(150,000	)	6,481,942		(7,123,216	)	(788,064	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

								Deficit
								Accumulated
					Stock		Additional	During the		Total
					Subscription		Paid-In	Development		Stockholder
	Preferred		Common		Receivable		Capital	Stage		(Deficit)
	Shares	$	Shares	$	$		$	$		$

Balance, December 31, 2007	-		3,209,973	3,210	(150,000	)	6,481,942	(7,123,216	)	(788,064	)

Shares issued for cash at $0.01 per share	-		10,000	10	-		4,990	-		5,000

Net loss for the year ended December 31, 2008	-		-	-	-		-	(105,158	)	(105,158	)

Balance, December 31, 2008	-	-	3,219,973	3,220	(150,000	)	6,486,932	(7,228,374	)	(888,222	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

											Deficit
											Accumulated
							Stock		Additional		During the		Total
							Subscription		Paid-In		Development		Stockholder
	Preferred		Common				Receivable		Capital		Stage		(Deficit)
	Shares	$	Shares		$		$		$		$		$

Balance, December 31, 2008	-	-	3,219,973		3,220		(150,000	)	6,486,932		(7,228,374	)	(888,222	)

Common stock issued for consulting services at $0.10 to $0.20 per share	-	-	56,000		56		-		299,944		-		300,000

Common stock issued for finder fees at $0.10 to $0.20 per share	-	-	11,600		12		-		173,988		-		174,000

Common stock issued for cash at $0.25 per share	-	-	1,200		1		-		14,999		-		15,000

Conversion of notes payable at $0.01 to $0.08 per share	-	-	260,000		260		-		3,559,739		-		3,559,999

Value of beneficial conversion feature of notes payable	-	-	-		-		-		60,000		-		60,000

Cancellation of common shares related to subscription receivable	-	-	(2,660,000	)	(2,660	)	133,000		(130,340	)	-		-

Net loss for the year ended December 31, 2009	-	-	-		-		-		-		(3,625,831	)	(3,625,831	)

Balance, December 31, 2009	-	-	888,772		8,899		(17,000	)	10,465,262		(10,854,205	)	(405,054	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

								Deficit
								Accumulated
					Stock		Additional	During the		Total
					Subscription		Paid-In	Development		Stockholder
	Preferred		Common		Receivable		Capital	Stage		(Deficit)
	Shares	$	Shares	$	$		$	$		$

Balance, December 31, 2009	-	-	888,772	889	(17,000	)	10,465,262	(10,854,205	)	(405,054	)

Common stock issued for services	-	-	20,000	20	-		169,980	-		170,000

Common stock issued as collateral on Leare Dev. Loan		-	5,000	5	-		12,495	-		12,500

Common stock issued on extension of Leare Development Loan		-	2,000	2	-		4,998	-		5,000

Value of beneficial conversion feature of notes payable	-	-	-	-	-		319,961	-		319,961

Net loss for the twelve months ended December 31, 2010								(1,097,585	)	(1,097,585	)

Balance, December 31, 2010	-	-	915,773	916	(17,000	)	10,972,696	(11,951,790	)	(995,178	)

Common stock issued for services at $0.004 per share			400,000	400	-		69,600	-		70,000

Common stock issued for settlement of debt at $0.004 per share			700,000	700	-		134,300	-		135,000

Net Income for the year ended December 31, 2011	-	-	-	-	-		-	91,569		91,569

Balance, December 31, 2011	-	-	2,015,773	2,016	(17,000	)	11,176,596	(11,860,221	)	(689,609	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Stockholder’s Deficit for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

									Deficit
									Accumulated
					Stock		Additional		During the		Total
					Subscription		Paid-In		Development		Stockholder
	Preferred		Common		Receivable		Capital		Stage		(Deficit)
	Shares	$	Shares	$	$		$		$		$

Balance, December 31, 2011	-	-	2,015,773	2,016	(17,000	)	11,176,596		(11,860,221	)	(689,609	)

Rounding shares issued to shareholders			22,467	22	-		(22	)	-		-

Net loss for the twelve months ended December 31, 2012	-	-	-	-	-		-		(109,440	)	(109,440	)

Balance, December 31, 2012	-	-	2,038,240	2,038	(17,000	)	11,176,574		(11,969,661	)	(808,049	)

Shares issued in settlement of debt	-	-	89,999,998	90,000	-		2,609,000		-		2,699,000

Shares issued pursuant to the acquisition of oil and gas lease rights	-	-	200,000	200	-		19,800		-		20,000

Net loss for the twelve months ended December 31, 2013	-	-	-	-	-		-		(2,386,213	)	(2,386,213	)

Balance, December 31, 2013	-	-	92,238,238	92,238	(17,000	)	13,805,374		(14,355,874	)	(475,262	)

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)

Statements of Cash Flows for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2013

								From Inception on
		For the Year Ended						April 10, 1991 to
		December 31,						December 31,
		2013			2012			2012
CASH FLOWS FROM OPERATING ACTIVITIES

Net (Loss) Income	$	(2,386,213	)	$	(109,440	)	$	(14,355,874	)
Adjustments to reconcile net loss to net cash used by operating activities:
Amortization of prepaid expenses		-			64,167			324,262
Amortization of beneficial conversion feature		-			-			379,961
Expenses paid on behalf of the Company					3,569			3,569
Expenses paid by related parties		-			32,339			119,133
Depreciation and amortization		-			-			281,322
Gain on settlement of debt and extinguishing of oil and gas leases		-			-			(286,855	)
Common stock and options issued for services		-			-			943,977
Common stock and options issued for collateral and extension of debt		-			-			17,500
Loss on impairment of assets		-			-			1,174,833
Loss on settlement of debt		2,274,000			-			6,424,908
Interest expense in connection with induced conversion		-			-			262,032
Foreign currency exchange		-			-			(120,814	)
Changes to operating assets and liabilities:
Accounts receivable		-			-			3,203
Notes Receivable		(9,266	)		-			(9,266	)
Inventories		-			-			(66,200	)
Prepaid expenses and other current assets		-			-			(140,429	)
Prepaid royalties		-			-			(99,980	)
Accounts payable and accrued liabilities		43,353			(2,508	)		141,645
Bank overdraft		-			-			-
Royalty and license fees		-			-			196,765

Net Cash Used in Operating Activities		(78,126	)		(11,873	)		(4,810,308	)

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

FORMCAP CORP.
(A Development Stage Company)

Statements of Cash Flows for the years ended December 31, 2013 and 2012 and for the period since April 10, 1991 (Inception) to December 31, 2012 (CONTINUED)

								From Inception on
		For the Year Ended						April 10, 1991 to
		December 31,						December 31,
		2013			2012			2012

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of capital assets		-			-			(104,880	)
Acquisition deposits		-			-			(431,000	)
Extinguishment of oil and gas leases		-			-			-
Purchase of oil and gas lease		(6,802	)		-			(256,802	)
Capitalized software expenditures		-			-			(135,181	)
Principal payments on notes receivable		-			-			44,117
Notes receivable advances		-			-			(701,152	)
Convertible promissory note receivable		(9,266	)					(9,266	)
Proceeds from sale of notes receivable		-			-			350,000

Net Cash Used in Investing Activities		(16,068	)		-			(1,244,164	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party payables		15,000			6,417			2,065,177
Repayments of related party payables		-			-			(637,012	)
Proceeds from notes payable					5,000			931,919
Repayment of notes payable					-			-
Proceeds from the sale of preferred stock		-			-			3,000
Proceeds from the sale of common stock and stock options		-			-			3,608,242
Process from Convertible notes payable		70,790			-			70,790

Net Cash Provided by Financing Activities		235,663			11,417			6,042,116

NET INCREASE (DECREASE) IN CASH		862			(456	)		910
CASH AT BEGINNING OF PERIOD		48			504			-

CASH AT END OF PERIOD	$	910		$	48		$	910

SUPPLEMENTAL DISCLOSURES OFCASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	10		$	43		$	12,660

NON CASH FINANCING ACTIVITIES:
Common stock issued for rounding shares	$			$	22		$	22
Common stock issued for prepaid expenses	$	-		$	-		$	280,000
Common stock issued for purchase of oil and gas leases	$	20,000		$	-		$	20,000
Conversion of related party payables to common stock	$	425,000		$	-		$	3,984,999
Extinguishment of related party notes payable and Accounts Payable	$	2,699,000		$			$	2,699,000
Notes Payable Issued for Oil and Gas Lease	$	75,000		$			$	75,000

The accompanying notes are an integral part of these financial statements

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS

FormCap Corp. (the “Company” or “FormCap”) was incorporated in the State of Florida on April 10, 1991, under the name of Aarden-Bryn Enterprises, Inc. The Company became a foreign registrant in the State of Nevada on December 24, 1998, and became qualified to transact business in the State of Nevada.

Since its incorporation, the Company has changed its name several times. On August 27, 1998 the Company changed its name to Corbett’s Cool Clear WTAA, Inc., on September 24, 1999 to WTAA International, Inc., on December 6, 2001 to Gravitas International, Inc., and finally to its current name, FormCap Corp. on October 12, 2007.

On September 18, 2007, the Company merged the Florida jurisdiction and the Nevada jurisdiction into one Nevada jurisdiction.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are stated in US dollars. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may differ from these estimates.

Reclassification of Financial Statement Accounts
Certain amounts in the December 31, 2012 as well as the inception column of the financial statements have been reclassified to conform to the presentation in the December 31, 2013 financial statements.

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

Development Stage Company
The Company is considered to be in the development stage as defined in Accounting Standards Codification (ASC) 915 “Development Stage Entities.” The Company is devoting substantially all of its efforts to development of business plans.

Basic Earnings (Loss) Per Share
Basic earnings (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no dilutive or potentially dilutive instruments outstanding as of December 31, 2013 and 2012.

Stock Issued in Exchange for Services
The valuation of common stock issued in exchange for services is valued at an estimated fair market value as determined by the most readily determinable value of either the stock or services exchanged. Values of the stock are based upon other sales and issuances of the Company’s common stock within the same general time period.

Cash and Cash Equivalents
Cash equivalents are comprised of certain highly liquid investments with original maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits of $250,000. The Company has not experienced any losses related to this concentration of risk. Deposits did not exceed insured limits during the years ended December 31, 2013 and 2012.

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Financial Instruments
For accounts receivable, accounts payable, accrued liabilities, current portion of long-term debt and long-term debt, the carrying amounts of these financial instruments approximates their fair value. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Foreign Currency Translation
The Company translates foreign currency transactions and balances to its reporting currency, United States Dollars, in accordance with ASC 830 “Foreign Currency Matters”. Monetary assets and liabilities are translated into the functional currency at the exchange rate in effect at the end of the year. Non-monetary assets and liabilities are translated at the exchange rate prevailing when the assets were acquired or the liabilities assumed. Revenue and expenses are translated at the rate approximating the rate of exchange on the transaction date. All exchange gains and losses are included in the determination of net income (loss) for the year.

Income Taxes
The Company applies ASC 740, which requires the asset and liability method of accounting for income taxes. The asset and liability method requires that the current or deferred tax consequences of all events recognized in the financial statements are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered.

The Company adopted ASC 740, at the beginning of fiscal year 2008. This interpretation requires recognition and measurement of uncertain tax positions using a “more-likely-than-not” approach, requiring the recognition and measurement of uncertain tax positions. The adoption of ASC 740 had no material impact on the Company’s financial statements.

Recent Accounting Pronouncements
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.

NOTE 3 - GOING CONCERN

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

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

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

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

NOTE 4 – PROMISSORY NOTE RECEIVABLE

On June 3, 2013 the Company advanced the sum of $11,194 ($11,500 Canadian Dollars) to an unrelated Canadian company. The loan is secured by a promissory note and is due on December 31, 2014. On November 30, 2013 the Borrower repaid $1,928, leaving a balance owing of $9,266 as of December 31, 2013.

The promissory note is non-interest bearing until maturity and bears interest at 3% per annum thereafter. The Promissory note will become due and payable if the company receives financing totalling $5,000,000 in aggregate prior to the maturity date. The promissory note is convertible into common shares of the company either in whole or in part at the option of the Company.

NOTE 5 – EXPLORATION PROPERTY LEASE

On November 19, 2013 the Company executed a Definitive Agreement with Kerr Energy Group and Keta Oil & Gas LLC (Kerr and Keta) both incorporated in Wichita, Kansas.

Pursuant to the terms of the Agreement the Company paid Kerr and Keta a non-refundable deposit in the amount of $75,000 (the “Deposit”) to be applied to the purchase price of oil leases to be purchased by the Company, in Cowley County Kansas and agreed to issue Kerr and Keta a total of 200,000 Rule 144 shares of common stock of FormCap.

NOTE 6 – CONVERTIBLE PROMISSORY NOTES PAYABLE

During April and May, 2013 the Company issued convertible promissory notes in the amounts of $15,000 to two unrelated third parties. The notes mature on December 31, 2014

On June 3, 2013, the Company issued promissory notes in the amounts of $20,000 Canadian Dollars in favour an unrelated third party. The notes mature on December 31, 2015

On July 30, 2013 the Company issued a promissory note in the amount $5,000 Dollars in favour an unrelated third party. The note matures on December 31, 2015

On August 9, 2013 the Company issued a promissory note in the amount of $3,000 in favour an unrelated third party. The note matures on December 31, 2015

On September 30, 2013 the Company issued a promissory note in the amount of $25,000 to an unrelated third party. The note matures on December 31, 2015

On November 8, 2013 the Company issued a promissory note in the amount of $7,500 to a related third party. The note matures on December 31, 2015

On November 6, 2013 the Company issued a promissory note in the amount of $3,000 to a unrelated third party. The note matures on December 31, 2015

On November 19, 2013 the Company issued a promissory note in the amount of $7,500 to a unrelated third party. The note matures on December 31, 2015

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

On December 16, 2013, an unrelated third party paid $50,000 to Kerr and Keta in connection with the acquisition of the Cowley leases. On that date the Company issued a promissory note in the amount of $50,000 to the unrelated third party. The note matures on December 31, 2015

On December 24, 2013 the Company issued a promissory note in the amount of $24,800 to an unrelated third party. The note matures on December 31, 2015

The promissory notes are non-interest bearing until maturity and bear interest at 3% per annum thereafter. The Promissory notes will become due and payable if the Company receives financing totalling $5,000,000 in aggregate prior to the maturity date. The promissory notes are convertible into common shares of the Company on terms to be determined by the Company, either in whole or in part at the option of the Holders.

NOTE 7 – RELATED PARTY PAYABLES

The Company from time to time has borrowed funds from or has received services from several related parties for operating purposes.

During 2012 the Company borrowed cash in the amount of $6,417 and had expenses paid on behalf of the Company by related parties in the amount of $32,339.

As of December 31, 2013 the Company owed related parties $126,500. These amounts bear no interest, are not collateralized, and are due on demand.

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

NOTE 8 – NOTES PAYABLE

During 2012 the Company borrowed cash from various third parties in the amount of $5,000. These parties also paid expenses on behalf of the Company in the amount of $3,569.

The balance owed to these parties as of December 31, 2013 was $78,653 (December 31, 2012 - $78,653). These amounts bear no interest, are not collateralized, and are due on demand.

NOTE 9 – COMMON STOCK

The Company had 50,000,000 shares of preferred stock authorized with no shares outstanding as of December 31, 2013 and 2012. The Company also had 200,000,000 shares of Common Stock authorized with 98,238,236 and 2,038,240 shares issued and outstanding as of December 31, 2013 and 2012 respectively.

On November 23, 2011 500,000 common shares were issued under a debt settlement agreement with a related Party.

On December 1, 2011, 200,000 common shares were issued under the terms of an Oil & Gas Farm-In, Operating and Consulting Agreement with a consultant.

On December 1, 2011, 200,000 common shares were issued to the same consultant under a debt settlement agreement as payment in full for previous debt incurred under a Consulting Agreement.

On December 1, 2011, 200,000 common shares were issued to the President of the Company as payment for services rendered in the performance of his duties.

On October 1, 2012, the Company effected a 1 for 50 reverse stock split. All references in these financial statements to number of common shares issued and outstanding, price per share and weighted average number of common shares have been adjusted to reflect the stock split on a retroactive basis, unless otherwise noted. The Company’s authorized preferred stock and authorized common stock remain unchanged.

Prior to the reverse stock split, the Company had 100,788,607 common shares issued and outstanding. Immediately after the reverse split the Company had 2,038,240 common shares issued and outstanding, including 22,467 common shares issued to various shareholders as a result of rounding. The rounding shares were not issued for compensation and have no net effect on owner’s equity.

During the year ended December 31, 2013, the Company issued 89,999,998 Common shares in settlement of debts owed by the Company (see Note 10).

On November 7, 2013 the Company issued 200,000 shares to Kerr and Keta in connection with the acquisition of the Cowley Leases (see Note 5)

NOTE 10 – DEBT SETTLEMENT

On May 16, 2013 the Company settled debts owed to related parties in the amount of $50,000 by the issuance of 50,000,000 Common Shares. The Company recorded a loss of $1,362,587 on this transaction.

On May 20, 2013 the Company settled debts owed to related parties in the amount of $375,000 by the issuance of 39,999,998 Common Shares. The Company recorded a loss of $911,413 on this transaction.

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

NOTE 11 – INCOME TAXES

Income Taxes
The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

Net deferred tax assets consist of the following components as of December 31, 2013 and 2012:

		December 31,			December 31,
Deferred tax assets:		2013			2012
Net operating loss carryover	$	(7,856,769	)	$	(7,744,556	)
Common stock and warrants issued for services		563,712			563,712	)
Common stock issued for settlement of debt		45,900			45,900
Loss on extinguishment of debt		2,621,982			1,848,822
Impairment of assets		423,710			423,710
Amortization of beneficial conversion feature		258,373			258,373
Valuation allowance		2,671,301			2,633,149
Income tax expense per books	$	-		$	-

The income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal and state income tax rates of 39% to pretax income from continuing operations for the year ended December 31, 2012 and 2011 due to the following:

		December 31,			December 31,
		2013			2012
Income tax expense at statutory rate	$	(38,152	)	$	(37,210	)
Common stock and warrants issued for services					-
Loss on extinguishment of debt					-
Impairment of assets					-
Amortization of beneficial conversion feature					-
(Gain) Loss on extinguishment of debt					-
Valuation allowance		38,152			37,210
Income tax expense per books	$	-		$	-

As at December 31, 2013, the Company had net operating loss carry forwards of approximately $6,622,735 through 2032. No tax benefit has been reported in the December 31, 2013 financial statements as the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

FORMCAP CORP.
(A Development Stage Company)
Notes to the Financial Statements December 31, 2013 and 2012

NOTE 12 – SUBSEQUENT EVENTS

In accordance with ASC 855-10 Company management reviewed all material events through the date of this report

Payments in connection with the acquisition of oil and gas leases

On January 2, 2014, an unrelated third party paid Kerr and Keta a further $25,000 in connection with the acquisition of the Cowley leases. On that date the Company issued a promissory note in the amount of $25,000 to the unrelated third party.

On January 23, 2014, an unrelated third party paid Kerr and Keta a further $50,000 in connection with the acquisition of the Cowley leases. On that date the Company issued a promissory note in the amount of $50,000 to the unrelated third party. The promissory notes are non-interest bearing until maturity on December 31, 2015 and bear interest at 3% per annum thereafter. The Promissory notes will become due and payable if the Company receives financing totalling $5,000,000 in aggregate prior to the maturity date. The promissory notes are convertible into common shares of the Company on terms to be determined by the Company, either in whole or in part at the option of the Holder.

On March 11, 2014 an unrelated third party paid Kerr and Keta a further $305,000 in connection with the acquisition of the Cowley leases. This payment was made pursuant to a material definitive agreement entered into between the Company and the unrelated third party (see below)

Entry into a Material Definitive Agreement.

Ironridge Global IV, Ltd. ("Ironridge") purchased from various creditors of the Company, bona fide claims held by those creditors against the Company in the aggregate amount of $671,938.90 (the "Claim Amount"). Subsequently, the Company offered to settle those claims in exchange for the issuance of unrestricted and fully tradable shares of the Company's common stock. Ironridge accepted the Company's settlement offer, subject to a hearing on the fairness of the settlement terms. On February 21, 2014, the Company, Ironridge and the CEO of the Company entered into a Stipulation Order for the settlement on the terms agreed on by Ironridge and the Company. On February 21, 2014, a California Superior Court for the County of Los Angeles (the "State Court") held a hearing on the fairness of the Company's settlement offer to Ironridge. Pursuant to the court order issued by the State Court on February 21, 2014, the shares of the Company's common stock will be deemed issued in settlement of the claims (subject to certain adjustments based on the future trading value of the stock) when delivered to Ironridge. On February 24, 2014 the Company's transfer agent delivered to Ironridge 10,000,000 shares of the Company's common stock. The shares issued to Ironridge are freely tradable and exempt from registration under the Securities Act of 1933 and the California Corporations Code. The number of shares to be issued to Ironridge is subject to adjustment based trading price of the Company's stock such that the value of the shares is sufficient to cover the Claim Amount, a 10% agent fee amount and Ironridge's reasonable legal fees and expenses ( the "Final Amount"). Under the Stipulation Order, Ironridge may not be the beneficial owner of more than 9.99% of the Company's outstanding shares of common stock until the Final Amount is paid. Further Ironridge has agreed not to exercise any voting rights of the shares issued to it nor influence or cause any change in control of the Company.

(b) Exhibits

31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

SIGNATURES

In accordance with 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.

Dated: April 15, 2014

FORMCAP CORP.

By:  /s/ Graham Douglas
        Graham Douglas
        President, Secretary, Treasurer & Director.

FORMCAP CORP. - FORM 10-K - April 15, 2014

Attached files

FORMCAP CORP. Reports