UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

 

FORM 10-Q

  

(Mark One)

 

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

 

For the quarterly period ended March 31, 2014

 

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

 

For the transition period from                 to

 

Commission file number 333-141875

 

TIGER OIL AND ENERGY, INC.

(Exact name of Registrant as specified in its charter)

 

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

 

7230 Indian Creek Ln., Ste 201

Las Vegas, NV 89149

(Address of principal executive offices)

 

(702) 839-4029

(Registrant’s telephone number, including area code)

 

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

 

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

 

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

 

[X] Yes [  ] No (Not Required)

 

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

 

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

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of May 14, 2014, the Company had 42,728,159 issued and outstanding shares of its common stock and 42,013 issued shares of preferred stock. 

 

  

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

 

INDEX

 

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

 

 

PART I — FINANCIAL INFORMATION

 

The accompanying interim unaudited financial statements of Tiger Oil and Energy, Inc. (a Nevada corporation) are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company’s most recent annual financial statements for the year ended December 31, 2013 included in a 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 27, 2014. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying interim financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying interim financial statements for the three months ended March 31, 2014 are not necessarily indicative of the operating results that may be expected for the full year ending December 31, 2014.

   

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

 

FINANCIAL STATEMENTS

 

March 31, 2014

  

		Page(s)
Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013			F-2
Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and from the Period of April 30, 2009 (Inception) to March 31, 2014			F-3
Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and from the Period of April 30, 2009 (Inception) to March 31, 2014			F-4
Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and from the Period of April 30, 2009 (Inception) to March 31, 2014			F-5
Notes to the Unaudited Financial Statements			F-6

 

  

TIGER OIL AND ENERGY, INC.
(An Exploration Stage Company)
Consolidated Balance Sheets
		March 31,				December 31,
		2014				2013
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	459,539			$	69
Deposit			200				200
Total Current Assets			459,739				269
TOTAL ASSETS		$	459,739			$	269
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	24,877			$	22,414
Note payable			200				110,200
Convertible note payable, net of discounts of
$304,658 and $-0-, respectively			295,342				—
Total Current Liabilities			320,419				132,614
LONG-TERM LIABILITIES
Asset retirement obligation			7,181				7,023
Total Long-Term Liabilities			7,181				7,023
TOTAL LIABILITIES			327,600				139,637
STOCKHOLDERS' DEFICIT
Preferred stock - 1,000,000 shares authorized,
$0.001 par value; 42,013 issued and outstanding			42				42
Common stock - 74,000,000 shares authorized,
$0.001 par value; 42,728,159 shares issued
and outstanding			42,728				42,728
Additional paid-in capital			4,675,177				4,275,176
Deficit accumulated incurred prior to the exploration stage			(524,202	)			(524,202	)
Deficit accumulated during the exploration stage			(4,061,606	)			(3,933,112	)
Total Stockholders' Deficit			132,139				(139,368	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	459,739			$	269
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

TIGER OIL AND ENERGY, INC.
(An Exploration Stage Company)
Condensed Consolidated Statements of Operations
										From Inception
										on April 30 2009
		For the Three Months Ended								through
		March 31,								March 31,
		2014				2013				2014
REVENUES		$	—			$	—			$	—
OPERATING EXPENSES
Accretion expense			158				1,215				17,068
Amortization of deferred tax benefit			—				—				170,800
Impairment of assets			—				—				1,030,673
Management fees			—				—				1,112,724
General and administrative			28,371				6,064				376,297
Total Operating Expenses			28,529				7,279				2,707,562
LOSS FROM OPERATIONS			(28,529	)			(7,279	)			(2,707,562	)
OTHER  INCOME (EXPENSE)
Interest expense			(102,415	)			(666	)			(108,721	)
Other income (expense)			—				—				40,000
Gain on forgiveness of debt			2,450				—				116,396
Gain (loss) on derivative liability			—				(505	)			(669	)
Loss on sale of oil and gas leases			—				—				20,042
Total Other Income (Expense)			(99,965	)			(1,171	)			67,048
LOSS BEFORE TAXES			(128,494	)			(8,450	)			(2,640,514	)
Provision for income taxes			—				—				—
NET LOSS FROM CONTINUING OPERATIONS			(128,494	)			(8,450	)			(2,640,514	)
Net income from discontinued operations			—				—				309,650
Loss on disposal of discontinued operations			—				—				(1,730,742	)
Loss from Discontinued Operations,
Net of Income Taxes			—				—				(1,421,092	)
NET LOSS		$	(128,494	)		$	(8,450	)		$	(4,061,606	)
BASIC AND DILUTED LOSS PER SHARE
FROM CONTINUING OPERATIONS		$	(0.00	)		$	(0.00	)
BASIC AND DILUTED LOSS PER SHARE
FROM DISCONTINUED OPERATIONS		$	—			$	—
TOTAL BASIC AND DILUTED LOSS PER SHARE		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING			47,181,711				42,728,159
The accompanying notes are a integral part of these condensed consolidated financials statements.

  

  

TIGER OIL AND ENERGY, INC.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
										From Inception
										on April 30 2009
		For the Three Months Ended								through
		March 31,								March 31,
		2014				2013				2014
OPERATING ACTIVITIES
Net loss		$	(128,494	)		$	(8,450	)		$	(4,061,606	)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities:
Depreciation, amortization and accretion expense			158				1,215				20,597
Impairment of assets			—				—				909,431
Change in derivative liability			—				505				669
Employee option grants issued			—				—				46,500
Cancellation of employee stock option shares			—				—				354,750
Impairment of intangible assets			—				—				121,242
Common stock issued for services			—				—				457,600
Gain on settlement of debt			—				—				(111,457	)
Deferred tax asset			—				—				170,800
Gain on sale of oil and gas leases			—				—				(20,042	)
Amortization of debt discounts			95,342				—				95,342
Changes in operating assets and liabilities:
Deposits			—				—				(200	)
Accounts receivable			—				—				42,000
Related-party payables			—				—				299,002
Accounts payable and accrued liabilities			2,464				1,403				(12,779	)
Accrued salaries			—				—				83,333
Net Cash Provided by (Used in) Continuing
Operating Activities			(30,530	)			(5,327	)			(1,604,818	)
Net Cash Provided by Discontinued Operating Activities			—				—				1,678,016
Net Cash Provided by (Used in) Operating Activities			(30,530	)			(5,327	)			73,198
INVESTING ACTIVITIES
Purchase of oil and gas leases			—				—				(217,556	)
Capitalized exploration and development costs			—				—				(9,703	)
Net Cash Used in Continuing Investing Activities			—				—				(227,259	)
Net Cash Used in Discontinued Investing Activities			—				—				—
Net Cash Used in Investing Activities			—				—				(227,259	)
FINANCING ACTIVITIES
Proceeds from related party payable			—				—				76,000
Repayments on related-party payables			—				—				(35,000	)
Proceeds from (repayments on) notes payable			(110,000	)			7,500				(57,500	)
Proceeds from convertible debt			600,000				—				600,000
Proceeds from the sale of common stock			—				—				30,000
Net Cash Provided by (Used in) Continuing
Financing Activities			490,000				7,500				613,500
Net Cash Used in Discontinued Financing Activities			—				—				—
Net Cash Provided by (Used in) Financing Activities			490,000				7,500				613,500
NET INCREASE (DECREASE) IN CASH		$	459,470			$	2,173			$	459,439
CASH AT BEGINNING OF PERIOD			69				136				100
CASH AT END OF PERIOD		$	459,539			$	2,309			$	459,539
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

TIGER OIL AND ENERGY, INC.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
										From Inception
										on April 30,
		For the Three Months Ended								2009 through
		March 31,								March 31,
		2014				2013				2014
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Income taxes		$	—			$	—			$	—
Interest			3,300				—				—
NON CASH FINANCING ACTIVITIES:
Common stock issued in purchases
of subsidiaries		$	—			$	—			$	550,500
Common stock and note issued for oil
and gas leases			—				—				80,000
Common stock cancelled			—				—				20,500
Contributed capital from forgiveness
of debt of a related-party			—				—				579,034
Sale of oil and gas leases to related
party for notes receivable and debt			—				—				42,000
Increase in asset retirement obligations			—				—				15,933
Forgiveness of debt from a related party			—				—				3,354
Beneficial conversion on convertible note			400,000				—				400,000

 

   

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Notes to Condensed Consolidated Financial Statements

March 31, 2014 and December 31, 2013

(Unaudited)

  

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2014, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2013 audited financial statements. The results of operations for the periods ended March 31, 2014 and 2013 are not necessarily indicative of the operating results for the full year.

 

NOTE 2 - GOING CONCERN

 

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

 

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

 

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

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

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

  

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Notes to Condensed Consolidated Financial Statements

March 31, 2014 and December 31, 2013

(Unaudited)

  

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Recent Accounting Pronouncements

 

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

 

Cash and Cash Equivalents

 

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

 

Fair Value of Financial Instruments

 

As at March 31, 2014, the fair value of cash, accounts receivable, accounts payable and notes payable approximate carrying values because of the short-term maturity of these instruments.

 

Oil and Gas Properties

 

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

 

Capitalized costs associated with impaired properties and capitalized costs related to properties having proved reserves, plus the estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 410 “Asset Retirement and Environmental Obligations” (FASB ASC 410), are amortized using the unit-of-production method based on proved reserves. Capitalized costs of oil and natural gas properties, net of accumulated amortization and deferred income taxes, are limited to the total of estimated future net cash flows from proved oil and natural gas reserves, discounted at ten percent, plus the cost of unevaluated properties.  Under certain specific conditions, companies could elect to use subsequent prices for determining the estimated future net cash flows. The use of subsequent pricing is no longer allowed. There are many factors, including global events that may influence the production, processing, marketing and price of oil and natural gas. A reduction in the valuation of oil and natural gas properties resulting from declining prices or production could adversely impact depletion rates and capitalized cost limitations. Capitalized costs associated with properties that have not been evaluated through drilling or seismic analysis, including exploration wells in progress at March 31, 2013, are excluded from the unit-of-production amortization. Exclusions are adjusted annually based on drilling results and interpretative analysis.

  

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Notes to Condensed Consolidated Financial Statements

March 31, 2014 and December 31, 2013

(Unaudited)

  

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Oil and Gas Properties (Continued)

 

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

  

Costs of oil and gas properties are depleted using the unit-of-production method. For the three months ended March 31, 2014, the Company recognized $-0- of depletion expense related to oil and gas production during the period.

 

Ceiling Test

 

In applying the full cost method, the Company performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of property and equipment is compared to the value of its proved reserves discounted at a ten percent interest rate of future net revenues, based on current economic and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties.  During the three months ended March 31, 2014 and the twelve months ended December 31, 2013, the Company had recorded $-0- and $-0- of impairment expense, respectively, in connection with the full cost ceiling test calculation.

 

Revenue Recognition

 

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

 

NOTE 4 - OIL AND GAS PROPERTIES

 

Oil and gas properties are stated at cost. The Company recognized impairment expense totaling $65,540 during the year ended December 31, 2013. As of March 31, 2014 and December 31, 2013 oil and gas properties consisted of the following:

 

		March 31, 2014				December 31, 2013
Unproved properties		$	65,540			$	65,540
Impairment of oil and gas leases			(65,540	)			(65,540	)
Net oil and gas properties		$	—			$	—

  

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Notes to Condensed Consolidated Financial Statements

March 31, 2014 and December 31, 2013

(Unaudited)

 

NOTE 5 - CONVERTIBLE NOTES PAYABLE

 

On January 3, 2014, the Company received $600 ,000 in connection with the convertible note financing commitment disclosed in Note 7, the terms of which call for the Company to receive three tranches of $200,000 each on a callable convertible note wherein the Company borrows the sum at 5% interest for one year and the investor can elect to continue to receive the interest on the note or have the Company issue the investor shares of common stock of the Company at $0.50 per share to retire the debt.

 

The Company analyzed the convertible debts under ASC 470-20 and determined that a beneficial conversion feature existed at note execution. The intrinsic value of the beneficial conversion feature was determined to be $400,000 and was recorded as additional paid-in capital with an offset to debt discounts. During the year ended December 31, 2013, $95,342 of the debt discount was amortized to interest expense, leaving an ending balance of debt discounts of $304,658. No beneficial conversion feature was calculated to be present upon execution with respect to the $200,000 tranche of funds received.

 

NOTE 6 - STOCKHOLDERS’ DEFICIT

 

The Company has 1,000,000 preferred shares authorized at a par value of $0.001 and 74,000,000 common shares authorized at par value of $0.001. As of March 31, 2014 and December 31, 2013 the Company has 42,013 shares of preferred stock and 42,728,159 shares of common stock issued and outstanding. The following is a list of the Company’s common stock issuances for the three months ended March 31, 2014 and for the years ended December 31, 2013 and 2012:

 

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

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

On December 8, 2013, the Company has signed an election to participate in the first of three wells with TOTO Energy LLC in Cowley County Kansas. The Company will earn a 30% working interest and a 24.45% net royalty interest in the well. Cost of the first well has increased to $630,000 because of the cold weather for drilling and fracking each well with the Company’s cost of 30% to be $189,000 per well and will be scheduled for early spring.

 

On December 12, 2013, the Company secured a commitment from an unrelated party for the $600,000 required to proceed with drilling plans for the Cowley County KS in partnership with TOTO Energy, LLC. The Company will earn up to a 30% working interest and a 24.45% net royalty interest in the wells drilled and fracked.

 

The terms of the agreement call for the Company to receive three tranches of $200,000 each on a callable convertible note wherein the Company borrows the sum at 5% interest for one year and the investor can elect to continue to receive the interest on the note or have the Company issue the investor shares of common stock of the Company at $0.50 per share to retire the debt.

   

 

TIGER OIL AND ENERGY, INC.

(An Exploration Stage Company)

Notes to Condensed Consolidated Financial Statements

March 31, 2014 and December 31, 2013

(Unaudited)

 

NOTE 8 - SUBSEQUENT EVENTS

 

On April 1, 2014, the Company made its first payments to TOTO Energy, LLC to commence operations in the aforementioned development. The payment consisted of $24,000 for the land lease, and $189,000 for estimated costs of operations, comprising their 30% working interest in the development.

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and there are no other material subsequent events to report.

 

  

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

  

This 10Q contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward -looking statements contained herein to reflect future events or developments.

 

Going Concern

 

The future of our company is dependent upon its ability to obtain financing and upon future profitable operations from the sale of products and services through our websites. Management has plans to seek additional capital through a private placement and public offering of its common stock, if necessary. Our auditors have expressed a going concern opinion because uncertainties raise doubts about the Issuers ability to continue as a going concern.

 

Corporate Overview

 

Unless otherwise indicated, in this 10Q, references to “we,” “our,” “us,” the “Company,” “TGRO” refer to Tiger Oil and Energy, Inc., a Nevada corporation (formerly UTEC, Inc.). Future plans include the exploration, development and production of oil and gas in the United States. Our current focus is to secure financing to increase our holdings and develop our current oil and gas assets over the next twelve months.

 

The Company through its acquisition of Jett Rink LLC owns interests in two oil and gas wells for approximately 50 acres located in Creek County, State of Oklahoma, together with any personal property and lease equipment located thereon. These two wells are shut-in and produce no revenue.

 

On April 9, 2014 we elected to partner with TOTO Energy LLC and drill our first well on the Cowley County leases. The Company paid $24,000 for a 30% WI in the Stalnaker lease and agreed to spend $189,000 for our share of drilling costs of the Stalnaker 17-1 well. (paid).

 

On June 1, 2013 the Company sold its 30% interest in three oil leases in Cowley County, KS valued at approximately $35,000 to a related party in consideration of the retirement of debt of $36,454.

 

On August 9, 2013 Ryan Kerr submitted his resignation to the Board of Directors with no disagreements with the Company.

 

On September 13, 2013 we received written notice from Brent Whitley, owner of the Whitley #1 and Whitley #2 oil leases advising us that the lease held by the Company was being terminated for non-production. Whereas the Company had an asset on the lease consisting of oil tank batteries and infrastructure valued at approximately $32,000 net, after transportation costs; and whereas The State of Kansas (KCC) had determined that the responsibility for plugging the Whitley #1 and #2 is the Company’s and the cost for plugging has been estimated to be a total of $32,000; then the Board of Directors believed that it was in the best interest of the Corporation to transfer the Company’s interest in the Whitley #1 and Whitley #2 surface battery tanks and infrastructure to DK Operating Inc. for $32,000 in full satisfaction of the Company’s plugging responsibilities to KCC.

 

On December 8, 2013 we purchased a 30% Working Interest (WI) in three leases in Cowley County KS from a related party and agreed to participate in the drilling of up to three wells with TOTO Energy LLC. of Spring TX which owns 70% of the said leases.

 

 

On December 12, 2013 The Company enter into a Callable Convertible Note agreement with an unrelated lender wherein the Company borrows the sum of $600,000 and promises to pay the sum of $600,000.00, on December 12, 2014 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of five percent (5%) (the “Interest Rate”) per annum from December 12, 2013 (the “Issue Date”) until the same becomes due and payable. The Holder shall have the right from time to time, and at any time on or prior to the Maturity Date to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”). The Conversion Price shall be at a price of $0.50 per share in each Tranche.

 

On April 9, 2014 we elected to partner with TOTO Energy LLC and drill our first well on the Cowley County leases. The Company holds a 30% WI in the Stalnaker lease and agreed to spend $189,000 for our share of drilling costs of the Stalnaker 17-1 well. (paid).

 

On May 10, 2014 we elected to partner with TOTO Energy LLC and drill our second well on the Cowley County leases. The Company holds a 30% WI in the DeFore lease and agreed to spend $189,000 for our share of drilling costs of the DeFore 19-1 well. (paid).

 

Our current focus is to secure financing to increase our holdings and develop our current oil and gas assets over the next twelve months.

 

Revenues

 

Revenues from continuing operations for the three months ended March 31, 2014 were $-0. 

 

Operating Expenses

 

Operating expenses for the three months ended March 31, 2014 and 2013 were $28,529 and $7,279, respectively. The majority of these expenses related to general and administrative expenses totaling $28,371 and $6,064 for the three months ended March 31, 2014 and 2013, respectively. The Company also recognized accretion expense of $158 and $1,215 during the three months ended March 31, 2014 and 2013, respectively.

 

Other Income (Expenses)

 

During the three months ended March 31, 2014 and 2013 the Company recognized interest expense in the amount of $102,415 and $666, respectively. The Company also recognized a gain on forgiveness of debt in the amount of $2,450 and $-0- in the three months ended March 31, 2014 and 2013, respectively. Additionally, the Company recognized a loss on derivative liability of $-0- and $505 in three months ended March 31, 2014 and 2013, respectively.

 

Net Loss

 

For the three months ended March 31, 2014 and 2013, the Company recognized net losses in the amounts of $128,494 and $8,450, respectively.

 

 

Liabilities

 

The Company’s liabilities primarily consist of current amounts payable or accrued to trade creditors. At March 31, 2014 and 2013 the Company holds a note payable with an outstanding balance of $24,877 and $22,414, respectively. The Company also has a convertible note payable with a net balance of $295,342 and $-0- at March 31, 2014, and 2013, respectively. Additionally, the Company has a long-term asset retirement obligation with a balance of $7,181 and $7,023 at March 31, 2014 and 2013, respectively.

 

Liquidity and Capital Resources

 

As of March 31, 2014, the Company had $459,739 in current assets, consisting of $459,539 in cash, and deposits of $200, compared to $269 in current assets at December 31, 2013, which consisted of cash of $69 and deposits of $200. Total liabilities at March 31, 2014, totaled $327,600 compared to $139,637 at December 31, 2013. At March 31, 2014 the Company had a current ratio of 1.43.

 

The Company estimates that it will require $400,000 to accomplish its short-term goal of bringing shut-in wells back into production and the company's sole source of liquidity to this point has been through the sale of common stock. Such funding that is required to maintain liquidity will come in the form of equity sales of common stock.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

As of March 31, 2014 under the direction of the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a — 15(e) under the Securities Exchange Act of 1934, as amended. Based on the evaluation of these controls and procedures required by paragraph (b) of Sec. 240.13a-15 or 240.15d-15 the disclosure controls and procedures have been found to be ineffective.

 

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

 

Evaluation of Internal Control Over Financial Reporting

 

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2014. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of the end of the fiscal year covered by this Quarterly Report on Form 10-Q that our internal control over financial reporting has not been effective.

 

  

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of March 31, 2014:

 

i)

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

 

ii)

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

 

iii)

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

 

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

 

CHANGES IN INTERNAL CONTROLS

 

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

 

The Company has not taken any steps at this time to address these weaknesses but will formulate a plan before fiscal year ending December 31, 2014.

  

PART II - Other Information

 

Item 1. Legal Proceedings

 

None. 

 

Item 1A. Risk Factors

 

None. 

 

 

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

   

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

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

None.

 

Item 5. Other Information

 

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

 

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

   

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

 

On January 1, 2014 the Board of Directors agreed to compensate its two directors at $1,000 per month each.

  

Item 6. Exhibits

 

Exhibits:

 

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

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

TIGER OIL AND ENERGY, INC.
May 14, 2014
/s/ Kenneth B. Liebscher
Kenneth B. Liebscher, Director & CEO