Attached files
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EX-31.1 - EXHIBIT 31.1 - FIELDPOINT PETROLEUM CORP | ex31_1.htm |
EX-32.1 - EXHIBIT 32.1 - FIELDPOINT PETROLEUM CORP | ex32_1.htm |
EX-31.2 - EXHIBIT 31.2 - FIELDPOINT PETROLEUM CORP | ex31_2.htm |
EX-32.2 - EXHIBIT 32.2 - FIELDPOINT PETROLEUM CORP | ex32_2.htm |
EXCEL - IDEA: XBRL DOCUMENT - FIELDPOINT PETROLEUM CORP | Financial_Report.xls |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2015
☐ 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: 001-32624
FieldPoint Petroleum Corporation
(Exact name of small business issuer as specified in its charter)
Colorado
|
84-0811034
|
|||
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
609 Castle Ridge Road, Suite 335
Austin, Texas 78746
(Address of Principal Executive Offices) (Zip Code)
(512) 579-3560
(Issuer's Telephone Number, Including Area Code)
(former name, address and fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 ☒ 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 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 mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
|
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 ☒
As of May 11, 2015, the number of shares outstanding of the Registrant's $.01 par value common stock was 8,135,385.
PART I – FINANCIAL INFORMATION
Item 1. | Financial Statements |
FieldPoint Petroleum Corporation
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
2015 |
December 31,
2014 |
|||||||
ASSETS | ||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
1,436,762
|
$
|
978,145
|
||||
Certificates of deposit
|
-
|
30,815
|
||||||
Accounts receivable:
|
||||||||
Oil and natural gas sales
|
518,305
|
589,643
|
||||||
Joint interest billings, less allowance for doubtful accounts of approximately $174,000 each period
|
289,988
|
309,417
|
||||||
Prepaid income taxes
|
352,522
|
350,486
|
||||||
Deferred income tax asset—current
|
89,000
|
98,000
|
||||||
Prepaid expenses and other current assets
|
78,777
|
74,032
|
||||||
Total current assets
|
2,765,354
|
2,430,538
|
||||||
PROPERTY AND EQUIPMENT:
|
||||||||
Oil and natural gas properties (successful efforts method)
|
40,954,310
|
40,873,612
|
||||||
Other equipment
|
108,460
|
108,460
|
||||||
Less accumulated depletion and depreciation
|
(21,021,781
|
)
|
(20,514,981
|
)
|
||||
Net property and equipment
|
20,040,989
|
20,467,091
|
||||||
Total assets
|
$
|
22,806,343
|
$
|
22,897,629
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable and accrued expenses
|
$
|
945,946
|
$
|
546,731
|
||||
Oil and gas revenues payable
|
456,049
|
315,954
|
||||||
Total current liabilities
|
1,401,995
|
862,685
|
||||||
LONG-TERM DEBT
|
7,240,000
|
7,240,000
|
||||||
DEFERRED INCOME TAXES
|
1,824,000
|
2,064,000
|
||||||
ASSET RETIREMENT OBLIGATION
|
1,792,409
|
1,763,043
|
||||||
Total liabilities
|
12,258,404
|
11,929,728
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Common stock, $.01 par value, 75,000,000 shares authorized; 9,062,385 and 9,052,385 shares issued, respectively, and 8,135,385 and 8,125,385 outstanding, respectively
|
90,623
|
90,523
|
||||||
Additional paid-in capital
|
12,146,179
|
12,116,487
|
||||||
Retained earnings
|
278,029
|
727,783
|
||||||
Treasury stock, 927,000 shares, each period, at cost
|
(1,966,892
|
)
|
(1,966,892
|
)
|
||||
Total stockholders’ equity
|
10,547,939
|
10,967,901
|
||||||
Total liabilities and stockholders’ equity
|
$
|
22,806,343
|
$
|
22,897,629
|
See accompanying notes to these unaudited condensed consolidated financial statements.
2
FieldPoint Petroleum Corporation
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31, |
||||||||
2015
|
2014
|
|||||||
REVENUE:
|
||||||||
Oil and natural gas sales
|
$
|
1,090,357
|
$
|
2,904,215
|
||||
Well operational and pumping fees
|
1,262
|
8,950
|
||||||
Disposal fees
|
25,347
|
-
|
||||||
Total revenue
|
1,116,966
|
2,913,165
|
||||||
COSTS AND EXPENSES:
|
||||||||
Production expense
|
819,393
|
979,468
|
||||||
Depletion and depreciation
|
506,800
|
825,500
|
||||||
Exploration expense
|
15,497
|
-
|
||||||
Accretion of discount on asset retirement obligations
|
26,000
|
26,000
|
||||||
General and administrative
|
373,327
|
495,552
|
||||||
Total costs and expenses
|
1,741,017
|
2,326,520
|
||||||
OPERATING INCOME (LOSS)
|
(624,051
|
)
|
586,645
|
|||||
OTHER INCOME (EXPENSE):
|
||||||||
Interest income
|
122
|
323
|
||||||
Interest expense
|
(63,445
|
)
|
(68,452
|
)
|
||||
Unrealized loss on commodity derivatives
|
-
|
(46,209
|
)
|
|||||
Miscellaneous
|
6,620
|
629
|
||||||
Total other expense
|
(56,703
|
)
|
(113,709
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
(680,754
|
)
|
472,936
|
|||||
INCOME TAX EXPENSE – CURRENT
|
-
|
(64,000
|
)
|
|||||
INCOME TAX BENEFIT (EXPENSE) – DEFERRED
|
231,000
|
(101,000
|
)
|
|||||
TOTAL INCOME TAX PROVISION
|
231,000
|
(165,000
|
)
|
|||||
NET INCOME (LOSS)
|
$
|
(449,754
|
)
|
$
|
307,936
|
|||
EARNINGS PER SHARE:
|
||||||||
BASIC
|
$
|
(0.06
|
)
|
$
|
0.04
|
|||
DILUTED
|
$
|
(0.06
|
)
|
$
|
0.03
|
|||
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
||||||||
BASIC
|
8,135,274
|
8,066,336
|
||||||
DILUTED
|
8,135,274
|
8,953,701
|
See accompanying notes to these unaudited condensed consolidated financial statements.
3
FieldPoint Petroleum Corporation
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31, |
||||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
(449,754
|
)
|
$
|
307,936
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Unrealized loss on commodity derivatives
|
-
|
46,209
|
||||||
Depletion and depreciation
|
506,800
|
825,500
|
||||||
Exploration expense
|
15,497
|
-
|
||||||
Accretion of discount on asset retirement obligations
|
26,000
|
26,000
|
||||||
Deferred income tax expense (benefit)
|
(231,000
|
)
|
101,000
|
|||||
Stock compensation expense
|
29,792
|
-
|
||||||
Changes in current assets and liabilities:
|
||||||||
Accounts receivable
|
90,767
|
(453,016
|
)
|
|||||
Income taxes receivable
|
(2,036
|
)
|
50,641
|
|||||
Prepaid expenses and other assets
|
(4,745
|
)
|
(592,047
|
)
|
||||
Accounts payable and accrued expenses
|
380,119
|
76,305
|
||||||
Oil and gas revenues payable
|
140,095
|
(46,395
|
)
|
|||||
Other
|
30,815
|
-
|
||||||
Net cash provided by operating activities
|
532,350
|
342,133
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Additions to oil and natural gas properties and other equipment
|
(73,733
|
)
|
(1,609,716
|
)
|
||||
Net cash used in investing activities
|
(73,733
|
)
|
(1,609,716
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from long term debt
|
-
|
500,000
|
||||||
Net cash provided by financing activities
|
-
|
500,000
|
||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
458,617
|
(767,583
|
)
|
|||||
CASH AND CASH EQUIVALENTS, beginning of the period
|
978,145
|
2,648,487
|
||||||
CASH AND CASH EQUIVALENTS, end of the period
|
$
|
1,436,762
|
$
|
1,880,904
|
||||
SUPPLEMENTAL INFORMATION:
|
||||||||
Cash paid during the period for interest
|
$
|
62,444
|
$
|
64,237
|
||||
Cash paid during the period for income taxes
|
$
|
2,036
|
$
|
17,752
|
||||
Change in accrued capital expenditures
|
$
|
22,462
|
$
|
-
|
See accompanying notes to these unaudited condensed consolidated financial statements.
4
FieldPoint Petroleum Corporation
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | Nature of Business, Organization and Basis of Preparation and Presentation |
FieldPoint Petroleum Corporation (the “Company”, “FieldPoint”, “our”, or “we”) is incorporated under the laws of the state of Colorado. The Company is engaged in the acquisition, operation and development of oil and natural gas properties, which are located in Louisiana, New Mexico, Oklahoma, Texas, and Wyoming.
The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary to present fairly the financial position and results of operations for the periods presented have been made. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Form 10-K filing for the year ended December 31, 2014.
2. | Recently Issued Accounting Pronouncements |
In February 2015, the FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis," which makes changes to both the variable interest model and the voting model, affecting all reporting entities involved with limited partnerships or similar entities, particularly industries such as the oil and gas, transportation and real estate sectors. In addition to reducing the number of consolidation models from four to two, the guidance simplifies and improves current guidance by placing more emphasis on risk of loss when determining a controlling financial interest and reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity. The requirements of the guidance are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, with early adoption permitted. The adoption of ASU 2015-02 is currently not expected to have a material effect on our consolidated financial statements.
In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability, consistent with the presentation of a debt discount. The guidance is effective on a retrospective basis for annual periods beginning after December 15, 2015, including interim periods within that reporting period, with early adoption permitted. The adoption of the updated standard is currently not expected to have a material effect on our consolidated financial statements and related disclosures.
3.
|
Oil and Natural Gas Properties
|
In January 2014, the Company drilled and completed a successful development well in Lee County, Texas. The net cost to the Company was approximately $1,000,000. No wells were drilled or completed during the three months ended March 31, 2015.
See accompanying notes to these unaudited condensed consolidated financial statements.
5
4. | Earnings Per Share |
Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share take common stock equivalents (such as options and warrants) into consideration using the treasury stock method. The Company had 7,911,726 and 7,960,775 warrants outstanding with an exercise price of $4.00 at March 31, 2015 and 2014, respectively. The dilutive effect of the warrants for the three months ended March 31, 2015 and 2014 is presented below.
For the Three Months Ended
March 31,
|
||||||||
2015
|
2014
|
|||||||
Net income (loss)
|
$
|
(449,754
|
)
|
$
|
307,936
|
|||
Weighted average common stock outstanding
|
8,135,274
|
8,066,336
|
||||||
Weighted average dilutive effect of stock warrants
|
-
|
887,365
|
||||||
Dilutive weighted average shares
|
8,135,274
|
8,953,701
|
||||||
Earnings (loss) per share:
|
||||||||
Basic
|
$
|
(0.06
|
)
|
$
|
0.04
|
|||
Diluted
|
$
|
(0.06
|
)
|
$
|
0.03
|
5. | Income Taxes |
For the three months ending March 31, 2015, and 2014, the tax provision is approximately 34% and 35%, respectively, of book income before tax. The rate for the three months ended March 31, 2015, differed slightly from the statutory federal and state rates due primarily to permanent differences in book and taxable income related to stock compensation expense. The rate for the three months ended March 31, 2014, differed slightly from the statutory federal and state rates due primarily to permanent differences in book and taxable income related to the domestic production activities deduction.
6. | Related Party Transactions |
The Company leased office space from the estate of its former president through January 2014 for $2,500 a month. Beginning February 1, 2014, the Company no longer rents office space from the estate.
During the three month period ended March 31, 2014, the Company paid a relative of a Board member $28,000 for petroleum engineering services. There were no comparable payments during the three month period ended March 31, 2015.
7. | Long-Term Debt |
The Company has a line of credit with a bank with a borrowing base of $11,000,000 at March 31, 2015, and December 31, 2014. The agreement requires monthly interest-only payments until maturity on October 18, 2016. The line of credit provides for certain financial covenants and ratios measured quarterly which include a current ratio, leverage ratio, and interest coverage ratio requirements. The Company was in compliance with financial covenants as of March 31, 2015.
6
8. | Stockholders’ Equity |
There were 7,911,726 warrants outstanding at March 31, 2015. There was no warrant activity for the period. The weighted average excise price was $4.00. The weighted average expected life was 3.25 years at December 31, 2014, and was 3.00 years at March 31, 2015.
As a signing bonus to his “at will” employment agreement, Phillip Roberson as President and CFO, is entitled to receive a total of 50,000 shares of common stock, of which 10,000 shares were immediately vested. An additional 10,000 shares were received and vested January 1, 2015. Ten thousand shares will be received and vested at each of the six month anniversary dates of the commencement date until all are received and vested. The fair value of this stock grant was $275,000 of which $29,792 was recognized as non-cash stock compensation expense during the three months ended March 31, 2015. The remaining future expense related to this stock grant is $75,625 and is expected to be recognized over the weighted average expected life of less than one year.
9. | Commodity Derivatives |
No commodity positions were outstanding at March 31, 2015, or December 31, 2014.
10. | Subsequent Events |
On May 13, 2015 the company entered into a costless collar hedging agreement with Citibank for 200 barrels of oil per day that runs for a term of six months from June 1, 2015 to December 31, 2015, with a floor of $55 per barrel and a ceiling of $70 per barrel.
7
PART I
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion should be read in conjunction with the Company’s Condensed Consolidated Financial Statements, and respective notes thereto, included elsewhere herein. The information below should not be construed to imply that the results discussed herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of the management of FieldPoint Petroleum Corporation.
General
FieldPoint Petroleum Corporation derives its revenues from its operating activities including sales of oil and natural gas and operating oil and natural gas properties. The Company's capital for investment in producing oil and natural gas properties has been provided by cash flow from operating activities and from bank financing. The Company categorizes its operating expenses into the categories of production expenses and other expenses.
The Company completed drilling the Ranger 8A-1H well in the Taylor Serbin field in Texas. Production began February 1, 2014. The Company completed drilling the Ranger 11A-1H well in the Taylor Serbin field in Texas. Production began May 20, 2014.
In July 2014, the Company completed the Ranger 8A-2H and the Ranger 8A3-3H in Lee County, Texas. The Company has a 25% working interest and 18.75% net revenue interest in each well. The net cost to drill and complete the wells was approximately $850,000 per well. The wells were successfully completed and are in production.
The Company has temporarily suspended drilling and exploration activities due to low commodity prices and has no plans at this time to drill a fourth well in the East Lusk field in New Mexico or continue development of the Taylor Serbin field. Furthermore, we plan to limit any remedial work that does not increase production and reduce general and administrative costs as much as possible until commodity pricing improves.
Results of Operations
Comparison of three months ended March 31, 2015 to the three months ended March 31, 2014
Quarter Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
Revenue:
|
||||||||
Oil sales
|
$
|
993,998
|
$
|
2,605,280
|
||||
Natural gas sales
|
96,359
|
298,935
|
||||||
Total oil and natural gas sales
|
$
|
1,090,357
|
$
|
2,904,215
|
||||
Sales volumes:
|
||||||||
Oil (Bbls)
|
21,694
|
28,009
|
||||||
Natural gas (Mcf)
|
34,333
|
44,483
|
||||||
Total (BOE)
|
27,417
|
35,423
|
||||||
Average sales prices:
|
||||||||
Oil ($/Bbl)
|
$
|
45.82
|
$
|
93.02
|
||||
Natural gas ($/Mcf)
|
2.81
|
6.72
|
||||||
Total ($/BOE)
|
$
|
39.77
|
$
|
81.99
|
||||
Costs and expenses ($/BOE)
|
||||||||
Lease operating expense (lifting costs)
|
$
|
29.89
|
$
|
27.65
|
||||
Depletion and depreciation
|
18.48
|
23.30
|
||||||
Exploration expense
|
0.56
|
-
|
||||||
Accretion of discount on asset retirement obligations
|
0.95
|
0.74
|
||||||
General and administrative
|
13.62
|
13.99
|
||||||
Total
|
$
|
63.50
|
$
|
65.68
|
8
Oil and natural gas sales revenues decreased 62% or $1,813,858 to $1,090,357 for the three-month period ended March 31, 2015, from the comparable 2014 period. Average oil sales prices decreased 51% to $45.82 for the three-month period ended March 31, 2015, compared to $93.02 for the period ended March 31, 2014. Average natural gas sales prices decreased to $2.81 for the three-month period ended March 31, 2015, compared to $6.72 for the period ended March 31, 2014. Decreased oil and natural gas production accounted for a decrease in revenue of approximately $656,000. Lower commodity prices for oil and natural gas account for a decrease in revenue of approximately $1,158,000. We have temporarily suspended drilling and exploration activity due to low commodity prices and expect our volumes to decline in the coming quarters until drilling and exploration activities are re-established.
Lease operating expenses decreased 16% or $160,075 to $819,393 for the three month period ended March 31, 2015, from the comparable 2014 period. This was primarily due to decreased production volumes. Lifting costs per BOE increased $2.24 to $29.89 for the 2015 period compared to $27.65 for the three months ended March 31, 2014, due mainly to remedial work that did not increase production but was necessary to keep our older leases in compliance with state and federal laws. We anticipate lease operating expenses to remain stable over the following quarters due to a cessation of new well activity as a result of low commodity pricing.
Depletion and depreciation decreased 39% or $318,700 to $506,800 for the three month period ended March 31, 2015, versus $825,500 in the 2014 comparable period. This was primarily due to lower production volumes during the three months ended March 31, 2015.
General and administrative overhead cost decreased 25% or $122,225 to $373,327 for the three-month period ended March 31, 2015, from the three-month period ended March 31, 2014. This was primarily attributable to a decrease in Board fees, consulting and professional services. At this time, the Company anticipates general and administrative expenses to remain stable or decrease slightly in the coming quarters.
Other expenses, net for the quarter ended March 31, 2015, were $56,703 compared to other expense, net of $113,709 for the quarter ended March 31, 2014. The net decrease was primarily due to a $46,209 unrealized loss on commodity derivatives in the three months ended March 31, 2014.
Liquidity and Capital Resources
Cash flow provided by operating activities was $532,350 for the three month period ended March 31, 2015, as compared to $342,133 of cash flow provided by operating activities in the comparable 2014 period. The increase in cash flows from operating activities was primarily due to changes in accounts payable, accounts receivable and prepaid expenses offset by lower net income, depletion, and deferred tax benefit.
Cash flow used in investing activities was $73,733 for the three month period ended March 31, 2015, and $1,609,716 in the comparable 2014 period due to fewer additions to oil and natural gas properties and equipment in the current period.
9
No cash flow was provided by financing activities for the three month period ended March 31, 2015. Cash flow provided by financing activities for the three month period ended March 31, 2014, was $500,000 from the draw on our line of credit.
We may continue to access capital through draws from our line of credit which has a borrowing base of $11,000,000 at March 31, 2015. The next redetermination date is September 30, 2015. However, we are required to maintain certain minimum leverage ratios to be in compliance with our bank covenants required by our line of credit. If we violated any of these covenants we would need to request Citibank to amend our lending agreement, or secure alternative financing in the debt or equity markets, which may not be available. Based on industry outlook for the remainder of 2015, prices for oil and gas may continue to be lower than the comparable period in 2014 and at our current run rate we may break a borrowing covenant in the next quarter.
10
PART I
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We periodically enter into certain commodity price risk management transactions to manage our exposure to oil and natural gas price volatility. These transactions may take the form of futures contracts, swaps or options. All data relating to our derivative positions is presented in accordance with authoritative guidance. Accordingly, unrealized gains and losses related to the change in fair value of derivative contracts that qualify and are designated as cash flow hedges are recorded as other comprehensive income or loss and such amounts are reclassified to oil and natural gas sales revenues as the associated production occurs. Derivative contracts that do not qualify for hedge accounting treatment are recorded as derivative assets and liabilities at fair value in the consolidated balance sheet, and the associated unrealized gains and losses are recorded as current expense or income in the consolidated statement of operations. While such derivative contracts do not qualify for hedge accounting, management believes these contracts can be utilized as an effective component of commodity price risk management activities. On March 27, 2014, we entered into a commodity derivative position effective April 1, 2014. The collars had a floor of $87.50 and a ceiling of $105.00 for 200 barrels of oil per day from April 1, 2014, to September 30, 2014. We had a net unrealized loss of $46,209 on commodity derivative transactions during the three month period ending March 31, 2014. There were no commodity positions open at March 31, 2015.
PART I
Item 4. | CONTROLS AND PROCEDURES |
a) | Disclosure Controls and Procedures |
Our Principal Executive Officer, Roger D. Bryant, and our Principal Financial Officer, Phillip H. Roberson, have established and are currently maintaining disclosure controls and procedures for the Company. The disclosure controls and procedures have been designed to provide reasonable assurance that the information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed by the Company is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure.
The Principal Executive Officer and the Principal Financial Officer conducted a review and evaluation of the effectiveness of the Company’s disclosure controls and procedures and have concluded, based on their evaluation as of the end of the period covered by this Report, that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed by the Company is accumulated and communicated to management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure and we refer you to Exchange Act Rule 13a-15(e).
b) | Changes in Internal Control over Financial Reporting |
There have been no changes to the Company’s system of internal controls over financial reporting during the quarter ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, the Company’s system of controls over financial reporting. As part of a continuing effort to improve the Company’s business processes, management is evaluating its internal controls and may update certain controls to accommodate any modifications to its business processes or accounting procedures.
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c) | Limitations of Any Internal Control Design |
Our principal executive and financial officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive and financial officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
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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
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibits | ||
Certifications of Chief Executive Officer
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Certifications of Chief Financial Officer
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Certification of Chief Executive Officer Pursuant to U.S.C. Section 1350
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Certification of Chief Financial Officer Pursuant to U.S.C. Section 1350
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Schema Document
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101.CAL
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XBRL Calculation Linkbase Document
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101.LAB
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XBRL Label Linkbase Document
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101.PRE
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XBRL Presentation Linkbase Document
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101.DEF
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XBRL Definition Linkbase Document
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: |
May 14, 2015
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By: |
/s/ Roger D. Bryant
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Roger D. Bryant, Principal Executive Officer
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Date: | May 14, 2015 |
By:
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/s/ Phillip H. Roberson
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Phillip H. Roberson, Principal Financial Officer
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