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

Form 10-Q

(Mark One)

[X]

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

For the quarterly period ended June 30, 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  000-30193

NATION ENERGY INC.

(Exact name of registrant as specified in its charter)


Wyoming

 

59-2887569

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)


RPO Box 60610 Granville Park
Vancouver, British Columbia, Canada

 

V6H 4B9

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number  (604) 331-3399

Former Name, former address and former fiscal year, if changed since last report:  N/A

Indicate by checkmark 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 the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   [x]     No [ ]


Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definition 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

[  ] (Do not check if a smaller reporting company)

Smaller reporting company[X]



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ X ]     No [ ]



APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  150,020,000 common shares issued and outstanding as of August 14, 2015.



TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Balance Sheets as of June 30, 2015 (unaudited) and March 31, 2015.

Condensed Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended June 30, 2015 and 2014 (unaudited)

Condensed Statements of Cash Flows for the Three Months Ended June 30, 2015 and 2014 (unaudited)

Notes to Condensed Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures


PART II.

OTHER INFORMATION


Item 1.

Legal Proceedings

Item 1A.Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

Signatures



PART I - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS


Our unaudited interim financial statements for the period ended June 30, 2015 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.


It is the opinion of management that the interim financial statements for the period ended June 30, 2015 include all adjustments necessary in order to ensure that the interim financial statements are not misleading.





Nation Energy, Inc.

Condensed Balance Sheets

 

 

 

 

 

 

June 30,

 

March 31,

 

2015

 

2015

 

(Unaudited)

 

 

ASSETS

Current assets:

 

 

 

     Cash

 $    10,580

 

 $    47,479

Total current assets

       10,580

 

       47,479

 

 

 

 

 Total assets

 $    10,580

 

 $    47,479

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 

 

 

 

 Current liabilities:

 

 

 

      Accounts payable

 $    19,948

 

 $    12,282

      Accounts payable and accrued expenses - related party

     800,054

 

     774,456

      Loans payable - related party, current

     917,654

 

     872,936

 Total current liabilities

  1,737,656

 

  1,659,674

 

 

 

 

 Long term liabilities

 

 

 

      Loans payable - related party, noncurrent

     117,719

 

     112,977

Total liabilities

  1,855,375

 

  1,772,651

 Stockholders' (deficit)

 

 

 

   Common stock, no par value; 100,000,000

 $    16,020

 

 $    16,020

       shares authorized; 16,020,000 shares issued  

 

 

 

        and outstanding

 

 

 

   Additional paid-in capital

  6,868,380

 

  6,868,380

   Accumulated (deficit) prior to the development stage

(6,839,714)

 

(6,839,714)

   Accumulated (deficit) during the development stage

(1,882,788)

 

(1,785,225)

   Accumulated comprehensive (loss):   

 

 

 

   Foreign currency translation (loss)

       (6,693)

 

       15,367

 Total stockholders' (deficit)

(1,844,795)

 

(1,725,172)

 

 

 

 

 Total liabilities and stockholders' (deficit)

 $    10,580

 

 $    47,479

 

 

 

 

 The accompanying notes are an integral part of these financial statements

 F-1




Nation Energy, Inc.

Condensed  Statements of Operations and Comprehensive Loss

For the Three Months Ended June 30, 2015 and 2014

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Revenue:

 

 $           -   

   

 $           -   

   

Direct expenses:

 

 

 

 

 

    Royalties

 

              -   

 

              -   

 

    Operating

 

              -   

 

              -   

 

 

 

 

 

 

 

  Operating income

 

              -   

 

              -   

 

 

 

 

 

 

 

  General and administrative expenses

 

      49,170

 

       28,349

 

 

 

 

 

 

 

     

 

 

 

 

 

  Income (loss) before other income (expense)

 

      (49,170)

 

      (28,349)

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

   Interest (expense)

 

      (48,393)

 

      (46,975)

 

Total other (expense)

 

      (48,393)

 

      (46,975)

 

 

 

 

 

 

 

Net loss

 

      (97,563)

 

      (75,324)

 

 

 

 

 

 

 

  Foreign currency translation gain (loss)

 

      (22,060)

 

      (30,768)

 

 

 

 

 

 

   

  Comprehensive loss

 

 $ (119,623)

   

 $ (106,092)

 

 

 

 

 

 

 

  Per share information:

 

 

 

 

 

     Weighted average number of

 

 

 

 

 

     common shares outstanding

 

 

 

 

 

      - basic and diluted

 

 16,020,000

 

 16,020,000

 

 

 

 

 

 

 

  Net loss per common

 

 

 

 

 

     share - basic and diluted

 

 $     (0.007)

   

 $     (0.007)

 

 

 

 

 

 

 

 The accompanying notes are an integral part of these financial statements

 F-2




Nation Energy, Inc.

Condensed Statements of Cash Flows

For the Three Months Ended June 30, 2015 and 2014

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

June 30,

 

June 30,

 

 

2015

 

2014

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

  Net loss

 $     (97,563)

 

 $      (75,324)

 

Adjustments to reconcile net loss to net cash

 

 

 

 

  proived by (used in) operating activities:

 

 

 

 

Changes in working capital:

 

 

 

 

   Increase (decrease) in accounts payable

           7,666

 

          13,000

 

   Increase in accounts payable - related party

         75,058

 

          88,687

 

Net cash (used in) operating activities

        (14,839)

 

          26,363

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

   Proceeds from loan payable - related party

                -   

 

            4,662

 

Net cash provided by financing activities

                -   

 

            4,662

 

 

 

 

 

 

Effect of currency rate change (loss)

        (22,060)

 

         (30,768)

 

 

 

 

 

 

Net increase (decrease) in cash

        (36,899)

 

               257

 

 

 

 

 

 

Beginning balance, cash

         47,479

 

            2,749

 

 

 

 

 

 

Ending balance, cash

 $       10,580

 

 $         3,006

 

 

 

 

 

 

 

 

 

 

 

 The accompanying notes are an integral part of these financial statements

 F-3




Nation Energy Inc.

Notes to Condensed Unaudited Interim Financial Statements

June 30, 2015


Note 1.  Basis of Presentation

The accompanying condensed unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.  They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited financial statements.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the financial statements and notes thereto, included in the Company’s Form 10-K as of and for the year ended March 31, 2015 (“The Annual Report”).

The Company was an oil and gas exploration, development and production company with properties located in Alberta Canada. Effective June 1, 2008, the Company sold all of its oil and gas properties in the Smoky Hill area of Alberta and began to review other prospects. On October 11, 2013, the Company entered into a letter agreement with Paltar Petroleum Limited (“Paltar”), an Australian company, pursuant to which the Company agreed to acquire four exploration and development permits and twenty-nine applications for exploration and development permits in respect of prospective acreage located in northern Australia.  On March 31, 2014, the Company amended this letter agreement and, on November 27, 2014 and April 29, 2015, the parties amended and restated the letter agreement to add additional exploration properties and provide for new closing terms and to extend closing date and maturities dates of promissory notes, respectively.  On June 13, 2015, the parties entered into a second amended and restated agreement, replacing in its entirety the amended and restated agreement dated November 27, 2014. To implement any new business plan, significant financing will be required and the Company will need to be successful in its efforts to identify, acquire and develop a new business venture.

On June 19, 2015, the Company registered a wholly-owned subsidiary in Australia, Nation Energy (Australia) PTY Ltd. (“Nation Australia”).


The Company is currently in the development stage as defined by Accounting Standards Codification subtopic 915-10 “Development Stage Entities” (“ASC 915-10”).  Upon the sale of all of its oil and gas assets, the Company re-entered the exploration stage.  Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise.  For the period from inception through June 1, 2008, the Company has accumulated a deficit of ($6,839,714) and a deficit accumulated during the development stage of ($1,882,788).

Note 2.  Recent Accounting Pronouncements


Accounting standards-setting organizations frequently issue new or revised accounting rules. The Company regularly reviews all new pronouncements that have been issued to determine their impact, if any, on its financial statements.

In May 2014, the FASB issued ASU No. 2014-09, ”Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The new standard is effective for the Company on December 15, 2017.  Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In June 2014, the FASB issued ASU No. 2014-10 “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 addresses the cost and complexity associated with the incremental reporting requirements for development stage entities, such as start-up companies, without compromising the availability of relevant information and eliminates an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The Company elected to apply ASU 2014-10 effective the quarter ended September 30, 2014. ASU 2014-10 impacts financial statement presentation only and removes the requirement to present additional inception-to-date information.

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted.  The Company will evaluate the going concern considerations in this ASU; however, as of the current period, management believes that is current disclosures meet the requirement under this ASU.

In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”. This ASU is effective for annual and interim reporting periods beginning after December 15, 2015. ASU No. 2015-01 eliminates the concept of extraordinary items.  Management does not anticipate that this accounting pronouncement will have any material future effect on the Company’s consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This ASU is effective for annual and interim periods beginning after December 15, 2015. ASU No. 2015-03 changes the presentation of debt issuance costs in financial statements. Management does not anticipate that this accounting pronouncement will have a material future effect on the Company’s consolidated financial statements.


Note 3.  Going Concern


The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has incurred (losses) from inception through June 1, 2008 of ($6,839,714) and further (losses) of ($1,882,788) during the development stage. The Company has working capital and stockholders’ (deficits) of ($1,727,076) at June 30, 2015, and working capital and stockholders’ (deficits) of ($1,612,195) at March 31, 2015. The Company is reliant on raising capital to initiate its business plan. The Company’s ability to continue as a going concern is contingent upon being able to secure financing and attain profitable operations.


The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.


Note 4.  Net (Loss) Per Share


Basic (loss) per common share calculations are determined by dividing net (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted (loss) per common share calculations are determined by dividing net (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding.  During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation.


Note 5.  Related Party Transactions

During March 2002, the Company entered into a verbal agreement with a related party, Caravel Management Corp. (“Caravel”), in which Caravel will provide administrative services on a month-to-month basis. On January 1, 2009, the Company entered into a written agreement revising the previous verbal agreement with Caravel.  The agreement provides for administrative services, office rent and supplies for $7,865 per month. Subsequently, effective November 1, 2010 the Company revised its agreement with Caravel to provide administrative services for $3,500 per month. In addition to administrative services, the agreement also provides for office rent and supplies. Total expenses recognized under this agreement were $10,500 for the three months ended June 30, 2015 and 2014.


The Company entered into loan agreements with Caravel and John Hislop in 2003 and 2004 to fund operations. Caravel is a private management company that is wholly-owned by John Hislop, the Company’s chairman, president, chief executive officer, secretary and chief financial officer. The terms of these loan agreements provided that any principal amount outstanding is payable upon demand and bears interest at 15% per annum, payable quarterly. On March 31, 2006, the Company consolidated and restructured the loans. As part of the restructuring, the Company borrowed an additional C$250,000 (US $203,932). The new loan bears interest at 15% per annum, calculated and compounded monthly and is payable quarterly. Any principal amount outstanding under the loan is payable upon demand.  The loan is payable in Canadian dollars and is secured by a Promissory Note. As of June 30, 2015, the principal balance of the loan was $833,639 and accrued interest payable of $297,377.


On July 18, 2014, the Company entered into a promissory note with its sole officer and director, John Hislop for US$50,000. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum upon demand by Mr. Hislop, both before and after each of maturity, default and judgement commencing effective July 18, 2014. The principal sum and all accrued and unpaid interest will become due and payable on July 18, 2016. As of June 30, 2015, the principal balance of the loan was $50,000 and accrued interest payable of $7,152.


On September 2, 2014, the Company entered into a promissory note with its sole officer and director, John Hislop for C$20,000 (US$16,012). The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum upon demand by Mr. Hislop, both before and after each of maturity, default and judgement commencing effective September 2, 2014. The principal sum and all accrued and unpaid interest will become due and payable on September 2, 2016. As of June 30, 2015, the principal balance of the loan was $16,012 and accrued interest payable of $2,040.


On January 29, 2015, the Company entered into a promissory note with its sole officer and director, John Hislop (“Lender”) for C$50,000 (US$40,030). The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum upon demand by the Lender, both before and after each of maturity, default and judgement commencing effective January 29, 2015. The principal sum and all accrued and unpaid interest will become due and payable on January 29, 2017. As of June 30, 2015, the principal balance of the loan was $40,030 and accrued interest payable of $2,487.


On April 21, 2015, the Company entered into a debt settlement and subscription agreement with its sole officer and director, John Hislop whereby the Company agreed to settle a portion of the indebtedness, in the amount of $1,340,000, by allotting and issuing to John Hislop 134,000,000 shares of common stock of the Company at a deemed price of $0.01 per share.  On April 24, 2015, the Company announced that it had issued 134,000,000 shares of its common stock at a deemed price of $0.01 per share to Mr. Hislop, and it filed a copy of the debt settlement and subscription agreement with Mr. Hislop on EDGAR under cover of a Form 8-K.  However, due to a technical flaw in the process of adopting the amendment to its Articles of Incorporation (announced on February 3, 2014), the Company was only authorized to issue 100,000,000 shares of its common stock on April 23, 2015, and the issuance to Mr. Hislop on April 23, 2015, was therefore void and, as of June 30, 2015, the debt settlement agreement had not closed.  On June 29, 2015, the Company sent to its shareholders a proxy statement for a shareholder meeting to be held July 22, 2015, at which meeting the Company proposed to rectify the technical flaw in its earlier effort to increase its authorized capital.  On July 28, 2015, the Company closed the debt settlement agreement and reissued the 134,000,000 shares to Mr. Hislop pursuant to the debt settlement and subscription agreement immediately following shareholder approval of the increase in its authorized capital on July 23, 2015.


Note 6.   Subsequent Events


On June 13, 2015, we entered into a second amended and restated agreement with Paltar Petroleum Limited, replacing in its entirety the amended and restated agreement dated November 27, 2014.  The second amended and restated agreement provides that on June 26, 2015 and under seven separate Earning Agreements, Paltar will farm out three specific graticular blocks in each of the six petroleum exploration permits identified in the Agreement and will cause Officer Petroleum Pty Ltd., a wholly-owned Australian subsidiary of Paltar, to farm out forty blocks in Exploration Permit 468 (“EP 468”) in exchange for our company’s (i) issuance of an aggregate 600 million shares of common stock to Paltar, with an agreed value of US$.0333 per share, on the second business day following a meeting of our shareholders to amend and restate our company’s Articles of Incorporation, and (ii) payment to Paltar of an aggregate AUD$5,315,000 by December 31, 2015.  This amendment required approval from shareholders to increase the authorized shares and this transaction. The second amended and restated agreement further provides that each earning agreement will require that Nation Australia Pty Ltd., a wholly-owned Australian subsidiary of our company, perform all necessary work and make all necessary expenditures to keep each concerned exploration permit in full force and effect until production licenses have been granted covering the blocks identified in that permit, although Nation Australia may voluntarily terminate the earning agreement and surrender any further earning rights after the end of three permit years.  The second amended and restated agreement further provides that upon issuance of a production license covering one of the blocks, Paltar (or, if applicable, Officer Petroleum) will assign its interest in such license, insofar as it covers the block, to Nation Australia.


On July 22, 2015, the Company held an annual and special meeting of shareholders. All of the resolutions were approved and each of the Company’s four nominees was elected to its Board of Directors.




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


Forward Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  

The material assumptions supporting these forward-looking statements include, among other things:

·

our ability to obtain necessary financing on acceptable terms;

·

retention of skilled personnel;

·

the timely receipt of required regulatory approvals;

·

continuation of current tax and regulatory regimes;

·

current exchange and interest rates; and

·

general economic and financial market conditions.

Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" of the annual report on Form 10-K for the year ended March 31, 2015 and the risks set out below, any of which may cause our company’s or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  These risks include, by way of example and not in limitation:

·

our ability to establish or find resources or reserves;

·

liabilities inherent in natural gas and crude oil operations;

·

uncertainties associated with estimating natural gas and crude oil resources or reserves;

·

geological, technical, drilling and processing problems;

·

competition for, among other things, capital, resources, undeveloped lands and skilled personnel;

·

assessments of the acquisitions;

·

risks related to commodity price fluctuations;

·

the uncertainty of profitability based upon our history of losses;

·

risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned exploration and development projects;

·

risks related to environmental regulation and liability;

·

risks that the amounts reserved or allocated for environmental compliance, reclamation, post-closure control measures, monitoring and on-going maintenance may not be sufficient to cover such costs;

·

risks related to tax assessments;

·

political and regulatory risks associated with oil and gas exploration;  

·

other risks and uncertainties related to our prospects, properties and business strategy; and

·

our company is categorized as a “shell company” as that term is used in the Securities and Exchange Commission’s rules.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements.  These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.

Forward looking statements are made based on management’s beliefs, estimates, and opinions on the date the statements are made.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performances or achievements.  Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with generally accepted accounting principles (“US GAAP”).

As used in this quarterly report, the terms "we", "us", "our", and "Nation Energy" mean Nation Energy Inc., unless otherwise indicated.


In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.


Our Current Business


We currently have no business and operate as a shell company. We are in the process of evaluating the merits of joint venture opportunities in the resource sector.


Plan of Operation


The following is a discussion and analysis of our plan of operation and the factors that could affect our future financial condition. This discussion and analysis should be read in conjunction with our unaudited financial statements and the notes thereto included elsewhere in this quarterly report.

Following the sale of all of our oil and gas operations effective June 1, 2008, we began to actively seek new oil and gas opportunities.  On October 11, 2013, we entered into a letter agreement with Paltar Petroleum Limited, an Australian company, pursuant to which we agreed to acquire four exploration and development permits and twenty-nine applications for exploration and development permits in respect of prospective acreage located in northern Australia.  On March 31, 2014, we amended this letter agreement and, on November 27, 2014, we amended and restated the letter agreement to add additional exploration properties and provide for new closing terms.  On June 13, 2015, we entered into a second amended and restated agreement, replacing in its entirety the amended and restated agreement dated November 27, 2014. We filed a copy of this second amended and restated letter agreement as an exhibit to our Form 8K filed on EDGAR June 18, 2015.

On June 19, 2015, the Company registered a wholly-owned subsidiary in Australia, Nation Energy (Australia) PTY Ltd. (“Nation Australia”).

The second amended and restated agreement provides that on June 26, 2015 and under seven separate Earning Agreements, Paltar will farm out three specific graticular blocks in each of the six petroleum exploration permits identified in the Agreement and will cause Officer Petroleum Pty Ltd., a wholly-owned Australian subsidiary of Paltar, to farm out forty blocks in Exploration Permit 468 (“EP 468”) in exchange for our company’s (i) issuance of an aggregate 600 million shares of common stock to Paltar, with an agreed value of US$.0333 per share, on the second business day following a meeting of our shareholders to amend and restate our company’s Articles of Incorporation, and (ii) payment to Paltar of an aggregate AUD$5,315,000 by December 31, 2015.  The second amended and restated agreement further provides that each earning agreement will require that Nation Australia, a wholly-owned Australian subsidiary of our company, perform all necessary work and make all necessary expenditures to keep each concerned exploration permit in full force and effect until production licenses have been granted covering the blocks identified in that permit, although Nation Australia may voluntarily terminate the earning agreement and surrender any further earning rights after the end of three permit years.  The second amended and restated agreement further provides that upon issuance of a production license covering one of the blocks, Paltar (or, if applicable, Officer Petroleum) will assign its interest in such license, insofar as it covers the block, to Nation Australia.

Pursuant to the second amended and restated agreement, Paltar and John Hislop, our company’s major shareholder, a director and its only officer, agreed to use commercially reasonable efforts to enter into a shareholder agreement which will include a covenant that Paltar and Mr. Hislop will each vote their shares of our company to increase the number of our directors to five and, for five years after the 600,000,000 shares are issued to Paltar as contemplated in the second amended and restated agreement, to elect Mr. Hislop (or his nominee), Darrel Causbrook, David Siegel, and Marc Bruner, Paltar’s director, officer and major shareholder (or such other nominees as Paltar may nominate from time-to-time), and one other person as members of our company’s board of directors.

Pursuant to the second amended and restated agreement, Paltar has also agreed to a lockup of the 600,000,000 shares of our company issued to it such that none may be sold for three years after issuance, except as may be otherwise permitted by resolution of our board of directors (from which vote Paltar’s nominees to our board of directors will abstain).  If any of these shares are transferred by Paltar to Marc Bruner, they will be locked up for an additional 2 years (for a total of 5 years from the date of issuance).

The second amended and restated agreement also provides that on the earn-In closing date, Paltar will grant to Nation Australia an indivisible option, exercisable in the sole discretion of Nation Australia at any time before July 31, 2018, to purchase (i) all of Paltar’s interest in the oil and gas exploration permits to be farmed out under the second amended and restated agreement and various applications for exploration permits listed in the second amended and restated agreement (including the right to exploration permits when applications for such permits are granted) and (ii) all of the outstanding securities of Officer Petroleum for an aggregate cash purchase price of AUD$10,000,000 (US$7,376,088).

The full text of the Agreement has been filed on EDGAR and SEDAR.

We currently have no business and operate as a shell company.  In addition to our efforts to complete the transactions contemplated in the second amended and restated agreement with Paltar Petroleum, we continue to evaluate the merits of other opportunities in the resource sector.

 

Cash Requirements During the Next Twelve Months

Over the next twelve months, we intend to use funds to evaluate new business acquisitions, as follows:

Estimated Funding Required During the Next Twelve Months

 

General and Administrative

$60,000

 

 

Professional Fees

    150,000

 

 

Paltar Transaction

3,900,000

 

 

 

Total

$4,110,000

We have suffered recurring losses from operations.  The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. Management's plan in this regard is to raise additional capital through a debt or an equity offering.  The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

Due to the uncertainty of our ability to meet our current operating expenses noted above, in their report on the annual financial statements for the year ended March 31, 2015, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.  Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

The continuation of our business is dependent upon obtaining further financing, a successful program of exploration, and, finally achieving a profitable level of operations.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further funds required for our continued operations.  We are pursuing various financing alternatives to meet our immediate and long-term financial requirements.  There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.  If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due.  In such event, we will be forced to scale down or perhaps even cease our operations.

Disclosure of Outstanding Share Data

As of August 14, 2015, we had 150,020,000 shares of common stock issued and outstanding.  We do not have any warrants, options or shares of any other class issued and outstanding as of the date of this quarterly report.

RESULTS OF OPERATIONS – Three Months Ended June 30, 2015 and 2014

The following summary of our results of operations should be read in conjunction with our financial statements for the period ended June 30, 2015, which are included herein.


Our operating results for the three months ended June 30, 2015, for the three months ended June 30, 2014 and the changes between those periods for the respective items are summarized as follows:


 

Three Months Ended June 30, 2015

Three Months Ended June 30, 2014

Difference Increase/(Decrease) %

General and administrative

$49,170

$28,349

73%

Interest expense

$48,393

$46,975

3%

Net (loss)

$(97,563)

$(75,324)

30%


We generated a net (loss) of $(97,563) for the three months ended June 30, 2015 compared to a net (loss) of $(75,324) for the three months ended June 30, 2014.  This increased loss is primarily due to increased interest expenses on the loans from Mr. Hislop and increased legal fees relating to the Paltar transaction. Net (loss) per common share for the three months ended June 30, 2015 was ($0.007) compared to ($0.007) per common share for the three months ended June 30, 2014.  General and administrative expenses increased to $49,170 during the three months ended June 30, 2015 from $28,349 during the three months ended June 30, 2014. This increase is primarily due to increased legal fees pertaining to the second amended and restated agreement with Paltar Petroleum.  Legal fees were $24,387 for the three months ended June 30, 2015 compared to $2,117 for the same three month period in 2014.


Interest expense for the three months ended June 30, 2015 totaled $48,393 compared to $46,975 for the three months ended June 30, 2014.  


We reported a foreign currency translation loss of $22,060 for the three months ended June 30, 2015 compared to a loss of $30,768 for the three months ended June 30, 2014.  Our loan and accrued interest were incurred and are calculated in Canadian dollars while the reporting currency is the US dollar.  The value of the Canadian dollar at June 30, 2015 was C$0.8006 to US$1.00 compared to C$0.9372 to US$1.00 at June 30, 2014.


The major components of our general and administrative expenses for the period are outlined in the table below:


 

Three Months Ended June 30, 2015

Three Months Ended June 30, 2014

Difference Increase/(Decrease) %

Administration fees

$10,500

$10,500

0%

Office & MIS

$238

$211

13%

Legal fees

$24,387

$2,117

1,052%

Transfer Agent & Filing Fees

$7,545

$10,020

(25)%

Accounting

$6,500

$5,500

18%

Total Expenses

$49,170

$28,349

73%

General and administrative expenses increased to $49,170 in the three month period ended June 30, 2015 from $28,349 in the three month period ended June 30, 2014.  General expenses include administration fees which remained the same as the comparative three month period.  Office expenses and Management Information System fees increased to $238 in the three month period ended June 30, 2015 from $211. Legal fees increased to $24,387 in the three month period ended June 30, 2015 from $2,117 in the three month period ended June 30, 2014 due primarily to legal fees relating to the second amended and restated agreement with Paltar Petroleum.  Filing fees and transfer agent fees decreased to $7,545 in the three month period ended June 30, 2015 compared to $10,020 in the three month period ended June 30, 2014.  This decrease is a result of reduced annual fees of $7,500 from the OTC Market Group compared to $10,000 in the previous year. Accounting fees increased to $6,500 from $5,500 in the comparative three month period.  

Liquidity and Financial Condition


Working Capital


 

June 30, 2015

March 31, 2015

Current Assets

$10,580

$47,479

Current Liabilities

$1,737,656

$1,659,674

Working Capital (Deficiency)

($1,727,076)

($1,612,195)


Cash Flows  


 

Three Months Ended            June 30, 2015

Three Months Ended                  June 30, 2014

Cash flows provided by (used in) Operating Activities

$(14,879)

$26,363

Cash flows provided by Investing Activities

$Nil

$Nil

Cash flows provided by Financing Activities

$Nil

$4,662

Effect of exchange rate changes on cash

$(22,060)

$(30,768)

Net increase (decrease) in cash

$(36,899)

$257


Operating Activities


Net cash (used in) operating activities was $(14,879) for the three months ended June 30, 2015 compared with net cash provided by (used in) operating activities of $26,363 for the same period in 2014.  The decrease in cash (used in) operating activities is mainly attributed to the increased net loss at June 30, 2015 of $(97,563) compared to $(75,324) at June 30, 2014.  


Investing Activities


Net cash provided by investing activities amounted to $Nil for the three months ended June 30, 2015 and 2014.  


Financing Activities


Net cash provided by financing activities amounted to $Nil  in the three month period ended June 30, 2015 compared to $4,662 in the three month period ended June 30, 2014. This decrease in financing activities is due to no funds being loaned to the Company in the 3 months ended June 30, 2015.


Loans Payable


The Company entered into loan agreements with Caravel and John Hislop in 2003 and 2004 to fund operations. Caravel is a private management company that is wholly-owned by John Hislop, our chairman, president, chief executive officer, secretary and chief financial officer. The terms of these loan agreements provided that any principal amount outstanding is payable upon demand and bears interest at 15% per annum, payable quarterly. On March 31, 2006, we consolidated and restructured the loans. As part of the restructuring, we borrowed an additional C$250,000 (US $203,932).  The new loan bears interest at 15% per annum, calculated and compounded monthly and is payable quarterly. Any principal amount outstanding under the loan is payable upon demand.  The loan is payable in Canadian dollars and is secured by a Promissory Note. As of June 30, 2015, the principal balance of the loan was $833,639 and accrued interest payable of $297,377.


On July 18, 2014, we entered into a promissory note with our sole officer and director, John Hislop, for $50,000. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum upon demand by Mr. Hislop, both before and after each of maturity, default and judgement commencing effective July 18, 2014. The principal sum and all accrued and unpaid interest will become due and payable on July 18, 2016. As of June 30, 2015, the principal balance of the loan was $50,000 and accrued interest payable of $7,151.


On September 2, 2014, we entered into a promissory note with our sole officer and director, John Hislop, for C$20,000. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum upon demand by Mr. Hislop, both before and after each of maturity, default and judgement commencing effective September 2, 2014. The principal sum and all accrued and unpaid interest will become due and payable on September 2, 2016. As of June 30, 2015, the principal balance of the loan was $16,012 and accrued interest payable of $2,040.


On January 29, 2015, we entered into a promissory note with our sole officer and director, John Hislop, for C$50,000. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum upon demand by Mr. Hislop, both before and after each of maturity, default and judgement commencing effective January 29, 2015. The principal sum and all accrued and unpaid interest will become due and payable on January 29, 2017. As of June 30, 2015, the principal balance of the loan was $40,030 and accrued interest payable of $2,487.


On April 21, 2015, the Company entered into a debt settlement and subscription agreement with its sole officer and director, John Hislop whereby the Company agreed to settle a portion of the indebtedness, in the amount of $1,340,000, by allotting and issuing to John Hislop 134,000,000 shares of common stock of the Company at a deemed price of $0.01 per share. On April 24, 2015, the Company announced that it had issued 134,000,000 shares of its common stock at a deemed price of $0.01 per share to Mr. Hislop, and it filed a copy of the debt settlement and subscription agreement with Mr. Hislop on EDGAR under cover of a Form 8-K.  However, due to a technical flaw in the process of adopting the amendment to its Articles of Incorporation (announced on February 3, 2014), the Company was only authorized to issue 100,000,000 shares of its common stock on April 23, 2015, and the issuance to Mr. Hislop on April 23, 2015, was therefore void and, as of June 30, 2015, the debt settlement agreement had not closed.  On June 29, 2015, the Company sent to its shareholders a proxy statement for a shareholder meeting to be held July 22, 2015, at which meeting the Company proposed to rectify the technical flaw in its earlier effort to increase its authorized capital.  On July 28, 2015, the Company closed the debt settlement agreement and reissued the 134,000,000 shares to Mr. Hislop pursuant to the debt settlement and subscription agreement immediately following shareholder approval of the increase in its authorized capital on July 23, 2015.


Going Concern


The unaudited financial statements accompanying this report have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business.  Our company has incurred losses since inception in excess of $8 million and has only generated modest profitable operations when we commenced gas production in fiscal 2006.  We have relied solely on shareholder advances to participate and continue operations.


Our company’s ability to continue as a going concern is contingent upon being able to secure financing and attain profitable operations.  Our company is currently evaluating business opportunities and will require financing for acquisition of any new business venture.  

  

Net cash (used in) operating activities in the three months ended June 30, 2015 totaled $(14,839) versus net cash provided by operating activities of $26,363 in the three months ended June 30, 2014.  Cash balances were $10,580 and $3,006 as of June 30, 2015 and 2014, respectively. Our company’s ability to continue as a going concern is contingent upon being able to secure financing and attain profitable operations.

We have a limited operating history.  We can only estimate the future needs for capital based on the current status of our operations, our current plans and current economic condition. Due to the uncertainties regarding our future activities, we are unable to predict precisely what amount will be used for any particular purpose.

Future Financings

As of June 30, 2015, we had cash of $10,580. We currently do not have sufficient funds to acquire and develop any opportunities, including the opportunity presented by our second amended and restated agreement with Paltar Petroleum. We anticipate continuing to rely on shareholder loans or equity sales of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity or arrange for more debt or other financing to fund any future activities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4 . CONTROLS AND PROCEDURES

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and financial officer evaluated our company’s disclosure controls and procedures (as define in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective. Disclosure controls and procedures are controls and procedures designed to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company’s management, including our principal executive officer and financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff:


1.

Lack of a sufficient number of independent directors for our board and audit committee. As of June 30, 2015, we had no independent director on our board, which is comprised of one director. As a publicly-traded company, we strive to have a majority of our board of directors be independent;

2.

Insufficient segregation of duties in our finance and accounting functions due to limited personnel. During the three months ended June 30, 2015, we had limited staff that performed nearly all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statement. This creates certain incompatible duties and lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement of our interim or annual financial statements that would not be prevented or detected; and

3.

Insufficient corporate governance policies. Although we have a code of ethics which provides broad guidelines for corporate governance, our corporate governance activities and processes are not always formally documented. Specifically, decisions made by the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management.

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies. We intend to consider the results of our remediation efforts and related testing as part of our year-end 2015 assessment of the effectiveness of our internal control over financial reporting.

As part of our effort to remediate these deficiencies, on July 22, 2015, we held our annual and special meeting of shareholders. The shareholders elected John R. Hislop, David N. Siegel, Darrel J. Causbrook and Marc A. Bruner as directors. David N. Siegel, Darrel J. Causbrook and Marc A. Bruner are independent directors.

In addition, subject to receipt of additional financing, we intend to undertake the below remediation measures to address the material weaknesses described in this report. Such remediation activities include the following:

1.

We intend to continue to update the documentation of our corporate governance and internal control processes, including formal risk assessment of our financial reporting processes.

It should be noted that a control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control 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 our 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 by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of internal control is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

There were no changes in our internal control over financial reporting during the three month period ended June 30, 2015 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.




PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our director and officer or affiliates, or any registered or beneficial stockholder is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

Not applicable.

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

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits Required by Item 601 of Regulation S-K

Exhibit Number and Description

(3)

Articles of Incorporation/Bylaws

3.1

Certificate of Merger (Delaware) effective June 12, 2003 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on August 19, 2003)

3.2

Certificate of Merger (Wyoming) effective June 13, 2003 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on August 19, 2003)

3.3

Amended & Restated Bylaws (Wyoming) (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on November 14, 2003)

3.4

Certificate of Incorporation (incorporated by reference from our Annual Report on Form 10K filed with the Securities and Exchange Commission on August 13, 2010)

3.5

Amended and Restated Articles of Incorporation filed with the Secretary of State of the State of Wyoming on August 3, 2015 (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 12, 2015).

(10)

Material Contracts

10.1

1999 Stock Option Plan (incorporated by reference from our Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on March 31, 2000).

10.2

Demand Promissory Note issued to Caravel Management Corp. and John Hislop, dated March 31, 2006 (incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 13, 2010).

10.3

Management Services Agreement dated November 1, 2010 between Nation Energy Inc. and Caravel Management Corp. (incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 2, 2010).   

10.4

Letter Agreement with Paltar Petroleum Limited (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 18, 2013).

10.5

First Amendment to Letter Agreement dated October 11, 2013 with Paltar Petroleum Limited (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 8, 2014).  

10.6

Promissory Note issued to John Hislop, dated July 18, 2014 (incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 4, 2015).

10.7

Promissory Note issued to John Hislop, dated September 2, 2014 (incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 4, 2015).

10.8

Amended and Restated Agreement with Paltar Petroleum Limited (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 1, 2014).

10.9

Debt Settlement Agreement with John Hislop dated April 21, 2015 (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 24, 2015).

10.10

Promissory Note issued to John Hislop, dated January 29, 2015 (incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 4, 2015).

10.11

Second Amended and Restated Agreement with Paltar Petroleum Limited dated June 13, 2015 (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2015).

(14)

Code of Ethics

14.1

Code of Business Conduct and Ethics (incorporated by reference from our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on July 15, 2004).

(31)

Section 302 Certifications

31.1*

Section 302 Certification under Sarbanes-Oxley Act of 2002

(32)

Section 906 Certifications

32.1*

Section 906 Certification under Sarbanes-Oxley Act of 2002

(99)

Additional Exhibits

99.1

Audit Committee Charter (incorporated by reference from our Annual Report on Form 10K filed with the Securities and Exchange Commission on February 9, 2011)

(101)

XBRL-Related Documents

101.INS*

XBRL INSTANCE DOCUMENT

101.SCH*

XBRL TAXONOMY EXTENSION SCHEMA

101.CAL*

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

101.DEF*

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

101.LAB*

XBRL TAXONOMY EXTENSION LABEL LINKBASE

101.PRE*

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

*Filed herewith



SIGNATURES

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

NATION ENERGY INC.

By: “/s/ John R. Hislop”    

John Hislop
President, Chief Executive Officer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Date: August 14, 2015



Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) UNDER THE SECURITIES EXHANGE ACT
OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, John Hislop, certify that:

1)

I have reviewed this Quarterly Report on Form 10-Q of Nation Energy Inc.

2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

1)

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:  August 14, 2015

“/s/ John Hislop”

John Hislop

President, Chief Executive Officer, Chief Financial Officer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)






EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John Hislop, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a)

the Quarterly Report on Form 10-Q of Nation Energy Inc. for the quarterly period ended June 30, 2015 (“the Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Nation Energy Inc.

Dated: August 14, 2015

“/s/ John Hislop”

John Hislop

President, Chief Executive Officer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)