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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:

April 30, 2016

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-52392

AMAZING ENERGY OIL AND GAS, CO.

(Exact name of registrant as specified in its charter)

701 S Taylor Street

Suite 470, LB 113

Amarillo, Texas 79101

(Address of principal executive office)

Registrant's telephone number, including area code: (806) 322-1922

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 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 check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 53,491,528 as of June 10, 2016.

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AMAZING ENERGY OIL AND GAS, CO.

TABLE OF CONTENTS

PART I

ITEM 1.

FINANCIAL STATEMENTS.

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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The accompanying notes are an integral part of these financial statements

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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The accompanying notes are an integral part of these financial statements

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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The accompanying notes are an integral part of these financial statements

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Note 1. Description of Business and Basis of Presentation

On October 14, 2014, Gold Crest Mines, Inc. incorporated a wholly owned Nevada subsidiary corporation named Amazing Energy Oil and Gas, Co.  On October 15, 2014, Gold Crest merged the foregoing wholly owned subsidiary corporation into Gold Crest Mines, Inc. and, pursuant to Nevada law, changed its name to Amazing Energy Oil and Gas, Co. ("Amazing Energy" or "the Company" or "the Parent" "us" or "we"). In October of 2014, the Company entered into a change in control agreement as the first step in a reverse acquisition process with certain shareholders of Amazing Energy, Inc. Through its primary subsidiary, Amazing Energy, Inc. (also a Nevada corporation), the main business of the Company is the exploration, development, and production of oil and gas in the Permian Basin of West Texas.

Amazing Energy, Inc. was formed in 2010 as a Texas corporation and then changed its domicile to Nevada in 2011. The Company owns interests in oil and gas properties located in Texas. The Company is primarily engaged in the acquisition, exploration and development of oil and gas properties and the production and sale of oil and natural gas. Amazing Energy, LLC was formed in December 2008 as a Texas Limited Liability Company. In December of 2010, Amazing Energy, Inc. and Amazing Energy, LLC were combined as commonly controlled entities.

Recapitalization

On October 9, 2014, the Company entered into a change in control agreement with Amazing Energy, Inc., a Nevada corporation and Amazing Energy LLC, a Texas limited liability company (collectively the "Predecessors"). Pursuant to the change in control agreement, the Company issued to the Predecessors 384,848,504 (9,621,213) shares of Common Stock and 79,755 shares of our newly created Series "A" Convertible preferred stock in consideration of said AEI Shareholders transferring all right, title and interest in and to 12,829,000 shares of common stock of AEI.  Each Series "A" Convertible preferred share is convertible into 10,000 restricted shares of the Company's common stock upon the Company's articles of incorporation being amended to increase our authorized shares of common stock to allow for the issuance of the 797,550,000 (19,938,750) additional common shares (the "Transaction"). All of the series "A" convertible shares of stock have been converted into shares of common stock. The shares of Common Stock and Preferred Stock issued to the Predecessors represent approximately 95% of the shares of Common Stock outstanding following the closing of the Transaction (the "Closing"). The Transaction results in the owners of the Predecessors (the "accounting acquirer") having actual or effective operating control of the Company after the Transaction, with the stockholders of the Company (the "legal acquirer") continuing only as passive investors. The Closing did not affect the number of shares of Common Stock held by the Company's existing public stockholders.

The Predecessors were considered the accounting acquirer for accounting purposes because they obtained effective control of the Company.  The Predecessors did not have a change in control since the Predecessors' operations comprise the ongoing operations of the combined entity, their senior management became the senior management of the combined entity, and their former owners own a majority of the voting interest in the combined entity and are able to elect a majority of the combined entity's board of directors. This transaction has been treated as a reverse acquisition effectively as if Predecessors issued shares for consideration equal to the net monetary assets of Amazing Energy. Under reverse acquisition accounting, the consolidated financial statements of the entity are considered a continuation of the financial statements of the Predecessors, the accounting acquirer. The historical financial statements presented herein for the periods prior to October 31, 2014 are that of the Predecessors.  Historical financial statements for periods after October 31, 2014 include the combined business of the Company and the Predecessors.

On October 14, 2014, Gold Crest incorporated a wholly owned Nevada subsidiary corporation by the name of Amazing Energy Oil and Gas, Co.  On October 15, 2014, Gold Crest merged the foregoing wholly owned subsidiary corporation into Gold Crest Mines, Inc. and, pursuant to Nevada law, without the need of shareholder approval, changed our name to Amazing Energy Oil and Gas, Co.

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

On October 15, 2014, our Board of Directors approved, declared it advisable and in our best interest and directed that there be submitted to the holders of a majority of our common stock for approval, the prospective amendment to our Articles of Incorporation to increase the number of authorized shares of Common Stock from five hundred million (500,000,000) shares to three billion (3,000,000,000) shares, par value $0.001 per share.

In October 15, 2014, our Board of Directors approved a one-for-forty reverse stock split of the Company's common stock. The one-for-forty reverse stock split was effective February 15, 2015.  As a result of the reverse stock split, the number of issued and outstanding shares was adjusted.  Following the effective date of the reverse stock split, the par value of the common stock remained at $0.001 per share. Unless otherwise indicated, all references herein to shares outstanding and share issuances have been adjusted to give effect to the aforementioned stock split.

Basis of presentation

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). These consolidated financial statements do not contain all of the information required for annual financial statements. 

The unaudited consolidated financial statements have been prepared using the significant accounting policies as set out in the audited financial statements of Amazing Energy Oil and Gas, Co. for the year ended July 31, 2015. The unaudited consolidated financial statements should be read in conjunction with the historical financial statements and notes thereto of Amazing Energy Oil and Gas, Co. as filed with the SEC on Form 10-K filed November 13, 2015.

It is management's opinion that these consolidated financial statements include all adjustments necessary for fair presentation, in all material respects, in accordance with US GAAP applied on a basis consistent with Amazing Energy, Inc.'s accounting policies.  Results of operations for the three and nine months ended April 30, 2016, are not indicative of results for the year ended July 31, 2016.

Fair value measurements

The Company discloses the following information for each class of assets and liabilities that are measured at fair value:

The fair value measurement;

The level within the fair value hierarchy in which the fair value measurement in their entirety fall, segregating significant other observable inputs (Level 2) and significant observable inputs (Level 3);

For fair value measurements using significant unobservable inputs (Level3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following:

i)	total gains or losses for the period (realized and unrealized) segregating those gains or losses included in earnings, a description of where gains or losses included in earnings are reported in the statement of operations;

ii)	the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets and still held at the reporting period date and a description of where those unrealized gains or losses are reported;

iii)	purchases, sales, issuances, and settlements (net); and

iv)	transfers into and/or out of Level 3.

The amount of the total gains or losses for the period included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and

in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period.

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Note 2. Going Concern

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.

At April 30, 2016, the Company had not yet achieved profitable operations, has had accumulated losses since its inception and expects to incur further losses in the development of its business. These conditions raise substantial doubt about the Company's ability to continue as a going concern.  The Company's ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management's plan to address the Company's ability to continue as a going concern includes:  (1) obtaining debt or equity funding from private placement or institutional sources; (2) obtain loans from financial institutions, where possible, or (3) participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3. Earnings Per Share

Basic earnings per share include no dilution and are computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period.  Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company.  At April 30, 2016, the number of potential outstanding shares relating to conversion options contained in related party debt could provide for 13,921,168 (See Note 6) additional shares of common stock outstanding. Potentially dilutive securities outstanding are not included in the calculation when such securities would have an anti-dilutive effect on earnings per share.

Note 4. Oil and Gas Properties

The Company is currently participating in oil and gas exploration activities in Texas. All of the Company's oil and gas properties are located in the United States.

Pecos County, Texas

The Company has leasehold rights within approximately 70,000 contiguous acres in Pecos County, Texas, which lies within the Permian Basin. The property is located in the Northeast region of the County. The Pecos leasehold is comprised of multiple leases, and the Company has a variable working interest in twenty wells on these leases. The Company has drilled twenty wells throughout this property, with sixteen producing wells and four shut-in wells. The oil and gas property balances at April 30, 2016, and July 31, 2015 are set forth in the table below:

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Note 5. Related Party Receivables and Payables

The Company contracts under a joint operating agreement with Jilpetco, Inc. as the oil and gas field operating entity. All of the Company's revenues are received from and well operating expenses are billed by Jilpetco, Inc., which is wholly owned by Jed Miesner, the Company's CEO, President, and majority shareholder. The related party receivables are for the sales of oil and gas and are all due from Jilpetco, Inc. As the field operator, Jilpetco, Inc. collects the payments from oil and gas sales and remits the Company's share to the Company.

In November 2015, Jilpetco Inc., the operating company of the WWJD wells, made an adjustment to the paydeck of all the WWJD wells located in Section 91, Pecos County, TX. This adjustment effected Amazing Energy LLC's net revenue interest (NRI) in the WWJD wells. The overall effect was a net negative oil and gas revenue adjustment of $43,603 to Amazing Energy LLC. The adjustment resulted from examining new title records via a Division Order Title Opinion, which showed Amazing Energy LLC owning less NRI in the WWJD wells. The revenue adjustment was retroactive to the first sales of oil and gas production.

Related party payables consist of accrued oil and gas drilling and production expenses billed to the Company by Jilpetco, Inc. Related party receivables and accounts payable are as follows:

Note 6. Related Party Convertible Debt

On January 3, 2011, the Company formalized a loan agreement with Jed Miesner, the Company's CEO and Chairman for $1,940,000. The loan is scheduled to mature on December 31, 2030, bears interest at the rate of 8% per annum, and is collateralized with a leasehold deed of trust covering certain leasehold interests in Pecos County, Texas.

Amazing Energy, LLC, (a wholly owned subsidiary of the Company) on December 30, 2010, entered into a $2,000,000 line of credit facility with JLM Strategic Investments, an entity controlled by Jed Miesner. Funds advanced on the line of credit mature on December 31, 2030, bear interest at the rate of 8% per annum and are collateralized with a leasehold deed of trust covering certain leasehold interests in Pecos County, Texas.

On December 30, 2010, Amazing Energy, LLC, formalized loan agreements with Petro Pro Ltd., an entity also controlled by Jed Miesner for $1,100,000. The loans are scheduled to mature on December 31, 2030, bear interest at the rate of 8% per annum and are collateralized with a leasehold deed of trust covering certain leasehold interests in Pecos County, Texas.

As of April 30, 2016, and July 31, 2015, the accrued and unpaid interest due to related parties was $545,327 and $343,219, respectively. Related party interest expense for the quarters ended April 30, 2016 and 2015 was $67,369 and $48,182 respectively. Related party interest expense for the nine month periods ended April 30, 2016 and 2015 was $202,108 and $144,404 respectively.

Modification of Debt Agreements

On February 1, 2015, the Company amended the related party loan agreements discussed above. The amendments included modifying the terms of the notes to adjust the interest rate to 8% for two years following the amendment date, a rate of 6% for the following 2 years and a rate of Prime plus 2% for the remaining years. The amended notes also included a conversion feature that allows the principal and accrued interest of the loans to be converted into common stock of Amazing Energy, Inc. at $0.60 per share at the option of related party note holders. If converted, these notes and accrued interest would convert

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

into 6,041,775 shares of Amazing Energy, Inc.'s common stock which can then be converted into 13,921,168 shares of the Company. In connection with the amendments, the Company estimated the fair value of the conversion feature to be $13,921,168, which was recognized as a loss on modification of debt in the Company's non-operating expenses.

Note 7. Asset Retirement Obligations

The Company accounts for its future asset retirement obligations by recording the fair value of the liability during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long lived asset. The Company depletes the amount added to proved oil and gas property costs and gathering assets using the units-of-production method. The Company's asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties and gathering assets. The asset retirement liability is allocated to operating expense using a systematic and rational method. The information below reconciles the value of the asset retirement obligation for the periods presented.

Note 8. Mineral Property Option Agreement

The Company ("Amazing") owns a subsidiary corporation, Kisa Mines, Inc. ("Kisa"). Afranex Gold Limited ("Afranex") had originally agreed through an option agreement to purchase all of the outstanding common stock of Kisa for $300,000 on or before December 31, 2015. On November 23, 2015, Amazing and Afranex agreed to extend the option to December 31, 2016, or such later date as agreed upon. The updated option agreement supersedes all previous correspondence and understandings between the parties. Afranex paid a $50,000 non-refundable option fee to Amazing on November 27, 2015, as consideration for extending this option. A new term sheet and option agreement was formalized and dated on January 31, 2016.  Under the terms of this agreement, Afranex has the right to acquire either 100% of the outstanding common stock of Kisa or 100% of Kisa's right, title and interest in the mining permits and associated assets of Kisa. Subject to the agreement, Afranex may exercise the option to purchase either the stock of Kisa or its assets at any time during the option period by delivering to Amazing a written notice stating that Afranex desires to exercise the option. The revised and extended option agreement specifies the following financial terms:

The prior deposit received in 2014 of $20,000 was also recognized as gain but is not to be applied against the purchase price.

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Note 9. Subsequent Event

On April 15, 2016, we entered into an agreement with Gulf South Holding, Inc. ("GSHI") to acquire all the outstanding shares of common stock of Gulf South Securities, Inc., an SEC, FINRA registered broker-dealer located in Gig Harbor, Washington, in exchange for 5,349,153 shares of our common stock and 2,674,576 stock purchase warrants.  The agreement also contains provisions for the issuance of Series A Preferred Stock and Series B Preferred Stock, with provisions for the conversion and redemption of same.  Further, the agreement contains other provisions with respect to converting certain debt to equity positions.  Delaney Equity Group, LLC ("Delaney") will receive 250,000 restricted shares of our common stock for its involvement with this transaction pursuant to our agreement with Delaney dated September 11, 2015 which is filed as Exhibit 10.17 to our Form 10-Q for the quarter ended January 31, 2016.

On April 28, 2016, we amended the foregoing agreement by extending the Closing date to May 2, 2016.  No other provisions of the agreement were amended.  As of the date of this report, we have not closed.

On April 15, 2016, we entered into an agreement with Jed Miesner, our president, to acquire all of his interest (100% of the total outstanding shares of common stock) of Jilpetco, Inc., a Texas corporation ("Jilpetco") for consideration of $500,000.  Jilpetco is engaged in the business of operating and providing oilfield services to oil and gas properties.  As a result, Jilpetco will become our wholly owned subsidiary corporation.  As of April 30, 2016, no portion of the consideration had been paid.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion is management's assessment of the current and historical financial and operating results of the Company and of our financial condition.  It is intended to provide information relevant to an understanding of our financial condition, changes in our financial condition and our results of operations and cash flows and should be read in conjunction with our unaudited financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the nine months ended April 30, 2016, and in our Annual Report on Form 10-K for the year ended July 31, 2015.  Note that any reference to "Amazing", the "Company", "we", "us" or "our" mean Amazing Energy Oil and Gas, Co.

Cautionary Statement Regarding Forward-Looking Statements

This Management's Discussion and Analysis includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: "believe," "expect," "plan", "estimate," "anticipate," "intend," "project," "will," "predicts," "seeks," "may," "would," "could," "potential," "continue," "ongoing," "should" and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from our predictions. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Current Activities

Through April 30, 2016, we drilled twenty-one wells on our leasehold in Pecos County, Texas. Sixteen of the twenty-one wells are currently productive, and five wells are shut in.

Acquisition of Gulf South Securities, Inc.

As previously reported, we entered into an agreement with Gulf South Holdings, Inc. ("GSHI") to acquire all the outstanding shares of common stock of Gulf South Securities, Inc., an SEC, FINRA registered broker-dealer locate in Gig Harbor, Washington in exchange for 5,349,153 shares of our common stock and 2,674,576 stock purchase warrants.  The agreement also contains provisions the issuance of Series A Preferred Stock and Series B Preferred Stock with provisions for the conversion and redemption of the same.  Further, the agreement contains other provisions with respect to converting certain debts to equity positions.  Delaney Equity Group, LLC ("Delaney") will receive 250,000 restricted shares of our common stock for its involvement with this transaction pursuant to our agreement with Delaney dated September 11, 2015 which is filed as Exhibit 10.17 to our Form 10-Q for the quarter ended January 31, 2016. We anticipated closing this transaction shortly.  In any event, it will be closed prior to our year end, July 31, 2016.

As previously reported, we entered into an agreement with Jed Miesner, our president, to acquire all of his interest (100% of the total outstanding shares of common stock) of Jilpetco, Inc., a Texas corporation ("Jilpetco") in consideration of $500,000.  Jilpetco is engaged in the business of operating and providing oilfield services to oil and gas properties.  As a result, Jilpetco will become our wholly owned subsidiary corporation.  There is no assurance that we will acquire Jilpetco.

Results of Operations

The following table presents selected operational and financial data for the three month periods ended April 30, 2016, and 2015, respectively.

Oil Production and Revenue

Multiple factors contributed to the production decrease for the comparable three-month period which include the natural decline of the production reservoirs and budgetary cuts made to lease operating expenditures. The most significant factor contributing to the production decrease was the lack of gas sales due to the gas gathering system that we deliver our gas into being shut-in since late January 2016. We received notification in February 2016 that the Trans-Pecos gathering system with downstream delivery into the Regency (Energy Transfer) Coyanosa Facilities was shut-in until further notice due to the sulphur recovery plant being down. The Trans-Pecos system is operated by Pioneer Gas Pipeline, Inc. which is the company that buys our gas. The Trans-Pecos system remains shut-in.  During the three-month period ended April 30, 2016, the Company sold 1,828 BOE at an average net sales price per BOE of $27.07 for net revenues of approximately $49,493. In November 2015, Jilpetco Inc., the operating company of the WWJD wells, made an adjustment to the paydeck of all the WWJD wells located in Section 91, Pecos County, TX. This adjustment effected Amazing Energy LLC's net revenue interest (NRI) in the WWJD wells. The overall effect was a net negative oil and gas revenue adjustment of $43,603 to Amazing Energy LLC. The adjustment resulted from examining new title records via a Division Order Title Opinion, which showed Amazing Energy LLC owning less NRI in the WWJD wells. The revenue adjustment was retroactive to the first sales of oil and gas production. During the comparative quarter ended April 30, 2015, the Company sold 6,634 of BOE at an average price of $24.02 per BOE, for net revenues of $124,619.

Depletion

Depletion of oil and gas properties is calculated under the units of production method, following the full cost method of accounting. For the three-month period ended April 30, 2016, depletion was $22,133 or $13.09 per BOE, as compared to $115,841 or $17.46 per BOE for the three-month period ended April 30, 2015. The decrease in depletion of $93,708 was primarily due to a 75% decrease in production. As of July 31, 2015, our total proved reserves were 576,040 BOE compared to 455,375 BOE for the year ended July 31, 2014.

Lease Operating Expenses

Lease operating expenses decreased from $194,962 for the quarter ended April 30, 2015, to $179,996 for the quarter ended April 30, 2016. This decrease for the comparable three-month period was primarily due to budgetary plans made to decrease LOE spending to offset the significant drop in oil prices that continued to decline through the end of the quarter.

Selling, General and Administrative Expenses

For the quarter ended April 30, 2016, our selling, general and administrative expenses were $63,436, compared to $274,741 for the comparative quarter ended April 30, 2015. This decrease was attributable to the overall decline in the oil and gas markets over the past few months.

Liquidity and Capital Resources

We had a working capital deficit of $1,779,830 as of April 30, 2016, compared to a working capital deficit of $1,053,542 as of July 31, 2015. The increase in the working capital deficit of $726,288 was primarily due to a decrease in related party oil and gas receivables, and increases in related party accounts payable interest payable, and short term convertible debt. Jilpetco Inc., the related party which operates the field service functions for the Company, has advanced funds to the Company because of a lack of cash flow on the part of the registrant.

During the quarter April 30, 2016, we did not raise any funds through the sale of equity securities or the issuance of debt. Other than the limited amount of cash generated through the sale of oil and gas, the majority of operating funds were from loans provided by Jilpetco, Inc., a corporation owned and controlled by our president, Jed Miesner. The Company issued total of 50,000 shares of common stock to Delaney Equity Group, LLC, located in Palm Beach Gardens, Florida during the quarter ended January 31, 2016. These shares of common stock were issued for investment banking consulting services.

We continue to seek sufficient capital in order to expand our drilling program. The most cost effective source of capital would be joint-ventured working interest participation funds. A typical joint venture would be 100% of the drilling and completion funds provided by such working interest participant and the funding source receiving a 75% working interest in

the applicable wells. We would retain a 25% carried working interest in such a drilling program. As of April 30, 2016, we have begun through Gulf South Securities, Inc. an offering of 20,000,000 restricted shares of common stock for $.26 per share for total proceeds of $5,200,000.

Our operating cash flow is dependent upon many factors, including production levels, sales volume, oil and gas prices and other factors that may be beyond our control. Oil and gas prices decreased substantially from the quarter ended April 30, 2015, to the quarter ended April 30, 2016. During the quarter ended April 30, 2016, oil prices ranged between $25 and $35 per barrel.

Critical Accounting Policies and Recent Accounting Pronouncements

We have identified the policies below as critical to our business operations and the understanding of our financial statements.  The impact of these policies and associated risks is discussed throughout Management's Discussion and Analysis where such policies affect our reported and expected financial results.  A complete discussion of our accounting policies is included in Note 3 of the July 31, 2015, Notes to Consolidated Financial Statements included in our annual Form 10-K Report for the year ended July 31, 2015.

Principles of Consolidation

Our consolidated financial statements include all of our subsidiaries.  Our most significant subsidiary is Amazing Energy, Inc., which holds our Pecos County leases.  The assets and results of operations of Amazing Energy, Inc. represent substantially all of our consolidated assets and operations at April 30, 2016.

Oil and Gas Reserve Information

The information regarding our oil and gas reserves, the changes thereto and the estimated future net cash flows are dependent upon reservoir evaluation, price and other assumptions used in preparing our annual reserve study.  A qualified independent petroleum engineer was engaged to prepare the estimates of our oil and gas reserves in accordance with applicable reservoir engineering standards and in accordance with Securities and Exchange Commission guidelines.  However, there are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and the timing of development expenditures.  These uncertainties are greater for properties which are undeveloped or have a limited production history.  Changes in prices and cost levels, as well as the timing of future development costs, may cause actual results to vary significantly from the data presented.  Our oil and gas reserve data represent estimates only and are not intended to be a forecast or fair market value of our assets.

Full Cost Method of Accounting

We account for our oil and natural gas operations using the full cost method of accounting. Under this method, all costs associated with property acquisition, exploration and development of oil and gas reserves are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and cost of drilling and equipping productive and non-productive wells.  Drilling costs include directly related overhead costs. All of our properties are located within the continental United States.

Revenue Recognition

We predominantly derive our revenue from the sale of produced crude oil and natural gas. Revenue is recorded in the month the product is delivered to the purchaser. We receive payment from one to three months after delivery. At the end of each month, we estimate the amount of production delivered to purchasers and the price we will receive. Variances between our estimated revenue and actual payment are recorded in the month the payment is received; however, differences have been insignificant.

Capitalized Interest Costs

Currently, we do not capitalize interest costs on oil and gas projects under development, including the costs of unproved leasehold and property acquisition costs, wells in progress and related facilities.  However, we may begin capitalizing interest in the future. During the three month periods ended April 30, 2016 and 2015, we didn't capitalize any interest.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company, we are not required to provide the information otherwise required by this Item.

ITEM 4.

CONTROLS AND PROCEDURES.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. As of April 30, 2016, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was because we did not have sufficient personnel in our accounting and financial reporting functions.  As a result, we were not able to achieve adequate segregation of duties and were not able to provide for adequate review of financial information, particularly our lack of a sufficient number of accounting staff with experience in public company SEC reporting and technical expertise. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis. The aforementioned material weakness was identified by our management in connection with the review of our financial statements for the period ended April 30, 2016.

Management believes that the material weakness set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

CEO and CFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended April 30, 2016, that has affected, or are reasonably likely to affect, our internal control over financial reporting.

PART II

ITEM 1.

LEGAL PROCEEDINGS.

None

ITEM 1A.

RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY SECURITIES.

Not Applicable

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on June 10, 2016.

EXHIBIT INDEX