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UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

 

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FORM 10-Q 

 

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

 

For the quarterly period ended June 30, 2016

 

OR

 

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: 333-169507

 

(Exact Name Of Registrant As Specified In Its Charter)

 

	Nevada	27-2413874
	(State of Incorporation)	(I.R.S. Employer Identification No.)
	601 Cien Street, Suite 235, Kemah, TX	77565-3077
	(Address of Principal Executive Offices)	(ZIP Code)

 

Registrant’s Telephone Number, Including Area Code: (281) 334-9479

 

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

 

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

 

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

	Large accelerated filer   ☐	Accelerated filer  ☐
	Non-accelerated filer  ☐	Smaller reporting company  ☒

  

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

 

The number of shares outstanding of each of the issuer's classes of equity as of August 11, 2016 is 128,031,064 shares of common stock.

 

 

TABLE OF CONTENTS

  

Item	Description		Page
	PART I – FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS		3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		10
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		12
ITEM 4.	CONTROLS AND PROCEDURES		12
	PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		13
ITEM 1A.	RISK FACTORS		13
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		13
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		13
ITEM 4.	MINE SAFETY DISCLOSURES		13
ITEM 5.	OTHER INFORMATION		13
ITEM 6.	EXHIBITS		13

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Financial Statements 

Financial Statements
Unaudited Consolidated Balance Sheets - June 30, 2016 and December 31, 2015	4
Unaudited Consolidated Statements of Operations - Three Months and Six Months Ended June 30, 2016 and 2015	5
Unaudited Consolidated Statements of Cash Flows - Six Months Ended June 30, 2016 and 2015	6
Notes to Unaudited Consolidated Financial Statements	7

 

 

 

BRENHAM OIL & GAS CORP.

CONSOLIDATED BALANCE SHEETS 

(Unaudited) 

 

		June 30, 2016				December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents		$	6,156			$	6,051
Total assets		$	6,156			$	6,051
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses		$	24,193			$	23,518
Accounts payable – related parties			731,739				651,750
Total current liabilities			755,932				675,268
Long-term liabilities:
Asset retirement obligations			7,625				7,400
Total liabilities			763,557				682,668
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding			-				-
Common stock, $0.0001 par value, 200,000,000 shares authorized; 128,293,536 shares issued and outstanding			12,830				12,830
Less: treasury stock, at cost; 262,472 shares			(4,728	)			(4,728	)
Additional paid-in capital			992,981				992,981
Accumulated deficit			(1,758,484	)			(1,677,700	)
Total stockholders’ deficit			(757,401	)			(676,617	)
Total liabilities and stockholders’ deficit		$	6,156			$	6,051

   

See accompanying notes to the unaudited consolidated financial statements.

  

BRENHAM OIL & GAS CORP. 

CONSOLIDATED STATEMENTS OF OPERATIONS 

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(Unaudited) 

 

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2016				2015				2016				2015
Oil and gas revenues		$	-			$	2,208			$	-			$	4,010
Costs and expenses:
Lease operating expenses			-				2,580				-				6,281
General and administrative			47,708				35,262				80,559				74,811
Depletion and accretion			225				1,472				225				2,782
Impairment of oil and gas assets			-				-				-				20,000
Total operating expenses			47,933				39,314				80,784				103,874
Net loss		$	(47,933	)		$	(37,106	)		$	(80,784	)		$	(99,864	)
Net loss per common share – basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average number of common shares outstanding – basic and diluted			128,293,536				128,293,536				128,293,152				128,293,152

 

See accompanying notes to the unaudited consolidated financial statements. 

 

BRENHAM OIL & GAS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS 

FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015
 (Unaudited) 

 

		For the Six Months Ended June 30,
		2016				2015
Cash flows from operating activities:
Net loss		$	(80,784	)		$	(99,864	)
Adjustments to reconcile net loss to cash used in operating activities:
Depletion and accretion			225				2,782
Impairment of oil and gas property			-				20,000
Changes in operating assets and liabilities:
Accounts payable and accrued expenses			675				(165	)
Net cash used in operating activities			(79,884	)			(77,247	)
Cash flows from financing activities:
Payments for acquisition of treasury stock			-				(267	)
Advances from related parties, net			79,989				77,805
Net cash provided by financing activities			79,989				77,538
Net increase in cash			105				291
Cash and cash equivalents, beginning of period			6,051				6,000
Cash and cash equivalents, end of period		$	6,156			$	6,291
Supplemental disclosures:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-
Non-cash investing and financing transactions:
Change in estimate of asset retirement costs		$	-			$	1,298

 

See accompanying notes to the unaudited consolidated financial statements. 

 

BRENHAM OIL & GAS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1. Summary of Significant Accounting Policies

  

Basis of Presentation

 

The accompanying unaudited interim consolidated financial statements of Brenham Oil & Gas Corp. (“Brenham”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Brenham's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

 

Organization, Ownership and Business

 

Brenham Oil & Gas, Inc. was incorporated under the laws of the State of Texas in November 1997 and became a wholly-owned subsidiary of American International Industries, Inc. ("American") in November 1997. On April 21, 2010, the Company was re-domiciled in Nevada as Brenham Oil & Gas Corp. (“Brenham”) and Brenham Oil & Gas, Inc. became a wholly-owned subsidiary of Brenham. American was issued 64,977,093 shares of common stock of Brenham in connection with the reorganization in exchange for all shares outstanding of Brenham Oil & Gas, Inc. The reorganization has been retroactively applied to the consolidated financial statements for all periods presented.

 

Use of Estimates

 

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Going Concern

 

The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company incurred a loss from operations during the six months ended June 30, 2016 and 2015, has financial commitments in excess of current capital resources, and expects to incur further losses in the future, thus raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future 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 plans to obtain the necessary financing to meet its obligations during 2016. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.

 

Cash and Cash Equivalents

 

Brenham considers all short-term securities purchased with a maturity of three months or less to be cash equivalents.

 

 

Oil & Gas Properties

 

The Company follows the full cost method of accounting for its investments in oil and gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves, including unproductive wells, are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities, and asset retirement costs. General and administrative costs related to production and general overhead are expensed as incurred.

Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil, in which case the gain or loss is recognized in the statement of operations.

 

Future development, site restoration, dismantlement and abandonment costs, are estimated property by property, based upon current economic conditions and regulatory requirements, and are included in amortization of our oil and natural gas property costs.

 

Depletion of capitalized oil properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves.

 

At the end of each quarter, the unamortized cost of oil and natural gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method. There was no ceiling test write-down recorded during the six months ended June 30, 2016 and 2015.

 

The Company assesses the carrying value of its unproved properties for impairment periodically. If the results of an assessment indicate that an unproved property is impaired (which was assessed in connection with the Company’s evaluation of goodwill impairment), then the carrying value of the unproved properties is added to the proved oil property costs to be amortized and subject to the ceiling test. The Company recorded an oil and gas impairment of $20,000 during the six months ended June 30, 2015.

 

At December 31, 2015, the Company wrote off all of the Company’s oil and gas properties as impairment expense.

 

Income Taxes

 

Brenham is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense.

 

Brenham has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of June 30, 2016, Brenham had not recorded any tax benefits from uncertain tax positions.

 

Net Loss Per Common Share

 

Net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Basic and diluted net losses per share were the same, as there were no common stock equivalents outstanding. 

  

Recent Accounting Pronouncements

 

There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Company’s financial position, operations, or cash flows.

 

Subsequent Events

 

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.

Note 2. Accounts Payable – Related Parties

  

Related party payables at June 30, 2016 consisted of $600,639 owed to American as advances to assist with Brenham's operating expenses, and $131,100 owed to KDT for the acquisition of mineral rights for the Gillock Field. Related party payables at December 31, 2015 consists of $520,650 owed to American as advances to assist with Brenham's operating expenses, and $131,100 owed to KDT and Daniel Dror II Trust of 2012 for the acquisition of mineral rights for the Gillock Field. KDT is owned by an entity which is controlled by the brother of Daniel Dror, Brenham’s Chairman, Chief Executive Officer, and President. Daniel Dror II is the adult son of Daniel Dror, Brenham’s Chairman and Chief Executive Officer.  The advances to Brenham are non-interest bearing and due on demand.

  

Note 3. Merger Agreement

 

On April 25, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement) with Angola International Capital Ltd., A Bermuda corporation (“AIC”) pursuant to which a wholly-owned subsidiary of the Company will be merged into AIC which will be the surviving entity and will become a subsidiary of the Company.  Prior to closing, Brenham shall effect a recapitalization that consists of a 200-to-one reverse split of its 128,042,064 shares of issued outstanding common stock.  As the date of this report, parties are still negotiating the final terms.

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

 

As used in this Quarterly Report, the terms "we", "us", "our" and the "Company" means Brenham Oil & Gas, Corp., a Nevada corporation, and its subsidiary, Brenham Oil & Gas, Inc. (collectively, "Brenham"). To the extent that we make any forward-looking statements in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report, we emphasize that forward-looking statements involve risks and uncertainties and our actual results may differ materially from those expressed or implied by our forward-looking statements. Our forward-looking statements in this Quarterly Report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties. Generally, forward-looking statements include phrases with words such as "expect", "anticipate", "intend", "plan", "believe", "seek", "estimate" and similar expressions to identify forward-looking statements.

 

Overview

 

Brenham’s primary objective and current focus will be accessing capital to fund its drilling programs in Texas.

 

Brenham is an independent exploration and production company focused on acquiring a portfolio of assets in the United States and international locations. Brenham’s approach is to create a foundation of development and production assets in the United States, coupled with high potential international exploration opportunities.

 

Our focus for United States production is Texas, including both conventional and unconventional resources. The Company intends to identify existing oil fields where technology can be applied to increase the percentage of oil that can be recovered from such fields. Secondly, the Company seeks to identify acreage in unconventional resources capable of generating oil and condensate production, such as the Eagle Ford.

 

Our focus for international exploration is Sub-Saharan Africa. This is based on the considerable experience of our management team, which includes a track record of acquisitions and discoveries for major oil and gas companies in Africa. The analysis used by Brenham to identify exploration acquisitions is based on a top-down and bottom-up approach. The “top down” process seeks to utilize our management team’s prior experience of comparing analogues of success and failure from seismic and drilling data in Africa (and elsewhere) for purposes of generating a “short-list” of the most attractive blocks. The “bottom up” process seeks to obtain narrowly focused, prospect-specific data on a block-by-block basis. The “bottom-up” review of specific blocks is used to confirm management’s “short-list” of recommendations.

 

We intend to develop strategic relationships and enter into long-term participation agreements with major oil and gas companies, in both domestic and international markets. We believe that such alliances will create a platform for exploration and development activities. 

 

The discussion of the results of operations represents our historical results. The following discussion may not be indicative of future results for many reasons, including the continuing trend in the financial markets, the credit crisis and related turmoil in the global financial system which may be expected to have a material adverse impact on our plan of operation and our liquidity and our financial condition. If conditions in the financial markets do not improve, our ability to access the capital markets or borrow money may be restricted at a time when we would like, or need, to raise capital. This could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations and capital expenditures in the future. Additionally, changing economic conditions could lead to reduced demand for natural gas and oil, or further reductions in the prices of natural gas and oil, or both, which could have a negative impact on our ability to implement our plan of operations and related financial positions, results of operations and cash flows. While the ultimate outcome and impact of the recent trends in the financial markets cannot be predicted, it may have a material adverse effect on our plan of operation, future liquidity, results of operations and financial condition.

 

The discussion of the results of operations represents our historical results. The following discussion may not be indicative of future results.

 

Three Months Ended June 30, 2016 versus Three Months Ended June 30, 2015

 

Net loss for the three months ended June 30, 2016 was $47,933, compared to $37,106 for the three months ended June 30, 2015. Oil and gas revenues were $0 and $2,208 for the three months ended June 30, 2016 and 2015, respectively. Lease operating expenses were $0 and $2,580 for the three months ended June 30, 2016 and 2015, respectively. General and administrative expenses for the three months ended June 30, 2016 were $47,708, and consisted primarily of executive compensation and legal and professional expenses. General and administrative expenses for the three months ended June 30, 2015 were $35,362, and consisted of executive compensation, travel, and legal and professional expenses.

 

Six Months Ended June 30, 2016 versus Six Months Ended June 30, 2015

 

Net loss for the six months ended June 30, 2016 was $80,784, compared to $99,864 for the six months ended June 30, 2015. Oil and gas revenues for the six months ended June 30, 2016 were $0. Field. Lease operating expenses for the were $0 and $6,281 for the six months ended June 30, 2016 and 2015, respectively. General and administrative expenses for the six months ended June 30, 2016 were $80,559, and consisted primarily of executive compensation and legal and professional expenses.  General and administrative expenses for the six months ended June 30, 2015 were $74,811, and consisted of executive compensation, travel, and legal and professional expenses.

 

Liquidity and Capital Resources

 

At June 30, 2016 and December 31, 2015, total assets were $6,156 and $6,051, respectively. 

At June 30, 2016, total liabilities were $763,557, consisting of $24,193 in accounts payable and accrued expenses, $731,739 of accounts payable to related parties, and asset retirement obligations of $7,625. At December 31, 2015, total liabilities were $682,668, consisting of $23,518 in accounts payable and accrued expenses, $651,750 in accounts payable to related parties, and asset retirement obligations of $7,400.

  

We had cash flow used in operations of $79,884 during the six months ended June 30, 2016, principally due to a net loss of 80,784. We had cash used in operations of $77,247 during the six months ended June 30, 2015 principally due to a net loss of $99,864, partially offset by an impairment of oil and gas property of $20,000.

 

For the six months ended June 30, 2016 and 2015, we had no cash flows from investing activities.

 

For the six months ended June 30, 2016 and 2015, cash provided by financing activities was $79,989 and $77,538, respectively, which consist primarily of advances from related parties. 

 

Our future financial condition and liquidity will be impacted by, among other factors, the success of selection of prospects, our future exploration and appraisal drilling program, the number of commercially viable oil and gas discoveries made and the quantities of oil and gas discovered, the speed with which we can bring such discoveries to production, and the actual cost of exploration, appraisal and development of our prospects. 

 

Until such time as we can identify specific prospects, we cannot determine with any certainty the amount of capital that we will be required to raise to fund each potential prospect. To date, we have not begun negotiations with any investment bank, financial institution or other source of funding for the purpose of raising either equity or debt capital, nor have we negotiated with any potential joint venture partner for the purpose of pursuing any potential prospect. Only when and if we identify prospects and seek to enter into contracts, licenses or other arrangements to pursue such prospects will we be able to determine the amount of funding that will be required for each such prospect. We have no arrangements with our executive officers or principal shareholders to provide any funding and any funding that they may be requested to provide may be limited.

Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our shareholders. For example, if we raise additional funds by issuing additional equity securities, further dilution to our existing shareholders will result. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our exploration and appraisal drilling programs. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our prospects which we would otherwise develop on our own, or with a majority working interest.

Contractual Obligations

 

In the future, we may be party to the following contractual arrangements, which will subject us to further contractual obligations:

 

•

credit facilities;

 

•

contracts for the lease of drilling rigs;

 

•

contracts for the provision of production facilities;

 

•

infrastructure construction contracts; and

 

•

long-term oil and gas property lease arrangements.

 

Off-Balance Sheet Arrangements

 

As of June 30, 2016 and December 31, 2015, we did not have any off-balance sheet arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term "market risks" refers to the risk of loss arising from changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. All of our market risk sensitive instruments will be entered into for purposes of risk management and not for speculation.

 

Due to the historical volatility of commodity prices, if and when we commence production, we may enter into various derivative instruments to manage our exposure to volatility of commodity market prices. We may use options (including floors and collars) and fixed price swaps to mitigate the impact of downward swings in commodity prices to our cash flow. All contracts will be settled with cash and would not require the delivery of physical volumes to satisfy settlement. While in times of higher commodity prices this strategy may result in our having lower net cash inflows than we would otherwise have if we had not utilized these instruments, management believes the risk reduction benefits of such a strategy would outweigh the potential costs.

 

We may borrow under fixed rate and variable rate debt instruments that give rise to interest rate risk. Our objective in borrowing under fixed or variable rate debt is to satisfy capital requirements while minimizing our costs of capital.

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures. As of June 30, 2016, the Company's chief executive officer and interim chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and interim chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report. Such conclusion reflects the departure of our chief financial officer and assumption of duties of the principal financial officer by our chief executive officer and the resulting lack of accounting experience of our now principal financial officer and a lack of segregation of duties. Until we are able to remedy these material weaknesses, we are relying on third party consultants to assist with financial reporting.

 

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

For the six months ended June 30, 2016, there were no material changes from risk factors as disclosed in Company’s annual report for the year ended December 31, 2015.

 

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

 

The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

 

Exhibit No.		Description
31.1		Certification of CEO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002
31.2		Certification of CFO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002
32.1		Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2		Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
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

 

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, hereunto duly authorized.

 

By /s/ Daniel Dror
Daniel Dror
Chief Executive Officer, President, and Chairman
August 12, 2016

 

By /s/ Charles R. Zeller
Charles R. Zeller
Director and Interim Chief Financial Officer
August 12, 2016