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. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our 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. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this quarterly report.
Unless otherwise specified in this quarterly report, all dollar amounts are
expressed in United States dollars and all references to "common stock" refer to
shares of our common stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
means PetroGas Company, unless otherwise indicated.
We were incorporated under the name Alazzio Entertainment Corp. on January 24,
2014, under the laws of the State of Nevada. Our original business plan was to
operate photo booth rentals.
On April 3, 2015, a change in control occurred by virtue of our company's
largest shareholder, Dmitri Kapsumun selling 900,000 shares (split adjusted) of
our common stock to Rise Fast Limited, a Hong Kong corporation. Such shares
represented 71.77% of our total issued and outstanding shares of common stock.
As part of the sale of the shares, Rise Fast Limited arranged with the resigning
member of our company's Board of Directors, to appoint Mr. Huang Yu as the sole
officer and director of our company.
On April 16, 2015, we filed a Certificate of Amendment with the Nevada Secretary
of State (the "Nevada SOS") whereby we amended our Articles of Incorporation by
increasing our authorized number of shares of common stock from 75 million to
300 million (not adjusted for the one (1) for one hundred (100) stock split) and
increasing all of our issued and outstanding shares of common stock at a ratio
of fifteen (15) shares for every one (1) share held. Our Board of Directors
approved this amendment on April 15, 2015 and shareholders holding 71.77% of our
issued and outstanding shares approved this amendment via a written consent
executed on April 16, 2015.
Effective April 29, 2015 we changed our name to America Resources Exploration
Inc. by way of a merger with our wholly-owned subsidiary, incorporated solely
for the purpose of the change of name.
On June 10, 2015, we entered into an Asset Purchase Agreement with Zheng
Xiangwu, a resident of Guang Dong Province, China, whereby we issued 40,000
million shares of its common stock in exchange for rights to certain oil and gas
leases located in Frio and Atascosa Counties, Texas, consisting of a total of
714 total acres of land, two (2) working wells and a total of seven (7) wells
(the "Leases"). The acquisition of the Leases pursuant to the Asset Purchase
Agreement was completed on June 1, 2015. As a result of the completion of this
acquisition, 40,000 shares of our company's common stock were issued to Mr.
Zheng Xiangwu, who owns our company's largest shareholder, Rise Fast Limited.
The number of shares issued to Mr. Zheng was determined by valuing the Leases at
$160,000 and valuing our company's stock at $0.04 per share. At the completion
of the Asset Purchase Agreement, we entered into the oil and gas industry.
Table of Contents
On June 11, 2015, we entered into various assignment agreements with Mr. Zheng
for the acquisition of multiple oil and gas leases and overriding royalty
interests ("ORR's") as set out in the table below. From July 6, 2015 through
July 9, 2015, we completed the acquisition of such oil and gas leases and ORR's,
whereby we issued a total of 6,500 shares of our common stock to Mr. Zheng.
Assignment Date Name of The Property Type of Property Location
June 11th, 2015 Ellis County Overriding Royalty Int. Oklahoma
June 11th, 2015 Hemphill County Overriding Royalty Int. Texas
June 11th, 2015 Madison County Wellbore Interest Texas
June 11th, 2015 Shelby County Wellbore Interest Texas
June 11th, 2015 Emergy County Lease Purchase Utah
On August 13, 2015 we entered into an Asset Purchase Agreement with Inceptus
Resources, LLC whereby our company acquired a 78% net revenue interest in 200
acres located in Callahan County, Texas, and a 78% net revenue interest in 522
acres also located in Callahan County, Texas.
On January 20, 2016, we changed our name to PetroGas Company, by way of a merger
with our wholly-owned subsidiary, incorporated solely for the purpose of the
change of name. In addition, we amended our Articles of Incorporation for a
reverse stock split by decreasing all of our issued and outstanding shares of
common stock at a ratio one (1) new for one hundred (100) old shares of common
stock. The reverse stock split was approved by our directors and shareholders
holding 68.65% of our issued and outstanding shares of common stock on January
13, 2016 and the reverse stock split became effective with FINRA on March 7,
2016. The change of name resulted in a change of trading symbol to "PTCO".
On September 13, 2017, we filed a Certificate of Amendment with the Nevada
Secretary of State whereby we amended our Articles of Incorporation by
decreasing all of our issued and outstanding shares of common stock at a ratio
of one (1) share for every one hundred (100) shares held. Our Board of Directors
approved the Amendment on July 21, 2017 and Shareholders holding 75.95% of our
company's shares approved the Amendment via written consent executed on July 21,
2017, with an effective date of October 5, 2017.
On February 20, 2019 a majority of our shareholders and our board of directors
approved a resolution to effect a reverse stock split of our issued and
outstanding shares of common stock on a one (1) new for 100 old basis. The
reverse split was approved by FINRA with an effective date of March 19, 2019. As
a result of the reverse split, our issued and outstanding shares of common stock
decreased from 30,099,230 to 300,993 shares of common stock. Our authorized
capital remained unchanged.
Our principal executive offices are located at 2800 Post Oak Boulevard, Suite
4100, Houston, Texas 77056. Our telephone number is (832) 899-8597.
We have never declared bankruptcy, been in receivership, or involved in any kind
of legal proceeding.
We hold a 94% interest in Seabourn Oil Company, LLC, a Texas LLC.
On June 12, 2015, we acquired three (3) producing leases covering 714 acres
situated in Atascosa and Frio Counties, Texas, located in the Eagle Ford Shale
formation - the Jane Burns "C" ("Burns"), the Theo Rogers "C", and the Theo
Rogers "A" & "D" ("Rogers") Leases. We acquired a 99.5% working interest
(74.625% net revenue interest) in each lease.
Table of Contents
The Burns and Rogers Leases provide exploration and production opportunities in
the Kyote Field pay zone, very near the Eagle Ford Shale play with access to
available rig crews and other vendor-servicers, due to their close proximity to
San Antonio, Texas.
The Burns and Rogers Leases hold collectively seven (7) oil wells, but none of
which are operating wells. Although our company's management and industry
professionals believed at the time that they were acquired that our company
could double or triple previous production on these wells, depressed oil prices
indicate that the cost to bring these wells online an uneconomical venture.
On November 30, 2016, we acquired various royalty interests in Texas for
$10,485. On December 14, 2016, we acquired two oil and gas leases in Ohio for
$2,705. On January 1, 2017, our company acquired the lease for three oil and gas
properties for $4,975.
We are actively seeking to acquire producing and non-producing leases that will
allow us to explore and drill in high-profile pay zones.
We intend to raise capital at a low cost from private placements so that we may
acquire numerous additional leases, and to commence drilling, and taking
advantage of the inevitable uptick in oil prices to come.
In the current climate, our company believes that there are a very large number
of oil & gas leases under distress due to the depressed gas prices and that we
can strategically position our company to acquire as many of these leases as
possible at a discount to market value, hence creating shareholder value.
We are planning an exploration strategy to drill new wells on the current
Leases, as well as acquire deeper rights in order to drill some of the wells at
great depths. We expect that reservoirs at those depths could yield a very high
daily output of oil.
Results of Operations
We have earned limited royalty revenues since inception.
Three months ended June 30, 2021 compared to three months ended June 30, 2020
Three Months Three Months
June 30, June 30,
2021 2020 Changes
Operating Expenses $ 9,835 $ 7,963 $ 1,872
Other Expenses $ 12,876 $ 30,390 $ (17,514 )
Net Loss $ (22,711 ) $ (38,353 ) $ 15,642
Our net loss for the three months ended June 30, 2021 decreased to $22,711 from
$38,353 for the three months ended June 30, 2020 due to a decrease in other
Our operating expenses for the three months ended June 30, 2021 increased to
$9,835 from $7,963 for the three months ended June 30, 2020.
Table of Contents
Other expenses for the three months ended June 30, 2021 was $12,876 as compared
to $30,390 incurred during the three months ended June 30, 2020 related to note
interest expense and amortization of note discount.
Liquidity and Capital Resources
The following table provides selected financial data about our company as of
June 30, 2021 and March 31, 2021, respectively.
As of As of
June 30, March 31,
2021 2021 Changes
Current Assets $ - $ - $ -
Current Liabilities $ 431,681 $ 408,970 $ 22,711
Working Capital (Deficiency) $ (431,681 ) $ (408,970 ) $ (22,711 )
Three Months Three Months
June 30, June 30,
2021 2020 Changes
Net cash used in Operating Activities $ (12,250 ) $ (10,000 ) $ (2,250 )
Net cash provided by Financing
$ 12,250 $ 10,000 $ 2,250
Net (decrease) increase in cash and cash
equivalents $ - $ - $ -
As of June 30, 2021, we had a working capital deficiency of 431,681 as compared
to $408,920 as March 31, 2021. The increase in working capital deficiency was
due to the increase in advances from related parties and accrued interest during
the three months ended June 30, 2021.
Cash Flow from Operating Activities
For the three months ended June 30, 2021, we used $12,250 of cash for operations
primarily as a result of the net loss of $22,711, increased by a decrease in
accounts payable and accrued liabilities of $2,415 and an increase in acctued
For the three months ended June 30, 2020, we used $10,000 of cash for operations
primarily as a result of the net loss of $38,353, decreased by non-cash expense
of $18,568 for amortization of debt discount and a net change in working capital
Cash Flow from Investing Activities
We did not use any funds for investing activities during the three months ended
June 30, 2021 and June 30, 2020.
Table of Contents
Cash Flow from Financing Activities
For the three months ended June 30, 2021, we had net cash provided by financing
activities from director advancement as compared to net cash provided by
financing activities from issuance of convertible promissory note of $10,000 for
the three months ended June 30, 2020.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, and capital
expenditures or capital resources that are material to stockholders.
© Edgar Online, source Glimpses