NOTE 4 - SUBSEQUENT EVENTS
The Company has entered into various agreements requiring it to issue restricted common stock to certain consultants. These agreements have obligated the Company to issue a total of 23,106 restricted common shares each to two separate consultants and an additional 40,000 restricted common shares to a third consultant in September.
Two of the agreements require the Company to issue an additional number of restricted common shares monthly valued at a total of $5,000 using the fair market value of our common stock as of the last trading day of the month. The third agreement requires the Company to issue both 20,000 shares of common stock and 20,000 warrants monthly beginning October 2012.
While the Company has entered into the obligations to issue the common stock in September, no shares have yet been issued.
In November 2012, the Company has entered into promissory notes totaling $110,000 in exchange for cash of $110,000. These promissory notes have a term of 60 days from issuance and accrue interest at a rate of 6% per annum. In addition, the holders of the promissory notes will be issued a total of 275,000 shares of the Company's restricted common stock.
6
At the time of this filing, the transaction has not closed.
In November 2012, the Company entered into a Purchase and Sale Agreement with Great Northern Energy, Inc. ("Great Northern") to purchase working interests in oil and gas leases, applied carried interests and farmout rights and certain other properties and interests in Texas in exchange for $3,900,000. Cash of $100,000 was paid toward the purchase price. The remaining purchase price is made in the form of two promissory notes. The first promissory note in the amount of $1,100,000 ("$1.1 Million Promissory Note") has a term of year from its issuance date, with payments to be made on a quarterly basis and will be secured by the assets being purchased. The second promissory note is in the amount of $2,700,000 ("$2.7 Million Promissory Note") is due June 30, 2013, with a payment of $1,100,000 due on closing, the note will also be secured by the assets being purchased. In addition, the Company has agrees to issue 6,500,000 shares of its restricted common stock and reserve an additional 3,500,000 shares to be used to purchase additional working interests in the properties. The closing date of the transaction is expected to be December 1, 2012 or 45 days thereafter if all the conditions of the Purchase and Sale Agreement have not been met on December 1, 2012.
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