Tianci International, Inc. - Quarter Report: 2014 October (Form 10-Q)

g7686.htm

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 October 31, 2014

[ ] 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: 333-184061

FREEDOM PETROLEUM INC.

(Exact name of registrant as specified in its charter)

Nevada		45-5540446
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

650 Poydras Street, Office 15 Suite 1400, New Orleans LA 70130

(Address of principal executive offices)

1-504-799-2550

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 [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 (§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 [X]

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ]		Smaller reporting company [X]
(Do not check if a 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 [X]

As of December 18, 2014, there were 53,469,477 shares of the issuer’s common stock, par value $0.0001,outstanding.

FREEDOM PETROLEUM INC.

Form 10-Q


Part I	FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements	3
	Balance Sheets	3
	Statements of Operations	4
	Statement of Stockholders’ Equity (Deficit)	5
	Statements of Cash Flows	6
	Notes to unaudited Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 4.	Controls and Procedures	19

Part II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 5.	Other Information	20

Item 6.	Exhibits	20

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

FREEDOM PETROLEUM, INC.

BALANCE SHEETS

	October 31,			July 31,
	2014			2014
	(Unaudited)
ASSETS

Current Assets
Cash and cash equivalents	$	22,935		$	76,108
Deposits		1,318			1,318
Total Current Assets		24,253			77,426
Oil and gas property		61,299			-
Total Assets	$	85,552		$	77,426

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities
Accounts payable and accrued expenses	$	78,844		$	6,300
Due to related party		72,310			54,274
Total Current Liabilities		151,154			60,574

Stockholders’ Equity (Deficit)
Preferred stock, $0.0001 par value; 20,000,000 shares authorized,
0 shares issued and outstanding		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized;
53,297,602 and 52,828,852 shares issued and outstanding, respectively		5,330			5,283
Common stock subscription		31			150,000
Common stock subscriptions receivable		(100,000	)		-
Additional paid-in capital		545,437			295,515
Accumulated deficit		(516,400	)		(433,946	)
Total Stockholders’ Equity (Deficit)		(65,602	)		16,852

Total Liabilities and Stockholders’ Equity (Deficit)	$	85,552		$	77,426

The accompanying notes are an integral part of these financial statements.

FREEDOM PETROLEUM, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended October31,
	2014			2013

Revenues	$	-		$	-

Operating Expenses
General and administrative		13,708			1,417
Professional fees		30,914			3,000
Consulting fees – related party		30,000			-
Website design		7,832			-
Total Operating Expenses		82,454			4,417

Loss From Operations		(82,454	)		(4,417	)

Other Income		-			900

Loss Before Provision for Income Taxes		(82,454	)		(3,517	)

Provision for Income Taxes		-			-

Net Loss	$	(82,454	)	$	(3,517	)

Net Loss Per Share: Basic and Diluted	$	(0.00	)	$	(0.00	)

Weighted Average Number of Shares Outstanding: Basic and Diluted		52,833,947			52,200,000

The accompanying notes are an integral part of these financial statements.

FREEDOM PETROLEUM, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

										Common
					Additional		Common			Stock						Total
	Common Stock				Paid in		Stock			Subscription			Accumulated			Stockholders'
	Shares		Amount		Capital		Subscription			Receivable			Deficit			Equity (Deficit)

Balance, July 31, 2013 (Audited)		52,200,000	$	5,220	$	62,740	$	-		$	-		$	(78,510	)	$	(10,550	)

Forgiveness of related party payable		-		-		12,740		-			-			-			12,740

Stock issued for debt		128,852		13		45,085		-			-			-			45,098

Stock issued for compensation		500,000		50		174,950		-			-			-			175,000

Common stock subscription received		-		-		-		150,000			-			-			150,000

Net loss for the year (audited)		-		-		-		-			-			(355,436	)		(355,436	)

Balance, July 31, 2014 (Audited)		52,828,852		5,283		295,515		150,000			-			(433,946	)		16,852

Common stock issued for cash		468,750		47		149,953		(150,000	)		-			-			-

Common stock subscription		-		-		99,969		31			(100,000	)		-			-

Net loss for the period (unaudited)		-		-		-		-			-			(82,454	)		(82,454	)

Balance, October 31, 2014 (Unaudited)		53,297,602	$	5,330	$	545,437	$	31		$	(100,000	)	$	(516,400	)	$	(65,602	)

The accompanying notes are an integral part of these financial statements.

FREEDOM PETROLEUM, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended October 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(82,454	)	$	(3,517	)
Change in operating assets and liabilities
Accounts payable and accrued expenses		52,544			(3,300	)
Accrued compensation		30,000			-
Net Cash Provided by (Used in) Operating Activities		90			(6,817	)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of unproved oil and gas properties		(61,299	)		-
Net Cash Used in Investing Activities		(61,299	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Advance received from a related party		8,036			8,000
Net Cash Provided by (Used in) Financing Activities		8,036			8,000

Net Increase (Decrease) in cash and cash equivalents		(53,173	)		1,183

Cash and cash equivalents, beginning of the period		76,108			1,674

Cash and cash equivalents, end of the period	$	22,935		$	2,857

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	-		$	-

The accompanying notes are an integral part of these financial statements.

FREEDOM PETROLEUM, INC.

NOTES TO FINANCIAL STATEMENTS

OCTOBER 31, 2014

(UNAUDITED)

NOTE 1 – GENERAL ORGANIZATION AND BUSINESS

Freedom Petroleum, Inc. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on June 13, 2012. The Company intends to engage in the exploration and development of oil and gas properties. The Company’s fiscal year end is July 31.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Basis of Presentation

The interim financial information referred to above has been prepared and presented in conformity with accounting principles generally accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The interim financial information has been prepared on a basis consistent with prior interim periods and years and includes all disclosures that are necessary and required by applicable laws and regulations. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended April 30, 2014.

The unaudited financial statement and notes are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These interim financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The more significant areas requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. The Company had $22,935 and $76,108 of cash at October 31, 2014 and July 31, 2014, respectively.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, accounts payable and accrued expenses, and amounts due to related parties. The fair value of these financial instruments approximate carrying amounts due either to length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements.

Revenue Recognition

The Company has yet to realize revenues from operations. The Company will recognize revenue when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is reasonably assured.

Oil and Gas Properties

The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including certain payroll, asset retirement costs, other internal costs, and interest incurred for the purpose of finding oil and natural gas reserves, are capitalized. Internal costs that are capitalized are directly attributable to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred. Proceeds from the sale of oil and natural gas properties are applied to reduce the capitalized costs of oil and natural gas properties unless the sale would significantly alter the relationship between capitalized costs and proved reserves, in which case a gain or loss is recognized.

Capitalized costs associated with impaired properties and capitalized costs related to properties having proved reserves, plus the estimated future development costs, and asset retirement costs under ASC 410 “Asset Retirement and Environmental Obligations”, are amortized using the unit-of-production method based on proved reserves. Capitalized costs of oil and natural gas properties, net of accumulated amortization and deferred income taxes, are limited to the total of estimated future net cash flows from proved oil and natural gas reserves, discounted at ten percent, plus the cost of unevaluated properties.

There are many factors, including global events that may influence the production, processing, marketing and price of oil and natural gas. A reduction in the valuation of oil and natural gas properties resulting from declining prices or production could adversely impact depletion rates and capitalized cost limitations. Capitalized costs associated with properties that have not been evaluated through drilling or seismic analysis are excluded from the unit-of-production amortization. Exclusions are adjusted annually based on drilling results and interpretative analysis.

Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the statements of operations.

Costs of oil and gas properties are amortized using the units of production method.

Ceiling test: Under the full cost method of accounting, the net book value of oil and gas properties, less related deferred income taxes, may not exceed a calculated “ceiling”. The ceiling limitation is the estimated after-tax future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum and adjusted for cash flow hedges. Estimated future net cash flows exclude future cash outflows associated with settling accrued asset retirement obligations.

The Company has adopted U.S. Securities and Exchange Commission (“SEC”) Release 33-8995 and the amendments to ASC 932, “Extractive Industries – Oil and Gas” (the Modernization Rules). Under the Modernization Rules, estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of production, except where prices are defined by contractual arrangements.

Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as additional depletion, depreciation and amortization expense (“DD&A”) in the accompanying statement of operations. Such limitations are tested quarterly. As at October 31, 2014 and July 31, 2014, the Company had oil and gas property costs of $61,299 and $0, respectively.

Impairment of Oil and Gas Properties

Unproved oil and gas properties are assessed at each reporting period for impairment of value, and a loss is recognized at the time of the impairment by providing an impairment allowance. An asset would be impaired if the undiscounted cash flows were less than its carrying value. Impairments are measured by the amount by which the carrying value exceeds its fair value. Because the Company uses the successful efforts method, the Company assesses its properties individually for impairment, instead of on an aggregate pool of costs. Impairment of unproved properties is based on the facts and circumstances surrounding each lease and is recognized based on management’s evaluation. Management’s evaluation follows a two-step process where (1) recoverability of the carrying value of the asset is reviewed to determine if there is sufficient value recoverable to support the capitalized value at the report date; and, (2) if assets fail the recoverability test, impairment testing is conducted, including the evaluation of various criteria such as: prior history of successful operations; production currently in place and/or future projected cash flows (if any); reserve reports or evaluations from which management can prepare future cash flow analyses; the Company’s ability to monetize the asset(s) under evaluation; and Management’s intent regarding future development.

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. The Company had no stock-based expenses, for the three months ended October 31, 2014 and 2013.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. There has been no stock-based compensation issued to non-employees.

Income Taxes

The Company provides for income taxes using an asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. No provision for income taxes is included in the statement due to its immaterial amount, net of the allowance account, based on the likelihood of the Company to utilize the loss carry-forward.

Basic and Diluted Earnings (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as at October 31, 2014 and 2013.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s financial position, results of operations, or cash flow.

NOTE 3 – DUE TO RELATED PARTY

During the year ended July 31, 2014, the current sole director and officer, who is also a majority shareholder, advanced the Company $24,274 for operating expenses. During the three months ended October 31, 2014, the director advanced another $8,036 to the Company for operating expenses and the total balance of $32,310 was included in amount due to related party as at October 31, 2014. The loan is unsecured, non-interest bearing, and has no specific terms of repayment.

Pursuant to an employee agreement effective on March 1, 2014, the Company was obligated to pay $10,000 per month to the current sole officer and director for management service. During the year ended July 31, 2014, $20,000 was paid to this officer and $30,000 was included in amount due to related parties as at July 31, 2014. On August 1, 2014, $20,000 was paid to the officer. As at October 31, 2014, $40,000 unpaid consulting fees were included in the amount due to related party.

As at October 31, 2014 and July 31, 2014, our sole officer and director was owed $72,310 and $54,274, respectively.

NOTE 4 – OIL AND NATURAL GAS PROPERTIES

On October 10, 2014, the Company entered into a Purchase and Sale Agreement with Shalex Corporation (“Shalex”) (the “Agreement”) whereby the Company purchased a one hundred percent (100%) undivided working interest and shall receive 87% Net Revenue Interest (NRI) in certain oil and gas interests (Crown Land) and properties arising from the oil and gas leases (the “Leases”), which together comprise a parcel of 2,304 hectares in the Bentley area of Alberta, Canada (the “Property”) and (ii) the Pre-Existing Well (the "Well"). In exchange for the Leases, the Company will pay an aggregate of four hundred thousand dollars (US$400,000) (the “Purchase Price”) incrementally, at an agreed upon payment schedule, following the completion of certain administrative benchmarks as set forth in the Agreement, such as the requirement to provide certain financial materials regarding the Leases to the Company; such benchmarks are also therefore a condition to closing the transaction. The closing of the transaction, and transfer of title from Shalex to the Company, shall occur within 30 days after payment of the full Purchase Price; provided however, that it shall not take place later than 135 days following the signing of the Agreement. The Purchase Price shall be reduced to $360,000 if a continuation application for one of the Leases on the Property is not approved.

In consideration for the Agreement, the Company has agreed to pay the following amounts on or before the dates specified in the following schedule:

	Cash Payments (USD)

On or before November 5, 2014 (paid)	$	50,000
On or before December 8, 2014		125,000
On or before January 20, 2015		125,000
On or before March 6, 2015		100,000
	$	400,000

The parties agreed to pay all maintenance costs, as such term is defined in the Agreement, associated with the leases for the fiscal years ending December 31, 2014 and 2015, on a pro-rata basis based upon the date the Agreement was signed and such costs were previously paid by Shalex. The Company maintains the right to surrender in whole or part any of the Leases by non-payment of delay rentals, provided that the Company gives Shalex at least 60 days prior written notice. If Shalex does not agree to the surrender, the Company must assign all interest conveyed pursuant to the Agreement on the Lease(s) to Shalex absolutely free and clear of any liens, overriding royalty or other encumbrances of any kind whatsoever other than those in existence at the time of the Agreement or placed thereon pursuant thereto.

The Agreement contains representations, warranties and covenants by the Company and Shalex that are customary for transactions of this type such as (i) in the case of the Company: organization, good standing and qualification to do business; capitalization; authorization and enforceability of the transaction and transaction documents; consents being obtained or not required to consummate the transaction; and compliance with securities laws; and (ii) in the case of Shalex: ownership of the property and lack of asserted defaults.

The Agreement may be terminated, (i) by the Company if they identify an issue, prior to the final payment of the Purchase Price, that would prevent them from being able to use the Property in a manner consistent with the spirit and intended purpose of this Agreement; (ii) by Shalex if the Company does not make the payments by the contractually agreed to deadline; and (iii) upon mutual consent of the parties.

During the three months ended October 31, 2014, the company capitalized $50,000 acquisition costs and $11,299 maintenance costs for this oil and gas properties.

NOTE 5 – CAPITAL STOCK

Preferred Stock

The Company has 20,000,000 authorized preferred shares with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

There were no shares of preferred stock issued and outstanding as of October 31, 2014 and July 31, 2014

Common Stock

The Company has authorized 100,000,000 common shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the year ended July 31, 2014, the Company issued to the sole officer and director, who is also a majority stockholder, 128,852 shares of common stock at a price of approximately $0.35 per share for debt cancellation of $45,098.

During the year ended July 31, 2014, the Company issued to the sole officer and director, who is also a majority stockholder, 500,000 shares of common stock at a price of $0.35 per share for compensation of $175,000, pursuant to an employee agreement.

During the year ended July 31, 2014, related parties forgave loans of $12,740 which was recorded as additional paid in capital.

During the three months ended October 31, 2014, the Company issued 468,750 shares of common stock at a price of approximately $0.32 per share for total cash proceeds of $150,000, which was received prior to the year ended of July 31, 2014.

On October 20, 2014, the Company entered into a Share Purchase Agreement with an unaffiliated investor. Pursuant to the purchase agreement, the investor subscribed for 312,500 shares of the Company's common stock for $100,000, at a value of $0.32 per share.

There were 53,297,602 and 52,828,852 shares of common stock issued and outstanding as of October 31, 2014 and July 31, 2014, respectively.

NOTE 6 – INCOME TAXES

For the three months ended October 31, 2014 and 2013, the Company has incurred a net loss and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward was approximately $516,400 at October 31, 2014 and will expire beginning in the year 2032.

The provision for Federal income tax consists of the following for the years ended October 31, 2014 and 2013:

	2014			2013
Federal income tax benefit attributable to:
Current operations	$	28,034		$	1,196
Less: valuation allowance		(28,034	)		(1,196	)
Net provision for Federal income taxes	$	-		$	-

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of October 31, 2014 and July 31, 2014:

	October 31, 2014			July 31, 2014
Deferred tax asset attributable to:
Net operating loss carryover	$	175,575		$	147,541
Less: valuation allowance		(175,575	)		(147,541	)
Net deferred tax asset	$	-		$	-

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards of $516,400 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry-forwards may be limited as to use in future years.

NOTE 7 – ENVIRONMENTAL AND OTHER CONTINGENCIES

The Company’s operations and earnings may be affected by various forms of governmental action in the United States and the countries that the oil & gas properties located. Examples of such governmental action include, but are by no means limited to: tax increases and retroactive tax claims; royalty and revenue sharing increases; import and export controls; price controls; currency controls; allocation of supplies of crude oil and petroleum products and other goods; expropriation of property; restrictions and preferences affecting the issuance of oil and gas or mineral leases; restrictions on drilling and/or production; laws and regulations intended for the promotion of safety and the protection and/or remediation of the environment; governmental support for other forms of energy; and laws and regulations affecting the Company’s relationships with employees, suppliers, customers, stockholders and others. Because governmental actions are often motivated by political considerations and may be taken without full consideration of their consequences, and may be taken in response to actions of other governments, it is not practical to attempt to predict the likelihood of such actions, the form the actions may take or the effect such actions may have on the Company.

Companies in the oil and gas industry are subject to numerous federal, state, and local regulations dealing with the environment. Violation of federal or state environmental laws, regulations and permits can result in the imposition of significant civil and criminal penalties, injunctions and construction bans or delays. A discharge of hazardous substances into the environment could, to the extent such event is not insured, subject the Company to substantial expense, including both the cost to comply with applicable regulations and claims by neighboring landowners and other third parties for any personal injury and property damage that might result.

The Company currently leases a property at which hazardous substances could have been or are being handled. In addition, many of these properties have been operated by third parties whose treatment and disposal or release of hydrocarbons or other wastes were not under the Company’s control. Under existing laws, the Company could be required to remove or remediate previously disposed wastes (including wastes disposed of or released by prior owners or operators), to clean up contaminated property (including contaminated groundwater) or to perform remedial plugging operations to prevent future contamination. The Company is investigating the extent of any such liability and the availability of applicable defenses and believes the costs related to these sites will not have a material adverse effect on the Company’s net income, financial condition or liquidity in a future period.

The Company’s liability for remedial obligations includes certain amounts that are based on anticipated regulatory approval for proposed remediation of former refinery waste sites. Although regulatory authorities may require more costly alternatives than the proposed processes, the cost of such potential alternative processes is not expected to be a material amount. Certain environmental expenditures are likely to be recovered by the Company from other sources, primarily environmental funds maintained by certain states. Since no assurance can be given that future recoveries from other sources will occur, the Company has not recorded a benefit for likely recoveries.

There is the possibility that environmental expenditures could be required at currently unidentified sites, and new or revised regulations could require additional expenditures at known sites. However, based on information currently available to the Company, the amount of future remediation costs incurred at known or currently unidentified sites is not expected to have a material adverse effect on the Company’s future net income, cash flows or liquidity. The Company has recorded $0 for its estimated asset retirement obligations as at October 31, 2014 and July 31, 2014.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

On December 20, 2013, the Company entered into an Office Services Agreement with Abby Office Centers for renting office space, furniture and equipment from January 1, 2014 to December 31, 2014 for a monthly price of $1,251.

On October 28, 2014, the Company entered into an agreement for Investor Relation services with MZ Group North America from November 1, 2014 to October 31, 2015 for a monthly price of $5,000.

NOTE 9 – GOING CONCERN

The 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 has a capital deficiency of $126,901 and has incurred losses since inception resulting in an accumulated deficit of $516,400 as at October 31, 2014. Further losses are anticipated in the development of the business, 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 intends to finance operating costs over the next twelve months with loans from directors and/or private placement of common stock.

NOTE 10 – SUBSEQUENT EVENTS

On November 3, 2014, the Company received $55,000 and issued 171,875 shares of common stock, for the share subscription agreement signed on October 20, 2014.

On November 25, 2014, the Company entered into an Office Services Agreement with Key Business Centre for renting office space, furniture and equipment from December 1, 2014 to November 30, 2015 for monthly rent of $843. Accordingly, as of January 1, 2015 our offices will be located at Key Business Center, 702 W. Idaho Street, Suite 1100, Boise, ID 83702.

On December 11, 2014, the Company amended the Purchase and Sale Agreement with Shalex Corporation to defer the current payment due, for $125,000, to be made by January 1, 2015.

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no additional events have occurred that require disclosure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K, as filed on November 13, 2013. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the “Company,” “Freedom Petroleum,” “we,” “us,” or “our” are to Freedom Petroleum, Inc.

Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

Freedom Petroleum, Inc. (the “Company”), an exploration stage company, was incorporated in the State of Nevada on June 13, 2012. We are engaged in the exploration and development of oil and gas properties.

In January 2014, we were a party to that certain Securities Purchase Agreement (the "Agreement") by and among ourselves, certain of our shareholders (the "Selling Shareholders") owning an aggregate of 27,000,000 shares (approximately 51.7%) of our common stock (the "Sold Stock") and Anton Lin ("Lin"). Pursuant to the Agreement, Lin purchased the Sold Stock for $27,000 (the "Purchase Price") from the Selling Shareholders in a private sale transaction (the "Private Sale"). The Selling Shareholders were our former sole officer and director: Thomas Hynes ("Hynes") and corporate secretary: Nina Bijedic ("Bijedic"). Pursuant to the Agreement, Hynes and Bijedic submitted their resignations from all positions held with us; prior to the closing of the Private Sale, our Board of Directors appointed Lin as our sole director and Chief Executive Officer, which appointment took effect immediately following the close of the Private Sale. Following the Private Sale, a change in control occurred since Mr. Lin gained ownership of almost 52% of our outstanding common stock.

We have had limited operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock as the sole source of funds for our future operations.

Plan of Operation

We are a start-up, exploration-stage company and have not yet generated or realized any revenues from our business operations.

Our auditors have issued a going concern opinion on our audited financial statements for the year ended July 31, 2014. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. There is no assurance we will ever reach this point. Accordingly, we must raise cash from other sources. Our only other source for cash at this time is investments by others. We must raise cash to implement our project and stay in business. As of July 31, 2014, the Company had $22,935 in cash on hand.

On October 10, 2014, we entered into a Purchase and Sale Agreement with Shalex Corporation (“Shalex”) (the “Agreement”) whereby we purchased a one hundred percent (100%) undivided working interest and shall receive an 87% Net Revenue Interest (NRI) in certain oil and gas interests (Crown Land) and properties arising from the oil and gas leases (the “Leases”), which together comprise a parcel of 2,304 hectares in the Bentley area of Alberta, Canada (the “Property”) and (ii) the Pre-Existing Well (the "Well"). In exchange for the Leases, we will pay an aggregate of four hundred thousand dollars (US$400,000) (the “Purchase Price”) incrementally, at an agreed upon payment schedule, following the completion of certain administrative benchmarks as set forth in the Agreement, such as the requirement to provide certain financial materials regarding the Leases to us; such benchmarks are also therefore a condition to closing the transaction. The closing of the transaction, and transfer of title from Shalex to us, shall occur within 30 days after payment of the full Purchase Price; provided however, that it shall not take place later than 135 days following the signing of the Agreement. The Purchase Price shall be reduced to $360,000 if a continuation application for one of the Leases on the Property is not approved.

The parties agreed to pay all maintenance costs, as such term is defined in the Agreement, associated with the leases for the fiscal years ending December 31, 2014 and 2015, on a pro-rata basis based upon the date the Agreement was signed and such costs were previously paid by Shalex. We maintain the right to surrender in whole or part any of the Leases by non-payment of delay rentals, provided that we give Shalex at least 60 days prior written notice. If Shalex does not agree to the surrender, we must assign all interest conveyed pursuant to the Agreement on the Lease(s) to Shalex absolutely free and clear of any liens, overriding royalty or other encumbrances of any kind whatsoever other than those in existence at the time of the Agreement or placed thereon pursuant thereto.

Our plan now is to explore the Leases and hope that we will ultimately be able to develop same.

If we are unable to complete any phase of our exploration program because we do not have sufficient capital, we may cease operations until we raise more money. If we cannot or do not raise additional capital, we will cease operations. If we cease operations, we do not have any additional plans at this time.

Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

To become profitable and competitive, we must conduct the research and exploration of our properties before we start production of any minerals we may find. We sought equity financing to provide for the capital required to implement our research and exploration phases. We do not believe we have sufficient funds to operate our business for the 12 months.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

If we are unable to complete any phase of our exploration program or fail to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.

We are currently dependent on our sole officer and director for providing the necessary capital to operate. As of October 31, 2014, our officer has advanced a total of $32,310.

Results of Operations

The following summary of our results of operations, for the three months ended October 31, 2014 and 2013, should be read in conjunction with our audited financial statements for the year ended July 31, 2014, as included in our Form 10-K.

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

The following table provides selected financial data about our company as of October 31, 2014 and July 31, 2014.

Balance Sheet Data

	October 31, 2014			July 31, 2014

Cash	$	22,935		$	76,108
Total Assets	$	85,552		$	77,426
Total Liabilities	$	151,154		$	60,574
Stockholders’ Equity (Deficit)	$	(65,602	)	$	16,852

We have not generated any revenues since inception (June 13, 2012) through October 31, 2014.

For the Three Months Ended October 31, 2014 Compared to the Three Months Ended October 31, 2013

	Three Months Ended October 31,
	2014			2013

Operating revenues	$	-		$	-
Operating expenses:
General and administrative		13,708			1,417
Professional fees		30,914			3,000
Consulting fees – related party		30,000			-
Website design		7,832			-
Total Operating expenses		82,454			4,417
Loss from Operations		(82,454	)		(4,417	)
Other income		-			900
Provision for income tax		-			-
Net loss	$	(82,454	)	$	(3,517	)

Our operating expenses, for the three months ended October 31, 2014 increased $78,037or 1,767% as compared to the same period in 2013. During the three month period ended October 31, 2014, we recorded $7,832 for website development costs and a $30,000 consulting fee to the sole officer and director, who is also our majority shareholder pursuant to his employment contract. Expenses, from professional, general and administrative fees, were $44,622 for the three months ended October 31, 2014 as compared to $4,417 for the same period in 2013. This increase was largely due to increased general and administrative fees and professional fees during the three month period in 2014 of $12,291and $27,914respectively.

The three month period ending October 31, 2013 was principally the start-up period for the Company. Costs were lower due to less activities and cash flow was realized through the issuance of shares to fund the Company’s initial operations. During the period ending October 31, 2014, we sought to increase the focus of the Company's activity and operations. We spent significant resources on finding and vetting a new oil and gas property, commenced development of a new website, and incurred increased professional and administratrive expenses, thus increasing operating expenditures. We expect operating expenses to continue to increase over the next 12 months as we expand our operations and development of our oil and gas property.

Liquidity and Capital Resources

Working Capital

	October 31, 2014			July 31, 2014

Current Assets	$	24,253		$	77,426
Current Liabilities	$	151,154		$	60,574
Working Capital (Deficiency)	$	(126,901	)	$	16,852

Cash Flows

	Three months Ended October 31, 2014			Three months Ended October 31, 2013

Cash Flows from (used in) Operating Activities	$	20,090		$	(6,817	)
Cash Flows used in Investing Activities	$	(61,299	)	$	-
Cash Flows from (used in) Financing Activities	$	(11,964	)	$	8,000
Net increase (decrease) in Cash During Period	$	(53,173	)	$	1,183

Cash Flow from Operating Activities

During the three month period ended October 31, 2014, cash provided by operating activities was $20,090 compared to cash used in operating activities of $6,817 during the period ended October 31, 2013. The increase in cash provided by operating activities was attributed to the increase in operating liabilities owed and unpaid at October 31, 2014. The Company had a net loss of $82,453 but this loss was offset by an increase in accounts payable and accrued compensation of $102,544. Of these accounts payable, $61,299 was for funds owing on our acquisition of an oil and gas property and another $30,000 in compensation to our sole officer and director. For the period ended October 31, 2013, the company had a net loss of $3,517 and used cash to pay accounts payable of $3,300.

Cash Flow from Investing Activities

During the three month period ended October 31, 2014 cash used in investing activities was $61,299 as compared to $0 for the same period ended October 31, 2013. During the period ended October 31, 2014 we acquired an unproven oil and gas property for which we were required to make property and maintenance payments of $61,299.

Cash Flow from Financing Activities

During the three month period ended October 31, 2014, cash used in financing activities was $11,964 compared to cash provided by financing activities of $8,000, for the same period in 2013. The decrease in 2014 is attributable to $20,000 paid to an officer of the Company.

Off-Balance Sheet Arrangements

We do not have any 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, capital expenditures, or capital resources that is material to investors.

Item 4. Control and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also 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.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of October 31, 2014, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Information on any and all equity securities we have sold during the period covered by this Report that were not registered under the Securities Act of 1933, as amended and not included in a previously filed Current Report on Form 8-K is set forth below:

In September 2014, the Company issued 468,750 shares of common stock at a price of approximately $0.32 per share for total cash proceeds of $150,000 that it received prior to the year ended of July 31, 2014, but failed to physically issue at such time.

On October 20, 2014, the Company entered into a Share Purchase Agreement for 312,500 shares of its common stock to one non-US investor. The shares were subscribed pursuant to Regulation S, as promulgated under the Securities Act of 1933, as amended. On November 3, 2014, the Company received $55,000 of the subscription proceeds, and issued 171,875 shares.

Unless otherwise noted, all of the transactions listed above were made pursuant to the exemption from the registration provisions of the Securities Act of 1933, as amended, provided by Section 4(2) of the Securities Act for sales not involving a public offering. None of the securities issued have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Item 5. Other Information.

On October 20, 2014, the Company entered into a Share Purchase Agreement with one non-US investor, pursuant to Regulation S, as promulgated under the Securities Act of 1933, as amended. Pursuant to the purchase agreement, the investor purchased 312,500 shares of the Company's common stock for $100,000 (the "Purchase Price"), at a value of $0.32 per share. However, the Company only received $55,000 of the Purchae Price, on November 3, 2014, and therefore only issued 171,875 of the shares.

Item 6. Exhibits.

Exhibit Number		Description of Exhibit

(3)		Articles of Incorporation and Bylaws

3.1		Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2012)

3.2		Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2012)

(10)		Material Contracts

10.1		Oil and Gas Lease Purchase Agreement dated July 23, 2012 between our Company and Summit West Oil, LLC (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2102)

10.2		Form of Employment Agreement with Anton Lin, dated March 14, 2014 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on March 17, 2014)

10.3		Form of Purchase and Sale Agreement by and between Freedom Petroleum, Inc., and Lornex Financial Ltd. dated April 28, 2014 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 28, 2014)

10.4		Securities Purchase Agreement dated June 5, 2014 (Incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q filed on June 13, 2014)

10.5		Securities Purchase Agreement dated October 20, 2014

(31)		Rule 13a-14(a) / 15d-14(a) Certifications

31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

(32)		Section 1350 Certifications

32.1*		Rule 1350 Certification of Chief Executive Officer.

32.2*		Rule 1350 Certification of Chief Financial Officer.

101		Interactive Data File

101**		Interactive Data File (Form 10-Q for the quarter ended October 31, 2014 furnished in XBRL).
101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE		XBRL Instance Document XBRL Taxonomy Extension Schema Document XBRL Taxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.

Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under these sections.

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.

	FREEDOM PETROLEUM INC.
	(Registrant)


Dated: December 19, 2014	/s/ Anton Lin
	Anton Lin
	President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Director
	(Principal Executive Officer and Financial and Accounting Officer)