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

g7314.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 January 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		45-5440446
(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 [ ]

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 March 14, 2014, there were 52,328,852 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	13

Item 4.	Controls and Procedures	17

Part II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

PART I ¾ FINANCIAL INFORMATION

Item 1. Financial Statements.

FREEDOM PETROLEUM, INC.

(An Exploration Stage Company)

BALANCE SHEETS

(Unaudited)

	As of January 31, 2014			As of July 31, 2013
ASSETS

Current Assets
Cash and cash equivalents	$	200		$	1,674
Deposits		1,318			—

Total Current Assets		1,518			1,674

Total Assets	$	1,518		$	1,674

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities
Accounts payable and accrued expenses	$	3,000		$	6,400
Due to related parties		—			5,824

Total Current Liabilities		3,000			12,224

Stockholders’ 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;
52,328,852 and 52,200,000 shares issued and outstanding, respectively		5,233			5,220
Additional paid-in capital		120,565			62,740
Deficit accumulated during the exploration stage		(127,280	)		(78,510	)
Total Stockholders’ Deficit		(1,482	)		(10,550	)

Total Liabilities and Stockholders' Deficit	$	1,518		$	1,674

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

FREEDOM PETROLEUM, INC.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended January 31,						Six Months Ended January 31,						Period From June 13, 2012 (Date of Inception) through January 31,
	2014			2013			2014			2013			2014

GROSS REVENUES	$	—		$	—		$	—		$	—		$	—

OPERATING EXPENSES
General and administrative		22,028			5,223			23,445			8,578			53,755
Professional fees		23,225			—			26,225			—			49,225
Consulting fees – related party		—			—									10,000
Website design		—			—									800
Impairment		—			—									15,000
TOTAL OPERATING EXPENSES		45,253			5,223			49,670			8,578			128,780

LOSS FROM OPERATIONS		(45,253	)		(5,223	)		(49,670	)		(8,578	)		(128,780	)

OTHER INCOME (EXPENSE)		—			—			900			—			1,500

LOSS BEFORE PROVISION FOR INCOME TAXES		(45,253	)		(5,223	)		(48,770	)		(8,578	)		(127,280	)

PROVISION FOR INCOME TAXES		—			—			—			—			—

NET LOSS	$	(45,253	)	$	(5,223	)	$	(48,770	)	$	(8,578	)	$	(127,280	)

NET LOSS PER SHARE:
BASIC AND DILUTED	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
BASIC AND DILUTED		52,201,401			40,188,000			52,200,700			33,594,000

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

FREEDOM PETROLEUM, INC.

(An Exploration Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE PERIOD FROM JUNE 13, 2012 (DATE OF INCEPTION) TO JANUARY 31, 2014

(Unaudited)

	Common Stock				Additional Paid in		Deficit Accumulated during the Exploration			Total Stockholders’ Equity
	Shares		Amount		Capital		Stage			(Deficit)

Inception, June 13, 2012		—	$	—	$	—	$	—		$	—

Stock issued for cash		27,000,000		2,700		24,460		—			27,160

Net loss for the year ended July 31, 2012		—		—		—		(8,404	)		(8,404	)

Balance, July 31, 2012		27,000,000		2,700		24,460		(8,404	)		18,756

Stock issued for cash		25,200,000		2,520		35,280		—			37,800

Forgiveness of related party payable		—		—		3,000		—			3,000

Net loss for the year ended July 31, 2013		—		—		—		(70,106	)		(70,106	)

Balance, July 31, 2013		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

Net loss for the period ended January 31, 2014		—		—		—		(48,770	)		(48,770	)

Balance, January 31, 2014		52,328,852	$	5,233	$	120,565	$	(127,280	)	$	(1,482	)

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

FREEDOM PETROLEUM, INC.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended January 31,						Period from June 13, 2012 (Date of Inception) through January 31,
2009	2014			2013			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(48,770	)	$	(8,578	)	$	(127,280	)
Adjustments To Reconcile Net Loss To Net Cash Provided by Operating Activities
Impairment loss		—			—			15,000
Change in operating assets & liabilities
Deposits		(1,318	)		—			(1,318	)
Increase (decrease) in accounts payable and accrued expenses		(3,400	)		(16,650	)		3,000
Net Cash Provided by (Used in) Operating Activities		(53,488	)		(25,228	)		(110,598	)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of unproved oil and gas properties		—			—			(15,000	)
Net Cash Used in Investing Activities		—			—			(15,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loan from related party		—			—			3,000
Increase in due to related parties		53,098			—			58,922
Payments to related parties		(1,084	)		—			(1,084	)
Proceeds from issuance of common stock		—			37,773			64,960
Net Cash Provided by Financing Activities		52,014			37,773			125,798

Net Increase (Decrease) in Cash and Cash Equivalents		(1,474	)		12,545			200

Cash and cash equivalents, beginning of the period		1,674			24,230			—

Cash and cash equivalents, end of the period	$	200		$	36,775		$	200

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

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION:
Forgiveness of related party payable recorded as contributed capital	$	12,740		$	—		$	15,740
Common stock issued for related party debt	$	45,098		$	—		$	45,098

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

FREEDOM PETROLEUM, INC.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

January 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 is in the exploration stage as defined under Accounting Standards Codification (“ASC 915”) and it intends to engage in the exploration and development of oil and gas properties.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in U.S. dollars. The Company’s fiscal year end is July 31.

Basis of Accounting

The accompanying financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and are presented in U.S. dollars. The Company is currently an exploration stage enterprise. An exploration stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from. All losses accumulated since the inception of the business have been considered as part of its exploration stage activities.

Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

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 $200 and $1,674 of cash at January 31, 2014 and July 31, 2013, respectively.

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.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, accounts payable and accrued expenses, and amounts due to a related party. The carrying amounts of these financial instruments approximate fair value 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 and is still in the exploration stage. 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 of January 31, 2014, the Company had no capitalized oil and gas property costs.

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. There has been no stock-based compensation issued to employees.

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 of January 31, 2014.

Recent Accounting Pronouncements

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

NOTE 3 – DUE TO RELATED PARTIES

During the period, the current sole director and officer, who is also a majority shareholder, advanced the Company $45,098 for operating expenses, which was later forgiven in full for exchange of common shares. (See Note 5)

As of October 31, 2013 and July 31, 2013, the Company was obligated to former officers and a director, for non-interest bearing demand loans with balances of $13,824 and 5,824, respectively. During the quarter ended Jarnuary 31, 2014, $1,084 was repaid in cash and the remaing $12,740, was forgiven in full and recorded as contributed capital, when control of the Company changed on January 23, 2014.

NOTE 4 – OIL AND NATURAL GAS PROPERTIES

On July 23, 2012, the Company purchased a lease from an unrelated third party consisting of approximately 624 net acres in Lewis and Clark County, Montana for a total purchase price of $15,000. In addition, annual rental payments of $937 are due to the State of Montana starting June 1, 2014 through June 5, 2022. The Company has not incurred any exploration or development costs in connection with this lease and, therefore, recorded an impairment loss in the amount of $15,000 as of July 31, 2013.

Minimum annual rental payments total $8,434 for the nine-year term. The lease can be extended after June 5, 2022 so long as oil and gas in paying quantities are produced from the land. As of January 31, 2014, the Company still maintains the lease, although it is considering its leasing options and looking for new prospects.

NOTE 5 – CAPITAL STOCK

The authorized capital of the Company is 100,000,000 common shares with a par value of $0.0001 and 20,000,000 preferred shares with a par value of $0.0001.

During the period ended July 31, 2012, the Company issued 27,000,000 shares of common stock at a price of approximately $0.001 per share for total cash proceeds of $27,160.

During the year ended July 31, 2013, the Company issued 25,200,000 shares of common stock at a price of approximately $0.0015 per share for total cash proceeds of $37,800.

During the year ended July 31, 2013, a related party paid Company expenses in the amount of $3,000 which were later forgiven and recorded as contributed capital.

During the period ended January 31, 2014, realated parties forgave loans of $12,740 which was recorded as contributed capital.

As of January 31, 2014, the Comnpany 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.

There were 52,328,852 and 52,200,000 shares of common stock issued and outstanding as of January 31, 2014 and July 31, 2013, respectively. There were no shares of preferred stock issued and outstanding as of January 31, 2014 and July 31, 2013.

NOTE 6 – INCOME TAXES

For the period ended January 31, 2014, 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 $127,280 at January 31, 2014 and will expire beginning in the year 2032.

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

	2014			2013
Federal income tax benefit attributable to:
Current operations	$	15,386		$	2,917
Less: valuation allowance		(15,386	)		(2,917	)
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 January 31, 2014 and July 31, 2013:

	January 31, 2014			July 31, 2013
Deferred tax asset attributable to:
Net operating loss carryover	$	43,275		$	26,693
Less: valuation allowance		(43,275	)		(26,693	)
Net deferred tax asset	$	—		$	—

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards of $127,280 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. 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 of January 31, 2014.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The Company entered into an informal agreement to rent office space on a month-to-month basis with an unrelated party for $300/month to begin on January 1, 2013. The Company began sharing the office space with other tenants on June 1, 2013, also on a month-to-month basis. These tenants were subleasing the space from the Company for $300/month and for the period ended October 31, 2013, the Company recognized $900 of other income related to the three months of office sharing. During the three month period ended January 31, 2014, the agreement was cancelled and no additional revenue was recognized.

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.

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 working capital deficit and has incurred losses since inception resulting in an accumulated deficit of $127,280 as of January 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

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to January 31, 2014 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

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.

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, 2013. 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 sources 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 January 31, 2014, our company had $200 in cash on hand.

We have acquired 100%, subject to an overriding royalty of 3.3333% of 8/8ths of all the oil, gas and other hydrocarbons produced, saved and marketed, of a 624 net acre Bakken shale lease in Lewis and Clark County, Montana, known as the Bear River Prospect. The Bear River Prospect is specifically at Township 15 North, Range 4 West and is legally described as Section 32: Lots 1 through 8, E2.

On July 23, 2012 we entered into, and on August 2, 2012 we closed on a Lease Purchase Agreement with Summit West Oil, LLC pursuant to which we acquired the Bear River Prospect for $15,000. The lease is subject to a 3.3333% royalty owed to Summit West Oil, LLC, as well as a 16.67% royalty owed to the government of Montana over all oil and gas produced from the property.

The lease is for a ten year term with a commencement date of June 5, 2012. The ability to renew the lease is to be renegotiated before or upon termination if Freedom Petroleum Inc. should choose to renew the leasing rights. The lease is extended automatically upon the ignition of oil or gas production from the property.

Our plans for 2014 are to find new oil and gas exploration leases on which to begin exploration.

If we are unable to complete any phase of our exploration program because we do not have sufficient capital, we will 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.

We are currently dependent on our sole officer and director for providing the necessary capital to operate. As of January 31, 2014, our officers have advanced a total of $25,000.

Results of Operations

The following summary of our results of operations, for the three and six months ended January 31, 2014 and 2013, should be read in conjunction with our audited financial statements for the year ended July 31, 2013, 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 January 31, 2014 and July 31, 2013.

Balance Sheet Date	January 31, 2014		July 31, 2013

Cash	$	200	$	1,674
Total Assets	$	1,518	$	1,674
Total Liabilities	$	3,000	$	12,224
Stockholders’ Deficit	$	1,482	$	10,550

We have generated no revenues and have incurred $128,780 in operating expenses since June 13, 2012 (inception) through January 31, 2014.

For the Three and Six Months Ended January 31, 2014 Compared to the Three and Six Months Ended January 31, 2013

	Three Months Ended January 31,						Six Months Ended January 31,
	2013			2013			2014			2013

Operating revenues	$	-		$	-		$	-		$	-
Operating expenses:
General and administrative		22,028			5,223			23,445			8,578
Professional fees		23,225			-			26,225			-
Total Operating expenses		45,253			5,223			49,670			8,578
Operating loss		(45,253	)		(5,223	)		(49,670	)		(8,578	)
Other income		-			-			900			-
Provision for income tax		-			-			-			-
Net loss	$	(45,253	)	$	(5,223	)	$	(48,770	)	$	(8,578	)

Our operating expenses, for the three months ended January 31, 2014 increased $40,030 or 766% as compared to the same period in 2013. Expenses, all from professional, general and administrative fees, were $45,253 for the six months ended January 31, 2014 as compared to $5,223 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 $16,805 and $23,225, respectively.

Our operating expenses, for the six months ended January 31, 2014 increased $41,092 or 479% as compared to the same period in 2013. Expenses, all from professional, general and administrative fees, were $49,670 for the six months ended January 31, 2014 as compared to $8,578 for the same period in 2012. This increase was largely due to increased general and administrative fees and professional fees during the six month period in 2014 of $14,867 and $26,225, respectively.

The six month period ending January 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 three month period ending January 31, 2014, a majority shareholding in the Company was purchased by a new investor who sought to increase the focus of the Company's activity and operations. New offices, a new website, legal counsel and other apparatus to prepare the Company for expanding operations in 2014 were obtained, increasing operating expenditures. The three month period ending January 31, 2014 amplifies this contrast, due to the acquisition of the majority shareholding in the company, and the majority of the increases in the operating expenses that occurred within the three month period ending January 31, 2014.

Liquidity and Capital Resources

Working Capital

	January 31, 2014		July 31, 2013

Current Assets	$	1,518	$	1,674
Current Liabilities	$	3,000	$	12,224
Working Capital Deficiency	$	1,482	$	10,550

Cash Flows

	Six Months Ended January 31, 2014			Six Months Ended January 31, 2013

Cash Flows from (used in) Operating Activities	$	(53,488	)	$	(25,228	)
Cash Flows from (used in) Investing Activities	$	-		$	-
Cash Flows from (used in) Financing Activities	$	52,014		$	37,773
Net Increase (decrease) in Cash During Period	$	(1,474	)	$	12,545

Cash Flow from Operating Activities

During the six month period ended January 31, 2014, cash used in operating activities was $53,488 compared to cash used in operating activities of $25,228 during the period ended January 31, 2013. The increase in cash used in operating activities was attributed to a focussed program of developing the Company’s brand, facilities, and the commencement of a search for new prospects after the acquisition of a majority shareholding in the Company by the new officer and director.

Cash Flow from Investing Activities

During the six month period ended January 31, 2014 and 2013, our company did not use any cash for investing activities. From inception (June 13, 2012) through January 31, 2014 $15,000 was spent for acquisition of oil and gas properties.

Cash Flow from Financing Activities

During the six month period ended January 31, 2014, cash provided by financing activities was $52,014 compared to $37,773 for the same period in 2013. The increase in 2014 is attributatble to $$45,098 and $8,000 provided by an officer and a former officer of the Company, respectively. From inception (June 13, 2012) through January 31, 2014 cash flows from financing activities was $125,798, $64,960 from the issuance of common stock, $3,000 from a related party and $57,838 from Officers of the Company.

To meet our need for cash we raised $37,800 from the sale of 25,200,000 registered shares pursuant to our S-1 Registration Statement filed with the SEC, which became effective on December 7, 2012.

We received our initial funding of $27,160 through the sale of common stock to Thomas Hynes, who purchased 17,000,000 shares of common stock at $0.001 on July 30, 2012 for $17,000, and, 10,000,000 shares to Nina Bijedic on July 31, 2012 for a $10,000. During the year ended July 31, 2013, we issued 25,200,000 shares of common stock at $0.0015, and issued 128,852 shares of common stock in exchnage for debt owed to a related party debt, resulting in total shares issued and outstanding as of January 31, 2014 and July 31, 2013 of 52,328,852 and 52,200,000, respectively. From inception until the date of this filing, we have had limited operating activities. Our financial statements from inception (June 13, 2012) through the period ended January 31, 2014, reported no revenues and a net loss of $127,280.

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

As of January 31, 2014, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of January 31, 2014.

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

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended January 31, 2014, 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. Unless otherwise noted, all of the transactions listed below 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. 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.

On January 31, 2014, we issued 128,852 shares of our common stock at a price of approximately $0.35 per share for to cancel $45,098 in debt owed to our sole officer and director, who is also a majority stockholder.

Item 5. Other Information.

On March 14, 2014, we entered into an Employment Agreement with Mr. Anton Lin, to serve as our Chief Executive Officer, President and Chairman of our Board, effective as of March 1, 2014. Pursuant to the agreement, Mr. Lin shall serve in such roles on a year to year basis, unless earlier terminated pursuant to the terms in the agreement. Mr. Lin is entitled to a yearly base salary of $120,000, to be paid monthly; however, Mr. Lin has agreed to defer all such compensation, which shall accrue, until such time as the Company's cash position improves. Under the agreement, the Board may increase the base salary by 25% at each annual review of Mr. Lin's performance. Upon execution of the agreement, Mr. Lin shall recieve 500,000 shares of our common stock (the "Signing Shares"); on each year anniversary of the agreement, Mr. Lin shall receive an additional 1,000,000 shares of our common stock. The agreement does provide that Mr. Lin is entitled to certain severance compensation upon the termination of his agreement, other than for cause, due to disability or upon a change in control. The agreement also contains standard non-compete and confidentiality clauses.

Following receipt of the Signing Shares, Mr. Lin will own approximatley 27,628,852 shares of our common stock, which after issuance, will represent approximately 51% of our then issued and outstanding shares of common stock.

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

(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

32.1*		Rule 1350 Certification of Chief Financial Officer

101		Interactive Data File

101**		Interactive Data File (Form 10-Q for the quarter ended January 31, 2014 furnished in XBRL)
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		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: March 17 , 2014	/s/ Anton Lin
	Anton Lin
	President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Director
	(Principal Executive Officer and Financial and Accounting Officer)