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Tiger Oil & Energy, Inc. - Quarter Report: 2011 June (Form 10-Q)

tigeroil10q06302011.htm


 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
 
 
FORM 10-Q
 
(Mark One)
 
o      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2011
 
o      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from to
 
Commission file number 333-141875
 
TIGER OIL AND ENERGY, INC.
 
(Exact name of Registrant as specified in its charter)

NEVADA
20-5936198
   
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
 
 
7230 Indian Creek Ln., Ste 201
Las Vegas, NV 89149
(Address of principal executive offices)

 
(702) 839-4029
(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) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 checkmark 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
 

 
 

 

 
[  ]  Yes                                [X]           No (Not Required)
 
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.

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS
 
As of August 15, 2011, the Company had 52,728,159 issued and outstanding shares of its common stock.
 
 
PART I — FINANCIAL INFORMATION

The accompanying interim unaudited financial statements of Tiger Oil and Energy, Inc. (a Nevada corporation) are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's most recent annual financial statements for the year ended December 31, 2010 included in a 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on April 14, 2010. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying interim financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying interim financial statements for the six months ended June 30, 2011 are not necessarily indicative of the operating results that may be expected for the full year ending December 31, 2011.
 
 
 
 

 
 

TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)

Consolidated Financial Statements

December 31, 2010 and June 30, 2011
Contents
1
   
Consolidated Balance Sheets
2
   
Consolidated Statements of Operations
3
   
Consolidated Statements of Stockholders' Equity
4
   
Consolidated Statements of Cash Flows
5
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
11
 
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
12
   
Item 4T. Controls and Procedures
13
   
PART II — OTHER INFORMATION
13
   
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
13
   
Item 5.  Other Information
13
   
Item 6. Exhibits
15
 
 
 
1

 
 
 
TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Consolidated Balance Sheets
             
ASSETS
           
             
   
June 30,
   
December 31,
 
   
2011
   
2010
 
   
(Unaudited)
       
CURRENT ASSETS
           
Cash and cash equivalents
  $ 50     $ 14,352  
Prepaid expenses
    -       400  
                 
Total Current Assets
    50       14,752  
                 
OTHER ASSETS
               
Oil and gas properties, including $81,000 of
               
unproved property costs using the successful
               
efforts method of accounting
    395,997       314,997  
                 
Total Other Assets
    395,997       314,997  
                 
TOTAL ASSETS
  $ 396,047     $ 329,749  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable and accrued expenses
  $ 17,065     $ 4,103  
Related-party payables
    56,664       19,064  
Note payable
    15,240       15,240  
Derivative liability
    9,354       11,911  
                 
Total Current Liabilities
    98,323       50,318  
                 
LONG-TERM LIABILITIES
               
Asset retirement obligation
    6,145       5,878  
                 
Total Long-Term Liabilities
    6,145       5,878  
                 
TOTAL LIABILITIES
    104,468       56,196  
                 
STOCKHOLDERS' EQUITY
               
Preferred stock - 1,000,000 shares authorized, $0.001 par value;
               
42,013 issued and outstanding
    42       42  
Common stock - 74,000,000 shares authorized, $0.001 par value;
               
52,728,159 and 52,478,159 issued and outstanding, respectively
    52,728       52,478  
Additional paid-in capital
    4,212,139       4,167,389  
Deficit accumulated incurred prior to the exploration stage
    (524,202 )     (524,202 )
Deficit accumulated during the exploration stage
    (3,449,128 )     (3,422,154 )
                 
Total Stockholders' Equity
    291,579       273,553  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 396,047     $ 329,749  
                 
The accompanying notes are an integral part of these financial statements.
 

 
2

 
 
 
TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Consolidated Statements of Operations
(Unaudited)
                               
                           
From Inception
 
                           
on April 30,
 
   
For the Three Months Ended
   
For the Six Months Ended
   
2009 through
 
   
June 30,
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
   
2011
 
                               
REVENUES
  $ -     $ -     $ -     $ -     $ -  
                                         
OPERATING EXPENSES
                                       
                                         
Accretion expense
    -       -       267       -       267  
Amortization of deferred tax benefit
    -       -       -       -       170,800  
Impairment of intangible assets
    -       -       -       -       650,136  
Management fees
    -       -       -       -       1,109,933  
General and administrative
    10,271       39,438       28,814       99,592       238,409  
                                         
Total Operating Expenses
    10,271       39,438       29,081       99,592       2,169,545  
                                         
LOSS FROM OPERATIONS
    (10,271 )     (39,438 )     (29,081 )     (99,592 )     (2,169,545 )
                                         
OTHER  INCOME (EXPENSE)
                                       
                                         
Interest expense
    (225 )     (109 )     (450 )     (109 )     (811 )
Gain on forgiveness of debt
    -       -       -       -       111,674  
Other income
    -       -       -       -       40,000  
Gain (loss) on derivative liability
    7,496       -       2,557       -       (9,354 )
                                         
Total Other Expense
    7,271       (109 )     2,107       (109 )     141,509  
                                         
LOSS BEFORE TAXES
    (3,000 )     (39,547 )     (26,974 )     (99,701 )     (2,028,036 )
                                         
Provision for income taxes
    -       -       -       -       -  
                                         
NET LOSS FROM CONTINUING OPERATIONS
    (3,000 )     (39,547 )     (26,974 )     (99,701 )     (2,028,036 )
                                         
Net income from discontinued operations
    -       -       -       -       309,650  
Loss on disposal of discontinued operations
    -       -       -       -       (1,730,742 )
                                         
Loss from Discontinued Operations,
                                       
  Net of Income Taxes
    -       -       -       -       (1,421,092 )
                                         
NET LOSS
  $ (3,000 )   $ (39,547 )   $ (26,974 )   $ (99,701 )   $ (3,449,128 )
                                         
BASIC LOSS PER SHARE
                                       
FROM CONTINUING OPERATIONS
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
BASIC LOSS PER SHARE
                                       
 FROM DISCONTINUED OPERATIONS
  $ 0.00     $ 0.00     $ 0.00     $ 0.00          
                                         
TOTAL BASIC LOSS PER SHARE
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
WEIGHTED AVERAGE NUMBER
                                       
  OF SHARES OUTSTANDING
    52,728,159       34,118,159       52,685,341       34,118,159          
                                         
                                         
The accompanying notes are a integral part of these financials statements.
 

 
3

 
 

TIGER OIL AND ENERGY, INC.
 
(Formerly UTEC, Inc.)
 
(An Exploration Stage Company)
 
Consolidated Statements of Stockholders' Equity (Deficit)
 
                                           
                                 
Deficit
       
                           
Additional
   
Accumulated
       
   
Preferred Stock
   
Common Stock
   
Paid-In
   
During the
       
   
Shares
 
Amount
   
Shares
   
Amount
   
Capital
   
Exploration Stage
   
Total
 
                                           
Balance, December 31, 2006
    22,013     $ 22       25,917,159     $ 25,917     $ -     $ (33,951 )   $ (8,012 )
                                                         
Common stock issued for acquisition
                                                 
at $0.08 per share
    -       -       22,500,000       22,500       1,879,439       -       1,901,939  
                                                         
Common shares issued for finders
                                                 
fee at $0.001 per share
    -       -       2,525,000       2,525       -       -       2,525  
                                                         
Preferred shares issued for acquisition
                                                 
at $0.001 per share
    20,000       20       -       -       -       -       20  
                                                         
Common stock issued pursuant to employment
                                         
stock grants at $0.06 per share
    -       -       1,914,000       1,914       105,487       -       107,401  
                                                         
Common shares issued for intangible assets
                                         
at $0.08 per share
    -       -       850,000       850       70,750       -       71,600  
                                                         
Common shares issued for services
                                                 
at $0.45 per share
    -       -       50,000       50       22,450       -       22,500  
                                                         
Capital contribution by shareholder
    -       -       -       -       38,250       -       38,250  
                                                         
Net loss for the year ended
                                                       
  December 31, 2007
    -       -       -       -       -       (285,341 )     (285,341 )
                                                         
Balance, December 31, 2007
    42,013     $ 42       53,756,159     $ 53,756     $ 2,116,376     $ (319,292 )   $ 1,850,882  
                                                         
Cancelled share issued pursuant to
                                                 
employee stock grants
    -       -       (1,898,000 )     (1,898 )     (105,485 )     -       (107,383 )
                                                         
Common stock issued for cash
                                                       
at $0.38 per share
    -       -       110,000       110       41,874       -       41,984  
                                                         
Option expense pursuant to employee
                                                 
option plan
    -       -       -       -       96,750       -       96,750  
                                                         
Net loss for the year ended
                                                       
  December 31, 2008
    -       -       -       -       -       (204,910 )     (204,910 )
                                                         
Balance, December 31, 2008
    42,013       42       51,968,159       51,968       2,149,515       (524,202 )     1,677,323  
                                                         
Option expense pursuant to employee
                                                 
option plan
    -       -       -       -       401,250       -       401,250  
                                                         
Operational segment sold in exchange
                                                 
for common stock
    -       -       (22,500,000 )     (22,500 )     22,500       -       -  
                                                         
Common stock issued for purchase
                                                 
of subsidiary at $0.01 per share
    -       -       4,050,000       4,050       36,450       -       40,500  
                                                         
Common stock issued for cash
                                                       
at $0.05 per share
    -       -       600,000       600       29,400       -       30,000  
                                                         
Net loss for the year ended
                                                       
December 31, 2009
    -       -       -       -       -       (2,442,684 )     (2,442,684 )
                                                         
Balance, December 31, 2009
    42,013       42       34,118,159       34,118       2,639,115       (2,966,886 )     (293,611 )
                                                         
Common stock issued for services
                                                 
  at $0.05 per share in October 2010
    -       -       8,000,000       8,000       392,000       -       400,000  
                                                         
Common stock issued in acquisition of
                                                 
  Jett Rink subsidiary
    -       -       10,000,000       10,000       500,000       -       510,000  
                                                         
Common stock issued for services at
                                                 
  $0.16 pere share on December 30, 2010
    -       -       360,000       360       57,240       -       57,600  
                                                         
Contributed capital
    -       -       -       -       579,034       -       579,034  
                                                         
Net loss for the year ended
                                                       
December 31, 2010
    -       -       -       -       -       (979,470 )     (979,470 )
                                                         
Balance, December 31, 2010
    42,013       42       52,478,159       52,478       4,167,389       (3,946,356 )     273,553  
                                                         
Common stock issued for oil and gas leases
                                               
  at $0.18 per share (unaudited)
    -       -       250,000       250       44,750       -       45,000  
                                                         
Net loss for the six months ended
                                                 
  June 30, 2011 (unaudited)
    -       -       -       -       -       (26,974 )     (26,974 )
                                                         
Balance, June 30, 2011 (unaudited)
    42,013     $ 42       52,728,159     $ 52,728     $ 4,212,139     $ (3,973,330 )   $ 291,579  
                                                         
                                                         
                                                         
                                                         
The accompanying notes are an integral part of these financial statements.
 
 
                                                       
 

 
4

 


TIGER OIL AND ENERGY, INC.
 
(Formerly UTEC, Inc.)
 
(An Exploration Stage Company)
 
Consolidated Statements of Cash Flows
 
(Unaudited)
 
                   
               
From Inception
 
               
on April 30,
 
   
For the Six Months Ended
   
2009 through
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
 
OPERATING ACTIVITIES
                 
                   
Net loss
  $ (26,974 )   $ (99,701 )   $ (3,449,128 )
Adjustments to Reconcile Net Loss to Net
                       
Cash Used by Operating Activities:
                       
Depreciation expense
    -       3,740       726  
Accretion expense
    267       -       267  
Impairment of goodwill
    -       -       528,894  
Change in deriative liability
    (2,557 )     -       9,354  
Amortization of intangibles
    -       -       2,803  
Employee option grants issued
    -       -       46,500  
Cancellation of employee stock option shares
    -       -       354,750  
Impairment of intangible assets
    -       -       121,242  
Common stock issued for services
    -       -       457,600  
Gain on settlement of debt
    -       -       (111,457 )
Deferred tax asset
    -       -       170,800  
Changes in operating assets and liabilities:
                       
Increase in prepaid expenses
    400       -       -  
Related party payables
    2,600       19,131       (33,822 )
Accounts payable and accrued liabilities
    12,962       70,915       312,628  
Accrued salaries
    -       -       83,333  
                         
Net Cash Used in Continuing Operating Activities
    (13,302 )     (5,915 )     (1,505,510 )
Net Cash Provided by Discontinued Operating Activities
    -       -       1,678,016  
Net Cash Provided by (Used in) Operating Activities
    (13,302 )     (5,915 )     172,506  
                         
INVESTING ACTIVITIES
                       
                         
Purchase of property and equipment
    -       (3,326 )     (216,556 )
Purchase of oil and gas properties
    (1,000 )     -       (1,000 )
                         
Net Cash Used in Continuing Investing Activities
    (1,000 )     (3,326 )     (217,556 )
Net Cash Used in Discontinued Investing Activities
    -       -       -  
Net Cash Used in Investing Activities
    (1,000 )     (3,326 )     (217,556 )
                         
FINANCING ACTIVITIES
                       
                         
Proceeds from note payable
    -       -       15,000  
Proceeds from the sale of common stock
    -       -       30,000  
                         
Net Cash Provided by Continuing Financing Activities
    -       -       45,000  
Net Cash Used in Discontinued Financing Activities
    -       -       -  
Net Cash Provided by Financing Activities
    -       -       45,000  
                         
NET INCREASE (DECREASE) IN CASH
  $ (14,302 )   $ (9,241 )   $ (50 )
CASH AT BEGINNING OF PERIOD
    14,352       9,453       100  
                         
CASH AT END OF PERIOD
  $ 50     $ 212     $ 50  
 

 
5

 
 
 
TIGER OIL AND ENERGY, INC.
 
(Formerly UTEC, Inc.)
 
(An Exploration Stage Company)
 
Consolidated Statements of Cash Flows
 
(Unaudited)
 
                   
             
From Inception
 
             
on April 30,
 
 
For the Six Months Ended
 
2009 through
 
 
June 30,
       
June 30,
 
 
2011
 
2010
 
2011
 
   
 
             
SUPPLEMENTAL DISCLOSURES OF
                 
CASH FLOW INFORMATION
                 
                   
CASH PAID FOR:
                 
Income taxes
  $ -     $ -     $ -  
Interest
    -       -       -  
                         
NON CASH FINANCING ACTIVITIES:
                       
Common stock issued in purchases of subsidiaries
  $ -     $ -     $ 550,500  
Common stock cancelled
    -       -       20,500  
Contributed capital from forgiveness of a related-party debt
    -       498,432       579,034  
Common stock and note issued to related party
                       
   for acquisition of unproved oil and gas leases
    80,000       -       80,000  
 

 
6

 

 
TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2011 and December 31, 2010
­­­
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2011, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2010 audited financial statements.  The results of operations for the period ended June 30, 2011 and 2010 are not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.


 
7

 

 
TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2011 and December 31, 2010

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and Cash Equivalents
Cash and cash equivalents include cash in banks and financial instruments which mature within three months of the date of purchase.

Fair Value of Financial Instruments
As at June 30, 2011, the fair value of cash, accounts receivable, accounts payable and notes payable approximate carrying values because of the short-term maturity of these instruments.

Oil and Gas Properties
The Company uses the successful efforts method of accounting for oil and gas operations.  Under this method of accounting, costs to acquire mineral interests in oil and gas properties, to drill and equip development wells, and to drill and equip exploratory wells that find proved reserves are capitalized.  Depletion and depreciation of capitalized costs for producing oil and gas properties is calculated using the unit-of-production method based on estimates of proved producing oil and gas reserves on a field-by-field basis.  Depletion and depreciation expense for the Company’s oil and gas properties was $-0- for the six months ended June 30, 2011.
 
The costs of unproved leaseholds and mineral interests are capitalized pending the results of exploration efforts.  In addition, unproved leasehold costs are assessed periodically, on a property-by-property basis, and a loss is recognized to the extent, if any, the property has been impaired.  This impairment will generally be based on geophysical or geologic data.  For the six months ended June 30, 2011, there was no impairment of unproved leaseholds.  Due to the perpetual nature of the Company’s ownership of the mineral interests, the drilling of a well, whether successful or unsuccessful, may not represent a complete test of all depths of interest.  Therefore, at the time that a well is drilled, only a portion of the costs allocated to the acreage drilled may be expensed.  As unproved leaseholds are determined to be productive, the related costs are transferred to proved leaseholds.  The costs associated with unproved leaseholds and mineral interests that have been allowed to expire are charged to exploration expense.
 
The Company evaluates impairment of its property and equipment in accordance with ASC Topic 360, “Long-Lived Assets”.  This standard requires that long-lived assets that are held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  When it is determined that an asset’s estimated future net cash flows will not be sufficient to recover its carrying amount, an impairment charge must be recorded to reduce the carrying amount of the asset to its estimated fair value.  Fair value is determined by reference to the present value of estimated future cash flows of such properties.  During the six months ended June 30, 2011 there was no impairment of the Company’s long-lived assets.

The fair value of an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The present value of the estimated asset retirement costs is capitalized as part of the carrying amount of the long-lived asset. For the Company, asset retirement obligations (“ARO”) relate to the plugging and abandonment of drilled oil and gas properties. The amounts recognized are based upon numerous estimates including future retirement costs; future recoverable reserve quantities and reserve lives; and the credit-adjusted risk-free interest rate.

Exploration costs, including exploratory dry holes, annual delay rental and geological and geophysical costs are charged to expense when incurred.


 
8

 

 
TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2011 and December 31, 2010

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Oil and Gas Properties (Continued)

Ceiling test

In applying the full cost method, the Company performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of property and equipment is compared to the value of its proved reserves discounted at a ten percent interest rate of future net revenues, based on current economic and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties.

Revenue Recognition

Revenues from the sale of oil and natural gas are recognized when the product is delivered at a fixed or determinable price, title has transferred, and collectability is reasonably assured and evidenced by a contract.  For oil sales, this occurs when the customer takes delivery of oil from the operators’ storage tanks.

The Company follows the “sales method” of accounting for oil and natural gas revenue, so it recognizes revenue on all natural gas or crude oil sold to purchasers, regardless of whether the sales are proportionate to its ownership in the property.  A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than its share of the expected remaining proved reserves.  

NOTE 4 – NOTES PAYABLE

On September 20, 2010 the Company borrowed a total of $15,000 from an unrelated third-party entity. The note bears interest at a rate of six percent per annum and is convertible at the option of the lender into common shares of the Company at the average bid quote for a period of five days prior to conversion.  The note has no formal payment terms or due date, other than being due one demand.  Due to the unknown quantity of shares to be issued pursuant to the future conversion of the note, the Company recorded a derivative liability in the amount of $9,354 relating to the conversion feature of the note, and a related loss on derivative liability in the same amount.

ASC 815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value as an other income or expense item.  The Company’s only liability measured at fair value on a recurring basis is its derivative liability associated with the above convertible note.  At June 30, 2011, the Company revalued the derivative liability and determined that, during the six months ended June 30, 2011, the Company’s derivative liability decreased by $2,557 from $11,911 to $9,354.  The Company recognized a corresponding gain on derivative liability in conjunction with this revaluation.

On February 1, 2011, the Company issued a note to a related party in exchange for $35,000 payment toward the purchase of certain oil leases in Kansas.  The note is non-interest bearing and due on January 31, 2012 (see Note 5 below).

 
 
9

 

 
TIGER OIL AND ENERGY, INC.
(Formerly UTEC, Inc.)
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2011 and December 31, 2010

NOTE 5 – OIL AND GAS PROPERTIES

On February 1, 2011, the Company entered into an agreement with a related party to purchase a 100 percent interest in three oil and mineral leases in Cowley, County, Kansas.  As consideration for the purchase, the Company issued a non-interest bearing note for $35,000, and 250,000 shares of its common stock valued at the market rate of $0.18 per share.  The total consideration paid for the leases was $80,000.  The property is being accounted for under the successful efforts method of accounting.

On April 1, 2011, the Company acquired a 100 percent working interest and an 80 percent net revenue interest in two oil and gas wells located in Ness County, Kansas. The Company acquired interests in two oil wells located on approximately 240 leased acres.  The wells had been shut down in previous years and are not producing as of the date of this report.  The effective date of the purchase and sale was April 1, 2010. The purchase price paid for the Acquisition was $1,000 at auction and the properties carry a $2,109 aggregate annual surface lease agreement payment.  The property is being accounted for under the successful efforts method of accounting.

NOTE 6 – COMMON STOCK

On February 1, 2011, the Company issued 250,000 common shares as part of a lease purchase agreement. (See Note 5 above)  The shares were valued at $0.18 per share based upon the closing share price on the date of issuance, resulting in an aggregate share value of $45,000.

NOTE 7 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and there are no material subsequent events to report.

 
 
10

 


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

On October 1, 2009 the Company purchased 100% of the outstanding shares of C2R Energy Commodities Inc for the issuance of 4,050,000 of the Company’s $0.001 par value common shares. These unregistered shares were issued under section 4(2) of the Securities Act of 1933 as they were transactions by an issuer not involving any public offering.
 
On July 29, 2010, UTEC, Inc., a Nevada corporation (the “Company”), entered into an Exchange Agreement (the “Exchange Agreement”) with Jett Rink Oil, LLC, a Kansas limited liability company (“Jett Rink”) and Bill Herndon, the sole member of Jett Rink, pursuant to which the Company agreed to acquire from Bill Herndon all of the membership interest in Jett Rink in exchange for approximately 10,000,000 shares of the Company’s Common Stock.  Jett Rink is involved in the business relating to the exploration, development and production of oil and gas in the United States.

The Exchange Agreement contained customary representations, warranties, and conditions to closing. The closing of the Exchange Agreement was subject to the satisfaction of certain pre-closing conditions, including (i) changing the name of the Company to “Tiger Oil and Energy, Inc.,” (ii) the cancellation of all of the 4,650,000 outstanding options that have been granted to the Company’s key employees, consultants, officers and directors pursuant to the Company’s non-qualified stock option plan, and (iii) completion of audited financial statements of Jett Rink, among others.  These closing conditions were satisfied and the Exchange Agreement was consummated on October 29, 2010.  Accordingly, the Company changed its corporate name to Tiger Oil and Energy, Inc.
 
On October 27th, 2010 Tiger Oil and Energy, Inc. (TGRO) entered into a co-development agreement with Black Hawk Exploration, in which the Company, after an investment of $400,000 by TGRO in a new well in Black Hawk's Cowley County lease, the Company will earn a 40% working interest in the # 1 Baker well, BHWX will receive a 50% interest in the new well and TGRO will have the right to participate in the 9 well rework program at the Cowley Prospect. BHWX will receive a 20% interest in any other new well TGRO drills on Black Hawk's current or future Cowley County, Kansas leases and Black Hawk has the option to invest in each additional new well drilled by TGRO on a prorated basis up to an additional 30%.
 
On November 29th the Company expanded its original agreement and entered into a joint venture agreement with Black Hawk Exploration covering approximately 2,553 acres of oil and gas leases in Cowley County, Kansas. BHWX owns 100% of the leases within the Prospect Area and has an undivided 81.5% working interest in and to the oil and gas leases and their previous 10 shut-in oil and gas wells.
 
The joint agreement includes in one shut-in oil/gas well, the #1 Baker, located on the Keith Baker lease. Also subject to joint development is a 100% interest in 9 other oil wells previously shut-in. The Company’s program calls for re-working all 10 locations directly or in joint venture with Black Hawk and returning all of them to cash flow production
 
On Feb. 4th, 2011, Tiger Oil and Energy, Inc. retained International IR Inc. (IRR) to provide media services. IIR is a strategic consulting firm that works primarily with emerging growth companies in the resource sector. IIR will focus on providing multiple information platforms to share TGRO's negotiate on behalf of the Company acquisition, exploration and joint venture strategies. 
 
 
 
11

 
 
 
On February 9th, 2011, - Tiger Oil and Energy, acquired a 100% interest in three Oil and Gas leases totaling 400 acres in Southern Kansas, comprised of three historically productive properties. Tiger's Geologist has reviewed the Holman #2, #3, #4, and #5; the Adams #1 and the Glasse wells commonly known as the Wise #1 and Roberts #1 and have recommended a 7 well exploration and production study. All the leases acquired by the parties covering lands within the prospect area are owned 100% by TGRO with an undivided eighty-one and one-half percent (81.5%) working interest in the oil and gas leases described. The Company issued a Note and 250,000 shares of its common stock in the acquisition. These shares had not been issued at the date of this report.
 
On April 1, 2011, we purchased, at auction, two shut-in oil wells located in Ness County KS, for cash.

For the Three Months Ended June 30, 2011 and 2010

Revenues

Revenues from continuing operations for the three-month periods ended June 30, 2011 and 2010 were zero.  The Company divested all assets that generated revenue in the second quarter of 2009 as part of the sale of the legacy business.  These operations are classified as discontinued in the Company’s financial statements.

Expenses

Expenses from continuing operations for the three month periods ended June 30, 2011 and 2010 were $10,271 and $39,438, respectively.  Additionally, the Company recognized a gain on derivative liability in the amount of $7,946 during the three months ended June 30, 2011 and interest expense in the amount of $225 and $109 during the six months ended June 30, 2010 and 2009, respectively.

For the Six Months Ended June 30, 2011 and 2010

Revenues

Revenues from continuing operations for the six-month periods ended June 30, 2011 and 2010 were zero.  The Company divested all assets that generated revenue in the second quarter of 2009 as part of the sale of the legacy business.  These operations are classified as discontinued in the Company’s financial statements.

Expenses

Expenses from continuing operations for the six month periods ended June30, 2011 and 2010 were $29,081 and $99,592, respectively.  Additionally, the Company recognized a gain on derivative liability in the amount of $2,557 during the six months ended June 30, 2011 and interest expense in the amount of $450 and $109 during the six months ended June 30, 2010 and 2009, respectively.
 
Liquidity and Capital Resources

As of June 30, 2011, the company had $50 cash on hand.  In April 2009, the Company sold its commercial explosives development, analysis, testing and manufacturing business (“Legacy Business”) in a non-cash transaction to a related party in exchange for stock in the Company totaling 22,500,000 shares.  The stock was cancelled in July of 2009.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.
 
 
 
12

 

 
Item 4T. Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to Tiger Oil and Energy management as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2011, due primarily to a lack of segregation of duties.

Changes in internal controls over financial reporting
 
There was no change in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
 
PART II — OTHER INFORMATION

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

On October 1, 2009 the Company purchased 100% of the outstanding shares of C2R Energy Commodities Inc for the issuance of 4,050,000 of the Company’s $0.001 par value common shares. These unregistered shares were issued under section 4(2) of the Securities Act of 1933 as they were transactions by an issuer not involving any public offering.
 
On July 29, 2010, UTEC, Inc., a Nevada corporation (the “Company”), entered into an Exchange Agreement (the “Exchange Agreement”) with Jett Rink Oil, LLC, a Kansas limited liability company (“Jett Rink”) and Bill Herndon, the sole member of Jett Rink, pursuant to which the Company agreed to acquire from Bill Herndon all of the membership interest in Jett Rink in exchange for approximately 10,000,000 shares of the Company’s Common Stock.  Jett Rink is involved in the business relating to the exploration, development and production of oil and gas in the United States.

On December 13, 2010 the Company issued 600,000 shares of common stock to a private investor for cash consideration of $60,000

On January 04, 2011 the Company issued 8,000,000 shares of its common stock to officers of the Company for services provided.  The fair value of the shares was determined based on the market price of $0.16 per share on the date of issuance.  
 
On February 9th, 2011, - Tiger Oil and Energy, acquired a 100% interest in three Oil and Gas leases totaling 400 acres in Southern Kansas, comprised of three historically productive properties. The Company issued a Note and 250,000 shares of its common stock in the acquisition. The shares have not been issued at the date of this report.
 
Item 5.  Other Information

On May 21, 2010 the Board of Directors elected Kenneth B. Liebscher as President/CEO and Howard Bouch as Secretary /CFO.
 
 
 
13

 

 
On July 30, 2010, the Board of Directors of the Company appointed Bill Herndon and Paul Liebman to serve on the Board of Directors of the Company.
 
On February 3, 2011, Mr. Paul Liebman tendered his resignation from the Board of Directors.
 
On November 1, 2010 the Board of Directors appointed Ryan Kerr to serve on the Board of Directors of the Company.
 
Bill Herndon has over 20 years of experience in all phases of the oil and gas industry including capital investment and analysis, project management and structuring, acquisition and development of oil and gas wells, exploration and drilling and completion management.  His family has been in the oil and gas industry since the 1930’s, mainly operating in Oklahoma, Kansas and Texas.  Mr. Herndon is the sole member of Jett Rink Oil, LLC.  Since December 2005 Mr. Herndon has been the President and sole member of Tiger Oil and Gas, LLC.  In 1990 Mr. Herndon participated in the wildcat play called State Line Field in Kansas.  The field has produced over one million barrels of oil to date.  He has raised over $25 million since 2007 from hedge funds and industry partners for various production acquisitions, in-field drilling programs, and new oil and gas development projects.  Mr. Herndon has also managed the leasing of over 100,000 acres in the last two years for 12 different projects and conducted seismic programs for approximately 80,000 acres on these projects in addition to managing the initial drilling programs on these projects.  Mr. Herndon successfully funded the acquisition of a field with industry groups and working interest partners that has produced out of multiple zones with total cumulative production of 3,500,00 barrels of oil and 40 billion cubic feet of gas.  The field is currently producing 40 barrels of oil per day and 300,000 mcf per day.  Mr. Herndon received a Bachelors Degree in Business from Wichita State University.  Mr. Herndon’s strong business skills and experience in the oil and gas industry will be of particular value to the Board of Directors.
 
Bill Herndon is the sole member of Jett Rink.  Mr. Herndon and Jett Rink are parties to the Exchange Agreement described in Item 1.01 above, pursuant to which at the closing of the Exchange Agreement Mr. Herndon will receive approximately 10,000,000 shares of the Company’s Common Stock.  There are no related party transactions between the Company and Mr. Kerr that are reportable under Item 404(a) of Regulation S-K.

Mr. Kerr currently manages Inland Oil Corp., his family-owned business. Mr. Kerr has over 15 years experience in locating, producing, completing and general operations in the oil and gas industry. Mr. Kerr has successfully drilled and completed hundreds of wells throughout the Mid-continent region and is actively involved with development and operations of fields in this region. Mr. Kerr’s extensive experience in oil and gas exploration and production is furthered as an exploration geologist where he has consulted on several water-flood and infill drilling projects throughout Oklahoma, Kansas, North Dakota, Wyoming, New Mexico, Texas, and California.  Currently, Mr. Kerr has been heading drilling programs for several operators in Oklahoma, as well as design and implementation of a Nitrogen gas flood in Wagoner County Oklahoma in the Stone Bluff Field.  This project consisted of flooding 1,200+ - acres with the producing interval from the Dutcher Sand zone at a depth of 1250’feet. Production since the start of the nitrogen injection flood has been increased from the formation at a rate of 1 MMCF per day.

Neither Mr. Herndon nor Mr. Kerr have previously held any positions with the Company.  Neither Mr. Herndon nor Mr. Kerr have any family relationships with any director or executive officer of the Company, or persons nominated or chosen by the Company to become directors or executive officers.  Neither Mr. Herndon nor Mr. Kerr have been named at the time of this Current Report, to any committee of the Board of Directors.

On July 29, 2010, UTEC, Inc., a Nevada corporation (the “Company”), entered into an Exchange Agreement (the “Exchange Agreement”) with Jett Rink Oil, LLC, a Kansas limited liability company (“Jett Rink”) and Bill Herndon, the sole member of Jett Rink, pursuant to which the Company agreed to acquire from Bill Herndon all of the membership interest in Jett Rink in exchange for approximately 10,000,000 shares of the Company’s Common Stock.  Jett Rink is involved in the business relating to the exploration, development and production of oil and gas in the United States.
 
 
 
14

 

 
The Exchange Agreement contained customary representations, warranties, and conditions to closing. The closing of the Exchange Agreement was subject to the satisfaction of certain pre-closing conditions, including (i) changing the name of the Company to “Tiger Oil and Energy, Inc.,” (ii) the cancellation of all of the 4,650,000 outstanding options that have been granted to the Company’s key employees, consultants, officers and directors pursuant to the Company’s non-qualified stock option plan, and (iii) completion of audited financial statements of Jett Rink, among others.  These closing conditions were satisfied and the Exchange Agreement was consummated on October 29, 2010.  Accordingly, the Company changed its corporate name to Tiger Oil and Energy, Inc.


Item 6. Exhibits
 
Exhibits:

     
Exhibit No.
Document
Location
31
Rule 13a-41(a)/15d-14(a) Certificates
Included
32
Section 1350 Certifications
Included


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.


TIGER OIL AND ENERGY, INC.



August 12, 2011


/s/ Kenneth B. Liebscher
 Kenneth B. Liebscher, Director & CEO
 

 
15