As filed with the Securities and Exchange Commission on January 28, 2014

 

Registration No. 333-

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

   

FORM S-1

 

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

   

TEXAS JACK OIL & GAS CORPORATION

(Exact Name of Small Business Issuer in its Charter)

 

     
Nevada 1382 46-2316220
(State or other Jurisdiction of Incorporation) (Primary Standard Classification Code) (IRS Employer Identification No.)

 

TEXAS JACK OIL & GAS CORPORATION

15 Belfort, Newport Coast, CA 92657

Phone: (949) 706-3628

(Address and Telephone Number of Registrant’s Principal

Executive Offices and Principal Place of Business)

 

Paracorp Incorporated

318 North Carson Street, Suite 208

Carson City, Nevada 89032

Phone: (775) 883-0104

(Name, Address and Telephone Number of Agent for Service)

 

Copies of communications to:

Leo Moriarty, Esq.

LAW OFFICE OF LEO J. MORIARTY

3020 Old Ranch Parkway, Suite 300

Seal Beach, CA 90740

Phone: (714) 305-5783

Fax: (714) 316-1306

E-Mail: ljmlegal@aol.com

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.        x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering.         o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.        o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.        o

 

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.       o

 

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 o Accelerated filer o
Non-accelerated filer o Smaller reporting company x

 

 

 
 

 

 

CALCULATION OF REGISTRATION FEE

 

         

Title of Each Class of Securities

to be Registered

Amount to be

Registered

Proposed Maximum

Aggregate Offering

Price per Security

Proposed Maximum

Aggregate

Offering Price

Amount of

Registration

Fee (3)

         
Common Stock, $0.001 par value (1) 8,400,000(5) $0.001(2) $8,400 $1.08
Common Stock, $0.001 par value (1) 5,000,000(6) $0.10(2) $500,000 $64.40
TOTAL 13,400,000(4) $65.48

 

(1) In accordance with Rule 416(a), the registrant is also registering hereunder an indeterminate number of shares that May be issued and resold resulting from stock splits, stock dividends or similar transactions.

 

(2) Estimated in accordance with Rule 457(o) of the Securities Act of 1933 solely for the purpose of computing the amount of the registration fee. The offering price has been arbitrarily determined by Texas Jack Oil & Gas Corporation and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they May be sold at this, or at any price.

 

(3) The registration fee for securities to be offered to the public is based on an estimate of the Proposed Maximum Aggregate Offering Price of the securities, and such estimate is solely for the purpose of calculating the registration fee pursuant to Rule 457(o).

 

(4) Represents shares of the registrant’s common stock being registered for resale that have been issued to the Selling Stockholders named in this registration statement (8,400,000) and proposed 5,000,000 shares to be sold in the future.

 

(5) This Registration Statement covers the resale by our selling shareholders of up to 8,400,000 shares of common stock previously issued to such selling shareholders.

 

(6) This Registration Statement covers the resale by future shareholders of up to 5,000,000 shares of common stock issued to future shareholders.

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT ALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.

 

 
 

 

The information in this preliminary prospectus is not complete and May be changed. These securities May not be sold until the registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

 

Subject to completion, dated January 28, 2014

 

TEXAS JACK OIL & GAS CORPORATION

 

8,400,000 SHARES OF COMMON STOCK (existing shareholders) AT $0.001 AND

5,000,000 SHARES OF COMMON STOCK AT $0.1 PER SHARE

 

 

Prior to this registration, there has been no public trading market for the common stock of Texas Jack Oil & Gas Corporation("Texas Jack", the "Company", "us", "we", "our") and it is not presently traded on any market or securities exchange. We are offering up to 5,000,000 shares of common stock for sale by us to the public and registering 8,400,000 shares of existing stock held by existing shareholders.

 

We are offering for sale a minimum of 2,000,000 and a maximum of 5,000,000 shares of common stock at a price of $0.10 per share (the "Offering"). The Offering is being conducted on a self-underwritten, best effort basis, which means our officer and director will attempt to sell the shares and we will not be able to spend any of the proceeds unless a minimum of 2,000,000 shares are sold. This Offering will continue for the earlier of: (i) 180 days after this registration statement becomes effective with the Securities and Exchange Commission, or (ii) the date on which all 5,000,000 shares registered hereunder have been sold. We may at our discretion extend the Offering for an additional 90 days. Proceeds from the sale of the shares will be used to fund the initial stages of our business development. There have been no arrangements to place the Offering funds in escrow. We intend to open a standard, non-interest bearing, bank account to be used only for the deposit of funds received from the sale of the shares in this Offering. When at least 2,000,000 shares of the Offering are sold and the Offering has expired the funds will be transferred to our business account for use in the implementation of our business plan. If the minimum number of shares are not sold by the expiration date of the Offering, the funds will be promptly returned to the investors (within 3 business days), without interest or deduction. However; since the funds will not be placed into an escrow account, any third party creditor who may obtain a judgment or lien against us could satisfy the judgment or lien by executing on the bank account where the Offering proceeds are being held, resulting in a loss of any investment you make in our securities.

 

There can be no assurance that all or any shares being offered in this Prospectus are going to be sold and that we will be able to raise any funds from this Offering.

 

Shares Offered by Company   Price to Public     Selling Agent Commissions   Proceeds to the Company  
Per Share   $ 0.10     Not applicable   $ 0.10  
Minimum  (2,000,000 shares)   $ 200,000     Not applicable   $ 200,000  
Maximum (5,000,000 shares)   $ 500,000     Not applicable   $ 500,000  

 

Neither the Securities and Exchange Commission nor any state regulatory authority has approved or disapproved of these securities, endorsed the merits of this Offering, or determined that this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

This prospectus relates to the resale of an aggregate of an additional 8,400,000 shares of common stock, par value $0.001, sold to ten investors pursuant to a 506 commencing in May and ending in January 2014 , see “the Selling Security Holders” under this prospectus. These securities will be offered for sale by the Selling Security Holder identified in this prospectus in accordance with the methods and terms described in the section of this prospectus entitled “Plan of Distribution."

 

 
 

 

We will not receive any of the proceeds from the sale of these 8,400,000 shares. We will pay all expenses, except for the brokerage expenses, fees, discounts and commissions, which will all be paid by the Selling Security Holders, incurred in connection with the offering described in this prospectus. Our common stock is more fully described in the section of this prospectus entitled “Description of Securities."

 

Our common stock is presently not traded on any market or securities exchange. The Selling Security Holders have not engaged any underwriter in connection with the sale of his shares of common stock. Common stock being registered in this registration statement may be sold by the Selling Security Holder at a fixed price of $0.10 per share. The selling shareholders will offer their securities at the fixed price for the duration of the offering, regardless of whether his shares are able to be quoted on the OTCBB during the offering period. We intend to apply to have our common stock quoted on the Over-the-Counter Bulletin Board (“OTCBB”). There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority ("FINRA") to facilitate such quotation, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares of the Selling Security Holder.

 

The President of the company Robert Schwarz is an “underwriter” within the meaning of the Securities Act of 1933, as amended with respect to all shares being offered hereby.

 

We are an “emerging growth company” under the Jumpstart Our Business Startups Act (“JOBS Act”) and are eligible for reduced public company reporting requirements.

 

We do not consider our self a blank check company. We have no plans or intentions to be acquired by or to merge with an operating company, nor do we, nor any of our shareholders, have plans to enter into a change of control or similar transaction or to change our management.

 

Our management consisting of Robert Schwarz has never been previously involved in the management or ownership of a development stage company that has not implemented fully its business plan, engaged in a change of control or similar transaction, or generated no or minimal revenues to date.

 

Texas Jack Oil & Gas Corporation is a development stage company and has a limited history of development stage operations. We presently do not have the funding to execute our business plan.  As of the date of this prospectus, we have generated nominal revenues ($1,575) from our development stage business operations.

 

AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. See "Risk Factors” beginning on page 9 for risks of an investment in the securities offered by this prospectus, which you should consider before you purchase any shares.

 

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

The Date of This Prospectus is:  _____________, 2014

 

 
 

 

This prospectus is not an offer to sell any securities other than the shares of common stock offered hereby. This prospectus is not an offer to sell securities in any circumstances in which such an offer is unlawful.

 

We have not authorized anyone, including any salesperson or broker, to give oral or written information about this offering, the Company, or the shares of common stock offered hereby that is different from the information included in this prospectus. You should not assume that the information in this prospectus, or any supplement to this prospectus, is accurate at any date other than the date indicated on the cover Schwarz of this prospectus or any supplement to it.

 

TABLE OF CONTENTS

 

PROSPECTUS SUMMARY 6
THE OFFERING 9
SUMMARY OF FINANCIAL INFORMATION 11
RISK FACTORS 13
(A) RISKS RELATED TO OUR BUSINESS 13
(B) RISKS RELATED TO THE OFFERING AND OUR SECURITIES 17
(C) RISKS RELATED TO THE INDUSTRY 20
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 22
USE OF PROCEEDS 23
DILUTION 23
DETERMINATION OF OFFERING PRICE 25
SELLING SECURITY HOLDERS 25
PLAN OF DISTRIBUTION 26
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS 31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 31
DESCRIPTION OF BUSINESS 31
LEGAL PROCEEDINGS 44
MANAGEMENT 45
REMUNERATION OF DIRECTORS AND OFFICER 47
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 48
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS 48
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 49
DESCRIPTION OF SECURITIES TO BE REGISTERED 50
INTEREST OF NAMED EXPERTS AND COUNSEL 51
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 51
AVAILABLE INFORMATION 51
REPORTS TO SECURITY HOLDER 51
FINANCIAL STATEMENTS F-1
PART II INFORMATION NOT REQUIRED IN PROSPECTUS II-1

 

 
 

 

PROSPECTUS SUMMARY

 

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Financial Statements, before making an investment decision. In this Prospectus, the terms “TEXAS JACK” “Company,” “we,” “us” and “our” refer to Texas Jack Oil & Gas Corporation.

 

Overview

We are an exploration stage company, as a for-profit company, and electing a fiscal year end of June 30.

 

We were incorporated in the State of Nevada on March 7, 2013, under the name of Texas Jack Oil & Gas Corporation.

 

Texas Jack Oil & Gas Corporation is a development stage company with a limited history of development stage operations.

 

Where You Can Find Us

 

Our principal executive office is located at Texas Jack Oil & Gas Corporation, 15 Belfort Newport Coast, California 92657.

 

Our telephone number is 949-706-3628. We maintain our statutory registered agent's office at Paracorp, Incorporated 318 North Carson Street, Suite 208 Carson City, Nevada 89032.

 

GENERAL INTRODUCTION

 

Texas Jack Oil & Gas Corporation is engaged in the exploration and development of oil and gas properties.

 

The company presently owns a 3% percent working lease interest in one well located in the Jack County, Texas. The operator of the wells is Southlake who is currently drilling and completing additional horizontal and vertical oil and gas wells in the Marble Falls formation in Jack and Young Counties, Texas. Southlake has leased 1,067 acres in Jack and Young Counties located approximately 90 miles west of Fort Worth, Texas. Southlake expects to drill a total of nine or ten horizontal wells with lateral lines of approximately 2,000 feet will be drilled using a multi-stage completion technique to maximize production from the wells; an additional four or five vertical wells will be drilled to the Marble Falls formation in order to exploit acreage not accessible through horizontal drilling. Southlake procured the leases on 1,067 contiguous acres beginning in October of 2010. The one well that Texas Jack owns a 3% interest in carry’s a 79.00% Net Revenue Interest or NRI, meaning the Working Interest Owners will receive 79% of the revenue produced from the wells with the Royalty Interest owners receiving the other 21% of the revenue. This property is described in "Description of Property" further in this Prospectus. Texas Jack has no further commitments with Southlake at this time to purchase any additional working interest.

 

The Company is reviewing a purchase of a 5% percent working interest located in Archer and Jack Counties, Texas for $100,000. The operator of the wells is 3 Ten Resources, Inc. The 3Ten #1 well, the 3Ten #2 well and the 3Ten #3 well are all situated on the Operator’s approximate 1,311 acre oil and gas lease located in Archer and Jack Counties, Texas approximately 3 miles West of Antelope, Texas. Each well in this three well package will be drilled as vertical wells to the Mississippian Formation, at an estimated depth of approximately 6,000’. The company has not entered into any formal agreements with 3 Ten Resources at this time.

 

Since our inception on March 7, 2013 through September 30, 2013 we have incurred cumulative losses of $67,156.

 

6
 

 

We issued 15,000,000 shares of common stock valued at $165,000 being original cost to the founder for interest in mine property through the issuance of common stock to our sole officer and director, Robert Schwarz, at $0.011 per share in May of 2013. From inception until the date of this filing we have had limited operating activities. Our financial statements from inception (March 7, 2013) through September 30, 2013 report $1,575 in revenue and a net loss of $67,156. Our independent auditor has issued an audit opinion for Texas Jack Oil & Gas Corporation which includes a statement expressing substantial doubt as to our ability to continue as a going concern.

 

We were incorporated to engage in the exploration and development of oil and gas properties. Our first 3% working interest is located on 1,067 acres in Jack and Young counties located approximately 90 miles west of Fort Worth, Texas. There are currently three additional operating oil wells on the property. This property is described in "Description of Property" further in this Prospectus.

 

We expect to continue to incur losses for at least the next 12 months. We do not expect to generate revenue that is sufficient to cover our expenses, and we do not have sufficient cash and cash equivalents to execute our plan of operations for at least the next twelve months. We will need to obtain additional financing, through equity security sales, debt instruments and private financing, to conduct our day-to-day operations, and to fully execute our business plan. We plan to raise the capital necessary to fund our business through the sale of equity securities, debt instruments or private financing. (See “Plan of Operation”)

 

Taking into account that our company is a new startup and is without an established income stream and/or profit & loss statement the estimated annual burn rate for the operating plan commencing January 1, 2014 is projected during the first fiscal year, without due consideration for adjustment is $50,000. This includes a three month burn, in cash, of $13,500 (at $4,500 per month) considering the Company encounters a bad quarter during its first year in business. In addition to the $50,000 needed for the operating plan the company will need approximately $10,000 for completing this registration.  Mr. Schwarz has agreed to fund the Company, through an oral agreement until such time as the Company raises $50,000 for the operating plan and $10,000 for registration expenses.  Mr. Schwarz, however, is under no legal obligation and/or duty to do so. Additionally, although there is an oral agreement between the Company and Mr. Schwarz to fund the Company until such time as the Company raises $50,000 for the operating plan and $10,000 for remaining registration expenses Mr. Schwarz has not agreed to fund any specific amount to the Company.

 

Our independent auditors have added an explanatory paragraph to their report of our audited financial statements for the period from March 7, 2013 (inception) to September 30, 2013, stating that our net loss of $67,156, lack of significant revenues and dependence on our ability to raise additional capital to continue our business, raise substantial doubt about our ability to continue as a going concern.  

 

Our financial statements and their explanatory notes included as part of this prospectus do not include any adjustments that might result from the outcome of this uncertainty. There is no guarantee that we will be able to raise funds through equity security sales, debt instruments, and private financing. Currently, we have no agreements in place to raise money through debt instruments or private financing. If we fail to obtain additional financing, either through an offering of our securities or by obtaining loans, we may be forced to cease our planned business operations altogether. Presently, other than Mr. Schwarz, no other sources of financing have been identified and it is unknown if any other sources will be identified. There is no assurance that the Company will be able to obtain any bank loans or private financing.

 

BUSINESS DEVELOPMENT

 

Mr. Schwarz will continue to review potential exploration and developments of oil and gas properties.

 

We intend to derive income from the sale of the oil and gas produced and sold on our present working interest.

 

Subsequent Business Strategy

 

Texas Jack Oil & Gas Corporation will continue reviewing potential oil and gas properties. The Company has only received nominal returns on the sale of oil and gas from the one well that the company has a working interest in. Texas Jack Oil & Gas Corporation is considered a development stage company because it has not commenced its major operations and has only recognized nominal revenues ($1,575) in connection with its business to date. As a result, we are a startup company, that is, we have no operating history or nominal revenue, and are at a competitive disadvantage.

 

7
 

 

We have no operating history and expect to incur losses for the foreseeable future. Should we continue to incur losses for a significant amount of time, the value of your investment in the common shares could be affected downward, and you could even lose your entire investment.

 

We have only received nominal returns from our development stage operations, nor have we otherwise engaged in any business operations. Texas Jack Oil & Gas Corporation is a development stage company and in the absence of revenues and operations as indicated in the Independent Auditor’s Report dated January 27, 2014, cites a going concern issue. The going concern statement opinion issued by the independent auditors is the result of a lack of operations and working capital.

 

The Company will need to raise capital which concerned the independent auditors because there is insufficient cash for operations for the next twelve months. We will have to seek other sources of capital through equity security sales, debt instruments and private financing.

 

We established the minimum amount of estimated annual burn rate for the operating plan commencing January 1, 2014 of $50,000 and an additional $10,000 to complete this registration. The Company will need to raise these funds through debt instruments such as bank loans or private financing so that operations could start, in order to generate some type of revenue. Presently no other sources have been identified and it is unknown if any other sources will be identified. There is no assurance that the Company will be able to obtain any bank loans or private financing.

 

Over the next twelve months, Texas Jack Oil & Gas Corporation plans to build out and establish its reputation and network in the exploration and development of oil and gas properties in Texas. The Company aims to form long term working relationships with developers and operators to locate the right properties to invest in.

 

Mrs. Robert Schwarz is the Chief Executive Officer, President, (Principal Executive Officer) and Director. Currently the Company has one employee; Robert Schwarz however as it grows, it plans to employ additional employees as needed.

 

DESCRIPTION OF PROPERTY

 

Our corporate office is located at 15 Belfort, Newport Coast, CA 92657. We currently are provided 500 square feet of office space from our President Robert Schwarz at no cost. There are currently no proposed programs for renovation, improvement or development of the facility currently in use. 

 

PRINCIPAL OPERATIONS OF THE COMPANY

 

Texas Jack Oil & Gas Corporation also referred to as “Texas Jack” and the “Company”, was incorporated in the State of Nevada on March 7, 2013. Texas Jack Oil & Gas Corporation is engaged in the exploration and development of oil and gas properties in Jack County Texas area at this time.

 

Texas Jack Oil & Gas Corporation is a development stage company with a limited history of development stage operations. We presently do not have the funding to execute our business plan.

 

Achievement of our business objective is basically dependent upon the judgment, skill and knowledge of our management. Mr. Schwarz is currently our sole executive officer and director. There can be no assurance that a suitable replacement could be found for any of our officers upon their retirement, resignation, inability to act on our behalf, or death.

 

8
 

 

RISK FACTORS

 

The Company's financial condition, business, operation and prospects involve a high degree of risk. You are urged to carefully read and consider the risks and uncertainties beginning on page 9 of this prospectus entitled Risk Factors as well as the other information in this report before deciding to invest in our Company. All known materials risks are discussed in the Risk Factors section of this prospectus. If any of the risks beginning on page 9 of this Prospectus entitled “Risk Factors” are realized, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means that our stockholders could lose all or a part of their investment.

 

 

THE OFFERING

 

We have 23,400,000 shares of common stock issued and outstanding. Through this offering we will register 8,400,000 shares held by existing shareholders and up to 5,000,000 shares of common stock for sale by us to the public. These shares represent additional common stock to be issued by us. We will endeavor to sell all 5,000,000 shares of common stock after this registration becomes effective. The price at which we offer these shares is fixed at $0.10 per share for the duration of the offering. We will receive all proceeds from the sale of the 5,000,000 common stock unless we are unable to sell the minimum of 2,000,000 shares. We will not receive any of the proceeds from the 8,400,000 shares held by existing shareholders.

 

 

Common stock offered by Selling Security Holders   8,400,000 shares of common stock. This number represents approximately 36% of our current outstanding common stock (1) .
     
Price paid by Selling Shareholders   $0.001
     
Securities Being Offered for future sale   A minimum of 2,000,000 and a maximum 5,000,000 of shares of common stock.
     
Offering price   $0.10
     
Offering period   The shares are offered for a period not to exceed 180 days, unless extended by our board of directors for an additional 90 days.
     
Common stock outstanding before the offering   23,400,000 shares of common stock as of January 27, 2014.
     
Common stock outstanding after the offering (if all 5,000,000 shares are hold)   28,400,000 shares of common stock.
     
Terms of the Offering   The present Selling Security Holders will determine when and how they will sell the common stock offered in this prospectus.
     
Termination of the Offering   The offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) such time as all of the common stock becomes eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act, or any other rule of similar effect
     
Use of proceeds, existing Security Holders   Texas Jack will not receive any of the proceeds of the offering from the existing Security Holders.  The Selling Security Holders will receive all of the proceeds.
     
Net Proceeds from 5,000,000 shares   $200,000 to $500,000 to fund the operating plan of the company
     
Risk Factors   The Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page 9.
     
(1)   Based on 23,400,000 shares of common stock outstanding as of January 27, 2014

 

9
 

 

This prospectus relates to the sale of up to 8,400,000 shares of our common stock by the selling shareholders identified in the section of this prospectus entitled "Selling Security Holders." The number of common shares offered by this prospectus represents up to approximately 36% of the total common stock outstanding before the offering.

 

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

The Company has no equity compensation plans and individual compensation arrangements and does not intend to enter into any equity compensation plans and individual compensation arrangements in the future.

 

Texas Jack Oil & Gas Corporation. Information regarding the Selling Security Holders (8,400,000 shares), the common shares being offered to sell under this prospectus, and the times and manner in which they may offer and sell those shares, is provided in the sections of this prospectus entitled "Selling Security Holders" and "Plan of Distribution." Texas Jack Oil & Gas Corporation will not receive any of the proceeds from the sale of the ten Security Holders 8,400,000 shares. The registration of common shares pursuant to this prospectus does not necessarily mean that any of those shares will ultimately be offered or sold by the Selling Security Holders.

 

10
 

 

SUMMARY OF FINANCIAL INFORMATION

 

The following table provides summary financial statement data as of the period from March 7, 2013 (Inception) through September 30, 2013. The financial statement data as of the period ended September 30, 2013 has been derived from our unaudited condensed financial statements. The results of operations for past accounting periods are not necessarily indicative of the results to be expected for any future accounting period. The data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our financial statements and the related notes included in this prospectus, and the statements and related notes included in this prospectus.

 

TEXAS JACK OIL & GAS CORPORATION

(a development stage company)

UNAUDITED CONDENSED STATEMENT OF OPERATIONS

 

    For three months ended September 30, 2013     For the Period from March 7, 2013 (date of inception) through September 30, 2013  
             
Revenue   $ 1,575     $ 1,575  
      1,575       1,575  
OPERATING EXPENSES:                
Selling, general and administrative expenses   $ 31,120       65,539  
Total operating expenses     (31,120 )     (65,539 )
                 
Loss from operations     (29,545 )     (63,964 )
                 
OTHER EXPENSE                
Interest expense     2,009       3,192  
Total other expenses     (2,009 )     (3,192 )
                 
Net loss before provision of income tax     (31,554 )     (67,156 )
Income taxes            
                 
Net loss   $ (31,554 )   $ (67,156 )
                 
Net income (loss) per common share, basic   $ (0.00 )        
                 
Weighted average number of common shares outstanding, basic and diluted     23,000,000          

 

The accompanying notes are an integral part of these unaudited condensed financial statements

11
 

 

EMERGING GROWTH COMPANY

 

We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups Act.

 

We shall continue to be deemed an emerging growth company until the earliest of:

 

a. the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

 

b. the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under this title;

 

c. the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

 

d. the date on which such issuer is deemed to be a `large accelerated filer', as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.

 

As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.

 

Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

 

As an emerging growth company we are exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

 

We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act.

 

SMALLER REPORTING COMPANY

 

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY - THE JOBS ACT

 

We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

 

 

* A requirement to have only two years of audited financial statements and only two years of related MD&A ;

 

* Exemption from the auditor attestation requirement in the assessment of the emerging growth company's internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;

 

* Reduced disclosure about the emerging growth company's executive compensation arrangements; and

 

* No non-binding advisory votes on executive compensation or golden parachute arrangements.

 

We may take advantage of the reduced reporting requirements applicable to smaller reporting companies even if we no longer qualify as an "emerging growth company."

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act.

 

We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

 

 

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RISK FACTORS

 

The shares of our common stock being offered for resale by the Selling Security Holder are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the common stock. Before purchasing any of the shares of common stock, you should carefully consider the following factors relating to our business and prospects. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, you May lose all or part of your investment. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock.

 

(A) RISKS RELATED TO OUR BUSINESS

 

WE HAVE RECEIVED AN OPINION OF GOING CONCERN FROM OUR AUDITORS. IF WE DO NOT RECEIVE ADDITIONAL FUNDING, WE WOULD HAVE TO CURTAIL OR CEASE DEVELOPMENT STAGE OPERATIONS. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.

 

Our independent auditors noted in their report accompanying our financial statements for the period ended September 30, 2013 that we have only generated nominal revenues ($1,574) since inception. As of September 30, 2013, we had a net loss of $67,156, and they further stated that the uncertainty related to these conditions raised substantial doubt about our ability to continue as a going concern. At September 30, 2013, our cash on hand was $2,436. We do not currently have sufficient capital resources to fund operations. To stay in business, we will need to raise additional capital through public or private sales of our securities, debt financing or short-term bank loans, or a combination of the foregoing.  As of the date of this prospectus, we have commenced business operations but have not yet generated any revenues.

 

We will need additional capital to fully implement our business, operating and development plans. However, additional funding from an alternate source or sources may not be available to us on favorable terms, if at all. To the extent that money is raised through the sale of our securities, the issuance of those securities could result in dilution to our existing security holder. If we raise money through debt financing or bank loans, we May be required to secure the financing with some or all of our business assets, which could be sold or retained by the creditor should we default in our payment obligations. If we fail to raise sufficient funds, we would have to curtail or cease operations.

 

 

THE COMPANY HAS A LIMITED DEVELOPMENT STAGE OPERATING HISTORY UPON WHICH TO BASE AN EVALUATION OF ITS BUSINESS AND PROSPECTS. WE MAY NOT BE SUCCESSFUL IN OUR EFFORTS TO GROW OUR BUSINESS AND TO EARN INCREASED REVENUES. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT .

 

We have a limited history from March 7, 2013 inception to January 27, 2014 of development stage operations and we may not be successful in our efforts to grow our business and to earn revenues. Our business and prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. As a result, management May be unable to adjust its spending in a timely manner to compensate for any unexpected revenue shortfall. An investment in our securities represents significant risk and you May lose all or part of your entire investment.

 

If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.

 

Our ability to achieve and maintain profitability and positive cash flows is dependent upon:

 

· Our ability to generate revenues
· Our ability to locate additional profitable oil and gas properties
· Attract, retain and motivate qualified personnel who can successfully assist us in implementing our business plan;
· Maintain current strategic relationships and develop new strategic relationships;
· Our ability to reduce operating costs
· Our ability to update our website

 

Based upon current plans, we expect to incur operating losses in future periods until revenues are sufficient to fund operations. Failure to generate enough revenues for us to become profitable may cause us to suspend or cease activities.

 

 

WE HAVE A HISTORY OF LOSSES. FUTURE LOSSES AND NEGATIVE CASH FLOW MAY LIMIT OR DELAY OUR ABILITY TO BECOME PROFITABLE. IT IS POSSIBLE THAT WE MAY NEVER ACHIEVE PROFITABILITY. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.

 

We have yet to establish profitable development stage operations or a history of profitable development stage operations. We anticipate that we will continue to incur substantial development stage operating losses for an indefinite period of time due to the significant costs associated with the development of our business.

 

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Since incorporation, we have expended financial resources on the development of our business. As a result, losses have been incurred since incorporation. Management expects to experience development stage operating losses and negative cash flow for the foreseeable future. Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners.

 

The Company’s ability to become profitable depends on its ability to acquire additional working interests in oil and gas. If the Company does achieve profitability, it cannot be certain that it would be able to sustain or increase profitability on a quarterly or annual basis in the future. An investment in our securities represents significant risk and you may lose all or part of your entire investment.

 

 

IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.

 

We will need to obtain additional financing in order to complete our business plan because we currently do not have any income. We do not have any arrangements for outside financing, other than with Mr. Schwarz and this offering, we may not be able to find such financing if required.

 

Mr. Schwarz has agreed to fund the Company, through an oral agreement, until such time as the Company raises $50,000 for the operating plan and $10,000 for registration expenses. Mr. Schwarz, however, is under no legal obligation and/or duty to do so. Additionally, although there is an oral agreement between the Company and Mr. Schwarz to fund the Company until such time as the Company raises $50,000 for the operating plan and $10,000 for registration expenses , Mr. Schwarz has not agreed to fund any specific amount to the Company.

 

Obtaining additional financing would be subject to a number of factors, including investor acceptance. These factors may adversely affect the timing, amount, terms, or conditions of any financing that we may obtain or make any additional financing unavailable to us. If we do not obtain additional financing our business will fail.

 

 

BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MAY HAVE TO LIMIT OUR ACQUISITION ACTIVITY WHICH MAY RESULT IN A LOSS OF YOUR INVESTMENT.

 

Because we are small and do not have much capital, we must limit our acquisition activity. As such we may not be able to lease as many properties as we would like. In that event, a profitable oil or gas reserve may go undiscovered. Without producing wells we cannot generate revenues and you will lose your investment.

 

However, it is estimated that the amount of additional costs and expenses associated with public company reporting requirements will be approximately $10,000. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.  

 

 

BECAUSE OF LACK OF CAPITAL OUR EXPLORATION ACTIVITIES WILL BE LIMITED.

 

Due to the fact we are small and do not have much capital, we must limit our exploration activities to a relatively small area. We intend to generate revenue through the one existing working interest. Because we will be limiting the scope of our exploration activities, we may not be able to generate timely or sufficient sales to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations. The Company’s financing requirements for next twelve month are the following.

 

· $10,000 toward marketing materials which include filers, broachers, direct marketing and mailing costs.
· $10,000 towards costs associated with public company reporting requirements
· $5,000 related to expenses associated with newly applicable corporate governance requirements.
· $15,000 for software and hardware to develop an internet site,
· $10,000 for program administration and working capital

 

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In addition to the estimated annual burn rate for the operating plan commencing January 1, 2014 of $50,000 we will need additional amount of approximately $10,000 for completing this registration.  

 

Our future capital requirements depend on many factors, including the following:

 

· the progress of our exploration,
· The progress in getting our web site completed and operational.

 

Although we have from time to time reviewed opportunities provided to us by investment bankers or potential investors in regard to additional equity financings, there can be no assurance that additional financing will be available when needed, or if available, will be available on acceptable terms. The Company also does not have any agreement in place with any investment bankers or potential investors to provide the Company with any financing. Insufficient funds may prevent us from implementing our business strategy and will require us to further delay, scale back or eliminate our exploration program, or to scale back or eliminate our other operations.

 

In order to obtain working capital we will continue to seek capital through debt or equity financing which may include the issuance of convertible debentures or convertible preferred stock whose rights and preferences are superior to those of the common stockholders.

 

 

BECAUSE OUR SOLE OFFICER AND DIRECTOR WILL ONLY BE DEVOTING LIMITED TIME TO OUR COMPANY, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF OPERATIONS. THIS ACTIVITY COULD PREVENT US FROM ATTRACTING NEW CUSTOMERS, AND OR BUSINESSES, AND RESULT IN A LACK OF REVENUES THAT MAY CAUSE US TO SUSPEND OR CEASE OPERATIONS.

 

At this time we have commenced business operations but have only generated nominal revenues. Our sole officer and director, Robert Schwarz, will only be devoting limited time to our operations. Mr. Schwarz will be devoting approximately 25 hours per week of his time to our operations. Because our sole officer and director will only be devoting limited time to our Company, our operations may be sporadic and occur at times which are convenient to her. As a result, operations may be periodically interrupted or suspended which could result in a lack of revenues and a possible cessation of operations.

 

 

OUR DEVELOPMENT STAGE OPERATING RESULTS WILL BE VOLATILE AND DIFFICULT TO PREDICT. IF THE COMPANY FAILS TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE SIGNIFICANTLY.

 

Management expects both quarterly and annual development stage operating results to fluctuate significantly in the future. Because our development stage operating results will be volatile and difficult to predict, in some future quarter our development stage operating results may fall below the expectations of securities analysts and investors. If this occurs, the trading price of our common stock May decline significantly. At this time we do not have a trading symbol and the shares of Texas Jack Oil & Gas Corporation are not traded on any market.

 

A number of factors will cause gross margins to fluctuate in future periods. Factors that may harm our business or cause our development stage operating results to fluctuate include the following: the inability to obtain new customers at reasonable cost; the ability of competitors to offer new or enhanced products; price competition; the failure to develop marketing relationships with key business partners; increases in our marketing and advertising costs; the amount and timing of development stage operating costs and capital expenditures relating to expansion of operations; a change to or changes to government regulations; a general economic slowdown. Any change in one or more of these factors could reduce our ability to earn and grow revenue in future periods.

 

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BECAUSE OUR MANAGEMENT DOES NOT HAVE PRIOR EXTENIVE EXPLORATION EXPERIENCE IN THE OIL AND GAS FIELD, WE MAY HAVE TO HIRE ADDITIONAL PERSONNEL.

 

Because our management does not have prior extensive experience in the oil and gas field, we may have to hire additional experienced personnel to assist us with our operations. If we need the additional experienced personnel and we cannot afford to hire them, we could fail in our plan of operations and have to suspend operations or cease operations entirely.

 

 

OUR CURRENT BUSINESS DEVELOPMENT STAGE OPERATIONS RELY HEAVILY UPON OUR KEY EMPLOYEE AND FOUNDER, MRS. ROBERT SCHWARZ.

 

We have been heavily dependent upon the expertise and management of Mrs. Robert Schwarz, our Chief Executive Officer and President, and our future performance will depend upon her continued services. The loss of the services of Mr. Schwarz’s services could seriously interrupt our business operations, and could have a very negative impact on our ability to fulfill our business plan and to carry out our existing development stage operations. The Company currently does not maintain key man life insurance on this individual. There can be no assurance that a suitable replacement could be found for her upon retirement, resignation, inability to act on our behalf, or death.

 

 

THE LIMITED PUBLIC COMPANY EXPERIENCE OF OUR SOLE OFFICER COULD ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES LAWS.

 

Our sole officer has limited public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. Our senior management has never had sole responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our sole officer management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.

 

 

NONE OF TEXAS JACK’S TECHNOLOGY OR BUSINESS MODEL PARTICULARS IS PROPRIETARY.

 

The hurdles to enter the exploration of oil and gas segment are low. The technology required to commence operations for any potential competitor are available from third party operators (providers) and the costs to support an exploration are not onerous. The business model, with few exceptions, is not new and can be readily adopted by those with a basic knowledge of the oil and gas industry and mid-level technology expertise.

 

 

THE OIL AND NATURAL GAS INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL BE SUCCESSFUL IN ACQUIRING LEASES.

 

The oil and natural gas industry is intensely competitive. Although we do not compete with other oil and gas companies for the sale of any oil and gas that we may produce, as there is sufficient demand in the world market for these products, we compete with numerous individuals and companies, including many major oil and natural gas companies which have substantially greater technical, financial and operational resources and staff. Accordingly, there is a high degree of competition for desirable oil and natural gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised or that any projected work will be completed.

 

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THERE CAN BE NO ASSURANCE THAT WE WILL DISCOVER OIL OR NATURAL GAS IN ANY COMMERCIAL QUANTITY ON OUR PROPERTIES.

 

Exploration for economic reserves of oil and natural gas is subject to a number of risks. There is competition for the acquisition of available oil and natural gas properties. Few properties that are explored are ultimately developed into producing oil and/or natural gas wells. If we cannot discover oil or natural gas in any commercial quantity thereon, our business will fail.

 

 

WE WILL BE RELIANT UPON AN OUTSIDE OPERATOR TO MONITOR THE DAY TO DAY OPERATION OF THE WELLS. IF THE OPERATOR FAILS TO CARRY OUT THE TERMS OF OUR AGREEMENT OR WE LOSE THE SERVICES OF THE OPERATOR OUR BUSINESS MAY FAIL.

 

The operating of our current well and monthly maintenance of the well will be carried out by an independent operator. We have an operating agreement in place, however; their failure to live up to the terms of the agreement or a cancellation of the agreement could have an adverse effect on production and future revenues, consequently our operations, earnings and ultimate financial success may suffer irreparable harm as a result.

 

 

(B) RISKS RELATED TO THE OFFERING AND OUR SECURITIES

 

WE MAY NEVER PAY ANY DIVIDENDS TO SHAREHOLDERS.

 

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.

 

 

OUR CONTROLLING SECURITY HOLDER MAY TAKE ACTIONS THAT CONFLICT WITH YOUR INTERESTS.

 

Mrs. Robert Schwarz, our Chief Executive Officer and sole director owns 64% of our capital stock with voting rights. Even if the entire offering is sold, Mr. Schwarz will continue to control a large amount of the company because he will hold 52% of the Company’s issued and outstanding common stock. In this case, Mr. Schwarz will be able to exercise his 52% control over all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions, and he will have significant control over our management and policies. The directors elected by our controlling security holder will be able to significantly influence decisions affecting our capital structure. This control may have the effect of delaying or preventing changes in control or changes in management, or limiting the ability of our other security holders to approve transactions that they may deem to be in their best interest. For example, our controlling security holder will be able to control the sale or other disposition of our operating businesses and subsidiaries to another entity. The interests of our Chief Executive Officer may differ from the interests of our other shareholders and thus may result in corporate decisions that are disadvantageous to our other shareholders.

 

 

OUR SOLE OFFICER AND DIRECTOR LIVES OUTSIDE OF JACK COUNTY, TEXAS, MAKING IT DIFFICULT TO OVERSEE THE WELLS.

 

Because our sole officer and director lives in Newport Coast, California, and our current wells are located in Jack County, Texas, there may be a higher risk that our business may fail.

 

17
 

 

The distance from where our sole officer and director lives and where the well operations are located, may create a detrimental situation due to lack of oversight. Though we have an operating agreement with an independent operator to monitor the well production, there is no assurance that it will be carried out properly without direct oversight by our officer and director. This could have an adverse effect on production and future revenues, consequently our operations, earnings and ultimate financial success may suffer irreparable harm as a result.

 

 

THE OFFERING PRICE OF THE (5,000,000) COMMON STOCK WAS ARBITRARILY DETERMINED, AND THEREFORE SHOULD NOT BE USED AS AN INDICATOR OF THE FUTURE MARKET PRICE OF THE SECURITIES. THEREFORE, THE OFFERING PRICE BEARS NO RELATIONSHIP TO OUR ACTUAL VALUE AND MAY MAKE OUR SHARES DIFFICULT TO SELL.

 

The initial fixed offering price of $0.10 per share of common stock offered by us under to this Prospectus was determined by us arbitrarily. The price is not based on our financial condition and prospects, market prices of similar securities of comparable publicly traded companies, certain financial and operating information of companies engaged in similar activities to ours, or general conditions of the securities market. The price may not be indicative of the market price, if any, for the common stock that may develop in the trading market after this offering. The market price for our common stock, if any, may decline below the initial public price at which the shares are offered. Moreover, recently the stock markets have experienced extreme price and volume fluctuations which have had a negative impact on smaller companies. In the past, securities class action litigation has often been instituted against various companies following periods of volatility in the market price of their securities. If instituted against us, regardless of the outcome, such litigation would result in substantial costs and a diversion of management's attention and resources, which would increase our operating expenses and affect our financial condition and business operations.

 

The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. The offering price bears no relationship to the book value; assets or earnings of our Company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities.

 

 

YOU MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND OUR PREFERRED STOCK.

 

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 700,000,000 shares of capital stock consisting of 60,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share.

 

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. Any such issuances will result in immediate dilution to our existing shareholder’s interests, which will negatively affect the value of your shares. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes.

 

18
 

 

OUR COMMON STOCK IS CONSIDERED PENNY STOCKS, WHICH MAY BE SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.

 

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the SEC that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.

 

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

 

 

CURRENTLY, THERE IS NO PUBLIC MARKET FOR OUR COMMON STOCK, AND THERE IS NO ASSURANCE THAT ANY PUBLIC MARKET WILL EVER DEVELOP OR THAT OUR COMMON STOCK WILL BE QUOTED FOR TRADING AND, EVEN IF QUOTED, THAT A VIABLE, LIQUID MARKET WITH LOW VOLATILITY WILL DEVELOP.

 

Currently, our common stock is not listed on any public market, exchange, or quotation system. Although we are taking steps to enable our common stock to be publicly traded, a market for our common stock may never develop. We currently plan to apply for quotation of our common stock on the OTCBB upon the effectiveness of the registration statement of which this Prospectus forms a part. However, our common stock may never be traded on the OTCBB or even if traded, a viable public market may not materialize. Even if we are successful in developing a public market, there may not be enough liquidity in such market to enable shareholders to sell their Shares. If our common stock is not quoted on the OTCBB or if a viable public market for our common stock does not develop, investors may not be able to re-sell the Shares, rendering the same effectively worthless and resulting in a complete loss of their investment.

 

We are planning to identify a market maker to file an application with the Financial Industry Regulatory Authority, Inc. ("FINRA") on our behalf so that we may quote our shares of common stock on the OTCBB commencing upon the effectiveness of our registration statement of which this Prospectus is a part. We cannot assure you that such market maker's application will be accepted by the FINRA. We are not permitted to file such application on our own behalf. If the application is accepted, there can be no assurances as to whether any market for our common stock will develop or of the price at which our common stock will trade. If the application is accepted, we cannot predict the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

 

In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for the common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be fixed at $0.10 per share. The selling shareholder will offer his securities at the fixed price for the duration of the offering, regardless of whether her shares are able to be quoted on the OTCBB during the offering period. However, our shares may not become traded on the OTCBB or another exchange. In addition, prices for our common stock may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company, and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.

 

 

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(C) RISKS RELATED TO THE INDUSTRY

 

RISKS RELATING TO THE OIL AND NATURAL GAS INDUSTRY

 

THE MARKETABILITY OF NATURAL RESOURCES IS AFFECTED BY NUMEROUS FACTORS BEYOND OUR CONTROL WHICH MAY RESULT IN US NOT RECEIVING AN ADEQUATE RETURN ON INVESTED CAPITAL TO BE PROFITABLE OR VIABLE.

 

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and natural gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and natural gas and environmental protection regulations. The effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

 

 

OIL AND NATURAL GAS OPERATIONS ARE SUBJECT TO COMPREHENSIVE REGULATION WHICH MAY CAUSE SUBSTANTIAL DELAYS OR REQUIRE CAPITAL OUTLAYS IN EXCESS OF THOSE ANTICIPATED CAUSING AN ADVERSE EFFECT ON OUR COMPANY.

 

Oil and natural gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and natural gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages. To date, we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in the future and this may affect our ability to expand or maintain our operations.

 

 

EXPLORATION AND PRODUCTION ACTIVITIES ARE SUBJECT TO CERTAIN ENVIRONMENTAL REGULATIONS WHICH MAY PREVENT OR DELAY THE COMMENCEMENT OR CONTINUATION OF OUR OPERATIONS.

 

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuation of a given operation. Specifically, we may be subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

 

 

ANY CHANGE TO GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A NEGATIVE IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY.

 

The business of oil and natural gas exploration and development is subject to substantial regulation under various countries laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of oil and natural gas and related products and other matters. Amendments to current laws and regulations governing operations and activities of oil and natural gas exploration and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to the properties subject to our farm-out agreements and the oil and natural gas industry generally will not be changed in a manner which may adversely affect our progress and cause delays, inability to explore and develop or abandonment of these interests.

 

20
 

 

Permits, leases, licenses, and approvals are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted in respect of our activities or, if granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses, and approvals will not contain terms and provisions which May adversely affect our exploration and development activities.

 

 

IF OUR ASSESSMENT OF OUR LEASED PROPERTY, OR ANY FUTURE LEASED PROPERTIES, IS MATERIALLY INACCURATE, IT COULD HAVE SIGNIFICANT IMPACT ON FUTURE OPERATIONS AND EARNINGS.

 

The successful acquisition of producing properties requires assessments of many factors, which are inherently inexact and may be inaccurate, including the following:

 

  · the amount of recoverable reserves;
     
  · future oil and natural gas prices;
     
  · estimates of operating costs;
     
  · estimates of future development costs;
     
  · estimates of the costs and timing of plugging and abandonment; and
     
  · potential environmental and other liabilities.

 

Our assessment will not reveal all existing or potential problems, nor will it permit us to become familiar enough with the properties to assess fully their capabilities and deficiencies.

 

 

IF OIL AND NATURAL GAS PRICES DECREASE, WE MAY BE REQUIRED TO TAKE WRITE-DOWNS OF THE CARRYING VALUE OF OUR OIL AND NATURAL GAS PROPERTY, POTENTIALLY NEGATIVELY IMPACTING THE TRADING VALUE OF OUR SECURITIES.

 

Accounting rules require that we review periodically the carrying value of our oil and natural gas property for possible impairment. Based on specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, we may be required to write down the carrying value of our oil and natural gas property. A write-down could constitute a non-cash charge to earnings. It is likely the cumulative effect of a write-down could also negatively impact the trading price of our securities.

 

 

WE MAY INCUR SUBSTANTIAL LOSSES AND BE SUBJECT TO SUBSTANTIAL LIABILITY CLAIMS AS A RESULT OF OUR OIL AND NATURAL GAS OPERATIONS.

 

We do not currently have insurance for possible risks. Losses and liabilities arising from uninsured events could materially and adversely affect our business, financial condition or results of operations. The oil and natural gas production activities will be subject to all of the operating risks associated with the production of oil and natural gas, including the possibility of:

 

  · environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater and shoreline contamination;
     
  · abnormally pressured formations;
     
  · mechanical difficulties;
     
  · fires and explosions;
     
  · personal injuries and death; and
     
  · natural disasters.

 

21
 

 

Any of these risks could adversely affect our ability to conduct operations or result in substantial losses to our company. We may elect not to obtain insurance if we believe that the cost of available insurance is excessive relative to the risks presented. In addition, pollution and environmental risks generally are not fully insurable. If a significant accident or other event occurs and is not fully covered by insurance, then it could adversely affect us.

 

 

WE COULD NOT ACT AS THE "OPERATOR" ON OUR PROPERTY, AND SO WE ARE EXPOSED TO THE RISKS OF OUR THIRD-PARTY OPERATORS.

 

We will be relying on the expertise of contracted third-party oil and gas exploration and development operators and third-party consultants for their judgment, experience and advice. We can give no assurance that these third party operators or consultants will always act in our best interests, and we are exposed as a third party to their operations and actions and advice in those properties and activities in which we are contractually bound.

 

 

UNLESS WE REPLACE OUR OIL AND NATURAL GAS RESERVES, OUR RESERVES AND PRODUCTION WILL DECLINE, WHICH WOULD ADVERSELY AFFECT OUR CASH FLOWS AND INCOME.

 

Unless we conduct successful development and exploitation activities or acquire properties containing proved reserves, our reserves when we find them will decline as those reserves are produced. We currently have no proved reserves on our property. Producing oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Our future oil and natural gas reserves and production, and, therefore our cash flow and income, are highly dependent on our success in efficiently developing and exploiting our current reserves and economically finding or acquiring additional recoverable reserves. If we are unable to develop, exploit, find or acquire additional reserves to replace our current and future production, our cash flow and income will decline as production declines, until our existing property would be incapable of sustaining commercial production.

 

 

IF ACCESS TO MARKETS IS RESTRICTED, IT COULD NEGATIVELY IMPACT OUR PRODUCTION, OUR INCOME AND ULTIMATELY OUR ABILITY TO RETAIN OUR LEASE AND ANY FUTURE LEASES.

 

Market conditions or the unavailability of satisfactory oil and natural gas gathering arrangements may hinder access to oil and natural gas markets or delay production. The availability of a ready market for our oil and natural gas production depends on a number of factors, including the demand for and supply of oil and natural gas and the proximity of reserves to pipelines and terminal facilities. The ability to market production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities owned and operated by third parties. Our failure to obtain such services on acceptable terms could materially harm our business.

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

The information contained in this report, including in the documents incorporated by reference into this report, includes some statement that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our and their management's expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

The forward-looking statements contained in this report are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including the following forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties' control) or other assumptions.

 

22
 

 

USE OF PROCEEDS

 

We will not receive any proceeds from the sale of the 8,400,000 shares by the ten (10) Selling Security Holders. All proceeds from the sale of the shares offered hereby will be for the account of the ten (10) Selling Security Holders, as described below in the sections entitled "Selling Security Holders" and "Plan of Distribution."

 

With the exception of any brokerage fees and commission which are the obligation of the Selling Security Holders, we are responsible for the fees, costs and expenses of this offering which are estimated to be $35,000, inclusive of our legal and accounting fees, printing costs and filing and other miscellaneous fees and expenses, of which the Company has incurred approximately $25,620 as of September 30, 2013.

 

Assuming sale of all 5,000,000 of the shares offered herein, of which there is no assurance, the net proceeds from this Offering will be $500,000. The proceeds are expected to be disbursed, in the priority set forth below, during the first twelve (12) months after the successful completion of the Offering:

 

      100%     70%     40%
Total Proceeds to the Company   $ 500,000     $ 350,000     $ 200,000  
                         
Lease of additional Oil & Gas Property   $ 170,500     $ 0     $ 0  
Lease of additional working interest   $ 250,408     $ 250,704     $ 107,704  
Administration and General Expense   $ 5,000     $ 5,000     $ 5,000  
Legal and Accounting   $ 10,000     $ 10,000     $ 10,000  
Working Capital   $ 64,092     $ 84,296     $ 77,296  
                         
Total Use of Net Proceeds   $ 500,000     $ 350,000     $ 200,000  

 

We will establish a separate bank account and all proceeds will be deposited into that account until the total amount of the Offering is received and all shares are sold, or the minimum of 2,000,000 shares are sold and the Offering expires, at which time the funds will be released to us for use in our operations. In the event we do not sell the minimum number of shares before the expiration date of the Offering, all funds will be returned promptly to the subscribers, without interest or deduction. If it becomes necessary our director has verbally agreed to loan the company funds to complete the registration process, but we will require full funding to implement our business plan.

 

If we are only able to sell 40% of the securities we are offering, substantially all of the funds raised by this Offering will be spent on the monthly maintenance of the well and assuring that we meet our corporate and disclosure obligations so that we remain in good standing with the State of Nevada and maintain our status as a reporting issuer with the SEC.

 

 

DILUTION

 

The common stock sold by the ten (10) Selling shareholders are provided in Item 7 is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to those existing nine shareholders.

 

Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders.

 

23
 

 

As of September 30, 2013, the net tangible book value of our shares was $105,844 or approximately $.0045 per share, based upon 23,400,000 shares outstanding.

 

Upon 100% completion of this Offering, but without taking into account any change in the net tangible book value after completion of this Offering other than that resulting from the sale of all the shares and receipt of the total proceeds of $500,000, the net tangible book value of the 28,400,000 shares to be outstanding will be $605,844, or approximately $0.021 per Share. Accordingly, the net tangible book value of the shares held by our existing stockholders (23,400,000 shares) will be increased by $0.02 per share without any additional investment on their part. The purchasers of shares in this Offering will incur immediate dilution (a reduction in the net tangible book value per share from the offering price of $0.10 per Share) of $0.08 per share. As a result, after completion of the Offering, the net tangible book value of the shares held by purchasers in this Offering would be $0.02 per share, reflecting an immediate reduction in the $0.08 price per share they paid for their shares.

 

After 100% completion of the Offering, our sole officer and director, Robert Schwarz will own 52% of the total number of share then outstanding, for which he made an initial contribution of $165,000 as interest in mine property which was original cost to the founder, or an average of $0.011 per share. The existing stockholder will own 30% of the total number of shares then outstanding, for which they will have made a cash investment of $8,400, or an average of $0.001 per Share. Upon completion of the Offering, the purchasers of the shares offered hereby will own 18% of the total number of shares then outstanding, for which they will have made cash investment of $500,000, or $0.10 per share.

 

The following table illustrates the per share dilution to the new investors in the event only a percentage of the shares are sold, and if all the shares are sold, and does not give any effect to the results of any operations subsequent to September 30, 2013:

 

Percentage of Offering     40%     70%     100%
                         
Proceeds to the Company   $ 200,000     $ 350,000     $ 500,000  
Number of Shares     2,000,000       3,500,000       5,000,000  
                         
Price Paid by founder   $ 0.011     $ 0.011     $ 0.011  
Price Paid per Share by Existing 10 Shareholders   $ 0.001     $ 0.001     $ 0.001  
Public Offering Price per Share   $ 0.10     $ 0.10     $ 0.10  
Net Tangible Book Value Prior to this Offering   $ 0.0045     $ 0.0045     $ 0.0045  
Increase in Net Tangible Book Value per Share Attributable to cash payments from purchasers of the shares offered   $ 0.012     $ 0.0169     $ 0.021  
Value per Share Attributable to cash payments from purchasers of the shares offered   $ 0.10     $ 0.10     $ 0.10  
Immediate Dilution per Share to New Investors   $ 0.08     $ 0.08     $ 0.08  

 

The following table summarizes the number and percentage of shares purchased the amount and percentage of consideration paid and the average price per Share paid by our existing stockholder and by new investors in this offering if all 5,000,000 shares are sold:

 

    Total Price Per Share     Number of shares Held     Percent of Ownership     Consideration Paid  
Founder   $ 0.011       15,000,000       52 %   $ 165,000
(interest in Mine property)
 
Existing Shareholders   $ 0.001       8,400,000       30 %   $ 8,400  
Investors in this offering   $ 0.100       5,000,000       18 %   $ 500,000  

 

24
 

 

DETERMINATION OF OFFERING PRICE

 

The price of the shares has been arbitrarily determined by our board of directors. We selected the $0.10 price for the sale of our shares of common stock. The prices at which the shares of common stock covered by the prospectus may actually be sold will be $0.10 per share. There is no assurance that our shares may ever be traded on the OTCBB or any other exchange.

 

In determining the initial public offering price of the shares we considered several factors including the following:

 

· our start up status;

· our new business structure and operations as well as lack of client base;

· prevailing market conditions, including the history and prospects for our industry;

· our future prospects and the experience of our management;

· our capital structure.

 

Therefore, the public offering price of the shares does not necessarily bear any relationship to established valuation criteria and may not be indicative of prices that may prevail at any time or from time to time in the public market for the common stock. You cannot be sure that a public market for any of our securities will develop and continue or that the securities will ever trade at a price at or higher than the offering price in this Offering.

 

 

SELLING SECURITY HOLDERS

 

The common shares being offered for resale by the selling security holder consists of the 8,400,000 shares of our common stock held by 10 shareholders . Such shareholders include the holders of the 8,400,000 shares of its $0.001 par value common stock during June through January of 2014 in a private placement under Rule 506 of the Securities Act of 1933 for $8,400 in cash, or $0.001 per share there are a total of ten individual investors. Due to a lack of operations, management believes the purchase price of $0.001 per share is representative of fair value.  In May of 2013, the Company issued 15,000,000 shares to its founder at $0.011 for purchase of interest in mine property, the founder is not registering any of his shares, nor is he offering to sell any of his shares at this time.

 

The following table sets forth the name of the selling security holders, the number of shares of common stock beneficially owned by each of the selling stockholders as of January 27, 2014 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.

 

 

  Name  

Shares

Beneficially

Owned

prior to

Offering

 

Shares to be

Offered

 

Shares

Beneficially

Owned

after

Offering

 

Percent

Beneficially

Owned

after

Offering

1 Kent Donithan   980,000   980,000   0   0%
2 Tamatha Donithan   500,000   500,000   0   0%
3 Bobby Como   980,000   980,000   0   0%
4 Damon Bottoms   980,000   980,000   0   0%
5 Michael Maley   980,000   980,000    0   0%
6 John Gauen   980,000   980,000   0   0%
7 Joe Issacs   980,000   980,000   0   0%
8 Terry Morrison   960,000   960,000    0   0%
9  Rodney Throgmorton   660,000   660,000    0   0%
10 David Parker   400,000   400,000   0   0%
  TOTAL:   8,400,000   8,400,000        

  

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None of the selling shareholders :

 

  · has had a material relationship with us other than as a shareholder at any time within the past three years; or
  · has ever been one of our officers or directors or an officer or director of our predecessors or affiliates 
  · are broker-dealers or affiliated with broker-dealers. 

 

 

PLAN OF DISTRIBUTION

 

We are offering the shares on a "self-underwritten" basis directly through Robert Schwarz, our officer. Mr. Schwarz will not receive any commissions or other remuneration of any kind in connection with his participation in this Offering based either directly or indirectly on transactions in securities.

 

This Offering is a self-underwritten offering, which means that it does not involve the participation of an underwriter to market, distribute or sell the shares offered under this prospectus. This offering will terminate upon the earlier to occur of (i) 180 days after this registration statement becomes effective with the Securities and Exchange Commission, (ii) the date on which all 5,000,000 shares registered hereunder have been sold. We may, at our discretion, extend the offering for an additional 90 days.

 

When at least 2,000,000 shares of the Offering are sold and the Offering has expired the funds will be transferred to our business account for use in the implementation of our business plan. If the minimum number of shares are not sold by the expiration date of the Offering, the funds will be promptly returned to the investors (within 3 business days), without interest or deduction.

 

Mr. Schwarz will not register as a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer.

 

1. Mr. Schwarz is not subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Act, at the time of his participation;

 

2. Mr. Schwarz will not be compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;

 

26
 

 

3. Mr. Schwarz is not, nor will he be at the time of participation in the Offering, an associated person of a broker-dealer; and

 

4. Mr. Schwarz meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs, or is intended primarily to perform at the end of the Offering, substantial duties for or on behalf of our company, other than in connection with transactions in securities; and (B) is not a broker or dealer, or been an associated person of a broker or dealer, within the preceding twelve months; and (C) have not participated in selling and offering securities for any issuer more than once every twelve months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).

 

Mr. Schwarz does not intend to purchase any shares in this Offering.

 

If applicable, the shares may not be offered or sold in certain jurisdictions unless they are registered or otherwise comply with the applicable securities laws of such jurisdictions by exemption, qualification or otherwise. We intend to sell the shares only in the states in which this offering has been qualified or an exemption from the registration requirements is available, and purchases of shares may be made only in those states.

 

In addition and without limiting the foregoing, we will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.

 

We will not use public solicitation or general advertising in connection with the Offering. This Offering will continue for the longer of: (i) 180 days after this registration statement becomes effective with the Securities and Exchange Commission, or (ii) the date on which all 5,000,000 shares registered hereunder have been sold. We may at our discretion extend the offering for an additional 90 days.

 

DEPOSIT OF OFFERING PROCEEDS

 

We are offering for sale a minimum of 2,000,000 and a maximum of 5,000,000 shares of common stock at a price of $0.10 per share. We will not be able to spend any of the proceeds unless the minimum number of shares is sold and the Offering expires. We intend to hold all funds collected in a standard bank account until the total amount of $500,000 has been received and the Offering is closed or the minimum shares are sold and the Offering expires. At that time, the funds will be transferred to our business account for use in the implementation of our business plan. In the event the minimum numbers of shares are not sold out prior to the Expiration Date, all money will be promptly returned to the investors, without interest or deduction within 3 business days.

 

We determined the use of the standard bank account was the most efficient use of our current limited funds. Please see the risk factor section to read the related risk to you as a purchaser of any shares.

 

PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION

 

If you decide to subscribe for any of the 5,000,000 shares in this Offering, you will be required to execute a Subscription Agreement and tender it, together with a check, bank draft or cashier's check payable to the company. Subscriptions, once received by the company, are irrevocable. All checks for subscriptions should be made payable to Texas Jack Oil & Gas Corporation.

 

The ten (10) selling security holders may sell some or all of their shares at a fixed price of $0.001 per share until our shares are quoted on the OTCBB and thereafter at prevailing market prices or privately negotiated prices. Prior to being quoted on the OTC Bulletin Board, shareholders may sell their shares in private transactions to other individuals. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the OTCBB concurrently with the filing of this prospectus. In order to be quoted on the OTC Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Bulletin Board, nor can there be any assurance that such an application for quotation will be approved.

 

27
 

 

Once a market has developed for our common stock, the shares may be sold or distributed from time to time by the selling stockholders, who may be deemed to be underwriters, directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods:

 

  ordinary brokers transactions, which may include long or short sales,
  transactions involving cross or block trades on any securities or market where our common stock is trading, market where our common stock is trading,
  through direct sales to purchasers or sales effected through agents,
  through transactions in options, swaps or other derivatives (whether exchange listed of otherwise), or exchange listed or otherwise), or
  any combination of the foregoing.

 

In addition, the ten (10) selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus. To our best knowledge, none of the selling security holders are broker-dealers or affiliates of broker dealers.

 

We will advise the selling security holders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling security holders and their affiliates. In addition, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling security holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling security holders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 

Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We will not receive any proceeds from the sale of the shares of the selling security holders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approximately $35,000. The majority of these expenses have already been paid and are included in the financial statement.

 

Notwithstanding anything set forth herein, no FINRA member will charge commissions that exceed 8% of the total proceeds of the offering pursuant to FINRA Rule 2710.

 

If our common stock becomes listed on the OTCBB it will have an effect on our liquidity. Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.

 

Additionally, our stock is a penny stock. Burdens are imposed upon broker-dealers by penny stock requirements that may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

 

28
 

 

The ten (10) Selling Security Holders may also sell shares directly to market makers acting as principals or brokers or dealers, who may act as agent or acquire the common stock as a principal. Any broker or dealer participating as agent in such transactions may receive a commission from the Selling Security Holders or, if they act as agent for the purchaser of such common stock, a commission from the purchaser. The Selling Security Holders will likely pay the usual and customary brokerage fees for such services. Brokers or dealers may agree with the Selling Security Holders to sell a specified number of shares at a stipulated price of $0.001 per share and, to the extent such broker or dealer is unable to do so acting as agent for the Selling Security Holders, to purchase, as principal, any unsold shares at the price required to fulfill the respective broker's or dealer's commitment to the Selling Security Holders. Brokers or dealers who acquire shares as principals may thereafter resell such shares from time to time in transactions in a market or on an exchange, in negotiated transactions or otherwise, at market prices of $0.001, and in connection with such re-sales may pay or receive commissions to or from the purchasers of such shares. These transactions may involve cross and block transactions that may involve sales to and through other brokers or dealers. We can provide no assurance that all or any of the common stock offered will be sold by the Selling Security Holder.

 

If, after the date of this prospectus, the Selling Security Holder enters into an agreement to sell their shares to a broker-dealer as principal and the broker-dealer is acting as an underwriter, we will need to file a post-effective amendment to the registration statement of which this prospectus is a part. We will need to identify the broker-dealer, provide required information on the plan of distribution, and revise the disclosures in that amendment, and file the agreement as an exhibit to the registration statement. Also, the broker-dealer would have to seek and obtain clearance of the underwriting compensation and arrangements from FINRA.

 

In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale; there is an exemption from such registration or if there is a qualification requirement available and with which Texas Jack Oil & Gas Corporation has complied.

 

In addition and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.

 

We are paying the expenses of the offering because we seek to: (i) become a reporting company with the Commission under the Securities Exchange Act of 1934 (the "1934 Act"); and (ii) enable our common stock to be traded on the OTC Bulletin Board. We believe that the registration of the resale of shares on behalf of the existing security holder may facilitate the development of a public market in our common stock if our common stock is approved for trading on the OTC Bulletin Board.

 

We consider that the development of a public market for our common stock will make an investment in our common stock more attractive to future investors. We will at some point in the near future need to raise additional capital through private placement offerings. We believe that obtaining reporting company status under the 1934 Act and trading on the OTC Bulletin Board should increase our ability to raise these additional funds from investors.

 

The Selling Security Holder and any broker-dealers or agents must comply with the requirements of the Securities Act and the Securities Exchange Act in the offer and sale of the common stock. In particular, during such times as the Selling Security Holder is engaged in a distribution of the common stock, and therefore be considered to be an underwriter, she must comply with applicable law and may, among other things may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, she must comply with applicable law and may, among other things:

 

· Not engage in any stabilization activities in connection with our common stock;
· Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and,
· Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act.

 

There is no assurance that the Selling Security Holder will sell any or all of the shares offered by her. Under the securities laws of certain states, the shares may be sold in such states only through registered or licensed broker/dealers. In addition, in certain states the shares may not be sold unless they have been registered or qualified for sale in that state or an exemption from registration or qualification is available and is met. There are no pre-existing contractual agreements for any person to purchase the shares.

 

29
 

 

Of the 23,400,000 shares of common stock outstanding as of January 27, 2014, 15,000,000 shares are owned by our sole officer and director Robert Schwarz. And the remaining 8,400,000 are held by 10 individuals (See selling shareholders listed above).

 

Dividends

 

We have not declared any cash dividends, nor do we intend to do so. We are not subject to any legal restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent. Dividend policy will be based on our cash resources and needs, and it is anticipated that all available cash will be needed for our operations, in the foreseeable future.

 

Section 15(g) of the Exchange Act

 

Our shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6 and Rule 15g-9 promulgated thereunder. They impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to brokers-dealers, they do not apply to us.

 

Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules. Rule 15g-2 declares unlawful broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document.

 

Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.

 

Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

 

Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

 

Rule 15g-6 requires broker-dealers selling penny stocks to provide their customers with monthly account statements.

 

Rule 15g-9 requires broker-dealers to approved the transaction for the customer's account; obtain a written agreement from the customer setting forth the identity and quantity of the stock being purchased; obtain from the customer information regarding his investment experience; make a determination that the investment is suitable for the investor; deliver to the customer a written statement for the basis for the suitability determination; notify the customer of his rights and remedies in cases of fraud in penny stock transactions; and, the FINRA's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker-dealers and their associated persons. The application of the penny stock rules may affect your ability to resell your shares.

 

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MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

 

Our securities are not listed on any exchange or quotation service. We are not required to comply with the timely disclosure policies of any exchange or quotation service. The requirements to which we would be subject if our securities were so listed typically include the timely disclosure of a material change or fact with respect to our affairs and the making of required filings. Although we are not required to deliver an annual report to security holders, the Company intends to provide an annual report to our security holders, which will include audited financial statements.

 

When we become a reporting company with the Securities and Exchange Commission, the public may read and copy any materials filed with the Securities and Exchange Commission at the Security and Exchange Commission’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission. The address of that site is www.sec.gov .

 

There are no outstanding options or warrants to purchase, or securities convertible into, shares of our common stock.

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

 

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

We are a development stage corporation and have not yet generated or realized any revenues from our business operations.

 

Our auditors have raised substantial doubt as to our ability to continue as an on-going business for the next 12 months. We have not generated any revenue and have only begun to develop our business plan, website and sales literature.

 

GENERAL OVERVIEW

 

DESCRIPTION OF BUSINESS

 

We are an exploration stage company with limited revenues and operating history. Our independent auditor has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern. We currently own a 3% working interest in the Bright 1H, which was drilled in late summer of 2012 and was completed and placed into production in October 2012. The well has been drilled with lateral lines that are approximately 2,000 feet in length. There are a total of three producing wells on this property however Texas Jack only has an interest in one well.

 

The Company is reviewing its next project where Texas Jack would purchase a 3% working interest in a lease operated by 3-Ten located in Jack County Texas. At this time Texas Jack has not purchased the working interest or entered into any contracts with operator.

 

Our focus for the current fiscal year will be on further locating and developing new working interests, while continuing to pursue acquisition of new leases and/or existing oil and gas wells which have potential for production, if revenues warrant.

 

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GENERAL INFORMATION ABOUT OUR CURRENT WORKING INTEREST.

 

ACQUISITION OF THE 3% WORKING INTEREST.

 

On October 1, 2012 the President of Texas Jack purchased the 3% working interest from Southlake Energy for $165,000. On May 1, 2013 the President of the Company executed an assignment agreement with SouthLake Energy which transferred the 3% working interest in the 3 Bright 1H well located in Young County Texas to Texas Jack Oil & Gas Corporation. The 3% working interest in the Bright 1H, which was drilled in late summer of 2012 and was completed and placed into production in October 2012. The well has been drilled with lateral lines that are approximately 2,000 feet in length. The Bright 1H well is further described as being situated on 87.03 acres of land of situated within the S.R. Halley Survey, Abstract No. 1748, Jack County, Texas, said 87.03 acres being out of and part of a 325.45 acre tract of land described in a Deed to Edwin B. Bright et ux. Recorded in Volume 333, Schwarz 645 of the Official Public Records of Jack County, Texas.

 

The consideration for the assignment was $165,000 being original cost to the founder. The well was drilled late summer of 2012 and put into production October 2012 and is currently producing approximately 100 barrels of oil per month.

 

LOCATION, ACCESS, CLIMATE, LOCAL RESOURCES & INFRASTRUCTURE

 

General Area: The Bright 1H well is further described as being situated on 87.03 acres of land of situated within the S.R. Halley Survey, Abstract No. 1748, Jack County, Texas, said 87.03 acres being out of and part of a 325.45 acre tract of land described in a Deed to Edwin B. Bright et ux. Recorded in Volume 333, Schwarz 645 of the Official Public Records of Jack County, Texas. (see attached Plat below)

 

 

[MAP SHOWING Bright 1H in Jack County Texas]

 

Jack County, in north central Texas, is bordered by Clay, Archer, and Montague counties to the north, Young County to the west, Palo Pinto and Parker counties to the south, and Wise County to the east. Jacksboro, the county seat and the largest town in the county, is sixty miles southeast of Wichita Falls and seventy miles northwest of Fort Worth. The county's center is at 98°10' west longitude and 33°12' north latitude. As of the 2010 census its population was 9,044. Its county seat is Jacksboro. Jack County is named for Patrick Churchill Jack and his brother William Houston Jack, both soldiers of the Texas Revolution.

 

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The county's 920 square miles is forested mainly by mesquite, live oak, blackjack oak, and post oak, with pecan, elm, walnut, and cottonwood trees along the waterways. The altitude increases from east to west and ranges from 800 feet to 1,350 feet. The West Fork of the Trinity River cuts across Jack County diagonally from northwest to southeast and provides the main drainage for the county. Among other creeks are East Rock, Howard, Lost, Crooked, the North Fork of Crooked, Little Cleveland, the West Fork of Keechi, Two Bush, and Henderson. Lake Bridgeport and Lake Jacksboro are in the county. Mineral resources include petroleum, natural gas, and stone.

 

History: Before white settlement Jack County was a borderland between the Caddo Indians to the east and the Comanches to the west. The first Europeans to visit the area may have been Spaniards under Franciso Vasquez de Coronado in the sixteenth century, but they made no permanent settlements. Jack County was included in the Texan Emigration and Land Company, more commonly known as the Peters colony. Settlers began arriving in the future county by 1855, and by 1856 the first settlement, Keechi, was established. Early settlers entering Jack County came mainly from the middle South states, primarily Alabama, North Carolina, Arkansas, Missouri, and Kentucky, many by way of Smith County or other parts of Texas.

 

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Cattle ranching dominated the county's economy during its early years. The first cattle drive north from Jack County was made in 1866, and by 1890 there were 68,756 cattle in the county. After large-scale farming was introduced in the late 1870s, the number of farms grew rapidly, increasing from 945 in 1880 to 1,888 in 1910. The dominant crop in the county's early years was corn, with 115,761 bushels harvested in 1880 and 663,490 bushels in 1900. During the late 1880s and 1890s oats and wheat were introduced, and by 1920 Jack County was a leading producer of grains; in that year county farmers grew 498,250 bushels of oats, 249,643 bushels of corn, and 351,819 bushels of wheat. Cotton was also grown in considerable quantities after 1890, and by the early 1920s the annual yield was 6,000 bales. Despite the growth of crop farming, livestock raising continued to play an important role in the county's economic life. Revenue from cattle remained an important source of income for many farmers and ranchers, and receipts from poultry and egg production grew throughout the early decades of the twentieth century.

 

Oil, discovered near Bryson in 1923, set off a small boom, as numerous oilfield workers and others attracted by the prospects of easy money moved in. Nevertheless the population of the county as a whole declined steadily after 1915, largely as the result of a series of agricultural busts. The population, which reached a peak of 11,817 in 1910, fell to 9,863 in 1920 and 9,046 in 1930. Income from oil helped some cash-poor farmers to settle debts and survive the lean years of the Great Depression, but many others were forced to sell their farms and equipment and try their hands at something else. The economy began to recover during World War II, but subsequently the population declined slowly. Between 1940 and 1990 the number of residents fell from 10,206 to 6,981. In the early 1990s cow and calf operations provided the largest source of agricultural receipts; the leading crop was wheat. The sale of firewood also provided important income. Leading industries included petroleum production and oil-well servicing. Oil production steadily increased to 1,800,000 barrels annually in the early 1990s. Production began to decline thereafter, however. A little over 706,000 barrels of oil and 12,131,871 cubic feet of gas-well gas were produced in the county in 2004; by the end of that year 203,811,409 barrels of oil had been taken from county lands since 1923.

 

BIBLIOGRAPHY: 

 

Thomas F. Horton, History of Jack County (Jacksboro, Texas: Gazette Print, 193-?).

 

Ida Lasater Huckabay, Ninety-Four Years in Jack County (Austin: Steck, 1949; centennial ed., Waco: Texian Press, 1974).

 

Jack County Scrapbook, Dolph Briscoe Center for American History, University of Texas at Austin.

 

Gilbert Webb, comp., Four Score Years in Jack County, 1860–1940 (Jacksboro, Texas, 1940).

 

 

MARKETS

 

The availability of a ready market and the prices obtained for produced oil depends on many factors, including the extent of domestic production and imports of oil, the proximity and capacity of pipelines and other transportation facilities, fluctuating demand, the marketing of competitive fuels, and the effects of governmental regulation on production and sales. A ready domestic market for oil exists because of the presence of pipelines for transport. The existence of an international market exists depends upon the presence of international delivery systems and political and pricing factors.

 

If we are successful in the continuing production of oil on our current property and possible additional property, the operator of our three wells will continue to target refiners, remarketers and third party intermediaries, who either have, or have access to, consumer delivery systems. Southwest will continue to sell the oil under both short-term (less than one year) and long-term (one year or more) agreements at prices negotiated with third parties. Currently Spears Oil, a third party operator, picks up the oil and sells it to Shell Oil Company. The price is based upon a 20-day floating average. Typically either the entire contract (in the case of short-term contracts) or the price provisions of the contract (in the case of long-term contracts) are renegotiated at intervals ranging in frequency from daily to annually.

 

We have not yet adopted any specific sales and marketing plans. However, as we purchase future properties and or working interests, the need to hire marketing personnel will be addressed.

 

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COMPETITION

 

We operate in a highly competitive environment for acquiring properties, modernizing existing wells and marketing oil that is produced. The majority of our competitors possess and employ financial, technical and personnel resources substantially greater than ours, which can be particularly important in the areas in which we plan to operate. Those companies may be able to pay more for productive properties and exploratory prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our financial resources permit. Our ability to acquire additional prospects and to find and develop reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. Also, there is substantial competition for capital available for investment in the oil and natural gas industry.

 

Current competitive factors in the domestic oil and gas industry are unique. The actual price range of crude oil is largely established by major international producers. Pricing for natural gas is more regional; however, more favorable prices can usually be negotiated for larger quantities of oil and/or gas product. In this respect, while we believe we have a price disadvantage when compared to larger producers, we view our primary pricing risk to be related to a potential decline in international prices to a level which could render our production uneconomical.

 

We will be committed to use the services of the existing gathering companies in our present area of production. This potentially gives such gathering companies certain short-term relative monopolistic powers to set gathering and transportation costs, because obtaining the services of an alternative gathering company may require substantial additional costs.

 

General competitive conditions may be substantially affected by various forms of energy legislation and/or regulation introduced from time to time by the governments of the United States and other countries, as well as factors beyond our control, including international political conditions, overall levels of supply and demand for oil and gas, and the markets for synthetic fuels and alternative energy sources.

 

In the face of competition, we may not be successful in acquiring, exploring or developing profitable oil and gas properties or interests, and we cannot give any assurance that suitable properties or interests will be available for our acquisition, exploration or development. Despite this, we hope to compete successfully in the industry by:

 

 

· keeping our costs low;

· relying on the strength of our President’s contacts; and

· using our size and experience to our advantage by adapting quickly to changing market conditions or responding swiftly to potential opportunities.

 

DISTRIBUTION METHODS

 

The oil that we produce is distributed through oil gathering companies. The contract operator, Southlake energy, will make the arrangements with the gathering companies.

 

 

BANKRUPTCY OR SIMILAR PROCEEDINGS

 

There has been no bankruptcy, receivership or similar proceeding.

 

REORGANIZATIONS, PURCHASE OR SALE OF ASSETS

 

There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business.

 

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SOURCE AND AVAILABILITY OF RAW MATERIALS

 

We have no significant raw materials. However, if we are successful in our plan of operations we may make use of numerous oil field service companies. We currently only have 3% working interest in one well lease in Jack County Texas, there are numerous oil field service companies.

 

MAJOR CUSTOMERS

 

We will principally sell our oil through our operator to marketers and other purchasers that have access to nearby pipeline facilities. Generally, in areas where there is no practical access to pipelines, oil is trucked to storage facilities. We believe that the loss of any of these oil purchasers would not materially impact our business, because we could readily find other purchasers for our oil as produced.

 

PATENTS, TRADEMARKS, FRANCHISES, ROYALTY AGREEMENTS OR LABOR CONTRACTS

 

We have no patents, trademarks, licenses, concessions, or labor contracts.

 

COMPLIANCE WITH GOVERNMENT AND ENVIRONMENTAL REGULATIONS OF TRANSPORTATION OF OIL

 

The sales of crude oil are not currently regulated and are made at negotiated prices. Nevertheless, Congress could reenact price controls in the future.

 

Our sales of crude oil will be affected by the availability, terms and cost of transportation. The transportation of oil in common carrier pipelines is also subject to rate regulation. The Federal Energy Regulatory Commission, or the FERC, regulates interstate oil pipeline transportation rates under the Interstate Commerce Act. Intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to state.

 

Insofar as effective interstate and intrastate rates are equally applicable to all comparable shippers, we believe that the regulation of oil transportation rates will not affect our operations in any way that is of material difference from those of our competitors. Further, interstate and intrastate common carrier oil pipelines must provide service on a non-discriminatory basis. Under this open access standard, common carriers must offer service to all shippers requesting service on the same terms and under the same rates. When oil pipelines operate at full capacity, access is govern