R
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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£
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Nevada
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26-2793743
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification
No.)
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19
Briar Hollow Lane, Suite 115, Houston, Texas
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77027
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(Address
of principal executive offices)
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(Zip
Code)
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Page
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PART
I
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|
Item
1. Financial Statements
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2
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Item
2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
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3
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk
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8
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Item
4T. Controls and Procedures
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9
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PART
II
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Item
1. Legal Proceedings
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9
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Item
1A. Risk Factors
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9
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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9
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Item
3. Defaults Upon Senior Securities
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9
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Item
4. Submission of Matters to a Vote of Security
Holders
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9
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Item
5. Other Information
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9
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Item
6. Exhibits
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10
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Signatures
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11
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OCTAGON
88 RESOURCES, INC.
|
|
(An exploration stage enterprise) | |
Index to Financial Statements | |
Balance
Sheet:
|
F-2
|
September
30, 2008 and June 30, 2008
|
|
Statements
of Operations:
|
F-3
|
For
the three months ended September 30, 2008
|
|
Cumulative,
for the period from inception, June 9, 2008, through September 30,
2008
|
|
Statements
of Stockholders' Equity:
|
F-4
|
For
the period from inception, June 9, 2008, through September 30,
2008
|
|
Statements
of Cash Flows:
|
F-5
|
For
the three months ended September 30, 2008
|
|
Cumulative,
for the period from inception, June 9, 2008, through June 30,
2008
|
|
Notes
to Financial Statements:
|
F-6
|
September
30, 2008
|
|
Octagon Resources
88, Inc.
(An
exploration stage enterprise)
Balance Sheets
|
||||||||
|
||||||||
|
||||||||
September
30,
|
June
30,
|
|||||||
2008
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
|
$ | 21,618 | $ | 5,060 | ||||
Prepaid
expenses
|
12,727 | 5,000 | ||||||
Total
current assets
|
34,345 | 10,060 | ||||||
Oil
and gas properties:
|
||||||||
Undeveloped,
unproven properties
|
15,000 | 15,000 | ||||||
Total
other assets
|
15,000 | 15,000 | ||||||
Total
assets
|
$ | 49,345 | $ | 25,060 | ||||
LIABILITIES
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable, trade
|
$ | 3,200 | $ | - | ||||
Accounts
payable, related parties
|
- | 927 | ||||||
Farm-in
agreement obligation
|
10,000 | 10,000 | ||||||
Funds
received in advance
|
20,000 | - | ||||||
Total
current liabilities
|
33,200 | 10,927 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
stock, $0.0001 par value, 400,000,000 authorized,
|
||||||||
33,042,000
and 32,042,000 shares issued and outstanding
|
3,304 | 3,204 | ||||||
Capital
in excess of par value
|
25,283 | 11,856 | ||||||
(Deficit)
accumulated during the development stage
|
(12,442 | ) | (927 | ) | ||||
Total
stockholders' equity
|
16,145 | 14,133 | ||||||
Total
liabilities and stockholders' equity
|
$ | 49,345 | $ | 25,060 |
OCTAGON 88 RESOURCES, INC. | ||||||||
(An exploration stage enterprise) | ||||||||
Statement of Operations | ||||||||
(Unaudited) | ||||||||
Cumulative,
|
||||||||
Inception,
|
||||||||
June
9, 2008,
|
Quarter
|
|||||||
Through
|
Ended
|
|||||||
September
30,
|
September
30,
|
|||||||
2008
|
2008
|
|||||||
Revenues
|
$ | - | $ | - | ||||
General
and administrative expenses:
|
||||||||
Management
fees
|
5,800 | 5,800 | ||||||
Professional
fees
|
5,700 | 5,700 | ||||||
Organizational
expenses
|
927 | - | ||||||
Other
general and administrative expenses
|
15 | 15 | ||||||
Total
operating expenses
|
12,442 | 11,515 | ||||||
(Loss)
from operations
|
(12,442 | ) | (11,515 | ) | ||||
Other
income (expense):
|
- | - | ||||||
(Loss)
before taxes
|
(12,442 | ) | (11,515 | ) | ||||
Provision
(credit) for taxes on income:
|
- | - | ||||||
Net
(loss)
|
$ | (12,442 | ) | $ | (11,515 | ) | ||
Basic
earnings (loss) per common share
|
$ | (0.00 | ) | |||||
Weighted
average number of shares outstanding
|
32,052,870 |
OCTAGON 88 RESOURCES, INC. | ||||||||||||||||||||
(An exploration stage enterprise) | ||||||||||||||||||||
Statement of Stockholders' Equity | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Deficit)
|
||||||||||||||||||||
Accumulated
|
|
|||||||||||||||||||
Capital
In
|
During the
|
|||||||||||||||||||
Common
Stock
|
Excess
Of
|
Development
|
||||||||||||||||||
Shares
|
Amount
|
Par
Value
|
Stage
|
Total
|
||||||||||||||||
Inception,
June 9, 2008
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Shares
issued for cash
|
32,042,000 | 3,204 | 11,856 | 15,060 | ||||||||||||||||
Development
stage net (loss)
|
(927 | ) | (927 | ) | ||||||||||||||||
Balances,
June 30, 2008
|
32,042,000 | $ | 3,204 | $ | 11,856 | $ | (927 | ) | $ | 14,133 | ||||||||||
Shares
issued for cash
|
1,000,000 | 100 | 9,900 | 10,000 | ||||||||||||||||
Less,
Applicable expenses
|
(2,273 | ) | (2,273 | ) | ||||||||||||||||
Services
contributed by shareholders
|
||||||||||||||||||||
for
which no shares were issued
|
- | 5,800 | 5,800 | |||||||||||||||||
Development
stage net (loss)
|
(11,515 | ) | (11,515 | ) | ||||||||||||||||
Balances,
September 30, 2008
|
33,042,000 | $ | 3,304 | $ | 25,283 | $ | (12,442 | ) | $ | 16,145 | ||||||||||
OCTAGON 88 RESOURCES, INC. | ||||||||
(An exploration stage enterprise) | ||||||||
Statement of Cash Flows | ||||||||
(Unaudited) | ||||||||
Cumulative,
|
||||||||
Inception,
|
||||||||
June
9, 2008,
|
Quarter
|
|||||||
Through
|
Ended
|
|||||||
September
30,
|
September
30,
|
|||||||
2008
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
(loss)
|
$ | (12,442 | ) | $ | (11,515 | ) | ||
Adjustments
to reconcile net (loss) to cash
|
||||||||
provided
(used) by development stage activities:
|
||||||||
Services
contributed by shareholders
|
5,800 | 5,800 | ||||||
Changes
in current assets and liabilities:
|
||||||||
Prepaid
expenses
|
(12,727 | ) | (7,727 | ) | ||||
Accounts
payable, trade
|
3,200 | 3,200 | ||||||
Accounts
payable, related parties
|
- | (927 | ) | |||||
Net
cash flows from operating activities
|
(16,169 | ) | (11,169 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Acquisition
of undeveloped, unproven properties
|
(15,000 | ) | - | |||||
Net
cash flows from investing activities
|
(15,000 | ) | - | |||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from sale of common stock
|
25,060 | 10,000 | ||||||
Less,
Applicable expenses
|
(2,273 | ) | (2,273 | ) | ||||
Increase
in funds received in advance
|
20,000 | 20,000 | ||||||
Increase
in balance due, properties purchase agreement
|
10,000 | - | ||||||
Net
cash flows from financing activities
|
52,787 | 27,727 | ||||||
Net
cash flows
|
21,618 | 16,558 | ||||||
Cash
and equivalents, beginning of period
|
- | 5,060 | ||||||
Cash
and equivalents, end of period
|
$ | 21,618 | $ | 21,618 | ||||
Supplemental
cash flow disclosures:
|
||||||||
Cash
paid for interest
|
$ | - | $ | - | ||||
Cash
paid for income taxes
|
- | - | ||||||
|
a.
|
Geological
and geophysical costs and the costs of carrying and retaining undeveloped
properties are charged to expense when incurred since they do not result
in the acquisition of assets.
|
|
b.
|
Costs
incurred to drill exploratory wells and exploratory-type stratigraphic
test wells that do not find proved reserves are charged to expense when it
is determined that the wells have not found proved
reserves.
|
|
c.
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Costs
incurred to acquire properties and drill development-type stratigraphic
test wells, successful exploratory well, and successful exploratory-type
stratigraphic wells are
capitalized.
|
|
d.
|
Capitalized
costs of wells and related equipment are amortized, depleted, or
depreciated using the unit-of-production
method.
|
|
e.
|
Costs
of unproved properties are assessed periodically to determine if an
impairment loss should be
recognized.
|
Inception,
June 9, 2008
Through
September
30, 2008
|
Quarter
ended September 30, 2008
|
|||||||
Refundable
Federal income tax attributable to:
|
||||||||
Current
operations
|
$ | (4,200 | ) | $ | (3,900 | ) | ||
Nondeductible
expenses
|
2,000 | 2,000 | ||||||
Change
in deferred tax valuation allowance
|
2,200 | 1,900 | ||||||
Net
refundable amount
|
- | - | ||||||
Inception,
June 9, 2008
Through
September
30, 2008
|
||||
Deferred
tax asset attributable to:
|
||||
Net
operating loss carryover
|
$ | 2,200 | ||
Less,
Valuation allowance
|
(2,200 | ) | ||
Net
deferred tax asset
|
- | |||
Price
Per
|
|||||||||||||
Date
|
Description
|
Shares
|
Share
|
Amount
|
|||||||||
06/09/08
|
Shares
sold for cash
|
32,042,000 | $ | .00047 | $ | 15,060 | |||||||
09/29/08
|
Shares
sold for cash
|
1,000,000 | $ | .01000 | 10,000 | ||||||||
09/30/08
|
Cumulative
Totals
|
33,042,000 | $ | 25,060 |
Price
Per
|
|||||||||||||
Date
|
Description
|
Shares
|
Share
|
Amount
|
|||||||||
10/03/08
|
Shares
sold for cash
|
1,800,000 | $ | .01000 | $ | 18,000 | |||||||
10/09/08
|
Shares
sold for cash
|
2,000,000 | $ | .01000 | 20,000 | ||||||||
10/09/08
|
Shares
sold for cash
|
1,800,000 | $ | .01000 | 18,000 | ||||||||
Total
sales in October
|
5,600,000 | $ | .01000 | 56,000 | |||||||||
10/09/08
|
Cumulative
Totals
|
38,642,000 | $ | 81,060 | |||||||||
·
|
Focus
growth capital to higher quality
reservoirs;
|
·
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Utilize
production enhancement techniques to increase productivity and add value
within the parameters of good oilfield production
practices;
|
·
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Create
value from our asset base through exploitation, development and
exploration activities; and
|
·
|
Utilize
risk management opportunities through hedging or other means for cash flow
management.
|
·
|
Exhibit
the potential for delivering superior rates of return on capital
employed;
|
·
|
Accretive
to cash flow per share;
|
·
|
Accretive
to net asset value;
|
·
|
Accretive
to reserves per share;
|
·
|
Potential
for value enhancement through further exploitation, including improved
production practices, additional development drilling, infill drilling or
re-drilling/re-completion and improved marketing
arrangements;
|
·
|
Assets
that include associated undeveloped lands for development and exploration
opportunities;
|
·
|
Geological
opportunities with multi-zone potential;
and
|
·
|
Near-term
market access and sufficient infrastructure for increased
activity.
|
·
|
The Goodwin area is located
approximately 130 miles northwest of Edmonton, Alberta,
Canada. The Canada Petroleum and Natural Gas Lease Number
050606526, comprises approximately 640 acres of land with petroleum and
natural gas exploitation rights from the surface to the base of the Viking
formation, which base is approximately 5000 feet below the surface of the
Lease. Unless hydrocarbon is produced from the Lease on or before June 14,
2011, the Lease may expire, in which case we would have no further claim
on the Lease.
|
·
|
There is an existing abandoned
wellbore on the lease which was abandoned on November 19, 1985. The well
logs that were run on the well indicate multiple anomalies that may
indicate the presence of hydrocarbon in what is known as the Belly River
formation. There were also Drill Stem Tests performed on one Belly River
anomaly at approx. 2050 feet drill depth that produced at a rate of
approximately 127,000 cubic feet per day of natural
gas.
|
·
|
The Farmor purchased a 100%
working interest in the Lease at an Alberta Government auction on June 14,
2006 for the sum of Cdn$30,494.00. The Lease is for 5 years and
expires on June 14, 2011 unless continued by the production of
hydrocarbons, in which case the Lease will be continued until the Lease is
abandoned. We acquired our right to earn a 50% working interest from the
Farmor, through negotiation, on June 10, 2008. We paid $15,000
plus spend a further $30,000 on exploration related expenses, on or before
June 14, 2010, to earn our 50% working interest. The Farmor has performed
initial geological analysis to try to determine the aerial extent of the
anomalies but the results have been
inconclusive.
|
·
|
We plan to do additional work
to more definitively delineate the aerial extent of the anomalies so that
we can make a more informed determination of the exploration process going
forward. No commercially viable reserves may exist on our Lease.
|
|
Drilling
Activity
|
(a)
|
Raise
additional capital to execute our business plans;
|
(b)
|
Engage
consultants to perform our planned exploratory work
program.
|
Estimated
Expenses
|
||||
General
and Administrative (including legal and accounting
fees)
|
$ | 15,000 | ||
Exploration
|
$ | 30,000 | ||
Total
|
$ | 45,000 |
1.
|
General and Administrative |
We
anticipate spending approximately $15,000 on general and administration
costs in the next twelve months, which will include consulting, legal and
accounting fees.
|
|
2.
|
Exploration |
We
anticipate spending approximately $30,000 on exploration of our oil &
gas property
|
|
|
a.
|
Geological
and geophysical costs and the costs of carrying and retaining undeveloped
properties are charged to expense when incurred since they do not result
in the acquisition of assets.
|
|
b.
|
Costs
incurred to drill exploratory wells and exploratory-type stratigraphic
test wells that do not find proved reserves are charged to expense when it
is determined that the wells have not found proved
reserves.
|
|
c.
|
Costs
incurred to acquire properties and drill development-type stratigraphic
test wells, successful exploratory well, and successful exploratory-type
stratigraphic wells are
capitalized.
|
|
d.
|
Capitalized
costs of wells and related equipment are amortized, depleted, or
depreciated using the unit-of-production
method.
|
|
e.
|
Costs
of unproved properties are assessed periodically to determine if an
impairment loss should be
recognized.
|
Number
|
Description
|
|
3.1
|
Articles
of Incorporation
|
Incorporated
by reference to the Exhibits filed with the Form S-1 filed with the SEC on
September 18, 2008
|
3.2
|
Bylaws
|
Incorporated
by reference to the Exhibits filed with the Form S-1 filed with the SEC on
September 18, 2008
|
31.1
|
Section
302 Certification- Principal Executive Officer
|
Filed
herewith
|
31.2
|
Section
302 Certification Principal Financial Officer
|
Filed
herewith
|
32.1
|
Certification
Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
32.2
|
Certification
Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
/s/Clinton F. Bateman
|
/s/
Kara B. McDuffie
|
|||
Name:
Clinton F. Bateman
|
Name Kara
B. McDuffie
|
|||
Title: President
and Director (Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer)
|
Title:
Secretary-Treasurer and Director
|
|||
Date: November 14, 2008 | Date: November 14, 2008 |