U. S. Securities and Exchange Commission

Washington, D.C. 20549
______________
 
 
FORM 10-Q
______________
  
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarter ended December 31, 2012
 
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ____________ to____________
 
Commission File No. 00-51638
GULFSLOPE ENERGY, INC.
(Exact name of the issuer as specified in its charter)

Delaware
16-1689008
(State or Other Jurisdiction of
(I.R.S. Employer I.D. No.)
incorporation or organization)
 

3 Riverway, Suite 1800
Houston,Texas 77056
 (Address of Principal Executive Offices)

(713) 942-6639
(Issuer’s Telephone Number)


Check whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer [  ]
Accelerated filer [  ]
Non-accelerated filer [  ]
Smaller reporting company [X]

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

 
1

 
 
APPLICABLE ONLY TO ISSUER INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court.  Yes [  ] No [  ]

Not applicable.

Indicate the number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date.

The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:


Class
 
Outstanding as of February 14, 2013
Common Capital Voting Stock, $0.001 par value per share
 
235,150,000

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts included in this Report including, without limitation, statements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Report, regarding our financial condition, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements including, but not limited to, economic conditions generally and in the markets in which we may participate, competition within our chosen industry, technological advances and failure by us to successfully develop business relationships.  
 
Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
 
 
 
 
 
 
 
2

 
PART I - FINANCIAL STATEMENTS

Item 1. Financial Statements.

December 31, 2012
 
C O N T E N T S


 
 Condensed Balance Sheets
4
 Condensed Statements of Operations   
5
 Condensed Statements of Cash Flows
6
 Notes to Condensed Financial Statements
7
 

 
 
 




 
 
 
 
 
 
 
 
 
 

 
 
3

 

GulfSlope Energy, Inc.
(A Development Stage Company)
Condensed Balance Sheets
As of December 31, 2012 and September 30, 2012
(Unaudited)
 
 
             
   
12/31/2012
   
9/30/2012
 
             
Assets
           
Current Assets
           
Cash
 
$
127,244
   
$
423,009
 
Prepaid Expenses
   
200,555
     
329,373
 
Total Current Assets
   
327,799
     
752,382
 
Total Assets
 
$
327,799
   
$
752,382
 
 
Liabilities and Stockholders' Equity
               
Current Liabilities
               
Accounts Payable
 
$
34,707
   
$
31,731
 
Related-Party Payable
   
-
     
31,183
 
Total Current Liabilities
   
34,707
     
62,914
 
Total Liabilities
 
$
34,707
   
$
62,914
 
Stockholders' Equity
               
Preferred Stock; par value ($0.001);
   
-
     
-
 
Authorized 50,000,000 shares
               
none issued or outstanding
               
Common Stock; par value ($0.001);
   
235,150
     
235,150
 
Authorized 750,000,000 shares; issued
               
and outstanding 235,150,000 and 235,150,000 respectively
               
Paid-in Capital
   
2,151,610
     
2,151,610
 
Deficit Accumulated during the development stage
   
(2,093,668
)
   
(1,697,292
)
Total Stockholders' Equity
   
293,092
     
689,468
 
Total Liabilities and Stockholders' Equity
 
$
327,799
   
$
752,382
 

 See accompanying notes to condensed financial statements.
 
 
4

 
GulfSlope Energy, Inc.
 (A Development Stage Company)
Condensed Statements of Operations
For the Three Months Ended December 31, 2012 and 2011, and
For the Period from Inception through December 31, 2012
(Unaudited)
 
 
 
                 
   
For the
   
For the
   
Since
 
   
Three Months
   
Three Months
   
Inception
 
   
Ended
   
Ended
   
[12/12/03 -
 
   
12/31/2012
   
12/31/2011
   
12/31/2012]
 
Revenues
 
$
-
   
$
-
   
$
9,694
 
Revenues from Related Parties
   
-
     
-
     
2,346
 
Total Revenues
   
-
     
-
     
12,040
 
Cost of Sales
   
-
     
-
     
8,394
 
Cost of Sales to Related Parties
   
-
     
-
     
2,101
 
Total Cost of Sales
   
-
     
-
     
10,495
 
Gross Profit
   
-
     
-
     
1,545
 
General & Administrative Expenses
   
396,376
     
31,460
     
2,078,899
 
Net Loss from Operations
   
(396,376
)
   
(31,460
)
   
(2,077,354
)
Other Income/(Expenses):
                       
Interest Expense
   
-
     
-
     
(15,514
)
Net Loss Before Income Taxes
   
(396,376
)
   
(31,460
)
   
(2,092,868
)
Provision for Income Taxes
   
-
     
-
     
(800
)
Net Loss
   
(396,376
)
   
(31,460
)
   
(2,093,668
)
Loss Per Share - Basic and Diluted
 
$
(0.00
)
 
$
(0.01
)
 
$
(0.12
)
Weighted Average Shares Outstanding
   
235,150,000
     
14,302,717
     
17,211,566
 

 See accompanying notes to condensed financial statements.
 
 
 
 
 
 
5

 
GulfSlope Energy, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
For the Three Months Ended December 31, 2012 and 2011, and
For the Period from Inception through December 31, 2012
(Unaudited)
 
 
                   
   
For the
   
For the
   
Since
 
   
Three Months
   
Three Months
   
Inception
 
   
Ended
   
Ended
   
[12/12/03 -
 
   
12/31/2012
   
12/31/2011
   
12/31/2012]
 
Net Loss
   
(396,376
)
   
(31,460
)
   
(2,093,668
)
Adjustments to reconcile net income/loss to net cash
                       
From Operating Activities:
                       
Depreciation
     -        -      
8,906
 
   Stock issued for services
      -         -         1,350,000  
Changes in operating assets and liabilities:
                       
(Increase)/Decrease in Prepaid Expenses
   
128,818
     
(20,068
)
   
(200,555
)
Increase/(Decrease) in Accounts Payable/Accrued Liabilities
   
2,976
 
   
7,193
     
34,708
 
Increase/(Decrease) in Accrued Interest/Related Party Payable
   
(31,183
   
-
     
11,022
 
Net Cash From Operating Activities
   
(295,765
)
   
(44,335
)
   
(889,587
)
Cash From Investing Activities
                       
Purchase of Equipment
   
-
     
-
     
(7,406
)
Net Cash From Investing Activities
   
-
     
-
     
(7,406
)
Cash from Financing Activities
                       
Proceeds for stock issuance
   
-
     
26,500
     
1,024,237
 
Loan from Shareholders
   
-
     
-
     
41,769
 
Payment on Loans from Shareholders
   
-
     
-
     
(41,769
)
Net Cash From Financing Activities
   
-
     
26,500
     
1,024 ,237
 
Net Increase/(Decrease) in cash
   
(295,765
)
   
(17,835
)
   
127,244
 
Beginning Cash Balance
   
423,009
     
87,505
     
-
 
Ending Cash Balance
 
$
127,244
   
$
69,670
   
$
127,244
 
Supplemental Schedule of Cash Flow Activities
                       
Cash paid for income taxes
 
$
-
   
$
-
   
$
800
 
Cash paid for interest
 
$
-
   
$
-
   
$
11,296
 
Related party debt forgiveness
 
$
-
   
$
-
   
$
11,023
 
Property contributed by shareholder
 
$
-
   
$
-
   
$
1,500
 
Stock issued for prepaid expenses   $  -     $  -     $  550,000  

 See accompanying notes to condensed financial statements.
 
 
 
 
6

 
 
GulfSlope Energy, Inc.
(A Development Stage Company)
Notes to Condensed Financial Statements
December 31, 2012
(Unaudited)
 

NOTE 1 - BASIS OF PRESENTATION

The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012. The results of operations for the period ended December 31, 2012, are not necessarily indicative of the operating results for the full year.

NOTE 2 - LIQUIDITY/GOING CONCERN

The Company’s plan of operation for the next twelve months is to: (i) consider guidelines of industries in which we may have an interest; (ii) adopt a business plan regarding engaging in the business of any selected industry; and (iii) commence such operations through funding and/or the acquisition of a “going concern” engaged in any industry selected. However, the Company has only $327,799 in assets, and has not established operations, and has accumulated losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company estimates that it will need to raise a minimum of $500,000 to meet its obligations during fiscal year 2013. The Company plans to finance the Company through equity and/or debt financings. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – COMMON STOCK/PAID IN CAPITAL

Effective April 13, 2012, the Company completed a reincorporation in the State of Delaware from the State of Utah. The reincorporation was effected by the merger of Plan A with and into GulfSlope Energy, Inc., a newly formed, wholly owned Delaware subsidiary. As of the effective time of the reincorporation merger, Plan A ceased to exist as a separate entity with GulfSlope being the surviving entity. Each outstanding share of common stock of Plan A was automatically converted into one share of GulfSlope common stock. The par value of GulfSlope common stock and preferred stock changed from $0.01 per share to $0.001 per share. In addition, the number of authorized shares of common stock was increased from 50,000,000 to 750,000,000 and the number of authorized shares of preferred stock was increased from 5,000,000 to 50,000,000. These financial statements and related notes give retroactive effect to the change in par value.

On May 1, 2012, the Company issued 50,000,000 shares of common stock to a third party for services rendered pursuant to a one-year consulting agreement. This agreement was valued at $500,000 or $0.01 per share. As of December 31, 2012, $333,333 has been expensed with $166,667 recorded as a prepaid expense.

On June 22, 2012, the Company entered into a one-year consulting agreement with John Preftokis, the Company’s former President and Chief Executive Officer, for 5,000,000 shares of common stock. The shares were subsequently issued in July 2012. This agreement was valued at $50,000, or $0.01 per share. As of December 31, 2012, $26,111 has been expensed with $23,889 recorded as a prepaid expense.

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows.  Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.
 
 
 
7

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

Forward-looking Statements

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” above.
 

Plan of Operations

During the next 12 months, our foreseeable cash requirements will primarily relate to 1) maintaining our good standing; the payment of our SEC reporting filing expenses, including associated legal and accounting fees; costs incident to reviewing or investigating any potential business venture, 2) compensation of our sole officer and a third party consultant, and 3) maintaining our good standing as a corporation in our state of organization. However, if we acquire assets or launch operations, we may need to raise additional capital.  See "Liquidity and Capital Requirements."


Results of Operations

Three Months Ended December 31, 2012 Compared to Three Months Ended December 31, 2011

We had no operations during the quarterly period ended December 31, 2012, nor do we have operations as of the date of this filing.  We had no sales during the three months ended December 31, 2012 and 2011. General and administrative expenses were $396,376 for the three months ended December 31, 2012, compared to $31,460 for the three months ended December 31, 2011. The increase in general and administrative expenses for the three months ended December 31, 2012 compared to the same period in 2011 was primarily attributed to (i) an increase of approximately $212,000 of consulting fees and professional fees paid to third parties ($148,000 is related to non-cash stock compensation expense), (ii) an increase of approximately $121,000 of compensation and benefits paid to our chief executive officer, and (iii) an increase of approximately $29,000 in travel expenses.
 
 
 
 
 
 

 
 
8

 
Liquidity and Capital Requirements

At of December 31, 2012, the Company has current assets of $327,799, current liabilities of $34,707 resulting in a working capital surplus of $293,092. We currently have no sources of revenue or credit facilities upon which we can draw to fund operations. We will require a minimum of $700,000 to fund operations during fiscal year 2013, comprised of the following: (i) $420,000 to fund obligations under existing employment and consulting agreements and (ii) and $280,000 for general working capital purposes based on our current burn rate. This will require that we raise a minimum of $500,000 during fiscal year 2013 to fund these expenses.

The Company has no sources of revenue and will continue to rely on best efforts equity, equity equivalent or debt financings and borrowings from shareholders to fund operations. Future equity financings may be dilutive to our stockholders, and the terms of future equity financings may include preferences or rights superior to our common stock. Debt financings may involve a pledge of assets (if any) and will rank senior to our common stock. There can be no assurance that we will be able to raise additional capital on terms favorable to the Company or at all. Failure to raise additional capital, on favorable terms or at all, will have a material adverse effect on our operations, and will likely cause us to curtail or cease operations.  Our auditors have issued a going concern opinion for our financial statements due to their substantial doubt about our ability to continue as a going concern.
 
Off-balance Sheet Arrangements

None; not applicable

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not required.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures.
 
Under the supervision and with the participation of our management, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).  Based upon that evaluation, our management concluded that, as of December 31, 2012, our disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

Limitations on the Effectiveness of Controls

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company's financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.


Changes in Internal Control Over Financial Reporting

During the most recent fiscal quarter covered by this Quarterly Report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 

 
 
9

 
PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None; not applicable.

Item 1A. Risk Factors

Not required.

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

None; not applicable.

Item 3. Defaults Upon Senior Securities

None; not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The following exhibits are attached hereto or are incorporated by reference:
 
Exhibit No.
Description
 
31.1 (1)
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1 (1)
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
The following financial information from our Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 formatted in Extensible Business Reporting language (XBRL); (i) Condensed Balance Sheets, (ii) Condensed Statements of Operations, (iii) Condensed Statements of Cash Flows and (iv) Notes to the Condensed Financial Statements(2)
 
(1)  
Filed herewith.
(2)
Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 
 
10

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


GULFSLOPE ENERGY, INC.
(Issuer)

Date:
02/14/2013
 
By:
/s/James M. Askew                                               
       
James M. Askew, Principal Executive Officer,
Principal Financial Officer, President and Director

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
11