Annual report pursuant to Section 13 and 15(d)

CORRECTION OF IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS

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CORRECTION OF IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS
12 Months Ended
Sep. 30, 2019
Correction Of Immaterial Error In Previously Issued Financial Statements  
CORRECTION OF IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 12 – CORRECTION OF IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS

 

Prior to the filing of the Company’s September 30, 2019 Form 10-K, the management of the Company determined that capitalized interest should be computed for the Company’s oil and gas properties that were being actively developed. As a result, the Company is revising certain of its condensed financial statements as of and for the quarters ended December 31, 2018, March 31, 2019, and June 30, 2019 to correct this error. After considering Staff Accounting Bulletin No. 99, Assessing Materiality, management does not deem this revision to be material to its financial statements due to its consideration of the amount and direction of the error and its impact on the quality of key oil and natural gas industry financial metrics.  

 

As a result of the correction, the originally reported net loss for the three months ended December 31, 2018, March 31, 2019, and June 30, 2019 was decreased by approximately $78,000, $106,000, and $371,000, respectively, and the originally reported net loss for the six months ended March 31, 2019, and nine months ended June 30, 2019 was decreased by approximately $183,000 and $554,000, respectively. Originally reported basic and diluted loss per share for these periods was not changed.

 

The following tables reflect the amounts within the balance sheet, statement of operations and statement of cash flows as originally reported to amounts as now reflected as of and for the quarters ended December 31, 2018, March 31, 2019, and June 30, 2019.

 

    December 31, 2018  
    As Originally
reported
    Adjustment     Corrected  
Balance Sheet                        
Oil and Natural Gas Properties   $ 11,203,790     $ 77,542     $ 11,281,332  
Total Assets   $ 28,172,736     $ 77,542     $ 28,250,278  
Accumulated Deficit   $ (42,282,117 )   $ 77,542     $ (42,204,575 )
Total Liabilities and Stockholders’ Deficit   $ 28,172,736     $ 77,542     $ 28,250,278  
                         
    March 31, 2019  
      As Originally
reported
      Adjustment       Corrected  
Balance Sheet                        
Oil and Natural Gas Properties   $ 16,892,281     $ 183,299     $ 17,075,580  
Total Assets   $ 32,438,825     $ 183,299     $ 32,622,124  
Accumulated Deficit   $ (47,695,556 )   $ 183,299     $ (47,512,257 )
Total Liabilities and Stockholders’ Deficit   $ 32,438,825     $ 183,299     $ 32,622,124  
                         
    June 30, 2019  
      As Originally
reported
      Adjustment       Corrected  
Balance Sheet                        
Oil and Natural Gas Properties   $ 17,318,916     $ 554,086     $ 17,873,002  
Total Assets   $ 37,551,079     $ 554,086     $ 38,105,165  
Accumulated Deficit   $ (54,574,356 )   $ 554,086     $ (54,020,270 )
Total Liabilities and Stockholders’ Deficit   $ 37,551,079     $ 554,086     $ 38,105,165  

 

    Three Months Ended December 31, 2018  
    As Originally reported     Adjustment     Corrected  
                   
Statement of Operations                        
Interest Expense, net
  $ (98,157 )   $ 77,542     $ (20,615 )
Net Loss   $ (423,861 )   $ 77,542     $ (346,319 )
                         
Statement of Cash Flows                        
Net Loss   $ (423,861 )   $ 77,542     $ (346,319 )
Capitalized Interest Expense   $     $ (77,542 )   $ (77,542 )
                                     
    Three Months Ended March 31, 2019     Six Months Ended March 31, 2019  
    As Originally reported     Adjustment     Corrected     As Originally reported     Adjustment     Corrected  
                                     
Statements of Operations                                                
Interest Expense, net   $ (106,152 )   $ 105,757     $ (395 )   $ (204,309 )   $ 183,299     $ (21,010 )
Net Loss   $ (5,413,439 )   $ 105,757     $ (5,307,682 )   $ (5,837,299 )   $ 183,299     $ (5,654,000 )
                                                 
Statement of Cash Flows                                                
Net Loss                           $ (5,837,299 )   $ 183,299     $ (5,654,000 )
Capitalized Interest Expense                           $     $ (183,299 )   $ (183,299 )
                                     
    Three Months Ended June 30, 2019     Nine Months Ended June 30, 2019  
    As Originally reported     Adjustment     Corrected     As Originally reported     Adjustment     Corrected  
                                     
Statements of Operations                                                
Interest Expense, net   $ (2,080,620 )   $ 370,787     $ (1,709,833 )   $ (2,284,928 )   $ 554,086     $ (1,730,842 )
Net Loss   $ (6,878,800 )   $ 370,787     $ (6,508,013 )   $ (12,716,099 )   $ 554,086     $ (12,162,013 )
                                                 
Statement of Cash Flows                                                
Net Loss                           $ (12,716,099 )   $ 554,086     $ (12,162,013 )
Capitalized Interest Expense                           $     $ (554,086 )   $ (554,086 )