Business Context and Reporting Period
Company: GoEnergy, Inc. (Note: Metadata listed "Prairie Operating Co." but filing is for GoEnergy, Inc.)
Reporting Period: Quarter ended October 31, 2010
Status: Exploration Stage Company
Operations: The Company has no current revenue source. It holds interests in oil and gas wells and mining claims (specifically the "Eagle Property" in British Columbia) but has not commenced significant operations or exploration activities due to lack of funds.
Key Financial Metrics
| Metric | Q3 2010 (3 Months) | Q3 2009 (3 Months) | Inception to Oct 31, 2010 |
|---|---|---|---|
| Revenue | $0 | $0 | $4,865 (Investment Income) |
| Net Loss | $(41,605) | $(3,121) | $(240,705) |
| Cash and Equivalents | $12,864 | $3,601 | $12,864 |
| Total Assets | $13,349 | $990 | $13,349 |
| Total Liabilities | $157,409 | $128,445 | $157,409 |
| Working Capital | $(144,060) | $(127,455) | $(144,060) |
| Loss Per Share | $(0.01) | $(0.00) | N/A |
Debt & Liquidity: The Company has a significant working capital deficit. Current liabilities include approximately $121,848 in loans from related parties and $25,000 in a new convertible loan from a related party. Cash flow from operations was negative $(18,111) for the quarter, offset by $30,000 in financing activities (related party loans).
Material Changes vs. Prior Period
- Net Loss Increase: Net loss increased significantly from $(3,121) in Q3 2009 to $(41,605) in Q3 2010. This was driven primarily by a $25,779 interest expense on related party loans and $10,000 in administrative expenses paid to a related party (the President).
- Liability Growth: Total current liabilities increased by approximately $29,000, largely due to the accrual of interest on related party loans and the addition of a new $25,000 convertible loan.
- Cash Position: Cash and cash equivalents increased from $975 at the beginning of the quarter to $12,864, funded entirely by related party financing.
Outlook, Risks, and Subsequent Events
Going Concern: The filing explicitly states that the Company's accumulated deficit and working capital deficit raise substantial doubt about its ability to continue as a going concern. Management plans to raise funds via borrowing or equity issuance but has no specific plan in place.
Exploration Plan: The Company intends to explore the Eagle Property in three phases (costing approx. $6,200, $16,500, and $126,500 respectively) but currently lacks the funds to commence Phase One.
Subsequent Events (Post-Oct 31, 2010):
- Share Exchange: On November 5, 2010, the Company entered into an agreement to acquire Kick the Can Corp. (KTC Corp) in exchange for issuing 33,430,107 shares (approx. 95.51% of outstanding stock). The exchange closed December 7, 2010.
- Bridge Notes: Simultaneously with the exchange agreement, the Company issued $200,000 in Bridge Notes and warrants to certain persons.
- Private Placement: Following the share exchange, the Company entered into agreements to sell up to $1.5 million in Series A Cumulative Convertible Preferred Stock and warrants to accredited investors.
Investor Verification Checklist
- Going Concern Status: Verify if the Company has secured the additional funding required to avoid insolvency, given the $144,060 working capital deficit.
- Related Party Dependence: Confirm the terms and repayment status of the $146,848 in total related party loans, which constitute the majority of liabilities.
- Share Exchange Impact: Review the details of the Kick the Can Corp. acquisition and the resulting dilution (issuance of 33M+ shares) to understand the new capital structure.
- Exploration Funding: Determine if the $1.5 million preferred stock offering was successfully closed to fund the planned exploration phases.
- Bridge Note Conversion: Monitor if the $200,000 Bridge Notes convert into equity upon a "Qualified Offering" (defined as a $600k+ private placement).