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EX-31.1 - VIKING ENERGY GROUP, INC.v165472_ex31-1.htm
EX-31.2 - VIKING ENERGY GROUP, INC.v165472_ex31-2.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 2009

¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  ______________   to  _______________

Commission file number 000-29219

SINOCUBATE, INC.
(Exact name of registrant as specified in its charter)

Nevada
 
98-0199508
(State or other jurisdiction of incorporation or
organization)
 
(IRS Employer Identification No.)

65 Broadway, 7th Floor
New York, New York
 
10006
(Address of principal executive offices)
 
(Zip Code)

Issuer’s telephone number
 
(212) 359 4300

 
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark 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 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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 ¨
 
APPLICABLE ONLY TO ISSUERS 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 Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ¨ No ¨ Not Applicable

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of common stock outstanding as of September 30, 2009 was 995,655.



 
 

 

SINOCUBATE, INC.

FORM 10-Q

PART I – FINANCIAL INFORMATION
 
ITEM 1.
FINANCIAL STATEMENTS
F-1
 
BALANCE SHEETS (Unaudited)
F-2
 
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
F-3
 
STATEMENT OF CASH FLOWS (Unaudited)
F-4
 
STATEMENT OF STOCKHOLDERS’ DEFICIENCY (Unaudited)
F-5
 
NOTES TO FINANCIAL STATEMENTS (Unaudited)
F-8
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
3
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
5
ITEM 4.
CONTROLS AND PROCEDURES
5
PART II – OTHER INFORMATION
 
ITEM 1.
LEGAL PROCEEDINGS
6
ITEM 1A.
RISK FACTORS
6
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
6
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
6
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
6
ITEM 5.
OTHER INFORMATION
6
ITEM 6.
EXHIBITS
6
SIGNATURES
7

 
2

 

PART I – FINANCIAL INFORMATION

ITEM 1. 
FINANCIAL STATEMENTS

SINOCUBATE, INC. 
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2009
(Unaudited)

 
F-1

 

SINOCUBATE, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)

   
September 30,
   
December 31,
 
 
 
2009
   
2008
 
   
Unaudited
       
ASSETS
           
             
Current
           
Cash
 
$
   
$
   
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
                 
Current
               
Accounts payable and accrued liabilities
 
$
   
$
   
Notes payable
   
         
                 
     
         
                 
Capital stock
               
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding as of September 30, 2009
               
Common stock, $0.01 par value, 100,000,000 shares authorized 995,655 shares issued and outstanding as of September 30, 2009
   
996
     
    996
 
Additional paid-in capital
   
2,296,443
     
2,282,641
 
Deficit
   
(1,305,454
)
   
(1,305,454)
 
Deficit accumulated during the development stage
   
(991,985
)
   
(978,183)
 
                 
     
         
                 
   
$
   
$
   

SEE ACCOMPANYING NOTE
 
F-2

 
SINOCUBATE, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)

    
Three months ended
     
Nine months ended
     
January 1, 2004
(Date of Inception of
the Development 
Stage) to
 
   
September 30,
   
September 30
   
September 30,
 
   
2009
   
2008
   
2009
   
2008
   
2009
 
General and administrative expenses
                             
Amortization
 
$
-
   
$
-
   
$
-
   
$
-
   
$
27,077
 
Bad debt
   
-
     
-
     
-
     
-
     
525
 
Corporate promotion
                                   
13,920
 
Finance charges
           
10
             
16,112
     
27,397
 
Insurance
                                   
15,901
 
Interest on notes payable
           
3,234
             
11,220
     
34,648
 
Management and consultant fees
           
14,774
             
65,755
     
290,354
 
Office supplies and services
           
91
             
3,428
     
43,240
 
Professional fees
   
4,000
             
13,802
     
18,810
     
299,819
 
Rent
   
-
     
-
             
-
     
16311
 
Wages
                                   
84,258
 
                                         
Loss before other items
   
(4,000
)
   
(18,109
)
   
(13,802
)
   
(130,325
)
   
(853,450
)
                                         
Other items
   
  
                                 
Loss on disposition of equipment
   
-
     
-
     
-
     
-
     
(15,028
)
Write-down of intangible assets
   
-
     
-
     
-
     
-
     
(50,001
)
Write-off of payables
           
37,040
             
73,607
     
73,607
 
Write-off of notes payable
                                   
14,823
 
Gain on settlement of lawsuit
           
31,874
                     
44,445
 
Gain on sales of investment
                           
31,874
     
31,874
 
Other income
           
36,512
             
36,512
     
42,530
 
                                         
Income (loss) from continuing operations
   
(4,000
   
87,317
     
(13,802)
     
26,668
     
(711,200
)
                                         
Operating income (loss) from discontinued Operations
                                   
(388,905
)
Gain (Loss) on sale of discontinued operations
           
-
             
78,436
     
108,120
 
                                         
Net income (loss)
 
$
(4,000
 
$
87,317
   
$
(13,802
 
$
105,104
   
$
(991,985
)
                                         
Basic and diluted income (loss) per common share
 
$
(0.004
 
$
0.12
   
$
(0.01
 
$
0.15
         
                                         
Weighted average number of common share outstanding – basic and diluted
   
995,655,
     
752,039
     
995,655
     
709,866
         
                                         
Comprehensive loss
                                       
Net income (loss)
 
$
(4,000
 
$
87,317
   
$
(13,802
 
$
105,104
   
$
(991,985
)
Foreign currency translation adjustment
           
(15
)
           
805
         
Total comprehensive income(loss)
 
$
(4,000
 
$
87,302
   
$
(13,802
 
$
105,909
   
$
(991,985
)

SEE ACCOMPANYING NOTES

 
F-3

 

SINOCUBATE, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)

                    
January 1, 2004
  
                     
(Date of
Inception
  
                     
of the
Development
  
     
Nine months ended
     
Stage) to
  
     
September 30,
     
September 30,
 
   
2009
   
2008
   
2009
 
Cash flows from operating activities
                 
Net income (loss)
 
$
(13,802
 
$
(105,104
)
 
$
(991,985
)
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Finance charges
   
-
     
16,102
     
27,387
 
Accrued interest on notes payable
   
-
     
7,986
     
31,414
 
Amortization
   
-
     
-
     
27,077
 
Accrued Expenses
   
13,802
     
(17,306
   
63,108
 
Foreign exchange effect on notes payable
   
-
     
(2,798
   
5,303
 
Issuance of common stock for services
   
-
     
-
     
1,000
 
Stock-based compensation
   
-
     
-
     
4,460
 
Loss on disposition of equipment
   
-
     
-
     
225,184
 
Write-down of intangible assets
   
-
     
-
     
360,001
 
Write-off of payables
   
-
     
(73,607
   
(73,607)
 
Write-off of notes payable
   
-
     
-
     
(18,729
)
Gain on settlement of lawsuit
   
-
     
-
     
(44,445
)
Gain on sale of subsidiaries
   
-
     
(78,436
   
(108,121
)
Gain on Sale of investment
   
-
     
(31,874
   
-
 
Other Income
   
-
     
(36,512
   
-
 
Changes in non-cash working capital items:
   
-
     
-
     
-
 
Prepaid expenses and deposits
   
-
     
-
     
-
 
Accounts payable and accrued liabilities
   
-
     
10,013
     
143,521
 
                         
Cash used in continuing operations
   
-
     
(66,716
   
(422,836
)
Discontinued operations
   
-
     
(362
   
(171,213
)
                         
Net cash used in operating activities
   
-
     
(67,078
   
(640,784
)
                         
Cash flows from investing activities
                       
Proceeds from sale of subsidiary
   
-
     
-
     
1
 
Proceeds from assets disposition
   
-
     
-
     
5,458
 
Purchase of equipment
   
-
     
-
     
(5,808
)
Net cash used in investing activities
   
-
     
-
     
(349
                         
Cash flows from financing activities
                       
Settlement of notes payable
   
-
     
-
     
398,614
 
Proceeds from issuance of common stock
   
-
     
-
     
1,000
 
                         
Net cash provided by financing activities
   
-
             
399,614
 
             
-
         
Effect of exchange rate changes on cash
   
-
     
805
     
(14,734
                         
Change in cash from continuing operations
           
(67,078
   
(209,518
     
-
                 
Cash, beginning
           
66,273
     
209,518
 
     
-
                 
Cash, ending
 
$
-
     
-
   
$
-
 
 
Supplemental cash flow information

SEE ACCOMPANYING NOTES

 
F-4

 

SINOCUBATE, INC.
 (A Development Stage Company)
STATEMENT OF STOCKHOLDERS’ DEFICIENCY
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
Accumulated
  
  
 
  
  
Deficit
Accumulated
  
  
 
  
  
  
 
  
  
 
  
  
Additional
  
  
 
  
  
Other
  
  
 
  
  
During the
  
  
 
  
  
  
Common Shares
  
  
Treasury
  
  
Paid-in
  
  
Subscriptions
  
  
Comprehensive
  
  
 
  
  
Development
  
  
 
  
   
Number
   
Amount
   
Stock
   
Capital
   
Received
   
Income
   
Deficit
   
Stage
   
Total
 
May 3, 1989 (Inception) through December 31, 1997
   
60,022
   
$
600
   
$
-
   
$
9,400
   
$
-
   
$
-
   
$
(10,000
)
 
$
-
   
$
-
 
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
(148,931
)
   
-
     
(148,931
)
Shares issued for cash
   
180,000
     
1,800
     
-
     
148,200
     
2,000
     
-
     
-
     
-
     
152,000
 
Balance at December 31, 1998
   
240,022
     
2,400
     
-
     
157,600
     
2,000
     
-
     
(158,931
)
   
-
     
3,069
 
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
(511,587
)
   
-
     
(511,587
)
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
(14,130
)
   
-
     
-
     
(14,130
)
Share issued for services
   
15,000
     
150
     
-
     
124,850
     
-
     
-
     
-
     
-
     
125,000
 
Subscription receivable
   
12,000
     
120
     
-
     
99,880
     
8,000
     
-
     
-
     
-
     
108,000
 
Share issued for intangible assets
   
15,000
     
150
     
-
     
124,850
     
-
     
-
     
-
     
-
     
125,000
 
Balance at December 31, 1999
   
282,022
     
2,820
     
-
     
507,180
     
10,000
     
(14,130
)
   
(670,518
)
   
-
     
(164,648
)
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
(339,063
)
   
-
     
(339,063
)
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
18,885
     
-
     
-
     
18,885
 
Shares issued for cash
   
21,600
     
216
     
-
     
259,784
     
-
     
-
     
-
     
-
     
260,000
 
Shares issued for settlement of debt
   
4,500
     
45
     
-
     
174,955
     
-
     
-
     
-
     
-
     
175,000
 
Subscription receivable
   
600
     
6
     
-
     
9,994
     
(200
)
   
-
     
-
     
-
     
9,800
 
Subscription received
   
30,000
     
300
     
-
     
499,700
     
(9,350
)
   
-
     
-
     
-
     
490,650
 
Stock option benefit
   
-
     
-
     
-
     
14,235
     
-
     
-
     
-
     
-
     
14,235
 
Balance at December 31, 2000
   
338,722
     
3,387
     
-
     
1,465,848
     
450
     
4,755
     
(1,009,581
)
   
-
     
464,859
 
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
375,621
     
-
     
375,621
 
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
13,629
     
-
     
-
     
13,629
 
Shares issued for cash
   
300
     
3
     
-
     
2,247
     
-
     
-
     
-
     
-
     
2,250
 
Subscription received
   
-
     
-
     
-
     
-
     
200
     
-
     
-
     
-
     
200
 
Stock option benefit
   
-
     
-
     
-
     
118,920
     
-
     
-
     
-
     
-
     
118,920
 
Repurchase of common stock for treasury
   
-
     
-
     
(270
)
   
(6,611
)
   
-
     
-
     
-
     
-
     
(6,881
)
Balance at December 31, 2001
   
339,022
     
3,390
     
(270
)
   
1,580,404
     
650
     
18,384
     
(633,960
)
   
-
     
968,598
 
Net loss
   
-
     
-
     
-
     
-
     
-
             
(63,864
)
   
-
     
(63,864
)
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
             
(1,155
)
           
-
     
(1,155
)
Shares issued for cash
   
4,500
     
45
     
-
     
33,705
     
-
     
-
     
-
     
-
     
33,750
 
Balance at December 31, 2002
   
343,522
   
$
3,435
   
$
(270
)
 
$
1,614,109
   
$
650
   
$
17,229
   
$
(697,824
)
 
$
-
   
$
937,329
 
 
SEE ACCOMPANYING NOTES

 
F-5

 

SINOCUBATE, INC.
 (A Development Stage Company)
STATEMENT OF STOCKHOLDERS’ DEFICIENCY
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
Deficit
  
  
 
  
  
  
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
Accumulated
  
  
 
  
  
Accumulated
  
  
 
  
  
  
 
  
  
 
  
  
 
  
  
Additional
  
  
 
  
  
Other
  
  
 
  
  
During the
  
  
 
  
  
  
Common Shares
  
  
Treasury
  
  
Paid-in
  
  
Subscriptions
  
  
Comprehensive
  
  
 
  
  
Development
  
  
 
  
   
Number
   
Amount
   
Stock
   
Capital
   
Received
   
Income
   
Deficit
   
Stage
   
Total
 
Balance at December 31, 2002
   
343,522
     
3,435
     
(270
)
   
1,614,109
     
650
     
17,229
     
(697,824
)
   
-
     
937,329
 
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
(607,630
)
   
-
     
(607,630
)
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
1,752
     
-
     
-
     
1,752
 
Stock option benefit
   
-
     
-
     
-
     
11,800
             
-
     
-
     
-
     
11,800
 
Cancellation of agreement
   
-
     
-
     
-
             
(650
)
   
-
     
-
     
-
     
(650
)
Share issues for cash on exercise of options
   
12,000
     
120
     
-
     
11,880
     
-
     
-
     
-
     
-
     
12,000
 
Share issues for consulting services
   
45,000
     
450
     
-
     
49,675
     
-
     
-
     
-
     
-
     
50,125
 
Share issues for intangible assets
   
60,000
     
600
     
-
     
104,400
     
-
     
-
     
-
     
-
     
105,000
 
Share issued for software
   
60,000
     
600
     
-
     
53,400
     
-
     
-
     
-
     
-
     
54,000
 
Balance at December 31, 2003
   
520,522
     
5,205
     
(270
)
   
1,845,264
     
-
     
18,981
     
(1,305,454
)
   
-
     
563,726
 
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(795,364
)
   
(795,364
)
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
(238
)
   
-
     
-
     
(238
)
Stock-based compensation
   
-
     
-
     
-
     
4,460
     
-
     
-
     
-
     
-
     
4,460
 
Shares issued for cash on exercise of options
   
1,000
     
10
     
-
     
990
     
-
     
-
     
-
     
-
     
1,000
 
Share issued for debt
   
140,000
     
1,400
     
-
     
68,600
     
-
     
-
     
-
     
-
     
70,000
 
Share issued for consulting services
   
2,000
     
20
     
-
     
980
     
-
     
-
     
-
     
-
     
1,000
 
Balance at December 31, 2004
   
663,522
     
6,635
     
(270
)
   
1,920,294
     
-
     
18,743
     
(1,305,454
)
   
(795,364
)
   
(155,416
)
Net loss