HK EBUS Corp - FORM 10-Q - January 12, 2011

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EX-32.1 - HK EBUS Corp	v207854_ex32-1.htm
EX-31.1 - HK EBUS Corp	v207854_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 – Q

(Mark One)

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

For the quarterly period ended November 30, 2010

¨	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: 000-52782

Viper Resources, Inc.
(Exact name of registrant as specified in its charter)

Nevada		26-2113613
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Uptown Center 2100 West Loop South, Suite 900 Houston, Texas 77027
(Address of principal executive offices)

(832) 476-8941
(Registrant’s telephone number, including area code)


(Former Name, 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ 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 (Check one).

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of January 10, 2011 there were 84,116,214 shares of the issuer’s common stock, par value $0.00001, outstanding.

VIPER RESOURCES, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2010

TABLE OF CONTENTS

		PAGE

	Special Note Regarding Forward Looking Information	3

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18

Item 4	Controls and Procedures	18

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	19

Item 4.	(Removed and Reserved)	19

Item 5.	Other Information	19

Item 6.	Exhibits	22

	SIGNATURES	23

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

To the extent that the information presented in this Quarterly Report on Form 10-Q for the quarter ended November 30, 2010 discusses financial projections, information or expectations about our products or markets, or otherwise makes statements about future events, such statements are forward-looking. We are making these forward-looking statements in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties are described, among other places in this Quarterly Report, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

In addition, we disclaim any obligations to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report. When considering such forward-looking statements, you should keep in mind the risks referenced above and the other cautionary statements in this Quarterly Report.

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

		PAGE

Balance Sheets as at November 30, 2010 (Unaudited) and May 31, 2010		5

Statements of Operations for the three and six months ended
November 30, 2010 and November 30, 2009 (Unaudited) and the period from
November 18, 2005 (inception) through November 30, 2010 (Unaudited)		6

Statements of Cash Flows for the six months ended
November 30, 2010 and November 30, 2009(Unaudited) and the period from
November 18, 2005 (inception) through November 30, 2010 (Unaudited)		7

Notes to Financial Statements		8 - 12

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

BALANCE SHEET

	November 30,			May 31,
	2010			2010
	(Unaudited)			(Audited)
ASSETS

Current assets
Cash	$	174,363		$	202,557
Total current assets		174,363			202,557

Property and equipment
Office equipment net of $724 and $434 depreciation		2,172			2,462
Oil and gas properties, non producing, full cost method		96,000			96,000
Total property and equipment		98,172			98,462

Other assets
Prepaid expenses		-			20,000
Total other assets		-			20,000

Total Assets	$	272,535		$	321,019

LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued liabilities	$	1,410		$	2,050
Due to related party		100			1,510
Total current liabilities		1,510			3,560

Stockholders' Equity
Preferred stock, $0.00001 par value; 100,000,000 shares authorized; none issued and outstanding
Common stock, $0.00001 par value; 100,000,000 shares authorized; 84,116,214 issued and outstanding at November 30, 2010 and 79,116,214 issued and outstanding at May 31, 2010		841			791

Additional paid-in capital		6,743,372			6,643,422
Deficit accumulated during the exploration stage		(6,473,188	)		(6,326,754	)

Total Stockholders' Equity		271,025			317,459

Total Liabilities and Stockholders' Equity	$	272,535		$	321,019

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

													November 18,
													2005 (Inception)
													Through
	Three Months Ended November 30,						Six Months Ended November 30,						November 30,
	2010			2009			2010			2009			2010

Revenue	$	-		$	-		$	-		$	-		$	-

Expenses
Advertising					-									1,495
Accounting		1,300			4,250			7,350			8,300			52,765
Bank Charges		45			821			210			1,675			7,352
Delay rentals					-									2,944
Depreciation		145			145			290			145			724
Directors fees		-									12,500			17,000
Exploration costs		-			-									129,885
Insurance		5,000			10,000			20,000			10,000			60,000
Legal		7,500			77,718			32,413			100,551			322,905
Office expense		1,064			7,946			2,665			11,176			27,666
Rent		4,140			6,000			8,219			12,739			67,593
Telephone		601			1,326			1,320			1,747			10,401
Transfer agent		507			760			950			760			24,117
Travel		-			10,543						10,543			37,982
Management services		30,000			30,000			60,000			75,000			308,100
Write downs - oil and gas properties														5,243,871
Website/investor communications		8,018			31,225			13,017			99,056			141,362

Total expenses		58,320			180,734			146,434			344,192			6,456,162

Loss from operations		(58,320	)		(180,734	)		(146,434	)		(344,192	)		(6,456,162	)

Other income (expense)
(Interest)		-			-			-			(1,659	)		(17,026	)

Income (loss) before provision for income taxes		(58,320	)		(180,734	)		(146,434	)		(345,851	)		(6,473,188	)

Provision for income tax		-			-			-			-			-

Net income (loss)	$	(58,320	)	$	(180,734	)	$	(146,434	)	$	(345,851	)	$	(6,473,189	)

Net income (loss) per share
(Basic and fully diluted)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Basic weighted average number of common shares outstanding		83,491,214			78,384,884			83,491,214			78,384,884

Fully diluted average number of common shares outstanding		83,491,214			78,384,884			83,491,214			78,384,884

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

							November 18,
							2005 (Inception)
	Six Months Ended						Through
	November 30,						November 30,
	2010			2009			2010

Cash Flows From Operating Activities
Net income (loss) during the exploration stage		(146,434	)		(345,850	)		(6,473,189	)

Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Donated office space and services		-			-			13,500
Non-cash expenses
Depreciation		289			145			723
Compensatory stock issuances		-			12,500			17,000
Changes in operating assets and liabilities
Accounts payable and accrued liabilities		(2,050	)		(391	)		9,808
Other assets		20,000			(50,000	)		-
Exploration costs - lease write downs		-			-			5,243,871
Net cash provided by (used for) operating activities		(128,195	)		(383,596	)		(1,188,287	)

Cash Flows From Investing Activities:
Fixed assets		-			(2,896	)		(2,896	)
Oil and gas properties		-			(400,000	)		(691,871	)
Net cash flows from investing activities		-			(402,896	)		(694,767	)

Cash Flows From Financing Activities:
Sale of common stock		100,000			1,150,000			1,940,450
Increase in due to related party		-			-			116,966

Net cash provided by (used for) financing activities		100,000			1,150,000			2,057,416

Net Increase (Decrease) in Cash		(28,195	)		363,508			174,362

Cash at Beginning of Period		202,557			21,072			-

Cash at End of Period	$	174,362		$	384,580		$	174,362

Schedule of Non-Cash Investing and Financing Activities
In fiscal year 2010 the Company paid cash of $500,000 and issued 4,747,227 common shares valued at $4,648,000 in exchange for oil and gas properties valued at $5,148,000. The Company issued 153,508 common shares for debt relief of $125,263.

Supplemental Disclosure
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

November 30, 2010

NOTE 1.

ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Viper Resources, Inc. formerly Cobra Oil and Gas Company (the “Company”), was incorporated in the State of Nevada on November 18, 2005. The Company was formed to engage in identifying, investigating, exploring, and where determined advantageous, developing, mining, refining, and marketing oil and gas. The Company may also engage in any other business permitted by law, as designated by the Board of Directors of the Company.

Exploration Stage

The Company is currently in the exploration stage and has no significant operations.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Tax

The Company accounts for income taxes under Accounting Standards Codified No. 740 (“ASC 740”). Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Fiscal year

The Company employs a fiscal year ending May 31.

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

November 30, 2010

Net Income (Loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

Revenue Recognition

Revenue is recognized on an accrual basis as earned under contract terms. The Company has had no revenue to date.

Oil and Gas Interests

The Company follows the full-cost method of accounting for oil and natural gas properties. Under this method, all costs incurred in the exploration, acquisition, and development, including unproductive wells, are capitalized in separate cost centers for each country. Such capitalized costs include contract and concessions acquisition, geological, geophysical, and other exploration work, drilling, completing and equipping oil and gas wells, constructing production facilities and pipelines, and other related costs.

The capitalized costs of oil and gas properties in each cost center are amortized on a composite units of production method based on future gross revenues from proved reserves. Sales or other dispositions of oil and gas properties are normally accounted for as adjustments of capitalized costs. Gain or loss is not recognized in income unless a significant portion of a cost center’s reserves is involved. Capitalized costs associated with acquisition and evaluation of unproved properties are excluded from amortization until it is determined whether proved reserves can be assigned to such properties or until the value of the properties is impaired. If the net capitalized costs of oil and gas properties in a cost center exceed an amount equal to the sum of the present value of estimated future net revenues from proved oil and gas reserves in the cost center and the lower of cost or fair value of properties not being amortized, both adjusted for income tax effects, such excess is charged to expense.

Since the company has not produced any oil or gas, a provision for depletion has not been made.

Financial Instruments

The carrying value of the Company’s financial instruments, including cash and cash equivalents, as reported in the accompanying balance sheet, approximates fair value.

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

November 30, 2010

Stock based compensation

The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

NOTE 2.

OIL AND GAS PROPERTIES

The Company expensed $180,000 in Montana leases to exploration costs in fiscal year May 2010. This was due to an option expiration that was not exercised.

During the fiscal year ended May 2010 the Company has entered into working interest purchase agreements with Enercor, Inc. (a Nevada Corporation) with respect to three leases. The first of these gives the Company the right to receive a 35% working interest in the “Tar Sands” components of lease acreage, covering approximately 33,632 acres located in Southern Uintah County Utah, when and if exploration permission is granted by the U S Bureau of Land Management. The transaction was originated in July of 2009 with a value of $4,500,000 consisting of $4,000,000 in stock and $500,000 cash. Due to lack of action on the part of the U S Bureau of Land Management, and the current degree of uncertainty with regard to tar sand extraction techniques as applied to the Company’s lease holdings, the lease was written down to a value of $0 as of the end of the May 2010 fiscal year.

The second of these leases is a State of Utah BLM lease in which other parties retain a 62.5% working interest. We have received a 37.5% working interest from Enercor, Inc. in approximately 640 acres which has rights for oil and gas drilling and which we are seeking additional rights to the tar sands in the area from the U S Bureau of Land Management. The lease was acquired in August of 2009 and valued at $336,000 and was bought through the issuance of Company stock. At the May 2010 fiscal year end the fair market value was determined to be $36,000, with the Company taking a write down expense of $300,000.

The third of these leases is a State of Utah BLM lease in which other parties retain a 37.5% residual working interest after our purchase of a 62.5% working interest from Enercor. This lease has oil and gas drilling rights and we are seeking approval for the tar sands also. This lease was acquired in July of 2009 through the issuance of Company stock valued at $312,000. At the May 2010 fiscal year end the fair market value was determined to be $60,000, with the Company taking a write down expense of $252,000.

The acquisition of each of these leases was accomplished primarily through the issuance of new shares of Company common stock.

NOTE 3.

RELATED PARTY TRANSACTIONS

During the year ended May 31, 2010, the Company negotiated a settlement with Mr. Doug Berry, a former officer and stockholder, to exchange common stock of the Company for monies that had been advanced to the Company by Mr. Berry. The terms of the agreement are that the Company issue 153,508 shares of common stock in exchange for release of debt amounting to $125,263 which includes $110,625 in principal and $14,638 of accrued interest. The shares were valued at $0.816 per share which represented a 20% discount to the closing price of our common stock on the date of the Agreement.

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

November 30, 2010

The chief executive officer of Enercor, Inc. a company from which Viper Resources, Inc. purchased various lease interest in fiscal year 2010 for $5,148,000, formerly sat on the advisory board of Viper Resources, Inc. and is a shareholder in the Company.

NOTE 4.

OFFICE LEASE

In May 2008 the Company entered into a one year office lease, automatically renewable each year for one year until terminated by the landlord or tenant, at a rate of $2,000 per month plus costs. Lease expenses recorded under this lease in 2010 and 2009 were approximately $24,000 each year. The minimum required payments under the lease for fiscal year end 2011 are approximately $24,000.

NOTE 5.

WARRANTS

At May 31, 2008 the Company had 1,000,000 common stock purchase warrants outstanding, originally sold as part of a unit, allowing the holder to purchase one share of common stock at an exercise price of $.40, anytime through May 15, 2011. In fiscal year 2009 the Company sold 1,000,000 units to an investor for cash at $.25 per unit, or $250,000 total. Each unit consists of one share of common stock, and one warrant to purchase one share of common stock at an exercise price of $.40, anytime through June 9, 2011. At May 31, 2009 none of the warrants had been exercised, leaving a yearend balance of 2,000,000 warrants. The entire value of the units of $250,000 was assigned to the common stock as the warrants are non-detachable.

In fiscal year 2010 the Company sold 2,025,209 units to investors for cash at prices from $.17 - $1.00 per unit, or $1,250,000 total. Each unit consists of one share of common stock, and one warrant to purchase one share of common stock at an exercise prices ranging from $.20 - $1.25, anytime through expiration dates from June 2012 through February 2013. The entire value of the units was assigned to the common stock as the warrants are non-detachable. At May 31, 2010 none of the warrants had been exercised or had expired, leaving a yearend balance of 4,025,209 warrants.

During the quarter ended August 31, 2010 the Company sold 5,000,000 units to investors at a price of $0.02 per unit for a total of $100,000. Each unit consists of one share of common stock, and one warrant to purchase one share of common stock at an exercise price of $0.025, anytime through expiration date of July 2013. The entire value of the units was assigned to the common stock as the warrants are non-detachable. At November 30, 2010 none of the warrants had been exercised or had expired, leaving a quarter end balance of 9,025,209 warrants.

VIPER RESOURCES, INC.

(formerly Cobra Oil and Gas Company)

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

November 30, 2010

NOTE 6.

INCOME TAX

The Company accounts for income taxes pursuant to ASC 740 (“ASC 740”). Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

At May 31, 2010 and 2009 the Company had net operating loss carryforwards of approximately $6,313,000 and $520,000 which begin to expire in 2026. The deferred tax asset of approximately $2,210,000 and $180,000 in 2010 and 2009 created by the net operating losses have been offset by a 100% valuation allowance. The change in the valuation allowance in 2010 and 2009 was $2,030,000 and $100,000.

NOTE 7.

GOING CONCERN

The Company has suffered losses from operations and has a working capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company may raise additional capital through the sale of its equity securities, through offerings of debt securities, or through borrowings from financial institutions. In addition, the Company hopes to generate revenues from finding and producing oil and gas on its lease properties.

NOTE 8.

SUPPLEMENTAL OIL AND GAS INFORMATION

Capitalized costs at August 31, 2010 relating to the Company’s oil and gas activities are as follows:

Unproved properties, Utah, net

96,000.

Capitalized costs at May 31, 2010 relating to the Company’s oil and gas activities are as follows:

Unproved properties, Utah, net

96,000.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our audited consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of various factors, including those discussed elsewhere in this annual report.

We are in the exploration stage as an oil and gas exploration company and are presently engaged in limited oil and gas activities in Utah and Montana. We had minimal operations and generated no revenues during the quarter ended November 30, 2010 or the fiscal year ended May 31, 2010. Our ability to develop and maintain a meaningful level of revenues from operations is dependent on our ability to successfully acquire and drill exploration and development wells and complete producing property acquisition.

At the present time, we have no developed properties and no production.

In its report dated August 10, 2010, our auditors, Ronald R. Chadwick, PC expressed an opinion that there is substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. We have generated no operating revenues since our inception. We had an accumulated deficit of $6,473,188 and $6,326,754 as of November 30, 2010 and May 31, 2010, respectively. Our continuation as a going concern is dependent upon future events, including our ability to raise additional capital and to generate positive cash flows.

On July 25, 2009, August 5, 2009 and August 12, 2009 we entered into Purchase Agreements with Enercor Inc. pursuant to which we have acquired contract rights and working interests in leases located in Uintah County, Utah (see Part II, Item 5 hereof).

Our current business plan strategy is to develop our properties and any other prospects that we may acquire interests in. We intend to find any additional lease acquisitions and any seismic costs needed to further define the prospects from additional financing. No assurance can be given that such additional financing will be available to us as and when needed or, if available, the terms on which it will be available.

Subject to receipt of necessary financing, we plan to spend approximately $1,000,000 in the next 12 months on exploration and development activities such as seismic data acquisition, additional lease acquisition, technical studies and participating in joint venture development and exploration drilling.

We will require financing to meet working capital costs, including the cost of reviewing and negotiating transactions and other ordinary general and administrative costs such as regulatory compliance, investor relations, advisory services, officer’s salaries, office and general expenses, professional fees, travel and entertainment and rent and related expenses. We estimate that the level of working capital needed for these general and administrative costs for the next twelve months will be approximately $200,000. However, this estimate is subject to change, depending on the number of transactions in which we ultimately become involved. In addition, funding will be required for follow-on development of working interest obligations of any successful exploration prospects.

Oil and gas exploration requires significant outlays of capital and in many situations may offer a limited probability of success. We hope to enhance our chances for success by effectively using available technology, rigorously evaluating sub-surface data, and, to the extent possible, managing dry-hole and financial risks.

We intend to rely on synergistic partnering with sophisticated industry partners. The ideal partner would tend to be a regionally focused independent which has a large seismic database, a solid grasp on the play’s history, and a lead in understanding technology to exploit the play. However, there is no assurance that we will be able to successfully negotiate any such partnering agreement or raise the necessary financing to invest in such a venture, or that any such venture will yield us any revenues or profits.

We will face competition from firms that are well-established, successful, better capitalized and, in many instances, willing to pay more for properties than what we might consider prudent. Thus, our success will depend on the execution of our business model to

identify available transactions

quickly evaluate which transactions are most promising; and

negotiate a creative transaction structure.

Presently, we have one full-time employee consisting of Massimiliano Pozzoni, our President and Chief Executive and Financial Officer. We do not expect significant changes in the number of employees during the next twelve months.

We intend to contract out certain technical and administrative functions on an as-needed basis in order to conduct our operating activities. Our management team will select and hire these contractors and manage and evaluate their work performance.

Results of Operations

Revenues

We have had no revenues since our inception.

Expenses

Three and Six Months Ended November 30, 2010 and 2009

Due principally to lower legal, travel and website/investor communication expenses, our operating expenses during the three and six months ended November 30, 2010 decreased to $58,320 and $146,434 from $180,733 and $344,191 during the three and six months ended November 30, 2009.

Net Loss

Three and Six Months Ended November 30, 2010 and 2009

We incurred net losses for the three and six months ended November 30, 2010 of $58,320 and $146,434, respectively. We incurred net losses for the three and six months ended November 30, 2009 of $180,733 and $345,850, respectively. The decrease in net loss was directly attributable to the decrease in our operating expenses.

Liquidity and Capital Resources

At November 30, 2010, we had working capital of $172,853 compared to working capital of $198,997 at May 31, 2010. Current liabilities decreased to $1,510 at November 30, 2010 from $3,560 at May 31, 2010. The decrease in current liabilities at November 30, 2010 compared to May 31, 2010 was due to decreases in accounts payable and accrued liabilities and amounts due to related parties. Current assets decreased to $174,383 at November 30, 2010 from $202,557 at May 31, 2010. The decrease in current assets at November 30, 2010 compared to May 31, 2010 was due to a decrease in cash.

Critical Accounting Policies and Estimates

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Use of Estimates

Income Tax

The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net Income (Loss) per share

Revenue Recognition

Revenue is recognized on an accrual basis as earned under contract terms. The Company has had no revenue to date.

Oil and Gas Interests

Since the Company has not produced any oil or gas, a provision for depletion has not been made.

Financial Instruments

The carrying value of the Company’s financial instruments, including cash and cash equivalents, as reported in the Company’s balance sheet, approximates fair value.

Recent Accounting Pronouncements

The Company has adopted the provisions of SFAS No. 123(r) which are effective in general for transactions entered into or modified after June 15, 2005. The adoption did not have a material effect on the results of operations of the Company.

In May, 2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154, “Accounting Changes and Error Corrections – A Replacement of APB Opinion No. 20 and SFAS No. 3”. SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. The provisions of SFAS No. 154 are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The adoption of this standard is not expected to have a material effect on the Company’s results of operations or financial position.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Effect of Inflation and Changes in Price

Our future revenues, future rate of growth, results of operations, financial condition and ability to borrow funds or obtain additional capital, as well as the carrying value of our properties, are substantially dependent upon prevailing prices of oil and natural gas. If the price of oil and natural gas increases (decreases), there could be a corresponding increase (decrease) in the operating cost that we are required to bear for operations, as well as an increase (decrease) in revenues. Inflation has had a minimal effect on the operating activities of the Company.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Our Disclosure Controls

Under the supervision and with the participation of our chief executive and financial officer, Massimiliano Pozzoni, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, our chief executive and financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended November 30, 2010 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

In the ordinary course of our business, we may from time to time become subject to routine litigation or administrative proceedings which are incidental to our business. We are not presently a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.

ITEM 1A.

RISK FACTORS

Not applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We made no sales of equity securities during the three months ended November 30, 2010.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

(REMOVED AND RESERVED)

ITEM 5.

OTHER INFORMATION

On July 25, 2009 we entered into a Purchase Agreement with Enercor, Inc., a Nevada corporation (“Enercor”). Therein we acquired a 35% – 40% interest in certain contract rights acquired by Enercor as the successor to an agreement (the “Tar Sand Rights Agreement”) granting rights to extract tar sand deposits pursuant to Combined Hydrocarbon Leases (“CHL’s”) to be issued by the Bureau of Land Management (“BLM”) covering approximately 33,632 acres of land in Southern Uintah County, Utah (the “Property”). The issuance of the CHL’s is subject to regulatory requirements including, but not limited to, approvals of operating plans and environmental impact studies. If the CHL’s are issued, the right to develop the tar sand deposits covered by the CHL’s was to be assigned to Enercor, subject to a reserved overriding royalty and certain third party consent rights, and Enercor was to, in turn, assign a 35% – 40% working interest (the “Working Interest”) in the tar sand deposit development rights granted by the CHL’s to us. The Tar Sand Rights Agreement required the approval of the other contracting party to the assignment to and by Enercor of the tar sand deposit rights (the “Contract Approval”). On December 8, 2009 the other contracting party to the Tar Sand Rights Agreement entered into a Tar Sands Acquisition Agreement (the “Tar Sands Acquisition Agreement”) with Enercor pursuant to which it assigned to Enercor the existing federal oil and gas leases on the Property (the “Leases”), any CHL’s that may be subsequently issued on the Property, and all of such other contracting party’s rights in such Leases and CHL’s in exchange for $80,000, representing payment of certain out-of-pocket and legal fees incurred by such party in connection with the CHL conversion process, and a reserved overriding royalty. Upon the closing under the Tar Sands Acquisition Agreement, the Tar Sand Rights Agreement, including the Contract Approval requirement thereunder, was deemed void and of no further effect, Enercor owned the Leases and other rights described above, and Enercor now has standing to deal directly with the BLM in connection with the request to the BLM to issued CHL’s on the Property. Accordingly, when and if CHL’s are issued on the Property, they will be issued directly to Enercor and Enercor will be required to assign the Working Interest in the tar sands deposits to us without the necessity of first obtaining third party approval. The grant of the CHL’s to Enercor remains subject to satisfactory completion of all regulatory requirements. We expect the BLM to issue the CHL’s but can offer no assurance as to when and if this will occur.

We were required to pay Enercor an aggregate of up to $5,000,000 for the contract interest in a combination of cash ($500,000 to $1,000,000) and shares of our restricted common stock ($4,000,000). The stock payment consisting of 4,147,237 shares of our common stock was made on July 31, 2009 (the “Initial Closing Date”). The cash payments, each in the amount of $100,000 were required to be made at 30 day intervals following the Initial Closing Date. We determined to limit our aggregate cash payments to $500,000, all of which have been made, and receive an assignment, if applicable, of a 35% working interest.

On December 29, 2009 we agreed to restructure our arrangement with Enercor from a purchase and sale arrangement to a joint venture arrangement for the joint development of the Property’s tar sand deposits. During the quarter ended February 28, 2010 we and Enercor determined to forgo the restructuring and leave the transaction as a purchase and sale arrangement. The determination to leave the transaction as a purchase and sale arrangement had no material effect on our rights in the Property or our transaction costs.

On August 5, 2009 we entered into a Purchase Agreement with Enercor. Therein we acquired a 37.5% working interest in a lease covering 640 acres in Uintah County, Utah (Lease UTU – 38076). The lease is subject to aggregate royalties of 18.25%. The lease provides for conventional oil and gas drilling. We intend to apply to the Bureau of Land Management for the issuance of a Combined Hydrocarbon Lease on the property which will allow us to also engage in tar sands extraction activity. The lease is adjacent to the leases which are the subject of our July 25, 2009 and August 12 2009 Purchase Agreements with Enercor. We paid Enercor 300,000 shares of our common stock for the working interest.

On August 12, 2009 we entered into a Purchase Agreement with Enercor. Therein we acquired a 62.5% working interest in a lease covering 640 acres in Uintah County, Utah (Lease UTU – 27413). The lease is subject to aggregate royalties of 18.25%. The lease provides for conventional oil and gas drilling. We intend to apply to the Bureau of Land Management for the issuance of a Combined Hydrocarbon Lease on the property which will allow us to also engage in tar sands extraction activity. The lease is adjacent to the leases which are the subject of our July 25, 2009 and August 5, 2009 Purchase Agreements with Enercor. We paid Enercor 300,000 shares of our common stock for the working interest.

On July 6, 2009 we entered into a Share Issuance Agreement (the “Share Issuance Agreement”) with Baden Energy Group Ltd. (“Baden”) pursuant to which Baden could, at our request, purchase units of our securities at a price equal to 80% of the volume weighted average of the closing price for our common stock for the ten business days immediately preceding the date we supplied Baden with written notice of our request that they purchase units (the “Unit Price”). Each unit purchased consisted of one share of our restricted common stock and one common stock purchase warrant to purchase one share of our common stock for a period of three years from issuance at an exercise price equal to 125% of the Unit Price. Each such request by us was required to be in the amount of not less than $100,000 of units and required to be in multiples of $100,000. We were required to use the proceeds from all unit sales for exploration activities, working capital and general corporate activities. Baden could however, in its sole discretion, refuse to act on any request by us due to its determination that market conditions were unfavorable.

The Share Issuance Agreement was in effect until July 6, 2010. During the term of the Share Issuance Agreement, we were able to sell up to $6,000,000 of units to Baden, which amount could be increased by Baden, in its discretion, to $10,000,000.

During the period ending July 6, 2010, we could not discuss, solicit, negotiate or engage in any investment or corporate financing agreements without the prior written consent of Baden, which consent could not be arbitrarily withheld. Further, Baden had a right of first refusal during such period on all of our proposed financings with third parties. The foregoing right of Baden to prohibit our discussion, solicitation, negotiation or engagement in investment or corporate financing agreements or to maintain a right of first refusal was to be of no further force or effect, however, in the event Baden refused a unit purchase request from us by reason of unfavorable market conditions.

The Share Issuance Agreement further provided that until July 6, 2010 we could only engage in equity financings and could not engage in debt financings. The Share Issuance Agreement was not assignable or transferrable by Baden without our prior written consent, which consent could not be arbitrarily withheld.

Effective August 12, 2009 Baden purchased 319,419 units, at our request, pursuant to our Share Issuance Agreement with Baden at a price of $0.94 per unit or an aggregate of $300,000. Each unit consists of one share of our common stock and one common stock purchase warrant to purchase one additional share of our common stock at a price of $1.18 per share for a period of three years from issuance.

Effective September 22, 2009 Baden purchased 600,000 units, at our request, pursuant to our Share Issuance Agreement with Baden at a price of $1.00 per unit or an aggregate of $600,000. Each unit consists of one share of our common stock and one common stock purchase warrant to purchase one additional share of our common stock at a price of $1.25 per share for a period of three years from issuance.

Effective February 23, 2010 Baden purchased 606,060 units, at our request, pursuant to our Share Issuance Agreement with Baden at a price of $0.165 per unit or an aggregate of $100,000. Each unit consists of one share of our common stock and one common stock purchase warrant to purchase one additional share of our common stock at a price of $0.20 per share for a period of three years from issuance.

Notwithstanding the July 6, 2010 termination of the Share Issuance Agreement, effective July 20, 2010 Baden purchased 5,000,000 units, at our request, at a price of $0.02 per unit or an aggregate of $100,000. Each unit consists of one share of our common stock and one common stock purchase warrant to purchase one additional share of our common stock at a price of $0.025 per share for a period of three years from issuance. Baden has no further obligation to buy any of our securities and we do not expect to be making additional sales of our securities to Baden in the future.

On January 28, 2010, we entered into an Investment Agreement (“Investment Agreement”) with Dutchess Opportunity Fund, II, LP (the “Investor”). Pursuant to the Investment Agreement, the Investor committed to purchase up to $5,000,000 of our common stock over a period of thirty-six months (the “Equity Line”). We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement. The purchase price shall be set at 94% of the highest posted bid price for our common stock during the 5 consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put notice. The amount that we are entitled to put in any one notice shall be equal to either (i) 200% of the average daily trading volume for our common stock for the 3 trading days prior to the applicable put notice date, multiplied by the average of the 3 daily closing prices immediately preceding the put date or (ii) $100,000. The Investor will not be obligated to purchase shares if the Investor’s total number of shares beneficially held at that time would exceed 4.99% of the number of shares of our common stock as determined in accordance with Rule 13d-1 of the Securities Exchange Act of 1934, as amended. In addition, we are not permitted to draw on the facility unless there is an effective registration statement to cover the resale of the shares.

Pursuant to the terms of a Registration Rights Agreement dated January 28, 2010 between us and the Investor, on February 25, 2010 we filed a registration statement (the “Registration Statement”) with the SEC to register the resale by the Investor of up to 25,000,000 shares of the common stock underlying the Investment Agreement. On April 6, 2010 we filed Amendment No. 1 to the Registration Statement and pursuant to a cut-back comment from the SEC Staff, reduced the number of shares being registered under the Registration Statement to 14,500,000. On June 1, 2010 we withdrew the registration statement and filed a new registration statement on June 2, 2010 under which we are seeking to register 14,705,000 shares. We are obligated to use all commercially reasonable efforts to have the registration statement declared effective as soon as possible.

ITEM 6.

EXHIBITS

(a)

Exhibits.

31.1/31.2

Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial Officer

32.1/32.2

Rule 1350 Certification of Chief Executive and Financial Officer

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VIPER RESOURCES, INC.

Dated: January 10, 2011	By:	/s/ Massimiliano Pozzoni
		Massimiliano Pozzoni
		President, Chief Executive, Financial
		and Accounting Officer

HK EBUS Corp - FORM 10-Q - January 12, 2011

Attached files

HK EBUS Corp Reports