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EXCEL - IDEA: XBRL DOCUMENT - BARCLAY ROAD, INC. | Financial_Report.xls |
EX-31 - EXHIBIT 31 - BARCLAY ROAD, INC. | exh31.htm |
EX-32 - EXHIBIT 32 - BARCLAY ROAD, INC. | exh32.htm |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
þ
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
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For the quarterly period ended September 30, 2011 |
o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from to |
Commission File Number 000-52332
BARCLAY ROAD, INC.
(Exact name of registrant as specified in its charter)
Wyoming
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20-5571215
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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112 ½ Sevier Court, Barbourville, KY
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40906
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(Address of principal executive offices)
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(Zip Code)
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(404) 229-6408
(Registrant’s Telephone Number, Including Area Code)
(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 þ 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 þ NO o
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 o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
YES þ NO o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 341,743,768 shares of common stock, no par value, issued and outstanding as of November 8, 2011.
BARCLAY ROAD, INC.
INDEX
Barclay Road, Inc.
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Index
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Page
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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1
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Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010 (Unaudited)
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2 | ||||
Statements of Operations for the Nine and Three Months Ended September 30, 2011 and 2010 and the Period October 20,
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2006 (Date of formation) through September 30, 2011 (Unaudited)
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3
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Statement of Stockholders' Equity for the Period Ended September 30, 2011 (Unaudited)
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4 | ||||
Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010 and the Period October 20, 2006 (Date of
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formation) through September 30, 2011 (Unaudited)
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5 | ||||
Notes to Unaudited Financial Statements
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6 | ||||
Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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13 | |||||
Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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14 | |||||
Item 4.
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Controls and Procedures
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14 | |||||
PART II.
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OTHER INFORMATION
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Item 5.
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Other Information
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15 | |||
Item 6.
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Exhibits.
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15 | |||
Signatures
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16 |
PART I—FINANCIAL INFORMATION
ITEM 1.
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FINANCIAL STATEMENTS (UNAUDITED)
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Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. The following condensed consolidated financial statements should be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.
The results of operations for the nine and three months ended September 30, 2011 are not necessarily indicative of the results for the entire fiscal year or for any other period.
1
BARCLAY ROAD, INC. | ||||||||
BALANCE SHEETS
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(A Development Stage Company)
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(Unaudited)
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ASSETS
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September 30,
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December 31,
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2011
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2010
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Intangible asset - net
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$ | 2,500 | $ | 4,000 | ||||
Investment in oil and gas properties
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260 | - | ||||||
TOTAL ASSETS
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$ | 2,760 | $ | 4,000 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
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Current Liabilities:
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Accrued expenses
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$ | 11,500 | $ | 10,755 | ||||
Advances from related parties
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- | 27,418 | ||||||
Total Current Liabilities
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11,500 | 38,173 | ||||||
Commitments and Contingencies
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Stockholders' Deficiency:
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Common stock no par value - authorized unlimited;
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341,743,768 and 41,743,768 outstanding as of
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September 30, 2011 and December 31, 2010, respectively
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1,035,362 | 1,015,102 | ||||||
Paid in capital
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53,410 | 6,497 | ||||||
Deficit accumulated during development stage
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(1,097,512 | ) | (1,055,772 | ) | ||||
Total Stockholders' Deficiency
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(8,740 | ) | (34,173 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY
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$ | 2,760 | $ | 4,000 |
2
BARCLAY ROAD, INC.
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STATEMENTS OF OPERATIONS
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(A Development Stage Company)
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(Unaudited)
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For the Period
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For the Three Months
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For the Nine Months
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October 20, 2006
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Ended | Ended | (Date of Inception) | ||||||||||||||||||
September 30,
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September 30,
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Through
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2011
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2010
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2011
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2010
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September 30, 2011
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Revenues
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$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Cost and expenses:
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General and administrative expenses
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19,101 | 500 | 41,740 | 1,500 | 903,812 | |||||||||||||||
Impairment loss
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- | - | - | - | 231,195 | |||||||||||||||
19,101 | 500 | 41,740 | 1,500 | 1,135,007 | ||||||||||||||||
Loss from operations
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(19,101 | ) | (500 | ) | (41,740 | ) | (1,500 | ) | (1,135,007 | ) | ||||||||||
Other income (expense):
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Gain on sale of asset
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- | - | 37,747 | |||||||||||||||||
Interest expense
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- | - | - | - | (252 | ) | ||||||||||||||
- | - | - | - | 37,495 | ||||||||||||||||
Loss before provision for income taxes
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(19,101 | ) | (500 | ) | (41,740 | ) | (1,500 | ) | (1,097,512 | ) | ||||||||||
Provision for income taxes
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- | - | - | - | - | |||||||||||||||
Net loss
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$ | (19,101 | ) | $ | (500 | ) | $ | (41,740 | ) | $ | (1,500 | ) | $ | (1,097,512 | ) | |||||
Loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
Weighted average number of common shares
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outstanding - basic and diluted
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66,743,768 | 41,743,768 | 50,168,676 | 41,743,768 |
3
BARCLAY ROAD, INC.
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STATEMENTS OF STOCKHOLDERS' DEFICIENCY
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(A Development Stage Company)
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(Unaudited)
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Deficit
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Additional
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Accumulated
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Paid
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During
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Common Stock |
in
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Development
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Total
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Number of shares
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Amount
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Capital
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Stage
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Beginning balance, October 20, 2006
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$ | 231,195 | 251,720 | $ | 231,195 | $ | - | $ | - | |||||||||||
Net loss
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(260,621 | ) | (260,621 | ) | ||||||||||||||||
Balance at December 31, 2006
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(29,426 | ) | 251,720 | 231,195 | - | (260,621 | ) | |||||||||||||
Stock issued for consulting fees (valued @ $.009 per share)
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714,825 | 40,061 | 714,825 | |||||||||||||||||
Stock issued for intangible asset
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10,000 | 1,000 | 10,000 | |||||||||||||||||
Net loss
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(692,888 | ) | (692,888 | ) | ||||||||||||||||
Balance at December 31, 2007
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2,511 | 292,781 | 956,020 | (953,509 | ) | |||||||||||||||
Contribution from officer
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6,497 | 6,497 | ||||||||||||||||||
Stock issued for consulting fees (valued at $.001 per share)
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23,820 | 23,820,000 | 23,820 | |||||||||||||||||
Net loss
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(45,153 | ) | (45,153 | ) | ||||||||||||||||
Balance, January 1, 2009
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(12,325 | ) | 24,112,781 | 979,840 | 6,497 | (998,662 | ) | |||||||||||||
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Common stock issued for consulting fees (valued @ $.002
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per share)
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35,262 | 17,630,987 | 35,262 | |||||||||||||||||
Net loss
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(49,303 | ) | (49,303 | ) | ||||||||||||||||
Balance, December 31, 2009
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(26,366 | ) | 41,743,768 | 1,015,102 | 6,497 | (1,047,965 | ) | |||||||||||||
Net loss
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(7,807 | ) | (7,807 | ) | ||||||||||||||||
Balance, December 31, 2010
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(34,173 | ) | 41,743,768 | 1,015,102 | 6,497 | (1,055,772 | ) | |||||||||||||
Common stock issued for acquisition of oil and gas
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properties
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260 | 200,000,000 | 260 | |||||||||||||||||
Common stock issued for debt
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20,000 | 100,000,000 | 20,000 | |||||||||||||||||
Contribution from shareholders
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46,913 | 46,913 | ||||||||||||||||||
Net loss
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(41,740 | ) | (41,740 | ) | ||||||||||||||||
Balance, September 30, 2011
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$ | (8,740 | ) | 341,743,768 | $ | 1,035,362 | $ | 53,410 | $ | (1,097,512 | ) |
4
BARCLAY ROAD, INC.
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STATEMENTS OF CASH FLOWS
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(A Development Stage Company)
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(Unaudited)
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For the Nine Months Ended
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For the Period
October 20, 2006 (Date of |
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September 30,
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Inception) through
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2011
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2010
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September 30, 2011
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Cash flows from operating activities:
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Net loss
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$ | (41,740 | ) | $ | (1,500 | ) | $ | (1,097,512 | ) | |||
Adjustments to reconcile net loss
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to net cash used in operating activities:
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Depreciation and amortization
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1,500 | 1,500 | 8,352 | |||||||||
Stock-based compensation
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- | - | 773,907 | |||||||||
Impairment loss
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- | - | 231,195 | |||||||||
Gain on sale of asset
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- | - | (37,747 | ) | ||||||||
Changes in operating assets
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and liabilities:
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- | - | - | |||||||||
Increase in accrued expenses and accounts payable
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745 | - | 11,500 | |||||||||
Net Cash Used in Operating Activities
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(39,495 | ) | - | (110,305 | ) | |||||||
Cash flows from investing activities:
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Purchase of property, plant and
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equipment
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- | - | (1,704 | ) | ||||||||
Net Cash Used in Investing Activities
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- | - | (1,704 | ) | ||||||||
Cash flows from financing activities:
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Advances from related parties
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39,495 | - | 112,009 | |||||||||
Net Cash Provided by Financing Activities
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39,495 | - | 112,009 | |||||||||
Net increase (decrease) in cash
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- | - | - | |||||||||
Cash - beginning of year
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- | - | - | |||||||||
Cash - end of year
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$ | - | $ | - | $ | - | ||||||
Supplementary information:
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Cash paid during the year for:
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Interest
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$ | - | $ | - | ||||||||
Income taxes
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$ | - | $ | - | ||||||||
Common stock issued for
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oil and gas properties
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$ | 260 | $ | 260 | ||||||||
Common stock issued for debt
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$ | 20,000 | $ | 20,000 | ||||||||
Advances from related parties contributed to
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paid-in-capital
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$ | 46,913 | $ | 53,410 | ||||||||
Advances from related parties exchanged for the
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sale of asset
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$ | 38,599 |
5
BARCLAY ROAD, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(A DEVELOPMENT STAGE COMPANY)
(Unaudited)
1.
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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The balance sheet as of September 30, 2011 and the statements of operations, stockholders' deficiency and cash flows for the periods presented have been prepared by Barclay Road, Inc. (the "Company" or "Barclay Road") and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' deficiency and cash flows for all periods presented have been made. The information for the balance sheet as of December 31, 2010 was derived from audited financial statements of the Company.
Organization
Barclay Road, Inc. was incorporated on October 20, 2006 pursuant to the laws of Wyoming.
The Company is considered a development stage enterprise as defined in ASC 205-915 "Development Stage Entities". Planned principal activities have not yet produced significant revenues, as the Company had been engaged primarily in software development. The Company is currently engaged in oil and gas activities in the state of Kentucky and acquired an oil and gas lease. The ability of the Company to emerge from the development stage with respect to its planned principal business activity is dependent upon its successful efforts to raise additional equity financing for the drilling and exploration of oil and natural gas.
Basis of Presentation
On November 2, 2006, the Company entered into a plan of merger with Lifetime Books, Inc. (“Lifetime Books”). In connection with the plan of merger, the Company acquired the assets and assumed the liabilities of Lifetime Books. For accounting purposes, the plan of merger has been treated as a recapitalization of Lifetime Books (subsidiary) as the acquirer. The financial statements prior to November 2, 2006 are those of Lifetime Books.
As provided for in the plan of merger, the stockholders at Lifetime Books received 211,225 of Barclay Road common stock, representing 100% of the outstanding stock after the merger, in exchange for the outstanding common shares of Lifetime Books common stock, which was accounted for as a reverse acquisition. The financial statements reflect the retroactive restatement of Lifetime Books’ historical stockholders’ equity to reflect the equivalent number of shares of common stock issued in the plan of merger.
The merger of Lifetime Books was reported as a purchase with no goodwill, with book values considered to be fair value.
As of December 31, 2007, the Company sold its investment in Lifetime Books to Herbert C. Becker ("Becker") in exchange for the Company's obligation to Becker.
On March 18, 2008, the Company's shareholders approved a one-for-two thousand reverse stock split of its common stock which became effective on that date.
6
On September 20, 2011, the Company acquired an oil and gas lease in Knox County, Kentucky.
Going Concern
The Company’s financial statements for the period October 20, 2006 (Date of Inception) through September 30, 2011, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. Management recognizes that the Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.
The Company’s business is subject to most of the risks inherent in the establishment of a new business enterprise. The likelihood of success of the Company must be considered in light of the expenses, difficulties, delays and unanticipated challenges encountered in connection with the Inception of a new business, raising operating and development capital, and drilling and exploration for oil and natural gas. There is no assurance the Company will ultimately achieve a profitable level of operations.
The Company presently does not have sufficient liquid assets to finance its anticipated funding needs and obligations. The Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and achieve a level of sales adequate to support its cost structure. Management is actively seeking additional capital to ensure the continuation of its activities. However, there is no assurance that additional capital will be obtained or that the Company will be profitable. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties should the Company be unable to continue as a going concern.
Significant Accounting Policies
The Company’s significant accounting policies are summarized in Note 1 of the Company’s Report on Form 10-K for the year ended December 31, 2010. There were no significant changes to these accounting policies during the nine months ended September 30, 2011, except as noted below, and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
Full Cost Method
The Company follows the full cost method of accounting for its investments in oil and natural gas properties. All costs incurred in the acquisition, exploration and development of oil and natural gas properties, including unproductive wells, are capitalized. Included in capitalized costs are general and administrative costs that are directly related with acquisition, exploration and development activities. Proceeds from the sale of oil and natural gas properties are credited to the full cost pool, except in transactions involving a significant quantity of reserves, or where the proceeds received from the sale would significantly alter the relationship between capitalized costs and proved reserves, in which case a gain or loss is recognized. Under the rules of the Securities and Exchange Commission (“SEC”) for the full cost method of accounting, the net carrying value of oil and natural gas properties, reduced by the asset retirement obligation, is limited to the sum of the present value (10% discount rate) of the estimated future net cash flows from proved reserves, based on the current prices plus the lower of cost or estimated fair market value of unproved properties adjusted for related income tax effects.
7
Capitalized costs of proved oil and natural gas properties are depleted on a units of production method using proved oil and natural gas reserves. Costs depleted include net capitalized costs subject to depletion and estimated future dismantlement, restoration, and abandonment costs. Estimated future abandonment, dismantlement and site restoration costs include costs to dismantle, relocate and dispose of the Company’s offshore production platforms, gathering systems, wells and related structures, considering related salvage values.
2.
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ACQUISITIONS OF OIL AND GAS PROPERTIES
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On September 20, 2011, the Company acquired an oil and gas lease from Mission Energy, LLC, a Kentucky limited liability company ("Mission"), providing the Company of all Mission's right, title and interest in an oil and gas lease in Knox County, Kentucky. In connection with the acquisition of the lease, the Company issued 200,000,000 shares of its common stock to Mission and its designees with a fair value of $260.
The lease consists of approximately 52 acres, has a well spacing requirement of 10 acres, and is in the Appalachian Basin. Knox County has been widely explored and drilled for oil and gas and is known to have multiple pay formations including the Maxon Sand, Big Lime, Borden Shale, Devonian Shale and Corniferous Formations. Knox County has been a producer of oil and gas dating back to the early 1940s.
3.
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EARNINGS (LOSS) PER SHARE
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Basic earnings (loss) per common share is computed by dividing net income by the weighted average number of common shares outstanding during the specified period. Diluted earnings (loss) per common share is computed by dividing net income by the weighed average number of common shares and potential common shares during the specified period. For the nine and three months ended September 30, 2011 and 2010, there were no potentially dilutive securities outstanding.
8
4.
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FAIR VALUE MEASUREMENTS
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The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
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Level 1 - Observable inputs such as quoted market prices in active markets
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Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable
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Level 3 - Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions
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As of September 30, 2011, the Company held certain financial assets that are measured at fair value on a recurring basis. The fair values of the cash and cash equivalents is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis as Level 2 or Level 3 and there were no transfers in or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, 2011 and 2010.
The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of September 30, 2011 and December 31, 2010.
Assets at Fair Value as of September 30, 2011 and | ||||||||||||||||
December 31, 2010 Using | ||||||||||||||||
Quoted Prices in | Significant | |||||||||||||||
Active Markers | Other | Significant | ||||||||||||||
for Identical | Observable | Unobservable | ||||||||||||||
Assets | Inputs | Inputs | ||||||||||||||
September 30, 2011 | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | ||||||||
December 31,2010 | ||||||||||||||||
Total | $ | - | $ | - | $ | - | $ | - |
9
There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the nine months ended September 30, 2011 and the Company did not have any financial liabilities as of September 30, 2011.
The Company has other financial instruments, such as accrued expenses and other liabilities which have been excluded from the tables above. Due to the short-term nature of these instruments, the carrying value of accrued expenses and other liabilities approximate their fair values.
5.
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IMPAIRMENT LOSS
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On December 7, 1988, a judgment for $231,195 U.S. was issued to the benefit of Herbert L. Becker (a director and shareholder of the Company) against Lifetime Books. The shareholder took possession of all assets of Lifetime Books via a judgment lien certificate.
Lifetime Books is a publishing house with more than 1,500 titles. Lifetime Books purchases or licenses manuscripts from authors or from other publishers, and then prints and sells them through bookstores such as Barnes and Noble and Amazon.com.
As of December 31, 2006, the Company recorded an impairment loss of $231,195 writing down the value of the manuscripts to $-0-.
6.
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INTANGIBLES
|
Other intangibles included the purchase of a trade name. Amounts assigned to these intangibles were determined by management. Management considered a number of factors in determining the allocation including valuations and independent approvals. Other intangibles are being amortized over 5 years, the expected life. Amortization expense for the nine months ended September 30, 2011 and 2010, was $1,500, and $1,500, respectively.
The components of intangible assets, net are as follows:
December 31, 2010 | ||||||||
Gross Carrying Amount | Accumulated Amortization | |||||||
Trade name | $ | 10,000 | $ | 7,500 |
10
7.
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ADVANCES FROM RELATED PARTIES
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During the nine months ended September 30, 2011 and 2010, the Company received $39,495 and $-0-, respectively from certain shareholders to pay obligations for the Company. These advances are interest free and are due on demand. On September 28, 2011, the Company agreed to issue the debt holders 100,000,000 shares of common stock to liquidate outstanding debt of $20,000, which shares were issued in October 2011. The balance of the debt in the amount of $46,913 was forgiven and the Company recorded the forgiveness as a contribution to paid-in-capital from the debt holders and increased paid-in-capital for the same amount.
As of September 30, 2011 and December 31, 2010, the Company owed these related parties $-0- and $27,418, respectively.
8.
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COMMON STOCK
|
The Company is authorized to issue unlimited common shares of no par value stock, of which 341,743,768 shares were outstanding as of September 30, 2011. Any amounts included in paid-in capital represents contributions of capital from shareholders or forgiveness of debts from related parties.
On September 28, 2011, the Company agreed to issue the debt holders 100,000,000 shares of common stock to liquidate outstanding debt of $20,000, which shares were issued in October 2011. The balance of the debt in the amount of $46,913 was forgiven and the Company recorded the forgiveness as a contribution to paid-in-capital from the debt holders and increased paid-in-capital for the same amount.
On March 18, 2008, the Company's shareholders approved a one-for-two thousand reverse stock split of its outstanding common stock which became effective on that date.
All share references since inception have been revised to give retroactive effect to the reverse stock split.
9.
|
INCOME TAXES
|
Since the Company is in its development stage and has no income, no income tax benefit has been reflected on the financial statements.
The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax bases of reported assets and liabilities.
The principal items giving rise to deferred taxes are certain expenses which have been deducted for financial reporting purposes which are not currently deductible for income tax purposes and future benefit of certain net operating loss carryforward. In recognition of the uncertainty regarding the ultimate amount of tax benefits to be deferred from the Company’s net operating loss carryforward, the Company has recorded a valuation allowance for the entire amount of the deferred assets.
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10.
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STOCK-BASED COMPENSATION
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The Company issues shares of its common stock to non-employees as compensation for services rendered. For the nine months ended September 30, 2011 and 2010, the Company issued -0- and -0- shares and recorded $-0- and $-0-, respectively, as stock-based compensation.
For the period October 6, 2006 (Date of Inception) through September 30, 2011, the Company issued 41,491,048 shares and recorded $773,907 as stock-based compensation.
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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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The following discussion of our consolidated financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto and the other financial information included elsewhere in this report.
Certain statements contained in this report, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.
BACKGROUND
Barclay Road, Inc. (“Barclay Road” or the “Company”) was incorporated on October 20, 2006 pursuant to the laws of Wyoming. We are a development stage company. On November 2, 2006, the Company entered into a plan of merger with Lifetime Books, Inc. (“Lifetime Books”). In connection with the plan of merger, the Company acquired the assets and assumed the liabilities of Lifetime Books. As provided for in the plan of merger, the stockholders at Lifetime Books received 251,720 shares of Barclay Road common stock, representing 100% of the outstanding stock after the merger, in exchange for the outstanding common shares of Lifetime Books common stock, which was accounted for as a reverse acquisition. As of December 31, 2007, the Company sold its investment in Lifetime Books to Herbert L. Becker ("Becker") in exchange for the Company's obligation to Becker. On July 2, 2008, Becker resigned as Chairman of the Board and President of the Company, and Eduardo Valero Erana was elected Chairman of the Board, President and Chief Executive Officer of the Company.
PLAN OF OPERATION
With the sale of our Lifetime Books business, our Board of Directors determined that our business model should be re-evaluated to identify and acquire another business through a business combination. On September 20, 2011, the Company acquired an oil and gas lease from Mission Energy, LLC, a Kentucky limited liability company ("Mission"), providing the Company of all Mission's right, title and interest in an oil and gas lease in Knox County, Kentucky. In connection with the acquisition of the lease, the Company issued 200,000,000 shares of its common stock to Mission and its designees with a fair value of $260.
The lease consists of approximately 52 acres, has a well spacing requirement of 10 acres, and is in the Appalachian Basin. Knox County has been widely explored and drilled for oil and gas and is known to have multiple pay formations including the Maxon Sand, Big Lime, Borden Shale, Devonian Shale and Corniferous Formations. Knox County has been a producer of oil and gas dating back to the early 1940s.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2011 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2010
During the nine months ended September 30, 2011, we incurred a net loss of $41,740 compared to a net loss of $1,500 for the nine months ended September 30, 2010. The increase in our net loss for the nine months ended September 30, 2011 over the comparable period in 2010 is due to an increase of $40,240 in general and administrative expenses.
THREE MONTHS ENDED SEPTEMBER 30, 2011 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2010
During the three months ended September 30, 2011, we incurred a net loss of $19,101 compared to a net loss of $500 for the three months ended September 30, 2010. The increase in our net loss for the three months ended September 30, 2011 over the comparable period in 2010 is due to an increase of $18,601 in general and administrative expenses.
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LIQUIDITY
At September 30, 2011, we had a working capital deficit of approximately $11,500, compared with a working capital deficit of approximately $38,173 at December 31, 2010.
At September 30, 2011, we had total assets of approximately $2,760, compared to total assets of approximately $4,000 at December 31, 2010. We had no cash at September 30, 2011 or at December 31, 2010. Net cash used in operating activities in the nine months ended September 30, 2011 was $39,495, as compared with approximately $-0- in the comparable period in 2010; net cash used in investing activities was $-0- in 2011 and 2010; and net cash provided by financing activities was $39,495 in 2011, as compared with $-0- in 2010.
Our operations have never been profitable, and it is expected that we will continue to incur operating losses in the future. In the nine months ended September 30, 2011, we generated revenues of $-0-, incurred operating expenses of $41,740, and had no net income. As of September 30, 2011, we had $-0- of cash on hand to fund operations. There is no assurance that we will operate profitably in the future.
We will have to obtain significant additional capital to continue with our proposed business. There is no assurance that we will be able to obtain sufficient capital to implement either of our alternative business plans. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Recent Accounting Pronouncements
The Company’s significant accounting policies are summarized in Note 1 of the Company’s Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The Company does not expect that the adoption of any recent accounting pronouncements will have a material impact on its financial statements.
Commitments and Contractual Obligations
We did not have any commitments or contingencies as at September 30, 2011.
Off-Balance Sheet Arrangements
As of September 30, 2011, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and our Chief Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that these disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
(a) The Company held its Annual Meeting of Stockholders on November 7, 2011, in Barbourville, Kentucky.
(b) The following persons were elected directors of the Company at the Annual Meeting, to serve and hold office until the next annual meeting of stockholders and until their successors are elected and qualify: Andrew J. Kacic, Walter Powell and Eduardo Valero Erana.
(c) At the Annual Meeting, a total of 222,350,000 shares were present in person or by proxy out of 241,743,768 shares outstanding on the September 29, 2011 record date. The following is the result of stockholder voting on the proposals before the meeting:
Proposal
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Votes in Favor
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Votes Against
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Abstentions/
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Broker Nonvotes
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Election of
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Walter J. Kacic
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as a Director
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222,350,000
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--
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--
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Election of
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Walter Powell
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|||
as a Director
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222,350,000
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--
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--
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Election of
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|||
Eduardo Valero Erana
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as a Director
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222,350,000
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--
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--
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ITEM 6. EXHIBITS
(a) Exhibits
31
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Certification of Chief Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32
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Certification of Chief Executive and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
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Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.
SEC Ref. No.
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Title of Document
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Label Linkbase Document
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101.PRE
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XBRL Taxonomy Presentation Linkbase Document
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The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BARCLAY ROAD, INC. | |||
(Registrant)
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Date: November 9, 2011
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By:
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/s/Walter Powell | |
Walter Powell
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President and Principal Financial Officer |
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