TAMM Oil & Gas Corp. - FORM 10-Q

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - TAMM Oil & Gas Corp.	Financial_Report.xls
EX-31.2 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 FOR WILLIAM S. TIGHE (PRINCIPAL FINANCIAL OFFICER) DATED FEBRUARY 10, 2012. - TAMM Oil & Gas Corp.	ex31-2.htm
EX-32.2 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 FOR WILLIAM S. TIGHE (PRINCIPAL FINANCIAL OFFICER) DATED FEBRUARY 10, 2012. - TAMM Oil & Gas Corp.	ex32-2.htm
EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 FOR GUIDO HILEKES (PRINCIPAL EXECUTIVE OFFICER) DATED FEBRUARY 10, 2012. - TAMM Oil & Gas Corp.	ex32-1.htm
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 FOR GUIDO HILEKES (PRINCIPAL EXECUTIVE OFFICER) DATED FEBRUARY 10, 2012. - TAMM Oil & Gas Corp.	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

the quarterly period ended December 31, 2011

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _____________to _____________

Commission file number 333-137174

TAMM OIL AND GAS CORP.

(Exact name of small business issuer as specified in its charter)

Nevada	20-3773508
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Suite 1120, 833 4th Ave SW, Calgary, AB, Canada T2P 3T5

(Address of principal executive offices)

403-686-1000

(Issuer’s telephone number)

N/A

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

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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  No 

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 definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Larger accelerated filer 	Accelerated filer 
Non-accelerated filer 	Smaller reporting company 

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 92,582,524 shares outstanding as of February 10, 2012.

TAMM OIL AND GAS CORP.

TABLE OF CONTENTS

		Page
	Cautionary Statement Concerning Forward-Looking Statements	1

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of December 31, 2011 (unaudited) and March 31, 2011	2

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2011 and 2010, and from October 10, 2005 (date of inception) through December 31, 2011 (unaudited)	3

	Condensed Consolidated Statement of Stockholders' Equity from April 1, 2011 through December 31, 2011 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2011 and 2010, and from October 10, 2005 (date of inception) through December 31, 2011 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19

Item 4T.	Controls and Procedures	19

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	20

Item 2.	Recent Sales of Unregistered Securities and Use of Proceeds	20

Item 3.	Defaults Upon Senior Securities	20

Item 4.	Submission of Matters to a Vote of Security Holders	20

Item 5.	Other Information	20

Item 6.	Exhibits	21

Signatures		22

Cautionary Statement on Forward-Looking Statements.

The discussion in this Report on Form 10-Q, including the discussion in Item 2 of PART I, contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about the Company’s business, based on management’s current beliefs and assumptions made by management. Words such as “expects”, “anticipates”, “intends”, believes”, “plans”, “seeks”, “estimates”, and similar expressions or variations of these words are intended to identify such forward-looking statements. Additionally, statements that refer to the Company’s estimated or anticipated future results, sales or marketing strategies, new product development or performance or other non-historical facts are forward-looking and reflect the Company’s current perspective based on existing information. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements. Such risks and uncertainties include those set forth below in Item 1 as well as previous public filings with the Securities and Exchange Commission. The discussion of the Company’s financial condition and results of operations included in Item 2 of PART I should also be read in conjunction with the financial statements and related notes included in Item 1 of PART I of this quarterly report. These quarterly financial statements do not include all disclosures provided in the annual financial statements and should be read in conjunction with the “Risk Factors” and annual consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended March 31, 2011 as filed with the Commission on June 30, 2011. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

TAMM OIL AND GAS CORP.
(An Exploration Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			March 31,
	2011			2011
	(unaudited)
ASSETS
Current assets:
Cash	$	2,879		$	3,150
Accounts receivable		10,772			8,737
Other current assets		809			809
Total current assets		14,460			12,696

Property, plant and equipment:
Oil sands properties, unevaluated		14,134,299			14,825,270
Furniture and equipment, net		100			184
Total property, plant and equipment		14,134,399			14,825,454

Other assets:
Investment in affiliated entity		315,494			-
Receivable from affiliated entity		-			315,494
Total other assets		315,494			315,494

Total assets	$	14,464,353		$	15,153,644

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	630,500		$	546,476
Deposits		-			100,000
Advances from related parties		58,548			70,799
Total current liabilities		689,048			717,275

Commitments and contingencies

Stockholders' equity:
Preferred stock; $0.001 par value; 1,000,000 shares authorized, none issued and outstanding		-			-
Common stock; $0.001 par value; 750,000,000 shares authorized, 92,582,524 and 80,780,000 shares issued and outstanding as of December 31, 2011 and March 31, 2011, respectively		92,583			80,780
Common stock to be issued		330,075			3,616,857
Additional paid in capital		83,288,291			79,863,311
(Deficit) accumulated during exploration stage		(70,339,287	)		(70,206,676	)
Accumulated other comprehensive income		403,643			1,082,097
Total stockholders' equity		13,775,305			14,436,369

Total liabilities and stockholders' equity	$	14,464,353		$	15,153,644

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

TAMM OIL AND GAS CORP
(An Exploration Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)




	For the three months ended December 31,						For the nine months ended December 31,						For the period October 10, 2005 (date of inception) through
	2011			2010				2011		2010				December 31, 2011
OPERATING EXPENSES:
Selling, general and administrative	$	31,504		$	34,955		$	130,602		$	138,804			$	2,600,876
Loss on impairment of oil and gas properties		-			-			-			-				64,193,028
Depreciation		24			25			76			74				1,063
Total operating expenses		31,528			34,980			130,678			138,878				66,794,967

Loss from operations		(31,528	)		(34,980	)		(130,678	)		(138,878	)			(66,794,967	)

OTHER INCOME (EXPENSE)
Foreign exchange (loss)		-			-			-			-				(115	)
Interest (expense)		(608	)		(15,527	)		(1,933	)		(45,512	)			(164,491	)
Loss on settlement of debt		-			-			-			-				(3,340,173	)
Loss on impairment of fixed assets		-			-			-			-				(37,032	)

Loss before provision for income taxes		(32,136	)		(50,507	)		(132,611	)		(184,390	)			(70,336,778	)

Provision for income taxes:
Current		-			-			-			-				2,509
Deferred		-			-			-			-				-
Total income taxes		-			-			-			-				2,509

NET LOSS	$	(32,136	)	$	(50,507	)	$	(132,611	)	$	(184,390	)		$	(70,339,287	)

Net (loss) per common share (basic and fully diluted)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding, basic and fully diluted		92,582,523			80,780,000			90,363,896			80,780,000

Comprehensive (loss) income:
Net (loss)	$	(32,136	)	$	(50,507	)	$	(132,611		$	(184,390	)		$	(70,339,287	)
Foreign currency translation gain (loss)		412,070			474,337			(678,454	)		296,267				403,643

Comprehensive income (loss):	$	379,934		$	423,830		$	(811,065	)	$	111,877			$	(69,935,644	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

TAMM OIL AND GAS CORP.
(An Exploration Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FROM APRIL 1, 2011 THROUGH DECEMBER 31, 2011
(unaudited)

										Other			(Deficit) Accumulated
	Common stock				Additional		Common Stock			Comprehensive			During Exploration
	Shares		Amount		Paid in Capital		To be issued			Income (loss)			Stage			Total
Balance, March 31, 2011		80,780,000	$	80,780	$	79,863,311	$	3,616,858		$	1,082,097		$	(70,206,676	)	$	14,436,369
Common stock issued in settlement of debt		10,602,524		10,603		3,276,180		(3,286,783	)		-			-			-
Sale of common stock		1,200,000		1,200		148,800		-			-			-			150,000
Foreign currency translation gain		-		-		-		-			(678,454	)		-			(678,454	)
Net loss		-		-		-		-			-			(132,611	)		(132,611	)
Balance, December 31, 2011		92,582,524	$	92,583	$	83,288,291	$	330,075		$	403,643		$	(70,339,287	)	$	13,775,305

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

TAMM OIL AND GAS CORP.
(An Exploration Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

							For the period
							October 10, 2005
	For the nine months ended December 31,						(date of inception)
	2011			2010			through December 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(132,611	)	$	(184,390	)	$	(70,339,287	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation		76			74			1,063
Impairment of property and equipment		-			-			37,032
Impairment of investments in stock and royalty agreements		-			-			64,193,028
Common stock to be issued in settlement of assumed debt		-			-			433,164
Loss on settlement of debt		-			-			3,340,173
(Increase) in accounts receivable		(2,511	)		(2,299	)		(8,031	)
Decrease (increase) in prepaid expenses		(39	)		-			216
Increase in accounts payable and accrued liabilities		110,774			157,931			1,164,330
Net cash (used in) operating activities		(24,311	)		(28,684	)		(1,178,312	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and gas properties		-			(29,659	)		(1,201,439	)
Decrease in receivables, affiliates		-			52,024			228,570
Purchase of investment		-			-			(576,252	)
Purchases of property and equipment		-			-			(38,223	)
Net cash provided by (used in) investing activities		-			22,365			(1,587,344	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock		50,000			-			1,854,000
Proceeds from notes payable		-			-			1,307,295
Repayments of notes payable		(9,200	)		-			(535,189	)
Net cash provided by financing activities		40,800			-			2,626,106

Effect of currency rate change on cash		(16,760	)		(212	)		142,429

Net (decrease) increase in cash and cash equivalents		(271	)		(6,531	)		2,879
Cash and cash equivalents at beginning of period		3,150			8,573			-
Cash and cash equivalents at end of period	$	2,879		$	2,042		$	2,879

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	-		$	-		$	-
Cash paid during the period for taxes	$	-		$	-		$	2,509

NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock for royalty agreements	$	-		$	-		$	10,200,000
Issuance of common stock for undeveloped property	$	-		$	-		$	11,390,000
Issuance of common stock in exchange for common stock of an unaffiliated entity	$	-		$	-		$	54,263,160
Issuance of common stock in exchange for acquisition of Union Energy, LLC.	$	-		$	-		$	800,000
Fair value of warrants issued in settlement of debt	$	-		$	-		$	1,486,931
Common stock to be issued in settlement of debt	$	-		$	-		$	3,616,857

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the presentation of the accompanying unaudited condensed consolidated financial statements follows:

General

The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) as promulgated in Item 210 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results from operations for the three and nine month periods ended December 31, 2011, are not necessarily indicative of the results that may be expected for the year ending March 31, 2012. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended March 31, 2011, included in the Company’s Form 10-K filed with the SEC on June 30, 2011.

Business and Basis of Presentation

TAMM Oil and Gas Corp., formerly Hola Communications, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on October 10, 2005. The Company was formed to provide wireless broadband access. In October 2007, the Company decided to discontinue its efforts to develop its original business plan in the telecom industry and to re-direct its focus to the oil and gas Industry. In November 2007, the Company created a wholly owned Nevada subsidiary for the purpose of affecting a name change from Hola Communications, Inc. to TAMM Oil and Gas Corporation. To implement its current business plan, significant additional financing will be required and the Company will need to be successful in its efforts to identify, acquire and develop oil and gas reserves that are economically recoverable.

The Company is in the development (exploration) stage as defined by Accounting Standards Codification subtopic 915-10 Development Stage Entities (“ASC 915-10”) with its efforts principally devoted to developing oil and gas reserves. To date, the Company, has not generated sales revenues, has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from inception through December 31, 2011, the Company has accumulated losses of $70,339,287.

The unaudited condensed consolidated financial statements include the accounts of the Company, including TAMM Oil and Gas Corp., its wholly-owned subsidiary, Union Energy, LLC (see below). All significant intercompany balances and transactions have been eliminated in consolidation.

Acquisition of Union Energy, LLC

On June 12, 2009, the Company acquired Union Energy LLC, a Colorado limited liability corporation, in exchange for 1,000,000 shares of the Company’s common stock valued at $.80 per share, the fair market value of the stock on that date, for a total investment of $800,000. As part of the acquisition, the Company acquired a 100% working interest in 5,120 acres of oil sands leases in the Province of Alberta.

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

The total consideration paid was $800,000 and the significant components of the transaction are as follows:

Assets acquired:
Undeveloped oil sands property lease	$	800,000
Liabilities assumed:		( -	)
Net:	$	800,000

During the year ended March 31, 2011, the acquired leases expired, therefore the Company recorded an impairment loss of $800,000 during the year ended March 31, 2011.

Revenue Recognition

Revenues from the sale of petroleum and natural gas will be recorded when title passes from the Company to its petroleum and/or natural gas purchaser and collectability is reasonably assured. The Company will begin recording revenue once it is determined there are proved reserves and production commences

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Unconventional Oil Sands Properties

Acquisition, exploration and development of oil sands mining activities are capitalized when costs are recoverable and directly result in an identifiable future benefit, following the full cost method of accounting. Improvements that increase capacity or extend the useful lives of assets are capitalized. Maintenance and turnaround costs are expensed as incurred.

Oil sands properties are assessed, at minimum annually, or as economic events dictate, for potential impairment. Impairment is assessed by comparing the estimated net undiscounted future cash flows to the carrying value of the asset. If required, the impairment recorded is the amount by which the carrying value of the asset exceeds its fair value.

Capitalized costs are depleted and depreciated on the unit-of-production method based on the estimated gross proved reserves once determined by the independent petroleum engineers. Depletion and depreciation is calculated using the capitalized costs, including estimated asset retirement costs, plus the estimated future costs to be incurred in developing proved reserves, net of estimated salvage value.

Costs of acquiring and evaluating unproved properties and major development projects are excluded from the depletion and depreciation calculation if and until it is determined whether or not proved reserves can be assigned to such properties. Costs of unproved properties and major development projects are transferred to depletable costs based on the percentage of reserves assigned to each project over the expected total reserves when the project was initiated. These costs are assessed periodically to ascertain whether impairment has occurred.

Depletion and Amortization of Oil and Gas Properties

The Company follows the full cost method of accounting for oil and gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized oil and gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves.

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

The Company periodically evaluates the carrying value of long-lived assets, including unproved properties, to be held and used in accordance with Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.

Foreign Currency Translation

The Company translates the foreign currency financial statements into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”). Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive income (loss) within shareholders’ equity. Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated results of operations.

Functional Currency

The functional currency of the Companies is the Canadian dollar and the unaudited condensed consolidated financial statements are reported as US dollar. When a transaction is executed in a foreign currency, it is re-measured into Canadian dollars based on appropriate rates of exchange in effect at the time of the transaction. At each balance sheet date, recorded balances that are denominated in a currency other than the functional currency of the Companies are adjusted to reflect the current exchange rate. The resulting foreign currency transactions gains (losses) are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

Comprehensive Income (Loss)

The Company adopted Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”) which establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments and unrealized gains and losses on available for sale securities.

Net Income (Loss) per Share

The Company computes earnings per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net earnings (losses) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon the exercise of the Company's outstanding warrants (calculated using the treasury stock method). During the three and nine months ended December 31, 2011 and 2010, outstanding warrants were not considered because the exercise prices exceeded the weighted average common stock price of the Company for the period because they would be anti-dilutive, thereby decreasing the net loss per common share.

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

Reclassifications

Certain amounts reported in the Company’s consolidated financial statements for the prior periods may have been reclassified to conform to the current period presentation.

Reliance on Key Personnel and Consultants

The Company has no full-time employees and no part-time employees. There are approximately 3 consultants performing various specialized services. The Company is heavily dependent on the continued active participation of these current executive officers, employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact the business until adequate replacements can be identified and put in place.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

NOTE 2 – GOING CONCERN MATTERS

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements for the nine months and inception to date periods ended December 31, 2011, the Company has incurred losses of $132,611 and $70,339,287, respectively. In addition, as of December 31, 2011, the Company had a working capital deficit of $674,588, and no revenue generating operations. These factors, among others, indicate that the Company may be unable to continue as a going concern.

The Company's existence is dependent upon management's ability to generate business opportunities, evaluate existing properties and surrounding lands, and initiate commercial production to develop profitable operations which will resolve its liquidity problems. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

The Company is attempting to obtain financing for its operations. There can be no assurance that the Company will be successful in its effort to secure additional equity financing. If operations and cash flows continue to improve through these efforts, management believes that the Company can continue to successfully maintain operations. However, no assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems.

NOTE 3 – RECEIVABLE FROM AN AFFILIATED ENTITY

In connection with the October 2007 Letter of Intent to acquire all of the issued and outstanding shares of 1132559 Alberta Ltd. (“Alberta”), the Company purchased advances due to shareholders of Alberta, directly from the shareholders for $548,500 (during the year ended March 31, 2011, there were repayments of $88,905). The amount is recorded was receivable from an affiliated entity, as Alberta and TAMM have officers and/or directors in common. These advances were purchased for their face amounts, and they have no terms of repayment. As of March 31, 2011 the balance outstanding was $315,494.

On December 5, 2011, the Company exchanged the outstanding receivable from Alberta for 16 shares (10.46% interest) of Alberta and a non interest bearing obligation of $308,868. (see investments below)

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

NOTE 4 – INVESTMENT IN AFFILIATED ENTITY

As described Note 3, above, the Company exchanged an outstanding receivable from an affiliated entity (Alberta) for 16 shares of Alberta and a non interest bearing obligation of $308,868. The obligation is payable only upon the dissolution of Alberta. Alberta and the Company have officers and/or directors in common.

The 16 shares of Alberta, representing a 10.46% interest, are recorded at cost. From December 5, 2011 to December 31, 2011, the Company did not evaluate for impairment the fair value of the above cost-method investment, since there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value.

NOTE 5 – OIL SANDS PROPERTIES

Union Energy, LLC

On June 12, 2009, the Company acquired Union Energy, LLC, a Colorado limited liability corporation, the sole asset of which was a 100% working interest in 5,120 acres of Oil Sands leases in the Province of Alberta in exchange for 1,000,000 shares of the Company’s common stock valued at $.80 per share, the fair market value on the date of acquisition, for a total investment of $800,000.

During the year ended March 31, 2011, the Company recorded an impairment loss of $800,000.

Peace River

The Company holdings include 14 sections of petroleum and natural gas (“P&NG”) leases in the Peace River region of northern Alberta that have a carrying value of $372,721. In addition the Company leases 21 sections of oil sands leases in the Peace River region held at $718,903 adjacent to the above-mentioned sections.

Sawn Lake

The Company has a royalty agreement applicable to 32 sections of oil sands leases. The subject royalties are 2% of gross revenue prior to any expenses from oil sand production. The value of these rights is recorded at $945,068, net of impairment adjustment of $2,929,868, as discussed below.

During the year ended March 31, 2010, the Company management performed an evaluation of its royalty agreement for purposes of determining the implied fair value of the assets at March 31, 2010. The test indicated that the recorded remaining book value of its royalty agreement exceeded its fair value for the year ended March 31, 2010. As a result, upon completion of the assessment, management recorded a non-cash impairment charge of $2,929,868, net of tax, or $0.04 per share during the year ended March 31, 2010 to reduce the carrying value of the royalty agreement to $945,068. Considerable management judgment is necessary to estimate the fair value. Accordingly, actual results could vary significantly from management’s estimates.

Alberta Crown

On September 24, 2009, the Company acquired a 100% working interest in 1,280 acres of oil sands leases with a 2% gross overriding royalty retained by the seller in exchange for 2,428,000 shares of the Company’s common stock. The value of these rights is recorded at $1,626,760. In addition, the Company acquired 100% working interest in 6,400 acres of petroleum and natural gas leases with a 2% gross overriding royalty retained by the seller in exchange for 14,572,000 shares of the Company’s common stock. These rights are recorded at $9,763,240.

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

Farm In Agreement

The Company reached an Joint Venture agreement for a conventional industry farm in on the Manning properties with a private UK based Company with 61 sections of oil sands lease holdings in the Manning prospect area adjacent to the Company holdings. The agreements were ratified by the Board of Directors of TAMM on November 28, 2011.

The Company and Cougar Oil and Gas Canada, Inc. ("Cougar") terminated their previously announced farm-in agreement to negotiate a new agreement with the private Corporation. The private corporation has signed a multi-phase farm-in agreement with the Company to define and develop the Company's 47 section Manning area heavy oil prospect in parallel with the development of the private corporations 61 sections of land in the Manning area.

Cougar will become the “Operator” of the project, be compensated on commercial terms for the work done, and earn 5% working interest on the combined project lands of 108 sections from TAMM and the private corporation after one year.

The first phase of the farm-in consists of the private corporation performing a $2.5million work program to earn a 30% working interest in the Company's heavy oil prospect. Subsequent year programs of $6.5 million dollars will earn an additional 20% working interest.

The private corporation has a related party relationship to the Company due to family members serving on the board of directors of each company and a common director was added to both Board of Directors.

NOTE 6 – CAPITAL STOCK

Preferred Stock

The Company has authorized the issuance of 1,000,000 shares of preferred stock, with a par value of $.001 per share. The Company’s Board of Directors has broad discretion to create one or more series of preferred stock and to determine the rights, preferences, and privileges of any such series.

Common stock

The Company initially authorized the issuance of 50,000,000 shares of common stock, par value $.001. On November 13, 2007, the Company declared a 15:1 forward split, and concurrently increased its authorized shares to 750,000,000 shares of common stock, par value $.001 per share. All share amounts have been restated as if the split had occurred October 10, 2005.

As of December 31, 2011 and March 31, 2011, there were 92,582,524 and 80,780,000 shares of common stock issued and outstanding.

During the nine months ended December 31, 2011, the Company issued an aggregate of 10,602,524 shares of its common stock in settlement of outstanding notes and other obligations previously recorded as to be issued at March 31, 2011. Also, company issued 1,200,000 common stock at fair value of $150,000.

NOTE 7 – OPTIONS AND WARRANTS

Warrants

The following table summarizes the changes in warrants outstanding and related prices for the shares of the Company’s common stock issued to shareholders at December 31, 2011:

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

Exercise Price		Number Outstanding	Warrants Outstanding Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise price		Number Exercisable	Warrants Exercisable Weighted Average Exercise Price
$	0.25	1,200,000	2.40	$	0.25	1,200,000	$	0.25
$	0.30	5,833,643	2.23	$	0.30	5,833,643	$	0.30
		7,033,643	2.26			7,033,643	$	0.29

Transactions involving the Company’s warrant issuance are summarized as follows:

	Stock Warrants
			Weighted
			Exercise
	Shares		Price
Outstanding at March 31, 2010		—	$	—
Granted		5,833,643		0.30
Canceled		—		—
Expired		—		—
Exercised		—		—
Outstanding at March 31, 2011		5,833,643		0.30
Granted		1,200,000		0.25
Canceled		—		—
Expired		—		—
Exercised		—		—
Outstanding at December 31, 2011		7,033,643	$	0.29

In connection with the sale of common stock, the Company issued warrants to purchase 1,200,000 of the Company's common stock at $0.25 per share expiring three years from the date of issuance.

Options

As of December 31, 2011 and March 31, 2011, the Company had no outstanding options.

NOTE 8 - CONTINGENCIES

Operating leases

The Company is provided operating facilities from an affiliated entity at no cost.

Consulting agreements

The Company has consulting agreements with outside contractors, certain of whom are also Company stockholders. The Agreements are generally month to month.

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

Litigation

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.

NOTE 9 – RELATED PARTY TRANSACTIONS

The Company leases office space under an operating lease for its corporate use at $3,000 per month on a month to month basis from an entity with common senior management.

During the nine months ended December 31, 2011, the Company paid back $9,200 in advances from related parties. Total advances at December 31, 2011 amount to $58,548 excluding discussion below. The advances are due on demand with interest of 5% per annum. The Company incurred $608 and $1,933 as interest for the three and nine months ended December 31, 2011.

During the year ended March 31, 2011, the Company agreed to issue 1,770,511 shares of its common stock to reimburse a related party for legal expenses and other costs incurred on the Company's behalf totally $265,577. The Common stock was issued during the nine months ended December 31, 2011.

Farm In Agreement

The Company and Cougar Oil and Gas Canada, Inc. ("Cougar"), a Company under common control, terminated their previously announced farm-in agreement to negotiate a new agreement with the private Corporation. The private corporation has signed a multi-phase farm-in agreement with the Company to define and develop the Company's 47 section Manning area heavy oil prospect in parallel with the development of the private corporations 61 sections of land in the Manning area.

TAMM OIL AND GAS CORP.

(An Exploration Stage Company)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

Investment

As described Note 3, above, the Company exchanged an outstanding receivable from an affiliated entity, 1132559 Alberta Ltd. ("Alberta") for 16 shares of Alberta and a non interest bearing demand obligation of $308,868. Alberta and the Company have officers and/or directors in common.

The 16 shares of Alberta, representing a 10.46% interest, are recorded at cost.

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

TAMM Oil and Gas Corp. is referred to hereinafter as “we”, “our”, or “us”.

Overview

We are a petroleum exploration company in the development stage that seeks to identify, acquire and develop working interests in Canada based oil sands prospects. Oil sands properties are characterized by deposits of bitumen, a form of viscous (relatively high resistance to flow) crude oil. We have generated no revenues since our inception and from our inception, we have not been profitable. We have financed our operations to date through equity placements to accredited investors and borrowings from related parties.

Uncertainties and Trends

Our revenues are dependent in the future, upon the following factors:

	●	price volatility in worldwide oil prices, which is affected by: (a) interest rates; (b)currency exchange rates (c) inflation or deflation; (d) speculation and (e) production levels;
	●	global and regional supply and demand for oil;
	●	political and economic conditions;
	●	changes in the regulatory environment, which may lead to increased costs of doing business;
	●	our ability to raise adequate working capital;
	●	success of our development and exploration;
	●	level of our competition;
	●	our ability to attract and maintain key management and employees; and
	●	our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs.

The following discussion and analysis should be read in conjunction with our Financial Statements and notes thereto.

(a) Liquidity and capital resources – December 31, 2011 and March 31, 2011

(a) (1) Continuing working capital deficit

Our working capital deficit has limited our ability to expand our operations and pursue our business plan. The following table sets forth our continuing working capital at December 31, 2011 and March 31, 2011.

	December 31, 2011			March 31, 2011
Current Assets	$	14,460		$	12,696
Current Liabilities		689,048			717,275

Working Capital (Deficit)	$	(674,588	)	$	(704,579	)

Our current assets increased by $1,764 from $12,696 as of March 31, 2011 to $14,460 at December 31, 2011. The increase was primarily from changes in our GST receivable.

Our working capital deficit decreased by $29,991 to $674,588 as of December 31, 2011, from $704,579 at March 31, 2011. Accounts payable and accrued expenses increased from $546,476 as of March 31, 2011 to $630,500 as of December 31, 2011 from operations.

Other related party advances decreased to $58,548 as of December 31, 2011 from $70,799 as of March 31, 2011 due to Company reimbursements for prior advances.

We continue to focus on conserving cash, setting priorities for our most important obligations and seeking other means to pay or defer any obligations as necessary.

(a) (2) Property and equipment

During nine months ended December 31, 2011, there were no material changes to our property and equipment.

	December 31 2011		March 31, 2011
Office equipment	$	100	$	184
Fixed assets net	$	100	$	184

(a) (3) Capital commitments

We do not have any long term debt, capital lease obligations, operating or purchase obligations at December 31, 2011.

(a) (4) Derivative liability – Not applicable.

(a) (5) Equity

Stockholders’ equity decreased to $13,775,305 as of December 31, 2011, from $14,436,369 as of March 31, 2011. The primary reason for the decrease is a $678,454 foreign currency translation loss and our incurred year to date net loss of $132,611, net with an increase from proceeds of $150,000 from the sale of our common stock.

(a) (6) Off-balance sheet arrangements.

NONE

(a) (7) Results of operations.

Three month summary:

The following sets forth certain information regarding our results of operations for the three months ended December 31, 2011 and 2010:


Three months ended December 31,	2011			2010
General and administrative	$	31,504		$	34,955
Operating (loss)		(31,528	)		(34,980	)
Other (expense)		(608	)		(15,527	)
Net (loss)		(32,136	)		(50,507	)
Net (loss) per share - basic and diluted		(0.00)			(0.00	)
Weighted average shares - basic and diluted		92,582,523			80,780,000

Our operations have resulted in significant losses and negative cash flow as we have invested in our property lease interests.

Exploration & development. Exploration and mine development costs was $0 during the three months ended December 31, 2011 and 2010.

General and administrative expenses. Our general and administrative expenses decreased by $3,451, or 9.9%, to $31,504 during three months ended December 31, 2011 from $34,955 during same period last year. We attribute the decrease in our general and administrative expenses to professional and legal fees.

Depreciation. Depreciation was $24 for the three months ended December 31, 2011, $25 for the same period last year.

Net loss. Our net loss for the three months ended December 31, 2011 was $32,136 compared to $50,507 for the three months ended December 31, 2010, resulting in a basic per-share loss of $0.00 for both periods based on weighted average shares outstanding.

Nine month summary:

The following sets forth certain information regarding our results of operations for the nine months ended December 31, 2011 and 2010:

Nine months ended December 31,	2011			2010
General and administrative	$	130,602		$	138,804
Operating (loss)		(130,678	)		(138,878	)
Other (expense)		(1,933	)		(45,512	)
Net (loss)		(132,611	)		(184,390	)
Net (loss) per share - basic and diluted		(0.00)			(0.00	)
Weighted average shares - basic and diluted		90,363,896			80,780,000

Our operations have resulted in significant losses and negative cash flow as we have invested in our property lease interests.

Exploration & development. Exploration and mine development costs was $0 during the nine months ended December 31, 2011 and 2010.

General and administrative expenses. Our general and administrative expenses decreased by $8,202, or 5.9%, to $130,602 during nine months ended December 31, 2011 from $138,804 during same period last year. We attribute the decrease in our general and administrative expenses to professional and legal fees.

Depreciation. Depreciation was $76 for the nine months ended December 31, 2011, $74 for the same period last year.

Net loss. Our net loss for the nine months ended December 31, 2011 was $132,611 compared to $184,390 for the nine months ended December 31, 2010, resulting in a basic per-share loss of $0.00 for both periods based on weighted average shares outstanding.

Since inception we have not generated any revenues, therefore our general, administrative and other costs have exceeded the resources we have generated through operations. As described above in “Liquidity and Capital Resources,” we have been dependent on debt/equity financing, to meet our working capital obligations and to finance our continuing operating losses. Our current lack of production further complicates our ability to raise cash from these sources. There can be no assurance that we will be able to continue to finance our operating losses in such a manner. We have, however, been able to raise additional funds in the past and we believe that we will be able to do so in the future.

(a) (8) Cash flow

We have been able to meet our working capital obligations and cover our net loss through the collection of our receivable from related party, net of repayments of related party notes and sale of common stock. Net cash flows provided by our financing activities totaled $40,800 for the nine months ended December 31, 2011 and compared to $Nil provided for the same period in 2010. Cash decreased to $2,879 as of December 31, 2011 from $3,150 at March 31, 2011.

Net cash flows for the nine months ended December 31:	2011			2010
Net (loss)	$	(132,611	)	$	(184,390	)
Net cash flows (used in) operating activities		(24,311	)		(28,684	)
Net cash flows provided by investing activities		-			22,365
Net cash flows provided by financing activities		40,800			-
Effect of currency change on cash		(16,760	)		(212	)
Net decrease in cash and cash equivalents		(271	)		(6,531	)
Cash and cash equivalents at beginning of the year		3,150			8,573
Cash and cash equivalents at end of period		2,879			2,042

We have used our equity to raise cash necessary to acquire property leases, expenses, and for payment of services. Our ability to continue to use our equity for those purposes is dependent on the price and trading volume of our common stock, both of which are volatile, and our ability to comply with federal and applicable state securities laws.

Although we have been successful in obtaining funds to date, there can be no assurance that we will be able to continue to be successful in doing so. Our ability to finance our operations will, in the end, be dependent on our ability to generate cash flow from operations, of which there can be no assurance.

By adjusting our operations and development to the level of capitalization, we believe we have sufficient capital resources to meet projected cash flow deficits. However, if during that period or thereafter, we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations liquidity and financial condition.

Our registered independent certified public accountants have stated in their report dated June 29, 2011, that we have incurred operating losses in the last two years, and that we are dependent upon management’s ability to develop profitable operations and raise additional capital. These factors among others may raise substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

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

Going Concern

During the period October 10, 2005 (inception) to December 31, 2011, we generated no revenue and we had an accumulated deficit of $70,339,287. We will need significant financing to implement our business plan. Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern.

The accompanying unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from our possible inability to continue as a going concern.

Item 3. - Quantitative and Qualitative Disclosures about Market Risk.

The Company is a smaller reporting company as defined by Rule 12b-2 under the Exchange Act and is not required to provide the information required under this item.

Item 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer/chief financial officer (principal financial officer) as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended December 31, 2011 we carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of December 31, 2011.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Internal Controls over Financial Reporting

During the quarter ended December 31, 2011, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds

None.

Item 3 - Defaults on Senior Securities

None.

Item 4 - Submission of Matters to a Vote of Security Holders

None.

Item 5 - Other Information

None.

Item 6 Exhibits

The following exhibits, required by Item 601 of Regulation S-K, are being filed as part of this quarterly report, or are incorporated by reference where indicated:

Exhibit No.		Description

31.1*		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Guido Hilekes (Principal Executive Officer) dated February 10, 2012.

31.2*		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for William S. Tighe (Principal Financial Officer) dated February 10, 2012.

32.1*		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Guido Hilekes (Principal Executive Officer) dated February 10, 2012.

32.2*		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for William S. tighe (Principal Financial Officer) dated February 10, 2012.

101.INS		XBRL Instance
101.SCH		XBRL Schema
101.CAL		XBRL Calculation
101.DEF		XBRL Definition
101.LAB		XBRL Label
101.PRE		XBRL Presentation

*	filed herewith

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, in the capacities and the dates indicated, thereunto duly authorized.

	TAMM OIL AND GAS CORP.

Date: February 10, 2012	By:	/s/ Guido Hilekes
		Name: Guido Hilekes Title: Principal Executive Officer

TAMM Oil & Gas Corp. - FORM 10-Q - February 10, 2012

Attached files

TAMM Oil & Gas Corp. Reports