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EX-31 - NORSTRA ENERGY INCex31-2.txt
EX-32 - NORSTRA ENERGY INCex32-1.txt
EX-31 - NORSTRA ENERGY INCex31-1.txt

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-Q/A

Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended August 31, 2012

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

    For the transition period from ____________ to _____________

                         Commission File No. 333-168037


                              NORSTRA ENERGY, INC.
                       (Name of registrant in its charter)

            Nevada                                              27-1833279
  (State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                         Identification Number)

                                 414 Manor Road
                               Laredo Texas, 78041
                              1-888-474-8077 (TEL)

Indicate by checkmark whether the issuer: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act 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 [X] 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-1 (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 [X] No[ ]

Indicate by check mark whether the registrant is a large accelerated filed, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ]                        Accelerated filer [ ]
Non-accelerated filer [ ]                          Smaller reporting company [X]

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

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the
Preceding Five Years.

N/A

Indicate by checkmark whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act
of 1934 after the distribution of securities under a plan confirmed by a court.
Yes[ ] No[ ]

Applicable Only to Corporate Registrants

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the most practicable date:

      Class                                    Outstanding as of August 31, 2012
      -----                                    ---------------------------------
Common Stock, $0.001                                       69,763,100

NORSTRA ENERGY INC. FORM 10-Q PART I. FINANCIAL INFORMATION Item 1. Financial Statements 3 Condensed Balance Sheets 3 Condensed Statements of Operations 4 Condensed Statements of Cash Flows 5 Notes to condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 Item 4. Controls and Procedures 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12 Item 3 Defaults Upon Senior Securities 12 Item 4. Mine Safety Disclosures 12 Item 5. Other Information 12 Item 6. Exhibits 12 2
NORSTRA ENERGY, INC. (An Exploration Stage Company) Condensed Balance Sheets August 31, 2012 February 29, 2012 --------------- ----------------- (unaudited) CURRENT ASSETS Cash $ 25,694 $ 177 -------- -------- TOTAL CURRENT ASSETS 25,694 177 -------- -------- OTHER ASSETS Oil and gas properties, unproved (full cost method) 19,064 19,064 -------- -------- TOTAL OTHER ASSETS 19,064 19,064 -------- -------- TOTAL ASSETS $ 44,758 $ 19,241 ======== ======== CURRENT LIABILITIES Accounts Payable $ 1,250 $ -- Shareholder Loans 8,274 -- -------- -------- TOTAL CURRENT LIABILITIES 9,524 -- -------- -------- LONG TERM LIABILITIES Asset retirement obligation 4,725 4,392 -------- -------- TOTAL LIABILITIES $ 14,249 $ 4,392 ======== ======== STOCKHOLDERS' EQUITY Common stock; 150,000,000 shares authorized at $0.001 par value, 69,763,100 shares issued and outstanding $ 69,763 $ 40,513 Stock subscriptions receivable -- (5,000) Additional paid-in capital (19,032) (19,032) Deficit accumulated during the exploration stage (20,222) (1,632) -------- -------- TOTAL STOCKHOLDERS' EQUITY 30,509 14,849 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,758 $ 19,241 ======== ======== The accompanying notes are an integral part of the condensed unaudited financial statements. 3
NORSTRA ENERGY, INC. (An Exploration Stage Company) Condensed Statements of Operations (Unaudited) Period from For the Three For the Six November 12, 2010 Months ended Months ended (Date of Inception) to August 31, 2012 August 31, 2012 August 31, 2012 --------------- --------------- --------------- REVENUE $ -- $ -- $ -- OPERATING EXPENSES General and administrative 11,492 18,257 19,483 Accretion expense 168 333 661 ------------ ------------ ------------ Total Operating Expense 11,660 18,590 20,142 ------------ ------------ ------------ LOSS FROM OPERATIONS (11,660) (18,590) (20,142) OTHER EXPENSES Interest Expense -- -- 80 ------------ ------------ ------------ Total Other Expense -- -- (80) ------------ ------------ ------------ NET LOSS BEFORE INCOME TAXES (11,660) (18,590) (20,222) PROVISION FOR INCOME TAXES -- -- -- ------------ ------------ ------------ NET LOSS $ (11,660) $ (18,590) $ (20,222) ============ ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED 50,765,817 45,611,749 ------------ ------------ NET LOSS PER SHARE - BASIC AND DILUTED $ (0.00) $ (0.00) ------------ ------------ The accompanying notes are an integral part of the condensed unaudited financial statements. 4
NORSTRA ENERGY, INC. (An Exploration Stage Company) Condensed Statements of Cash Flows (Unaudited) Period from For the Six November 12, 2010 Months ended (Date of Inception) to August 31, 2012 August 31, 2012 --------------- --------------- OPERATING ACTIVITIES Net loss for the period $(18,590) $(20,222) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: Expenses paid on the Company's behalf by a related party 6,774 7,998 Accretion expense - oil and gas property 333 661 Changes in Operating Assets and Liabilities: Accounts payable 1,250 1,250 -------- -------- Net Cash Used in Operating Activities (10,233) (10,313) -------- -------- INVESTING ACTIVITIES Purchase of oil and gas leases -- (15,000) -------- -------- Net Cash Used in Investing Activities -- (15,000) -------- -------- FINANCING ACTIVITIES Proceeds from related party loans 1,500 6,500 Proceeds from subscription receivable 5,000 5,000 Proceeds from the sale of common stock 29,250 39,507 -------- -------- Net Cash Provided by Financing Activities 35,750 51,007 -------- -------- Net Increase in Cash and Cash Equivalents 25,517 25,694 Cash and Cash Equivalents - Beginning 177 -- -------- -------- Cash and Cash Equivalents - Ending $ 25,694 $ 25,694 ======== ======== Supplemental Cash Flow Information: Cash paid for interest $ -- $ -- Cash paid for income taxes $ -- $ -- Non-cash Financing and Investing Activities: Capitalized asset retirement obligations $ -- $ 4,064 Common stock issued for debt $ -- $ 5,000 The accompanying notes are an integral part of the condensed unaudited financial statements. 5
NORSTRA ENERGY INC. (A Development Stage Company) Notes To The Condensed Financial Statements August 31, 2012 and February 29, 2012 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NORSTRA ENERGY INC. ("the Company") was incorporated under the laws of the State of Nevada, U.S. on November 12, 2010. The Company is in the exploration stage as defined under Accounting Standards Codification ("ASC 915") and it intends to engage in the exploration and development of oil and gas properties. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Earnings per Share Basic and Diluted Net Earnings per Share (EPS) is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. At August 31, 2012 and 2011, no such potentially dilutive shares were issued or outstanding. Recent Accounting Pronouncements Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements. 2. GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 6
NORSTRA ENERGY INC. (A Development Stage Company) Notes To The Condensed Financial Statements August 31, 2012 and February 29, 2012 3. STOCKHOLDERS' EQUITY During the period ended August 31, 2012, the Company increased its authorized capital from 75,000,000 common shares to 150,000,000 common shares with a par value of $0.001 per share. The Company also authorized a stock split on a one (1) old for two (2) new basis, leaving a total of shares issued and outstanding as of August 31, 2012 of 69,763,100 shares. In February 2012, the Company issued 20,513,000 post-split shares of common stock (10,256,500 pre-split) for cash proceeds of $10,257. During the same month, the Company also issued 10,000,000 post-split shares of common stock (5,000,000 pre-split) for debt of $5,000 and 10,000,000 shares of post-split common stock (5,000,000 pre-split) for stock subscriptions receivable of $5,000. In August 2012 the payment was received for the subscriptions receivable. In July and August of 2012 29,250,000 post-split shares were issued at a price of $0.001 for cash proceeds of $29,250. 4. RELATED PARTY TRANSACTIONS On February 23, 2012, an officer and director loaned the Company $5,000. On February 25, 2012 the company issued 10,000,000 shares of common stock in extinguishment of the shareholder liability at $0.0005 per share. During the six months ended August 31, 2012, an officer and director of the Company paid operating expenses on behalf of the Company amounting to $6,774. The same officer and director also loaned the Company $1,500. The resulting shareholder payable is unsecured, due on demand and is non-interest bearing. 5. OIL AND GAS LEASES On February 1, 2011, the Company entered into an agreement with an unrelated third-party entity to purchase a 100% working interest and an 80% net revenue interest in an oil and gas lease in Reno County, Kansas. As consideration for the purchase, the Company paid $15,000 in cash. The Company has not incurred any exploration or development costs in connection with this lease. 6. SUBSEQUENT EVENTS Since August 31, 2012 5,000,000 shares have been issued at $0.001 per share for a total proceeds of $5,000. In accordance with ASC 855-10, the Company's management has reviewed all material events and there are no additional material subsequent events to report. 7
FORWARD-LOOKING STATEMENTS Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "August," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what August occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL We were incorporated under the name Norstra Energy, Inc. in the State of Nevada on November 12, 2010. We are a development-stage company and we have no revenues and minimal assets. As a result we have incurred losses since inception. We have not implemented our business plan as of this date. We have focused our limited managerial and financial capacity almost entirely on the efforts needed to undertake an ongoing S-1 offering. If the Offering is successful, we intend to seek sponsorship from a FINRA-registered broker-dealer and apply for quotation on the OTC Bulletin Board. In order to be quoted on the OTC Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There is no assurance that such an application will be filed. Even if we do obtain sponsorship of a market maker there is no guarantee that an application will be filed or our stock will become quoted or a market for our common stock will develop. Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," refers to NORSTRA ENERGY INC. CURRENT BUSINESS OPERATIONS As of the date of this Quarterly Report, we have not started operations. The Company is in the development stage as defined under Statement on Financial Accounting Standards No. 7, Development Stage Enterprises ("SFAS No.7") (ASC 915-10). As of August 31, 2012 we have no revenues, have minimal assets and have incurred losses since inception. We intend to engage in the exploration and development of oil and gas properties. The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception (November 12, 2010) through August 31, 2012, the Company has accumulated losses of $20,222. 8
RESULTS OF OPERATIONS Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities. SIX MONTH PERIOD ENDED AUGUST 31, 2012 COMPARED TO THE SIX MONTHS ENDED AUGUST 31, 2011 AND THE PERIOD FROM INCEPTION (NOVEMBER 12, 2010) TO AUGUST 31, 2012. Our net loss for the six-months ended August 31, 2012 was approximately ($18,590) compared to a net loss of ($-0-) during the six months ended August 31, 2011. During the six-months ended August 31, 2012 and 2010, we did not generate any revenue. Net loss during the period from inception (November 12, 2010) to August 31, 2012 was ($20,222). During the six-months ended August 31, 2012, we incurred general and administrative, consulting, and professional expenses of approximately $18,257 compared to $-0- during the six months ended August 31, 2011. General and administrative expenses incurred during the six-month period ended August 31, 2012 and 2010 were generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting and developmental costs. During the period from inception (November 12, 2010) to August 31, 2012, we incurred general and administrative, consulting, and professional expenses of approximately $19,483. Our net loss during the six-months ended August 31, 2012 and 2011 was ($18,590) or ($0.00) per share and ($-0-) or ($0.00), respectively. The weighted average number of shares outstanding was 45,611,749 for the six-month period ended August 31, 2012. LIQUIDITY AND CAPITAL RESOURCES SIX-MONTH PERIOD ENDED AUGUST 31, 2012 As at the six-months ended August 31, 2012, our current assets were $25,694 and our total current liabilities were $9,524 which resulted in a working capital of $16,170 As at the six-months ended August 31, 2012, current assets were comprised of $25,694 in cash compared to $177 in current assets at February 29, 2012. At the six-months ended August 31, 2012, current liabilities were comprised of $8,274 in advances from director. Long term liabilities were comprised of $4,725 in asset retirement obligations and $1,250 in accounts payable from professional fees. Stockholders' equity increased from $14,849 as of February 29, 2012 to $30,509 as of August 31, 2012. CASH FLOWS FROM OPERATING ACTIVITIES We have not generated positive cash flows from operating activities. For the six-month period ended August 31, 2012, net cash flows used in operating activities was ($10,233) consisting of a net loss of $18,590 and was offset by an accretion expense of $333, expenses paid on behalf of the company by a related party of $6,774, and accounts payable of $1,250. Net cash flows used in operating activities was ($10,313) for the period from inception (November 12, 2010) to August 31, 2012 consisting of a net loss of $20,222 which was offset by accretion expenses of $661, expenses paid on behalf of the company by a related party of $7,998 and accounts payable of $1,250. 9
CASH FLOWS FROM FINANCING ACTIVITIES We have financed our operations primarily from either advances from directors (operating expenses paid on behalf of the Company by directors) or the issuance of equity and debt instruments. For the six-months ended August 31, 2012, we generated $35,750 from financing activities. For the period from inception (November 12, 2010) through August 31, 2012, net cash provided by financing activities was $51,007, largely due to the issuance of 69,763,100 common shares pursuant to the Company's S-1 offering. PLAN OF OPERATION AND FUNDING We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business. Existing working capital, further advances, equity and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing August not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we August not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. MATERIAL COMMITMENTS As of the date of this Quarterly Report, we have a material commitment. During the period from inception (November 12, 2010) to August 31, 2012, Dallas Kerkenezov our Chief Executive Officer and a director, advanced us $9,499. The advances are non-interest bearing and payable upon demand. PURCHASE OF SIGNIFICANT EQUIPMENT We do not intend to purchase any significant equipment during the next twelve months. OFF-BALANCE SHEET ARRANGEMENTS As of the date of this Quarterly Report, we do not have any 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 that are material to investors. 10
GOING CONCERN The independent auditors' report accompanying our August 31, 2012 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk represents the risk of loss that August impact our financial position, results of operations or cash flows due to adverse change in foreign currency and interest rates. EXCHANGE RATE Our reporting currency is United States Dollars ("USD"). INTEREST RATE Any future loans will relate mainly to trade payables and will be mainly short-term. However our debt August be likely to rise in connection with expansion and if interest rates were to rise at the same time, this could become a significant impact on our operating and financing activities. We have not entered into derivative contracts either to hedge existing risks of for speculative purposes. ITEM 4. CONTROLS AND PROCEDURES Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2012. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the six-months ended August 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 11
PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On July 12 2012, our registration statement on Form S-1 became effective. 60,000,000 common shares were registered. ITEM 3. DEFAULTS UPON SENIOR SECURITIES No report required. ITEM 4. MINE SAFETY DISCLOSURES No report required. ITEM 5. OTHER INFORMATION No report required. ITEM 6. EXHIBITS 31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). 31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). 32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d- 14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101* Interactive Data Files pursuant to Rule 405 of Regulation S-T. ---------- * Filed previously 12
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORSTRA ENERGY INC. Dated: October 15, 2012 By: /s/ Dallas Kerkenezov ------------------------------------- Dallas Kerkenezov, President, Chief Financial Officer, Director 1