Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------
FORM 10Q
-----------------
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 000-26317
HINTO ENERGY, INC.
------------------
(Exact name of registrant as specified in its charter)
Wyoming 84-1384961
------- ----------
(State of Incorporation) (IRS Employer ID Number)
7609 Ralston Road, Arvada, CO 80002
-----------------------------------
(Address of principal executive offices)
303-647-4850
------------
(Registrant's Telephone number)
(Former Address and phone of principal executive offices)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the 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 for Regulation S-T (ss.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 file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ]
Smaller reporting company [X] (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 14, 2012, there were 14,626,527 shares of the registrant's common
stock issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Balance Sheets - September 30, 2012 and December 31, 2011 1
Statements of Operations -
Three and Nine months ended September 30, 2012 and the period
from from March 8, 2011 (Inception) through September 30, 2011
and the period from March 8, 2011 (Inception) to September 30,
2012 2
Statements of Changes in Shareholders' Deficit -
From March 8, 2011 (Inception) to September 30, 2012 3
Statements of Cash Flows -
Nine months ended September 30, 2012 and the period from
March 8, 2011 (Inception) through September 30, 2011 and
From March 8, 2011 (Inception) through September 30, 2012 4
Notes to the Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- Not Applicable 16
Item 4. Controls and Procedures 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 1A. Risk Factors - Not Applicable 18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
-Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable 19
Item 4. Mine Safety Disclosure - Not Applicable 19
Item 5. Other Information - Not Applicable 19
Item 6. Exhibits 19
SIGNATURES 20
PART I
ITEM 1. FINANCIAL STATEMENTS
HINTO ENERGY, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2012 2011
--------------- ---------------
Assets
Current Assets:
Cash $ 8,140 $ 487,501
Accounts Receivable 4,112 -
Deposits 5,000 25,000
--------------- ---------------
Total Current Assets 17,252 512,501
--------------- ---------------
Other assets:
Oil and Gas Leases 851,700 478,200
-------------- ---------------
Total Other Assets 851,700 478,200
--------------- ---------------
Total Assets $ 868,952 $ 990,701
=============== ===============
Liabilities and Stockholders' (Deficit) Equity
Current liabilities
Accounts payable $ 45,897 $ 71,416
Accrued liabilities 134,880 47,510
Convertible notes payable - 500,000
Subscription received - 40,000
Notes payable, other 370,000 375,000
--------------- ---------------
Total Current Liabilities 550,777 1,033,926
Long term note payable 500,000 500,000
--------------- ---------------
Total liabilities $ 1,050,777 $ 1,533,926
--------------- ---------------
Stockholders' (Deficit) Equity
Preferred stock, $0.001 par value; 25,000,000 shares
authorized, no shares issued and outstanding - -
Common stock, $0.001 par value; 50,000,000 shares authorized,
14,576,527 and 11,375,000 shares issued and outstanding
at September 30, 2012 and December 31, 2011, respectively 14,577 11,375
Additional paid-in capital 1,421,375 167,956
Deficit accumulated during the development stage (1,617,777) (722,556)
--------------- ---------------
Total Stockholders' (Deficit) Equity (181,825) (543,225)
--------------- ---------------
Total liabilities and stockholders' (deficit) equity $ 868,952 $ 990,701
=============== ===============
See the notes to these financial statements.
1
HINTO ENERGY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND
THE PERIOD FROM MARCH 8, 2011 (Inception) THROUGH JUNE 30, 2012
(UNAUDITED)
For The Three From March 8, For The Nine
Months Ended 2011 (Inception) Months Ended
September 30, Through September 30,
2012 September 30, 2011 2012
---------------- ------------------------ ------------------
Revenue: $ 21,439 $ - $ 31,803
Direct Cost of Revenue 22,036 - 22,036
---------------- ------------------------ ------------------
(597) 9,767
Operational expenses:
Office expenses 19,045 103,711 442,196
Goodwill write off - - -
Consulting fees 130,375 47,010 290,105
---------------- ------------------------ ------------------
Total operational expenses 149,420 150,721 732,301
---------------- ------------------------ ------------------
Other Income (Expenses)
Interest expense (19,875) (15,295) (67,948)
---------------- ------------------------ ------------------
Total other income (expense) (19,875) (15,295) (67,948)
---------------- ------------------------ ------------------
Net loss $ (169,892) $ (166,016) $ (790,482)
================ ======================== ==================
Per share information
Net loss per common share
Basic $ (0.01) $ (0.02) $ (0.06)
Fully diluted * * *
================ ======================== ==================
Weighted average number of common
stock outstanding 14,454,065 7,869,565 13,775,541
================ ======================== ==================
* Not provided as it is anti-dilutive
See the notes to these financial statements.
2
HINTO ENERGY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND
THE PERIOD FROM MARCH 8, 2011 (Inception) THROUGH JUNE 30, 2012
(UNAUDITED)
(continued)
From March 8, March 8, 2011
2011 (Inception) (Inception) to
Through September 30,
September 30, 2011 2011
------------------- --------------
Revenue: $ - $ 31,803
Direct Cost of Revenue - 22,036
----------------------- -----------------
9,767
Operational expenses:
Office expenses 87,533 687,518
Goodwill write off - 339,195
Consulting fees 114,180 499,308
----------------------- -----------------
Total operational expenses 201,713 1,526,021
----------------------- -----------------
Other Income (Expenses)
Interest expense (17,143) (101,523)
----------------------- -----------------
Total other income (expense) (17,143) (101,523)
----------------------- -----------------
Net loss $ (218,856) $ (1,617,777)
======================= =================
Per share information
Net loss per common share
Basic $ -
Fully diluted *
=======================
Weighted average number of common
stock outstanding 14,454,065
=======================
* Not provided as it is anti-dilutive
See the notes to these financial statements.
3
HINTO ENERGY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDER'S (DEFICIT) EQUITY
FOR THE PERIOD FROM MARCH 8, 2011 (Inception) THROUGH SEPTEMBER 30, 2012
(UNAUDITED)
Deficit Stockholders'
accumulated Equity South
Additional During Uintah Gas Total
Common Stock paid-in Development Properties, Noncontrolling Stockholders'
Number of Shares Amount Capital Stage Inc. Interest Equity
--------------- --------- ----------- ------------ ------------ ------------- ------------
Issuance of Founder Shares for cash 1,000,000 $ 1,000 $ (900) $ - $ 100 - $ 100
Issuance of Founder Shares for cash 1,000,000 1,000 (900) - 100 - 100
Issuance of Founder Shares for services 5,500,000 5,500 (4,950) - 550 - 550
Issuance of Common Stock 2,000,000 2,000 (1,800) - 200 - 200
for oil and gas leases
Shares cancelled in exchange for Hinto
shares held by South Uintah (300,000) (300) 300 - - - -
Issuance of shares for consulting 175,000 175 (157) - 18 - 18
Issuance of stock for cash by Hinto - - 147,000 - 147,000 63,000 210,000
Shareholder capital contribution - - 63,000 - 63,000 27,000 90,000
Minority interest at purchase
of majority interest in subsidiary - - - - - (16,797) (16,797)
Net Loss - - - (795,873) (795,873) (31,422) (827,295)
Recapitalization, due to reverse merger 2,000,000 2,000 71,203 (31,422) 41,781 (41,781) -
--------------- --------- ----------- ------------ ------------ ------------- ------------
Balance - December 31, 2011 11,375,000 11,375 272,796 (827,295) (543,124) - (543,124)
--------------- --------- ----------- ------------ ------------ ------------- ------------
Issuance of Shares for cash 715,000 715 356,785 - 357,500 - 357,500
Conversion of notes to common stock 2,121,931 2,122 540,910 - 543,032 - 543,032
Issuance of shares for services 338,868 339 238,096 - 238,435 - 238,435
Issuance of shares for interest 25,728 26 12,788 - 12,814 - 12,814
Net Loss - - - (790,482) (790,482) - (790,482)
--------------- --------- ----------- ------------ ------------ ------------- ------------
Balance - September 30, 2012 14,576,527 $ 14,577 $ 1,421,375 $(1,617,777) $ (181,825) $ - $ (181,825)
=============== ========= =========== ============ ============ ============= ============
See the notes to these financial statements.
4
HINTO ENERGY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND
THE PERIOD FROM MARCH 8, 2011 (Inception) THROUGH SEPTEMBER 30, 2012
(UNAUDITED)
For The Nine From March 8, March 8, 2011
Months Ended 2011 (Inception) (Inception) to
September 30, Through September 30,
2012 September 30, 2011 2012
----------------------------------------------------------------
Cash Flows from Operating Activities:
Net Loss $ (790,482) $ (218,856) $ (1,617,777)
Adjustments to net loss for non-cash items:
Accrued interest converted to stock 30,898 - 30,898
Stock issued for services 203,834 - 238,434
Write down of goodwill in subsidiary - - 339,195
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in Accounts receivable (4,112) - (4,112)
Decrease (increase) in deposits and advances 20,000 (18,982) (10,000)
Increase in accounts payable 76,444 20,500 205,622
Increase in accrued liabilities 20,057 23,393 134,880
-------------------- ----------------- --------------------
Net Cash Used by Operating Activities (443,361) (193,945) (682,860)
-------------------- ----------------- --------------------
Cash Flows from Investing Activities
Investment to acquire 70% interest in subsidiary - (300,000) (300,000)
Investment in well (198,500) - (198,500)
Purchase of Oil and Gas leases (175,000) (303,000) (478,000)
-------------------- ----------------- --------------------
Net Cash Used in Investing Activities (373,500) (603,000) (976,500)
-------------------- ----------------- --------------------
Cash Flows from Financing Activities:
Proceeds from convertible promissory notes 25,000 500,000 1,025,000
Proceeds from other notes payable - 400,000 400,000
Payments on other notes payable (5,000) - (205,000)
Proceeds from shareholder contribution - - 90,000
Proceeds from stock sales 317,500 200 357,500
-------------------- ----------------- --------------------
Net Cash Provided by Financing Activities 337,500 900,200 1,667,500
-------------------- ----------------- --------------------
Net Increase (decrease) in Cash (479,361) 103,255 8,140
Cash and Cash Equivalents - Beginning of Period 487,501 - -
-------------------- ----------------- --------------------
Cash and Cash Equivalents - End of Period $ 8,140 $ 103,255 $ 8,140
==================== ================= ====================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest expense $ - $ - $ -
==================== ================= ====================
Cash paid for income taxes $ - $ - $ -
==================== ================= ====================
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
ACTIVITIES:
Net deficit of subsidiary on purchase $ - $ - $ -
==================== ================= ====================
Issuance of notes payable for assets $ 150,000 $ - $ 150,000
==================== ================= ====================
Issuance of common stock for deposits and $ - $ - $ -
==================== ================= ====================
accounts payable $ 199,309 $ - $ 199,309
==================== ================= ====================
Issuance of common stock for oil leases $ - $ - $ -
==================== ================= ====================
See the notes to these financial statements.
5
HINTO ENERGY, INC.
(A Development Stage Company)
Notes to the Financial Statements For
the Periods Ended September 30, 2012 and December 31,
2011
(Unaudited)
NOTE 1 - BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Business
Hinto Energy, Inc. ("the Company") was incorporated in February 13, 1997 in the
state of Wyoming. The Company was originally incorporated for the purpose of
general investing. Due to an inability to raise adequate financing, the Company
was forced to cease operations in 2001. On October 12, 2004, the Company filed a
Form 15-12G, with the Securities and Exchange Commission ("SEC") to cease its
filing obligations under the Securities Act of 1934. On November 14, 2007, the
Company filed a Registration Statement on Form S-1 in order to register its
outstanding shares of common stock and resume its SEC filing status.
The Company's fiscal year end is December 31st. The Company's financial
statements are presented on the accrual basis of accounting.
Share Exchange Agreement
On July 27, 2011, the Company entered into a Share Exchange and Acquisition
Agreement with South Uintah Gas Properties, Inc. ("South Uintah") and the South
Uintah shareholders. Pursuant to the Share Exchange and Acquisition Agreement
("the Agreement"), the Company has agreed to issue shares of its restricted
common stock for 100% of the issued and outstanding common stock of South
Uintah. The shares were to be exchanged on a one for one basis.
The closing of the transaction was dependent upon the delivery of audited
financial statements by South Uintah.
Prior to the signing of the Agreement, South Uintah had purchased 3,000,000
shares of the Company's common stock from its then majority shareholder, Ms.
Sharon Fowler. After such purchase, South Uintah held approximately 70% of the
issued and outstanding common stock of the Company. As part of the Agreement,
South Uintah had agreed to return the 3,000,000 shares of common stock to the
Company. On December 22, 2011 the Company and South Uintah modified the purchase
agreement and reduced the number of shares to be returned by South Uintah by
300,000, to 2,700,000.
On January 23, 2012 the Company completed the Share Exchange and Acquisition
Agreement ("the Agreement") and the shareholders of South Uintah became the
majority shareholders of Hinto Energy, Inc. Hinto issued 11,446,931 shares of
stock in a one for one share exchange, assumed $175,000 in notes payable and
issued 6,700,000 of warrants in a one for one exchange with South Uintah warrant
holders. South Uintah returned 2,700,000 shares of Hinto stock to the Company,
such stock being cancelled. The Company accounted for the Share Exchange and
Acquisition as a reverse capitalization, with South Uintah being the accounting
acquirer.
6
Basis of Presentation
Development Stage Company
The Company has not earned significant revenues from planned operations.
Accordingly, the Company's activities have been accounted for as those of a
"Development Stage Company." Therefore, the Company's financial statements of
operations, stockholders' equity and cash flows disclose activity since the date
of the Company's inception, in this case, South Uintah Gas Properties, Inc., for
the period March 8, 2011 through December 31, 2011 and the combined companies,
Hinto and South Uintah from January 1, 2012 forward.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the 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 and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of
three months or less and money market instruments to be cash equivalents.
Oil and Gas Properties, Full Cost Method
The Company uses the full cost method of accounting for oil and gas producing
activities. Costs to acquire mineral interests in oil and gas properties, to
drill and equip exploratory wells used to find proved reserves, and to drill and
equip development wells including directly related overhead costs and related
asset retirement costs are capitalized.
Under this method, all costs, including internal costs directly related to
acquisition, exploration and development activities are capitalized as oil and
gas property costs. Properties not subject to amortization consist of
exploration and development costs which are evaluated on a property-by-property
basis. Amortization of these unproved property costs begins when the properties
become proved or their values become impaired. The Company assesses the
realization of unproved properties, taken as a whole, if any, on at least an
annual basis or when there has been an indication that impairment in value may
have occurred. Impairment of unproved properties is assessed based on
management's intention with regard to future exploration and development of
individually significant properties and the ability of the Company to obtain
funds to finance such exploration and development. If the results of an
assessment indicate that the properties are impaired, the amount of the
impairment is added to the capitalized costs to be amortized.
Costs of oil and gas properties will be amortized using the units of production
method.
7
In applying the full cost method, the Company will perform an impairment test
(ceiling test) at each reporting date, whereby the carrying value of property
and equipment is compared to the "estimated present value," of its proved
reserves discounted at a 10-percent interest rate of future net revenues, based
on current economic and operating conditions, plus the cost of properties not
being amortized, plus the lower of cost or fair market value of unproved
properties included in costs being amortized, less the income tax effects
related to book and tax basis differences of the properties. If capitalized
costs exceed this limit, the excess is charged as an impairment expense.
Revenue Recognition
The Company recognizes revenue when it is earned and expenses are recognized
when they occur.
Net Loss per Share
Basic net loss per common share is calculated by dividing the net loss
applicable to common shares by the weighted average number of common and common
equivalent shares outstanding during the period. For the periods ended September
30, 2012 and December 31, 2011, there were no potential common equivalent shares
used in the calculation of weighted average common shares outstanding as the
effect would be anti-dilutive because of the net loss.
Stock-Based Compensation
The Company adopted the provisions of and accounts for stock-based compensation
using an estimate of value in accordance with the fair value method. Under the
fair value recognition provisions of this statement, stock-based compensation
cost is measured at the grant date based on the fair value of the award and is
recognized as expense on a straight-line basis over the requisite service
period, which generally is the vesting period. The Company elected the
modified-prospective method, under which prior periods are not revised for
comparative purposes. The valuation method applies to new grants and to grants
that were outstanding as of the effective date and are subsequently modified.
Fair Value of Financial Instruments
The carrying amount of accounts payable is considered to be representative of
respective fair values because of the short-term nature of these financial
instruments.
Other Comprehensive Income
The Company has no material components of other comprehensive income (loss) and
accordingly, net loss is equal to comprehensive loss in all periods.
Income Taxes
Provision for income taxes represents actual or estimated amounts payable on tax
return filings each year. Deferred tax assets and liabilities are recorded for
the estimated future tax effects of temporary differences between the tax basis
of assets and liabilities and amounts reported in the accompanying balance
sheets, and for operating loss and tax credit carry forwards. The change in
deferred tax assets and liabilities for the period measures the deferred tax
provision or benefit for the period. Effects of changes in enacted tax laws on
deferred tax assets and liabilities are reflected as adjustment to the tax
provision or benefit in the period of enactment.
8
Recent Accounting Pronouncements
There were accounting standards and interpretations issued during the period
ended September 30, 2012, none of which are expected to have a material impact
on the Company's financial position, operations or cash flows.
NOTE 3 - GOING CONCERN AND MANAGEMENTS' PLAN
The Company's financial statements for the nine months ended September 30, 2012,
the period of March 3, 2011 through December 31, 2011and the period of March 3,
2011 through September 30, 2012 have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company reported a net
loss of $790,482 for the nine months ended September 30, 2012, and an
accumulated deficit of $1,617,777 as of September 30, 2012. At September 30,
2012, the Company had a working capital deficit of $533,525.
The future success of the Company is likely dependent on its ability to attract
additional capital, or to find an acquisition to add value to its present
shareholders and ultimately, upon its ability to develop future profitable
operations. There can be no assurance that the Company will be successful in
obtaining such financing, or that it will attain positive cash flow from
operations. Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for the
Company to continue as a going concern.
NOTE 4 - OIL AND GAS LEASES
On May 9, 2012, the Company and Pacific Energy and Mining Company ("Pacific")
entered into an Asset Purchase and Sale Agreement ("The Pacific Agreement."). On
May 30, 2012, the Company closed the transaction. As part of the Pacific
Agreement, the Company acquired certain oil and gas wells and related assets in
the Greater Cisco area of the Uintah Basin in Grand County, Utah.
The assets acquired include 4,783 gross acres in the Cisco Fields with an 80%
Net Revenue Interest (NRI) and approximately 3,827 net acres. The property
includes 27 wells that need to be re-worked, connected to a gas pipeline, or
offset drilled.
In exchange for such oil and gas wells and related assets, the Company paid
$325,000 in a combination of cash and a convertible promissory note, as follows:
- $175,000 cash; and
- a $150,000 convertible promissory note. The convertible promissory note has
an interest rate of 8% and is due May 30. 2013. The convertible promissory
note and accrued interest may be converted into shares of the Company's
restricted common stock at $1.00 per share.
The Company purchased a farmout of deep right interests in approximately 5,000
net acres in the Uintah Basin in Utah in July 2011, amended in December 2011.
The purchase price of the farmout interest was $478,200, made up of $303,000 in
cash, $175,000 in notes payable and $200 in common stock (2,000,000 shares.) The
Company has subsequently expended an additional $198,500 in cash for the
completion of a gas pipeline connection, surface equipment and initial well
rework.
9
NOTE 5 - CURRENT LIABILITIES
During June 2012, the Company, in exchange for cash of $25,000, issued a
convertible promissory note for $25,000. The note is convertible into shares of
the Company's restricted common stock at $0.50 per share and has a term of 12
months. In September 2012, the holder of the note converted the $25,000
principal of the note for 125,000 shares of the Company's common stock and the
accrued interest of $364 for 728 shares of the Company's restricted common
stock.
The Company has $375,000 in other notes payable that it expects to be paid in
the next twelve months. Of this amount, $200,000 is to be returned to a former
investor. Further information regarding the $200,000 amount payable is found in
Note 7.
NOTE 6 - LONG TERM NOTE PAYABLE
The Company placed a $500,000 secured convertible note payable with a single
investor. The note has a term of 3 years, an interest rate of 10%, is
convertible into the Company's common stock at $1 per share and is secured by
oil and gas leases held by South Uintah Gas Properties, Inc. in the Natural
Buttes area.
NOTE 7 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the Company is 50,000,000 shares of common stock
with a $0.001 par value. At September 30, 2012, the Company had 14,576,527
shares of its common stock issued and outstanding.
During the nine months ended September 30, 2012, the Company issued 715,000
shares of its common stock to investors that purchased $307,500 of securities at
a price of $.50 per common share and 147,250 shares for services valued at
$142,625.
The Company issued 191,618 shares of its common stock as a payment for
outstanding accounts payable of $95,809 owed for legal services to an affiliate
of the Company.
The Company issued 25,000 shares of its common stock as interest of $12,500.
The Company issued 50,728 shares of its common stock upon the conversion of an
outstanding convertible promissory note and accrued interest of $25,364.
The Company also issued 11,375,000 of its restricted common shares to acquire
South Uintah Gas Properties, Inc.
Preferred Stock
On August 18, 2011, the Company filed an amendment to the Articles of
Incorporation with the Secretary of State of Wyoming to authorize 25,000,000
shares of Preferred Shares to be designated in any series or classes and with
those rights, privileges and preferences to be determined at the discretion of
the Company's Board of Directors. At this time, the Company has not designated
any series of preferred stock or issued any shares of preferred stock.
10
Stock Option Plan
On August 17, 2011, the Company's shareholders approved the 2011 Hinto Energy,
Inc. Stock Option and Award Incentive Plan ("Plan"). The Plan provides for the
grant of stock options to directors, officers, employees, consultants, and
advisors of the Company. The Plan is administered by a committee consisting of
members of the Board of Directors (the "Stock Option Committee"), or in its
absence, the Board of Directors.
The Plan provides for a total of 2,000,000 shares of common stock to be reserved
for issuance subject to options. As of the date of this Proxy Statement, the
Board has not approved the grant of any options to purchase shares of common
stock, nor the conditions, performance or vesting requirements.
Warrants
The Company had the following warrants outstanding at September 30, 2012:
------------------------ ------------------- ---------------------- -------------------
Warrants Term in years Vesting in years Exercise Price
------------------------ ------------------- ---------------------- -------------------
3,000,000 3 to 5 Variable $2.00
------------------------ ------------------- ---------------------- -------------------
1,700,000 3 1 $1 and $3
------------------------ ------------------- ---------------------- -------------------
2,000,000 2 Vested $0.50
------------------------ ------------------- ---------------------- -------------------
Each warrant gives the holder the right to purchase one share of the Company's
common stock at the exercise price. The 3,000,000 warrants, issued in connection
with consulting services, vest at various dates from July 2012 through July 2014
and expire at various dates from June 2014 through June 2016. The 1,700,000
warrants, issued in connection with consulting services, are fully vested and
expire at various dates from June 2014 through November 2014, with 1,100,000
warrants being exercisable at $1 and 600,000 being exercisable at $3. The
2,000,000 warrants currently exercisable were issued in connection with notes
payable and expire at dates from May 2013 through July 2013. These 2,000,000
warrants are callable at the option of the Company in the first year from the
grant dates of May through July 2011 at the exercise price under various
conditions, generally if the Company completes a $4,500,000 private placement of
common stock. No expense was recorded by the Company on the issuance of any of
the 6,700,000 warrants, as the Company's common stock has no trading market and
no material common stock cash sales have been made, and thus none of the
warrants were in the money.
NOTE 8 - LEGAL MATTERS
In March 2012 a note holder of South Uintah Gas Properties, Inc., Bridge
Industries, LLC filed a complaint against the Company in the Circuit Court of
the Eighteenth Judicial Circuit, Seminole County, Florida, alleging in general
breach of contract and seeking return of all monies lent to South Uintah Gas
Properties, Inc. of $400,000, the value of 1,000,000 shares of the Company's
common stock and other equity appreciation, and compensation for services and
costs. The Company is evaluating the action and its response, and the outcome of
the case is currently unknown.
NOTE 9 - SUBSEQUENT EVENTS
The Company has evaluated it activities subsequent to the period ended September
30, 2012, through November 12, 2012 and found no reportable subsequent events.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2011, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
PLAN OF OPERATIONS
------------------
We had no operations prior to 2011 and we did not have any revenues during the
fiscal years ended December 31, 2011, 2010 and 2009. We did not recognize any
income in the years ended December 31, 2011 and 2010. We have minimal capital,
moderate cash and only our intangible assets which consist of our business plan,
relationships and contacts. We are illiquid and need cash infusions from
investors or shareholders to provide capital, or loans from any sources, none of
which have been arranged nor assured.
Share Acquisition and Exchange Agreement
On July 27, 2011, we entered into a Share Exchange and Acquisition Agreement
with South Uintah and the South Uintah shareholders. On January 23, 2012, we
entered into an Amended Share Exchange and Acquisition Agreement ("the Amended
Share Exchange Agreement"). Pursuant to the Amended Share Exchange Agreement, we
agreed to issue shares of the Company's restricted common stock for 100% of the
issued and outstanding common stock of South Uintah. The shares are to be
exchanged on a one for one basis. As a result, South Uintah became a
wholly-owned subsidiary of the Company.
In addition to the exchange of common stock, we have agreed to exchange on a one
for one basis the following outstanding debt and equity instruments with those
of our own. The table below sets forth the equity that is being exchanged.
Type of Equity South Uintah Balance To Be Issued By Hinto
----------------------------------- ------------------------ -------------------------
Common Stock 11,446,931 shares 11,446,931 shares
Warrants (1) 6,700,000 6,700,000
Debt Instruments(2) $375,000 $375,000
12
(1) The warrants have exercise prices ranging from $0.50 to $3.00 per share and
terms ranging from 2 to 3 years.
(2) The debt instrument has a term of two years.
South Uintah Gas Properties, Inc. was incorporated in the state of Colorado on
March 8, 2011. South Uintah was organized to operate as an independent oil and
gas company which would engage in the acquisition, exploration, development,
production and sale of natural gas and crude oil. Selected managed risk
exploration ventures would also be considered from time to time. The core area
of operation is the Rocky Mountain region, which contains all of our areas of
interest.
With the acquisition of South Uintah, the Company intends to strive to be a low
cost and effective producer of hydrocarbons and intends to develop the business
model and corporate strategy as discussed herein.
On May 9, 2012, the Company and Pacific Energy and Mining Company ("Pacific")
entered into an Asset Purchase and Sale Agreement ("The Pacific Agreement."). On
May 30, 2012, the Company closed the transaction. As part of the Pacific
Agreement, the Company acquired certain oil and gas wells and related assets in
the Greater Cisco area of the Uintah Basin in Grand County, Utah.
The assets acquired include 4,783 gross acres in the Cisco Spring Fields with an
80% Net Revenue Interest (NRI) and approximately 3,827 net acres. The property
includes 27 wells that need to be re-worked, connected to a gas pipeline, or
offset drilled.
In exchange for such oil and gas wells and related assets, the Company paid
$325,000 in a combination of cash and a convertible promissory note, as follows:
- $175,000 cash; and
- a $150,000 convertible promissory note. The convertible promissory note has
an interest rate of 8% and is due May 30. 2013. The convertible promissory
note and accrued interest may be converted into shares of the Company's
restricted common stock at $1.00 per share.
During the quarter ended September 30, 2012, we made progress on our business
plan by completing the hookup of our 22-1 gas well in the Uintah Basin of Utah
to a pipeline and generating initial revenues from the sale of oil and gas.
During the remaining part of 2012 our plan of operations includes the
continuation of recompletion operations and development of any new oil and gas
prospects.
Expected 2012 Budget - 12 months (January 2012 through December 2012)
---------------------------------------------------------------------
Development of connection, rework, recompletion, 3 well program $1,500,000
Working Capital $1,300,000
Acquisitions $1,000,000
Payment of Debt $375,000
General and Administrative Expenses:
Legal and Accounting/Auditing $157,000
Consulting $495,000
Filing Fees (State, SEC, etc.) $7,500
Travel $60,000
Interest $66,000
Miscellaneous $405,000
--------------------
TOTAL $5,000,000
13
The Company may change any or all of the budget categories in the execution of
its business model. None of the line items are to be considered fixed or
unchangeable. The Company may need substantial additional capital to support its
budget. The Company has no revenues to date in the oil and gas exploration,
development and production business.
We have conducted a Private Offering of shares of our restricted Common Stock
for capital. We intend to raise up to $5,000,000 in the next twelve months with
a structure not yet determined in debt or equity. We cannot give any assurances
that we will be able to raise the full $5,000,000 to fund the budget. Further,
we will need to raise additional funds to support not only our expected budget,
but our continued operations. We cannot make any assurances that we will be able
to raise such funds or whether we would be able to raise such funds with terms
that are favorable to us.
We will need substantial additional capital to support our proposed future
energy operations. We have no revenues. We have no committed source for any
funds as of date here. No representation is made that any funds will be
available when needed. In the event funds cannot be raised when needed, we may
not be able to carry out our business plan, may never achieve sales or royalty
income, and could fail in business as a result of these uncertainties.
Decisions regarding future participation in exploration wells or geophysical
studies or other activities will be made on a case-by-case basis. We may, in any
particular case, decide to participate or decline participation. If
participating, we may pay our proportionate share of costs to maintain our
proportionate interest through cash flow or debt or equity financing. If
participation is declined, we may elect to farmout, non-consent, sell or
otherwise negotiate a method of cost sharing in order to maintain some
continuing interest in the prospect.
Since Hinto is a public company, which had nominal activity, the acquisition has
been treated as a recapitalization of South Uintah. Though Hinto was the legal
acquirer in the merger, South Uintah was the accounting acquirer since its
shareholders gained control of Hinto. Therefore at the date of the merger the
historical financial statements of South Uintah became those of Hinto. As a
result, for the financial statements as of September 30, 2012, the merger date
will reflect historical financial statements of South Uintah and supersede any
prior financial statements of Hinto.
RESULTS OF OPERATIONS
---------------------
For the Three Months Ended September 30, 2012 Compared to the Three Months Ended
September 30, 2011
During the three months ended September 30, 2012, the Company recognized
revenues of $21,439 in revenues from its operational activities. The Company did
not recognize any revenues during the three months ended September 30, 2011.
During the three months ended September 30, 2012, we incurred total operational
expenses of $149,420 compared to $150,721 during the three months ended
September 30, 2011. The increase of $1,301 was a result of the $84,666 decrease
in general and administrative expenses offset by the $83,365 increase in
consulting expenses.
During the three months ended September 30, 2012, we recognized a net loss of
$169,892 compared to a net loss of $166,016 during the three months ended
September 30, 2011. The increase of $3,876 was a result of the $21,439 increase
in revenues, offset by a $22,036 increase in cost of revenues and a $1,301
increase in operational expenses.
14
For the Nine Months Ended September 30, 2012 Compared to the Period of Inception
(March 8, 2011) through September 30, 2011
During the period of inception (March 8, 2011) through September 30, 2011, the
Company did not recognize any revenues from its operating activities.
During the nine months ended September 30, 2012, the Company recognized revenues
of $31,803 in revenues from its operational activities and cost of revenues of
$22,036. These revenues have all been earned during the six month period ended
September 30, 2012. The Company expects to continue to recognize revenues from
its operational activities, but does not expect that such revenues to be
adequate to support its current operations.
During the nine months ended September 30, 2012, we incurred total operational
expenses of $732,301 compared to $201,713 during the period of inception (March
8, 2011) through September 30, 2011. The increase of $530,588 was a result of an
increase of $354,663 in general and administrative expense combined with a
$175,925 increase in consulting expenses. We expect operational expenses to
increase as we continue to pursue our operational plan.
During the nine months ended September 30, 2012, we recognized a net loss of
$790,482 compared to $218,856 during the period of inception (March 8, 2011)
through September 30, 2011. The increase of $571,626 was a result of the
$530,588 increase in operational expenses and a $50,805, offset by a $31,803
increase in revenues.
LIQUIDITY
---------
At September 30, 2012, the Company had total current assets of $17,252,
consisting of cash of $8,140, accounts receivable of $4,112 and deposits of
$5,000. At September 30, 2012, the Company had total current liabilities of
$550,777, consisting of, accounts payable of $45,897, accrued liabilities of
$134,880 and notes payables of $370,000. At September 30, 2012, we have a
working capital deficit of $533,525.
During the nine months ended September 30, 2012, we used cash of $443,361 in
operations. During the nine months ended September 30, 2012, we recognized a net
loss of $790,482, which was adjusted for the non-cash items of accrued interest
of $30,898 and services of $203,834 paid in stock.
During the period of inception (March 8, 2011) through September 30, 2011, we
used cash of $193,945 in operations. During the period of inception (March 8,
2011) through September 30, 2011, the Company recognized a net loss of $218,856,
which was not adjusted for any non-cash items.
During the nine months ended September 30, 2012, we used $198,500 in our
investing activities, solely in the development of our 22-1 well and $175,000 on
the purchase of certain oil and gas properties and related assets in the Greater
Cisco area of the Uintah Basin in Grand County, Utah.
During the period of inception (March 8, 2011) through September 30, 2011, the
Company used $603,000 in our investing activities, $300,000 to acquire a 70%
interest in Hinto Energy, Inc., which we eventually merged with and $303,000 to
purchase oil and gas leases.
During the nine months ended September 30, 2012, we received $337,500 from our
financing activities compared to $900,200 during the period of inception (March
8, 2011) through September 30, 2011.
15
The Company placed a $500,000 secured convertible note payable with a single
investor. The note has a term of 3 years, an interest rate of 10%, is
convertible into the Company's common stock at $1 per share and is secured by
oil and gas leases in the Natural Buttes area held by South Uintah Gas
Properties, Inc.
In March 2012 a note holder of South Uintah Gas Properties, Inc., Bridge
Industries, LLC filed a complaint against the Company in the Circuit Court of
the Eighteenth Judicial Circuit, Seminole County, Florida, alleging in general
breach of contract and seeking return of all monies lent to South Uintah Gas
Properties, Inc. of $400,000, the value of 1,000,000 shares of the Company's
common stock and other equity appreciation, and compensation for services and
costs. The Company is evaluating the action and its response, and the outcome of
the case is currently unknown.
During May 2012, the Company in exchange for cash of $25,000 issued a
convertible promissory note for $25,000. The note is convertible in shares of
the Company's restricted common stock at $0.50 per share and a term of 12
months. In September 2012, the holder of the convertible promissory note
converted the principal of $25,000 and the accrued interest of $364 for 50,724
shares of common stock.
During the nine months ended September 30, 2012, the Company issued 715,000
shares of its common stock to investors that purchased $357,500 of the
securities at a price of $.50 per common share.
The Company also issued 11,375,000 of its restricted common shares to acquire
South Uintah Gas Properties, Inc.
Short Term.
On a short-term basis, we do not generate any revenue or revenues insufficient
to cover operations. Based on prior history, we will continue to have
insufficient revenue to satisfy current and recurring expenses and liabilities.
For short term needs we will be dependent on receipt, if any, of offering
proceeds.
Capital Resources
We have only common and preferred stock as our capital resources.
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.
Need for Additional Financing
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
16
Critical Accounting Policies
----------------------------
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of
three months or less and money market instruments to be cash equivalents.
Oil and Gas Properties, Full Cost Method
The Company uses the full cost method of accounting for oil and gas producing
activities. Costs to acquire mineral interests in oil and gas properties, to
drill and equip exploratory wells used to find proved reserves, and to drill and
equip development wells including directly related overhead costs and related
asset retirement costs are capitalized.
Under this method, all costs, including internal costs directly related to
acquisition, exploration and development activities are capitalized as oil and
gas property costs. Properties not subject to amortization consist of
exploration and development costs which are evaluated on a property-by-property
basis. Amortization of these unproved property costs begins when the properties
become proved or their values become impaired. The Company assesses the
realization of unproved properties, taken as a whole, if any, on at least an
annual basis or when there has been an indication that impairment in value may
have occurred. Impairment of unproved properties is assessed based on
management's intention with regard to future exploration and development of
individually significant properties and the ability of the Company to obtain
funds to finance such exploration and development. If the results of an
assessment indicate that the properties are impaired, the amount of the
impairment is added to the capitalized costs to be amortized.
Costs of oil and gas properties will be amortized using the units of production
method.
In applying the full cost method, the Company will perform an impairment test
(ceiling test) at each reporting date, whereby the carrying value of property
and equipment is compared to the "estimated present value," of its proved
reserves discounted at a 10-percent interest rate of future net revenues, based
on current economic and operating conditions, plus the cost of properties not
being amortized, plus the lower of cost or fair market value of unproved
properties included in costs being amortized, less the income tax effects
related to book and tax basis differences of the properties. If capitalized
costs exceed this limit, the excess is charged as an impairment expense.
Revenue Recognition
The Company recognizes revenue when it is earned and expenses are recognized
when they occur.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) and that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Financial Officer (Principal
Executive Officer and Principal Financial Officer), as appropriate, to allow for
timely decisions regarding required disclosure.
17
As required by SEC Rule 15d-15(b), our Chief Financial Officer carried out an
evaluation under the supervision and with the participation of our management,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation and the evaluation
conducted at September 30, 2012, our Chief Financial Officer has concluded that
our disclosure controls and procedures are not effective in timely alerting them
to material information required to be included in our periodic SEC filings and
to ensure that information required to be disclosed in our periodic SEC filings
is accumulated and communicated to our management, including our Chief Financial
Officer, to allow timely decisions regarding required disclosure.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
Hinto's management is responsible for establishing and maintaining adequate
internal control over financial reporting for the company in accordance with as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's
internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company's internal control over financial
reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
the Company's assets;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that the Company's
receipts and expenditures are being made only in accordance with
authorizations of Hinto's management and directors; and
(3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company's assets
that could have a material effect on Hinto's financial statements.
We have identified certain material weaknesses in internal control over
financial reporting relating to a shortage of accounting and reporting personnel
due to limited financial resources and the size of our Company, as detailed
below:
(1) The Company currently does not have, but is in the process of
developing formally documented accounting policies and procedures,
which includes establishing a well-defined process for financial
reporting.
(2) Due to the limited size of our accounting department, we currently lack
the resources to handle complex accounting transactions. We believe
this deficiency could lead to errors in the presentation and disclosure
of financial information in our annual, quarterly, and other filings.
(3) As is the case with many companies of similar size, we currently lack
segregation of duties in the accounting department. Until our
operations expand and additional cash flow is generated from
operations, a complete segregation of duties within our accounting
function will not be possible.
Considering the nature and extent of our current operations and any risks or
errors in financial reporting under current operations and the fact that we have
been a small business with limited employees, such items caused a weakness in
internal controls involving the areas disclosed above.
18
We have concluded that our internal controls over financial reporting were
ineffective as of September 30, 2012, due to the existence of the material
weaknesses noted above that we have yet to fully remediate.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2012, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 2012 a note holder of South Uintah Gas Properties, Inc., Bridge
Industries, LLC filed a complaint against the Company in the Circuit Court of
the Eighteenth Judicial Circuit, Seminole County, Florida, alleging in general
breach of contract and seeking return of all monies lent to South Uintah Gas
Properties, Inc. of $400,000, the value of 1,000,000 shares of the Company's
common stock and other equity appreciation, and compensation for services and
costs. The Company is evaluating the action and its response, and the outcome of
the case is currently unknown.
ITEM 1A. RISK FACTORS
Not Applicable to Smaller Reporting Companies.
ITEM 2. CHANGES IN SECURITIES
During the period of July 1, 2012 through September 30, 2012, the Company has
made the following unregistered issuances of its securities.
DATE OF SALE TITLE OF SECURITIES NO. OF SHARES CONSIDERATION CLASS OF PURCHASER
------------------ ------------------------ ---------------- ----------------------------- -----------------------
September 2012 Common Shares 50,724 Conversion of Convertible Business Associate
Promissory Note
September 2012 Common Shares 100,000 $50,000 Business Associate
September 2012 Common Shares 23,250 Consulting Services Business Associate
Exemption From Registration Claimed
All of the above sales by the Company of its unregistered securities were made
by the Company in reliance upon Rule 506 of Regulation D and Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). All of the individuals
and/or entities that purchased the unregistered securities were primarily
existing shareholders, known to the Company and its management, through
pre-existing business relationships, as long standing business associates and
employees. All purchasers were provided access to all material information,
which they requested, and all information necessary to verify such information
and were afforded access to management of the Company in connection with their
purchases. All purchasers of the unregistered securities acquired such
securities for investment and not with a view toward distribution, acknowledging
such intent to the Company. All certificates or agreements representing such
securities that were issued contained restrictive legends, prohibiting further
transfer of the certificates or agreements representing such securities, without
such securities either being first registered or otherwise exempt from
registration in any further resale or disposition.
19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. MINE SAFETY DISCLOSURE.
Not Applicable.
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Financial Officer and Principal Executive
Officer pursuant to Section 302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive and Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act
20
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
HINTO ENERGY, INC.
(Registrant)
Dated: November 14, 2012 By: /s/ George Harris
----------------
George Harris (Chief Executive
Officer, Chief Financial Officer
and Principal Accounting Officer)
