All Energy Corp - FORM 10-Q/A

Attached files

file	filename
EX-32.1 - All Energy Corp	all10qaex321063012.htm
EX-31.1 - All Energy Corp	all10qaex311063012.htm
EXCEL - IDEA: XBRL DOCUMENT - All Energy Corp	Financial_Report.xls

U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
Form 10-Q/A Amendment #1
(Mark one)
[ X ]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2012
OR
[ ]	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File No. 0-29417

		All Energy Corporation
		(Exact name of registrant as specified in its charter)

	DELAWARE			62-1581902
	(State or Other Jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

		6165 N.W. 86th Street, Johnston, Iowa 50131
		(Address of principal executive offices, including zip code)
			(515) 331-6509
		(Issuer’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [ X ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ]					Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)					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 [ ] No [ X ]
As of August 15, 2012, there were 21,532,523 shares of the issuer’s common stock outstanding.

EXPLANATORY NOTE

We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as originally filed with the Securities and Exchange Commission on August 29, 2012 (the “Original Form 10-Q”): (i) Item 1 of Part I, “Financial Information”; (ii) Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (iii) Item 4T of Part I, “Controls and Procedures”; and (iv) Item 6 of Part II, “Exhibits”.

We have also updated the signature page, the certifications of our Chief Executive Officer and Acting Chief Financial Officer in Exhibits 31.1 and 32.1, as well as our financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibits 101.

No other sections of the Original Form 10-Q were affected, but, for the convenience of the reader, this report on Form 10-Q/A restates in its entirety, as amended, the Original Form 10-Q. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way, other than as required to reflect the restatement described below.

This amendment to the Quarterly Report on Form 10-Q of All Energy Corporation for the quarter ended June 30, 2012, filed on August 29, 2012, is being filed for the purpose of adjusting the amortization related to the debt discount along with the effects of the correction of the accounting related to the convertible promissory notes and Series A and Series B Warrants as reported in the Form 10-Q/A for September 30, 2011, and in Form 10-K/A for December 31, 2011, and as discussed in Note 7 of the accompanying financial statements. In the Original Form 10-Q, the Company recorded $88,295 of convertible debt/warrant expense in the consolidated statement of operations, $391,760 of additional paid in capital and a discount against the convertible promissory note of $220,700. This amendment correctly shows the accounting to record $220,700 of additional paid in capital, with a debt discount of $220,700 which is comprised of $201,832 for the relative fair value of the warrants to the proceeds received and $18,868 related to the beneficial conversion feature of the convertible promissory notes. The effect of this change is as follows. There is a decrease in notes payable – third parties of $19,327 related to the change of the amortization of the debt discount. There is a decrease in additional paid in capital of $171,060 related to the calculation of the fair value of the warrants. There is a decrease in the net loss from $535,442 as previously reported to $502,322 which is made up of decrease in the amortization of the debt discount. This results also in an increase in basic earnings per share from $(.00) to $(.02).

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
	Page
All Energy Corporation
Consolidated Balance Sheets as of June 30, 2012 (unaudited), and December 31, 2011 (audited)	4
Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2012 (unaudited) and 2011 (unaudited), and the Period from Commencement of Development Stage (June 7, 2004) to June 30, 2012 (unaudited)	5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 (unaudited) and 2011 (unaudited), and the Period from Commencement of Development Stage (June 7, 2004) to June 30, 2012 (unaudited)	6
Notes to Consolidated Financial Statements	8

				ALL ENERGY CORPORATION (a development stage company)
		CONSOLIDATED BALANCE SHEETS June 30, 2012, and December 31, 2011

	6/30/12 (unaudited)			12/31/11
ASSETS
Current assets
Cash and cash equivalents	$	150,666		$	2,978
Total current assets		150,666			2,978
Property and equipment - at cost
Oil and gas property		6,650			6,650
Equipment		3,333			3,333
Less accumulated depreciation		(3,258	)		(2,990	)
Total property and equipment - net		6,725			6,993
Other assets
Deposit		100,000			---
Total assets	$	257,391		$	9,971
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	70,592		$	76,831
Accrued expenses - related party		158,969			70,734
Notes payable and convertible notes, net of unamortized discounts of $124,141		374,653			201,381
Note payable - related party		10,500			541,350
Total current liabilities		614,714			890,296
Stockholders’ equity
Preferred stock, $.01 par value; 50,000,000 shares authorized, -0- and -0- shares issued and outstanding		---			---
Common stock, $.01 par value; 700,000,000 shares authorized, 21,312,413 and 1,820,196 shares issued in 2012 and 2011, respectively; and 21,171,413 and 1,679,196 shares outstanding in 2012 and 2011, respectively		213,124			18,202
Additional paid-in capital		18,130,009			17,149,607
Treasury stock, at cost; 141,000 and 141,000 shares		(150,000	)		(150,000	)
Subscription receivable		(150,000	)		---
Receivable from shareholder		(50,000	)		(50,000	)
Accumulated deficit		(6,423,944	)		(6,423,944	)
Deficit accumulated during the development stage		(11,926,512	)		(11,424,190	)
Total stockholders’ equity (deficit)		(357,323	)		(880,325	)
Total liabilities and stockholders’ equity	$	257,391		$	9,971
The accompanying notes are an integral part of these statements.

ALL ENERGY CORPORATION

(a development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months and Six Months Ended June 30, 2012 and 2011, and the Period from

Commencement of Development Stage (June 7, 2004) to June 30, 2012

	Three Months Ended June 30,						Six Months Ended June 30,
	2012 (unaudited)			2011 (unaudited)			2012 (unaudited)			2011 (unaudited)			Period from Commence- ment of Development Stage (June 7, 2004) to 6/30/12 (unaudited)
Revenues	$	---		$	---		$	---		$	---		$	8,092
Operating Costs and Expenses
Consulting		3,504			757			3,647			4,971			7,775,550
Legal and professional		29,738			---			37,356			15,090			1,350,056
Impairment charge		---			---			---			---			333,540
Depreciation and amortization		88			183			268			399			9,184
General and administrative		87,925			78,353			390,968			161,925			2,648,406
Total operating expenses		121,255			79,293			432,239			182,385			12,116,736
Other income (expense)
Beneficial conversion expense		---			---			---			(3,889	)		(171,000	)
Interest expense		(7,830	)		(8,151	)		(14,927	)		(7,838	)		(118,936	)
Interest income		17			2			19			8			51,393
Rental income		---			---			---			---			66,250
Loss on sale of land		---			---			---			---			(1,278	)
Loss on sale of investment		---			---			---			---			(125,000	)
Equity loss in subsidiary		---			---			---			---			(233,340	)
Debt discount amortization		(27,587	)		---			(55,175	)		---			(96,557	)
Debt forgiveness income		---			---			---			---			97,831
Total other income (expense)		(35,400	)		(8,149	)		(70,083	)		(11,719	)		(530,637	)
Net loss	$	(156,655	)	$	(87,442	)	$	(502,322	)	$	(194,104	)	$	(12,639,281	)
Income (loss) per share:
Basic	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.01	)
Diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Weighted average number of shares outstanding:
Basic		21,309,468			1,354,655			18,651,347			1,527,729
Diluted		41,078,154			1,527,729			58,322,363			1,805,784
The accompanying notes are an integral part of these statements.

			ALL ENERGY CORPORATION (a development stage company)
		CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2012 and 2011, and the Period from Commencement of Development Stage (June 7, 2004) to June 30, 2012

	Six Months Ended June 30,
	2012 (unaudited)			2011 (unaudited)			Period from Commencement of Development Stage (June 7, 2004) to 6/30/12 (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(502,322	)	$	(194,104	)	$	(12,639,281	)
Adjustments to reconcile net loss to cash used for operating activities:
Loss on sale of land		---			---			1,278
Loss on disposition of fixed assets		---			---			187
Forgiveness of debt		---			---			97,831
Equity loss in subsidiary		---			---			14,485
Depreciation and amortization		268			399			9,184
Non-cash beneficial conversion expense		---			3,889			171,000
Options issued for compensation		---			---			6,999,585
Stock issued for services and compensation		222,904			500			1,467,549
Debt discount amortization		55,175			---			96,557
Loss on investments		---			---			125,000
Impairment charge		---			---			333,540
Increase (decrease) in prepaids		---			18,807			(87,820	)
Increase in accounts payable		83,663			121,740			603,430
Net cash used for operating activities		(140,312	)		(48,769	)		(2,807,475	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land		---			---			(951,238	)
Deposit made on oil and gas property		(100,000	)		---			(100,000	)
Investment in Treaty Belize Energy LTD		---			---			(125,000	)
Investment in oil and gas property		---			---			(6,650	)
Increase in accrued liabilities - related party		---			---			40,056
Proceeds from sale of land		---			---			461,960
Purchase of office equipment		---			---			(4,160	)
Payments on construction-in-progress		---			---			(193,720	)
Net cash used in investing activities		(100,000	)		---			(878,752	)
The accompanying notes are an integral part of these statements.

			ALL ENERGY CORPORATION (a development stage company)
		CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2012 and 2011, and the Period from Commencement of Development Stage (June 7, 2004) to June 30, 2012

	Six Months Ended June 30,
	2012 (unaudited)			2011 (unaudited)			Period from Commencement of Development Stage (June 7, 2004) to 6/30/12 (unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock for cash		150,000			---			2,853,623
Principal payments on related party advances		---			---			(3,988	)
Proceeds from notes payable - related party		---			25,000			78,000
Proceeds from notes payable - third party		248,000			5,000			638,700
Payment on notes payable - related party		(10,000	)		---			(67,500	)
Proceeds from long-term debt, net of deferred borrowing costs		---			---			483,120
Purchase of treasury stock		---			---			(150,000	)
Contributions from shareholders		---			---			950
Net cash provided by financing activities		388,000			30,000			3,832,905

NET CHANGE IN CASH		147,688			(18,769	)		146,678
Cash, beginning of period		2,978			31,243			3,988
Cash, end of period	$	150,666		$	12,474		$	150,666
The accompanying notes are an integral part of these statements.

		ALL ENERGY CORPORATION (a development stage company)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2012 (unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim financial statements of All Energy Corporation (the “Company”) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America, pursuant to the Securities and Exchange Commission rules and regulations. In management’s opinion all adjustments necessary for a fair presentation of the results for interim periods have been reflected in the interim financial statements. The results of operations for any interim period are not necessarily indicative of the results for a full year. All adjustments to the financial statements are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Such disclosures are those that would substantially duplicate information contained in the most recent audited financial statements of the Company, such as significant accounting policies and stock options. Management presumes that users of the interim statements have read or have access to the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Note 2. Going Concern

The Company has incurred losses totaling $12,639,281 through June 30, 2012, and had a working capital deficit of $464,048 at June 30, 2012. Because of these conditions, the Company will require additional working capital to continue operations and develop its business. The Company intends to raise additional working capital either through private placements, public offerings and/or bank financing.

There are no assurances that the Company will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations or execute its business plan.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3. Management’s Plans for Liquidity

In August 2011, the Company obtained loans from third parties in the total amount of $220,700 for use in its current operations, including its efforts to locate and acquire business opportunities in the oil and natural gas industry. During 2012, the Company has obtained a total of $248,000 in loans for use in its operations and in acquiring oil and gas properties.

The Company will require significant additional capital with which to acquire interests in oil and natural gas properties. While the Company’s management believes it will be able to secure the financing, in the form of debt, equity or a combination thereof, necessary to complete any such proposed acquisition, there is no assurance that such will be the case. In addition, the Company will require additional funds, in order to sustain its operations through the remainder of 2012. The Company believes it will be able to secure the financing, in the form of debt, equity or a combination thereof, necessary to complete these opportunities. The Company does not have a current commitment for an equity investment or a loan in any amount.

During the remainder of 2012, the Company intends to commit its available capital, if any, to its pursuit of the acquisition of one or more additional business opportunities in the oil and natural gas industry. The needed funding will be sought from third parties.

Note 4. Business of the Company

Until August 2011, the Company actively pursued the acquisition of one or more ethanol plants. As of August 2011, the Company’s efforts in this regard had not been successful.

In August 2011, the Company changed its business to the exploration, development, acquisition and production of crude oil and natural gas within the United States.

Note 5. Oil and Gas Investments

Taylor County, Texas. In April 2012 (and amended in May 2012), the Company entered into a purchase and sale agreement relating to the purchase of an oil and gas lease located in Taylor County, Texas, which contains approximately 40 acres and a single producing oil well. Under the purchase and sale agreement, the purchase price for the subject lease is $250,000: $50,000 in cash was paid upon execution of the purchase and sale agreement, $50,000 in cash was paid in May 2012 and $150,000 in cash is payable at the closing. In addition to the lease, under the purchase and sale agreement, the Company is to acquire a consent to inject salt water, with respect to a nearby salt water disposal well. The closing under this agreement occurred in July 2012. As of June 30, 2012, $100,000 of has been paid and recorded as a deposit.

Belize. The Company owns 4% of the outstanding shares in Treaty Belize Energy, LTD (“TBE”), a Belize corporation that is seeking to development an oil and gas property located in Belize, for a cash investment of $100,000. In addition, the Company holds an option to purchase up to 15% ownership of Paradise Energy, LTD for up to one year at a cost of $360,000, $25,000 of which has been paid by the Company as a deposit. The Company also holds an option to purchase additional shares up to10% of TBE, at a total cost of approximately $500,000.

In January 2012, TBE reported that it had drilled its initial well near Independence Village, Belize, located adjacent to the Port of Big Creek in the Stann Creek District, and that oil in commercial quantities had been detected. The defined producing zone is between 1,235 and 1,290 feet. There is no assurance that this well will produce oil and/or gas in such quantities as would benefit the Company. A second, deeper well on the lease owned by TBE is planned for an as-yet determined date. There is no assurance that the second well will produce oil and/or gas. Due to these circumstances, the Company recognized a loss on these investments for the year ended December 31, 2011, in the amount of $125,000.

Louisiana. Also, the Company has entered into a participation agreement with respect to an oil and gas property located in Louisiana, pursuant to which the Company holds a 5% interest in such property and has made payments totaling $6,650.

Note 6. Notes Payable - Related Parties

From the third quarter of 2009 through July 2011, the Company obtained $73,000 in loans from one of its directors, the proceeds from which provided the Company with a portion of the capital needed to sustain its operations. On the dates of issuance, these promissory notes were convertible into a total of 7,100,000 shares of Company common stock. Until August 2011, these loans were payable on demand, bore interest at 10% per annum and were convertible, at the director’s option, into shares of the Company’s common stock at the rate of one share for every $.01 of debt converted. In August 2011, each of these loans was revised and extended to September 2012.

At December 31, 2011, $520,850 in accrued officer salary and interest is included in Note Payable - Related Parties. In January 2012, the entire amount was converted into a total of 15,097,101 shares of Company common stock, pursuant to a debt conversion agreement.

Note 7. Notes Payable - Third Parties

In January 2010, the Company borrowed $65,000 from a third party, and in May 2010, the Company borrowed $35,000 from the same third party, through the issuance of convertible promissory notes, payable in October 2010 (which was not extended and the balance due as of December 31, 2010, is $92,500) and February 2011, respectively, bearing interest at 8% per annum, and convertible into a number of shares based on the market price of the Company’s common stock. On the dates of issuance, these promissory notes were convertible into an aggregate of approximately 16,000,000 shares of Company common stock. The first of these convertible promissory notes has been partially converted as follows: (i) in August 2010, $7,500 was converted into 2,508,361 shares of the Company’s common stock; (ii) in January 2011, $6,000 was converted into 3,000,000 shares of the Company’s common stock; and (iii) in July 2011, $4,000 was converted into 3,076,923 shares of the Company’s common stock. On August 15, 2011, the Company entered into an assignment agreement with this third party where they would assign their debt to five third party note holders in the amount of $90,000 for the unpaid principal and interest owed to them. In connection with this assignment the Company had debt forgiveness income in the amount of $3,266 which has been reflected in the accompanying financial statements.

In April 2011, the Company borrowed $20,000 from a third party, through the issuance of a convertible promissory note, payable on demand, bearing interest at 10% per annum, and convertible, at the third party’s option, into shares of the Company’s common stock at the rate of one share for every $.01 of debt converted. On the date of issuance, this promissory note was convertible into 2,000,000 shares of Company common stock. In August 2011, this loan was revised and extended to September 2012.

Also in April 2011, the Company borrowed $5,000 from a third party for use as working capital, through the issuance of a convertible promissory note, payable on demand, bearing interest at 10% per annum, and convertible, at the third party’s option, into shares of the Company’s common stock at the rate of one share for every $.01 of debt converted. On the date of issuance, this promissory note was convertible into a total of 1,000,000 shares of Company common stock. In August 2011, this loan was revised and extended to September 2012. In June 2012, $500 of such indebtedness was converted into 50,000 shares of Company common stock.

In August 2011, the Company issued convertible promissory notes with an aggregate principal amount of $220,700. These notes mature on September 1, 2013, accrue interest at 8% per annum and are payable at maturity, unless converted by the holder into shares of Company common stock at a conversion rate of $0.0345 per share.

During the six months ended June 30, 2012, a total of $131,069 of such indebtedness was converted into a total of 3,799,116 shares of Company common stock.

Simultaneously with their notes, each party was issued Series A Warrants and Series B Warrants. Series A Warrants provide the holders the right to purchase up to a total of 2,000,000 share of Company common stock at an exercise price of $0.25 per share and Series B Warrants that provide the holders the right to purchase up to a total of 2,000,000 shares of Company common stock at an exercise price of $0.375 per share. The warrants have a four year life. The values in 2011 were based upon Black-Scholes computations with the following ranges of assumptions: Volatility 41.568%, interest rate 0.67%, expected term of 4 years and stock prices from $0.006.

The Company recorded $220,700 as a Debt Discount which is to be amortized over the term of the two year notes. As of June 30, 2012, and December 31, 2011, $96,557 and $27,588, respectively, of amortization has been recorded related to the debt discount.

In May 2012, the Company issued two promissory notes both with $100,000 face amounts in consideration of two loans of the same amount. Each such promissory note is due in October 2012, as extended, with $1,000 in interest due on each at their respective due dates.

Note 8. Loans on Open Account

During the six months ended June 30, 2012, the Company obtained loans on open account in the total amount of $48,000. These loans on open account are payable on demand and the Company accrues interest on these loans at 8%.

Note 9. Capital Stock

Common Stock Issued under Debt Conversion Agreement

During the six months ended June 30, 2012, $520,850 in accrued officer salary and interest was converted into a total of 15,097,101 shares of Company common stock, pursuant to a debt conversion agreement, a per share price of $.0345.

Common Stock Issued on Convertible Promissory Notes

During the six months ended June 30, 2012, a total of $131,069 of indebtedness evidenced by convertible promissory notes was converted into a total of 3,799,116 shares of Company common stock, a per share price of $.0345.

Common Stock Issued for Note Extensions

During the six months ended June 30, 2012, a total of 196,000 shares were issued pursuant to four separate promissory note extension agreements.

Common Stock Issued for Director Bonus

During the six months ended June 30, 2012, the Company issued a total of 100,000 shares of its common stock as bonuses to two of its directors. These shares were valued at $1.54 per share, or $154,000, in the aggregate. During the first six months of 2011, the Company did not issue any shares as a bonus.

Common Stock Issued for Services

During the six months ended June 30, 2012, the Company issued 50,000 shares with an aggregate value of $25,500, or $.51 per share, in payment of legal services.

During the six months ended June 30, 2011, the Company issued 50,000 shares of common stock in payment of $500 in consulting services.

Common Stock Options Issued for Services; Subscription Receivable; Exercise of Stock Options

In February 2012, the Company entered into a consulting agreement with a third party. This consultant’s sole compensation was the issuance of stock options to purchase 200,000 shares of Company common stock at an exercise price of $1.50 per share. In advance of payment therefor, all 200,000 shares underlying such options were issued by the Company. As of June 30, 2012, a total of $150,000 had been received by the Company in payment of 100,000 of such shares. Thus, at June 30, 2012, the accompanying balance sheet includes a stock subscription receivable in the amount of $150,000, which relates to 100,000 of such shares.

In addition, during May 2012, the Company entered into three separate consulting agreements with consultants, under which the Company issued stock options to purchase 400,000 shares of Company common stock at an exercise price of $1.30 per share and 250,000 shares of Company common stock at an exercise price of $1.00 per share (subsequent to June 30, 2012, the exercise price with respect to such 250,000 shares was revised by agreement to $.10 per share). As of June 30, 2012, none of such stock options had been exercised.

Note 10. Purchase of Oil and Gas Lease

In April 2012 (and amended in May 2012), the Company entered into a purchase and sale agreement relating to the purchase of an oil and gas lease located in Taylor County, Texas. The lease contains approximately 40 acres with a producing oil well, a second well that requires rework and an drill site for a third well. Under the purchase and sale agreement, the purchase price for the subject lease is $250,000: $50,000 in cash was paid upon execution of the purchase and sale agreement, $50,000 in cash was paid in May 2012 and $150,000 in cash is payable at the closing. In addition to the lease, under the purchase and sale agreement, the Company is to acquire a consent to inject salt water, with respect to a nearby salt water disposal well. The closing under this agreement occurred in July 2012.

Note 11. Subsequent Events

Issuance of Promissory Notes

In July 2012, the Company issued three convertible secured promissory notes with $20,000, $25,000 and $25,000 face amounts, respectively, in consideration of three loans of such amounts. Each such convertible promissory note is due in July 2017 with interest accruing in amounts equal to 1.8176%, 2.272% and 2.272%, respectively, of the remaining net cash flow of the Company’s subsidiary, AllEnergy - Bell, LLC, and payable each October 31, January 31, April 30 and July 31. Each of this convertible preferred promissory notes is secured by a deed of trust with respect to the oil and gas lease located in Taylor County, Texas, and owned by AllEnergy - Bell, LLC.

Extension of Promissory Notes

In July 2012, the Company entered into extension agreements with respect to two promissory notes both with $100,000 face amounts and $1,000 in accrued interest, which promissory notes were due and payable on June 30, 2012, and are now due and payable on October 1, 2012. The Company issued 25,000 shares of its common stock to each promissory note holder in consideration of such extensions. Also in connection with the extensions of such promissory notes, the Company obtained an additional $20,000 in loans from such promissory note holders, which amount is also due on October 1, 2012. Further, the aggregate amount of $222,000 owed to such parties is now secured by a deed of trust with respect to the oil and gas lease located in Taylor County, Texas, and owned by AllEnergy - Bell, LLC.

Exercise of Stock Options

In July 2012, stock options were exercised to purchase 80,000 shares of Company common stock at an aggregate exercise price of $8,000.

Purchase of Oil and Gas Lease

As described in Note 10, the Company completed the purchase of an oil and gas lease in July 2012.

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

Significant 2011 Transactions

Change in Control. In August 2011, our company, certain of our affiliates and certain third parties entered into and completed a series of transactions (collectively, the “Transaction”).

Pursuant to the Transaction, one of our officers and directors obtained control of our company. However, our management did not change in connection with the Transaction.

Change of Business Plan. In connection with the Transaction and because we had been unable to acquire an ethanol plant, our management has changed our plan of business from the acquisition of an ethanol plant to the exploration, development, acquisition and production of crude oil and natural gas within the United States.

Reverse Split. On August 12, 2011, our board of directors authorized a 50-to-1 reverse split of our outstanding common stock. The effective date of this reverse split was January 17, 2012.

Financing Transactions and Issuances of Securities. In connection with the Transaction, we entered into a series of financing-related agreements and issued securities thereunder.

Critical Accounting Policies

While we believe that the factors considered provide a meaningful basis for the accounting policies applied in the preparation of the condensed consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. If such estimates and assumptions prove to be inaccurate, we may be required to make adjustments to these estimates in future periods.

Litigation and Tax Assessments. Should we become involved in lawsuits, we intend to assess the likelihood of any adverse judgments or outcomes of any of these matters as well as the potential range of probable losses. A determination of the amount of accrual required, if any, for these contingencies will be made after careful analysis of each matter. The required accrual may change from time to time, due to new developments in any matter or changes in approach (such as a change in settlement strategy) in dealing with these matters.

Additionally, in the future, we may become engaged in various tax audits by federal and state governmental authorities incidental to our business activities. We anticipate that we will record reserves for any estimated probable losses for any such proceeding.

Stock-Based Compensation. We account for stock-based compensation based on the provisions of Accounting Standard Codification (“ASC”) 718 Share Based Payments. ASC 718 requires companies to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees and to record compensation cost for all stock awards granted after the required effective date and for awards modified, repurchased or cancelled after that date. The scope of ASC 718 encompasses a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans.

Recent Accounting Pronouncements. There were no recent accounting pronouncements that our company has not implemented that materially affect our financial statements.

Results of Operations - First Six Months 2012 vs. First Six Months 2011

Revenues. During the First Six Months 2012 and the First Six Months 2011, we generated no revenues. During the First Six Months 2012, our monthly cash operating expenses, which include costs associated with the pursuit of oil and gas opportunities, averaged approximately $10,000. As we continue to acquire additional oil and gas properties, our operating expenses will increase, although we are unable to predict the amount of such increase.

Expenses. Our cash outlays for operating expenses during the First Six Months 2012 were $140,312, up from $48,769 for the First Six Months 2011. Our non-cash operating expenses for the First Six Months 2012, which include $222,904 in stock issued for services and $55,175 in debt discount amortization, totaled $278,079; our non-cash operating expenses for the First Six Months 2011, which include stock issued for services, totaled $500.

Financial Condition

At June 30, 2012, we had $150,666 in cash and a working capital deficit of $464,048. At December 31, 2011, our cash position was $2,978 and our working capital deficit was $887,318. Currently, we possess approximately $50,000 in cash. Our current cash position is adequate to sustain our current level of operations for approximately six months.

As part of the Transaction, we obtained loans in the total amount of $220,700 for use in our current operations, including its efforts to locate and acquire a business opportunity in the oil and gas industry. In connection with these loans, we issued convertible promissory notes with an aggregate principal amount of $220,700. These convertible promissory notes mature on September 1, 2013, accrue interest at 8% per annum and are payable at maturity, unless converted by the holder into shares of common stock at a conversion rate of $0.0345 per share. During the First Quarter 2012, a total of approximately $131,070 of such convertible promissory notes had been converted into a total of approximately 3,799,116 shares of our common stock.

Prior to the Transaction, we owed our officer, Dean E. Sukowatey, a total of $535,650 in accrued and unpaid salary. In connection with the Transaction, our company and this officer entered into a debt conversion agreement with respect to $534,650 of such accrued and unpaid salary. Pursuant to the debt conversion agreement, this officer agreed to convert, and did so convert during the First Quarter 2012, the $534,650 in accrued and unpaid salary into shares of our common stock at a conversion price of $0.0345 per share, a total of 15,497,101 shares.

Management’s Plans Relating to Future Liquidity

In August 2011, as part of the Transaction, we obtained loans from third parties in the total amount of $220,700 for use in our current operations, including efforts to locate and acquire business opportunities in the oil and natural gas industry.

We will require significant additional capital with which to acquire interests in oil and natural gas properties. While our management believes we will be able to secure the financing, in the form of debt, equity or a combination thereof, necessary to complete any such proposed acquisition, there is no assurance that such will be the case. In addition, we will require additional funds, in order to sustain our operations through the remainder of 2012. We believe it will be able to secure the financing, in the form of debt, equity or a combination thereof, necessary to complete these opportunities. We do not have a current commitment for an equity investment or a loan in any amount.

In connection with the Transaction, we issued Series A Warrants that provide the holders the right to purchase up to a total of 2,000,000 shares of common stock at an exercise price of $0.25 per share and Series B Warrants that provide the holders the right to purchase up to a total of 2,000,000 shares of common stock at an exercise price of $0.375 per share. We expect that these warrants will provide a source of funds to our company during the twelve months ending April 30, 2013. However, there is no assurance that any of these warrants will be exercised.

During the remainder of 2012, the Company intends to commit its available capital, if any, to its pursuit of the acquisition of one or more business opportunities in the oil and natural gas industry. The needed funding will be sought from third parties.

Capital Expenditures

During the First Six Months 2012 and the First Six Months 2011, we made no capital expenditures. Subsequent to June 30, 2012, we completed the purchase of an oil and gas lease located in Taylor County, Texas, which contains approximately 40 acres and a single producing oil well. The purchase price for the subject lease was $250,000. In addition to the lease, under the purchase and sale agreement, the Company is to acquire a consent to inject salt water, with respect to a nearby salt water disposal well. We cannot predict the amount of any future capital expenditures, if any.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4T. Controls and Procedures.

Our Chief Executive Officer/Acting Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 has concluded that, as of the end of the fiscal quarter covered by this report on Form 10-Q, our disclosure controls and procedures were not effective to provide reasonable assurances that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and such information is accumulated and communicated to management, including the Chief Executive Officer/Acting Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosures.

There was no change in our internal control over financial reporting during the quarter ended June 30, 2011, that has materially affected, or is reasonably likely to materially affect, our company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

During the three months ended June 30, 2012, we issued unregistered securities, as follows:

1. (a) Securities Sold. In June 2012, 50,000 shares of common stock were issued; (b) Underwriter or Other Purchasers. Such shares of common stock were issued to Galen Knaack; (c) Consideration. Such shares of common stock were issued upon partial conversion of a convertible promissory note in the aggregate amount of $500; and (d) Exemption from Registration Claimed. These securities are exempt from registration under the Securities Act of 1933, as amended, pursuant to the provisions of Section 4(2) thereof, as a transaction not involving a public offering. This purchaser was a sophisticated investor capable of evaluating an investment in our company.

Subsequent to June 30 2012, we have issued unregistered securities, as follows:

2. (a) Securities Sold. In July 2012, a total of 50,000 shares of common stock were issued; (b) Underwriter or Other Purchasers. Such shares of common stock were issued to Joe R. Lee (25,000 shares) and Sun Bear, LLC (25,000 shares); (c) Consideration. Such shares of common stock were issued in consideration of promissory note extensions; and (d) Exemption from Registration Claimed. These securities are exempt from registration under the Securities Act of 1933, as amended, pursuant to the provisions of Section 4(2) thereof, as a transaction not involving a public offering. These purchasers were sophisticated investors capable of evaluating an investment in our company.

3. (a) Securities Sold. In July 2012, a total of $70,000 principal amount promissory notes were issued; (b) Underwriter or Other Purchasers. Such promissory notes were issued to Fred MacMillan ($20,000 principal amount), Galen Knaack ($25,000 principal amount) and Brad Knaack ($25,000 principal amount); (c) Consideration. Such promissory notes were for $70,000 in cash; and (d) Exemption from Registration Claimed. These securities are exempt from registration under the Securities Act of 1933, as amended, pursuant to the provisions of Section 4(2) thereof, as a transaction not involving a public offering. These purchasers were sophisticated investors capable of evaluating an investment in our company.

Item 3. Defaults upon Senior Securities.

None.

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

No matters were submitted to our shareholders during the three months ended June 30, 2012.

Item 5. Other Information.

None.

Item 6. Exhibits.

	Exhibit No.		Description
	31.1 *		Certification of Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1 *		Certification of Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS **		XBRL Instance Document.
	101.SCH **		XBRL Schema Document.
	101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document.
	101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document.
	101.LAB **		XBRL Taxonomy Extension Labels Linkbase Document.
	101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document.

*		filed herewith.
**		furnished herewith.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: June 16, 2014

ALL ENERGY CORPORATION

By: /s/ DEAN E. SUKOWATEY

Dean E. Sukowatey

President and Acting

Chief Financial Officer

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