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EXCEL - IDEA: XBRL DOCUMENT - Park Place Energy Corp. | Financial_Report.xls |
EX-31.2 - EXHIBIT 31.2 - Park Place Energy Corp. | exhibit31-2.htm |
EX-32.1 - EXHIBIT 32.1 - Park Place Energy Corp. | exhibit32-1.htm |
EX-31.1 - EXHIBIT 31.1 - Park Place Energy Corp. | exhibit31-1.htm |
EX-10.07 - EXHIBIT 10.07 - Park Place Energy Corp. | exhibit10-07.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____
Commission File Number: 000-51712
PARK PLACE ENERGY CORP.
(Exact name of small business issuer as specified in its
charter)
Nevada | 71-0971567 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2200 Ross Ave., Suite 4500E | |
Dallas, TX USA | 75201 |
(Address of principal executive offices) | (Zip Code) |
(214) 220-4340
Registrants telephone number,
including area code
N/A
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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[ x ] No[ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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 filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
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 ]
State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: 45,731,482 shares of common stock as of May 11, 2015.
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PARK PLACE ENERGY CORP. |
Form 10-Q |
Table of Contents |
2
PART I
Item 1. Financial Statements |
PARK PLACE ENERGY CORP. |
Consolidated Balance Sheets |
March 31, | December 31, | |||||
2015 | 2014 | |||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash | $ | 1,131,725 | $ | 1,539,439 | ||
Receivables | 3,449 | 6,307 | ||||
Prepaid expenses and deposits | 13,289 | 11,993 | ||||
Total current assets | 1,148,463 | 1,557,739 | ||||
Oil and gas properties | 2,398,634 | 2,196,157 | ||||
Total assets | $ | 3,547,097 | $ | 3,753 896 | ||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 231,365 | $ | 268,862 | ||
Total liabilities | 231,365 | 268,862 | ||||
Commitments and contingencies | ||||||
Stockholders equity | ||||||
Common stock
Authorized: 250,000,000 shares, par value $0.00001 Issued and outstanding: 45,731,482 and 45,624,427 shares, respectively |
457 |
456 |
||||
Additional paid-in capital | 17,214,606 | 17,072,916 | ||||
Stock to be issued | - | 46,116 | ||||
Accumulated other comprehensive gain | 1,201 | 558 | ||||
Accumulated deficit | (13,900,532 | ) | (13,635,012 | ) | ||
Total stockholders equity | 3,315,732 | 3,485,034 | ||||
Total liabilities and stockholders equity | $ | 3,547,097 | $ | 3,753,896 |
See accompanying notes to consolidated financial statements.
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PARK PLACE ENERGY CORP. |
Consolidated Statements of Operations |
(unaudited) |
Three months ended March 31, | ||||||
2015 | 2014 | |||||
Expenses | ||||||
General and administrative | $ | 216,431 | $ | 173,685 | ||
Total expenses | 216,431 | 173,685 | ||||
Loss before other expenses | (216,431 | ) | (173,685 | ) | ||
Other expenses | ||||||
Foreign exchange loss | (49,089 | ) | (3,746 | ) | ||
Total other expenses | (49,089 | ) | (3,746 | ) | ||
Net loss for the period | $ | (265,520 | ) | $ | (177,431 | ) |
Loss per share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) |
Weighted average number of shares outstanding | 45,725,535 | 33,368,193 |
See accompanying notes to consolidated financial statements.
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PARK PLACE ENERGY CORP. |
Consolidated Statements of Comprehensive Loss |
(unaudited) |
Three months ended March 31, | ||||||
2015 | 2014 | |||||
Net loss for the period | $ | (265,520 | ) | $ | (177,431 | ) |
Other comprehensive income: | ||||||
Foreign currency cumulative translation adjustment | 643 | | ||||
Comprehensive loss for the period | $ | (264,877 | ) | $ | (177,431 | ) |
See accompanying notes to consolidated financial statements.
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PARK PLACE ENERGY CORP. |
Consolidated Statement of Stockholders Equity |
Accumulated | |||||||||||||||||||||
other | |||||||||||||||||||||
Common Stock | Additional | Stock to | comprehensive | Accumulated | |||||||||||||||||
Shares | Amount | paid-in capital | be issued | income | deficit | Total | |||||||||||||||
Balance, December 31, 2014 | 45,624,427 | $ | 456 | $ | 17,072,916 | $ | 46,116 | $ | 558 | $ | (13,635,012 | ) | $ | 3,485,034 | |||||||
Issuance of restricted shares | 107,055 | 1 | 46,115 | (46,116 | ) | - | - | - | |||||||||||||
Stock-based compensation expense | - | - | 10,375 | - | - | - | 10,375 | ||||||||||||||
Restricted stock granted for oil and gas properties | - | - | 85,200 | - | - | - | 85,200 | ||||||||||||||
Currency translation adjustment | - | - | - | - | 643 | - | 643 | ||||||||||||||
Net loss | - | - | - | - | - | (265,520 | ) | (265,520 | ) | ||||||||||||
Balance, March 31, 2015 | 45,731,482 | $ | 457 | $ | 17,214,606 | $ | | $ | 1,201 | $ | (13,900,532 | ) | $ | 3,315,732 |
See accompanying notes to consolidated financial statements.
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PARK PLACE ENERGY CORP. |
Consolidated statements of cash flows |
(unaudited) |
Three months ended | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Operating activities | ||||||
Net loss for the period | $ | (265,520 | ) | $ | (177,431 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Stock-based compensation | 10,375 | 38,320 | ||||
Changes in operating assets and liabilities: | ||||||
Receivables | 2,858 | 5,955 | ||||
Prepaid expenses and deposits | (1,296 | ) | 4,056 | |||
Accounts payable and accrued liabilities | (57,175 | ) | (12,021 | ) | ||
Net cash used in operating activities | (310,758 | ) | (141,121 | ) | ||
Investing activities | ||||||
Oil and gas properties expenditures | (97,599 | ) | (155,448 | ) | ||
Net cash used in investing activities | (97,599 | ) | (155,448 | ) | ||
Financing activities | ||||||
Proceeds from issuance of common stock / stock subscriptions received | | 742,500 | ||||
Net cash provided by financing activities | | 742,500 | ||||
Effect of exchange rate changes on cash and cash equivalents | 643 | - | ||||
Change in cash | (407,714 | ) | 445,931 | |||
Cash, beginning of period | 1,539,439 | 32,782 | ||||
Cash, end of period | $ | 1,131,725 | $ | 478,713 | ||
Non-cash investing and financing activities: | ||||||
Oil and gas expenditures included in accounts payable | $ | 19,678 | $ | 53,065 | ||
Restricted stock granted for oil and gas properties | $ | 85,200 | $ | | ||
Stock to be issued | $ | 46,116 | $ | |
See accompanying notes to consolidated financial statements.
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PARK PLACE ENERGY CORP. |
Notes to the Consolidated Financial Statements |
(Expressed in US dollars) |
(unaudited) |
1. |
Summary of Significant Accounting Policies | |
(a) |
Basis of Presentation | |
These consolidated financial statements are unaudited and have been prepared from the books and records of Park Place Energy Corp. and its consolidated subsidiary (Park Place, the Company, we, or our). In our opinion, all normal and recurring adjustments necessary for a fair presentation of the financial position of the Company as of March 31, 2015, and the results of operations for the three months ended March 31, 2015 and 2014, and cash flows for the three months ended March 31, 2015 and 2014, have been made in conformity with generally accepted accounting principles. All significant intercompany accounts and transactions have been eliminated. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited consolidated financial statements of the Company included in its Form 10-K for the year ended December 31, 2014. | ||
(b) Recent Accounting Pronouncements | ||
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. | ||
2. |
Oil and Gas Properties |
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Unproven properties | |||||||
Bulgaria | $ | 2,398,634 | $ | 2,196,157 |
The Company holds a 98,205 acre oil and gas exploration permit in the Dobrudja Basin located in northeast Bulgaria. The Company intends to conduct exploration for natural gas and test production activities over a five year period in accordance with or exceeding its minimum work program obligation, which includes five wells, and additional testing and work. The Company intends to commence its work program efforts once it receives all regulatory approvals of its work programs.
3. |
Common Stock |
In January 2015, the Company issued 107,055 shares of common stock upon the vesting of restricted stock units. | |
4. |
Stock Options |
The following table summarizes the Companys stock options as of March 31, 2015.
Weighted | |||||||||||||
average | Weighted | Aggregate | |||||||||||
Number | exercise | average | intrinsic | ||||||||||
of options | price | fair value | value | ||||||||||
Outstanding, December 31, 2014 | 2,100,000 | $ | 0.17 | $ | 0.14 | ||||||||
Granted | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding, March 31, 2015 | 2,100,000 | 0.17 | 0.14 | $ | 42,000 |
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Additional information regarding stock options as of March 31, 2015, is as follows:
Outstanding | Exercisable | ||||||||||||||
Weighted | |||||||||||||||
average | |||||||||||||||
remaining | Weighted | Weighted | |||||||||||||
Range of | Number of | contractual life | average | Number of | average | ||||||||||
exercise prices | shares | (years) | exercise price | shares | exercise price | ||||||||||
$ 0.10 | 1,050,000 | 2.5 | $ | 0.10 | 1,000,000 | $ | 0.10 | ||||||||
0.20 | 100,000 | 1.8 | 0.20 | 50,000 | 0.20 | ||||||||||
0.23-0.235 | 850,000 | 1.6 | 0.23 | 825,000 | 0.23 | ||||||||||
0.28 | 100,000 | 2.3 | 0.28 | 50,000 | 0.28 | ||||||||||
2,100,000 | 2.1 | $ | 0.17 | 1,925,000 | $ | 0.16 |
The fair value of stock options vested during the three months ended March 31, 2015 and 2014 was $0 and $38,320, respectively, which was recorded as stock-based compensation and charged to operations. | |
Subsequent to March 31, 2015, the Company granted 150,000 stock options at an exercise price of $0.14 per share to directors of the Company. Such option agreements are their annual compensation. | |
5. |
Restricted Stock Units |
During three months ended March 31, 2015, the Company granted restricted stock units (RSUs) with a vesting period of nineteen months. Officers of the Company were granted 147,107 RSUs with a fair value of $20,595. Expense related to RSUs is recognized ratably over the vesting period. |
Number of | Weighted average | ||||||
restricted stock | fair value per | ||||||
units | award | ||||||
Balance, December 31, 2014 | 887,422 | $ | 0.25 | ||||
Issued | 386,571 | 0.14 | |||||
Vested | - | - | |||||
Balance, March 31, 2015 | 1,273,993 | $ | 0.22 |
During the three months ended March 31, 2015 and 2014, stock compensation expense related to vested restricted stock units was $10,375 and $0, respectively. During the three months ended March 31, 2015, $85,200 related to grants of restricted stock were charged to oil and gas properties ($0 for the prior year period).
At March 31, 2015 unrecognized compensation expense related to RSUs totaled $33,170 that will be recognized over a weighted average period of approximately 1.0 year.
6. |
Segmented Information |
The Companys operations are in the resource industry in Bulgaria with head offices in the United States and a satellite office in Sofia, Bulgaria. The Company operates as a single reportable segment and its oil and gas properties are located in Bulgaria.
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7. |
Income Taxes |
The Company is subject to United States federal and state income taxes at a rate of 34%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Companys income tax expense as reported is as follows:
2015 | 2014 | ||||||
Benefit at statutory rate | $ | (90,277 | ) | $ | (60,327 | ) | |
Permanent differences and other | 161 | - | |||||
Valuation allowance change | 90,116 | 60,327 | |||||
Income tax provision | $ | | $ | |
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Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide readers of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Our MD&A is presented in the following sections:
- Executive Summary
- Results of Operations
- Liquidity and Capital Resources
- Recent Accounting Pronouncements
- Forward-Looking Statements.
Our MD&A should be read in conjunction with our unaudited financial statements of Park Place Energy Corp. ("Park Place", Company", we, and "our") and related Notes in Part I, Item 1 of the Quarterly Report on Form 10-Q and Item 8, Financial Statements and Supplementary Data, of the Annual Report on Form 10-K for the year ended December 31, 2014.
Our website can be found at www.parkplaceenergy.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed with or furnished to the U.S. Securities and Exchange Commission ("SEC"), pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act"), can be accessed free of charge by linking directly from our website under the "Investor Relations - SEC Filings" caption to the SEC's Edgar Database.
Executive Summary
Park Place is an energy company engaged in oil and gas exploration in Bulgaria.
The Company holds a 98,205 acre oil and gas exploration permit in the Dobrudja Basin located in northeast Bulgaria. The Company intends to conduct exploration for natural gas and test production activities over a five year period in accordance with or exceeding its minimum work program obligation, which includes five wells, and additional testing and work.
On August 26, 2014, the Bulgarian environmental agency approved the Companys overall work program and first year annual work program. A number of parties appealed the decision of the environmental agency. An appeals proceeding has been commenced before an administrative judge panel with an initial hearing scheduled for May 20, 2015. The Company is participating in that proceeding as an interested party. The initial term of the License Agreement will not begin until (i) the appeals proceeding has been completed and the decision upheld, and (ii) the Ministry of Economy and Energy has approved the Companys overall work program and first year annual work program. The Company will continue its data gathering, evaluation and planning during this period.
Results of Operations
The following summary of our results of operations should be read in conjunction with our unaudited consolidated financial statements for the quarters ended March 31, 2015 and 2014, which are included herein.
Revenue
We are a pre-revenue stage company, and our future revenues depend upon successful exploration of oil and gas assets.
Expenses
Our general and administrative expenses increased to $216,431 for the three months ended March 31, 2015 from $173,685 for the three months ended March 31, 2014. Our overhead increased due to the retention of more consultants and increased general activity of the Company over the last year.
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Other Expense
For the three months ended March 31, 2015, other expense was a loss of $49,089 attributable to foreign exchange loss. For the three months ended March 31, 2014, other expense was a loss of $3,746 due to a foreign exchange loss.
Loss
Our net loss for the three months ended March 31, 2015 was $265,520 compared to a loss of $177,431 for the three months ended March 31, 2014. The increase in net loss was a result of the increase in expenses described above.
Liquidity and Capital Resources
The following table summarizes our liquidity position:
March 31, 2015 | December 31, | |||||
(Unaudited) | 2014 | |||||
Cash | $ | 1,131,725 | $ | 1,539,439 | ||
Working capital | 917,098 | 1,288,877 | ||||
Total assets | 3,547,097 | 3,753,896 | ||||
Total liabilities | 231,365 | 268,862 | ||||
Shareholders equity | 3,315,732 | 3,485,034 |
Cash Used in Operating Activities
We used net cash of $310,758 in operating activities for the three months ended March 31, 2015 compared to $141,121 for the three months ended March 31, 2014 primarily due increased activities relating to the appeals of the work programs in Bulgaria for the three months ended March 31, 2015.
Cash Flow from Investing Activities
Net cash used in investing activities for the three months ended March 31, 2015 was $97,599 compared to net cash use of $155,448 for the three months ended March 31, 2014. This decrease was due to decreased expenditures on the Bulgarian project.
Cash Provided By Financing Activities
We have funded our business to date primarily from sales of our common stock through private placements. We did not have any common stock sales during the first quarter of 2015. For the three months ended March 31, 2014, cash provided by financing activities was $742,500.
Future Operating Requirements
Based on our current plan of operations, we estimate that we will require approximately $990,000 to pursue our plan of operations for the remainder of 2015.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contractual Obligations
See Executive Summary section above for information about the Companys contractual obligations.
Recent Accounting Pronouncements
See Note 1 of the Consolidated Financial Statements for information about recent accounting pronouncements.
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Forward-Looking Information
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of applicable U.S. securities legislation. Additionally, forward-looking statements may be made orally or in press releases, conferences, reports, on our website or otherwise, in the future, by us or on our behalf. Such statements are generally identifiable by the terminology used such as plans, expects, estimates, budgets, intends, anticipates, believes, projects, indicates, targets, objective, could, should, may or other similar words.
By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements, including the factors discussed under Item 1A. Risk Factors in our most recent Annual Report on Form 10-K. Such factors include, but are not limited to, the following: fluctuations in and volatility of the market prices for oil and natural gas products; the ability to produce and transport oil and natural gas; the results of exploration and development drilling and related activities; global economic conditions, particularly in the countries in which we carry on business, especially economic slowdowns; actions by governmental authorities including increases in taxes, legislative and regulatory initiatives related to fracture stimulation activities, changes in environmental and other regulations, and renegotiations of contracts; political uncertainty, including actions by insurgent groups or other conflicts; the negotiation and closing of material contracts; future capital requirements and the availability of financing; estimates and economic assumptions used in connection with our acquisitions; risks associated with drilling, operating and decommissioning wells; actions of third-party co-owners of interests in properties in which we also own an interest; our ability to effectively integrate companies and properties that we acquire; our limited operating history; our history of operating losses; our lack of insurance coverage; and the other factors discussed in other documents that we file with or furnish to the U.S. Securities and Exchange Commission. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors and our course of action would depend upon our assessment of the future, considering all information then available. In that regard, any statements as to: future oil or natural gas production levels; capital expenditures; the allocation of capital expenditures to exploration and development activities; sources of funding for our capital expenditure programs; drilling of new wells; demand for oil and natural gas products; expenditures and allowances relating to environmental matters; dates by which certain areas will be developed or will come on-stream; expected finding and development costs; future production rates; ultimate recoverability of reserves, including the ability to convert probable and possible reserves to proved reserves; dates by which transactions are expected to close; future cash flows, uses of cash flows, collectability of receivables and availability of trade credit; expected operating costs; changes in any of the foregoing and other statements using forward-looking terminology are forward-looking statements, and there can be no assurance that the expectations conveyed by such forward-looking statements will, in fact, be realized.
Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity, achievements or financial condition.
Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, as well as others not now anticipated. The foregoing statements are not exclusive and further information concerning us, including factors that potentially could materially affect our financial results, may emerge from time to time. We do not intend to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Not applicable because we are a smaller reporting company.
Item 4. | Controls and Procedures |
Evaluation of Disclosure of Controls and Procedures
We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2015 (the Evaluation Date). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, we concluded that our disclosure controls and procedures were effective.
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We believe that our consolidated financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 fairly present our financial condition, results of operations and cash flows in all material respects.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. | Legal Proceedings |
We are not currently involved in any legal proceedings and we are unaware of any pending proceedings, except that the Company is a participant as an interested party in opposition to the appeals that have been filed in Bulgaria against the Bulgarian environmental agency that approved the Companys overall work program and first year annual work program.
Item 1A. | Risk Factors |
Not applicable because we are a smaller reporting company. See risk factors described in Item 1A of the Companys most recent Annual Report on Form 10-K.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None. | |
Item 3. | Defaults Upon Senior Securities |
None. | |
Item 4. | Mining Safety Disclosures |
Not applicable. | |
Item 5. | Other Information |
None |
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Item 6. | Exhibits |
10.07 |
Second Amendment to the Larsen Energy Consulting Inc. Agreement dated March 27, 2015 |
31.1 | |
31.2 | |
32.1 | |
101 |
The Companys unaudited Condensed Consolidated Financial Statements and related Notes for the quarter ended March 31, 2015 from this Quarterly Report on Form 10-Q, formatted in XBRL (eXtensible Business Reporting Language). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PARK PLACE ENERGY CORP.
By: | /s/ Scott C. Larsen |
Scott C. Larsen | |
President and CEO (Principal Executive Officer) | |
Date: May 13, 2015 | |
By: | /s/ Charles Michel |
Charles Michel | |
Chief Financial Officer (Principal Financial Officer) | |
Date: May 13, 2015 |
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