Company Quick10K Filing
Barrel Energy
Price-0.00 EPS-0
Shares41 P/E0
MCap-0 P/FCF0
Net Debt-0 EBIT-1
TEV-0 TEV/EBIT0
TTM 2019-06-30, in MM, except price, ratios
10-Q 2019-12-31 Filed 2020-02-27
10-K 2019-09-30 Filed 2020-01-30
S-1 2019-07-16 Public Filing
10-Q 2019-06-30 Filed 2019-08-21
10-Q 2019-03-31 Filed 2019-05-20
10-Q 2018-12-31 Filed 2019-03-19
10-K 2018-09-30 Filed 2019-02-27
8-K 2020-08-24
8-K 2020-05-14
8-K 2019-11-26
8-K 2019-06-17
8-K 2019-06-07
8-K 2019-05-14
8-K 2019-01-25
8-K 2019-01-16

BRLL 10K Annual Report

Item 1A: Risk Factors
Item 1B: Unresolved Staff Comment.
Item 2: Description of Property
Item 3: Legal Proceedings
Item 4: Mine Safety Disclosures
Part II
Item 5: Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
Item 6: Selected Financial Data
Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operation
Item 7A: Quantitative and Qualitative Disclosures About Market Risk
Item 8: Financial Statements and Supplementary Data
Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A (T): Controls and Procedures.
Item 9B: Other Information
Part III
Item 10: Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(A) of The Exchange Act
Item 11: Executive Compensation.
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13: Certain Relationships and Related Transactions
Item 14: Principal Accounting Fees and Services
Part IV
Item 15 - Exhibits, Financial Statement Schedules.
Note 1 - Nature of Business
Note 2 - Accounting Policies
Note 3 - Going Concern
Note 4 - Income Taxes
Note 5 - Common Stock
Note 6 - Impairment of Unproved Property
Note 7 - Convertible Note
Note 8 - Related Party Transactions
Note 9 - Subsequent Event
EX-31.1 brll_ex311.htm
EX-31.2 brll_ex312.htm
EX-32.1 brll_ex321.htm
EX-32.2 brll_ex322.htm

Barrel Energy Earnings 2018-09-30

Balance SheetIncome StatementCash Flow

10-K 1 brll_10k.htm FORM 10-K brll_10k.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended September 30, 2018

 

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Barrel Energy, Inc.

(Exact name of Company as specified in its charter)

    

Nevada

47-1963189

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

8275 S. Eastern Ave - Suite 200 Las Vegas, NV 89123

(Address of principal executive offices)

 

(702) 595 2247

(Company’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Exchange Act: None

 

.Securities registered under Section 12(g) of the Exchange Act: Common Stock

 

Check whether the Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x 

 

Check whether the Company is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. o 

 

Check whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Company 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 Company has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Company was required to submit and post such files). Yes x  No o

 

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of Company’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

Check whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

    

Large Accelerated Filer

o

Accelerated Filer

o

Non-accelerated Filer

¨

Smaller Reporting Company

x

Emerging Growth Company

x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

As of February 27, 2019, there were 37,476,332 shares of common stock, par value $.001, outstanding. The aggregate number of shares of the voting stock held by non-affiliates on April 30, 2018 was 1,468,000 (.25)with a market value of $367,000. For the purposes of the foregoing calculation only, all directors and executive officers of the registrant has been deemed affiliates

  

 
 
 
 

FORWARD-LOOKING STATEMENTS

 

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Barrel Energy, Inc. (the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

  

 
2
 
 

 

TABLE OF CONTENTS

 

 

 

Page

 

FORWARD-LOOKING STATEMENTS

 

 

 

 

 

 

 

PART I

 

 

 

 

 

 

 

Item 1.

Business

 

 

4

 

Item 1A.

Risk Factors

 

 

7

 

Item 1B.

Unresolved Staff Comments

 

 

7

 

Item 2.

Properties

 

 

7

 

Item 3.

Legal Proceedings

 

 

7

 

Item 4.

Mine Safety Disclosure

 

 

7

 

 

 

 

 

PART II

 

 

 

 

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

 

8

 

Item 6.

Selected Financial Data

 

 

10

 

Item 7.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

 

 

10

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

 

 

11

 

Item 8.

Financial Statements and Supplementary Data

 

 

11

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

 

11

 

Item 9A.

Controls and Procedures

 

 

11

 

Item 9B.

Other Information

 

 

12

 

 

 

 

 

PART III

 

 

 

 

 

 

 

Item 10.

Directors, Executive Officers, and Corporate Governance

 

 

13

 

Item 11.

Executive Compensation

 

 

16

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

 

17

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

 

17

 

Item 14.

Principal Accounting Fees and Services

 

 

18

 

 

 

 

 

PART IV

 

 

 

 

 

 

 

Item 15.

Exhibits, Financial Statement Schedules

 

 

19

 

 

 

 

 

SIGNATURES

 

 

20

 

 

 
3
 
Table of Contents

           

   ITEM I

 

BUSINESS

 

BARREL ENERGY INC. is a Nevada corporation, incorporated January 17, 2014, which has engaged historically in the oil and gas sector of the energy industry. The Company recently entered into agreements in the lithium exploration business, with an exploration property located near Safford, Arizona It still maintains its interest in capped oil and gas properties in Alberta Canada.

 

On October 11, 2018, Barrel Energy Inc. (the “Company”) entered into an Earn-In Agreement (the “Agreement”) with True Grit Resources, a British Columbia corporation (“TGR”), an unrelated third party. In exchange for the payment by the Company of certain consideration, the Company may earn of to 100% participation interest in certain mineral rights leases that TGR has in Arizona. The first payment for $100,000 is due within ten (10) days of the execution of the Agreement and another payment of $300,000 or expenditure to the property is due within 30 days of the first payment. Upon receipt of $400,000, the Company will have a 49% participation interest in the Arizona property mineral lease rights .The Company may require a 70% earn-in interest by expending a cumulative $1,400,000 on the property. In order to secure the 100% participation interest, the Company is required to expend a cumulative amount of payments and property expenditures of $2,400,000.

 

The mineral rights the Company is acquiring is subject to an option agreement dated October 3, 2017 between True Grit and two individuals with beneficial ownership of the mining Permit issued by the State of Arizona in accordance with ARS 27-234. The Company at the date of this filing is unable to confirm that the either the beneficial owners and or True Grit’s claims are current and active. If the Claims cannot be confirmed the earn in agreement may not be valid and may be void. Prior to any payments per the agreement, the Company is requiring from True Grit a statement from the Bureau of Land Management confirming the claims and permits on the property are current and in effect

 

On November 5, 2018 the Company received an extension for the initial payments of $400,000 of which the initial $100,000 is required to be paid by February 28, 2019.

 

On January 19, 2019 the Company terminated the agreement with True Grit Resources.

 

BISON OIL & GAS LEASES

 

The Bison property is located in the Province of Alberta, Canada and is comprised of four sections of interest (land totaling 2,560 acres) which includes one suspended gas well in the Gilwood member of the Middle Devonian Watt Mountain Formation. The acreage is located in north western Alberta in an area called the Peace River Arch (PRA), which is a deep positive structural feature caused by mountain building to the west. It is one of only a few large-scale tectonic elements in the Western Canada Sedimentary Basin that has significantly disturbed the Phanerozoic cover of the craton. The structure has influenced the location of oil and gas accumulations in strata ranging from the Middle Devonian to the Upper Cretaceous, and has long been a focus of hydrocarbon exploration in the region. It is known for its prolific oil, NGL and natural gas wells and is one of the most desirable light oil and natural gas liquids drilling areas in North America.

 

The Peace River Arch has already established facilities for natural gas gathering and compression facilities that can be accessed based on Barrel Energy’s needs. Although the Peach River Arch region boasts well established infrastructure weather conditions do play a role in our ability to access the Bison property. For instance the need to helicopter in equipment and or human resources may arise based on economic or weather conditions.

 

 
4
 
Table of Contents
 

Geology:

 

The Bison property is located in the Province of Alberta, Canada and is comprised of four sections of interest land (2,560 acres) which includes one suspended gas well in the Gilwood member of the Middle Devonian Watt Mountain Formation. The acreage is located in north western Alberta in an area called the Peace River Arch (PRA), which is a deep positive structural feature caused by mountain building to the west. Sediments shed from the Arch, during deposition were deposited in abundance in braided channels, fluvial stream channels and shallow marine environments, which created numerous hydrocarbon reservoirs in the area. Sediments were thickest adjacent to the emergent Arch with sands in of up to 180 feet in total thickness deposited in the braided channel systems coming off the structural highland. Thicknesses decreased to the east away from the source rock ultimately terminating some 75 miles east from the PRA. The Gilwood member at Bison shows approximately 7 feet of gas pay over water in the Gilwood formation and was perforated between 1468.5m and 1470.5m.

 

Land tenure:

 

The Bison leases were acquired through a private oil & gas company with an effective date of September 1, 2014. A total of 4 oil & gas leases located in Alberta, Canada were acquired totaling 2,520 acres, as follows:

 

Agreement

 

Land/Rights

 

Assigned working interest (WI)

 

Encumbrances

P&NG Lease

124394A

 

T95R15 W5M WSM 11

 

51%

 

Crown S/S royalty

 

Petroleum and natural gas to

 

 

 

 

base of Gailwood formation

 

 

 

 

 

 

P&NG Lease

124394A

 

T95R15 W5M WSM 13, 14

 

51%

 

Crown S/S royalty

 

Petroleum and natural gas to

 

 

8% nonconvertible gross overriding

 

base of Gailwood formation

 

 

royalty (GORR) on 51% of

 

 

 

 

production (paid by Barrel Energy Inc.)

 

 

 

 

P&NG Lease

0503120270

 

T95R15 W5M WSM 15

 

85% before payout (BPO)

 

Crown S/S royalty

 

Petroleum and natural gas to

 

51% after payout (APO)

 

12% convertible gross overriding

 

base of Gailwood formation

 

 

royalty (GORR) on 85% of

 

 

 

 

production (paid by Barrel Energy Inc.)

 

There is one well on the property, Invasion ELM Bison 10-15-95-15WSM. UWI 102/10-15-095-15W5/00. Currently the well is shut-in.

 

Disclosure of Oil and Gas Operations:

 

Reserves:

 

The Company did not have any reserves at September 30, 2018.

 

Production:

 

The Company has had not production from inception (January 27, 2014) through September 30, 2018. Following is a table showing production data from inception (January 27, 2014) through September 30, 2018:

 

Average Sales Price

 

 

Average Production Cost

 

 

Net Production (less royalties)

 

2018

 

 

2018

 

 

2018

 

Oil per BOE

 

 

Gas per BOE*

 

 

Oil and Gas per BOE**

 

 

Oil BOE’s

 

 

Gas BOE’s*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 
5
 
Table of Contents

 

Productive Wells and Acreage as of September 30, 2018:

 

The Company had no producing wells at end of the fiscal year September 30, 2018.

 

# of Producing

Wells (Gross/Net)

 

 

Gross/ Net Developed

Acres-Productive

 

Gross/ Net

Developed Acres

 

Oil

 

 

Gas

 

 

Oil

 

Gas

 

Oil

 

 

Gas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0

 

 

 

0

 

 

0 / 0

 

0 / 0

 

 

0

 

 

0 / 0

 

 

Developed Acreage as at September 30, 2018:

 

The Company’s holds an interest in -0- total gross developed acres and -0- total net developed acres; “gross acres” means acres in which the Company has a working interest and “net acres” means the Company’s aggregate working interest in the gross acres. There is one non producing well on the property.

 

Undeveloped Acreage as at September 30, 2018:

 

As at September 30, 2018 Barrel holds a total of 2,520 total gross undeveloped acres that it acquired in September, 2014. This acreage relates to the Bison leases described above.

 

Drilling Activity:

 

The Company acquired these properties on September 1, 2014. The Company has not yet done any drilling on the leases and no new work has been done on the properties during the year ended September 31. 2018.

 

Present Activities:

 

There are no present wells being drilled. As of the date of this report, Barrel management is planning its initial exploration activities at the property.

 

Delivery Commitments:

 

The Company does not have any delivery commitments or any short or long term contractual obligations.

 

Competition

 

Barrel has to compete with other companies searching for minerals in in the Western United States and Canada and seeking financing for the development of their specific properties. Often, not in all cases, these other mineral companies are better financed, have properties which have had sufficient exploration work done on them to warrant a future investor to consider investing in their company rather than ours. There are only a limited number of investors willing to invest in a company which had no proven reserves and has just started its exploration work. These other mineral exploration companies might induce investors to consider their properties and not ours.

 

The Company will continue to explore additional mining and oil and gas properties based on its ability to finance such properties and exploration and the market economies to support such development.

 

 
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Table of Contents

 

PATENTS AND TRADEMARKS

 

We do not have any proprietary products. We currently have no patents or trademarks for our company name or brand name

 

NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS

 

Not applicable.

 

GOVERNMENT AND INDUSTRY REGULATION

 

We will be subject to applicable laws and regulations that relate directly or indirectly to our operations including United States securities laws. We will also be subject to regulation by the Alberta Energy Regulator (AER). We will be required to apply to the AER to obtain drilling permits for wells on our Bison leases. We are subject to the laws of the State of Arizona pertaining to the mining property and drilling operations.

 

RESEARCH AND DEVELOPMENT ACTIVITIES

 

Other than time spent researching our proposed business we have not spent any funds on research and development activities to date. We do not currently plan to spend any funds on research and development activities in the future.

 

ENVIRONMENTAL LAWS

 

The mining and oil and natural gas industries are subject to state, provincial and federal environmental regulations. Such legislation provides for restrictions and prohibitions on the release or emission of various substances produced in association with certain oil and natural gas operations. In addition, such legislation requires that well and facility sites are abandoned and reclaimed to the satisfaction of provincial authorities. Compliance with such legislation can require significant expenditures and breach of such requirements may result in the suspension or revocation of necessary licenses and authorizations, civil liability for pollution damage, and the imposition of material fines and penalties.

 

Our operations are subject to numerous laws relating to environmental protection. These laws impose substantial penalties for any pollution resulting from our operations. We believe that our operations substantially comply with applicable environmental laws. The main governing body for the oil and gas properties, Alberta Energy Regulator (AER) ensures the safe, efficient, orderly, and environmentally responsible development of hydrocarbon resources over their entire life cycle. The State of Arizona is the governing body related to the mining property and requires certain permitting and mining practices to ensure environmental security of the property.

 

EMPLOYEES AND EMPLOYMENT AGREEMENTS

 

We currently have two employees. Harpreet Sangha acts as our Chairman Officer and Craig Alford as our President and Chief Financial Officer. We do not have any employment agreements.

 

Item 1A: Risk Factors

 

Item 1B: Unresolved Staff Comment.

 

None

 

Item 2: Description of Property

 

Our operations are currently being conducted out of the premises at 8275 S. Eastern Ave- Suite 200 Las Vegas, NV 89123 at no cost to the Company.

 

Item 3: Legal Proceedings

 

There are not presently any material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

Item 4: Mine Safety Disclosures

 

Not applicable.

 

 
7
 
Table of Contents
  

PART II

 

Item 5: Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities 

 

Our shares of common stock are currently trading on the Over the Counter Market under the Symbol “BRLL”. Our shares of common stock were initially approved for quotation on the OTC Bulletin Board and commenced trading on July 6, 2017.

 

The following quotations, obtained from www.nasdaq.com, reflect the high and low bids for our common shares.

 

The high and low bid prices of our common stock for the periods indicated below are as follows:

  

Quarter Ended

 

High

 

 

Low

 

September 30, 2018

 

 

0.25

 

 

 

0.12

 

June 30, 2018

 

 

0.25

 

 

 

0.25

 

March 31, 2018

 

 

0.35

 

 

 

0.25

 

December 31, 2017

 

 

0.23

 

 

 

0.15

 

September 30, 2017

 

 

0.30

 

 

 

0.10

 

June 30, 2017

 

 

0.02

 

 

 

0.02

 

March 31, 2017

 

NA

 

 

NA

 

December 31, 2016

 

NA

 

 

NA

 

 

(1)    Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.

 

Holders

 

As of September 30, 2018, there were 65 holders of record of the Common Stock.

 

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 

Our Certificate of Incorporation authorizes the issuance of up to 70,000,000 shares of common stock, par value $0.001 per share. The common stock is listed on the OTC Pink Sheet market with a bid price of $0.02 and initial trade commenced on July 6, 2017.

 

 
8
 
Table of Contents

 

On January 27, 2016, the Company issued 36,000 shares of common stock with a value of $900 for service. The shares were never physically issued. On June 10, 2017 the Company cancelled the issuance and paid $900 in cash to the vendor.

 

During the year ended September 30, 2016 the Company sold 768,000 shares of common stock at $0.025 per share with a value of $18,750 to 52 individuals for cash.

 

On September 25, 2017 the Company sold 833,332 shares of common stock with a value of $250,000 for cash.

 

On September 30, 2017 the Company issued 700,000 shares of common stock with a value of $5,612 (CDN $7,000) for partial conversion of convertible debt.

 

On November 13, 2018 the Company issued 175,000 shares of its common stock at $0.75 per share as a commitment fee to an unrelated party

 

During the period from September 30, 2018 to December 31, 2018, the Company entered into separate Subscription Agreements with 17 persons under which 25,000,000 shares of the Company’s common stock were sold for $0.001 per share. This included Harpreet Sangha, the Company’s Chairman, who entered into an agreement to purchase 10,000,000 shares of the Company’s common stock and Craig Alford, the Company’s President, who entered into an agreement to purchase 4,000,000 shares of the Company’s common stock. The subscription agreements dated September 30, 2018 for 11,500,000 shares of common stock with a value of $11,500 were treated as stock subscriptions receivable and funds were received in the period ending December 31, 2018. Subscription Agreements were approved by the Company’s Board of Directors. The sales of the 25,000,000 shares of the Company’s common stock occurred on November 5, 2018. The sales were made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 and, with respect to a majority of the purchasers, Regulation S.

 

Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”). The Company has not yet issued any of its preferred stock. 

 

Dividends

 

We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

 

The Company’s Board of Directors has the power to issue any or all of the authorized but unissued Common Stock without stockholder approval. The Company currently has no commitments to issue any shares of common stock. However, the Company will, in all likelihood, issue a substantial number of additional shares in connection with a business combination. Since the Company expects to issue additional shares of common stock in connection with a business combination, existing stockholders of the Company may experience substantial dilution in their shares. However, it is impossible to predict whether a business combination will ultimately result in dilution to existing shareholders. If the target has a relatively weak balance sheet, a business combination may result in significant dilution. If a target has a relatively strong balance sheet, there may be little or no dilution.

 

Issuer Purchases of Equity Securities

 

None

 

 
9
 
Table of Contents

 

Item 6: Selected Financial Data

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operation

 

Overview

 

On November 13, 2018 the Company issued 175,000 shares of its common stock at $0.75 per share as a commitment fee to an unrelated party

 

The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended September 30, 2018 and September 30, 2017 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors”.

 

Our financial statements are stated in United States Dollars and are prepared in accordance United States Generally Accepted Accounting Principles.

 

Results of Operations

 

The following results of operations, cash flows and changes in our financial position are for years ended September 30, 2018 and 2017.

 

The Company had no revenue for the years ended September 30, 2018 and 2017. Expenses during the years ended September 30, 2018 were $170,886 and $88,331 for 2017. The increase in expenses in 2018 was due to payment to officer and director and consulting fees totaling $129,722.

 

Other expense during the year ended September 30, 2018 was $5,147consisting of interest expense and currency loss compared to other income of $17,226 consisting of interest expense of $7,399 and a gain on debt forgiveness of $24,625 in 2017.The Company incurred a net loss of $176,033 in the period ending September 30, 2018 compare to a net loss of $71,105 for the same period in 2017.

 

Liquidity and Capital Resources

 

As of September 30, 2018, the Company had current assets of $36,791 in cash and prepaid expense. The company has $113,219 in current liabilities for negative working capital of $76,428. As of September 30, 2018, the Company had an accumulative deficit of $354,510.

 

Cash used in operating activities was $212,818 for the year ended September 30, 2018 and cash provided of $8,730 for 2017. The increase in the loss in 2018 from $71,105 in 2017 to $198,963 in 2018 was the major factor in the increased use of cash.

 

Cash used in financing activities as of September 30, 2018 was $32,448 which was the repayment of advances from related parties compared to cash provided of $250,000 in 2017 from the proceeds from the sale of common stock.

 

We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with amounts to be loaned to or invested in us by our stockholders or other investors.

 

We believe we will be able to meet these costs through amounts, as necessary, to be loaned to or invested in us by our stockholder plus the placement of common stock for cash.

 

 
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Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7A: Quantitative and Qualitative Disclosures about Market Risk

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 8: Financial Statements and Supplementary Data

 

Please see the financial statements beginning on page F-1 located elsewhere in this annual report on Form 10-K and incorporated herein by reference.

 

Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None

  

Item 9A (T): Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

For purposes of this section, the term disclosure controls and procedures mean controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. As of the end of the period covered by this Annual Report, The Company carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our CEO and CFO has concluded that the Company’s disclosure controls and procedures are not effective because of the identification of a material weakness in our internal control over financial reporting which is identified below.

 

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was 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. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

  

 
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Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting and thus, are not effective as of September 30, 2018. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

The material weaknesses relate to the following:

 

- Lack of segregation of duties in financial reporting, as our financial reporting and primarily all accounting functions are performed by our Chief Executive Officer. Our President does not possess accounting.

 

 

- Lack of a formal review process that includes multiple levels of review, as all accounting and financial reporting functions are performed by our Chief Financial Officer and the work is not reviewed by anyone.

 

 

- Lack of Audit Committee, independent directors and financial experts

 

 

- Lack of effective control instituted over financial disclosures and report process

 

These weaknesses are due to the company’s lack of working capital to hire additional staff. To remedy the material weaknesses, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

 

Changes in Internal Controls over Financial Reporting

 

The Company has not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B: Other Information

 

Not applicable.

 

 
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PART III

 

Item 10: Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

 

Directors of the corporation are elected by the stockholders to a term of one year and serve until a successor is elected and qualified. Officers of the corporation are appointed by the Board of Directors to a term of one year and serves until a successor is duly appointed and qualified, or until he or she is removed from office. The Board of Directors has no nominating, auditing or compensation committees. The name, address, age and position of our officers and director is set forth below:

 

Name and Address

 

Age

 

Position(s)

Gurminder Sangha(1)

 

39

 

Former President, Secretary

14890 66a Ave.

 

Director

Surrey, BC V3S 2W4 Canada

 

Jurgen Wolf (2)

 

82

 

Former Chief Financial Officer, Director

1206 - 588 Broughton St

 

Vancouver, BC V6G 3E3

 

Harpreet Sangha

 

54

 

CEO , CFO & Director

8275 S. Eastern Ave/

 

Suite 200

 

Las Vegas, NV 89123

 

Craig Alford

 

56

 

Director

8275 S Eastern Ave

 

Suite 200

 

Las Vegas, NV 89123

 

On August 31, 2018, Harpreet Sangha and Craig Alford were appointed to the Board of Directors of Barrel Energy, Inc. (the “Company”). Mr. Sangha was named Chairman of the Board, Chief Executive Officer, Chief Financial Officer There are no family relationships between the officers and directors. Gurm Sangha resigned as President and remained as a Director of the Company as well as the Corporate Secretary

 

 

(1) On October 23, 2018, Gurminder Sangha resigned as President, Corporate Secretary and Director of Barrel Energy, Inc.

 

 

 

 

(2) On November 12, 2018 Jurgen Wolf resigned as Chief Financial Officer and Director of the Company.

 

Gurminder Sangha and Jurgen Wolf held their offices/positions since the inception of the Company until their resignation.

 

 
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HARPREET SANGHA: CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER AND DIRECTOR

 

Mr. Sangha has been a founder, CEO and board member of several public companies and brings 32 years of entrepreneurial, operational and capital market experience to the Company. Currently, Mr. Sangha serves as Chairman of the Board of Black Cactus Global, Inc. (OTC: BLGI) and also as its CFO. Mr. Sangha has been an officer and director of Black Cactus since 2014. In 1986, he started his career as Investment Advisor and gained his affinity for raising capital for numerous startups and early stage public companies. Mr. Sangha departed this position in March 2006 to apply his unique ability of bringing capital to early stage projects and founded Douglas Lake Minerals. In the role of CEO, his leadership in Douglas Lake overcame rigorous operational challenges in the African environment and brought the value of the company to $240 million. He has also served as CEO, Secretary, and director of Sharprock Resources Inc. (OTCBB: SHRK) where he raised capital to explore a preproduction gold project in the Chukotka Region of Russia. He joined Rango Energy, Inc. in 2012 as Chairman of the Board and Chief Executive Officer. Mr. Sangha has established many valuable contacts and relationships with institutional clients worldwide.

 

CRAIG ALFORD: DIRECTOR

 

Mr. Alford has joined the Company as its President. Mr. Alford has been involved for over 28 years in mineral and oil and gas exploration. Mr. Alford has worked throughout North and South America, several Central Asian Republics, Russia, Australia and Africa. This experience has included independent consulting assignments, and positions within the management of major and junior company exploration companies. Mr. Alford has worked as a consultant for Conoco Philips (COP:NYSE) and Canadian Natural Resources Ltd (CNQ:TSX) within Canada. Mr. Alford holds both a Bachelor of Science (Honors) and a Master of Science in Geology and is a professional geologist registered with the Association of Ontario (APGO).

 

GURMINDER SANGHA: FORMER PRESIDENT SECRETARY AND DIRECTOR

 

Mr. Sangha has over 12 years of management and financing expertise in both public and private companies. Mr. Sangha has served as a board member on various TSX-Venture listed companies in a wide range of industries including oil & gas, mining and exploration. While serving as a board member his duties include corporate finance, business development activities, and governance. Mr. Sangha is on the board of Rockbridge Resources which is an active oil and gas company currently producing 100 barrels a day. His previous positions included various lending and securities related positions with Scotiabank. Mr. Sangha holds a Bachelor of Commerce degree.

 

JURGEN WOLF: FORMER CFO AND DIRECTOR

 

Mr. Wolf has been involved in the oil and gas industry for more than 15 years, assisting public companies with investor relations and administration. Mr. Wolf was educated in Germany and immigrated to Canada in 1953. From 1958 to 1982 he operated and owned pre-cast concrete factories in Calgary and Vancouver, and from 1982 to 2002 he operated and owned J.A. Wolf Projects, Ltd., a commercial construction company. Mr. Wolf was President and a director of former US Oil and Gas Resources Inc., which amalgamated to form Petrichor Energy Inc. in 2005. Mr. Wolf is a director of several public companies.

 

Conflict of Interest

 

The Officer and Directors of the Company will devote time to the Company however; there will be occasions when the time requirements of the Company’s business conflict with the demands of their other business and investment activities. Such conflicts may require that the Company attempt to employ additional personnel. There is no assurance that the services of such persons will be available or that they can be obtained upon terms favorable to the Company.

 

 
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There is no procedure in place which would allow the Officer and Director to resolve potential conflicts in an arms-length fashion. Accordingly, they will be required to use their discretion to resolve them in a manner which they consider appropriate.

 

The Company’s Officer and Directors may actively negotiate or otherwise consent to the purchase of a portion of his common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. It is anticipated that a substantial premium over the initial cost of such shares may be paid by the purchaser in conjunction with any sale of shares by the Company’s Officer and Directors which is made as a condition to, or in connection with, a proposed merger or acquisition transaction. The fact that a substantial premium may be paid to the Company’s Officer and Directors to acquire his shares creates a potential conflict of interest for him, in satisfying his fiduciary duties to the Company and its other shareholders. Even though such a sale could result in a substantial profit to them, they would be legally required to make the decision based upon the best interests of the Company and the Company’s other shareholders, rather than their own personal pecuniary benefit.

 

Compliance with Section 16(a) of the Exchange Act 

 

Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

 

Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended September 30, 2018 and written representations that no other reports were required, the Company believes that no person who, at any time during such fiscal year, was a director, officer, or beneficial owner of more than 10% of the Company’s common stock failed to comply with all Section 16(a) filing requirements during such fiscal years.

 

Code of Ethics 

 

We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serve in these capacities.

 

Nominating Committee 

 

There is no nominating committee. 

 

Audit Committee 

 

There is no audit committee. 

 

 
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Item 11: Executive Compensation.

 

Currently, our officers and directors are serving without set annual compensation. However for the year ended September 30, 2018 Mr. Sangha was paid $100,000 in compensation. The officers and directors are reimbursed for any out-of-pocket expenses that he incurs on our behalf. In the future, we may approve payment of salaries for officers and directors, but currently, no such plans have been approved. We also do not currently have any benefits, such as health or life insurance, available to our employees.

 

SUMMARY COMPENSATION TABLE 

 

Name

 

Years

 

 

Fees

Earned

Paid in

Cash($)

 

 

Stock

Awards($)

 

 

Option

Awards($)

 

 

Non-Equity

Incentive

Plan

Compensation($)

 

 

Nonqualified

Deferred

Compensation

Earnings($)

 

 

All Other

Compensation($)

 

 

Total($)

 

 

 

 

 

 

 

 

 

 

 

 

Gurminder Sangha

Former CEO, Director

 

 

2018

2017

 

 

100,000

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

100,000

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jurgen Wolf,

Former CFO Director

 

2018

2017

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harpreet Sangha

CEO and Director

 

2018

2017

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Craig Alford,

CFO and Director

 

2018

2017

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

 

--

--

 

 

Options

 

There have been no individual grants of stock options to purchase our common stock made to the executive officer named in the Summary Compensation Table.

 

Director Compensation 

 

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, our director in such capacity. 

 

Employment Agreements 

 

The Company is not a party to any employment agreements.

 

 
16
 
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Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 

 

(a) Security ownership of certain beneficial owners. 

 

The following table sets forth the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company. Also included are the shares held by all executive officers and directors as a group.

 

 

 

 

 

 

 

 

Name and Address

 

Amount and Nature of Beneficial Ownership

 

 

Percentage of Class

 

Gurm Sangha

 

 

10,000,000

 

 

 

26.68 %

Harpreet Sangha

 

 

10,000,000

 

 

 

26.68 %

Craig Alford

 

 

4,000,000

 

 

 

10.67 %

 

 

 

 

 

 

 

 

 

All Officers and Directors as a group

 

 

14,000,000

 

 

 

37.35 %

 

Item 13: Certain Relationships and Related Transactions 

 

During the year ended September 30, 2017, an officer and director paid $43,971 in expenses on behalf of the Company. The funds are unsecured, payable on demand and bear no interest. As of September 30, 2017 and 2018, the total amount due to the officer and director is US$62,994 and $32,970, respectively.

 

On October 10, 2017, the Company repaid a portion of the advances from shareholder $52,025 (CDN$65,000).

 

During the year ended September 30, 2018, an officer and director of the Company paid USD $37,668 of operating expenses on behalf of the Company while the Company repaid the related party $32,448. The total amount due as of September 30, 2018 is $32,971 The advances are unsecured, bear no interest and are payable on demand.

 

During the year ended September 30, 2018, the Company paid a related party, who is a former officer and director of the Company, USD $100,000 in consulting fees under a consulting agreement with the Company.

 

On December 1, 2014, the Company issued to a related party, who is a former officer and director of the Company, a convertible note for USD $2,245 (CAD $2,800). The note bears an interest rate of 5% per annum and matured on December 31, 2015. On December 29, 2017 the Company paid the outstanding principal of $2,226 and interest of $334 for a total of $2,560.

 

During the years ended September 30, 2018 and 2017 the Company’s operations conducted out of the premises at 14890 66a Ave., Surrey, B.C. V3S 9Y6 Canada. Mr. Gurm Sangha, the former President , Director made these premises available to the Company rent-free.

 

 
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Item 14: Principal Accounting Fees and Services 

 

The following table presents for fiscal year 2017 the aggregate fees billed in connection with the audits of our financial statements and other professional services rendered by our independent registered public accounting MaloneBailey, LLP. 

 

 

 

2018

 

 

2017

 

Audit fees

 

$ 18,400

 

 

$ 13,000

 

Audit related fees

 

 

--

 

 

 

--

 

Tax fees

 

 

--

 

 

 

--

 

All other fees

 

 

--

 

 

 

--

 

 

The following table presents for the fiscal year 2018 the aggregate fees billed in connection with the audits of our financial statements and other professional services rendered by our independent registered public accounting Fruci & Associates II, PLLC.

 

 

 

2018

 

 

2017

 

Audit fees

 

$ --

 

 

$ --

 

Audit related fees

 

 

--

 

 

 

--

 

Tax fees

 

 

--

 

 

 

--

 

All other fees

 

 

--

 

 

 

--

 

 

Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements

 

In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm for the fiscal year ended September 30, 2018.

 

 
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PART IV 

 

Item 15- Exhibits, Financial Statement Schedules. 

 

(a) Exhibits:

 

 

 

 

Incorporated by reference

Exhibit

 

Exhibit Description

 

Filed

herewith

 

Form

 

Period

ending

 

Exhibit

 

Filing

date

 

 

 

 

 

 

 

 

 

 

 

 

 

31.1

 

Rule 13a-14(a)/15d-14(a) Certification

 

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.2

 

Rule 13a-14(a)/15d-14(a) Certification

 

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.1

 

Section 1350 Certification

 

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.2

 

Section 1350 Certification

 

x

 

 

 

 

 

 

 

 

 

(b) The following documents are filed as part of the report:

 

 

1. Financial Statements: Balance Sheets, Statements of Operations, Statement of Stockholder’s Equity, Statements of Cash Flows, and Notes to Financial Statements.

 

 
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SIGNATURES

 

In accordance with the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized on February 27, 2019.

 

 

Barrel Energy Inc.,

Registrant

       
By: /s/ Craig Alford

 

 

Craig Alford  
    Principal Executive Officer and Director  

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

/s/ Craig Alford

 

Principal Executive Officer and Director

 

February 27, 2019

Craig Alford

 

 

 

 

 

 

 

 

 

/s/ Harpreet Sangha

 

Director

 

February 27, 2019

Harpreet Sangha

 

 

 

 

20

 
 

  

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of

Barrel Energy, Inc.

Surrey, British Columbia, Canada

 

We have audited the accompanying balance sheet of Barrel Energy, Inc. (the “Company”) as of September 30, 2017, and the related statements of operations and comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Barrel Energy, Inc. as of September 30, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that Barrel Energy, Inc. will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations which raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

December 28, 2017

 

 
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of  

Barrel Energy, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of Barrel Energy, Inc. (“the Company”) as of September 30, 2018, and the related statements of operations and comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for the year ended September 30, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018, and the results of its operations and its cash flows for the year ended September 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Matter

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has not established any source of revenue to cover its operating costs and has significant accumulated and working capital deficits. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

  

We have served as the Company’s auditor since 2019.

 

Spokane, Washington

February 27, 2019

 

 
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BARREL ENERGY INC

BALANCE SHEETS

 

 

 

September 30,

2018

 

 

September 30,

2017

 

 

 

 

 

 

 

 

ASSETS

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ 3,458

 

 

$ 250,160

 

Prepaid

 

 

33,333

 

 

 

--

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

36,791

 

 

 

250,160

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 36,791

 

 

$ 250,160

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expense

 

$ 27,719

 

 

$ 28,241

 

Advances from shareholder

 

 

32,791

 

 

 

62,994

 

Convertible note – related party

 

 

--

 

 

 

2,245

 

Convertible notes

 

 

52,709

 

 

 

54,515

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

113,219

 

 

 

147,995

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 5,000,000 authorized, zero issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001 par value, 70,000,000 authorized, 12,301,332 and 12,301,332 issued and outstanding, respectively

 

 

23,801

 

 

 

12,301

 

Additional paid-in capital

 

 

272,638

 

 

 

272,638

 

Stock subscription receivable

 

 

(11,500 )

 

 

--

 

Accumulated other comprehensive loss

 

 

(6,857 )

 

 

(4,297 )

Accumulated deficit

 

 

(354,510 )

 

 

(178,477 )

Total stockholders’ equity (deficit)

 

 

(76,428 )

 

 

102,165

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity (deficit)

 

$

36,791

 

 

$ 250,160

 

 

The accompanying notes are an integral part of these financial statements.

 

 
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BARREL ENERGY INC

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

 

 

Years Ended

September 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Consulting expense

 

$ 129,722

 

 

$ --

 

General and administrative expense

 

 

41,164

 

 

 

43,289

 

Impairment of unproven property

 

 

--

 

 

 

45,042

 

Loss from operations

 

 

(170,886 )

 

 

(88,331 )

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,147 )

 

 

(7,399 )

Gain on debt forgiveness

 

 

--

 

 

 

24,625

 

Total other income (expense)

 

 

(5,147 )

 

 

17,226

 

 

 

 

 

 

 

 

 

 

Net loss before tax

 

 

(176,033 )

 

 

(71,105 )

 

 

 

 

 

 

 

 

 

Income tax

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

Net loss

 

$ (176,033 )

 

$ (71,105 )

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(2,560 )

 

 

(8,900 )

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

(178,593 )

 

 

(80,005 )

 

 

 

 

 

 

 

 

 

Net loss per common share, basic and diluted

 

$ (0.01 )

 

$ (0.01 )

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding, basic and diluted

 

 

12,301,332

 

 

 

10,806,144

 

 

The accompanying notes are an integral part of these financial statements

 

 
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BARREL ENERGY INC

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017

 

 

 

 

 

Additional

 

 

Stock

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Subscription

 

 

Accumulative

 

 

Comprehensive

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Deficit

 

 

Income (Loss)

 

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – September 30, 2016

 

 

10,804,000

 

 

$

10,804

 

 

18,035

 

$

 

 

 

$

(107,372 )

 

$

4,603

 

 

$

(73,930 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash

 

 

833,332

 

 

 

833

 

 

 

249,167

 

 

 

 

 

 

--

 

 

 

--

 

 

 

250,000

 

Cancellation of common stock for service

 

 

(36,000 )

 

 

(36 )

 

 

(864 )

 

 

 

 

 

--

 

 

 

--

 

 

 

(900 )

Common stock issued for debt conversion

 

 

700,000

 

 

 

700

 

 

 

6,300

 

 

 

 

 

 

--

 

 

 

(1,388 )

 

 

5,612

 

Change due to currency translation

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

--

 

 

 

(7,512 )

 

 

(7,512 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

(71,105 )

 

 

--

 

 

 

(71,105 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2017

 

 

12,301,332

 

 

 

12,301

 

 

 

272,638

 

 

 

 

 

 

(178,477 )

 

 

(4,297 )

 

 

102,165

 

Stock issued for subscription receivable

 

 

11,500,000

 

 

 

11,500

 

 

 

--

 

 

 

(11,500 )

 

 

 

 

 

 

 

 

 

 

 

 

Change due to currency translation

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

 

--

 

 

 

(2,560 )

 

 

(2,560 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

 

(176,033 )

 

 

--

 

 

 

(176,033 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2018

 

 

23,801,332

 

 

$ 23,801

 

 

$ 272,638

 

 

$ (11,500 )

 

$ (354,510 )

 

$ (6,857 )

 

$ (76,428 )

 

The accompanying notes are an integral part of these financial statements.

 

 
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BARREL ENGERGY INC

STATEMENTS OF CASH FLOWS

 

 

 

Years Ended

September 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$ (176,033 )

 

$ (71,105 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Gain on debt forgiveness

 

 

--

 

 

 

(24,625 )

Stock based compensation

 

 

--

 

 

 

(900 )

Impairment of assets

 

 

--

 

 

 

45,042

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid

 

 

(33,333 )

 

 

--

 

Accounts payable and accrued expense

 

 

(522 )

 

 

60,318

 

Net cash provided by (used in) operating activities

 

 

(209,888 )

 

 

8,730

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

 

--

 

 

 

250,000

 

Repayment of advances and convertible note from related party

 

 

(32,448 )

 

 

--

 

Net cash provided by(used in ) financing activities

 

 

(32,448 )

 

 

250,000

 

 

 

 

 

 

 

 

 

 

Effects of currency translation

 

 

(4,366 )

 

 

(8,900 )

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

(246,702 )

 

 

249,830

 

Cash – beginning of year

 

 

250,160

 

 

 

330

 

Cash – end of year

 

$ 3,458

 

 

$ 250,160

 

 

 

 

 

 

 

 

 

 

SUPPLEMENT DISCLOSURES:

 

 

 

 

 

 

 

 

Interest paid

 

$ -

 

 

$ -

 

Income taxes paid

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Non-Monetary Transactions

 

 

 

 

 

 

 

 

Advances due to related party for expenses paid on behalf of the Company

 

$ 37,668

 

 

$ 43,971

 

Common stock issued for convertible debt

 

$ -

 

 

$ 5,612

 

Common stock subscribed not paid

 

$ 11,500

 

 

$ --

 

 

The accompanying notes are an integral part of these financial statements.

 

 
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BARREL ENERGY INC

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1 – NATURE OF BUSINESS

 

BARREL ENERGY INC. is a Nevada corporation, incorporated January 17, 2014, which has engaged historically in the oil and gas sector of the energy industry. The Company entered into an agreement in the lithium exploration business which was subsequently terminated by the Company. It still maintains its interest in capped oil and gas properties in Alberta Canada.

 

NOTE 2 – ACCOUNTING POLICIES

 

Accounting Method

 

The Company’s financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

 

The Company has elected a fiscal year ending on September 30.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

 

Oil and Gas Property

 

The Company holds a lease on shut in wells that are unproved oil and natural gas properties and the Company has not yet determined whether these properties contain reserves that are economically recoverable. The recoverability of amounts shown for oil and natural gas properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying oil and gas leases, the ability of the Company to obtain necessary financing to complete their exploration and development and future profitable production or sufficient proceeds from the disposition thereof. The Company is, therefore, unable to estimate when these costs will be included in the amortization computation.

 

The Company uses the successful efforts method in accounting for it oil and gas properties.

 

Unproven oil and natural gas properties are reviewed on an annual basis for impairment. As of September 30, 2017, the Company elected to impair the asset and reduce its value to zero. The Company had impairment expense of $45,042 and $0 for the year ended September 30, 2017 and 2018, respectively.

 

Property and equipment

 

Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.

 

 
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Foreign currency translation

 

The Company’s functional currency and reporting currency is in U.S. dollars. The financial statements of the Company are translated to U.S. dollars in accordance with SFAS No. 52, “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

 

Impairment of Long-lived Assets

 

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value. See Footnote 6.

 

Estimates and Assumptions

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The Company’s significant estimates include the fair value of common stock issued for services. Actual results could differ from those estimates.

 

Income Taxes

 

Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.

 

The Company accounts for income taxes under the provisions of Financial Accounting Standards Board) Accounting Standards Codification 740, Accounting for Income Taxes. It prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result, the Company has applied a more-likely-than-not recognition threshold for all tax uncertainties. The guidance only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the various taxing authorities.

 

The Company classifies penalties and interest related to unrecognized tax benefits as income tax expense in the Statements of Operations.

 

Basic and diluted net loss per share

 

Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. Diluted loss per share calculations include the dilutive effect of common stock which could total 7,536,400 shares if the convertible note and interest were converted to common stock. Basic and diluted net loss per share is the same due to the absence of common stock equivalents.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation to employees and consultants in accordance with FASB ASC 718. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black Scholes option-pricing model for common stock options and warrants and the closing price of the Company’s common stock for common share issuances.

 

 
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Prepaid Expense

 

Prepaid expenses of $33,333 and zero as September 30, 2018 and 2017, respectively consisted of prepaid consulting to a related party.

 

Recent Accounting Pronouncements

 

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on their financial position, results of operations or cash flows As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 

NOTE 3 – GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company, as shown in the accompanying balance sheets, an accumulated deficit of $354,510 and negative working capital of $76,428. The Company has not established any source of revenue to cover its operating costs. These factors raise substantial doubt about the company’s ability to continue as a going concern. The Company will engage in very limited activities that must be satisfied in cash until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 – INCOME TAXES

 

The Company follows Accounting Standards Codification 740, Accounting for Income Taxes. During 2009, there was a change in control of the Company.

 

Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry forwards. For federal income tax purposes, the Company uses the accrual basis of accounting, the same that is used for financial reporting purposes.

 

The Company did not have taxable income for the years ended September 30, 2018 or 2017. The Company’s deferred tax assets consisted of the following as of September 30, 2018, and 2017:

 

 

 

2018

 

 

2017

 

Net tax loss carry forward

 

 

74,447

 

 

 

62,467

 

Less: Valuation allowance

 

 

(74,447 )

 

 

(62,467 )

Net deferred tax asset

 

$ -

 

 

$ -

 

 

The Company had a net loss of $176,033 for the year ended September 30, 2018 and $71,105 for the year ended September 30, 2017. As of September 30, 2018, the Company’s net tax loss carry forward was $ 75,062 will begin to expire in the year 2036. All tax years from inception of the Company are open to review by appropriate taxing authorities.

 

 
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A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended September 30, 2018 and 2017 is as follows:

 

 

 

2018

 

 

2017

 

U.S. federal statutory rate

 

 

21 %

 

 

21 %

Net operating loss

 

 

(21 )%

 

 

(21 )%

Effective tax rate

 

 

--

 

 

--

 

The Company due to its loses has not filed US Corporate tax returns and is subject to examination back to inception.

 

Based on the recent change in corporation tax rates the Company calculated the deferred tax asset for the year ended September 30, 2018 at 21% compared to the rate of 35% prior to the change in corporation tax rates.

 

NOTE 5 – COMMON STOCK

 

On January 27, 2016 the Company issued 36,000 shares of common stock with a value of $900 for service. The shares were never physically issued. On June 10, 2017, the Company cancelled the issuance and paid $900 in cash to the vendor.

 

On September 25, 2017 the Company sold 833,332 shares of common stock with a value of $250,000 for cash.

 

On September 30, 2017 the Company issued 700,000 shares of common stock for the conversion of $5,612 (CDN $7,000) of convertible debt.

 

On September 20, 2019 the Company received stock subscription agreement for 11,500,000 shares of common stock with a value of $11,500. As of September 30, 2019 the Company treated these transactions as stock subscriptions receivable.

 

NOTE 6 – IMPAIRMENT OF UNPROVED PROPERTY

 

The Company reviewed the status of its asset which is an unimproved oil property under lease. From this review the Company determined it does not have the adequate resources combined with the present market price of oil to develop it into a producing property. As of September 30, 2017, the Company elected to impair the asset and reduce its value to zero. The Company had impairment expense of $0 for the year ended September 30, 2018 and $45,042 in 2017, respectively.

 

NOTE 7 – CONVERTIBLE NOTE

 

On July 1, 2014, the Company issued a USD $67,215 (CAD $75,000) convertible note for cash. The note bears an interest rate of 9.5% and matured on December 31, 2015. The note, plus accrued interest, is convertible by the holder, in part or whole, until the date of maturity into common stock of the Company at CAD one cent ($0.01) per share. The note is in default. The Company by resolution elected to allow conversion, for its extension, of any and all the notes outstanding principal and interest until the note is fully paid. On September 30, 2017 the Company issued 700,000 shares of common stock with a value of $5,612 (CDN $7,000) for partial conversion of the convertible note.

 

On October 20, 2014, the Company issued a USD $20,000 (CAD $22,454) convertible note for cash. The note bears an interest rate of 9.5% and matured on December 31, 2016. The note, plus accrued interest, is convertible by the holder, in part or whole, until the date of maturity into common stock of the Company at CAD one cent ($0.01) per share. On June 30, 2017, the principal and interest of the note was forgiven by its holders resulting in a gain of $24,625 consisting of principal of $20,000 (CAD $22,454) and interest of $4,625 (CAD $6,038).

 

On December 1, 2014, the Company issued to a related party, who is a former officer and director of the Company, a convertible note for USD $2,245 (CAD $2,800). The note bears an interest rate of 5% per annum and matured on December 31, 2015. On December 29, 2017 the Company paid the outstanding principal of $2,226 and interest of $334 for a total of $2,560.

 

As of September 30, 2018, the convertible debts outstanding was US $52,709 plus accrued interest of US $22,655 for a total liability of $75,364. As of September 30, 2017, the convertible debts outstanding was US $54,515 plus accrued interest of US $18,477 for a total liability of $72,992.

 

The Company analyzed the conversion option under ASC for “Derivatives and Hedging” and “Convertible Securities with Beneficial Conversion Features” and concluded that none applied.

 

 
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NOTE 8 – RELATED PARTY TRANSACTIONS

 

During the year ended September 30, 2017, an officer and director paid $43,971 in expenses on behalf of the Company. The funds are unsecured, payable on demand and bear no interest. As of September 30, 2017 and 2018, the total amount due to the officer and director is US$62,994 and $32,971, respectively.

 

During the year ended September 30, 2018, an officer and director of the Company paid USD $37,668 of operating expenses on behalf of the Company while the Company repaid the related party $32,448. The total amount due as of September 30, 2018 is $32,971 The advances are unsecured, bear no interest and are payable on demand.

 

During the year ended September 30, 2018, the Company paid a related party, who is a former officer and director of the Company, USD $100,000 in consulting fees under a consulting agreement with the Company. The contract was for one year and based on the date of the contract the Company expensed $66,667 for the year ended September 30, 2018 and prepaid of $33,333.

 

On December 1, 2014, the Company issued to a related party, who is a former officer and director of the Company, a convertible note for USD $2,245 (CAD $2,800). The note bears an interest rate of 5% per annum and matured on December 31, 2015. On December 29, 2017 the Company paid the outstanding principal of $2,226 and interest of $334 for a total of $2,560.

 

During the years ended September 30, 2018 and 2017 the Company’s operations conducted out of the premises at 14890 66a Ave., Surrey, B.C. V3S 9Y6 Canada. Mr. Gurm Sangha, the former President , Director made these premises available to the Company rent-free.

 

NOTE 9 – SUBSEQUENT EVENT

 

During the period from September 30, 2018 to December 31, 2018, the Company entered into separate Subscription Agreements with 17 persons under which 25,000,000 shares of the Company’s common stock were sold for $0.001 per share. This included Harpreet Sangha, the Company’s Chairman, who entered into an agreement to purchase 10,000,000 shares of the Company’s common stock and Craig Alford, the Company’s President, who entered into an agreement to purchase 4,000,000 shares of the Company’s common stock. The subscription agreements dated September 30, 2018 for 11,500,000 shares of common stock with a value of $11,500 were treated as stock subscriptions receivable and funds were received in the period ending December 31, 2018. Subscription Agreements were approved by the Company’s Board of Directors. The sales of the 25,000,000 shares of the Company’s common stock occurred on November 5, 2018. The sales were made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 and, with respect to a majority of the purchasers, Regulation S.

 

During the period from October 1 to December 31, 2019 the Company entered into consulting agreement with 5 individuals total cost of $35,500 plus 2 related parties for a total costs of $57,000. The agreement were for various lengths of time with all 7 terminating by December 31, 2019.

 

On October 11, 2018, Barrel Energy Inc. (the “Company”) entered into an Earn-In Agreement (the “Agreement”) with True Grit Resources, a British Columbia corporation (“TGR”), an unrelated third party. In exchange for the payment by the Company of certain consideration, the Company may earn of to 100% participation interest in certain mineral rights leases that TGR has in Arizona. The first payment for $100,000 is due within ten (10) days of the execution of the Agreement and another payment of $300,000 or expenditure to the property is due within 30 days of the first payment. Upon receipt of $400,000, the Company will have a 49% participation interest in the Arizona property mineral lease rights .The Company may require a 70% earn-in interest by expending a cumulative $1,400,000 on the property. In order to secure the 100% participation interest, the Company is required to expend a cumulative amount of payments and property expenditures of $2,400,000.

 

 
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The mineral rights the Company is acquiring is subject to an option agreement dated October 3, 2017 between True Grit and two individuals with beneficial ownership of the mining Permit issued by the State of Arizona in accordance with ARS 27-234. The Company at the date of this filing is unable to confirm that the either the beneficial owners and or True Grit’s claims are current and active. If the Claims cannot t be confirmed the earn in agreement may not be valid and may be void.

 

On November 5, 2018 the Company received an extension for the initial payments of $400,000 of which the initial $100,000 is required to be paid by February 28, 2019. The Company required the extension as it not received from True Grit.

 

On January 17, 2019 the Company terminated the Earn-In agreement with True Grit Resources.

 

On November 15, 2018 the Company received an advance from one non-related party for $65,000. On December 3, 2018 the Company received an additional advance of $35,000 from the same individual for a total of $100,000. Both advances are unsecured, on demand and bear no interest.

 

On November 12, 2018 the Company issued a $36,000 convertible note to Crown Partners, LLC. The note bears an original discount of $3,500, matures in 12 months from the origination date and bears interest at 5% per annuum. The note is convertible at any time, in part or whole, at $0.50 per share until the 180th date of the note at which time it is convertible an 55% of the market price which is defined as the lowest trading price 25 days prior to conversion.

 

On November 13, 2018 the Company entered into a $3,000,000 equity purchase agreement with Crown Bridge Partners. Under the terms of the agreement, the Company may put to the investor shares of the Company common stock in minimums of $10,000 to maximums of either $100,000 or 200% of the average trading volume, whichever is less. The agreement may be terminated at any time by the Company or when the total commitment of shares are sold by the Company to the investor. As part of the agreement, the Company issued 175,000 shares of its common stock at $0.75 per share as a commitment fee.

 

 

F-13