Contract
Effective January 20, 2011, we entered into a Shared Exchange Agreement with Xxxxxxx Basin Resources Inc.(the “Xxxxxxx Inc.”), a Nevada corporation incorporated on September 9, 2010, and designated therein as the “Seller”, and its stockholders designated therein as the “Selling Shareholders” (the “Agreement”). Pursuant to the provisions of the Agreement, we agreed to issue to the Selling Shareholders (i) 62,000,000 shares of our common stock and (ii) 2,076,324 shares of our convertible preferred stock, in exchange for the transfer and delivery to us by the Selling Shareholders of the 62,000,000 shares of common issued by the Seller, which are all of the issued and outstanding securities of the Seller. As result of the transaction contemplated by the Agreement, the Seller will become our wholly owned subsidiary.
The following unaudited pro forma financial statements are presented to illustrate the estimated effects of the Shares Exchange Agreement between the Company and Xxxxxxx Inc. We have derived the Company historical financial data from its unaudited financial statements as of and for the nine months period ended December 31, 2010. We have derived Xxxxxxx Inc. financial data from its unaudited financial statements as of and for the five months period ended January 31, 2011.
The unaudited pro forma combined balance sheet as of December 31, 2010 assumes the Exchange Transaction was consummated on December 31, 2010. The information presented in the unaudited pro forma combined financial statements does not purport to represent what the financial position or results of operations would have been had the Exchange Transaction occurred as of January 20, 2011, nor is it indicative of future financial position or results of operations. You should not rely on this information as being indicative of the historical results that would have been achieved had the companies always been combined, or the future result that the combined company will experience after the Exchange Transaction is consummated.
The pro forma adjustments are based upon available information and certain assumptions that the Company believes is reasonable under the circumstances. The unaudited pro forma financial statements should be read in conjunction with the accompanying notes and assumptions and the historical financial statements of Grid Petroleum Corp. and Xxxxxxx Basin Resources Inc..
| F-1 |
PROFORMA CONSOLIDATED BALANCE SHEET
December 31, 2010
(UNAUDITED)
(Stated in US Dollars)
| Grid Petroleum December 31, 2010 | Xxxxxxx Inc. January 31, 2011 | adjustment | Pro Forma Combined | ||||||||||||||||
| Current | |||||||||||||||||||
| Cash | $ | 18,605 | $ | 100 | $ | 18,705 | |||||||||||||
| Prepaid expenses | 26,602 | 26,602 | |||||||||||||||||
| Mineral lease | 7,700,000 | 7,700,000 | |||||||||||||||||
| Total current assets | 45,207 | 7,700,100 | — | — | 7,745,307 | ||||||||||||||
| Fixed assets | 527 | 527 | |||||||||||||||||
| Oil and gas properties | 85,334 | — | 85,334 | ||||||||||||||||
| Total assets | $ | 131,068 | $ | 7,700,100 | — | — | $ | 7,831,168 | |||||||||||
| Liabilities | |||||||||||||||||||
| Current | |||||||||||||||||||
| Demand loan | $ | 64,135 | $ | — | 64,135 | ||||||||||||||
| Officer loan | 25,775 | 25,775 | |||||||||||||||||
| Accounts payable | 140 | 269,000 | 269,140 | ||||||||||||||||
| Accrued liabilities | 7,958 | 7,958 | |||||||||||||||||
| Total current liabilities: | 72,233 | 294,775 | — | — | 367,008 | ||||||||||||||
| Stockholders’ Equity (Deficit) | |||||||||||||||||||
| Preferred stock - $0.001 par value, 10,000,000 preferred shares authorized | |||||||||||||||||||
| No preferred shares issued and outstanding at December 31, 2010 | 2,076 | 2,076 | |||||||||||||||||
| Capital stock – $0.0001 par value, 1,500,000,000 common shares authorized | — | ||||||||||||||||||
| 65,741,078 common shares issued and outstanding at December 31, 2010 | 65,782 | 62,000 | (62,000 | ) | 6,200 | 71,982 | |||||||||||||
| Additional Paid-in Capital | 805,475 | 7,369,000 | (7,369,000 | ) | 7,691,724 | 8,497,199 | |||||||||||||
| Common stock to be issued | — | ||||||||||||||||||
| Accumulated deficit | (297,123 | ) | — | (297,123 | ) | ||||||||||||||
| Accumulated deficit during exploration stage | (518,779 | ) | (25,675 | ) | 25,675 | (294,675 | ) | (813,454 | ) | ||||||||||
| Accumulated comprehensive | 3,480 | 3,480 | |||||||||||||||||
| Total stockholders’ equity (deficit) | 58,835 | 7,405,325 | (7,405,325 | ) | 7,405,325 | 7,464,160 | |||||||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 131,068 | $ | 7,700,100.00 | $ | (7,405,325 | ) | $ | 7,405,325 | $ | 7,831,168 | ||||||||
| F-2 |
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2010
(Stated in US Dollars)
| Grid Petroleum | Xxxxxxx Inc. | Pro forma Adjustments | Pro forma Consolidated | ||||||||||||
| Operating expenses | |||||||||||||||
| Interest | $ | 3,120 | — | — | $ | 3,120 | |||||||||
| Promotion and entertainment | 87,299 | — | — | 87,299 | |||||||||||
| Depreciation | 190 | — | — | 190 | |||||||||||
| Professional fees | 223,788 | 1,425 | — | 225,213 | |||||||||||
| Salaries and benefits | 145,311 | — | — | 145,311 | |||||||||||
| Rent | — | 11,250 | — | 11,250 | |||||||||||
| Impairment of goodwill | — | — | 269,000 | 269,000 | |||||||||||
| Office and administration | 59,071 | 13,000 | — | 72,071 | |||||||||||
| Total operating loss | (518,779 | ) | (25,675 | ) | (269,000 | ) | (813,454 | ) | |||||||
| Net loss for the period before income tax | (518,779 | ) | (25,675 | ) | (269,000 | ) | (813,454 | ) | |||||||
| Tax benefits | — | — | — | — | |||||||||||
| Net income (loss) | $ | (518,779 | ) | $ | (25,675 | ) | $ | (269,000 | ) | $ | (813,454 | ) | |||
| Comprehensive gain (loss): | |||||||||||||||
| Net loss | $ | (518,779 | ) | $ | (25,675 | ) | $ | (269,000 | ) | $ | (813,454 | ) | |||
| Foreign currency translation gain (loss) | (662 | ) | — | — | (662 | ) | |||||||||
| Comprehensive loss | $ | (519,441 | ) | $ | (25,675 | ) | $ | (269,000 | ) | $ | (814,116 | ) | |||
| F-3 |
Notes to Pro Forma Consolidated Financial Statements
(1) To reflect the issuance of 62,000,000 shares of common stock and 2,076,324 shares of preferred stock for all the issued and outstanding equity and voting interests of Grid .
(2) To reflect the elimination of Xxxxxxx Inc. deficit accumulated during the development stage.
| F-4 |
