0001103384
2010-07-01
2010-09-30
0001103384
2010-01-01
2010-09-30
0001103384
2010-12-31
0001103384
2011-07-01
2011-09-30
0001103384
2011-01-01
2011-09-30
0001103384
2011-09-30
0001103384
2004-06-07
2011-09-30
0001103384
2011-11-16
0001103384
2009-12-31
0001103384
2010-09-30
0001103384
2004-06-06
xbrli:shares
iso4217:USD
iso4217:USDxbrli:shares
ALL Fuels & Energy Co
0001103384
--12-31
Smaller Reporting Company
afsee
87894654
10-Q
false
2011-09-30
Q3
2011
18807
0
50050
25740
3333
3333
2223
2806
1110
7177
0
100000
0
100000
51160
132917
74469
54018
88611
53000
71000
130000
623070
814073
0
0
646829
910098
16275180
16428771
150000
150000
50000
50000
-6423944
-6423944
10869975
11396081
-571910
-681156
51160
132917
0.01
0.01
50000000
50000000
0
0
0
0
0.01
0.01
700000000
700000000
64682747
91009800
57632747
83959800
7050000
7050000
0
0
0
0
8092
17249
30811
4851
9823
7766704
10423
56015
15122
30212
1304723
0
0
0
0
333540
238
747
184
583
8732
76729
242930
75429
237355
2193090
104639
330503
95586
277973
11606789
0
221172
0
3889
171000
3709
9874
55519
59467
131931
5
22
6
14
51372
0
0
0
0
66250
0
0
0
0
-1278
0
0
0
0
-233340
94566
94566
11269
11269
105834
90862
-136458
-240304
-248133
-510153
-13777
-466961
-335890
-526106
-12108850
0
-0.01
0
0
0
0
0
0
52674386
52286607
52674386
76386438
67718828
70842544
67718828
90289216
0
0
-187
0
0
-14485
221172
3889
171000
0
0
6999585
42000
1300
1244645
11370
-18807
87820
14382
170145
466923
-105464
-124053
-2654401
0
0
951238
0
125000
125000
0
0
40056
0
0
461960
0
0
4160
0
0
193720
0
-131650
-778752
0
0
2703623
0
25000
28988
100000
268200
368200
11000
7000
78000
0
0
483120
0
0
150000
0
0
950
111000
250200
3454905
5536
-5503
21752
31243
25740
4748
10284
3988
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 1. Summary of Significant Accounting Policies</b></p>
<p style="line-height: 0.197919in;"><b>Basis of Presentation</b></p>
<p style="line-height: 0.197919in;">The accompanying unaudited interim financial statements of ALL Fuels & Energy Company (the “Company”) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America, pursuant to the Securities and Exchange Commission rules and regulations. In management’s opinion, all adjustments necessary for a fair presentation of the results for interim periods have been reflected in the interim financial statements. The results of operations for any interim period are not necessarily indicative of the results for a full year. All adjustments to the financial statements are of a normal recurring nature.</p>
<p style="line-height: 0.197919in;">Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Such disclosures are those that would substantially duplicate information contained in the most recent audited financial statements of the Company, such as significant accounting policies and stock options. Management presumes that users of the interim statements have read or have access to the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.</p>
<p style="text-align: justify; line-height: 0.158in;"><b>Note 2. Going Concern</b></p>
<p style="text-align: justify; line-height: 0.158in;">The Company has incurred losses totaling $12,108,850 through September 30, 2011, and had a working capital deficit of $788,333 at September 30, 2011. Because of these conditions, the Company will require additional working capital to continue operations and develop its business. The Company intends to raise additional working capital either through private placements, public offerings and/or bank financing.</p>
<p style="text-align: justify; line-height: 0.158in;">There are no assurances that the Company will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations or execute its business plan.</p>
<p style="text-align: justify; line-height: 0.158in;">These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 3. Management’s Plans for Liquidity</b></p>
<p style="line-height: 0.197919in;">From the third quarter of 2009 through July 2011, the Company obtained a total of $76,000 in loans from its directors, which provided the Company with a portion of the capital needed to sustain its operations. In April 2011, the Company obtained a total of $25,000 in loans from third parties, which provided the Company with a portion of the capital needed to sustain its operations. Until August 2011, all of these loans were payable on demand, bore interest at 10% per annum and were convertible, at the lenders’ option, into shares of the Company’s common stock at the rate of one share for every $.01 of debt converted. In August 2011, each of these loans were revised and extended to September 2012. See Note 11. Significant Transaction.</p>
<p style="line-height: 0.197919in;">In January 2010, the Company borrowed $65,000 from a third party, and in May 2010, the Company borrowed $35,000 from the same third party, through the issuance of convertible promissory notes, payable in October 2010 (which was not extended and the balance due as of December 31, 2010, is $92,500) and February 2011, respectively, bearing interest at 8% per annum, and convertible into a number of shares based on the market price of the Company’s common stock. On the dates of issuance, these promissory notes were convertible into an aggregate of approximately 16,000,000 shares of Company common stock. The first of these convertible promissory notes has been partially converted as follows: (i) in August 2010, $7,500 was converted into 2,508,361 shares of the Company’s common stock; (ii) in January 2011, $6,000 was converted into 3,000,000 shares of the Company’s common stock; and (iii) in July 2011, $4,000 was converted into 3,076,923 shares of the Company’s common stock.</p>
<p style="line-height: 0.197919in;">In August 2011, the Company obtained $220,700 through the issuance of convertible promissory notes, the proceeds from which are expected to be sufficient to sustain the Company’s current level of operations through the first quarter of 2012. See Note 11. Significant Transaction.</p>
<p style="line-height: 0.197919in;">The Company intends to commit its available capital to the exploration, development, acquisition and production of crude oil and natural gas. See Note 12. Oil and Gas Investments.</p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 4. Business of the Company</b></p>
<p style="line-height: 0.197919in;">Until August 2011, the Company actively pursued the acquisition of one or more ethanol plants. As of August 2011, the Company’s efforts in this regard had not been successful. In August 2011, the Company changed its business to the exploration, development, acquisition and production of crude oil and natural gas within the United States. See Note 12. Oil and Gas Investments.</p>
<p style="line-height: 0.197919in;">It is expected that the Company will be required to obtain capital from third parties, in order to consummate any significant acquisition transaction.</p>
<p style="line-height: 0.197919in;"> </p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 5. Prepaid Expenses</b></p>
<p style="line-height: 0.197919in;">At September 30, 2011, the Company had no prepaid expenses. At September 30, 2010, the Company had prepaid expenses of $13,091, which represented prepaid insurance.</p>
<p style="line-height: 0.197919in;"> </p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 7. Notes Payable - Related Parties</b></p>
<p style="line-height: 0.197919in;">From the third quarter of 2009 through July 2011, the Company obtained $71,000 in loans from one of its directors, the proceeds from which provided the Company with a portion of the capital needed to sustain its operations. On the dates of issuance, these promissory notes were convertible into a total of 7,100,000 shares of Company common stock. Until August 2011, these loans were payable on demand, bore interest at 10% per annum and were convertible, at the director’s option, into shares of the Company’s common stock at the rate of one share for every $.01 of debt converted. In August 2011, each of these loans was revised and extended to September 2012. See Note 11. Significant Transaction.</p>
<p style="line-height: 0.197919in;">In April 2011, another Company director loaned $5,000 to the Company. On the date of issuance, these promissory notes were convertible into a total of 500,000 shares of Company common stock. Until August 2011, this loan was payable on demand, bore interest at 10% per annum and were convertible, at the director’s option, into shares of the Company’s common stock at the rate of one share for every $.01 of debt converted. In August 2011, this loan was revised and extended to September 2012. See Note 11. Significant Transaction.</p>
<p style="line-height: 0.197919in;"> </p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 10. Convertible Promissory Notes and Warrants</b></p>
<p style="line-height: 0.197919in;">In August 2011, the Company issued convertible promissory notes with an aggregate principal balance of $220,700 as discussed in Note 9. In conjunction with these notes, the Company issued a total of 100,000,000 common stock purchase warrants to purchase a like number of shares of common stock, at an exercise price of $.005 per share, and 100,000,000 common stock purchase warrants to purchase a like number of shares of common stock at an exercise price of $.0075. All of these warrants are currently exercisable and expire in 2015. These warrants were issued to five third parties, in consideration for their notes payable.</p>
<p style="line-height: 0.197919in;">Accordingly, we calculated the fair value of the warrants using the Black-Scholes option pricing model. The calculation of the fair value of these warrants resulted in the net cash proceeds of the debt being less than the fair value of the warrants. As a result, the warrants were then recorded at fair value in the amount of $391,760 to additional paid in capital, a debt discount was recorded of $220,700 and the difference of $171,060 was recorded in the accompanying statement of operations. The debt discount will be recognized over the life of the loan.</p>
<p style="line-height: 0.197919in;">In addition, it is possible that, in future periods, the Company will incur charges against earnings as a result of the issuance of these warrants. The timing or amount of any such future charges cannot be predicted.</p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 9. Capital Stock</b></p>
<p style="line-height: 0.197919in;"><b>Common Stock for Bonus</b></p>
<p style="line-height: 0.197919in;">During the first nine months of 2011, the Company did not issue any shares as a bonus. In March 2010, the Company issued 50,000 shares of its common stock as a bonus to one of its directors. These shares were valued at $.04 per share, or $2,000, in the aggregate.</p>
<p style="line-height: 0.197919in;"><b>Common Stock for Services</b></p>
<p style="line-height: 0.197919in;">During the first nine months of 2011, the Company issued 50,000 shares of common stock in payment of $500 in consulting services.</p>
<p style="line-height: 0.197919in;">During the first nine months of 2010, the Company issued 2,000,000 shares of common stock in payment of $20,000 in legal services.</p>
<p style="line-height: 0.197919in;"><b>Common Stock for Debt Extensions</b></p>
<p style="line-height: 0.197919in;">During the first nine months of 2011, the Company issued 200,000 shares of common stock in consideration of the extension of the maturity dates on convertible promissory notes, with an aggregate principal balance of $103,000, from payable on demand to payable on September 1, 2012.</p>
<p style="line-height: 0.197919in;"><b>Warrant Cancellation</b></p>
<p style="line-height: 0.197919in;">In March 2010, a former Company director tendered for cancellation 5,520,366 warrants to purchase a like number of shares of Company common stock. The Company accepted such tender and cancelled all of such warrants.</p>
<p style="line-height: 0.197919in;"> </p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 12. Oil and Gas Investments</b></p>
<p style="line-height: 0.197919in;">The Company has purchased 4% of the outstanding shares in Treaty Belize Energy, LTD, a Belize corporation that is seeking to development an oil and gas property located in Belize, for a cash investment of $125,000. The Company recognized a loss on the investment for the quarter in the amount of $25,000 related to options paid during the acquisition.</p>
<p style="line-height: 0.197919in;">Also, the Company has entered into a participation agreement with respect to an oil and gas property located in Louisiana, pursuant to which the Company holds a 5% in such property and has made payments totaling $6,650.</p>
0
6650
388990
577055
0
0
171060
171060
171060
0
0
-25000
-25000
-25000
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 6. Non-cash Investing and Financing Activities</b></p>
<p style="line-height: 0.197919in;"> At September 30, 2011, the Company had the following non-cash investing and financing activities:</p>
<p style="line-height: 0.197919in; text-indent: -1in; margin-left: 1in;">              –            Note payable in the amount of $10,000 in exchange for common stock.</p>
<p style="line-height: 0.197919in; text-indent: -1in; margin-left: 1in;">              –            Reduction of accounts payable - related party in exchange for stock in the amount of $13,800.</p>
<p style="text-align: justify; line-height: 0.158335in;"><b>Note 11. Significant Transaction</b></p>
<p style="line-height: 0.197919in;"><b>Partial Conversion of Convertible Promissory Note</b></p>
<p style="line-height: 0.197919in;">In January 2010, the Company borrowed $65,000 from a third party through the issuance of a convertible promissory note, convertible into a number of shares based on the market price of the Company’s common stock. In January 2011, $6,000 of the principal amount of such convertible note was converted into 3,000,000 shares of the Company’s common stock. In July 2011, $4,000 of the principal amount of such convertible promissory note was converted into a total of 3,076,923 shares of the Company’s common stock. Following such conversion transactions, the remaining principal balance under such convertible promissory note was $47,500. On August 15, 2011, the Company entered into an assignment agreement with this third party where they would assign their debt to five third party note holders in the amount of $90,000 for the unpaid principal and interest owed to them. In connection with this assignment the Company had debt forgiveness income in the amount of $11,269 which has been reflected in the accompanying financial statements.</p>
<p style="line-height: 0.197919in;"><b>Change in Control</b></p>
<p style="line-height: 0.197919in;">In August 2011, the Company and certain of its affiliates entered into and completed a series of transactions (collectively, the “Transaction”).</p>
<p style="line-height: 0.197919in;">Pursuant to the Transaction, one of the Company’s officers and directors obtained control of the Company. However, management of the Company did not change in connection with the Transaction.</p>
<p style="line-height: 0.197919in;"><b>Change of Business Plan</b></p>
<p style="line-height: 0.197919in;">In connection with the Transaction and because the Company had been unable to acquire an ethanol plant, the Company’s management has changed the Company's plan of business from the acquisition of an ethanol plant to the exploration, development, acquisition and production of crude oil and natural gas within the United States.</p>
<p style="line-height: 0.197919in;"><b>Reverse Split</b></p>
<p style="line-height: 0.197919in;">On August 12, 2011, the board of directors of the Company authorized a 50-to-1 reverse split of the Company’s outstanding common stock. At a special shareholders’ meeting held, the reverse split was approved. The effective date of this reverse split is expected to be in November 2011. The Company’s financial statements for future periods will reflect this reverse split.</p>
<p style="line-height: 0.197919in;"><b>Financing Transaction and Issuance of Securities</b></p>
<p style="line-height: 0.197919in;">As part of the Transaction, the Company issued:</p>
<p style="line-height: 0.197919in; text-indent: -1in; margin-left: 1in;">              –            Convertible promissory notes with an aggregate principal amount of $220,700. These convertible promissory notes mature on September 1, 2013, accrue interest at 8% per annum and are payable at maturity, unless converted by the holder into shares of Company common stock at a conversion rate $0.00069 per share ($0.0345 per share post-reverse split);</p>
<p style="line-height: 0.197919in; text-indent: -1in; margin-left: 1in;">              –            Series A Warrants that provide the holders the right to purchase up to a total of 100,000,000 shares (2,000,000 shares post-reverse split) of Company common stock at an exercise price of $0.005 per share ($0.25 per share post-reverse split); and</p>
<p style="line-height: 0.197919in; text-indent: -1in; margin-left: 1in;">              –            Series B Warrants that provide the holders the right to purchase up to a total of 100,000,000 (2,000,000 shares post-reverse split) shares of Company common stock at an exercise price of $0.0075 per share ($0.375 per share post-reverse split).</p>
<p style="line-height: 0.197919in;"> The Series A Warrants and Series B Warrants expire on August 15, 2015. The convertible promissory notes, the Series A Warrants and the Series B Warrants contain standard adjustment provisions for stock splits, distributions, reorganizations, mergers and consolidations.</p>
<p style="line-height: 0.197919in;"> Additionally, the Transaction triggered an adjustment to the conversion price in the Company’s previously outstanding convertible promissory notes [original principal amounts of $65,000 ($47,500 current principal amount) and $35,000] from a variable conversion price to a fixed conversion price of $0.00069 per share ($0.0345 per share post-reverse split). In connection with the Transaction, these previously outstanding convertible promissory notes were assigned to new third party investors.</p>
<p style="line-height: 0.197919in;"><b>Extensions of Promissory Notes</b></p>
<p style="line-height: 0.197919in;">In connection with the Transaction, the Company issued a total of 200,000 shares (post-reverse split) of Company common stock (100,000 shares to directors and 100,000 shares to third parties), in consideration of the extension of the maturity dates on convertible promissory notes with an aggregate principal amount of $103,000 from payable on demand to payable on September 1, 2012.</p>
<p style="line-height: 0.197919in;"><b>Debt Conversion Agreement</b></p>
<p style="line-height: 0.197919in;">Prior to the Transaction, the Company owed its sole officer a total of $535,650 in accrued and unpaid salary. In connection with the Transaction, the Company and its officer entered into a debt conversion agreement with respect to $534,650 of such accrued and unpaid salary. Pursuant to the debt conversion agreement, the Company’s officer agreed to convert the $534,650 in accrued and unpaid salary into shares of Company common stock at a conversion price of $0.00069 per share ($0.0345 per share post-reverse split), upon the Company effecting the 50-to-1 reverse split. The debt conversion agreement has been amended once, pursuant to which amendment the Company’s officer had the right to convert $13,800 of the accrued and unpaid salary amount into a total of 20,000,000 shares (pre-reverse split) of Company common stock. The Company’s officer did so convert $13,800 of the accrued and unpaid salary amount into 20,000,000 shares, leaving $521,850 in accrued and unpaid salary subject to the debt conversion agreement.</p>
<p style="line-height: 0.197919in;"><b>Lock-up Agreement</b></p>
<p style="line-height: 0.197919in;">In connection with the debt conversion agreement, the Company and its officer entered into a lock-up agreement with respect to the shares that have been and are to be issued to the officer under the debt conversion agreement. The lock-up period is for nine months from the date or dates of issuance.</p>
<p style="line-height: 0.197919in;"><b>Amended and Restated Employment Agreement</b></p>
<p style="line-height: 0.197919in;">In connection with the Transaction, the Company and its officer entered into an amended and restated employment agreement. Pursuant to this amended and restated employment Agreement, the Company is to pay its officer up to $240,000 per year as follows: beginning at $12,500 per month for 4 months; $15,000 per month from month 5 until the Company closes on a debt or equity financing of at least $1,000,000; and $20,000 per month thereafter. This officer’s compensation is no longer connected to the acquisition of an ethanol plant. The initial term of this amended and restated employment agreement expires in August 2014.</p>
<p style="line-height: 0.197919in;"><b>Assignment Agreement</b></p>
<p style="line-height: 0.197919in;">In connection with the Company’s and its officer’s executing the amended and restated employment agreement, the Company and its officer also entered into an assignment agreement. Pursuant to this assignment agreement, the Company’s officer agreed to forgive $1,000 of his accrued and unpaid salary in exchange for the Company’s assigning the name “ALL Fuels & Energy Company” to him. This assignment is to become effective at such time as the Company changes its corporate name.</p>
0
6650
6650