AXLM 10-K 12/31/13

10-K 1 axlm10k_123113apg.htm AXLM 10-K 12/31/13 AXLM 10-K 12/31/13

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to ___________

Commission File No.: 000-54501

AUXILLIUM ENERGY, INC.

(Exact name of registrant as specified in its charter)


Nevada		27-1368734
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

575 Lexington Avenue 4^th Floor New York, New York 10022		10022
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (647) 456 4002

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common stock, par value $0.0001 per share.

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant 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 registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’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. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

Smaller reporting company [X]

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant’s most recently completed second fiscal quarter: $1,372,000.

Number of the issuer’s common stock outstanding as of March 24, 2014: 134,300,000.

Documents incorporate by reference: None.

TABLE OF CONTENTS


		Page
Part I		4

Item 1	Business	4
Item 1A	Risk Factors	9
Item 1B	Unresolved Staff Comments	14
Item 2	Properties	14
Item 3	Legal Proceedings	15
Item 4	Mine Safety Disclosures	15

Part II		15

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6	Selected Financial Data	15
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operation	15
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	20
Item 8	Financial Statements and Supplementary Data	20
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	37
Item 9A	Controls and Procedures	37
Item 9B	Other Information	38

Part III		38

Item 10	Directors, Executive Officers and Corporate Governance	38
Item 11	Executive Compensation	40
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	42
Item 13	Certain Relationships and Related Transactions, and Director Independence	42
Item 14	Principal Accounting Fees and Services	42

Part IV		43

Item 15	Exhibits, Financial Statement Schedules	43
Signatures		44

FORWARD-LOOKING STATEMENTS

Certain statements contained in this report constitute “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “began,” “target,” “would” and variations of such words and similar expressions are intended to identify such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following:


	●	the quality of our properties with regard to, among other things, the existence of reserves in economic quantities;
	●	uncertainties about the estimates of reserves;
	●	our ability to increase our production and oil and natural gas income through exploration and development;


	●	the number of well locations to be drilled and the time frame within which they will be drilled;
	●	the timing and extent of changes in commodity prices for natural gas and crude oil;
	●	domestic demand for oil and natural gas;
	●	drilling and operating risks;
	●	the availability of equipment, such as drilling rigs and transportation pipelines;
	●	changes in our drilling plans and related budgets;
	●	the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity; and

For a more detailed discussion of these and other factors that may affect our business, see the discussion in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein. We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this Annual Report on Form 10-K, except to the extent required by applicable securities laws.

USE OF CERTAIN DEFINED TERMS

In this Report, unless otherwise noted or as the context otherwise requires, “the Company,” “Auxillium,” “we,” “us,” and “our” refers to the combined business of Auxillium Energy, Inc. and its wholly-owned subsidiaries.

PART I

ITEM 1. BUSINESS.

Overview

We hold oil and gas leases in the North Slope Foothills of Alaska. In order to evaluate the potential of our leases in the North Slope region, we will require further investigation and exploration. We believe that our Alaska leases are in areas, which are potentially promising for gas production as indicated by data from Texaco’s drilling efforts in 1976. The Company does not however, make any representations as to the probability, quality and quantity of their future production. Furthermore, any gas recovered from our Alaska leases will not be salable unless or until a proposed North Slope gas pipeline is completed.

In addition, we had in the past attempted to explore oil and gas opportunities in Poland. However, after careful investigation, we considered that Poland was not a suitable location for the Company’s future oil and gas operations, and subsequently, no further actions were undertaken in Poland and our Polish subsidiary remains inactive.

As of March 27, 2013 we now operate a website at the following address: http://www.auxilliumenergy.com

Our Corporate History

We were organized under the laws of Nevada on November 9, 2009. Prior to March 31, 2011, we were engaged in the business of selling new and used auto mobiles. The Company purchased cars at auctions and from private parties and resold them. On January 9, 2010, we entered into a consulting agreement with Selga Auto LLC, an Atlanta, Georgia Company operated by our former director and Chief Executive Officer, Olegs Petusko. Under the terms of the consulting agreement, Selga Auto LLC, agreed to act as our buying agent at two car auctions for a fee of $300 per each automobile purchased with Selga Auto LLC’s assistance. On April 27, 2010, our consulting agreement with Selga Auto LLC was amended to ensure that our commercial interests would be afforded appropriate protections in the event of competing auction bids between us and Selga Auto LLC. For the fiscal year ended December 31, 2010, the Company generated $26,185 revenue while cost of goods sold was $24,650 and gross margin was $1,535.

On March 31, 2011 a change in control in the Company was effected as a result of a share sale agreement between our former director, President, and majority shareholder Olegs Petusko and current director, President and Chief Executive Officer, and majority shareholder, Warmond Fang, whereby Mr. Fang acquired 10,000,000 shares or approximately 80.5% of the then outstanding common stock of the Company . Upon change of control, Jatinder S. Bhogal was elected a director and Frank J. Hariton was elected secretary. The Company’s new management continued ongoing business, and entered into a consulting agreement with Selga Auto LLC on March 31, 2011 whereby Selga Auto LLC acted as our consultant in the automobile business for a term of six months. No vehicle purchases or sales were successfully transacted.

Management subsequently undertook efforts to identify additional commercial opportunities for the Company, and determined to investigate and commercially pursue the business of acquiring, exploring and developing oil and gas properties. We entered into the current line of business on July 11, 2011 by acquiring all of the shares of Auxillium Spółka zograniczoną odpowiedzialnością, a Polish corporation for 2,653 Zlotys (approximately $953). Upon consummation of the share sale agreement, Auxillium Spółka zograniczoną odpowiedzialnością was established as a wholly-owned subsidiary of the Company, and tasked with investigating oil and gas opportunities in Poland.

In addition to Poland, Management investigated domestic oil and gas opportunities in the United States, identifying Alaska as a promising jurisdiction. On August 18, 2011, we formed a new wholly owned subsidiary, Auxillium Alaska Inc., under the laws of the state of Alaska, to engage in oil and gas exploration activities in Alaska. On August 29, 2011, we discontinued our efforts in the automobile sales business.

According to the Research Development Council for Alaska, Alaska’s oil and gas production accounts for 13.2% of all US production. Furthermore in a 2009 analysis of Alaska, the US Energy Information Administration indicated that the Alaska North Slope contains 14 of the 100 largest oil fields in the United States, and 5 of the 100 largest natural gas fields. In a 2012 USGS report on Alaska, the USGS’ mean estimate of shale gas reserves for Alaska was 42 trillion cubic feet.

On August 29, 2011 through our wholly-owned subsidiary, Auxillium Alaska Inc., we entered into an agreement to acquire 100% right, title, and interest in certain oil and gas leases in Alaska’s North Slope region, owned by Union Energy (Alaska), LLC. Under the terms of the agreement, we agreed to pay $95,295 to Union Energy (Alaska), LLC and $24,000 to the State of Alaska Department of Natural Resources. On August 31, 2011, the Company paid $24,000 due to the State of Alaska and on December 28, 2011, we paid the $95,295 owed to Union Energy (Alaska), LLC for the leases. With the balance of $95,295 paid to Union Energy (Alaska) LLC, there are no further payments or monies owed to Union Energy (Alaska) LLC. Under the terms of the leases, there are oil and gas rental payments that the Company is required to pay to the State of Alaska Department of Natural Resources annually to maintain the leases. The payments are for a total of $28,800 on an annual basis due on September 1^st of each year. The payment was made in 2012 and was funded by an advance from our principal shareholder.

As a result of these actions we are an exploration stage company engaged primarily in the investigation, acquisition and exploration of prospective oil and gas properties. We plan to conduct exploration work on current and future properties in order to ascertain which, if any, may possess commercially exploitable quantities of oil and gas reserves. Our ability to commence exploration work is subject to factors, including but not limited to, the availability of financing, personnel, technical expertise, resources and other such factors that may have an impact on the Company to carry out exploration work. There is no assurance that we can successfully acquire such resources in order to conduct further acquisitions or exploration.

Stock Split

On December 21, 2012, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada. The Certificate of Change effectuated a ten for one (10:1) forward stock split (the “Stock Split”) and certain other changes as set forth herein. As a result of the filing of the Certificate of Change, (i) each of the 13,430,000 issued and outstanding shares of the Company’s common stock, par value $0.001, was changed to the ten (10) shares of common stock, par value $0.0001 per share; (ii) the number of outstanding shares of common stock was increased from 13,430,000 to 134,300,000 shares; (iii) the par value of the Company’s common stock was changed from $0.001 per share to $0.0001 per share; and (iv) the number of shares of common stock that the Company is authorized to issue was increased from 75,000,000 shares to 750,000,000 shares.

All shares and per share amounts in the consolidated financial statements have been adjusted to give retroactive effect to the Stock Split.

Corporate Name Change

On February 6, 2013, the Company filed Articles of Amendment to the Articles of Incorporation, and changed its name from Selga Inc. to Auxillium Energy Inc. (“Auxillium Energy” or the “Company”).

Our Plan of Operations

Poland Subsidiary

According to an April 5, 2011 report by the US Energy Information Administration (World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States.), Poland may have an estimated 5.3 trillion cubic meters of shale gas reserves, the largest such reserves in Europe.

Our subsidiary in Poland, Auxillium Spółka zograniczoną odpowiedzialnością was originally formed to investigate oil and gas opportunities in Poland in 2011. We had made initial plans to investigate oil and gas opportunities in Poland, but after a careful consideration of the challenges posed and capital resource required, we decided that it was not in the best interest of the Company to pursue any project in Poland. As such, the subsidiary Auxillium Spółka zograniczoną odpowiedzialnością did not have any activities in 2013 and has remained inactive. We do not foresee any change in the inactive status with regards to Auxillium Spółka zograniczoną odpowiedzialnością in the next 12 months, as the Company has no plans in place to pursue any project in Poland.

Alaska North Slope Prospect Lease

On August 29, 2011 through our wholly-owned subsidiary, Auxillium Alaska Inc., we entered into an agreement to acquire 100% right, title, and interest in certain oil and gas leases in Alaska’s North Slope region, owned by Union Energy (Alaska), LLC. On December 28, 2011 we concluded the acquisition of an oil and gas prospect in Alaska’s North Slope. Pursuant to the terms of the leases, the Company paid $95,295 to Union Energy (Alaska), LLC and $24,000 to the State of Alaska Department of Natural Resources and, granted Union Energy (Alaska) LLC a 6.25% override interest in the prospect. Under the terms of the leases, the Company shall also make an annual rental payment of $28,800 to the State of Alaska Department of Natural Resources, due on September 1 of each year. The payments were made in both 2012 and 2013 and were funded by an advance from our principal shareholder, President and Chief Executive Officer. As a result of these actions we are an exploration stage company engaged primarily in the investigation, acquisition and exploration of prospective oil and gas properties.

We have attempted to raise capital to acquire additional oil and gas lease in the adjacent areas to the area with respect to which we hold our existing leases, however we were not able to raise the requisite capital and thus no acquisitions were made in 2013. We did however through advance from our principal shareholder, President and Chief Executive Officer, Warmond Fang, pay the State of Alaska for the rental payments to maintain our current leases. The Company will make efforts to ensure that rental payments required under our existing lease are paid on a timely basis and, plan to continue to explore oil and gas lease acquisition opportunities in the adjacent areas through obtaining additional financing.

According to the US Energy Information Administration, Alaska’s North Slope contains 14 of the 100 largest oil fields in the United States, and 5 of the 100 largest natural gas fields. A U.S. Department of Energy report: “Alaska North Slope Oil and Gas A Promising Future or an Area in Decline?” published on April 2009 estimates the ultimate recoverable oil reserves on the North Slope to be 28 billion barrels, including reserves from existing fields as well as undiscovered resources. Natural gas estimates reach as high as 125 trillion cubic feet.

Our leases in the North Slope region cover 9,600 net acres and were originally issued to Union Energy (Alaska) LLC on September 1, 2008, with a term of 10 years and subject to a 12.5% royalty interest in favor of the State of Alaska. The Company believes, based upon currently available geological data and maps from the public domain

that our lease prospect contains the East Kurupa gas field, discovered by Texaco in 1976. (State of Alaska Department of Oil and Gas: Petroleum Potential of the Eastern National Petroleum Reserve-Alaska. April, 1997.) At present the main thrust of exploration in the North Slope is focused in the Prudhoe Bay area leaving much of the North Slope foothills unexplored; accordingly, we believe our leases located in the North Slope foothills may offer potential opportunities for further investigation and exploration.

In order to evaluate the potential of our leases in the North Slope region, we will require further investigation and exploration. We believe our Alaska leases are in areas, which are potentially promising for gas production as indicated by data from Texaco’s drilling efforts in 1976. The Company does not however, make any representations as to their future production, if any. Furthermore, any gas recovered from our Alaska leases will not be salable unless or until a proposed North Slope gas pipeline is completed.

We plan to conduct exploration work on current and future properties in order to ascertain which, if any, may possess commercially exploitable quantities of oil and gas reserves. Our ability to commence exploration work is subject to factors, including but not limited to, the availability of financing, personnel, technical expertise, resources and other such factors that may have an impact on the Company to carry out exploration work. There is no assurance that we can successfully acquire such resources in order to conduct further acquisitions or exploration.

Competition

We operate in a highly competitive industry, competing with major oil and gas companies, independent producers and institutional and individual investors, which are actively seeking oil and gas properties throughout the world together with the equipment, labor and materials required to operate properties. Most of our competitors have financial resources, staff and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to acquire good acreage positions and drill wells to explore for oil and gas, then, if warranted, drill production wells and install production equipment. Competition for the acquisition of oil and gas acreage is intense. Therefore, we may not be successful in acquiring and developing profitable properties in the face of this competition. No assurance can be given that sufficient oil and gas acreage will be available for acquisition and development.

Government Regulation

Oil and gas exploration and development companies are subject to various federal, state and local governmental regulations, which may be changed from time to time in response to economic or political conditions and can have a significant impact upon overall operations. Matters subject to regulation include permits for drilling operations, drilling bonds, reports concerning operations, the spacing of wells, unitization and pooling of properties, taxation, abandonment and restoration and environmental protection. These laws and regulations are under constant review for amendment or expansion. Changes in these regulations could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on us.

Oil and Gas Regulation

The governmental laws and regulations which could have a material impact on our Company are as follows:

Drilling and Production

These types of regulations include permit requirements for the drilling of wells, drilling bonds and reports concerning operations. Most states regulate one or more of the following: (i) the location of wells; (ii) the method of drilling and casing wells; (iii) the rates of production or "allowables"; (iv) the surface use and restoration of properties upon which wells are drilled; (v) the plugging and abandoning of wells; and (vi) notice to surface owners and other third parties.

State laws may regulate the size and shape of drilling and spacing units or proration units governing the pooling of oil and natural gas properties. Some states allow forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be

implemented by third parties and may reduce our interest in the unitized properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells generally prohibit the venting or flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of natural gas and oil we can produce from our wells or limit the number of wells or the locations at which we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and natural gas liquids within its jurisdiction.

Environmental Regulations

Our activities will be subject to existing federal, state and local laws and regulations governing environmental quality and pollution control. Our operations will be subject to stringent environmental regulation by state and federal authorities including the Environmental Protection Agency ("EPA"). Such regulation can increase the cost of such activities. In most instances, the regulatory requirements relate to water and air pollution control measures.

Waste Disposal

The Resource Conservation and Recovery Act ("RCRA"), and comparable state statutes, affect oil and gas exploration and production activities by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup of "hazardous wastes" and on the disposal of non-hazardous wastes. Under the auspices of the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. Drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of crude oil, natural gas, or geothermal energy constitute "solid wastes", which are regulated under the less stringent non-hazardous waste provisions, but there is no guarantee that the EPA or the individual states will not adopt more stringent requirements for the handling of non-hazardous wastes or categorize some non-hazardous wastes as hazardous for future regulation.

Air Emissions

Our operations are subject to local, state and federal regulations for the control of emissions of air pollution. Major sources of air pollutants are subject to more stringent, federally imposed permitting requirements. Administrative enforcement actions for failure to comply strictly with air pollution regulations or permits are generally resolved by payment of monetary fines and correction of any identified deficiencies. Alternatively, regulatory agencies could require us to forego construction, modification or operation of certain air emission sources.

Clean Water Act

The Clean Water Act ("CWA") imposes restrictions and strict controls regarding the discharge of wastes, including produced waters and other oil and natural gas wastes, into waters of the United States, a term broadly defined. Permits must be obtained to discharge pollutants into federal waters. The CWA provides for civil, criminal and administrative penalties for unauthorized discharges of oil, hazardous substances and other pollutants. It imposes substantial potential liability for the costs of removal or remediation associated with discharges of oil or hazardous substances. State laws governing discharges to water also provide varying civil, criminal and administrative penalties and impose liabilities in the case of a discharge of petroleum or it derivatives, or other hazardous substances, into state waters. In addition, the EPA has promulgated regulations that may require us to obtain permits to discharge storm water runoff. In the event of an unauthorized discharge of wastes, we may be liable for penalties and costs.

Intellectual Properties

To establish and protect our proprietary rights, we rely on a combination of trademarks, copyrights, trade secrets, license agreements, patent applications, confidentiality agreements and other contractual rights.

Employees

We have no employees as of the date of this report and anticipate that our operations will be conducted primarily through third party consultants and contractors rather than by employees. We do not anticipate hiring a large number of employees.

Item 1A.Risk Factors.

Risks Relating To Our Business

You should carefully consider the risks described below before investing in our publicly traded securities. The risks described below are not the only ones we face. Our business is also subject to the risks that affect many other companies, such as competition, technological obsolescence, labor relations, general economic conditions, geopolitical events, climate change and international operations. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations and our liquidity.

Risks Related to Our Business

Our exploratory drilling operations may not be successful, our business may fail and investors may lose their entire investment in our Company.

There can be no assurance that our future drilling activities will be successful. We may not recover all or any portion of our capital investment in the wells. Unsuccessful drilling activities would have a material adverse effect upon our results of operations and financial condition and would likely result in the ultimate failure of our business operations. The cost of drilling, completing, and operating wells is often uncertain, and a number of factors can delay or prevent drilling operations including: (i) unexpected drilling conditions; (ii) pressure or irregularities in formation; (iii) equipment failures or accidents; (iv) adverse weather conditions; and (iv) shortages or delays in availability of drilling rigs and delivery of equipment. If our exploratory drilling operations are not successful, our business may fail and investors may lose their entire investment in our Company.

Oil and gas exploration and development involves many operating risks. If we were to experience any of these problems, it could have a material, adverse effect on our operations and possibly cause us to go out of business and investors to lose their entire investment in our Company.

Our exploration activities will be subject to many risks, including the risk that we may not discover commercially productive reservoirs. Exploration for oil and natural gas can be unprofitable, not only from failing to discover reserves, but from productive wells that do not produce sufficient revenues to return a profit. In addition, our exploration activities may be curtailed, delayed or cancelled as a result of other factors, including:

•fires;

•explosions;

•blow-outs and surface cratering;

•uncontrollable flows of underground natural gas, oil, or formation water;

•natural disasters;

•facility and equipment failures;

•title problems;

•shortages or delays in the delivery of equipment and services;

•abnormal pressure formations; and,

•environmental hazards such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases. If any of these events occur, we could incur substantial losses as a result of:

•injury or loss of life;

•severe damage to and destruction of property, natural resources or equipment;

•pollution and other environmental damage;

•clean-up responsibilities;

•regulatory investigation and penalties;

•suspension of our operations; or,

•repairs necessary to resume operations.

We may be affected by any of these events more than larger companies, since we have limited working capital. We have not obtained any liability insurance for our operations at this time. If we were to experience any of these problems, it could have a material, adverse effect on our operations and could cause us to go out of business and investors to lose their entire investment in our Company.

The operations and the potential profitability of oil and gas exploration and development companies often depend upon factors beyond our control. If our operations and potential profitability are negatively impacted because of these factors, our business could suffer and investors could lose all or part of their investment in our Company.

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile and potentially subject to governmental price fixing, pegging and controls, or any combination of these and other factors, responding to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds and other expenses have become increasingly difficult, if not impossible, to project. These and other changes and events may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas, which may be acquired or discovered will be affected by numerous factors beyond our control. These factors include, but are not limited to, the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. These factors cannot be accurately predicted. If our operations and potential profitability are negatively impacted because of these factors, our business could suffer and investors could lose all or part of their investment in our Company.

The oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring further oil and gas exploration prospects and hiring qualified personnel. If we do not compete successfully in these areas, our operations will likely suffer and our Company will likely be unsuccessful.

The oil and gas industry is intensely competitive, and we compete with other companies that have greater resources. Many of these companies not only explore for and produce oil and natural gas, but also carry on refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low oil and natural gas market prices. Our larger competitors may be able to absorb the burden of present and future laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. These companies also may be better able to attract the qualified personnel required to run a successful oil and gas exploration company.

Oil and gas operations are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on us.

Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations, which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, state, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages, which we

may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend material amounts on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.

Oil and gas exploration and development activities are subject to certain environmental regulations, which may prevent or delay the commencement or continuance of our operations.

Our oil and gas exploration and development activities will be subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance.

Risks Related to Our Company

If we do not continue to obtain additional financing, our business will fail.

Our current operating funds are less than necessary to commence and complete all intended test wells on the Alaska properties covered by our oil and gas leases. Therefore, we will need to obtain additional financing in order to carry out our business strategy. We currently have limited operations and we have no gas sales.

As of December 31, 2013, we have cash on hand of approximately $46 representing the remaining proceeds of our two financing transactions. Exploration (and if successful, development) of the Alaska prospects is unlikely to commence in the short term and it is impossible to forecast costs associated with doing so at this time. Nevertheless, we will require substantial additional financing to cover such costs. Furthermore, we will require additional financing to sustain our business operations if we are not successful in earning revenues.

We do not currently have any arrangements for financing and may not be able to find such financing. Our ability to obtain additional financing will be subject to a number of factors, including but not limited to the market price for oil and gas, the success of our initial test wells and general market conditions. These factors will make the timing, amount, terms or conditions of financing uncertain and additional financing may be unavailable to us. We have relied upon interest free advances from our principal shareholder and President and Chief Executive Officer, Warmond Fang, which totaled $123,013 as of December 31, 2013. Mr. Fang is under no legally binding obligation to make such advances. If we do not obtain additional financing, our business will fail.

We are a new entrant into the oil and gas industry without a profitable or long operating history. We do not have any significant income producing oil and gas properties and we have limited financial resources. We have not yet commenced our exploration activities nor have we generated any significant revenue since our incorporation. There is no means by which investors can evaluate our potential for success and there is no assurance that we will ever operate profitably.

We have a limited operating history and must be considered in the exploration stage. Our Company's operations will be subject to all the risks inherent in the establishment of an exploration stage enterprise and the uncertainties arising from the absence of a significant operating history. Potential investors should be aware of the difficulties normally encountered by oil and gas exploration and development companies and the high rate of failure of such enterprises, especially those with a limited operating history such as ours. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the oil and gas exploration that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in our oil and gas exploration may not result in the discovery of oil and gas reserves. If the results of our exploration do not reveal commercially viable oil or gas reserves, we may decide to abandon our leasehold interests and acquire new oil and gas interests for exploration or cease operations. The acquisition of additional oil and gas interests will be dependent upon us possessing capital resources in order to purchase such

interests. If no funding is available, we may be forced to abandon our operations. No assurance can be given that we will ever operate on a profitable basis.

Potential investors should be aware of the difficulties normally encountered by new resource companies and the high rate of failure of such enterprises. There is a high risk that our business will fail.

Because our directors have other business interests, they may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to suffer and possibly fail.

Our directors intend to spend a minority of their business time providing their services to us. While they presently possess adequate time to attend to our interests, it is possible that the demands on our directors from their other obligations could increase, or the demands of our business operations could increase, with the result that they would no longer be able to devote sufficient time to the management of our business. If this happens, our Company will not likely perform to its potential and may fail.

Prospects that we decide to drill may not yield natural gas or oil in commercially viable quantities. If this happens, our business will likely fail and investors would likely lose their entire investment in our Company.

None of our properties covered by the oil and gas leases/permits have yet been fully evaluated by the Company. We will not know for certain, prior to drilling and testing, whether natural gas or oil will be present in those properties or, if present, whether natural gas or oil will be present in sufficient quantities to recover drilling or completion costs or to be economically viable. The cost of drilling, completing and operating any well is uncertain and any wells we drill may not be productive. If we never find commercially viable resources of oil and gas, our business will fail and investors will likely lose their entire investment in our Company.

Our Alaska prospects are in areas believed to contain gas, but presently lacking gas transportation facilities.

While our Alaska prospects are in areas that are promising for gas discovery, there are no existing pipeline facilities available to transport any gas they may produce to market. Unless such facilities are built and available to us, our gas would be “stranded gas” with little or no market value. The Company believes that a pipeline facility may be built in the future based on evolving oil and gas developments in Alaska. On March 30, 2012, ExxonMobil, ConocoPhillips, BP and TransCanada, through participation in the Alaska Pipeline Project, announced their collective efforts to commercialize North Slope natural gas resources within the Alaska Gasline Inducement Act. The four companies in conjunction with the government of Alaska are expected to focus efforts on the construction of a $26 billion pipeline that will allow for the movement of North Slope Gas to Valdez for export to overseas markets. An earlier study published on July 28, 2011 by Wood Mackenzie conducted for the Alaska Gasline Port Authority gave a favorable assessment for the construction of a gas pipeline to move North Slope gas to Valdez for export to overseas markets. The “Alaska Pipeline Project” released an official status update on July 30, 2012 in a press release titled “The Alaska Pipeline Project to Conduct Solicitation of Interest in Pipeline Capacity”. We are not aware of any formal announcement for the construction of a gas pipeline in 2013. Investors should be aware that, whether a pipeline is built, the timing of the construction of the pipeline and whether and on what terms the pipeline is made available to transport any potential gas are all matters beyond our control which could have significant impact on our future results.

Risks Related to Our Securities

If a liquid market for our common stock does not develop, shareholders may be unable to sell their shares.

Our common stock is DTC eligible and quoted for trading on the OTCQB but currently only a minimum liquid market for our common stock exists. There is no certainty that a liquid market will develop and if a liquid market is not developed for our shares, it will be difficult for shareholders to sell their stock.

If we fail to remain current on our reporting requirements, we could be removed from the OTCQB, which would limit the ability of broker-dealers to sell our common stock and the ability of stockholders to sell their

common stock in the secondary market.

Companies trading on the OTCQB must be reporting issuers under Section 12 of the Exchange Act, and must be current in their filings under the Exchange Act to maintain price quotation privileges on the OTCQB. If we fail to remain current on our reporting requirements, we could be removed from the OTCQB. As a result, the liquidity for our common stock could be adversely affected by limiting the ability of broker-dealers to sell our common stock and the ability of stockholders to sell their common stock in the secondary market.

We do not intend to pay dividends and there will be less ways in which you can make a gain on any investment in our Company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may likely prohibit the payment of a dividend.

Our Articles of Incorporation provide for indemnification of officers and directors at our expense and limit their liability, which may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.

Our Articles of Incorporation and applicable Nevada law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation or any of our directors, officers, employees, or agents, upon such person's promise to repay us, therefore, if it is ultimately determined that any such person should not have been entitled to indemnification this indemnification policy could result in substantial expenditures by us, which we will be unable to recoup.

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against these types of liabilities, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our securities we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is are likely to materially reduce the market and price for our shares, if such a market ever develops.

We are not subject to certain corporate governance provisions of the Sarbanes-Oxley Act.

Since our common stock is not listed for trading on a national securities exchange, we are not subject to certain of the corporate governance requirements established by the national securities exchanges pursuant to the Sarbanes-Oxley Act. These include rules relating to independent directors, director nomination, audit and compensation committees, retention of audit committee financial expert and the adoption of a code of ethics. Unless we voluntarily elect to fully comply with those obligations, which we have not done to date, the protections that these corporate governance provisions were enacted to provide will not exist with respect to us. We cannot assure you that we will make an application to have our securities listed for trading on a national securities exchange in the future, that we would be able to satisfy applicable listing standards, or if we did satisfy such standards, that we would be successful in continuing to meet such listing standards. Even if we were listed on a national securities exchange as a controlled company, we would not be subject to certain corporate governance requirements.

Limitations upon Broker-Dealers Effecting Transactions in “Penny Stocks”.

Trading in our common stock is subject to material limitations as a consequence of regulations, which limits the activities of broker-dealers effecting transactions in "penny stocks." Pursuant to Rule 3a51-1 under the Exchange Act, our common stock is a “penny stock” because it (i) is not listed on any national securities exchange or The

NASDAQ Stock Market™, (ii) has a market price of less than $5.00 per share, and (iii) its issuer (the Company) has net tangible assets less than $2,000,000 (if the issuer has been in business for at least three (3) years) or $5,000,000 (if the issuer has been in business for less than three (3) years).

Rule 15g-9 promulgated under the Exchange Act imposes limitations upon trading activities on "penny stocks", which makes selling our common stock more difficult compared to selling securities which are not "penny stocks." Rule 15a-9 restricts the solicitation of sales of "penny stocks" by broker-dealers unless the broker first (i) obtains from the purchaser information concerning his financial situation, investment experience and investment objectives, (ii) reasonably determines that the purchaser has sufficient knowledge and experience in financial matters that the person is capable of evaluating the risks of investing in “penny stocks”, and (iii) delivers and receives back from the purchaser a manually signed written statement acknowledging the purchaser's investment experience and financial sophistication.

Rules 15g-2 through 15g-6 promulgated under the Exchange Act require broker-dealers who engage in transactions in "penny stocks" first to provide their customers with a series of disclosures and documents, including (i) a standardized risk disclosure document identifying the risks inherent in investing in "penny stocks", (ii) all compensation received by the broker-dealer in connection with the transaction, (iii) current quotation prices and other relevant market data, and (iv) monthly account statements reflecting the fair market value of the securities.

There can be no assurance that any broker-dealer, which initiates quotations for the Common Stock will continue to do so, and the loss of any such broker-dealer likely would have a material adverse effect on the market price of our common stock.

Shares Eligible for Future Sale

The sale of a substantial number of shares of our common stock, or the perception that such sales could occur, could adversely affect prevailing market prices for our common stock. In addition, any such sale or perception could make it more difficult for us to sell equity, or equity-related securities in the future at a time and price that we deem appropriate. If and when this registration statement becomes effective and we become subject to the reporting requirements of the Exchange Act, we might elect to adopt a stock option plan and file a registration statement under the Securities Act registering the shares of common stock reserved for issuance thereunder. Following the effectiveness of any such registration statement, the shares of common stock issued under such plan, other than shares held by affiliates, if any, would be immediately eligible for resale in the public market without restriction.

The sales of shares of our common stock, which are not registered under the Securities Act, known as “restricted” shares, typically are affected under Rule 144. As of December 31, 2013 we had outstanding an aggregate of 100,000,000 shares of restricted common stock. All of our shares of common stock, except those issued in the last six months, might be sold under Rule 144. No prediction can be made as to the effect, if any, that future sales of “restricted” shares of our common stock, or the availability of such shares for future sale, will have on the market price of our common stock or our ability to raise capital through an offering of our equity securities.

ITEM 1B.UNRESOLVED STAFF COMMENTS.

We are not required to provide the information required by this Item because we are a smaller reporting company.

ITEM 2. PROPERTIES.

Our principal shareholder, President and Chief Executive Officer, Warmond Fang offers the office space for our use at no cost to us.

We hold oil and gas leases in the North Slope Foothills of Alaska. For detailed information on the leases, please see the section entitled “Business.”

ITEM 3. LEGAL PROCEEDINGS.

We currently have no legal proceedings pending nor have any legal proceedings been threatened against us, or any of our officers, directors or control persons of which we are aware.

ITEM 4. REMOVED AND RESERVED.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND ISSURER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock began to be quoted on the OTCBB under the symbol “SLGA” commencing August 27, 2010 and was moved to the OTCQB on July 23, 2012 pursuant to SEC rule 15c2-11 due to quoting inactivity. As a result of a corporate name change, the company also applied for a new ticker symbol with FINRA and began to be quoted under the symbol AXLM since February 23, 2013. We are not aware of any trades or quotations during the two calendar years ending December 31, 2013. There have been sporadic trades reported since that date at prices reported from $0.01 to $0.05.

Holders

As of December 31, 2013, we had 36 shareholders of record. The number of holders does not include the shareholders for whom shares are held in a “nominee” or “street” name by DTC.

Dividend Policy

We have not declared or paid any dividends on our common stock to date. We anticipate that any future earnings will be retained as working capital and used for business purposes. Accordingly, it is unlikely that we will declare or pay any such dividends in the foreseeable future.

Recent Sales of Unregistered Securities

No sales of unregistered securities of the Company were made by the Company in 2013.

ITEM 6. SELECTED FINANCIAL DATA.

We are not required to provide the information required by this Item because we are a smaller reporting company.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND REULTS OF OPERATION.

Overview

We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the following:


·	our ability to raise additional capital and secure additional financing;
·	anticipated trends in our financial condition and results of operations;
·	our ability to hire and retain key employees;
·	Risks related to diverting management’s attention from ongoing business operations.

Background

Prior to August 2011, the Company’s business model provided automobile resale service in Eastern European countries. In mid 2011, new management considered oil and gas exploration and development to be a more promising operation for our shareholders and has pursued the Company’s new business accordingly.

Plan of Operation and Liquidity

Our plan of operation for 2014 is to continue paying our oil and gas lease costs in Alaska and to look for other oil and gas leases to acquire. We anticipate the cost of maintaining our existing properties will be approximately $30,000 to $50,000. This figure could be possibly reduced, substantially, if we are able to find third parties to share the costs of developing and maintaining our oil and gas leases. However, there can be no guarantee that a third party can be found.

During 2014 we also anticipate spending $45,000 on administrative expenses, including fees payable in connection with our compliance reporting obligations as a public company, such as legal, accounting and audit fees.

Total expenditures in 2014 therefore could be at least $80,000. We have almost no cash on hand to cover these expenses, and we will require additional funding. We anticipate that additional funding will be provided in the form of equity financing from the sale of our common stock, or loans from our executive officers or directors. We cannot provide investors with any assurance that additional funds will be raised. Currently, we do not have any arrangements in place for future equity financings.

We had cash and cash equivalents of $46 as of December 31, 2013.

We have funded our activities to date primarily through the issuance of equity securities and upon interest free advances from our principal shareholder, President and Chief Executive Officer, Warmond Fang. However, Mr. Fang is under no legal obligation to make such advances to the Company.

Seasonality and Inflation

We do not believe that our business will be seasonal to any material extent except that exploratory operations, particularly in Alaska, may be hampered by severe winter weather conditions. Since energy costs are a key component of inflation, we do not believe that our results will be materially impacted by inflation in the current fiscal year.

Critical Accounting Policies

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. There are no material revenue generating activities that give rise to significant assumptions or estimates. Our most critical accounting policies as follows:

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reporting period.

The Company’s significant estimates and assumptions include the fair value of financial instruments; the carrying value, recoverability and impairment, if any, of long-lived assets, including the values assigned to and the estimated useful lives of oil and gas properties; income tax rate, income tax provision, deferred tax assets and valuation allowance of deferred tax assets; foreign currency exchange rate and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:


Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accrued oil and gas properties payable, approximate their fair values because of the short maturity of these instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of advances from stockholders due to their related party nature.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include unproved oil and gas properties, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

Management will periodically review the recoverability of the capitalized oil and gas properties. Management takes into consideration various information including, but not limited to, historical production records taken from previous oil and gas operations, results of exploration activities conducted to date, estimated future prices and reports and opinions of outside consultants. When it is determined that a project or property will be abandoned or its carrying value has been impaired, a provision is made for any expected loss on the project or property.

The impairment charges, if any, is included in operating expenses in the accompanying statements of operations.

Oil and Gas Properties

The Company follows Topic 932 “Financial Accounting and Reporting by Oil and Gas Producing Companies” of the FASB Accounting Standards Codification (“Topic 932”) of the FASB Accounting Standards Codification for its oil and gas properties and accounts for its oil and gas exploration and production activities using the successful efforts method. Under this method, all property acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending determination of whether the well has found proved reserves. If an exploratory well does not find proved reserves, the costs of drilling the well are charged to expense and included within cash flows from investing activities in the statements of cash flows pursuant to Topic 932. The costs of development wells are capitalized whether productive or nonproductive. Oil and gas lease acquisition costs are also capitalized. Interest cost is capitalized as a component of property cost for significant exploration and development projects that require greater than six months to be readied for their intended use.

Other exploration costs, including certain geological and geophysical expenses and delay rentals for oil and gas leases, are charged to expense as incurred. The sale of a partial interest in a proved property is accounted for as a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the unit-of-production amortization rate. A gain or loss is recognized for all other sales of proved properties and is classified in other operating revenues. Maintenance and repairs are charged to expense, and renewals and betterments are capitalized to the appropriate property and equipment accounts.

transferred to proved oil and gas properties. Proceeds from sales of partial interests in unproved leases are accounted for as a recovery of cost without recognizing any gain until all costs are recovered.

The provision for depreciation, depletion and amortization (“DD&A”) of oil and gas properties is calculated on a field-by-field basis using the unit-of-production method. Oil is converted to natural gas equivalents, Mcf, at the rate of one barrel to six Mcf. Taken into consideration in the calculation of DD&A are estimated future dismantlement, restoration and abandonment costs, which are net of estimated salvage values.

To date, the Company has no declared oil and gas reserves.

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Revenue Recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

The Company derives revenue primarily from the sale of produced natural gas and crude oil. The Company reports revenue as the gross amount received before taking into account production taxes and transportation costs, which are reported as separate expenses. Revenue is recorded in the month the Company’s production is delivered to the purchaser, but payment is generally received between thirty (30) and ninety (90) days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive.

Off-Balance Sheet Arrangements

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our financial statements for the years ended December 31, 2013 and 2012, and the reports thereon of Li & Company are included here:


INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		21
Consolidated Balance Sheets at November 30, 2013 and December 31, 2012		22
Consolidated Statements of Operations for the Year Ended December 31, 2013 and 2012 and for the Period from August 29, 2011 (Exploration Date) through December 31, 2013		23
Consolidated Statement of Stockholders’ Equity (Deficit) for the Period from August 29, 2011 (Exploration Date) through December 31, 2013		24
Consolidated Statements of Cash Flows for the Year Ended December 31, 2013 and 2012 and for the Period from August 29, 2011 (Exploration Date) through December 31, 2013		25
Notes to Consolidated Financial Statements		26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Auxillium Energy Inc.

(An exploration stage company)

We have audited the accompanying consolidated balance sheets of Auxillium Energy Inc. (the “Company”) as of December 31, 2013 and 2012 and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from August 29, 2011 (exploration date) through December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit s.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits 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 consolidated 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012 and the results of its operations and its cash flows for the years then ended and for the period from August 29, 2011 (exploration date) through December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company had a deficit accumulated during the exploration stage at December 31, 2013, a net loss and net cash used in operating activities for the year then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Li and Company, PC

Li and Company, PC

Skillman, New Jersey

March 31, 2014


Auxillium Energy Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets

				December 31, 2013		December 31, 2012
Assets
Current assets:
	Cash			$	46	$	97

		Total Current Assets			46		97

Oil and gas properties (successful efforts method):					95,295		95,295

			Total assets	$	95,341	$	95,392

Liabilities and stockholders' equity (deficit)
Current liabilities:
	Accrued expenses			$	41,692	$	24,648
	Advances from stockholders				123,013		67,098

		Total current liabilities			164,705		91,746

			Total liabilities		164,705		91,746

Stockholders' equity (deficit):
	Preferred stock par value $0.0001: 5,000,000 shares
	authorized; none issued or outstanding				-		-
	Common stock par value $0.0001: 750,000,000 shares
	authorized; 134,300,000 shares issued and outstanding				13,430		13,430
	Additional paid-in capital				171,040		171,040
	Accumulated deficit				(34,470)		(34,470)
	Deficit accumulated during the exploration stage				(219,364)		(146,354)

		Total stockholders' equity (deficit)			(69,364)		3,646

		Total liabilities and stockholders' equity (deficit)		$	95,341	$	95,392

See accompanying notes to the consolidated financial statements.


Auxillium Energy Inc.
(An Exploration Stage Company)
Consolidated Statements of Operations

							For the Period from
							August 29, 2011
			For the Year		For the Year		(Exploration Date)
			Ended		Ended		through
			December 31, 2013		December 31, 2012		December 31, 2013

Revenues earned during the exploration stage			$	-	$	-	$	-

Cost of revenues during the exploration stage:
	State license fees			28,800		28,800		81,600

Gross margin				(28,800)		(28,800)		(81,600)

Operating expenses:
	General and administrative expenses			2,284		954		4,366
	Professional fees			41,926		52,212		133,398

		Total operating expenses		44,210		53,166		137,764

Loss before income tax provision				(73,010)		(81,966)		(219,364)

Income tax provision				-		-		-

Net loss			$	(73,010)	$	(81,966)	$	(219,364)

Net loss per common share
		- Basic and diluted:	$	(0.00)	$	(0.00)

	Weighted average common shares outstanding
		- Basic and diluted		134,300,000		134,300,000

See accompanying notes to the consolidated financial statements.


Auxillium Energy Inc.
(An Exploration Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
For the Period from August 29, 2011 (Exploration Date) through December 31, 2013

		Common Stock Par Value $0.001			Additional				Deficit Accumulated			Total
		Number of Shares	Amount		Paid-in Capital		Accumulated Deficit		during the Exploration Stage			Stockholders' Equity (Deficit)

Balance, December 31, 2010		124,300,000	$	12,430	$	21,870	$	(27,867)	$	-		$	6,433

Forgiveness of debt by former stockholders						170							170

Issuance of common shares for cash at
	at $0.15 per share in December 2011	10,000,000		1,000		149,000							150,000

Net loss								(6,603)		(64,388)			(70,991)

Balance, December 31, 2011		134,300,000		13,430		171,040		(34,470)		(64,388)	#		85,612

Net loss										(81,966)			(81,966)

Balance, December 31, 2012		134,300,000		13,430		171,040		(34,470)		(146,354)	#		3,646

Net loss										(73,010)			(73,010)

Balance, December 31, 2013		134,300,000	$	13,430	$	171,040	$	(34,470)	$	(219,364)	#	$	(69,364)

See accompanying notes to the consolidated financial statements.


Auxillium Energy Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows

							For the Period from
							August 29, 2011
			For the Year		For the Year		(Exploration Date)
			Ended		Ended		through
			December 31, 2013		December 31, 2012		December 31, 2013

Cash flows from operating activities:
Net loss			$	(73,010)	$	(81,966)	$	(219,364)
Adjustments to reconcile net loss to net cash used in operating activities
	Changes in operating assets and liabilities:
		Accrued expenses		17,044		11,783		41,692

Net cash used in operating activities				(55,966)		(70,183)		(177,672)

Cash flows from investing activities:
	Purchase of unproved oil and gas property acreage			-		-		(95,295)

Net cash used in investing activities				-		-		(95,295)

Cash flows from financing activities:
	Advances from stockholders			55,915		24,466		123,013
	Proceeds from sale of common stock			-		-		150,000

Net cash provided by financing activities				55,915		24,466		273,013

Net change in cash				(51)		(45,717)		46

Cash at beginning of reporting period				97		45,814		-

Cash at end of reporting period			$	46	$	97	$	46

Supplemental disclosure of cash flows information:
	Interest paid		$	-	$	-	$	-

	Income tax paid		$	-	$	-	$	-

See accompanying notes to the consolidated financial statements.

Auxillium Energy Inc.

(An Exploration Stage Company)

December 31, 2013 and 2012

Notes to the Consolidated Financial Statements

Note 1 – Organization and Operations

Auxillium Energy Inc. (formerly Selga Inc.)

Selga Inc. (“Selga”) was incorporated under the laws of the State of Nevada on November 9, 2009.

Selga intended to export new and used cars from the United States to South America, Europe and Africa upon formation through August 29, 2011 (the date of discontinuance of auto export business). On August 29, 2011 the management of the Company decided to investigate and commercially pursue the business of acquiring, exploring and developing oil and gas properties. On February 6, 2013, Selga filed Articles of Amendment to the Articles of Incorporation, and changed its name from Selga Inc. to Auxillium Energy Inc. (“Auxillium Energy” or the “Company”).

Acquisition of Auxuillium Spółka Zograniczoną Odpowiedzialnością in Poland

On July 11, 2011 a share sale agreement was entered into by and between Selga Inc. and House Spółka z ograniczoną odpowiedzialnością. Under the terms of the share sale agreement, Selga purchased all of the shares of Auxillium Spółka zograniczoną odpowiedzialnością (“Auxillium Poland”), a Polish corporation for 2,653 Zlotys (approximately $953). Upon consummation of the share sale agreement, Auxillium Spółka zograniczoną odpowiedzialnością was established as a wholly-owned subsidiary of Selga Inc., and tasked with investigating oil and gas opportunities in Poland.

Auxillium Poland is currently inactive.

Formation of Auxillium Alaska, Inc.

On August 18, 2011, the Company formed a new wholly-owned subsidiary, Auxillium Alaska Inc., registered and incorporated under the laws of the state of Alaska, to engage in oil and gas exploration activities in Alaska. Prior to August 29, 2011 (the date of acquisition of the oil and gas properties), Auxillium Alaska Inc. is inactive.

Note 2 – Summary of Significant Accounting Policies

The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Exploration Stage Company

Although the Company started to investigate and commercially pursue the business of acquiring, exploring and developing oil and gas properties upon acquisition of oil and gas properties on August 29, 2011, a substantial portion of the Company’s activities has involved establishing the business and the Company has neither started exploring the oil and gas properties, nor generated any revenue to date. Upon entry into the oil and gas exploration

business the Company became an exploration stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. All activities since August 29, 2011 have been considered as part of the Company’s exploration stage activities.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

(i)

Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

(ii)

Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

(iii)

Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

Actual results could differ from those estimates.

Principles of Consolidation

The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists.

The Company's consolidated subsidiaries and/or entities are as follows:


Name of consolidated subsidiary or entity	State or other jurisdiction of incorporation or organization	Date of incorporation or formation (date of acquisition, if applicable)	Attributable interest

Auxillium Energy, Inc.	Nevada	November 9, 2009	100%

Auxillium Poland	Republic of Poland	July 11, 2011	100%

Auxillium Alaska	Alaska	August 18, 2011	100%

The consolidated financial statements include all accounts of the Company, Auxillium Poland, and Auxillium Alaska as of the reporting period ending date(s) and for the reporting period(s) then ended.

All inter-company balances and transactions have been eliminated.

Fair Value of Financial Instruments


Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, and accrued expenses, approximate their fair values because of the short maturity of these instruments.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

Management periodically reviews the recoverability of the capitalized oil and gas properties taking into consideration various information including, but not limited to, historical production records taken from previous oil and gas operations, results of exploration activities conducted to date, estimated future prices and reports and opinions of outside consultants. When a determination is made that a project or property will be abandoned, or its carrying value will be impaired, a provision is made for any expected loss on the project or property.

The impairment charges, if any, is included in operating expenses in the accompanying statements of operations.

Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Oil and Gas Properties

are capitalized when incurred, pending determination of whether the well has found proved reserves. If an exploratory well does not find proved reserves, the costs of drilling the well are charged to expense and included within cash flows from investing activities in the statements of cash flows pursuant to Topic 932. The costs of development wells are capitalized whether productive or nonproductive. Oil and gas lease acquisition costs are also capitalized. Interest cost is capitalized as a component of property cost for significant exploration and development projects that require greater than six months to be readied for their intended use.

Unevaluated properties are assessed periodically on a property-by-property basis and any impairment in value is charged to expense. If the unevaluated properties are subsequently determined to be productive, the related costs are transferred to proved oil and gas properties. Proceeds from sales of partial interests in unproved leases are accounted for as a recovery of cost without recognizing any gain until all costs are recovered.

To date, the Company has no declared oil and gas reserves.

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Revenue Recognition

The Company will derive revenue primarily from the sale of produced natural gas and crude oil. The Company reports revenue as the gross amount received before taking into account production taxes and transportation costs, which are reported as separate expenses. Revenue is recorded in the month the Company’s production is delivered to the purchaser, but payment is generally received between thirty (30) and ninety (90) days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive.

Income Tax Provision

The Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13.addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended December 31, 2013 or 2012.

Limitation on Utilization of NOLs due to Change in Control

Pursuant to the Internal Revenue Code Section 382 (“Section 382”), certain ownership changes may subject the NOL’s to annual limitations which could reduce or defer the NOL. Section 382 imposes limitations on a corporation’s ability to utilize NOLs if it experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. In the event of an ownership change, utilization of the NOLs would be subject to an annual limitation under Section 382 determined by multiplying the value of its stock at the time of the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may be carried over to later years. The imposition of this limitation on its ability to use the NOLs to offset future taxable income could cause the Company to pay U.S. federal income taxes earlier than if such limitation were not in effect and could cause such NOLs to expire unused, reducing or eliminating the benefit of such NOLs.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

There were no potentially outstanding dilutive shares for the reporting period ended December 31, 2013 or 2012.

Cash Flows Reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company

as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.

In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013.

In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.

In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Note 3 – Going Concern

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the consolidated financial statements, the Company had a deficit accumulated during the exploration stage at December 31, 2013, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company is attempting to commence explorations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds.

The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 – Oil and Gas Properties

Oil and Gas Properties in the State of Alaska

On August 29, 2011 Auxillium Alaska Inc. entered into an agreement to acquire an oil and gas prospect in Alaska’s North Slope region from Union Energy (Alaska), LLC (the “Leases”). Under the terms of the agreement, the Company agreed to pay $95,295 to Union Energy (Alaska), LLC and $24,000 to the State of Alaska Department of Natural Resources. Furthermore, pursuant to such agreement Union Energy (Alaska) LLC will deliver to Auxillium Alaska an 81.25% Net Revenue Interest in the Leases and retain a 6.25% overriding royalty interest on additional oil and gas leaseholds acquired or purchased by Auxillium Alaska within the Prospect Area of Mutual Interest (“AMI”) with the remaining 12.5% as royalty interest to be paid to the State of Alaska. Auxillium Alaska and Union will be subject to the AMI relating to the Properties.

On August 31, 2011 the Company paid $24,000 due to the State of Alaska and on December 28, 2011 the Company made the full payment of $95,295 owed to Union Energy (Alaska), LLC for the Leases pursuant to the agreement. With the balance of $95,295 paid to Union Energy (Alaska) LLC, there are no further payments or monies owed to Union Energy (Alaska) LLC and the Company has received assignment of the leases. Under the terms of the leases, there are oil and gas rental payments that the Company is required to pay to the State of Alaska Department of Natural Resources annually to maintain the leases. The payments are due on September 1st of each year.

On August 31, 2013 and 2012, Auxillium Alaska paid $28,800 due to the State of Alaska under their two (2) leases, respectively.

(i)

Impairment Test

The Company completed its annual impairment testing of mining properties and determined that there was no impairment as the fair value of mining properties, substantially exceeded their carrying values at December 31, 2013.

(ii)

Depreciation, Depletion and Amortization Expenses

No depreciation, depletion and amortization was recorded for the reporting period ended December 31, 2013 and 2012 as the Company has not yet commenced operations.

Note 5 – Related Party Transactions

Advances from Stockholders

From time to time, the principal stockholder and CEO of the Company advances funds to the Company for working capital purposes. These advances are unsecured, non-interest bearing and due on demand.

The major stockholder and officer advanced $42,632 to the Company for the period from July 1, 2011 (change of control) through December 31, 2011.

The principal shareholder and CEO advanced $24,466 for the reporting period ended December 31, 2012.

The principal shareholder and CEO advanced $55,915 for the reporting period ended December 31, 2013.

No repayments have been made on any advances from stockholders.

Note 6 – Stockholders’ Deficit

Shares Authorized

Upon formation the total number of shares of common stock which the Company is authorized to issue is Seventy Five Million (75,000,000) shares, par value $.001 per share.

Certificate of Change to the Certificate of Incorporation

On December 21, 2012, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada. The Certificate of Change effectuated a ten for one (10:1) forward stock split (the “Stock Split”) and certain other changes as set forth herein. As a result of the filing of the Certificate of Change, (i) each of the 13,430,000 issued and outstanding shares of the Company’s common stock, par value $0.001, was changed to the ten (10) shares of common stock, par value $0.0001 per share; (ii) the number of outstanding shares of common stock was increased from 13,430,000 to 134,300,000 shares; (iii) the par value of the Registrant’s common stock was changed from $0.001 per share to $0.0001 per share; and (iv) the number of shares of common stock that the Company is authorized to issue was increased from 75,000,000 shares to 750,000,000 shares.

All shares and per share amounts in the consolidated financial statements have been adjusted to give retroactive effect to the Stock Split.

Common Stock

On December 24, 2009, the Company issued 100,000,000 shares of common stock at $0.0001 per share for total cash proceeds of $10,000.

In May and June 2010, the Company issued 16,900,000 shares of common stock at $0.001 per share for total cash proceeds of $16,900. In July and August 2010, the Company issues 7,400,000 shares of common stock at $0.001 per share for total cash proceeds of $7,400.

In December 2011, the Company issued 10,000,000 shares of its common stock at $0.015 per share to two (2) investors for total cash proceeds of $150,000.

Additional Paid-in Capital

On April 1, 2011, as part of the change in control the former sole stockholder and officer agreed to forgive debt outstanding to him totaling $170 which has been recorded as contributed capital.

Note 7 – Income Tax Provision

Deferred Tax Assets

At December 31, 2013, the Company has available for federal income tax purposes a net operating loss (“NOL”) carry-forwards of $253,834 that may be used to offset future taxable income through the fiscal year ending December 31, 2033. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements since the Company believes that the realization of its net deferred tax asset of approximately $86,303 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by the full valuation allowance.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation

allowance increased approximately $24,823 and $27,873 for the year ended December 31, 2013 and 2012, respectively.

Components of deferred tax assets are as follows:


	December 31, 2013			December 31, 2012

Net deferred tax assets – Non-current:

Expected income tax benefit from NOL carry-forwards	$	86,303		$	61,480

Less valuation allowance		(86,303	)		(61,480	)

Deferred tax assets, net of valuation allowance	$	-		$	-

Income Tax Provision in the Consolidated Statements of Operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:


	For the Year Ended December 31, 2013			For the Year Ended December 31, 2012

Federal statutory income tax rate		34.0	%		34.0	%

Change in valuation allowance on net operating loss carry-forwards		(34.0	)		(34.0	)

Effective income tax rate		0.0	%		0.0	%

Tax Returns Remaining subject to IRS Audits

The Company has not yet filed its corporation income tax returns for the reporting period from November 9, 2009 (inception) through December 31, 2013, all of which will remain subject to audit under the statute of limitations by the Internal Revenue Service for a period of three (3) years from the date they are filed.

Note 8 – Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent event(s) to be disclosed.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including Warmond Fang, our President, Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2013. Based on that evaluation as of December 31, 2013, Mr. Fang concluded that, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Section 404 of the Sarbanes-Oxley Act of 2002 requires that management document and test the Company’s internal control over financial reporting and include in this Annual Report on Form 10-K a report on management’s assessment of the effectiveness of our 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 Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our President, Chief Executive Officer and Chief Financial Officer, Warmond Fang, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that our internal control over financial reporting was not effective, as of December 31, 2013. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that amounted to material weaknesses.

The matters involving internal control over financial reporting that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives of having segregation of the initiation of transactions, the recording of transactions and the custody of assets; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our President, Chief Executive Officer and Chief Financial Officer in connection with the review of our financial statements as of December 31, 2013.

To address the material weaknesses set forth in items (2) and (3) discussed above, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate, the following series of measures:

We plan to increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. First, we plan to create a position to segregate duties consistent with control objectives of having separate individuals perform (i) the initiation of transactions, (ii) the recording of transactions and (iii) the custody of assets. Second, we plan to create a senior position to focus on financial reporting and standardizing and documenting our accounting procedures with the goal of increasing the effectiveness of the internal controls in preventing and detecting misstatements of accounting information. Third, we plan to appoint one or more independent directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management.

We did not implement the said remedial measures in 2013. We anticipate that these remedial measures will be implemented when our financial conditions permit.

Changes in Internal Control over Financial Reporting

There were no changes that occurred during the fourth quarter of the year ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act).

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our directors and officers are:


Name	Age	Positions
Warmond Fang	32	President, Chief Executive Officer, and Director
Kathy Ann Martin	42	Director

Warmond Fang. Mr. Fang holds a Bachelors degree (Honors) in Political Science from York University and a Masters Degree (Honors with Distinction) in International Relations from the University of Hong Kong. Mr. Fang has also undertaken advanced academic studies in Chinese foreign policy, political economy and business law at Peking University. Since 2001 Mr. Fang has been president and CEO of Armega International Group, which operates in the hospitality industry. In 2005, Mr. Fang served as Business Development Consultant for Yunnan Daphne Pharmaceuticals where he managed overseas product marketing and development. From 2007 to 2008, Mr. Fang served as President and CEO of Dongguan Armega Education Consulting, providing translation/interpreting services, language training, and education consulting services to government, as well as domestic and foreign private enterprises operating in China.

Kathy Ann Martin. Ms. Martin will serve until our next annual meeting of shareholders. Mrs. Martin holds a Bachelor's degree in Health Sciences from the University of Toronto in 1998 and has completed further academic studies in business management at Centennial College in 1999. Mrs. Martin has experience in working with the government, non-profit organizations and the private sector. She has previously worked in the Ontario Ministry of Housing and the Ontario Ministry of the Attorney General as an internal communications coordinator facilitating communications between different senior staff and government departments. In the non-profit sector, Mrs. Martin

served as an administrator in the Canadian Orthopaedic Association from 1998-2000, where she dealt with such tasks as human resource management and external communication via community outreach and fundraiser activities. From 2002-2004 Mrs. Martin served as an administrator for ONTRAC Equipment, one of the largest distributors for John Deere in Ontario where she handled back office administration and accounts payable. From 2005-2012, Mrs. Martin was a freelance consultant specializing in human resources. Since 2013, Mrs. Martin has served as President/CEO of Peel Human Resources Consulting Inc.

Family Relationships

There are no family relationships, or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such person was selected to serve as a director or officer.

Involvement in certain legal proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:


●	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
●	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
●	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
●	been found by a court of competent jurisdiction in a civil action or by the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
●	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
●	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the Commission.

Term of Office

The term of office of the current directors shall continue until new directors are elected or appointed at an annual meeting of shareholders.

Committees of the Board and Financial Expert

We have not formed an Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee as of this Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert serving on our Board of Directors.

Code of Ethics

Due to the limited number of persons involved in the management of the Company, we have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, officers and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC and are required to furnish us with copies of these reports. Based solely on our review of the reports filed with the SEC, we believe that all persons subject to Section 16(a) of the Exchange Act timely filed all required reports in fiscal year 2012 and 2013, except that reports were not filed by the following persons:

Name

Number of

Late Reports

Transactions

Not Timely Reported

Known Failures

to File a

Required Form

Kathy Ann Martin

ITEM 11. EXECUTIVE COMPENSATION.

Compensation of Executive Officers

The following table sets forth all compensation earned during the year ended December 31, 2013 and 2012 of our two executive officers. We refer to all of these officers collectively as our “named executive officers”.

Summary Compensation Table

Name and

Principal

Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option Awards

($)

Non-Equity

Incentive Plan

Compensation ($)

Other Compensation

($)

All other Compensation

($)

Total

($)

Warmond Fang, President and Chief Executive Officer

12/31/12

12/31/13

Frank Hariton*,

Former Secretary

12/31/12

12/31/13

Mr. Hariton was paid a retainer of $1,500 a month for legal services but such retainer was terminated on December 30, 2013. He continues to serve as Company Secretary but is not and has not been compensated for serving as secretary.

Compensation of Directors

The Company has no standard arrangements in place or currently contemplated to compensate the Company’s directors for their service as directors or as members of any committee of directors.

Employment Agreements

We do not have employment agreements with any of our executive officers or directors. We have verbal understandings with our executive officer regarding reimbursement for actual out-of-pocket expenses.

Outstanding Equity Awards at Fiscal Year-End Table

There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in the Summary Compensation Table set forth above that would in any way result in payments to any such person because of his or her resignation, retirement or other termination of such person’s employment with us.

Indemnification of Directors and Executive Officers and Limitation of Liability

Nevada law generally permits us to indemnify our directors, officers, employees and agents. Pursuant to the provisions of Nevada Revised Statutes 78.7502, we, as a corporation organized in Nevada, may indemnify our directors, officers, employees and agents in accordance with the following:

(a) A corporation may indemnify any person who was or is a party or is threatened to be made a party to any action, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation, against expenses, actually and reasonably incurred by him in connection with the action, suit or proceeding if he: (a) is not liable for breach of his fiduciary duties as a director or officer pursuant to Nevada Revised Statutes 78.138; or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

(b) A corporation may indemnify any person who was or is a party or is threatened to be made a party to any action by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation against expenses actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he: (a) is not liable for breach of his fiduciary duties pursuant to Nevada Revised Statutes 78.138; or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals there from, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

(c) To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.

Charter Provisions, Bylaws and Other Arrangements of the Registrant

Our Certificate of Incorporation, as amended, does not contain any specific language enhancing or limiting the Nevada statutory provisions referred to above.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable.

ITEM 12. SECURITY OWNERSHIP of CERTAIN BENEFICIAL OWNERS and MANAGEMENT and RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of March 24, 2014, the stock ownership of (i) each of our named executive officers and directors, (ii) all executive officers and directors as a group, and (iii) each person known by us to be a beneficial owner of 5% or more of our common stock. No person listed below has any option, warrant or other right to acquire additional securities from us, except as may be otherwise noted. We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them except as stated therein.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership*	Percentage of Class

Warmond Fang 1065 Dobbs Ferry Road White Plains, NY 10607	100,000,000 shares	74.6%
Kathy Ann Martin	0	0.0%
All officers and directors as a group (2 persons)	100,000,000 shares	74.6%

*All share numbers are adjusted for a ten for one forward stock split affected in December 2012.

Changes in Control

We know of no contractual arrangements which may at a subsequent date result in a change of control in the Company.

ITEM 13. CERTAIN RELATIONSHIPS and RELATED TRANSACTIONS, and DIRECTOR INDEPENDENCE.

From time to time, the principal stockholder, President and Chief Executive Officer of the Company, Warmond Fang, advances funds to the Company for working capital purposes. These advances are unsecured, non-interest bearing and due on demand.

Mr. Fang advanced $55,915 and $24,466 for the years ended December 31, 2013 and 2012. No repayments have been made on any advances from Mr. Fang.

Director Independence

We believe that the following director of our company is considered “independent” under Rule 400(a)(15) of the National Association of Securities Dealers listing standards: Kathy Ann Martin.

ITEM 14. PRINCIPAL ACCOUNTANT FEES and SERVICES.

Audit Fees

The aggregate fees billed by the Company’s auditors for professional services rendered in connection with the audit of the Company’s annual financial statements in the Company’s Form 10-K and reviews of the financial statements included in the Company’s Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements was $17,500 to Li and Company, PC, our current independent

registered public accounting firm during the year ended December 31, 2013 and $17,500 to Li and Company, PC, our current independent registered public accounting firm during fiscal year ended December 31, 2012, respectively.

Tax Compliance Services

The Company did not pay Li and Company, PC for tax compliance services during the year ended December 31, 2013 and 2012.

Pre-approval of All Services from the Independent Auditors

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us or our subsidiaries to render any auditing or permitted non-audit related service, the engagement be:


	-	approved by our audit committee; or
	-	entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

We do not have an audit committee, however our board of directors acts as the audit committee, established pre-approval policies and procedures as to the particular service which do not include delegation of the audit committee's responsibilities to management. Our board of directors pre-approves all services provided by our independent auditors and is informed of each service.

PART IV

ITEM 15. EXHIBITS and FINANCIAL STATEMENT SCHEDULES


3.1		Articles of Incorporation, incorporated by reference to like numbered exhibit filed with the Registrant’s registration statement on Form S-1 filed February 26, 2010.

3.2		Certificate of Amendment to our Certificate of Incorporation filed February 6, 2013, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed February 14, 2013.

3.3		By –Laws, incorporated by reference to like numbered exhibit filed with the Registrant’s registration statement on Form S-1 filed February 26, 2010.

31.1		Certification of the Principal Executive and Principal Financial and Accounting Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Principal Executive and Principal Financial and Accounting Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language), (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements.

*In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		AUXILLIUM ENERGY, INC.

March 31, 2014	By:	/s/ Warmond Fang
		Warmond Fang
		President and Chief Executive Officer (Principal Executive and Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Warmond Fang Warmond Fang	President, Chief Executive Officer, Director (Principal Executive and Principal Financial and Accounting Officer)	March 31, 2014

/s/ Kathy Ann Martin Kathy Ann Martin	Director	March 31, 2014