Report Preview Details

0001096906-11-002038.txt : 20110822 0001096906-11-002038.hdr.sgml : 20110822 20110822162242 ACCESSION NUMBER: 0001096906-11-002038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110822 DATE AS OF CHANGE: 20110822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Paradigm Oil & Gas, Inc. CENTRAL INDEX KEY: 0001191354 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 331037546 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-103780 FILM NUMBER: 111050115 BUSINESS ADDRESS: STREET 1: 734 - 7TH AVENUE S.W. SUITE 460 CITY: CALGARY STATE: A0 ZIP: T2P 3P8 BUSINESS PHONE: 403-262-4716 MAIL ADDRESS: STREET 1: 734 - 7TH AVENUE S.W. SUITE 460 CITY: CALGARY STATE: A0 ZIP: T2P 3P8 FORMER COMPANY: FORMER CONFORMED NAME: PARADIGM ENTERPRISES INC DATE OF NAME CHANGE: 20020920 10-Q 1 paradigmoil10q063011.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM 10-Q ----------------------------- (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter year ended June 30, 2011 [] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _____ to _______ Commission file number: 333-103780 ---------------------------------- PARADIGM OIL AND GAS, INC. -------------------------------------------------------------------------------- (Exact name of small business issuer in its charter) Nevada 33-1037546 -------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 123 E. Market St 75147 Mabank, Texas, United States of America ----------------------------------------------- -------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number: (903) 880 1161 Securities Registered Under Section 12(b) of the Exchange Act: None Securities Registered Under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value ------------------------------ (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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. Yes No [X] 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. (Check one): Large accelerated filer Accelerated filer Non-accelerated Smaller reporting company [X] (Do not check if a smaller reporting company) filer Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes No [X] The Company's stock is traded on the OTC-BB. As of August 22, 2011, there were 23,887,826 shares of stock held by non-affiliates. As of August 22, 2011, 54,803,140 shares of the common stock of the registrant were outstanding. PART I - FINANCIAL INFORMATION Item 1. Financial Statements ----------------------------- PARADIGM OIL AND GAS, INC. (An Exploration Stage Company) Index to Consolidated Financial Statements Page ----- Consolidated Balance Sheets at June 30, 2011 and December 31, 2010..... F-2 Consolidated Statements of Operations for the three and six months ended June 30, 2011 and three months ended June 30, 2010 and for the periods from January 28, 2010 (inception) through June 30, 2010 and through June 30, 2011............................................ F-3 Consolidated Statements of Comprehensive (Loss) for the six months ended June 30, 2011 and for the periods from January 28, 2010 (inception) through June 30, 2010 and through June 30, 2011.......... F-4 Consolidated Statement of Changes in Shareholders' Equity for the period from January 28, 2010 (inception) through June 30, 2011... F-5 Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and for the periods from January 28, 2010 (inception) through June 30, 2010 and through June 30, 2011...................... F-6 Notes to Consolidated Financial Statements............................. F-7 PARADIGM OIL AND GAS, INC. (An Exploration Stage Company) Consolidated Balance Sheets June 30, 2011 and December 31, 2010 June 30, December 31, 2011 2010 ------------- ------------- (Unaudited) Assets Current assets: Cash $ 24,177 $ 68,644 Employee advances 7,559 7,059 Note receivable 28,050 25,050 Related party receivable 60,264 45,807 Inventory 7,823 7,823 ------------- ------------- Total current assets 127,873 154,383 ------------- ------------- Furniture and fixtures, net of $ 4,183-$ 2,436 in accumulated depreciation 20,169 22,605 Production equipment 196,124 196,124 Natural gas and oil properties Unproved (Note 3) 601,566 601,566 ------------- ------------- 817,859 820,295 ------------- ------------- Bond RRC 52,500 52,500 ------------- ------------- Total assets $ 998,232 $ 1,027,178 ============= ============= Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 192,036 $ 168,210 Advances from shareholder 62,046 76,546 Short term convertible notes and accrued interest 147,669 143,885 Short term loan 4,110 -- Note payable and accrued interest 101,609 96,066 ------------- ------------- Total current liabilities 507,470 484,707 ------------- ------------- Total liabilities 507,470 484,707 ------------- ------------- Shareholders' equity: Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.001 par value; 300,000,000 shares authorized, 54,803,140 and 53,287,826 shares issued and outstanding 54,804 53,288 Additional paid-in capital 3,138,786 2,981,174 Accumulated deficit during the exploration stage (2,681,163) (2,477,707) Accumulated comprehensive income (21,665) (14,284) ------------- ------------- Total shareholders' equity 490,762 542,471 ------------- ------------- $ 998,232 $ 1,027,178 ============= ============= The accompanying notes are an integral part of these consolidated financial statements. F-2 Paradigm Oil and Gas, Inc (an Exploration Stage Company) Consolidated Statements of Operations For the three months and six months ended June 30, 2011 and three months ended June 30,2010 and for the periods from January 28, 2010 (inception) through June 30, 2010 and through June 30, 2011

The accompanying notes are an integral part of these consolidated financial statements. F-3 PARADIGM OIL AND GAS, INC. (An Exploration Stage Company) Consolidated Statements of Comprehensive (Loss) For the six months ended June 30, 2011 and for the periods from January 28, 2010 (Inception) through June 30, 2010 and through June 30, 2011 January 28, January 28, 2010 2010 Six Months (Inception) (Inception) Ended Through Through June 30, June 30, June 30, 2011 2010 2011 ------------- ------------- ------------- Net loss $ (203,456) $ (2,283,047) $ (2,681,163) Other comprehensive loss: Foreign currency translation adjustments (7,381) 3,872 (21,665) ------------- ------------- ------------- Comprehensive loss $ (210,837) $ (2,279,175) $ (2,702,828) ============= ============= ============= The accompanying notes are an integral part of these consolidated financial statements. F-4 PARADIGM OIL AND GAS, INC (An Exploration Stage Company) Consolidated Statement of Changes in Shareholders Equity For the period from January 28, 2010 (Inception) through June 30, 2011

The accompanying notes are an integral part of these consolidated financial statements. F-5 Paradigm Oil and Gas, Inc (an Exploration Stage Company) Consolidated Statements of Cash Flows For the three months and six months ended June 30, 2011 and three months ended June 30,2010 and for the periods from January 28, 2010 (inception) through June 30, 2010 and through June 30, 2011 January 28, January 28, 2010 2010 Six Months (Inception) (Inception) Ended Through Through June 30, June 30, June 30, 2011 2010 2011 ------------- ------------- ------------- Cash flows from operating activities: Net loss $ (203,456) $ (2,283,047) $ (2,681,163) Adjustments to reconcile net loss to net cash used in operating activities: Non cash interest -- 2,345 -- Stock options 10,500 -- 10,500 Depreciation 2,436 -- 4,183 Assumption of liabilities in acquisition -- 633,279 633,279 Loss from shares issued on debt conversion -- 1,440,000 1,398,005 ------------- ------------- ------------- (190,520) (207,423) (635,196) Changes in operating assets and liabilities: Employee advances (500) (3,087) (7,559) Inventory -- (6,258) (7,823) Accrued interest 7,348 -- 13,423 Accounts payable and accrued liabilities 19,552 10,356 31,479 ------------- ------------- ------------- Net cash used in operating activities (164,120) (206,412) (605,676) Cash flows from (used in) investing activities: Note receivable (3,000) (25,050) (28,050) Related party receivable (14,457) -- (60,264) Bond RRC -- -- (52,500) Furniture and fixtures -- (1,178) (24,352) Production equipment -- (105,183) (196,124) Purchases on natural gas and oil properties -- (60,027) (60,027) Cash acquired in acquisition -- 121 121 ------------- ------------- ------------- Net cash used in investing activities (17,457) (191,317) (421,196) ------------- ------------- ------------- Cash flows from financing activities: Proceeds from convertible debenture payable -- 494,918 734,918 Proceeds from advances from shareholder 8,000 29,521 62,051 Repayments for advances from shareholder -- -- (17,530) Proceeds from short term convertible notes 125,000 -- 267,500 Proceeds from short term loan 15,000 -- 15,000 Repayments for short term loan (10,890) -- (10,890) ------------- ------------- ------------- Net cash provided by financing activities 137,110 524,439 1,051,049 ------------- ------------- ------------- Net change in cash (44,467) 126,710 24,177 Cash, beginning of period 68,644 -- -- ------------- ------------- ------------- Cash, end of period $ 24,177 $ 126,710 $ 24,177 ============= ============= ============= Supplemental disclosure of cash flow information: Foreign currency translation of liabilities $ (7,381) $ (3,872) $ (19,793) Assumption of accounts payable in acquisition -- $ 147,510 $ 147,510 Assumption of advances from shareholder in acquisition -- $ 40,025 $ 40,025 Assumption of note payable in acquisition -- $ 85,864 $ 85,864 Assumption of convertible debt in acquisition -- $ 360,000 $ 360,000 Issuance of common stock for convertible debt (148,628) $ (360,000) $ (1,094,918) The accompanying notes are an integral part of these consolidated financial statements. F-6 PARADIGM OIL & GAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the six months ended June 30, 2011 and for the periods from January 28, 2010 (inception) through June 30, 2010 and through June 30, 2011 1. UNAUDITED INFORMATION The consolidated balance sheet of Paradigm Oil & Gas, Inc. (the "Company") as of June 30, 2011, and the consolidated statements of operations for the three and six months ended June 30, 2011 and three months ended June 30, 2010 and for the periods ended from January 28, 2010 (Inception) to June 30, 2010 and through June 30, 2011 have not been audited. However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the consolidated financial position of the Company as of June 30, 2011, and the results of operations for the three and six months ended June 30, 2011. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements included in the Company's consolidated financial statements as filed on Form 10-K for the year ended December 31, 2010. BASIS OF PRESENTATION Organization Paradigm Enterprises, Inc. (the "Company") was incorporated in the state of Nevada on July 15, 2002 to engage in the acquisition, exploration and development of oil and gas properties. On February 7, 2005 the Company changed its name to Paradigm Oil and Gas, Inc. Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation. The Transaction is considered to be a reverse acquisition. The acquisition date now becomes the inception date of the Company. The Company is considered an exploration stage company, as it has not generated revenues from its operations. Reverse merger of Intergrated Oil and Gas Solutions Inc. On January 28, 2010, the Company entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired Company. Paradigm issued 42,000,000 of its $.001 par value shares common shares representing 82% of the fully-diluted shares of the Company in exchange for 100% of the Acquired Company's outstanding shares. The Acquired Company is now a 100% subsidiary of the Company. The Acquired Company holds 100% working interests in certain oil and gas leases along with certain oil and gas production equipment. The total purchase price to acquire these assets amounted to $541,539. These costs have been capitalized on the Acquired Company's books at cost as natural gas and oil properties, unproved properties. F-7 Subsidiary formed: Paradigm Integrated Technology Solutions Inc. On May 20, 2010 the Company formed Paradigm Integrated Technology Solutions Inc., as a wholly owned subsidiary to conduct business related to technologies that enhance secondary oil recovery. Going Concern These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. The Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. Inherent in the Company's business are various risks and uncertainties, including its limited operating history, historical operating losses, dependence upon strategic alliances, and the historical success rate of oil and gas exploration. Management's plan is to acquire interests in certain oil and gas properties with production and to rework existing wells to bring them on line for production. As shown in the accompanying financial statements, the Company has incurred a net loss of $2,681,163 for the period from January 28, 2010 (inception) through June 30, 2011. The Company has no revenue. The Company's future success is primarily dependent upon the existence of oil and gas in quantities which are commercially viable to produce, on properties for which the Company owns a working interest or an option to acquire an interest and/or through its successful deployment of the Company's Transportable Enhanced Oil Recovery Platform (T-EOR) and the Joint Venture Production Program. The Company's success will also be dependent upon its ability to raise sufficient capital to fund its rework and exploration programs and, to exploit the discovery on a timely and cost-effective basis. 2. RECENT ACCOUNTING PRONOUNCEMENTS During the period ended June 30, 2011, there were several new accounting pronouncements issued by the Financial Accounting Standards Board (FASB). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial position or operating results. The Company will monitor these emerging issues to assess any potential future impact on its consolidated financial statements. F-8 3. OIL AND GAS INTERESTS The Oil and Gas Interests are accounted for on a consolidated basis as follows; June 30, 2011 ------------- Chilson Property Acquisition cost January 28, 2010 $ 121,774 Cost of work program 21,350 ------------- $ 143,124 ------------- Lett Finlay Property Acquisition cost January 28, 2010 $ 308,708 ------------- $ 308,708 ------------- Lumpkin Property Acquisition cost January 28, 2010 $ 111,057 ------------- $ 111,057 ------------- Chilson B Acquisition cost June 30, 2010 $ 17,977 ------------- $ 17,977 ------------- Corsicana Acquisition cost June 22, 2010 $ 20,700 ------------- $ 20,700 ------------- Todd Creek Property Acquisition cost $ 298,631 Cash call 52,102 Refund (17,022) Written off (50,000) Impairment expense (283,711) ------------- $ - ------------- Hillsprings Property Acquisition cost $ 207,383 Impairment expense (207,383) ------------- $ - ------------- Sawn Lake Property Farmout and option agreement $ 152,423 Impairment expense (152,423) ------------- Total Oil and Gas Interests $ 601,566 ============= F-9 4. SHORT TERM CONVERTIBLE NOTES The Company has entered into a series of Short Term Convertible Notes bearing annual interest of 8% which mature 180 days after the issue date (maturity date). The note plus interest can be converted in whole or in part to common shares at the holder's option at the later of the maturity date or the default date. The Conversion price is calculated as 55% of the market price which is determined by averaging the lowest 3 day closing price over the last 10 trading day period ending one trading day prior to the day the conversion notice was sent by facsimile. If the note plus interest is not paid or converted on the maturity, then default interest begins to accrue on the whole amount bearing annual interest of 22%. Conversion Price During Major Announcements ------------------------------------------- In the event the Company (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Company is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Company or (ii) any person, group or entity (including the Company) publicly announces a tender offer to purchase 50% or more of the Company's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth above. For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this paragraph has been made, the date upon which the Company (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this paragraph to become operative. The Company may prepay the note plus accrued interest at any time after 91 days after the issue date and ending up to 180 days after the issue date. The total amount calculated to be prepaid will bear an additional charge of 75% of the calculated prepaid amount. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the notes (based on the Conversion Price of the Notes in effect from time to time). Outstanding Convertible at Note June 30, Issued 2011 ------------- ------------- Issue Date October 6, 2010 $ 50,000 $ --- November 18, 2010 40,000 --- December 20, 2010 52,500 20,000 January 28, 2011 32,500 32,500 March 9, 2011 25,000 25,000 April 29, 2011 32,500 32,500 June 7, 2011 32,500 32,500 ------------- ------------- $ 265,000 142,500 Accrued Interest 5,169 ------------- $ 147,669 ============= During the 2nd quarter of 2011 the Company converted the convertible notes and accrued interest dated October 6, 2010, and November 18, 2010 and partially the convertible note dated December 20, 2010. (see note 7). The Company entered into additional convertible notes dated April 29, 2011 and June 7, 2011. F-10 Failure to Deliver Common Stock Prior to Deadline. -------------------------------------------------- Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is more than three (3) business days after the Deadline, the Company shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Company fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Company by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was exchanged for a convertible note which was then converted into 243,932 common shares (see note 7). The Convertible note was to mature on June 1, 2012 and was convertible by the holder at any time. The convertible note carried a 5% annual interest rate. 5. SHORT TERM LOAN On March 9, 2011 the Company entered into a short term merchant account loan agreement for $15,000. The loan is secured by future sales/receivables and carries an annual interest of rate of 15%. Daily payments are made against the amount outstanding at a rate of up to $460 per day. As of June 30, 2011, $ 4,110 was outstanding. 6. NOTE PAYABLE The Company is indebted under a note payable to 1132559 Alberta Ltd, bearing annual interest of 7% and secured by 100% of the first proceeds of production under the Farmout and Option Agreement for the Sawn Lake Property. There are no fixed repayment terms. The Company may be in default of this note as more fully explained in note 11 of the December 31, 2010 financial statements. June 30, 2011 ------------- 1132559 Alberta Ltd $ 101,609 ------------- $ 101,609 ============= 7. SHAREHOLDERS' EQUITY Common Stock a) Effective January 28, 2010, Paradigm Oil & Gas Inc. (the "Company"), a Nevada corporation, entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 Par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired company The Acquired company is now a 100% subsidiary of the Company. Prior to the Acquisition, there were 188,058 shares of the Company's Common Stock outstanding. Immediately following the Acquisition, there are 42,188,058 shares of Common Stock outstanding. On the effective date of the acquisition, additional paid in Capital was increased by $ 8,358,000. This was adjusted by $ 8,400,000 to record the basis in Intergrated Oil and Gas Solutions Inc. An Expense of $ 633,279 was then recorded to recognize the assumption of Paradigms' liabilities assumed at the time of the acquisition. F-11 b) On February 2, 2010 the convertible note payable of $ 360,000 was converted into common shares at $ .04 per share. 9,000,000 shares were issued to the convertible debenture holders. On the effective date of the conversion, additional paid in capital was increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the conversion to the book value of the convertible debenture. c) On September 28, 2010 a convertible note in the amount of $ 734,918 was converted at $ 0.35 per share for a total of 2,099,768 Common Shares at a par value of $ 2,100. Additional paid in capital increased by $ 690,823. The share price was $ 0.33 on the closing of this transaction, as a result a gain of $ 41,995 was recognized and recorded as a Gain from issued shares on debt conversion. d) During the 2nd quarter period from April 25, 2011 to June 30, 2011 convertible notes were converted into 1,271,382 common shares as follows:

F-12 e) The $22,500 convertible debenture entered into on May 23, 2011 was converted into 243,932 common shares as follows:

As of June 30, 2011 there were 54,803,140 Common Shares outstanding. 8. RELATED PARTY TRANSACTIONS On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was exchanged for a convertible note which was then converted into 243,932 common shares. Additional loans of $ 8,000 were also issued to the Company. Two Shareholders of the Company have loans outstanding to the Company of $ 62,046 at June 30, 2011. The loans are interest free and have no formal terms of repayment. A related party to the Company has an amount due to the Company of $ 60,264 at June 30, 2011. 9. CONTRACTUAL OBLIGATIONS AND COMMITMENTS The Company is in default of its obligation to Compton Petroleum in respect to the Todd Creek Property, as it has not paid the full share of costs of drilling or to complete the well. As a result the Company has received no further information about the Todd Creek project. The Company does not expect to receive further information from the operator until all outstanding participation costs have been paid. In conjunction with the year end audit in 2007 and 2008, 1132559 Alberta Ltd alleged that the Company was in default of the Sawn Lake Property Lake farmout agreement over which their note payable (refer to note 11) is secured by 100% of the first proceeds of production of the Sawn Lake Property. Accordingly 1132559 Alberta Ltd position is that they own the Sawn Lake Property Lake farmout agreement. The Company does not believe there has been any default and maintains its ownership in the Sawn Lake farmout agreement. F-13 Item 2. Management's Discussion and Analysis of Financial Condition and Results ------------------------------------------------------------------------------- of Operations ------------- This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like: "believe", "expect", "estimate", "anticipate", "intend", "project" and similar expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as "may", "will", "should", "plans", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. Any references to "CA$" refer to Canadian Dollars and all references to "common shares" refer to the common shares in our capital stock. As used in this annual report, the terms "we", "us", "our", and "Paradigm" mean Paradigm Oil And Gas, Inc., unless otherwise indicated. Paradigm is an exploration stage company. There is no assurance that commercially viable reserves of oil and/or gas exist on our farmin lands or that commercially viable mineral deposits exist on the claims that we have under option. Some further drilling and exploration will be required before a final evaluation as to the economic and legal feasibility of our properties can be determined. OVERVIEW -------- We were incorporated as Paradigm Enterprises, Inc. in the state of Nevada on July 15, 2002 and established a year end of December 31. On February 7, 2005 we changed our name from Paradigm Enterprises, Inc. to Paradigm Oil And Gas, Inc. From July, 2002 to December, 2004, we were in the business of the exploration and development of a mineral property in British Columbia. The Company decided to abandon its interest in this mineral property and on August 26, 2005. We have not spent anything on research and development activities. On December 06, 2004, we entered into two participation proposals with Win Energy Corporation. On June 18, 2005, the Company received a payment of $147,258 from Win for the sale of 50% of the Company's 10% interest in the Todd Creek Property and currently holds a 5% interest in the project. On February 15, 2005, Paradigm entered into a Farmout and Option Agreement with 1132559 Alberta Ltd., a private Alberta corporation whereby Paradigm will farm in to a 5% interest in a test well at Township 91, Range 13 W5M, SE Section 36, and a similar interest in an additional option well at Township 91, Range 12 W5M, NW Section 29 in the Sawn Lake, Alberta, oil and gas project. In March 2006, a well was drilled in Section 36. The well is not producing at this time and Paradigm is waiting for further information from the operator on their plan of operations. Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 Par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired Company . The Transaction is considered to be a reverse acquisition. The acquisition date now becomes the inception date of the Company. The Acquired Company is now a 100% subsidiary of Paradigm. 2 The Acquired Company holds 100% working interests in certain oil and gas leases along with certain Oil and Gas production equipment. The costs to acquire these assets have amounted to $541,539. These costs have been capitalized on the acquired company's books at cost as Oil and Gas Properties under Lease. On May 20, 2010 the Company formed Paradigm Integrated Technology Solutions Inc., as a wholly owned subsidiary to conduct business related to technologies that enhance secondary oil recovery. On May 20, 2010 the Company's subsidiary, Paradigm Integrated Technology Solutions Inc., entered into a Transfer of Technology and Know How Agreement for the world wide marketing rights for the Transportable Enhanced Oil Recovery Platform. Under the terms of the agreement the Company agreed to purchase the first system which includes the exclusive ownership in the related technology and know how. $ 50,000 was paid on signing the agreement and $50,000 was to be paid within thirty days of signing the agreement towards the purchase of the first system and an additional $ 50,000 on delivery of the equipment. To date the Company has paid $ 161,471 towards this program and has taken delivery of the first system. In addition, the purchase of the next 10 systems carry an additional $ 10,000 charge per system above the list purchase price of the system for a total of $ 100,000, however the Company is under no obligation to purchase further systems. The first system was received on September 29, 2010 and has been fully tested and is now commissioned for production use which is occurring in the 4th quarter. On June 22, 2010 the Company's subsidiary, Intergrated Oil and Gas Solutions Inc. acquired the Corsicana lease. The cost to acquire this lease amounted to $ 20,700 for a 50% working interest in the 80% Net Revenue Interest. The lease is located in Navarro County, Texas. On June 30, 2010 the Company's subsidiary, Intergrated Oil and Gas Solutions Inc. acquired 2 additional Chilson leases, known as Chilson B. The cost to acquire these leases amounted to $ 17,977 for a 100% working interest in the 81% Net Revenue Interest. The new Chilson leases are adjacent to the existing Chilson lease the Company has which are all located in Wichita County, Texas. We have not been involved in any bankruptcy, receivership or similar proceeding nor has there been any material reclassification or merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of business other than the acquisition mentioned above on January 28, 2010. OUR CURRENT BUSINESS -------------------- PETROLEUM EXPLORATION, DEVELOPMENT AND RECOVERY Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 Par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired company. The Acquired company is now a 100% subsidiary of the Company. The Acquired Company holds 100% working interests in certain oil and gas leases along with certain Oil and Gas production equipment. The costs to acquire these assets have amounted to $541,538.90. These costs have been capitalized on the acquired company's books at cost as Oil and Gas Properties under Lease. The oil and gas properties are comprised of 4 leases totaling approximately nine hundred and thirty four (934) net mineral Acres, all located in the State of Texas, USA. 692 acres in Kaufman County, carry a 80% Net Revenue Interest, 40 acres located in the County of Wood, carry a 80% Net Revenue Interest, 122.37 acres located in the County of Henderson carry a 81.25% Net Revenue Interest and 80 acres in the County of Wichita carry a 75% Net Revenue Interest. Combined there are a total of 9 existing previously producing wells and available spacing to support the drilling of approximately 30 new wells in the 3800' to 9000' range and approximately 50 new wells in the 800' to 1,800' range. On June 22, 2010 the Company's subsidiary, Intergrated Oil and Gas Solutions Inc. acquired the Corsicana lease. The cost to acquire this lease amounted to $ 20,700 for a 50% working interest in the 80% Net Revenue Interest. The lease has 9 previously producing wells and have spacing over a total of 60 acres to support the potential of 17 new wells to depths of up to 2000 feet. The Corsicana lease is located in Navarro County, Texas. 3 On June 25, 2010 the Company's subsidiary, Intergrated Oil and Gas Solutions Inc. acquired 2 additional Chilson leases, known as Chilson B. The cost to acquire these leases amounted to $ 17,977 for a 100% working interest in the 81% Net Revenue Interest. Combined the 2 leases have 5 previously producing wells and have spacing over a total of 154 acres to support the potential of 37 new wells to depths of up to 2000 feet. The new Chilson leases are adjacent to the existing Chilson lease the Company has which are all located in Wichita County, Texas. On May 20, 2010 the Company's subsidiary, Paradigm Integrated Technology Solutions Inc., entered into a Transfer of Technology and Know How Agreement for the world wide marketing rights for the Transportable Enhanced Oil Recovery Platform. Under the terms of the agreement the Company agreed to purchase the first system which includes the exclusive ownership in the related technology and know how. $ 50,000 was paid on signing the agreement and $50,000 was to be paid within thirty days of signing the agreement towards the purchase of the first system and an additional $ 50,000 on delivery of the equipment. To date the Company has paid $ 196,124 towards this program and has taken delivery of the first system. In addition, the purchase of the next 10 systems carry an additional $ 10,000 charge per system above the list purchase price of the system for a total of $ 100,000, however the Company is under no obligation to purchase further systems. The first system was received on September 29, 2010 and has been fully tested and is now commissioned for production and is currently being demonstrated for commercial use. The Transportable Enhanced Oil Recovery Platform is a portable production system than can be easily and economically moved from well to well and quickly installed to remove Oil from the existing well bore. This allows for quick Oil recovery without the time and expense currently required to implement the infrastructure need to produce Oil today. By utilizing this system, wells can be produced from immediately and monitored as to flow rates to determine which wells are suitable for making additional investment for a more permanent operational infastructure. The company has begun to utilize this technology on it's existing properties and is in the process to introduce this technology to the market place. BUSINESS PRIOR TO ACQUISITION OF JANUARY 28, 2010 On December 06, 2004, we entered into two participation proposal agreements with Win Energy Corporation. HILLSPRINGS PROPERTY Paradigm paid $207,383 to Win to acquire a 10% working interest in one section (640 acres) in the Hillsprings Property (Township 10, Range 34,Section 29 W4), Alberta, Canada. It is now anticipated that a test well will be drilled on our property interest in 2007. TODD CREEK PROPERTY Paradigm paid $298,631 to Win to acquire a 10% working interest in 13.75 sections (8800 acres) in the Todd Creek Property, Alberta, Canada. In June, 2005, we sold 50% of our interest back to Win for net proceeds of $127,349 (value of the interest less certain unpaid operating expenses) as of the date of this report, Paradigm holds a 5% in the Todd Creek property and has paid a net cost of $149,316 to acquire its interest. During the second quarter of 2005, a well located in Todd Creek property was drilled to a specifically targeted depth. This well is located in 13-28-9-2W5 in Alberta, Canada and we will refer to this well as the "13-28 well." The 13-28 well was evaluated and tested. The operator encountered gas reservoirs and concluded that this well is a potential gas well. This well was tied into a newly constructed gas processing plant and production commenced in September 2006. To date we have received no revenue from this well due to the fact we owe Win Energy drilling costs. In January 2007, we completed the drilling of a second well in the Todd Creek Prospect located in 13-33-8-2 in Alberta, Canada and we will refer to this well as the "13-33 well." Reports by other farmin partners indicate that no economic hydrocarbons are present. SAWN LAKE PROJECT On February 15, 2005 Paradigm entered into a Farmout and Option Agreement with 1132559 Alberta Ltd., a private Alberta corporation whereby Paradigm will farm in to a 5% interest in a test well at Township 91, Range 13 Section 36 W5M SE, and a similar interest in an additional option well at Township 91, Range 12, Section 29 W5M NW in the Sawn Lake, Alberta exploratory oil and gas project. Paradigm will also have a right of first refusal to participate in each drilling spacing unit through a farm-in on the lands held by Deep Well Oil and Gas, Inc. in the Sawn Lake project in which 1132559 Alberta Ltd has an interest. The final terms of the option for the additional DSUs are yet to be agreed upon by both parties. Paradigm will earn 100% of the farmor's interest (an undivided 10% interest in the drilling spacing unit) before payout (BPO), reverting to 50% of the farmor's interest (an undivided 5% interest) after payout (APO). Paradigm will have then earned a 5% interest in the remaining wells to be drilled in that drilling spacing unit. 4 In order to earn its interest in the initial test well, total costs of the test well, estimated to be CA $216,489, up to the point of commercial oil sales are to be borne one hundred percent (100%) by Paradigm. Total costs, estimated to be $173,200, of the option well up to the point of commercial oil sales are also to be borne one hundred percent (100%) by Paradigm in order to earn its undivided interest. Payment of the full AFE amount is due upon invoicing of Paradigm by the operator (1132559 Alberta Ltd.) for each of the test and option wells. In March 2006, a well was drilled in Section 36. The well is not producing at this time and Paradigm is waiting for further information from the operator on their plan of operations. ITEM 2. DESCRIPTION OF PROPERTY PROPERTY ACQUIRED BY ACQUISITION OF INTERGRATED OIL AND GAS SOLUTIONS INC. ON JANUARY 28, 2010 The Acquired Company holds 100% working interests in certain oil and gas leases along with certain Oil and Gas production equipment. The costs to acquire these assets have amounted to $541,539. These costs have been capitalized on the acquired company's books at cost as Natural gas and oil properties, Unproved properties. The oil and gas properties are comprised of 4 leases totaling approximately nine hundred and thirty four (934) net mineral Acres, all located in the State of Texas, USA. And are summarized as follows; Chilson Property, 80 acres in the County of Wichita carry a 87.5% Net Revenue Interest. There are 7 existing wells on the property that have previously produced. Approximately 69 new wells can be drilled to depths that vary between 800 to 5,000 feet. Lett Finley Property, Consists of 2 leases-40 acres located in the County of Wood, carry a 75% Net Revenue Interest, and 122.37 acres located in the County of Henderson carry a 81.25% Net Revenue Interest There are 2 existing wells on the properties that have previously produced. 2 new offset wells can be drilled to 9,500 feet and another 7 infield wells can be drilled. Lumpkin Property 692 acres in Kaufman County, carry a 80% Net Revenue Interest. This lease is considered an exploration field with existing production nearby. 17 new wells can be drilled to 9,000 feet. On June 22, 2010 the Company's subsidiary, Intergrated Oil and Gas Solutions Inc. acquired the Corsicana lease. The cost to acquire this lease amounted to $ 20,700 for a 50% working interest in the 80% Net Revenue Interest. The lease has 9 previously producing wells and have spacing over a total of 60 acres to support the potential of 17 new wells to depths of up to 2000 feet. The Corsicana lease is located in Navarro County, Texas. On June 30, 2010 the Company's subsidiary, Intergrated Oil and Gas Solutions Inc. acquired 2 additional Chilson leases, known as Chilson B. The cost to acquire these leases amounted to $ 17,977 for a 100% working interest in the 81% Net Revenue Interest. Combined the 2 leases have 5 previously producing wells and have spacing over a total of 154 acres to support the potential of 37 new wells to depths of up to 2000 feet. The new Chilson leases are adjacent to the existing Chilson lease the Company has which are all located in Wichita County, Texas. PETROLEUM PROPERTIES PRIOR TO JANUARY 28, 2010 ---------------------------------------------- HILLSPRINGS In December 2004, we entered into a participation proposal with Compton Corporation whereby we could acquire an interest in the Hillsprings exploratory oil and gas drilling project about 100 miles south of Calgary in the Alberta foothills for the payment of a total of $207,383 excluding drilling costs. We acquired a 5% interest in one section (640 acres) of land located at Section 34, Township 5, Range 29 W4M. In 2008, due to the low prices for natural gas and the lack of sustainable production from the property we took an impairment charge against the Todd Creek property and wrote the value down to 0. 5 TODD In December 2004, we entered into a second participation proposal with Compton whereby we could acquire an interest in the Todd exploratory oil and gas drilling project also about 100 miles south of Calgary in the foothills of the Rocky Mountains for the payment of a total of $298,631 including drilling costs. On January 25, 2005, we concluded final payments and finalized the agreements whereby we acquired a 10% interest in 13.75 sections (8800 acres) of land located at Section 16, Township 9, Range 2 W5 and an option to December 31, 2006 to earn a 7.5% interest in an additional seven sections 4480 acres) in the surrounding area by contributing 10% of the drilling costs. Contributions to each well drilled will earn an interest in two sections. On June 18, 2005, the Corporation received a net payment of CA $117,442.50 from Compton Corporation for the sale of 50% of Paradigm's 10% interest in the Todd Creek Oil and Gas Property to Win, the original vendor. Paradigm now holds a 5% interest in the Todd Creek 13-28 well. On June 27, 2005, we announced that drilling of the Todd Creek Well had been moved into the final completion stage which may take up to 50 days to complete. The operators have placed the well on "tight hole" status and further news will be released upon completion of testing. As of the date of this report, that status continues; we will release further information as it comes available. "Tight hole" is a petroleum industry term used colloquially in which the performance data of a well is closely guarded. During this period, all information about the well - depth, formations, drilling rates, logs and other pertinent data - is not shared or made public. We have not been given any further information regarding the Todd Creek property as we are delinquent in our payments to Compton. A test well drilled in Section 16, Township 9, Range 2 W5 is included in the transaction, the results of which have not been released. Further details will be provided once the tight hole status has been lifted. The next proposed well will likely be drilled at location 13-28-9-2W5 with anticipated production from two reservoirs. Estimates indicate initial potential daily production could reach 400 barrels of oil equivalent per day based upon the flow rates from adjacent and similarly structured wells. It is anticipated that it will require more than 20 such wells to fully exploit the reservoirs in the project area. Producing wells in the area typically are of long life with minimal declines. The gas is sweet with minimal sulfur or CO2 and generally receives excellent prices. Existing wells on the Todd Creek prospect typically produce at depths between 1,600 and 1,900 meters. We are delinquent in our payments to Compton. Until we are current on our payments we will not receive any further information regarding the property. In 2008, due to the low prices for natural gas and the lack of sustainable production from the property we took an impairment charge against the Todd Creek property and wrote the value down to 0. SAWN LAKE On February 18, 2005, we announced that we have farmed into a 10% interest in a major heavy oil exploratory project located the Sawn Lake area of the Peace River region of Alberta in a project owned by 1132559 Alta. Ltd. The general terms of the farm-in agreement is that Paradigm will pay 10% to earn the full 10% interest until payout, and will retain 5% interest after payout. Paradigm's participation in any subsequent wells in that Drilling Spacing Unit (DSU) will be at 5% to earn an equal 5% interest. The first well will be drilled on DSU located at Township 91, Range 13 W5M, SE Section 36. Paradigm has also negotiated participation in another well in Township 91, Range 12 W5M, NW Section 29 under the same terms. Furthermore, Paradigm will have the option to participate in all future 1132559 Alta. Ltd.'s interests in Sawn Lake wells under terms to be negotiated. Other operators targeting the deeper Slave Point Formation have previously drilled much of the land. Because of the earlier extensive exploration for deeper light oil, Sawn Lake project is able to benefit from data collected by others pertaining to the drilling of 67 wells that penetrated and partially delineated the Bluesky Formation heavy oil reservoir. This acquisition is in line and consistent with Paradigm's investment strategy to acquire small interests in a variety of domestic and international upstream oil and gas projects to develop a high impact and diversified portfolio. Due to the ongoing dispute the cost of defending the Companies rights to the Sawn Lake property may cost more than the value of the property. In 2008 the Company took an impairment charge against the Sawn Lake property and wrote the value down to 0. 6 Financial Condition and Changes in Financial Condition The Company had no revenues from the sale of oil and gas in the six months ended, June 30, 2011. Consolidated operating expenses for the 2nd quarter ended June 30, 2011 amounted $ 80,529 compared to $ 157,505 for the prior year's 2nd quarter. The reduction in consolidated operating expenses was primarily due to a reduction in; Field labor for approximately $14,000, Lease costs for $12,000, Maintenance for $4,500, Utilities for $5,000, Advertising $6,700, Legal for $30,000, Management fees for $4,000 and Travel for $7,000. The reduction in expenses over the prior year is attributable to the a reduction in activity the Company is experiencing with the work programs on the existing properties as the company awaits for approval from the Railroad Commission for commercial use of the Transportable Production System, and resulting cash flow and additional financing to support the Company's growth. Overall field operation expenses for the 2nd quarter totaled $22,664 compared to $56,148 in prior years 2nd quarter. June 30, 2011 2nd quarter general expenses totaled $57,865 compared to $101,357 for prior year's 2nd quarter ended June 30, 2010. . Interest charges were reversed in the quarter due to a over accrual of interest charges on convertible notes in the prior quarters. Legal fees were reduced in the June 30, 2011 2nd quarter compared to the prior year's 2nd quarter due to costs associated with lasts years reverse merger and start up of operations. All other costs were in line with the current level of activity at the company and consistent with the prior quarter. Other Income/(Expense) Items During the 2nd quarter ended June 30, 2011, and 2010 2nd quarter there were no Other Income/(Expense) items, however in the prior year's first quarter period the following items occurred. Expense on Assumption of Liabilities on Acquisition On a year to date basis there was an expense on assumption of liabilities on acquisition which was booked in the period ended March 31, 2010. On the effective date of the acquisition, additional paid in capital was increased by $ 8,358,000.This was offset by $ 8,400,000 to record the basis in Intergrated Oil and Gas Solutions Inc. An expense of $ 633,279 was then recorded to recognize the assumption of liabilities on the acquisition. Loss from share issue on debt conversion On the effective date of the conversion, additional paid in Capital was increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the conversion to the book value of the convertible debenture. These charges were booked in the period ended March 31, 2010. Net Loss for the 2nd quarter ended June 30, 2011 amounted to $80,529 compared to a Net Loss of $157,505 for the priors years 2nd quarter and on a year to date basis the net loss for the six months ended June 30, 2011 was $203,456 compared to a net loss $2,283,047 for the prior year's period ended June 30, 2010. 7 Current Assets As of June 30, 2011 cash was recorded at $24,177. Employee Advances were $7,549 to cover contractors and employees performing field services. During the 2nd quarter, a note receivable was increased by $3,000 to $ 28,050 that was set up for work that was performed on the Corsicana property and lease acquisition which is owing to the Company from the other working interest owner on the property, and the related party receivable was increased to $60,264 for amounts advanced for acquisitions and work performed. The Bond RRC in the amount of $ 52,500 represents funds previously sent to the Texas Railroad Commission for the prepaid operating bond. With the purchase of one of the leases, there was existing Oil in the storage tank on the lease and additional oil was collected from a test run of the Transportable Enhanced Oil Recovery Platform which amounted to $ 7,823 which has been accounted for as inventory. Production Equipment $ 196,124 During the 2010, 2nd quarter, the Company's subsidiary, Paradigm Integrated Technology Solutions Inc., entered into a Transfer of Technology and Know How Agreement for the world wide marketing rights for the Transportable Enhanced Oil Recovery Platform. Under the terms of the agreement the Company agreed to purchase the first system which includes the exclusive ownership in the related technology and know how. $ 50,000 was paid on signing the agreement and $50,000 was to be paid within thirty days of signing the agreement towards the purchase of the first system and an additional $ 50,000 on delivery of the equipment. To date the Company has paid $ 161,471 towards this program and has taken delivery of the first system. In addition, the purchase of the next 10 systems carry an additional $ 10,000 charge per system above the list purchase price of the system for a total of $ 100,000, however the Company is under no obligation to purchase further systems. The first system was received on September 29, 2010 and has been fully tested and is now commissioned for production use. The system is now being demonstrated for commercial use and is being presented to Texas Railroad Commission for commercial use approval. Natural Gas and Oil Properties Natural gas and oil properties remained at $ 601,566. Liquidity and Capital Resources For the period ended June 30, 2011 we have yet to generate any revenues from our business operations. Since inception, we have received loans or used our common stock to raise money for our optioned mineral and petroleum acquisitions, for corporate expenses, acquisitions and to repay outstanding indebtedness. Net cash provided by financing activities for the 2nd quarter ended June 30, 2011 amounted $85,500 all provided by way of $77,500 in convertible notes payable and $8,000 in shareholder loans. On a year to date basis for the first six months ended June 30, 2011 at total of $143,000 was provided by way of $125,000 in convertible notes, $8,000 in shareholder loans and $10,000 in a short term merchant loan. As of June 30, 2011 our total assets which consist of cash, advances, inventory, a note receivable and related party receivable, furniture, production equipment and oil and gas properties and a bond with the Texas Railroad Commission amounted to $998,232 and our total liabilities reduced to $507,470 primarily due to conversion of notes into common shares of the company. Working capital stood at $(379,597). Management continues to source additional financing and analyze Oil production acquisitions to support the Company's cash requirements during the Company's development phase. There are no assurances that the Company will be successful with these initiatives. For the quarter ended June 30, 2011 our net loss was $(80,529) or $ (0.00) per share. The loss per share was based on a period weighted average of 53,287,826 common shares outstanding. On a year to date basis for the six months ended the net loss was $(203,456) or $(0.00). The loss per share was based on a period weighted average of 53,287,826 common shares outstanding. 8 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to the impact of market fluctuations associated with commodity prices and foreign currency. At this time, the Company has not entered into any hedging agreements due to limited value of transactions in foreign currency. ITEM 4. CONTROLS AND PROCEDURES. The Company maintains "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Act of 1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in reports it files or submits 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 the Company's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The management of the Company has designed and evaluated the Company's disclosure controls and procedures. Management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The Company's management, including its principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of June 30, 2011. Based on that evaluation, the Company's President and Chief Executive Officer concluded that the Company's disclosure controls and procedures, as of the end of the period ended June 30, 2011 covered by this Form 10-Q, were effective. CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING None. PART II - OTHER INFORMATION Item 1. Legal Proceedings. We are currently not a party to any pending legal proceedings and no such actions by, or to the best of our knowledge, against us have been threatened. Item 1A. Risk Factors IN ADDITION TO THE OTHER INFORMATION IN THIS REPORT, THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING OUR BUSINESS AND PROSPECTS, CONDITIONS EXIST WHICH CAUSE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN. Market for Our Products and Services The availability of a ready market for oil and gas, and the prices of such oil and gas, depends upon a number of factors, which are beyond our control. These include, among other things: o the level of domestic production; o actions taken by foreign oil and gas producing nations; o the availability of pipelines with adequate capacity; o the availability and marketing of other competitive fuels; 9 o fluctuating and seasonal demand for oil, gas and refined products; and o the extent of governmental regulation and taxation (under both present and future legislation) of the production, importation, refining, transportation, pricing, use and allocation of oil, gas, refined products and alternative fuels. In view of the many uncertainties affecting the supply and demand for crude oil, gas and refined petroleum products, it is not possible to predict accurately the prices or marketability of the gas and oil produced for sale. Competition The oil producing properties and exploratory drilling prospects, and gas industry is highly competitive in all its phases. Properties in which we have an interest will encounter strong competition from many other oil and gas producers, including many that possess substantial financial resources, in acquiring economically desirable producing properties and exploratory drilling prospects, and in obtaining equipment and labor to operate and maintain their properties. Existing and Probable Governmental Regulation We monitor and comply with current government regulations that affect our activities, although our operations may be adversely affected by changes in government policy, regulations or taxation. There can be no assurance that we will be able to obtain all of the necessary licenses and permits that may be required to carry out our exploration and development programs. It is not expected that any of these controls or regulations will affect our operations in a manner materially different than they would affect other natural gas and oil companies operating in the areas in which we operate. Canadian Government Regulation and US State of Texas Regulation The natural gas and oil industry is subject to extensive controls and regulations imposed by various levels of government. It is not expected that any of these controls or regulations will affect our operations in a manner materially different than they would affect other natural gas and oil companies of similar size. Pricing and Marketing Natural Gas In the United States in the State of Texas, we are focused on Oil production. Oil is sold to refineries at spot prices. In Canada, the price of natural gas sold in interprovincial and international trade is determined by negotiation between buyers and sellers. Natural gas exported from Canada is subject to regulation by the NEB and the Government of Canada. Exporters are free to negotiate prices and other terms with purchasers, provided that the export contracts continue to meet certain criteria prescribed by the NEB and the Government of Canada. Natural gas exports for a term of less than two years or for a term of two to 20 years (in quantities of not more than 30,000 m3/day), must be made pursuant to an NEB order. Any natural gas export to be made pursuant to a contract of longer duration (to a maximum of 25 years) or a larger quantity requires an exporter to obtain an export license from the NEB and the issue of such a license requires the approval of the Governor in Council. The government of Alberta also regulates the volume of natural gas that may be removed from the province for consumption elsewhere based on such factors as reserve availability, transportation arrangements and market considerations. Royalties and Incentives In Canada in addition to federal regulation, each province has legislation and regulations that govern land tenure, royalties, production rates, environmental protection and other matters. The royalty regime is a significant factor in the profitability of natural gas and oil production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the mineral owner and the lessee. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, and the rate of royalties payable generally depends in part on prescribed reference prices, well productivity, geographical location, field discovery date and the type or quality of the petroleum product produced. In the United States in the State of Texas, mineral rights owners usually have a royalty paid to them which range from 5-25% of net revenue. 10 Land Tenure Crude natural gas and oil located in the western provinces is owned predominantly by the respective provincial governments. Provincial governments grant rights to explore for and produce natural gas and oil pursuant to leases, licenses and permits for varying terms from two years and on conditions set forth in provincial legislation including requirements to perform specific work or make payments. Natural gas and oil located in such provinces can also be privately owned and rights to explore for and produce such natural gas and oil are granted by lease on such terms and conditions as may be negotiated. In the United States in the State of Texas, mineral owners sell and lease those rights to Operators who provide the infrastructure and support to develop and produce from the property. Leases usually remain in effect as long as work is being performed on the property or they are held by production. Compliance with Environmental Laws We did not incur any costs in connection with the compliance with any federal, state, or local environmental laws. However, costs could occur at any time through industrial accident or in connection with a terrorist act or a new project. Costs could extend into the millions of dollars for which we could be totally liable. In the event of liability, we would be entitled to contribution from other owners so that our percentage share of a particular project would be the percentage share of our liability on that project. However, other owners may not be willing or able to share in the cost of the liability. Even if liability is limited to our percentage share, any significant liability would wipe out our assets and resources. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None Item 3. Defaults Upon Senior Securities. None Item 4. Submission of Matters to a Vote of Security Holders. None Item 5. Other Information. None Item 6. Exhibits. Exhibit Number Exhibit Title 31.1 Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.ins XBRL Instance 101.xsd XBRL Schema 101.cal XBRL Calculation 101.def XBRL Definition 101.lab XBRL Label 101.pre XBRL Presentation 11 SIGNATURES In accordance with the requirements of Section Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Paradigm Oil & Gas, Inc. By /s/ Ron Polli --------------------------- Ron Polli President and Chief Executive Officer Date: August 22, 2011 By: /s/ Brian Kennedy --------------------------- Brian Kennedy Chief Financial Officer 12 -------------------------------------------------------------------------------- EX-31.1 2 paradigmoil10qexh311063011.txt ================================================================================ EXHIBIT 31.1 CERTIFICATIONS I, Ron Polli, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Paradigm Oil And Gas, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting; and Date: August 22, 2011 /s/ "Ron Polli" Ron Polli Chief Executive Officer -------------------------------------------------------------------------------- EX-31.2 3 paradigmoil10qexh312063011.txt ================================================================================ EXHIBIT 31.2 CERTIFICATIONS I, Brian Kennedy, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Paradigm Oil And Gas, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting; and Date: August 22, 2011 /s/ "Brian Kennedy" Brian Kennedy Chief Financial Officer -------------------------------------------------------------------------------- EX-32.1 4 paradigmoil10qexh321063011.txt ================================================================================ Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Paradigm Oil And Gas Inc. (the "Company") on Form 10-Q for the three months ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Report"), I, Ron Polli, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 22, 2011 /s/ "Ron Polli" Ron Polli Chief Executive Officer -------------------------------------------------------------------------------- EX-32.2 5 paradigmoil10qexh322063011.txt ================================================================================ Exhibit 32.2 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Paradigm Oil And Gas Inc. (the "Company") on Form 10-Q for the three months ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Report"), I, Brian Kennedy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 22, 2011 /s/ "Brian Kennedy" Brian Kennedy Chief Financial Officer -------------------------------------------------------------------------------- EX-101.INS 6 pdgo-20110630.xml 10-Q 2011-06-30 false PARADIGM OIL & GAS, INC. 0001191354 --12-31 54803140 Smaller Reporting Company Yes No No 2011 Q2

24177

68644

7559

7059

28050

25050

60264

45807

7823

127873

154383

20169 22605

196124

601566

817859

820295

52500

998232

1027178

192036

168210

62046

76546

147669

143885

4110

101609

96066

507470

484707

507470

484707

54804

53288

3138786

2981174

-2681163

-2477707

-21665

-14284

490762

542471

998232

1027178

4183 2436

0.001

10000000

0.001

300000000

54803140

53287826

16063

30041

54201

30041

128042

1319

13613

3416

13613

18201

1508 1508 11508

2190

6683

14553

9183

17602

132

240

409

692

1861

1774 3795 17817

-322

5571

940

5571

6511

22664

56148

78822

59100

201542

4001 12845 8236 15345 68161

9433

19488

32454

6698

6956

611

1218

2436

4183

1700

216

782

681

782

1463

-372

1145

9537

2345

15642

3000 4684 14559

833

30692

833

49750

27448

22500

26847

37500

46265

129802

116

1386

762

1496

2467

338 4943 338 5677 13970 2157

8073

4921

11759

4958

69946

1547

3797

6047

10500

3288 3722 4476 4900 16747

-2050

-1494

-3863

-2109

-9257

776 7517 3323 8795 19596

848

2380

1290

3327

57865

101357

124634

150668

448337

-80529

-157505

-203456

-209768

-649879

633279

1440000 1398005

-80529

-157505

-203456

-2283047

-2681163

-0.00

-0.05

53287826

50462262

53287826

50462262

-7381

3872

-21665

-210837

-2279175

-2702828

-190520

-207423

-635196

500

3087

7559

6258

7823

-7348

-13423

19552

10356

31479

-164120

-206412

-605676

3000

25050

28050

14457

60264

52500

1178

24352

105183

196124

60027

121 121

-17457

-191317

-421196

494918 734918

8000

29521

62051

17530

125000

267500

15000

10890

137110

524439

1051049

-44467

126710

24177

68644

24177

126710

-7381

-3872

-19793

147510

40025 40025 85864 85864 360000 360000

-148628

-360000

-1094918

188

541351

541539

188058

42000

8358000

8400000

42000000

-8400000

42188

499351

541539

42188058

11100

2481823

2492923

11099768

-2477707

-14284

53288

2981174

-2477707

-14284

53287826

1516

147112

148628

1515314

-203456

10500

-7381

54804

3138786

-2681163

-21665

54803140

<div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">1.   UNAUDITED INFORMATION</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The consolidated balance sheet of Paradigm Oil & Gas, Inc. (the "Company") as of</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">June 30, 2011, and the consolidated statements of operations for the three and</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">six months ended June 30, 2011 and three months ended June 30, 2010 and for the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">periods ended from January 28, 2010 (Inception) to June 30, 2010 and through</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">June 30, 2011 have not been audited. However, in the opinion of management, such</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">information includes all adjustments (consisting only of normal recurring</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">adjustments) which are necessary to properly reflect the consolidated financial</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">position of the Company as of June 30, 2011, and the results of operations for</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the three and six months ended June 30, 2011.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Certain information and notes normally included in financial statements prepared</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">in accordance with accounting principles generally accepted in the United States</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">of America have been condensed or omitted, although management believes that the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">disclosures are adequate to make the information presented not misleading.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Interim period results are not necessarily indicative of the results to be</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">achieved for an entire year. These consolidated financial statements should be</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">read in conjunction with the audited consolidated financial statements and notes</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">to the consolidated financial statements included in the Company's consolidated</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">financial statements as filed on Form 10-K for the year ended December 31, 2010.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">BASIS OF PRESENTATION</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Organization</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Paradigm Enterprises, Inc. (the "Company") was incorporated in the state of</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Nevada on July 15, 2002 to engage in the acquisition, exploration and</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">development of oil and gas properties. On February 7, 2005 the Company changed</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">its name to Paradigm Oil and Gas, Inc. Effective January 28, 2010, Paradigm Oil</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">& Gas Inc. entered into a share exchange agreement with the shareholders of</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">corporation. The Transaction is considered to be a reverse acquisition. The</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">acquisition date now becomes the inception date of the Company.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The Company is considered an exploration stage company, as it has not generated</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">revenues from its operations.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Reverse merger of Intergrated Oil and Gas Solutions Inc.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">On January 28, 2010, the Company entered into a Share exchange agreement with</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Company") in exchange for their one hundred percent (100%) interest in all of</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the capital stock of the Acquired Company.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Paradigm issued 42,000,000 of its $.001 par value shares common shares</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">representing 82% of the fully-diluted shares of the Company in exchange for 100%</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">of the Acquired Company's outstanding shares. The Acquired Company is now a 100%</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">subsidiary of the Company.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The Acquired Company holds 100% working interests in certain oil and gas leases</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">along with certain oil and gas production equipment. The total purchase price to</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">acquire these assets amounted to $541,539. These costs have been capitalized on</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the Acquired Company's books at cost as natural gas and oil properties, unproved</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">properties.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Subsidiary formed: Paradigm Integrated Technology Solutions Inc.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">On May 20, 2010 the Company formed Paradigm Integrated Technology Solutions</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Inc., as a wholly owned subsidiary to conduct business related to technologies</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">that enhance secondary oil recovery.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Going Concern</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">These financial statements have been prepared in conformity with generally</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">accepted accounting principles in the United States of America with the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">assumption that the Company will be able to realize its assets and discharge its</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">liabilities in the normal course of business rather than through a process of</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">forced liquidation.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The Company's significant operating losses raise substantial doubt about its</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">ability to continue as a going concern. Inherent in the Company's business are</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">various risks and uncertainties, including its limited operating history,</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">historical operating losses, dependence upon strategic alliances, and the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">historical success rate of oil and gas exploration. Management's plan is to</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">acquire interests in certain oil and gas properties with production and to</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">rework existing wells to bring them on line for production.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">As shown in the accompanying financial statements, the Company has incurred a</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">net loss of $2,681,163 for the period from January 28, 2010 (inception) through</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">June 30, 2011.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The Company has no revenue. The Company's future success is primarily dependent</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">upon the existence of oil and gas in quantities which are commercially viable to</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">produce, on properties for which the Company owns a working interest or an</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">option to acquire an interest and/or through its successful deployment of the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Company's Transportable Enhanced Oil Recovery Platform (T-EOR) and the Joint</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Venture Production Program. The Company's success will also be dependent upon</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">its ability to raise sufficient capital to fund its rework and exploration</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">programs and, to exploit the discovery on a timely and cost-effective basis.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman"></font><br></br> </div>

<div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">4.   SHORT TERM CONVERTIBLE NOTES</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The Company has entered into a series of Short Term Convertible Notes bearing</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">annual interest of 8% which mature 180 days after the issue date (maturity</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">date). The note plus interest can be converted in whole or in part to common</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">shares at the holder's option at the later of the maturity date or the default</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">date. The Conversion price is calculated as 55% of the market price which is</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">determined by averaging the lowest 3 day closing price over the last 10 trading</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">day period ending one trading day prior to the day the conversion notice was</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">sent by facsimile. If the note plus interest is not paid or converted on the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">maturity, then default interest begins to accrue on the whole amount bearing</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">annual interest of 22%.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Conversion Price During Major Announcements</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">-------------------------------------------</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">In the event the Company (i) makes a public announcement that it intends to</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">consolidate or merge with any other corporation (other than a merger in which</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the Company is the surviving or continuing corporation and its capital stock is</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">unchanged) or sell or transfer all or substantially all of the assets of the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Company or (ii) any person, group or entity (including the Company) publicly</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">announces a tender offer to purchase 50% or more of the Company's Common Stock</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">(or any other takeover scheme) (the date of the announcement referred to in</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the Conversion Price shall, effective upon the Announcement Date and continuing</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">through the Adjusted Conversion Price Termination Date (as defined below), be</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">equal to the lower of (x) the Conversion Price which would have been applicable</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">for a Conversion occurring on the Announcement Date and (y) the Conversion Price</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">that would otherwise be in effect. From and after the Adjusted Conversion Price</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Termination Date, the Conversion Price shall be determined as set forth above.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean,</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">with respect to any proposed transaction or tender offer (or takeover scheme)</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">for which a public announcement as contemplated by this paragraph has been made,</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the date upon which the Company (in the case of clause (i) above) or the person,</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">group or entity (in the case of clause (ii) above) consummates or publicly</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">announces the termination or abandonment of the proposed transaction or tender</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">offer (or takeover scheme) which caused this paragraph to become operative.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">The Company may prepay the note plus accrued interest at any time after 91 days</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">after the issue date and ending up to 180 days after the issue date. The total</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">amount calculated to be prepaid will bear an additional charge of 75% of the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">calculated prepaid amount. The Company is required at all times to have</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">authorized and reserved five times the number of shares that is actually</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">issuable upon full conversion of the notes (based on the Conversion Price of the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Notes in effect from time to time).</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                                    Outstanding</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                      Convertible        at</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                         Note         June 30,</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                        Issued          2011</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                    -------------  -------------</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman"></font><br></br> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           Issue Date</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           October  6, 2010                         $      50,000  $        ---</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           November  18, 2010                              40,000           ---</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           December 20, 2010                               52,500        20,000</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           January 28,  2011                               32,500        32,500</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           March  9, 2011                                  25,000        25,000</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           April 29, 2011                                  32,500        32,500</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           June 7, 2011                                    32,500        32,500</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                    -------------  -------------</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                    $     265,000       142,500</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">           Accrued Interest                                               5,169</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                                   -------------</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                                   $    147,669</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                                   =============</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">During the 2nd quarter of 2011 the Company converted the convertible notes and</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">accrued interest dated October 6, 2010, and November 18, 2010 and partially the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">convertible note dated December 20, 2010. (see note 7). The Company entered into</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">additional convertible notes dated April 29, 2011 and June 7, 2011.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Failure to Deliver Common Stock Prior to Deadline.</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">--------------------------------------------------</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Without in any way limiting the Holder's right to pursue other remedies,</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">including actual damages and/or equitable relief, the parties agree that if</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">delivery of the Common Stock issuable upon conversion of this Note is more than</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">three (3) business days after the Deadline, the Company shall pay to the Holder</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">$2,000 per day in cash, for each day beyond the Deadline that the Company fails</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">to deliver such Common Stock. Such cash amount shall be paid to Holder by the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">fifth day of the month following the month in which it has accrued or, at the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">option of the Holder (by written notice to the Company by the first day of the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">month following the month in which it has accrued), shall be added to the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">principal amount of this Note, in which event interest shall accrue thereon in</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">accordance with the terms of this Note and such additional principal amount</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">shall be convertible into Common Stock in accordance with the terms of this</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Note.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">exchanged for a convertible note which was then converted into 243,932 common</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">shares (see note 7) . The Convertible note was to mature on June 1, 2012 and was</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">convertible by the holder at any time. The convertible note carried a 5% annual</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">interest rate.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"> </div>

<div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">7.   SHAREHOLDERS' EQUITY</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Common Stock a) Effective January 28, 2010, Paradigm Oil & Gas Inc. (the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">"Company"), a Nevada corporation, entered into a Share exchange agreement with</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">company") a Texas</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">corporation, whereby the Company has issued 42,000,000, US$.001 Par value common</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">shares to unrelated shareholders in exchange for their one hundred percent</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">(100%) interest in all of the capital stock of the Acquired company The Acquired</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">company is now a 100% subsidiary of the Company.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Prior to the Acquisition, there were 188,058 shares of the Company's Common</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">Stock outstanding. Immediately following the Acquisition, there are 42,188,058</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">shares of Common Stock outstanding.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">On the effective date of the acquisition, additional paid in Capital was</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">increased by $ 8,358,000. This was adjusted by $ 8,400,000 to record the basis</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">in Intergrated Oil and Gas Solutions Inc. An Expense of $ 633,279 was then</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">recorded to recognize the assumption of Paradigms' liabilities assumed at the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">time of the acquisition.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">b) On February 2, 2010 the convertible note payable of $ 360,000 was converted</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">into common shares at $ .04 per share. 9,000,000 shares were issued to the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">convertible debenture holders.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">On the effective date of the conversion, additional paid in capital was</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">conversion to the book value of the convertible debenture.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">c) On September 28, 2010 a convertible note in the amount of $ 734,918 was</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">converted at $ 0.35 per share for a total of 2,099,768 Common Shares at a par</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">value of $ 2,100. Additional paid in capital increased by $ 690,823. The share</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">price was $ 0.33 on the closing of this transaction, as a result a gain of $</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">41,995 was recognized and recorded as a Gain from issued shares on debt</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">conversion.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">d) During the 2nd quarter period from April 25, 2011 to June 30, 2011</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">convertible notes were converted into 1,271,382 common shares as follows:</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman"></font><br></br> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">ISSUE DATE         PRINCIPAL    INTEREST    DATE       AMOUNT     PRICE   # OF SHARES    SHARE PV     APIC</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">October 6, 2010    $ 50,000  $  2,000    4/25/2011  $   15,000    0.1487      100,874  $      101  $    14,899</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                         4/28/2011  $   15,000    0.1249      120,096  $      120  $    14,880</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                         4/29/2011  $   12,000    0.1249       96,077  $       96  $    11,904</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                          5/4/2011  $   10,000    0.1212       82,508  $       83  $     9,917</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">November 18, 2010  $ 40,000  $  1,600    5/25/2011  $   15,000    0.1137      131,926  $      132  $    14,868</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                          6/1/2011  $   15,000    0.1063      141,110  $      141  $    14,859</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                          6/3/2011  $   11,600     0.099      117,172  $      117  $    11,483</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">December 20, 2010  $ 52,500  $  2,100    6/23/2011  $   15,000    0.0702      213,675  $      214  $    14,786</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                         6/30/2011  $   17,500    0.0653      267,944  $      268  $    17,232</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                    ----------             ------------------------------------</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                    $  126,100              1,271,382  $    1,272  $   124,828</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                                    ==========             ====================================</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">e) The $22,500 convertible debenture entered into on May 23, 2011 was converted</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">into 243,932 common shares as follows:</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman"></font><br></br> </div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">ISSUE DATE         PRINCIPAL    INTEREST    DATE       AMOUNT     PRICE   # OF SHARES    SHARE PV     APIC</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">May 23, 2011       $ 22,500    $   28   24/05/2011  $    7,500    0.128        58,594  $       59  $    7,441</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">---------------------------------------------------------------------------------------------------------------</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                        01/06/2011  $    7,500     0.09        83,333  $       83  $    7,417</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">---------------------------------------------------------------------------------------------------------------</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">                                        10/06/2011  $    7,528   0.0738       102,005  $      102  $    7,426</font></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">===============================================================================================================</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; LINE-HEIGHT:1.25; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-SIZE:10pt; FONT-FAMILY:Times New Roman">As of June 30, 2011 there were 54,803,140 Common Shares outstanding.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"> </div> <div style="DISPLAY:block; TEXT-INDENT:0pt; LINE-HEIGHT:1.25"> </div>

0001191354 2011-04-01 2011-06-30 0001191354 2010-04-01 2010-06-30 0001191354 2011-01-01 2011-06-30 0001191354 2010-01-28 2010-06-30 0001191354 2010-01-28 2011-06-30 0001191354 2011-06-30 0001191354 2010-12-31 0001191354 2010-06-30 0001191354 2010-01-26 2010-01-27 0001191354 2010-01-28 2010-12-31 0001191354 us-gaap:CommonStockMember 2010-01-26 2010-01-27 0001191354 us-gaap:AdditionalPaidInCapitalMember 2010-01-26 2010-01-27 0001191354 us-gaap:CommonStockMember 2010-01-25 0001191354 us-gaap:AdditionalPaidInCapitalMember 2010-01-25 0001191354 2010-01-25 0001191354 us-gaap:CommonStockMember 2010-01-27 0001191354 us-gaap:AdditionalPaidInCapitalMember 2010-01-27 0001191354 2010-01-27 0001191354 us-gaap:CommonStockMember 2010-01-28 2010-12-31 0001191354 us-gaap:AdditionalPaidInCapitalMember 2010-01-28 2010-12-31 0001191354 us-gaap:RetainedEarningsMember 2010-01-28 2010-12-31 0001191354 us-gaap:OtherComprehensiveIncomeMember 2010-01-28 2010-12-31 0001191354 us-gaap:CommonStockMember 2010-12-31 0001191354 us-gaap:AdditionalPaidInCapitalMember 2010-12-31 0001191354 us-gaap:RetainedEarningsMember 2010-12-31 0001191354 us-gaap:OtherComprehensiveIncomeMember 2010-12-31 0001191354 us-gaap:CommonStockMember 2011-01-01 2011-06-30 0001191354 us-gaap:AdditionalPaidInCapitalMember 2011-01-01 2011-06-30 0001191354 us-gaap:RetainedEarningsMember 2011-01-01 2011-06-30 0001191354 us-gaap:OtherComprehensiveIncomeMember 2011-01-01 2011-06-30 0001191354 us-gaap:CommonStockMember 2011-06-30 0001191354 us-gaap:AdditionalPaidInCapitalMember 2011-06-30 0001191354 us-gaap:RetainedEarningsMember 2011-06-30 0001191354 us-gaap:OtherComprehensiveIncomeMember 2011-06-30 0001191354 2011-08-22 iso4217:USD shares iso4217:USD shares

EX-101.SCH 7 pdgo-20110630.xsd 000040 - Statement - Consolidated Statements of Operations link:presentationLink link:definitionLink link:calculationLink 000090 - Disclosure - Recent Accounting Pronouncements link:presentationLink link:definitionLink link:calculationLink 000160 - Disclosure - Contractual Obligations and Commitments link:presentationLink link:definitionLink link:calculationLink 000020 - Statement - Consolidated Balance Sheets link:presentationLink link:definitionLink link:calculationLink 000130 - Disclosure - Note Payable link:presentationLink link:definitionLink link:calculationLink 000030 - Statement - Consolidated Balance Sheets Parenthetical link:presentationLink link:definitionLink link:calculationLink 000110 - Disclosure - Short Term Convertible Notes link:presentationLink link:definitionLink link:calculationLink 000140 - Disclosure - Shareholders' Equity link:presentationLink link:definitionLink link:calculationLink 000050 - Statement - Consolidated Statements of Comprehensive (Loss) link:presentationLink link:definitionLink link:calculationLink 000060 - Statement - Consolidated Statements of Cash Flows link:presentationLink link:definitionLink link:calculationLink 000120 - Disclosure - Short Term Loan link:presentationLink link:definitionLink link:calculationLink 000010 - Document - Document and Entity Information link:presentationLink link:definitionLink link:calculationLink 000100 - Disclosure - Oil and Gas Interests link:presentationLink link:definitionLink link:calculationLink 000080 - Disclosure - Unaudited Information link:presentationLink link:definitionLink link:calculationLink 000150 - Disclosure - Related Party Transactions link:presentationLink link:definitionLink link:calculationLink 000070 - Statement - Consolidated Statement of Changes in Shareholders Equity link:presentationLink link:definitionLink link:calculationLink EX-101.CAL 8 pdgo-20110630_cal.xml EX-101.DEF 9 pdgo-20110630_def.xml EX-101.LAB 10 pdgo-20110630_lab.xml Foreign currency translation of liabilities Proceeds from convertible debenture payable Basic weighted average common shares outstanding Preferred stock par value Accumulated deficit during the exploration stage Total Property Plant and Equipment Document Fiscal Year Focus Proceeds from short term convertible notes Travel {1} Travel Total current assets Total current assets Entity Well-known Seasoned Issuer Commitment and Contingencies Debt Disclosure [Text Block] Organization, Consolidation and Presentation of Financial Statements Common stock on conversion of debt (Note 7) - shares Adjustment to record basis in Integrated Oil and Gas Solutions Inc. Related party receivable {1} Related party receivable Total adjustments Professional and consulting fees Administration Common stock par value Related party receivable Statement [Line Items] Document Period End Date Document Type Short Term Convertible Notes {1} Short Term Convertible Notes Common stock on conversion of debt (Note 7) Issuance of common stock for acquisition Assumption of advances from shareholder in acquisition Cash acquired in acquisition Cash flows from (used in) investing activities: Total general expenses Total general expenses Note receivable {1} Note receivable Other comprehensive loss: Diluted weighted average common shares outstanding Foreign exchange loss Foreign exchange loss Advertising and promotion Labor Preferred stock shares authorized Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued or outstanding Liabilities and Shareholders' Equity Note receivable Short Term Convertible Notes Equity Component Repayments for advances from shareholder Repayments for advances from shareholder Cash flows from operating activities: Foreign currency translation adjustment Foreign currency translation adjustments Assumption of liabilities in acquisition Investor relations Common stock shares authorized Accounts payable and accrued liabilities Cash Commitments and Contingencies Disclosure [Text Block] Extractive Industries Assumption of note payable in acquisition Proceeds from advances from shareholder Furniture and fixtures Furniture and fixtures Net cash used in operating activities Net cash used in operating activities Consolidated Statements of Comprehensive (Loss) Telephone Stock options Stock options Rent Short term loan Total assets Unproved (Note 3) Unproved (Note 3) Entity Current Reporting Status Entity Common Stock, Shares Outstanding Related Party Transactions Disclosure [Text Block] Related Party Disclosures Interest Non cash interest Total field operation expenses Total field operation expenses Field operation expenses: Current liabilities: Furniture and fixtures, net of $ 4,183-$ 2,436 in accumulated depreciation Entity Registrant Name Balance - shares Balance - shares Balance - shares Accumuldated Deficit Additional Paid-In Capital Assumption of convertible debt in acquisition Repayments for short term loan Repayments for short term loan Purchases on natural gas and oil properties Purchases on natural gas and oil properties Change in Accrued interest Change in Accrued interest Accounting and audit Preferred stock shares outstanding Shareholders' equity: Bond RRC Employee advances Oil and Gas Exploration and Production Industries Disclosures [Text Block] Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Consolidated Statement of Changes in Shareholders Equity Office maintenance Management fees Legal fees Insurance Utilities Maintenance Additional paid-in capital Total current liabilities Total current liabilities Advances from shareholder Inventory Assets {1} Assets Entity Voluntary Filers Amendment Flag Issuance of common stock for acquisition - shares Issuance of common stock for convertible debt Supplemental disclosure of cash flow information: Proceeds from short term loan Consolidated Statements of Cash Flows Consolidated Balance Sheets Statement, Equity Components [Axis] Adjustments to reconcile net loss to net cash used in operating activities: Basic and diluted loss per share Common stock shares outstanding Accumulated Depreciation Furniture and Fixtures Current Fiscal Year End Date Entity Central Index Key Document and Entity Information Short-term Debt [Text Block] Debt Description of New Accounting Pronouncements Not yet Adopted [Text Block] Change in Inventory Change in Inventory Change in Employee advances Change in Employee advances Changes in operating assets and liabilities: Net loss Net loss Meals and entertainment Depreciation Consolidated Balance Sheets Parenthetical Stockholders' Equity Note Disclosure [Text Block] Cash flows from financing activities: Loss from operations Loss from operations Office Travel Preferred stock shares issued Total shareholders' equity Total shareholders' equity Balance Balance Common stock, $.001 par value; 300,000,000 shares authorized, 54,803,140 and 53,287,826 shares issued and outstanding Document Fiscal Period Focus Entity Filer Category Equity Accounting Changes and Error Corrections Assumption of accounts payable in acquisition Cash, beginning of period Cash, beginning of period Cash, end of period Bond RRC {1} Bond RRC Other expense: Transfer agent fees Transfer agent fees Lease costs Common stock shares issued Statement [Table] Common Stock Net cash provided by financing activities Loss from shares issued on debt conversion Loss from shares issued on debt conversion, net (Note 7) Utilities {1} Utilities Legal Consolidated Statements of Operations Note payable and accrued interest Natural gas and oil properties Production equipment Current assets: Other Comprehensive Loss Net change in cash Net change in cash Net cash used in investing activities Net cash used in investing activities Production equipment {1} Production equipment Change in Accounts payable and accrued liabilities Comprehensive loss Comprehensive loss General expenses: Natural gas and oil exploration costs Total Liabilities and Shareholders' equity Total Liabilities and Shareholders' equity Accumulated comprehensive income Total liabilities Total liabilities Short term convertible notes and accrued interest EX-101.PRE 11 pdgo-20110630_pre.xml XML 12 R3.htm IDEA: XBRL DOCUMENT

Consolidated Balance Sheets Parenthetical (USD $)	Jun. 30, 2011	Dec. 31, 2010
Accumulated Depreciation Furniture and Fixtures	$ 4,183	$ 2,436
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock shares issued
Preferred stock shares outstanding
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	300,000,000	300,000,000
Common stock shares issued	54,803,140	54,803,140
Common stock shares outstanding	53,287,826	53,287,826

- Definition

Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Shares outstanding equals shares issued minus shares held in treasury and other adjustments, if any.

+ References+ Details

- Definition

Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share.

+ References+ Details

XML 13 R4.htm IDEA: XBRL DOCUMENT

Consolidated Statements of Operations (USD $)	3 Months Ended		5 Months Ended	6 Months Ended	17 Months Ended
Consolidated Statements of Operations (USD $)	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2011
Field operation expenses:
Labor	$ 16,063	$ 30,041	$ 30,041	$ 54,201	$ 128,042
Lease costs	1,319	13,613	13,613	3,416	18,201
Legal	1,508			1,508	11,508
Maintenance	2,190	6,683	9,183	14,553	17,602
Natural gas and oil exploration costs	132	240	692	409	1,861
Travel	1,774			3,795	17,817
Utilities	(322)	5,571	5,571	940	6,511
Total field operation expenses	22,664	56,148	59,100	78,822	201,542
General expenses:
Accounting and audit	4,001	12,845	15,345	8,236	68,161
Administration	9,433			19,488	32,454
Advertising and promotion		6,698	6,956	41	611
Depreciation	1,218			2,436	4,183
Foreign exchange loss		(1,700)
Insurance	216	782	782	681	1,463
Interest	(372)	1,145	2,345	9,537	15,642
Investor relations	3,000			4,684	14,559
Legal fees	833	30,692	49,750	833	27,448
Management fees	22,500	26,847	46,265	37,500	129,802
Meals and entertainment	116	1,386	1,496	762	2,467
Office	338	4,943	5,677	338	13,970
Office maintenance					2,157
Professional and consulting fees	8,073	4,921	4,958	11,759	69,946
Rent	1,547			3,797	6,047
Stock options				10,500	10,500
Telephone	3,288	3,722	4,900	4,476	16,747
Transfer agent fees	2,050	1,494	2,109	3,863	9,257
Travel	776	7,517	8,795	3,323	19,596
Utilities	848	65	1,290	2,380	3,327
Total general expenses	57,865	101,357	150,668	124,634	448,337
Loss from operations	(80,529)	(157,505)	(209,768)	(203,456)	(649,879)
Assumption of liabilities in acquisition			633,279		633,279
Loss from shares issued on debt conversion, net (Note 7)			1,440,000		1,398,005
Net loss	$ (80,529)	$ (157,505)	$ (2,283,047)	$ (203,456)	$ (2,681,163)
Basic and diluted loss per share	$ 0.00	$ 0.00	$ (0.05)	$ 0.00
Basic weighted average common shares outstanding	53,287,826	53,287,826	50,462,262	53,287,826
Diluted weighted average common shares outstanding	53,287,826	53,287,826	50,462,262	53,287,826

XML 14 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information	3 Months Ended
Document and Entity Information	Jun. 30, 2011	Aug. 22, 2011
Document and Entity Information
Entity Registrant Name	PARADIGM OIL & GAS, INC.
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Entity Central Index Key	0001191354
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		54,803,140
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2

XML 15 Show.js IDEA: XBRL DOCUMENT /** * Rivet Software Inc. * * @copyright Copyright (c) 2006-2011 Rivet Software, Inc. All rights reserved. * Version 2.1.0.1 * */ var moreDialog = null; var Show = { Default:'raw', more:function( obj ){ var bClosed = false; if( moreDialog != null ) { try { bClosed = moreDialog.closed; } catch(e) { //Per article at http://support.microsoft.com/kb/244375 there is a problem with the WebBrowser control // that somtimes causes it to throw when checking the closed property on a child window that has been //closed. So if the exception occurs we assume the window is closed and move on from there. bClosed = true; } if( !bClosed ){ moreDialog.close(); } } obj = obj.parentNode.getElementsByTagName( 'pre' )[0]; var hasHtmlTag = false; var objHtml = ''; var raw = ''; //Check for raw HTML var nodes = obj.getElementsByTagName( '*' ); if( nodes.length ){ objHtml = obj.innerHTML; }else{ if( obj.innerText ){ raw = obj.innerText; }else{ raw = obj.textContent; } var matches = raw.match( /<\/?[a-zA-Z]{1}\w*[^>]*>/g ); if( matches && matches.length ){ objHtml = raw; //If there is an html node it will be 1st or 2nd, // but we can check a little further. var n = Math.min( 5, matches.length ); for( var i = 0; i < n; i++ ){ var el = matches[ i ].toString().toLowerCase(); if( el.indexOf( '= 0 ){ hasHtmlTag = true; break; } } } } if( objHtml.length ){ var html = ''; if( hasHtmlTag ){ html = objHtml; }else{ html = ''+ "\n"+''+ "\n"+' Report Preview Details'+ "\n"+' '+ "\n"+''+ "\n"+''+ objHtml + "\n"+''+ "\n"+''; } moreDialog = window.open("","More","width=700,height=650,status=0,resizable=yes,menubar=no,toolbar=no,scrollbars=yes"); moreDialog.document.write( html ); moreDialog.document.close(); if( !hasHtmlTag ){ moreDialog.document.body.style.margin = '0.5em'; } } else { //default view logic var lines = raw.split( "\n" ); var longest = 0; if( lines.length > 0 ){ for( var p = 0; p < lines.length; p++ ){ longest = Math.max( longest, lines[p].length ); } } //Decide on the default view this.Default = longest < 120 ? 'raw' : 'formatted'; //Build formatted view var text = raw.split( "\n\n" ) >= raw.split( "\r\n\r\n" ) ? raw.split( "\n\n" ) : raw.split( "\r\n\r\n" ) ; var formatted = ''; if( text.length > 0 ){ if( text.length == 1 ){ text = raw.split( "\n" ) >= raw.split( "\r\n" ) ? raw.split( "\n" ) : raw.split( "\r\n" ) ; formatted = "

"+ text.join( "

\n" ) +"

"; }else{ for( var p = 0; p < text.length; p++ ){ formatted += "

" + text[p] + "

\n"; } } }else{ formatted = '

' + raw + '

'; } html = ''+ "\n"+''+ "\n"+' Report Preview Details'+ "\n"+' '+ "\n"+''+ "\n"+''+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+' '+ "\n"+'

'+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+'

'+ "\n"+' '+ "\n"+'

'+ "\n"+'

'+raw+'

'+ "\n"+'

'+ "\n"+''+ "\n"+''; moreDialog = window.open("","More","width=700,height=650,status=0,resizable=yes,menubar=no,toolbar=no,scrollbars=yes"); moreDialog.document.write(html); moreDialog.document.close(); this.toggle( moreDialog ); } moreDialog.document.title = 'Report Preview Details'; }, toggle:function( win, domLink ){ var domId = this.Default; var doc = win.document; var domEl = doc.getElementById( domId ); domEl.style.display = 'block'; this.Default = domId == 'raw' ? 'formatted' : 'raw'; if( domLink ){ domLink.innerHTML = this.Default == 'raw' ? 'with Text Wrapped' : 'as Filed'; } var domElOpposite = doc.getElementById( this.Default ); domElOpposite.style.display = 'none'; }, LastAR : null, showAR : function ( link, id, win ){ if( Show.LastAR ){ Show.hideAR(); } var ref = link; do { ref = ref.nextSibling; } while (ref && ref.nodeName != 'TABLE'); if (!ref || ref.nodeName != 'TABLE') { var tmp = win ? win.document.getElementById(id) : document.getElementById(id); if( tmp ){ ref = tmp.cloneNode(true); ref.id = ''; link.parentNode.appendChild(ref); } } if( ref ){ ref.style.display = 'block'; Show.LastAR = ref; } }, toggleNext : function( link ){ var ref = link; do{ ref = ref.nextSibling; }while( ref.nodeName != 'DIV' ); if( ref.style && ref.style.display && ref.style.display == 'none' ){ ref.style.display = 'block'; if( link.textContent ){ link.textContent = link.textContent.replace( '+', '-' ); }else{ link.innerText = link.innerText.replace( '+', '-' ); } }else{ ref.style.display = 'none'; if( link.textContent ){ link.textContent = link.textContent.replace( '-', '+' ); }else{ link.innerText = link.innerText.replace( '-', '+' ); } } }, hideAR : function(){ Show.LastAR.style.display = 'none'; } } XML 16 R12.htm IDEA: XBRL DOCUMENT

Short Term Loan	3 Months Ended
Short Term Loan	Jun. 30, 2011
Debt
Short-term Debt [Text Block]	5. SHORT TERM LOAN On March 9, 2011 the Company entered into a short term merchant account loan agreement for $15,000. The loan is secured by future sales/receivables and carries an annual interest of rate of 15%. Daily payments are made against the amount outstanding at a rate of up to $460 per day. As of June 30, 2011, $ 4,110 was outstanding.

- Definition

The entire disclosure for short-term debt.

+ References+ Details

XML 17 R8.htm IDEA: XBRL DOCUMENT

Unaudited Information	3 Months Ended
Unaudited Information	Jun. 30, 2011
Organization, Consolidation and Presentation of Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. UNAUDITED INFORMATION The consolidated balance sheet of Paradigm Oil & Gas, Inc. (the "Company") as of June 30, 2011, and the consolidated statements of operations for the three and six months ended June 30, 2011 and three months ended June 30, 2010 and for the periods ended from January 28, 2010 (Inception) to June 30, 2010 and through June 30, 2011 have not been audited. However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the consolidated financial position of the Company as of June 30, 2011, and the results of operations for the three and six months ended June 30, 2011. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements included in the Company's consolidated financial statements as filed on Form 10-K for the year ended December 31, 2010. BASIS OF PRESENTATION Organization Paradigm Enterprises, Inc. (the "Company") was incorporated in the state of Nevada on July 15, 2002 to engage in the acquisition, exploration and development of oil and gas properties. On February 7, 2005 the Company changed its name to Paradigm Oil and Gas, Inc. Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation. The Transaction is considered to be a reverse acquisition. The acquisition date now becomes the inception date of the Company. The Company is considered an exploration stage company, as it has not generated revenues from its operations. Reverse merger of Intergrated Oil and Gas Solutions Inc. On January 28, 2010, the Company entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired Company. Paradigm issued 42,000,000 of its $.001 par value shares common shares representing 82% of the fully-diluted shares of the Company in exchange for 100% of the Acquired Company's outstanding shares. The Acquired Company is now a 100% subsidiary of the Company. The Acquired Company holds 100% working interests in certain oil and gas leases along with certain oil and gas production equipment. The total purchase price to acquire these assets amounted to $541,539. These costs have been capitalized on the Acquired Company's books at cost as natural gas and oil properties, unproved properties. Subsidiary formed: Paradigm Integrated Technology Solutions Inc. On May 20, 2010 the Company formed Paradigm Integrated Technology Solutions Inc., as a wholly owned subsidiary to conduct business related to technologies that enhance secondary oil recovery. Going Concern These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. The Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. Inherent in the Company's business are various risks and uncertainties, including its limited operating history, historical operating losses, dependence upon strategic alliances, and the historical success rate of oil and gas exploration. Management's plan is to acquire interests in certain oil and gas properties with production and to rework existing wells to bring them on line for production. As shown in the accompanying financial statements, the Company has incurred a net loss of $2,681,163 for the period from January 28, 2010 (inception) through June 30, 2011. The Company has no revenue. The Company's future success is primarily dependent upon the existence of oil and gas in quantities which are commercially viable to produce, on properties for which the Company owns a working interest or an option to acquire an interest and/or through its successful deployment of the Company's Transportable Enhanced Oil Recovery Platform (T-EOR) and the Joint Venture Production Program. The Company's success will also be dependent upon its ability to raise sufficient capital to fund its rework and exploration programs and, to exploit the discovery on a timely and cost-effective basis.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 720
-SubTopic 15
-URI http://asc.fasb.org/subtopic&trid=2122524

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6921930&loc=d3e5614-111684

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6970148&loc=SL6228881-111685

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 272
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS140-4/FIN46(R)-8
-Paragraph 8, C1, C7
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Name FASB Interpretation (FIN)
-Publisher FASB
-Number 46R
-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2209116

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 275
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2134480

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 915
-SubTopic 235
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6472506&loc=d3e38932-110933

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2122150

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6359553&loc=d3e288-107754

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2197480

+ Details

XML 18 R14.htm IDEA: XBRL DOCUMENT

Shareholders' Equity	3 Months Ended
Shareholders' Equity	Jun. 30, 2011
Equity
Stockholders' Equity Note Disclosure [Text Block]	7. SHAREHOLDERS' EQUITY Common Stock a) Effective January 28, 2010, Paradigm Oil & Gas Inc. (the "Company"), a Nevada corporation, entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 Par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired company The Acquired company is now a 100% subsidiary of the Company. Prior to the Acquisition, there were 188,058 shares of the Company's Common Stock outstanding. Immediately following the Acquisition, there are 42,188,058 shares of Common Stock outstanding. On the effective date of the acquisition, additional paid in Capital was increased by $ 8,358,000. This was adjusted by $ 8,400,000 to record the basis in Intergrated Oil and Gas Solutions Inc. An Expense of $ 633,279 was then recorded to recognize the assumption of Paradigms' liabilities assumed at the time of the acquisition. b) On February 2, 2010 the convertible note payable of $ 360,000 was converted into common shares at $ .04 per share. 9,000,000 shares were issued to the convertible debenture holders. On the effective date of the conversion, additional paid in capital was increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the conversion to the book value of the convertible debenture. c) On September 28, 2010 a convertible note in the amount of $ 734,918 was converted at $ 0.35 per share for a total of 2,099,768 Common Shares at a par value of $ 2,100. Additional paid in capital increased by $ 690,823. The share price was $ 0.33 on the closing of this transaction, as a result a gain of $ 41,995 was recognized and recorded as a Gain from issued shares on debt conversion. d) During the 2nd quarter period from April 25, 2011 to June 30, 2011 convertible notes were converted into 1,271,382 common shares as follows: ISSUE DATE PRINCIPAL INTEREST DATE AMOUNT PRICE # OF SHARES SHARE PV APIC October 6, 2010 $ 50,000 $ 2,000 4/25/2011 $ 15,000 0.1487 100,874 $ 101 $ 14,899 4/28/2011 $ 15,000 0.1249 120,096 $ 120 $ 14,880 4/29/2011 $ 12,000 0.1249 96,077 $ 96 $ 11,904 5/4/2011 $ 10,000 0.1212 82,508 $ 83 $ 9,917 November 18, 2010 $ 40,000 $ 1,600 5/25/2011 $ 15,000 0.1137 131,926 $ 132 $ 14,868 6/1/2011 $ 15,000 0.1063 141,110 $ 141 $ 14,859 6/3/2011 $ 11,600 0.099 117,172 $ 117 $ 11,483 December 20, 2010 $ 52,500 $ 2,100 6/23/2011 $ 15,000 0.0702 213,675 $ 214 $ 14,786 6/30/2011 $ 17,500 0.0653 267,944 $ 268 $ 17,232 ---------- ------------------------------------ $ 126,100 1,271,382 $ 1,272 $ 124,828 ========== ==================================== e) The $22,500 convertible debenture entered into on May 23, 2011 was converted into 243,932 common shares as follows: ISSUE DATE PRINCIPAL INTEREST DATE AMOUNT PRICE # OF SHARES SHARE PV APIC May 23, 2011 $ 22,500 $ 28 24/05/2011 $ 7,500 0.128 58,594 $ 59 $ 7,441 --------------------------------------------------------------------------------------------------------------- 01/06/2011 $ 7,500 0.09 83,333 $ 83 $ 7,417 --------------------------------------------------------------------------------------------------------------- 10/06/2011 $ 7,528 0.0738 102,005 $ 102 $ 7,426 =============================================================================================================== As of June 30, 2011 there were 54,803,140 Common Shares outstanding.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

+ Details

XML 19 R15.htm IDEA: XBRL DOCUMENT

Related Party Transactions	3 Months Ended
Related Party Transactions	Jun. 30, 2011
Related Party Disclosures
Related Party Transactions Disclosure [Text Block]	8. RELATED PARTY TRANSACTIONS On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was exchanged for a convertible note which was then converted into 243,932 common shares. Additional loans of $ 8,000 were also issued to the Company. Two Shareholders of the Company have loans outstanding to the Company of $ 62,046 at June 30, 2011. The loans are interest free and have no formal terms of repayment. A related party to the Company has an amount due to the Company of $ 60,264 at June 30, 2011.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

+ Details

XML 20 R13.htm IDEA: XBRL DOCUMENT

Note Payable	3 Months Ended
Note Payable	Jun. 30, 2011
Debt
Debt Disclosure [Text Block]	6. NOTE PAYABLE The Company is indebted under a note payable to 1132559 Alberta Ltd, bearing annual interest of 7% and secured by 100% of the first proceeds of production under the Farmout and Option Agreement for the Sawn Lake Property. There are no fixed repayment terms. The Company may be in default of this note as more fully explained in note 11 of the December 31, 2010 financial statements. June 30, 2011 ------------- 1132559 Alberta Ltd $ 101,609 ------------- $ 101,609 =============

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

XML 21 R6.htm IDEA: XBRL DOCUMENT

Consolidated Statements of Cash Flows (USD $)	5 Months Ended	6 Months Ended	17 Months Ended
Consolidated Statements of Cash Flows (USD $)	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2011
Cash flows from operating activities:
Net loss	$ (2,283,047)	$ (203,456)	$ (2,681,163)
Non cash interest	2,345	9,537	15,642
Stock options		10,500	10,500
Depreciation		2,436	4,183
Assumption of liabilities in acquisition	633,279		633,279
Loss from shares issued on debt conversion	1,440,000		1,398,005
Total adjustments	(207,423)	(190,520)	(635,196)
Change in Employee advances	(3,087)	(500)	(7,559)
Change in Inventory	(6,258)		(7,823)
Change in Accrued interest		7,348	13,423
Change in Accounts payable and accrued liabilities	10,356	19,552	31,479
Net cash used in operating activities	(206,412)	(164,120)	(605,676)
Cash flows from (used in) investing activities:
Note receivable	(25,050)	(3,000)	(28,050)
Related party receivable		(14,457)	(60,264)
Bond RRC			(52,500)
Furniture and fixtures	(1,178)		(24,352)
Production equipment	(105,183)		(196,124)
Purchases on natural gas and oil properties	(60,027)		(60,027)
Cash acquired in acquisition	121		121
Net cash used in investing activities	(191,317)	(17,457)	(421,196)
Cash flows from financing activities:
Proceeds from convertible debenture payable	494,918		734,918
Proceeds from advances from shareholder	29,521	8,000	62,051
Repayments for advances from shareholder			(17,530)
Proceeds from short term convertible notes		125,000	267,500
Proceeds from short term loan		15,000	15,000
Repayments for short term loan		(10,890)	(10,890)
Net cash provided by financing activities	524,439	137,110	1,051,049
Net change in cash	126,710	(44,467)	24,177
Cash, beginning of period		68,644
Cash, end of period	126,710	24,177	24,177
Supplemental disclosure of cash flow information:
Foreign currency translation of liabilities	(3,872)	(7,381)	(19,793)
Assumption of accounts payable in acquisition	147,510		147,510
Assumption of advances from shareholder in acquisition	40,025		40,025
Assumption of note payable in acquisition	85,864		85,864
Assumption of convertible debt in acquisition	360,000		360,000
Issuance of common stock for convertible debt	$ (360,000)	$ (148,628)	$ (1,094,918)

XML 22 R9.htm IDEA: XBRL DOCUMENT

Recent Accounting Pronouncements	3 Months Ended
Recent Accounting Pronouncements	Jun. 30, 2011
Accounting Changes and Error Corrections
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	2. RECENT ACCOUNTING PRONOUNCEMENTS During the period ended June 30, 2011, there were several new accounting pronouncements issued by the Financial Accounting Standards Board (FASB). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial position or operating results. The Company will monitor these emerging issues to assess any potential future impact on its consolidated financial statements.

XML 23 R10.htm IDEA: XBRL DOCUMENT

Oil and Gas Interests	3 Months Ended
Oil and Gas Interests	Jun. 30, 2011
Extractive Industries
Oil and Gas Exploration and Production Industries Disclosures [Text Block]	3. OIL AND GAS INTERESTS The Oil and Gas Interests are accounted for on a consolidated basis as follows; June 30, 2011 ------------- Chilson Property Acquisition cost January 28, 2010 $ 121,774 Cost of work program 21,350 ------------- $ 143,124 ------------- Lett Finlay Property Acquisition cost January 28, 2010 $ 308,708 ------------- $ 308,708 ------------- Lumpkin Property Acquisition cost January 28, 2010 $ 111,057 ------------- $ 111,057 ------------- Chilson B Acquisition cost June 30, 2010 $ 17,977 ------------- $ 17,977 ------------- Corsicana Acquisition cost June 22, 2010 $ 20,700 ------------- $ 20,700 ------------- Todd Creek Property Acquisition cost $ 298,631 Cash call 52,102 Refund (17,022) Written off (50,000) Impairment expense (283,711) ------------- $ - ------------- Hillsprings Property Acquisition cost $ 207,383 Impairment expense (207,383) ------------- $ - ------------- Sawn Lake Property Farmout and option agreement $ 152,423 Impairment expense (152,423) ------------- Total Oil and Gas Interests $ 601,566 =============

XML 24 report.css IDEA: XBRL DOCUMENT /* Updated 2009-11-04 */ /* v2.2.0.24 */ /* DefRef Styles */ ..report table.authRefData{ background-color: #def; border: 2px solid #2F4497; font-size: 1em; position: absolute; } ..report table.authRefData a { display: block; font-weight: bold; } ..report table.authRefData p { margin-top: 0px; } ..report table.authRefData .hide { background-color: #2F4497; padding: 1px 3px 0px 0px; text-align: right; } ..report table.authRefData .hide a:hover { background-color: #2F4497; } ..report table.authRefData .body { height: 150px; overflow: auto; width: 400px; } ..report table.authRefData table{ font-size: 1em; } /* Report Styles */ ..pl a, .pl a:visited { color: black; text-decoration: none; } /* table */ ..report { background-color: white; border: 2px solid #acf; clear: both; color: black; font: normal 8pt Helvetica, Arial, san-serif; margin-bottom: 2em; } ..report hr { border: 1px solid #acf; } /* Top labels */ ..report th { background-color: #acf; color: black; font-weight: bold; text-align: center; } ..report th.void { background-color: transparent; color: #000000; font: bold 10pt Helvetica, Arial, san-serif; text-align: left; } ..report .pl { text-align: left; vertical-align: top; white-space: normal; width: 200px; word-wrap: break-word; } ..report td.pl a.a { cursor: pointer; display: block; width: 200px; } ..report td.pl div.a { width: 200px; } ..report td.pl a:hover { background-color: #ffc; } /* Header rows... */ ..report tr.rh { background-color: #acf; color: black; font-weight: bold; } /* Calendars... */ ..report .rc { background-color: #f0f0f0; } /* Even rows... */ ..report .re, .report .reu { background-color: #def; } ..report .reu td { border-bottom: 1px solid black; } /* Odd rows... */ ..report .ro, .report .rou { background-color: white; } ..report .rou td { border-bottom: 1px solid black; } ..report .rou table td, .report .reu table td { border-bottom: 0px solid black; } /* styles for footnote marker */ ..report .fn { white-space: nowrap; } /* styles for numeric types */ ..report .num, .report .nump { text-align: right; white-space: nowrap; } ..report .nump { padding-left: 2em; } ..report .nump { padding: 0px 0.4em 0px 2em; } /* styles for text types */ ..report .text { text-align: left; white-space: normal; } ..report .text .big { margin-bottom: 1em; width: 17em; } ..report .text .more { display: none; } ..report .text .note { font-style: italic; font-weight: bold; } ..report .text .small { width: 10em; } ..report sup { font-style: italic; } ..report .outerFootnotes { font-size: 1em; } ZIP 25 0001096906-11-002038-xbrl.zip IDEA: XBRL DOCUMENT begin 644 0001096906-11-002038-xbrl.zip M4$L#!!0````(`-N"%C^5W)9?MSL``)E:`P`1`!P`<&1G;RTR,#$Q,#8S,"YX M;6Q55`D``YVZ4DZ=NE).=7@+``$$)0X```0Y`0``[%U;<^,VLGX^I^K\!^Y+ MG%2-;()W>I)L*;Y,E,S8CNW9W9R7%"Q"$C<4J9"4Q]Y?OPV0DD`*O),:3YQ, MI6Q+9'\?&HU&-Z[?_OUIZ4F/)(S

Short Term Convertible Notes	3 Months Ended
Short Term Convertible Notes	Jun. 30, 2011
Short Term Convertible Notes
Short Term Convertible Notes	4. SHORT TERM CONVERTIBLE NOTES The Company has entered into a series of Short Term Convertible Notes bearing annual interest of 8% which mature 180 days after the issue date (maturity date). The note plus interest can be converted in whole or in part to common shares at the holder's option at the later of the maturity date or the default date. The Conversion price is calculated as 55% of the market price which is determined by averaging the lowest 3 day closing price over the last 10 trading day period ending one trading day prior to the day the conversion notice was sent by facsimile. If the note plus interest is not paid or converted on the maturity, then default interest begins to accrue on the whole amount bearing annual interest of 22%. Conversion Price During Major Announcements ------------------------------------------- In the event the Company (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Company is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Company or (ii) any person, group or entity (including the Company) publicly announces a tender offer to purchase 50% or more of the Company's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth above. For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this paragraph has been made, the date upon which the Company (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this paragraph to become operative. The Company may prepay the note plus accrued interest at any time after 91 days after the issue date and ending up to 180 days after the issue date. The total amount calculated to be prepaid will bear an additional charge of 75% of the calculated prepaid amount. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the notes (based on the Conversion Price of the Notes in effect from time to time). Outstanding Convertible at Note June 30, Issued 2011 ------------- ------------- Issue Date October 6, 2010 $ 50,000 $ --- November 18, 2010 40,000 --- December 20, 2010 52,500 20,000 January 28, 2011 32,500 32,500 March 9, 2011 25,000 25,000 April 29, 2011 32,500 32,500 June 7, 2011 32,500 32,500 ------------- ------------- $ 265,000 142,500 Accrued Interest 5,169 ------------- $ 147,669 ============= During the 2nd quarter of 2011 the Company converted the convertible notes and accrued interest dated October 6, 2010, and November 18, 2010 and partially the convertible note dated December 20, 2010. (see note 7). The Company entered into additional convertible notes dated April 29, 2011 and June 7, 2011. Failure to Deliver Common Stock Prior to Deadline. -------------------------------------------------- Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is more than three (3) business days after the Deadline, the Company shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Company fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Company by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was exchanged for a convertible note which was then converted into 243,932 common shares (see note 7) . The Convertible note was to mature on June 1, 2012 and was convertible by the holder at any time. The convertible note carried a 5% annual interest rate.

Consolidated Statements of Comprehensive (Loss) (USD $)	5 Months Ended	6 Months Ended	17 Months Ended
Consolidated Statements of Comprehensive (Loss) (USD $)	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2011
Net loss	$ (2,283,047)	$ (203,456)	$ (2,681,163)
Other comprehensive loss:
Foreign currency translation adjustments	3,872	(7,381)	(21,665)
Comprehensive loss	$ (2,279,175)	$ (210,837)	$ (2,702,828)

Consolidated Statement of Changes in Shareholders Equity (USD $)	Total	Common Stock	Additional Paid-In Capital	Accumuldated Deficit	Other Comprehensive Loss
Balance at Jan. 25, 2010	$ 541,539	$ 188	$ 541,351
Balance - shares at Jan. 25, 2010	188,058	188,058
Issuance of common stock for acquisition	8,400,000	42,000	8,358,000
Issuance of common stock for acquisition - shares	42,000,000	42,000,000
Adjustment to record basis in Integrated Oil and Gas Solutions Inc.	(8,400,000)		(8,400,000)
Balance at Jan. 27, 2010	541,539	42,188	499,351
Balance - shares at Jan. 27, 2010	42,188,058	42,188,058
Common stock on conversion of debt (Note 7)	2,492,923	11,100	2,481,823
Common stock on conversion of debt (Note 7) - shares	11,099,768	11,099,768
Net loss	(2,477,707)			(2,477,707)
Foreign currency translation adjustment	(14,284)				(14,284)
Balance at Dec. 31, 2010	542,471	53,288	2,981,174	(2,477,707)	(14,284)
Balance - shares at Dec. 31, 2010	53,287,826	53,287,826
Common stock on conversion of debt (Note 7)	148,628	1,516	147,112
Common stock on conversion of debt (Note 7) - shares	1,515,314	1,515,314
Net loss	(203,456)			(203,456)
Foreign currency translation adjustment	(7,381)				(7,381)
Stock options	10,500		10,500
Balance at Jun. 30, 2011	$ 490,762	$ 54,804	$ 3,138,786	$ (2,681,163)	$ (21,665)
Balance - shares at Jun. 30, 2011	54,803,140	54,803,140

Contractual Obligations and Commitments	3 Months Ended
Contractual Obligations and Commitments	Jun. 30, 2011
Commitment and Contingencies
Commitments and Contingencies Disclosure [Text Block]	9. CONTRACTUAL OBLIGATIONS AND COMMITMENTS The Company is in default of its obligation to Compton Petroleum in respect to the Todd Creek Property, as it has not paid the full share of costs of drilling or to complete the well. As a result the Company has received no further information about the Todd Creek project. The Company does not expect to receive further information from the operator until all outstanding participation costs have been paid. In conjunction with the year end audit in 2007 and 2008, 1132559 Alberta Ltd alleged that the Company was in default of the Sawn Lake Property Lake farmout agreement over which their note payable (refer to note 11) is secured by 100% of the first proceeds of production of the Sawn Lake Property. Accordingly 1132559 Alberta Ltd position is that they own the Sawn Lake Property Lake farmout agreement. The Company does not believe there has been any default and maintains its ownership in the Sawn Lake farmout agreement.

Consolidated Balance Sheets (USD $)	Jun. 30, 2011	Dec. 31, 2010
Assets
Cash	$ 24,177	$ 68,644
Employee advances	7,559	7,059
Note receivable	28,050	25,050
Related party receivable	60,264	45,807
Inventory	7,823	7,823
Total current assets	127,873	154,383
Furniture and fixtures, net of $ 4,183-$ 2,436 in accumulated depreciation	20,169	22,605
Production equipment	196,124	196,124
Unproved (Note 3)	601,566	601,566
Total Property Plant and Equipment	817,859	820,295
Bond RRC	52,500	52,500
Total assets	998,232	1,027,178
Current liabilities:
Accounts payable and accrued liabilities	192,036	168,210
Advances from shareholder	62,046	76,546
Short term convertible notes and accrued interest	147,669	143,885
Short term loan	4,110
Note payable and accrued interest	101,609	96,066
Total current liabilities	507,470	484,707
Total liabilities	507,470	484,707
Shareholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued or outstanding
Common stock, $.001 par value; 300,000,000 shares authorized, 54,803,140 and 53,287,826 shares issued and outstanding	54,804	53,288
Additional paid-in capital	3,138,786	2,981,174
Accumulated deficit during the exploration stage	(2,681,163)	(2,477,707)
Accumulated comprehensive income	(21,665)	(14,284)
Total shareholders' equity	490,762	542,471
Total Liabilities and Shareholders' equity	$ 998,232	$ 1,027,178