Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
x
|
PART I FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
3
|
Balance Sheets as of August 31, 2014 (unaudited) and May 31, 2014
|
4
|
|
Statements of Operations (unaudited)
|
5
|
|
Statements of Cash Flows (unaudited)
|
6
|
|
Notes to Financial Statements (unaudited)
|
7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
11
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
12
|
Item 4.
|
Controls and Procedures
|
13
|
PART II OTHER INFORMATION
|
||
Item 6.
|
Exhibits
|
14
|
Signatures
|
15
|
Laredo Oil, Inc.
|
||||||||
Balance Sheets
|
||||||||
August 31,
2014
|
May 31,
2014
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
86,473
|
$
|
88,271
|
||||
Prepaid expenses and other current assets
|
161,951
|
48,223
|
||||||
Total Current Assets
|
248,424
|
136,494
|
||||||
TOTAL ASSETS
|
$
|
248,424
|
$
|
136,494
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
73,113
|
$
|
28,286
|
||||
Accrued payroll liabilities
|
639,689
|
482,515
|
||||||
Accrued interest
|
83,112
|
76,805
|
||||||
Deferred management fee revenue
|
45,833
|
45,833
|
||||||
Warrant liabilities
|
551,239
|
636,428
|
||||||
Notes payable
|
350,000
|
350,000
|
||||||
Total Current Liabilities
|
1,742,986
|
1,619,867
|
||||||
TOTAL LIABILITIES
|
1,742,986
|
1,619,867
|
||||||
Commitments and Contingencies
|
-
|
-
|
||||||
Stockholders’ Deficit
|
||||||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued and outstanding
|
-
|
-
|
||||||
Common stock: $0.0001 par value; 90,000,000 shares authorized; 53,600,013 issued and outstanding, respectively
|
5,360
|
5,360
|
||||||
Additional paid in capital
|
6,851,126
|
6,684,403
|
||||||
Accumulated deficit
|
(8,351,048
|
)
|
(8,173,136
|
)
|
||||
Total Stockholders’ Deficit
|
(1,494,562
|
)
|
(1,483,373
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
248,424
|
$
|
136,494
|
||||
Three Months
Ended
|
Three Months
Ended
|
|||||||
August 31, 2014
|
August 31, 2013
|
|||||||
Management fee revenue
|
$
|
1,554,902
|
$
|
700,197
|
||||
Direct costs
|
1,501,974
|
648,518
|
||||||
Gross profit
|
52,928
|
51,679
|
||||||
General, selling and administrative expenses
|
186,770
|
130,732
|
||||||
Consulting and professional services
|
122,728
|
84,662
|
||||||
Operating loss
|
(256,570
|
)
|
(163,715
|
)
|
||||
Other income (expense)
|
||||||||
Gain/(Loss) on revaluation of warrant liability
|
85,189
|
(48,875
|
)
|
|||||
Interest expense
|
(6,531
|
)
|
(5,435
|
)
|
||||
Net loss
|
$
|
(177,912
|
)
|
$
|
(218,025
|
)
|
||
Net loss per share, basic and diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
Weighted average number of basic and common shares outstanding
|
53,600,013
|
53,539,143
|
Three Months Ended
|
Three Months Ended
|
|||||||
August 31, 2014
|
August 31, 2013
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(177,912
|
)
|
$
|
(218,025
|
)
|
||
Adjustments to Reconcile Net Loss to Net Cash Used in by Operating Activities
|
||||||||
Share based compensation
|
166,723
|
108,949
|
||||||
Gain/(Loss) on revaluation of warrant liability
|
(85,189
|
)
|
48,875
|
|||||
Increase in prepaid expenses and other current assets
|
(113,728
|
)
|
(14,211
|
)
|
||||
Increase in accounts payable and accrued liabilities
|
208,308
|
58,432
|
||||||
NET CASH USED IN OPERATING ACTIVITIES
|
(1,798
|
)
|
(15,980
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
-
|
-
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
-
|
-
|
||||||
Net decrease in cash and cash equivalents
|
(1,798
|
)
|
(15,980
|
)
|
||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
88,271
|
107,674
|
||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
86,473
|
$
|
91,694
|
||||
Current Liability
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Warrant Liabilities – August 31, 2014
|
$
|
-
|
$
|
551,239
|
$
|
-
|
$
|
551,239
|
||||||||
Warrant Liabilities – May 31, 2014
|
$
|
-
|
$
|
636,428
|
$
|
-
|
$
|
636,428
|
●
|
Affiliates of the entity;
|
|
·
|
Entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity;
|
|
·
|
Trusts for the benefit of employees;
|
|
·
|
Principal owners of the entity and members of their immediate families;
|
|
·
|
Management of the entity and members of their immediate families;
|
Three Months Ended
|
||||||||
August 31, 2014
|
August 31, 2013
|
|||||||
Share-based compensation:
|
||||||||
General, selling and administrative expenses
|
$
|
159,223
|
$
|
95,824
|
||||
Consulting and professional services
|
7,500
|
13,125
|
||||||
166,723
|
108,949
|
|||||||
Share-based compensation by type of award:
|
||||||||
Stock options
|
159,223
|
95,824
|
||||||
Restricted stock
|
7,500
|
13,125
|
||||||
$
|
166,723
|
$
|
108,949
|
2014
|
2013
|
|||||||
Risk-free interest rates
|
0.09
|
%
|
0.39
|
%
|
||||
Contractual life
|
0.9 years
|
2.0 years
|
||||||
Expected volatility
|
147.57
|
%
|
186.0
|
%
|
||||
Dividend yield
|
0
|
%
|
0
|
%
|
3.1
|
Certificate of Incorporation, included as Exhibit 3.1 in our Form S-1 filed August 25, 2008, File No. 333-153168 and incorporated herein by reference.
|
3.2
|
Certificate of Amendment of Certificate of Incorporation, included as Exhibit 10.1 to our Form 8-K filed October 22, 2009 and incorporated herein by reference.
|
3.3
|
Bylaws, included as Exhibit 3.2 in our S-1 filed August 25, 2008, File No. 333-153168 and incorporated herein by reference.
|
10.1 | Amendment to Executive Employment Agreement dated October 15, 2014 between the Company and Mark See, CEO, amending that certain Letter Agreement dated October 16, 2009, which was included as Exhibit 10.1 to our Form 10-K filed September 14, 2010. |
10.2 | Amendment to Executive Employment Agreement dated October 15, 2014 between the Company and Bradley E. Sparks, CFO, amending that certain Letter Agreement dated October 20, 2009, which was included as Exhibit 10.2 to our Form 10-K filed September 14, 2010. |
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Extension Presentation Linkbase
|
Date: October 15, 2014
|
By:
|
/s/ Mark See
|
|
Mark See
|
|||
Chief Executive Officer and Chairman of the Board
|
|||
Date: October 15, 2014
|
By:
|
/s/ Bradley E. Sparks
|
|
Bradley E. Sparks
|
|||
Chief Financial Officer, Treasurer and Director
|
|||
|
a.
|
Section 10(e)(1) shall be replaced in its entirety to read as follows:
|
|
b.
|
Section 10(e)(2) shall be amended to delete the phrase “with the exception of 10(e)(4), which requires no notice period”.
|
|
c.
|
Section 10(e)(3) shall be replaced in its entirety to read as follows:
|
|
“In the event that the Executive terminates this Agreement and his employment with the Company for Good Reason, the Company shall pay or provide to the Executive (or, following his death, to the Executive’s heirs, administrators or executors): (A) any earned but unpaid Base Salary, unpaid pro rata annual bonus and unused vacation days accrued through the Executive’s last day of employment with the Company; (B) continued coverage, at the Company’s expense, under all Benefits Plans in which the Executive was a participant immediately prior to his last date of employment with the Company, or, in the event that any such Benefit Plans do not permit coverage of the Executive following his last date of employment with the Company, under benefit plans that provide no less coverage than such Benefit Plans, for a period of two years following the termination of employment; (C) reimbursement of any and all reasonable expenses paid or incurred by the Executive in connection with and related to the performance of his duties and responsibilities for the Company during the period ending on the termination date; and (D) the Base Salary, as in effect immediately prior to the Executive’s termination hereunder, and any bonuses earned, for a two year period following termination; provided that if such termination occurs within 12 months after a Change of Control, such two year period shall be increased to a three year period. All payments due hereunder shall be payable according to the Company’s standard payroll procedures; provided that if such termination occurs within 12 months after a Change of Control, the payment set forth in Section 10(e)(3)(D) shall be paid in a lump sum within 30 days of such termination. The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other appropriate deductions.”
|
|
a.
|
Section 13 of the Agreement shall be amended to add a new Section 13(m) to read as follows:
|
b.
|
Section 13 of the Agreement shall be amended to add a new Section 13(n) to read as follows:
|
LAREDO OIL, INC. | |||
|
By:
|
/s/ Bradley E. Sparks | |
Name: | Bradley E. Sparks | ||
Title : | Chief Financial Officer | ||
MARK SEE
|
|||
|
By:
|
/s/ Mark See | |
|
a.
|
Section 10(e)(1) shall be replaced in its entirety to read as follows:
|
b.
|
Section 10(e)(3) shall be replaced in its entirety to read as follows:
|
|
a.
|
Section 13 of the Agreement shall be amended to add a new Section 13(m) to read as follows:
|
|
b.
|
Section 13 of the Agreement shall be amended to add a new Section 13(n) to read as follows:
|
LAREDO OIL, INC. | |||
|
By:
|
/s/ Mark See | |
Name: | Mark See | ||
Title: | Chief Executive Officer | ||
BRADLEY SPARKS
|
|||
|
By:
|
/s/ Bradley E. Sparks | |
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended August 31, 2014 of Laredo Oil, Inc., the registrant;
|
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 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 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 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 an 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(s) 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 registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control 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 control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended August 31, 2014 of Laredo Oil, Inc., the registrant;
|
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 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 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 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 an 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(s) 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 registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control 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 control over financial reporting.
|
(1)
|
the 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
the 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
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