Acquisition of MarilynJean Media Inc. and Recapitalization

6 Months Ended

Jun. 30, 2013

Acquisition of MarilynJean Media Inc. and Recapitalization

Acquisition of MarilynJean Media Inc. and Recapitalization

3.

Acquisition of MarilynJean Media Inc. and Recapitalization

On March 25, 2013, the “Company entered into a share exchange agreement with MJM. Under the terms of the agreement, the Company, together with its wholly-owned subsidiary, MarilynJean Holdings Inc., acquired 100% of the issued and outstanding common shares of MJM in exchange for 75,000,000 shares of common stock of the Company and 106,651,250 exchangeable preferred stock of MarilynJean Holdings Inc. The exchangeable shares of preferred stock are redeemable by the holders into shares of common stock of the Company on a one-for-one basis. The share exchange agreement closed on March 28, 2013.

After the close of the share exchange agreement, the Company has 194,528,352 shares of common stock issued and outstanding and 106,651,250 shares of common stock reserved for issuance upon conversion of 106,651,250 exchangeable shares of preferred stock outstanding. The acquisition was a capital transaction in substance and therefore has been accounted for as a recapitalization, which is outside the scope ASC 805, “Business Combinations”. Under recapitalization accounting, MJM is considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. These consolidated financial statements include the accounts of the Company since the effective date of the recapitalization and the historical accounts of the business of MJM since its inception on September 1, 2011.

The assets acquired and liabilities assumed are as follows:

	$
Cash	267,058
Amounts receivable	1,979
Loan receivable	100,000
Oil and gas properties	50,000
Accounts payable and accrued liabilities	(18,132)
Due to related parties	(65,016)
Net assets acquired	335,889