OMB
APPROVAL
|
OMB
Number: 3235-0416
Expires:
March 31, 2007
Estimated
average burden hours per response:
..182
|
UNITED
STATES SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C., 20549
FORM
10-QSB
(Mark
one)
ý QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
Quarterly period ended February 29,
2008
r TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the
transition period from __________to___________
Commission
file number 333-130934
GOLDEN
ARIA CORP.
(Exact
name of small business issuer as specified in its charter)
Nevada
(State
or other jurisdiction of
incorporation
or organization)
|
20-1970188
(IRS
Employer
Identification
No.)
|
|
|
#604
– 700 West Pender Street, Vancouver, British Columbia, Canada V6C
1G8
(Address
of principal executive offices)
|
|
(604)
602-1633
(Issuer's
Telephone Number)
|
|
n/a
(Former
name, former address and former fiscal year, if changed since last
report)
|
Check
whether the issuer (1) filed all reports required to be filed by sections 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorten period
that the registrant was required to file such report), and (2) has been subject
to such filing requirements for the past 90 days. Yes ý No r
Indicate
by a check mark whether the registrant is a shell company (as defined in Rule
1b-2 of the Exchange Act).
Yes r No ý .
State the
number of shares outstanding of each of the issuer's classes of common equity as
of the latest practicable date:
Outstanding
as of February 29, 2008: 29,305,480 common shares
Transitional
Small Business Disclosure Format (Check one): Yes r No ý
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Page
#
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PART
I - FINANCIAL INFORMATION
|
|
Financial
Statements
|
3
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|
Management's
Discussion and Analysis or Plan of Operation
|
14
|
|
Controls
and Procedures
|
16
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PART
II - OTHER INFORMATION
|
|
Legal
Proceedings
|
17
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|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
17
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|
Defaults
Upon Senior Securities
|
17
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Submission
of Matters to a Vote of Security Holders
|
17
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|
Other
Information
|
17
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Exhibits
|
17
|
PART
I - FINANCIAL INFORMATION
Item
1. Financial Statements
The
following interim unaudited consolidated financial statement for the period
ended February 29, 2008:
(a)
|
Unaudited
Interim Consolidated Balance Sheets as of February 29, 2008 and August 31,
2007
|
F-1
|
(b)
|
Unaudited
Interim Consolidated Statements of Changes in Stockholders' Equity for the
Period from Inception on November 24, 2004 to February 29,
2008
|
F-2
|
(c)
|
Unaudited
Interim Consolidated Statements of Operations for the three month period
ended February 29, 2008 and February 28, 2007 and the Cumulative Period
from Inception on November 24, 2004 to February 29, 2008
|
F-3
|
(d)
|
Unaudited
Interim Consolidated Statements of Cash Flows for the three months ended
February 29, 2008 and February 28, 2007 and the Cumulative Period from
Inception on November 24, 2004 to February 29, 2008
|
F-4
|
(e)
|
Notes
to Unaudited Interim Consolidated Financial Statements
|
F-5
|
These
unaudited interim consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and the SEC instructions to Form
10-QSB. In the opinion of management, all adjustments considered necessary for a
fair presentation have been included. Operating results for the interim period
ended February 29, 2008 are not necessarily indicative of the results that can
be expected for the full year.
(An
Exploration Stage Company)
INTERIM
UNAUDITED CONSOLIDATED BALANCE SHEETS
February
29, 2008
(Unaudited)
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
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FEBRUARY
29,
|
|
AUGUST
31,
|
|
|
|
|
|
|
|
|
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2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
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|
(unaudited)
|
|
(audited)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
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|
Cash
and cash equivalents
|
|
|
|
|
|
$
|
371,974
|
$
|
301,579
|
|
Accounts
receivable
|
|
|
|
|
|
|
26,288
|
|
14,860
|
|
Prepaid
expenses and deposit
|
|
|
|
|
|
|
2,810
|
|
-
|
Total
current assets
|
|
|
|
|
|
|
401,072
|
|
316,439
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Non-Current
|
|
|
|
|
|
|
|
|
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|
Proven
- Oil and gas properties (Note 5)
|
|
|
|
|
|
250,651
|
|
203,658
|
|
Unproven
- Oil and gas properties (Note 5)
|
|
|
|
|
|
3,400,833
|
|
-
|
Total
Assets
|
|
|
|
|
|
$
|
4,052,556
|
$
|
520,097
|
|
|
|
|
|
|
|
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|
|
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LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Current
|
|
|
|
|
|
|
|
|
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Accounts
payable
|
|
|
|
|
|
$
|
5,906
|
$
|
12,688
|
|
Accrued
liabilities
|
|
|
|
|
|
|
-
|
|
3,375
|
|
Due
to related parties (Note 5)
|
|
|
|
|
|
|
182,002
|
|
206,871
|
Total
Current Liabilities
|
|
|
|
|
|
|
187,908
|
|
222,934
|
|
Deferred
tax liability
|
|
|
|
|
|
|
762,704
|
|
-
|
Total
Liabilities
|
|
|
|
|
|
|
950,612
|
|
222,934
|
|
|
|
|
|
|
|
|
|
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|
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|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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Share
capital
|
|
|
|
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|
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|
|
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Authorized:
|
|
|
|
|
|
|
|
|
|
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|
75,000,000
common shares with a par value of $0.001 per share
|
|
|
|
|
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|
Issued
and outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
29,305,480
common shares at February 29, 2008
|
|
|
|
|
|
|
|
|
|
(and
15,495,480 common shares at August 31, 2007)
|
|
|
|
29,305
|
|
15,495
|
Additional
paid-in capital
|
|
|
|
|
|
|
4,217,844
|
|
1,256,839
|
Deficit
accumulated during the
exploration stage
|
|
|
|
|
(1,145,205)
|
|
(975,171)
|
Total
Stockholders' Equity
|
|
|
|
|
|
|
3,101,944
|
|
297,163
|
Total
Liabilities and Stockholders' Equity
|
|
|
|
|
$
|
4,052,556
|
|
520,097
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
The
accompanying notes are an integral part of these financial
statements
|
|
|
|
|
|
|
|
|
|
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|
F1
GOLDEN
ARIA CORP.
|
|
(An
Exploration Stage Company)
|
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
NOVEMBER
24, 2004 (inception) TO FEBRUARY 29, 2008
|
|
(Expressed
in U.S. Dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
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COMMON
STOCK
|
|
|
|
|
|
|
|
|
|
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|
SHARES
|
|
AMOUNT
|
|
ADDITIONAL
PAID-IN
CAPITAL
|
|
ISSUED
|
|
ACCUMULATED
DURING
EXPLORATION
STAGE
|
|
TOTAL
STOCKHOLDERS' EQUITY
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
November 24, 2004 (Inception) |
- |
$
|
- |
$
|
- |
$
|
- |
$
|
- |
$
|
- |
|
|
Issuance
of common stock for cash
|
10,935,000
|
|
10,935
|
|
98,415
|
|
-
|
|
-
|
|
109,350
|
|
|
|
at
$0.01 per share on March 22, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for cash
|
2,225,000
|
|
2,225
|
|
331,525
|
|
-
|
|
-
|
|
333,750
|
|
|
|
at
$0.15 per share on April 6, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
to be issued
|
250,000
|
|
-
|
|
37,250
|
|
250
|
|
-
|
|
37,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(167,683)
|
|
(167,683)
|
|
|
Balance,
August 31, 2005
|
13,410,000
|
|
13,160
|
|
467,190
|
|
250
|
|
(167,683)
|
|
312,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued on September 29, 2005
|
-
|
|
250
|
|
-
|
|
(250)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
for the year
|
-
|
|
-
|
|
-
|
|
-
|
|
(200,091)
|
|
(200,091)
|
|
|
Balance,
August 31, 2006
|
13,410,000
|
|
13,410
|
|
467,190
|
|
-
|
|
(367,774)
|
|
112,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
issued for cash at $0.25 per unit
|
185,480
|
|
185
|
|
163,144
|
|
|
|
|
|
163,329
|
|
|
|
to
related parties on March 6, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(included
stock based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
$116,959)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for property on April 18, 2007
|
500,000
|
|
500
|
|
274,500
|
|
-
|
|
-
|
|
275,000
|
|
|
Units
issued for cash at $0.25 per unit
|
200,000
|
|
200
|
|
49,800
|
|
-
|
|
-
|
|
50,000
|
|
|
|
on
April 19, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
issued for cash at $0.25 per unit
|
1,200,000
|
|
1,200
|
|
298,800
|
|
-
|
|
-
|
|
300,000
|
|
|
|
on
August 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest from non-interest bearing loan
|
-
|
|
-
|
|
3,405
|
|
-
|
|
-
|
|
3,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
for the year
|
-
|
|
-
|
|
-
|
|
-
|
|
(607,397)
|
|
(607,397)
|
|
|
Balance,
August 31, 2007
|
15,495,480
|
$
|
15,495
|
$
|
1,256,839
|
$
|
-
|
$
|
(975,171)
|
$ |
297,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
issued for acquisition at $0.21 per unit
|
13,810,000
|
|
13,810
|
|
2,886,290
|
|
-
|
|
-
|
|
2,900,100
|
|
|
|
on
November 30, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest from non-interest bearing loan
|
-
|
|
-
|
|
4,002
|
|
-
|
|
-
|
|
4,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation on 1,785,000 options granted
|
-
|
|
-
|
|
70,713
|
|
-
|
|
-
|
|
70,713
|
|
|
(Note
8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(170,034)
|
|
|
(170,034)
|
|
|
Balance,
February 29, 2008
|
29,305,480
|
$
|
29,305
|
$
|
4,217,844
|
$
|
-
|
$
|
(1,145,205)
|
$ |
|
3,101,944
|
|
|
The
accompanying notes are an integral part of these financial
statements
|
|
|
|
|
F-2
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Expressed
in U.S. Dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
CUMULATIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERIOD
FROM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCEPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOVEMBER
24, 2004
|
|
|
|
|
|
|
THREE
MONTHS ENDED
|
|
SIX
MONTHS ENDED
|
|
TO
|
|
|
|
|
|
|
FEBRUARY
29,
|
|
FEBRUARY
28,
|
|
FEBRUARY
29,
|
|
FEBRUARY
28,
|
|
FEBRUARY
29,
|
|
|
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas and oil revenue
|
$
|
61,406
|
$
|
-
|
$
|
95,237
|
$
|
-
|
$
|
177,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas and oil operating costs and royalties
|
|
19,770
|
|
-
|
|
29,275
|
|
-
|
|
57,220
|
|
|
|
|
Depletion
|
|
20,268
|
|
-
|
|
33,116
|
|
-
|
|
109,208
|
|
|
|
|
Writedown
in carrying value of oil and gas property
|
|
9,914
|
|
-
|
|
9,914
|
|
-
|
|
226,213
|
|
|
|
|
|
|
49,952
|
|
-
|
|
72,305
|
|
-
|
|
392,641
|
|
|
|
Gross
Profit
|
|
11,454
|
|
-
|
|
22,932
|
|
-
|
|
(215,198)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting
and audit
|
|
13,586
|
|
10,218
|
|
36,785
|
|
29,395
|
|
146,683
|
|
|
|
|
Bank
charges and interest expense
|
|
2,097
|
|
233
|
|
4,280
|
|
402
|
|
8,642
|
|
|
|
|
Consulting
(Note 6 & Note 8)
|
|
76,713
|
|
6,360
|
|
83,073
|
|
12,720
|
|
260,178
|
|
|
|
|
Exploration
costs and option payment
|
|
-
|
|
121,943
|
|
-
|
|
94,251
|
|
318,292
|
|
|
|
|
Fees
and dues
|
|
1,850
|
|
864
|
|
3,020
|
|
2,019
|
|
10,766
|
|
|
|
|
Insurance
|
|
9,807
|
|
-
|
|
9,807
|
|
-
|
|
9,807
|
|
|
|
|
Investor
relations
|
|
2,094
|
|
(250)
|
|
4,044
|
|
2,953
|
|
6,997
|
|
|
|
|
Legal
an professional
|
|
17,216
|
|
5,206
|
|
31,103
|
|
12,885
|
|
105,085
|
|
|
|
|
Office
and miscellaneous
|
|
4,156
|
|
(609)
|
|
14,134
|
|
(366)
|
|
31,052
|
|
|
|
|
Rent
|
|
5,631
|
|
5,629
|
|
8,080
|
|
9,672
|
|
34,660
|
|
|
|
|
Travel
|
|
3,025
|
|
2,381
|
|
3,025
|
|
2,381
|
|
6,294
|
|
|
|
Total
expenses
|
|
136,175
|
|
151,975
|
|
197,351
|
|
166,312
|
|
938,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
for the period before other income
|
|
(124,721)
|
|
(151,975)
|
|
(174,419)
|
|
(166,312)
|
|
(1,153,654)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1,840
|
|
342
|
|
4,385
|
|
1,831
|
|
8,450
|
|
|
|
|
Write
off of mineral property
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
|
|
Net
(loss) for the period
|
$
|
(122,881)
|
$
|
(151,633)
|
$
|
(170,034)
|
$
|
(164,481)
|
$
|
(1,145,205)
|
|
|
|
Basic
and diluted loss per share
|
$
|
(0.00)
|
$
|
(0.01)
|
$
|
(0.01)
|
$
|
(0.01)
|
|
|
|
|
|
Weighted
average number of common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding
- basic and diluted
|
|
29,305,480
|
|
13,410,000
|
|
22,476,359
|
|
13,410,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral
part of these financial statements
F-3
GOLDEN
ARIA CORP.
|
(An
Exploration Stage Company)
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Expressed
in U.S. Dollars)
|
(Unaudited)
|
|
|
SIX
MONTHS ENDED
|
|
CUMULATIVE
PERIOD FROM
|
|
|
|
|
FEBRUARY
29,
2008
|
|
FEBRUARY
28,
2007
|
|
|
INCEPTION November
24, 2004 TO FEBRUARY 29, 2008
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in operating
activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) |
$
|
(170,034) |
$
|
(164,481)
|
|
$
|
|
(1,145,205)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes to reconcile net loss
to net cash used in operating activities |
|
|
|
|
|
|
|
|
|
|
Consulting - Stock based compensation (Note
8) |
|
70,713 |
|
|
|
187,672
|
|
|
|
|
Depletion
|
|
33,116
|
|
-
|
|
109,208
|
|
|
|
|
Write
down in carrying value of oil and gas properties
|
|
9,914
|
|
-
|
|
226,213
|
|
|
|
|
Stock
issued for mineral resource and oil and gas property
|
|
-
|
|
-
|
37,500
|
|
|
|
|
Write
off of mineral property
|
|
-
|
|
-
|
|
1
|
|
|
|
|
Imputed
interest expense
|
|
4,002
|
|
|
|
7,407
|
|
|
|
Adjusted
cash flows used in operating activities
|
|
(52,289)
|
|
(164,481)
|
|
(577,204)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in non-cash working capital items:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(720)
|
|
-
|
|
(15,580)
|
|
|
|
|
Prepaid
expenses and deposit
|
|
21,474
|
|
7,099
|
|
21,474
|
|
|
|
|
Accounts
payable
|
|
(34,702)
|
|
2,580
|
|
(22,014)
|
|
|
|
|
Accrued
liabilities
|
|
(3,375)
|
|
775
|
|
-
|
|
|
|
|
Due
to related parties
|
|
(24,869)
|
|
2,755
|
|
(21,054)
|
|
|
Net
cash used in operating activities
|
|
(94,481)
|
|
(151,272)
|
|
(614,378)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows used in investing activities
|
|
|
|
|
|
|
|
|
|
Oil
and gas properties acquisition
|
|
(36,152)
|
|
-
|
|
(54,145)
|
|
|
|
Mineral
resource properties acquisition
|
|
-
|
|
-
|
|
(1)
|
|
|
|
Cash
provided in connection with business acquisition
|
|
201,028
|
|
-
|
|
201,028
|
|
|
Net
cash from (used in) investing activities
|
|
164,876
|
|
-
|
|
146,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance(cancellation) of common stock
|
|
-
|
|
21,370
|
|
839,470
|
|
|
Net
cash from financing activities
|
|
-
|
|
21,370
|
|
839,470
|
|
|
Increase
(Decrease) in cash and cash equivalents
|
|
70,395
|
|
(129,902)
|
|
371,974
|
|
|
|
Cash
and cash equivalents, beginning of period
|
|
301,579
|
|
153,329
|
|
-
|
|
|
Cash
and cash equivalents, end of period
|
$
|
371,974
|
$
|
23,427
|
|
$
|
371,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial
statements
(An
Exploration Stage Company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
February
29, 2008
(Unaudited)
(Expressed
in U.S. Dollars)
The
unaudited consolidated financial statements as of February 29, 2008 and for the
six months ended February 29, 2008 included herein have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in annual financial
statements prepared in accordance with United States generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. These unaudited consolidated financial statements should be read in
conjunction with the August 31, 2007 audited annual financial statements and
notes thereto. Operating results for the three and six months ended February 29,
2008 are not necessarily indicative of the results that may be expected for the
year ended August 31, 2008.
2.
|
ORGANIZATION
AND BUSINESS ACQUISITION
|
The
Company is an independent natural gas and oil company engaged in the
exploration, development and acquisition of natural gas and oil properties in
the United States and Canada.
The
Company was incorporated in the State of Nevada on November 24,
2004.
Business
acquisition
Effective
November 30, 2007, the Company acquired Target Energy, Inc. (“Target”), a
private Nevada corporation, whose principal business is in the identification,
acquisition and exploration of oil and gas properties. The closing of
the transactions contemplated in the share exchange agreement and the
acquisition of all of the issued and outstanding common stock in the capital of
Target occurred on November 30, 2007. The Company issued to the
shareholders of Target 13,810,000 shares of common stock, which represented 100%
of the outstanding shares of Target. Following is a summary of
purchase price allocation:
|
|
November
30, 2007
|
|
|
|
Purchase
price:
|
|
|
|
|
|
Share
consideration - 13,810,000 common shares at $0.21 per
share
|
$
|
2,900,100
|
|
|
|
Purchase
Price Allocation:
|
|
|
|
|
|
Cash
and cash equivalents
|
$
|
201,028
|
Accounts
receivable
|
|
10,708
|
Prepaid
expense and deposits
|
|
24,284
|
Oil
and gas properties
|
|
3,454,704
|
Accounts
payable and accrued liabilities
|
|
(27,920)
|
Deferred
income tax liabilities
|
|
(762,704)
|
|
|
|
Total
|
$
|
2,900,100
|
F-5
As the
acquisition was completed on the November 30, 2007, therefore, only operations
commenced from December 1, 2007 of the Target’s was included in the consolidated
financial statements.
3.
|
GOING
CONCERN UNCERTAINTY
|
The
accompanying unaudited consolidated financial statements have been prepared on a
going concern basis which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of business for
the foreseeable future. The Company incurred a net loss of $170,043 for the six
months ended February 29, 2008 [net loss for the six months ended February 28,
2007 - $164,481] and as at February 29, 2008 has incurred cumulative losses of
$1,145,205 that raises substantial doubt about its ability to continue as a
going concern. Management has been able, thus far, to finance the
operations through equity financing and cash on hand. There is no
assurance that the Company will be able to continue to finance the Company on
this basis.
In view
of these conditions, the ability of the Company to continue as a going concern
is in substantial doubt and dependant upon its ability to generate sufficient
cash flow to meet its obligations on a timely basis, to obtain additional
financing as may be required, to receive the continued support of the Company’s
shareholders, and ultimately to obtain successful operations. These unaudited
consolidated financial statements do not give effect to any adjustments which
would be necessary should the Company be unable to continue as a going concern
and therefore be required to realize its assets and discharge its liabilities in
other than the normal course of business and at amounts different from those
reflected in the accompanying financial statements.
4.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
a)
|
Basis
of Consolidation
|
The
consolidated financial statements include the financial statements of the
Company and its wholly-owned subsidiary, Target Energy, Inc. All
significant inter-company balances and transactions have been
eliminated.
The
Company uses the sales method of accounting for natural gas and oil
revenues. Under this method, revenues are recognized upon the passage
of title, net of royalties. Revenues from natural gas production are
recorded using the sales method. When sales volumes exceed the
Company’s entitled share, an overproduced imbalance occurs. To the
extent the overproduced imbalance exceeds the Company’s share of the remaining
estimated proved natural gas reserves for a given property, the Company records
a liability. At February 29, 2008, the Company had no overproduced
imbalances.
c)
|
Oil
and Gas Properties
|
The
Company utilizes the full cost method to account for its investment in oil and
gas properties. Accordingly, all costs associated with acquisition,
exploration and development of oil and gas reserves, including such costs as
leasehold acquisition costs, capitalized interest costs relating to unproved
properties, geological expenditures, tangible and intangible development costs
including direct internal costs are capitalized to the full cost
pool. When the Company obtains proven oil and gas reserves,
capitalized costs, including estimated future costs to develop the reserves and
estimated abandonment costs, net of salvage, will be depleted on the
units-of-production method using estimates of proved
reserves. Investments in unproved properties and major development
projects including capitalized interest, if any, are not amortized until proved
reserves associated with the projects can be determined. If the
future exploration of unproved properties are determined uneconomical the amount
of such properties are added to the capitalized cost to be
amortized.
The
capitalized costs included in the full cost pool are subject to a “ceiling
test”, which limits such costs to the aggregate of the estimated present value,
using a ten percent discount rate of the future net revenues from proved
reserves, based on current economic and operating conditions.
Sales of
proved and unproved properties are accounted for as adjustments of capitalized
costs with no gain or loss recognized, unless such adjustments would
significantly alter the relationship between capitalized costs and proved
reserves of oil and gas, in which case the gain or loss is recognized in the
statement of operations.
Exploration
activities conducted jointly with others are reflected at the Company’s
proportionate interest in such activities.
Cost
related to site restoration programs are accrued over the life of the
project
d) Stock-Based
Compensation
The
Company adopted SFAS No. 123(revised), "Share-Based Payment", to
account for its stock options and similar equity instruments
issued. Accordingly, compensation costs attributable to stock options
or similar equity instruments granted are measured at the fair value at the
grant date, and expensed over the expected vesting period. SFAS No.
123(revised) requires excess tax benefits be reported as a financing cash inflow
rather than as a reduction of taxes paid.
F-6
5.
|
OIL
AND GAS PROPERTIES
|
Queensdale,
Saskatchewan (1A9-25)
On April
16, 2007, the Company acquired a 25% (net 15%) before payout (“BPO”) (12.5% (net
7.5%) after payout (“APO”)) interest in Queensdale, Saskatchewan Project from
0743608 B.C. Ltd. (Assignor), a company controlled by a Director/CEO of the
Company, for a total cost of CAD$250,000 and 500,000 shares in the common
stock. The Participation Agreement consists specifically of all
(100%) of the Assignor’s interest in the Queensdale 1A9-25/4A2-25-6-2 W2M well;
none (0%) of the Assignor’s interest in the Queensdale 4A9-25 / 2D15-25-6-2 W2M
well; and one-half (50%) interest in the Farmout Land and the Option
Land.
|
On
April 18, 2007, 500,000 shares were issued at market value $0.55 per share
giving a total of $275,000.
|
The
Company agrees to pay to the Assignor on monthly basis and within 5 business
days of receiving the payment from net generated oil and gas revenue, a minimum
of 80% of the payments received from net generated oil and gas revenue
attributable to the Queensdale 1A9-25 / 4A2-25-6-2 W2M well, until such time as
the full CAD$250,000 has been paid to the Assignor.
|
The
total cost capitalized cost incurred for the oil and gas property was
$496,049 which was attributed to the acquisition cost of the oil and gas
property. The Company applied the full cost method to account
for this property.
|
West
Queensdale, Saskatchewan (HZ 4A9-25/3A15-25-6-2 W2)
In
Connection with the acquisition of Target, the Company acquired another
producing well at Queensdale, Queensdale West HZ 4A9-25/3A15-25-6-2
W2. The well was drilled in February 2007 and was placed in
production on May 15, 2007. The Company has an 8% Gross Interest
before payout (BPO) and 4% net interest after payout in this
well.
Wordsworth,
Saskatchewan
Through
the Company’s subsidiary, Target, the Company owns a well working interest in
Wordsworth, Saskatchewan, The Wordsworth property has one producing oil well
which was drilled in May, 2006, and in which the Company has a 3.75% net
interest. This is a horizontal well called the Wordsworth East HZ
2A2-23/3A11-14-7-3 W2, and was considered a new pool discovery. A second well on
this property, the Wordsworth E. HZ 3B9-23/3A11-23-7-3 W2 located on the north
side of the Wordsworth prospect area, was deemed not commercially viable as a
producing oil well. However, after additional seismic was completed on this
project the partners have agreed to re-enter the well and make a new horizontal
leg turning to the south. It is anticipated this will result in a new
producing oil well this summer.
F-7
Coteau
Lake, Saskatchewan
In
connection with the acquisition of Target, the Company acquired certain working
interest in Coteau Lake, Saskatchewan.
Coteau
Lake is an exploration property and the Company has no producing oil or gas
wells on this land at this time. The Coteau Lake exploration project covers
1,280 acres of land. The Company’s gross and net interest in this project is
50%. There has been historic oil production on the Coteau Lake project
lands.
On
November 7, 2007, the Company’s subsidiary Target entered into a Letter of
Intent (the “LOI”) with Primrose Drilling Ventures Ltd. (“Primrose”), a body
corporate, having an office in the city of Calgary, in the Province of
Alberta. Pursuant to the LOI, the Target is the interest title holder
of Saskatchewan Crown Land parcels 124, 125 and 126.
Primrose
elected to proceed with a 50/50 joint venture with Target by reimbursing Target
for 50% of its land cost on parcels 124, 125 and 126 for CDN$26,590 which is
payable on signing within 15 days of the LOI. Primrose would become
operator of the project upon its acceptance of such appointment and agreement to
assume the duties, obligations and rights of the operator. A formal
Participation Agreement (“Agreement”) will include the provisions of LOI and
will be drawn up and concluded with 15 days of the above noted payment by
Primrose to Target. Included in the Participation Agreement would be
the Area of Mutual Interest (AMI) which would govern future land acquisitions
and timeline set out in the LOI.
(a)
Proved property
Property
|
|
August
31, 2007
|
|
Addition
|
Depletion
for the period
|
Write
down in carrying value
|
February
29, 2008
|
Canada– Proved
property
|
$
|
203,658
|
$
|
90,023
|
$
|
(33,116)
|
$
|
(9,914)
|
$
|
250,651
|
(b)
Unproved property
Property
|
|
August
31, 2007
|
|
Addition
|
|
Cost
added to capitalized cost
|
|
February
29, 2008
|
Canada–
Unproved property
|
$
|
-
|
$
|
2,638,129
|
$
|
-
|
$
|
2,638,129
|
|
Included
in the unproved property, $2,615,139 was resulted of the business
acquisition occurred on November 30, 2007. The acquired
unproven oil and gas properties of $ 2,615,139 have been recorded at
amounts necessary to reflect temporary differences associated with the
differences between their accounting and tax bases. As a result, these
properties are recorded in the consolidated balance sheet at February 29,
2008 at $ 3,377,843, with a corresponding future tax liability of $
762,704.
|
6.
|
RELATED
PARTIES TRANSACTION
|
In the
three month period ended February 29, 2008, the Company paid $6,000 (February
28, 2007: $Nil) to the President of the Company. The Company incurred
$Nil (February 28, 2007: $6,360) and $1,590 (February 28, 2007: $3,190); of
consulting fees and office rent, respectively, to companies controlled by /
related to a director of the Company. At February 29, 2008, the Company owed
$1,590 (February 28, 2007: $5,830) to those companies and an additional $180,412
(February 28, 2007: $Nil) was owed to a company controlled by a Director/CEO of
the Company for acquiring working interest in Queensdale, Saskatchewan
Project. The related party transactions are recorded at the exchange
amount established and agreed to between the related parties.
F-8
7. COMMON
STOCK AND WARRANTS
On
October 15, 2007, the Company entered into a share exchange agreement with
Target Energy (“Target”), a private Nevada corporation, and the former
shareholders of Target. The closing of the transactions contemplated in the
share exchange agreement and the acquisition of all of the issued and
outstanding common stock in the capital of Target occurred on November 30,
2007. The Company issued to the shareholders of Target 13,810,000
shares of common stock, which represented 100% of the outstanding shares of
Target. After giving effect to the share exchange agreement,
including the issuance of 13,810,000 of common shares in the
Company. As of February 29, 2008, the total number of shares issued
and outstanding is 29,305,480.
Warrants
A summary
of the changes in share purchase warrants for the period ended February 29, 2008
is presented below:
|
Warrants
Outstanding
|
|
|
Weighted
Average
|
|
Number
of Shares
|
Exercise
Price
|
Balance,
August 31, 2007
|
1,585,480
|
$ 0.40
|
|
|
|
Issued
|
-
|
-
|
|
|
|
Balance,
February 29, 2008
|
1,585,480
|
$ 0.40
|
The
Company has the following warrants outstanding and exercisable.
February 29,
2008
|
Warrants outstanding
and exercisable
|
|
|
|
|
|
|
Weighted
|
Weighted
|
|
|
average
|
average
|
|
Number
|
remaining
|
exercise
|
Exercise
price
|
of
shares
|
contractual
life
|
price
|
$0.40
|
385,480
|
0.75
years
|
0.40
|
$0.40
|
1,200,000
|
1.50
years
|
0.40
|
8. STOCK
OPTIONS
On
December 14, 2007, the Company granted 1,785,000 stock options to Directors,
Officers, and consultants of the Company with an exercise price of $0.35 per
share, expiring over 5 years. The vesting dates of options are as
below:
Vesting
Dates
|
Percentage
of options granted
|
December
14, 2007
|
25%
|
December
14, 2008
|
25%
|
December
14, 2009
|
25%
|
December
14, 2010
|
25%
|
For the
three months ended February 29, 2008, the Company recorded a total of $70,713
for stock based compensation expenses which has been included in consulting
fees.
F-9
A summary
of the changes in stock options for the period ended February 29, 2008 is
presented below:
|
Options
Outstanding
|
|
|
Weighted
Average
|
|
Number
of Shares
|
Exercise
Price
|
Balance,
August 31, 2007
|
-
|
$ -
|
|
|
|
Granted
|
1,785,000
|
0.35
|
|
|
|
Balance,
February 29, 2008
|
1,785,000
|
$ 0.35
|
The fair
value of each option granted has been estimated as of the date of the grant
using the Black-Scholes option pricing model with the following
assumptions:
|
Period
ended February 29, 2008
|
Expected
volatility
|
92.10%
|
Risk-free
interest rate
|
3.77%
|
Expected
life
|
5
years
|
Dividend
yield
|
0.0%
|
A summary
of weighted average fair value of stock options granted during the period ended
February 29, 2008 is as follows:
Period
ended February 29, 2008
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Fair
Value
|
|
|
|
Exercise
price is more than the market price at grant
date:
|
$ 0.35
|
$ 0.13
|
The
Company has the following options outstanding and
exercisable.
February
29, 2008
|
Options
outstanding
|
Options
exercisable
|
|
|
|
|
|
|
|
|
Weighted
|
Weighted
|
|
Weighted
|
|
|
average
|
Average
|
|
Average
|
Range
of
|
Number
|
remaining
|
Exercise
|
Number
|
Exercise
|
exercise
prices
|
of
shares
|
contractual
life
|
Price
|
of
shares
|
Price
|
|
|
|
|
|
|
$0.35
|
1,785,000
|
4.79
years
|
$0.35
|
446,250
|
$0.35
|
|
(a)
The Company has entered into a month-to-month rental arrangement for
office space in Kelowna, British Columbia, Canada for CAD$525 (including
CAD$25 GST) per month.
(b)
On May 25, 2006, the Company has entered into an administration contract
with Hurricane Corporate Services Ltd, an arms-length party, to provide
administrative services to the Company for $2,860 per month commencing
June 1, 2006. This agreement was subsequently cancelled on April 1,
2008.
(c)
On December 1, 2007, the Company entered into a consulting agreement with
the president of the Company for corporate administration and oil and gas
exploration and production consulting services for $2,000 per month on a
continuing basis.
(d)
On March 2, 2008, the Company entered into a controller agreement with CAB
Financial Services, a corporation organized under the laws of the Province
of British Columbia. CAB Financial Services is a consulting
company controlled by the chairman of the board and chief executive
officer of the Company.
Pursuant
to the controller agreement, CAB Financial Services will provide corporate
accounting and controller services to the Company in consideration for the
payment of CAD$3,675 (including CAD$175 GST) per month, together with
reimbursement for all travel and other expenses incurred by
it.
|
F-10
ITE
M 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION
Forward-Looking
Statements
Historical
results and trends should not be taken as indicative of future operations.
Management's statements contained in this report that are not historical facts
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934 (the "Exchange Act"), as amended. Actual results may differ
materially from those included in the forward-looking statements. The Company
intends such forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and is including this statement for purposes of
complying with those safe-harbor provisions. Forward-looking statements, which
are based on certain assumptions and describe future plans, strategies and
expectations of the Company, are generally identifiable by use of the
words "believe,""expect,""intend,""anticipate,""estimate,""project,""prospects,"
or similar expressions. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse affect on the operations and future prospects of
the Company on a consolidated basis include, but are not limited to:
unanticipated problems relating to exploration, hazards such as pollution, or
other hazards which cannot be insured against or predicted, changes in economic
conditions, availability of capital, competition, and generally accepted
accounting principles. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. Further information concerning the Company and its business,
including additional factors that could materially affect the Company's
financial results, is included herein and in the Company's other filings with
the SEC.
Management's
Discussion and Analysis
We are
currently an exploration company focused on developing oil and gas
properties. We have also begun an extensive review of opportunities
in the alternative energy sector, as continually improving economics in the
sector support sound business fundamentals. At the same time, costs of producing
energy from the Jurassic age of conventional energy, such as oil and natural
gas, continue to rise, and in some cases rise dramatically, particularly when
including all environmental costs. Management is thus looking at opportunities
that will provide scaleable long term economic and environmental benefits to the
market and to shareholders.
The
following disclosure relates to each property that we have an interest
in:
The Wordsworth light oil
project, South Eastern Saskatchewan, Canada
The
Wordsworth property has one producing oil well which was drilled in May, 2006,
and in which Golden Aria has a 3.75% net interest. This is a
horizontal well called the Wordsworth East HZ 2A2-23/3A11-14-7-3 W2, and was
considered a new pool discovery. A second well on this property, the Wordsworth
E. HZ 3B9-23/3A11-23-7-3 W2 located on the north side of the Wordsworth prospect
area, was deemed not commercially viable as a producing oil well. However, after
additional seismic was completed on this project the partners have agreed to
re-enter the well and make a new horizontal leg turning to the
south. It is anticipated this will result in a new producing oil well
this summer.
The Queensdale West light
oil project, South Eastern Saskatchewan, Canada
The
Queensdale West property has two producing oil wells. Golden Aria has an 15.00%
Gross Interest before payout (BPO) and 7.5% net interest after payout in the
Queensdale West HZ 91/01-25-6-2 W2 and an 8.00% Gross Interest before payout
(BPO) and 4% net interest after payout in the Queensdale West HZ 4A9-25 /
3A15-25-6-2 W2.
The Coteau Lake light oil
exploration project, South Eastern Saskatchewan, Canada
Coteau
Lake is an exploration property and we have no producing oil or gas wells on
this property at this time. Coteau Lake covers 1,280 acres of land. Golden
Aria’s gross and net interest in this project is 50%. There has been historic
oil production on the Coteau Lake project lands. Our internal
geological and geophysical work to date indicates our lands could be prospective
for oil & gas accumulations to have taken place. Our current focus on this
project is the defining of our first exploration well location.
Golden
Aria expects to evaluate additional properties on an ongoing basis and will
acquire interests when believed to be in the company interest.
Results
of Operations for the Six Months Ended February 29, 2008
For the
six-month period ended February 29, 2008, the Company had $95,237 in revenues
compared to no revenues for the same six-month period in the prior year. The
Company has generated $177,443 in revenues from inception on November 24, 2004
to February 29, 2008.
For the
six-month period ended February 29, 2008 we incurred costs and expenses in the
amount of $269,656, compared to costs and expenses of $166,312 for the same
six-month period in the prior year..
This
increase in costs and expenses is attributable to well operating cost and
administrative expenses we incurred in connection with the
following:
·
|
Cost
of Revenue. In the six month period ended February 29, 2008, the Company
incurred $72,305 (February 28, 2007: $0) in operating and depletion costs
relating to its revenue producing property. Depletion costs
specifically amounted to $33,116 for the six-month period ending February
29, 2008.
|
·
|
Accounting,
and audit fees increased to $36,785 (February 28, 2007:
$29,395). The increase was in line with
expectations.
|
·
|
Fees
paid to a consultant. In the six month period ended February 29, 2008, the
Company incurred $83,073 (February 28, 2007: $12,720); of which $70,713
was related to the stock option
plan.
|
·
|
Legal
and professional fees. In the six month period ended February 29, 2008,
the Company incurred $31,103 (February 28, 2007: $12,885); the increase
was caused by cots relating to the acquisition of Target Energy
Inc.
|
·
|
Office
and Miscellaneous. In the six month period ended February 29,
2008, the Company incurred $14,134 (February 28, 2007:($366)) relating to
exchange losses on translation of foreign
currency.
|
We
incurred general and administrative expenses in the amount of $197,351 for the
six-months ended February 29, 2008 compared to $166,312 for the same six-month
period ended in the prior year. The increase in general and administrative
expenses occurred due to the consulting fees and legal fees.
The loss
for the period ended February 29, 2008 was $170,034 compared to a loss of
$164,481 for the corresponding period in the prior year. The decrease
in loss was caused by an increase in operating expenses which was partially
offset by an increase in revenue.
Assets
As of
February 29, 2008, we had current assets of $401,072 and total assets of
$4,052,556. We had total assets of $520,097 as of August 31, 2007. The increase
in our total assets is primarily attributable to the acquisition of Target
Energy Inc., which occurred on November 30, 2007.
Liquidity
and Capital Resources
As of
February 29, 2008, we had total current assets of $401,092 (August 31,
2007: $316,439) and total assets in the amount of $4,052,556 (August
31, 2007: $520,097). Our total current liabilities as of February 29,
2008 were $187,908 (August 31, 2007: $222,934). As a result, on
February 29, 2008 we had working capital of $213,164 (August 31,
2007: $93,505). The increase in working capital was caused by the
acquisition of Target Energy Inc.
We relied
on cash on hand previously raised through the issue of equity capital to fund
our operations during the six months ended February 29, 2008.
The
company generates some revenue. However, we still anticipate the need to raise
significant capital through the sale of equity securities on a private or public
basis in order to sustain operations, meet our commitments for exploration and
to acquire additional mineral properties. It is uncertain whether we will be
able to obtain the necessary capital.
We intend
to fund operations and commitments over the next twelve months from our cash on
hand, including our capital expenditures, working capital or other cash
requirements. We believe cash from operating activities, and our existing cash
resources may not be sufficient to meet our working capital requirements for the
next 12 months. We will likely require additional funds to support the Company’s
business plan. Management intends to raise additional working capital
through debt and equity financing. There can be no assurance that additional
financing will be available on acceptable terms, if at all. If adequate funds
are not available, we may be unable to take advantage of future opportunities,
respond to competitive pressures, and may have to curtail
operations.
Natural
Gas and Oil Properties
We
account for our oil and gas producing activities using the full cost method of
accounting as prescribed by the United States Securities and Exchange Commission
(“SEC”). Accordingly, all costs associated with the acquisition of
properties and exploration with the intent of finding proved oil and gas
reserves contribute to the discovery of proved reserves, including the costs of
abandoned properties, dry holes, geophysical costs, and annual lease rentals are
capitalized. All general corporate costs are expensed as
incurred. In general, sales or other dispositions of oil and gas
properties are accounted for as adjustments to capitalized costs, with no gain
or loss recorded. Amortization of evaluated oil and gas properties is
computed on the units of production method based on all proved reserves on a
country-by-country basis. Unevaluated oil and gas properties are
assessed at least annually for impairment either individually or on an aggregate
basis. The net capitalized costs of evaluated oil and gas properties
(full cost ceiling limitation) are not to exceed their related estimated future
net revenues from proved reserves discounted at 10%, and the lower of cost or
estimated fair value of unproved properties, net of tax
considerations. These properties are included in the amortization
pool immediately upon the determination that the well is dry.
Unproved
properties consist of lease acquisition costs and costs on well currently being
drilled on the properties. The recorded costs of the investment in
unproved properties are not amortized until proved reserves associated with the
projects can be determined or until they are impaired.
Revenue
Recognition
Revenue
from sales of crude oil, natural gas and refined petroleum products are recorded
when deliveries have occurred and legal ownership of the commodity transfers to
the customers. Title transfers for crude oil, natural gas and bulk
refined products generally occur at pipeline custody points or when a tanker
lifting has occurred. Revenues from the production of oil and natural
gas properties in which we share an undivided interest with other producers are
recognized based on the actual volumes sold by us during the
period. Gas imbalances occur when our actual sales differ from its
entitlement under existing working interests. We record a liability
for gas imbalances when we have sold more than our working interest of gas
production and the estimated remaining reserves make it doubtful that the
partners can recoup their share of production from the field. At February 29,
2008, we had no overproduced imbalances.
Item
3. Controls and Procedures
We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of February 29, 2008. This evaluation was carried
out under the supervision and with the participation of our President (Principal
Executive Officer) Robert McAllister, Chief Executive Officer, Mr. Chris Bunka.
Based upon that evaluation, our Principal Executive Officer and Chief Executive
Officer concluded that, as of February 29, 2008, our disclosure controls and
procedures are effective. There have been no significant changes in our internal
controls over financial reporting during the quarter ended February 29, 2008
that have materially affected or are reasonably likely to materially affect such
controls.
Disclosure
controls and procedures are controls and other procedures designed to ensure
that information required to be disclosed in our reports filed or submitted
under the Exchange Act are recorded, processed, summarized and reported, within
the time periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to management, including our
Principal Executive Officer and Chief Executive Officer, to allow timely
decisions regarding required disclosure.
Limitations on the
Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. An internal control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the internal control. The design of
any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may
deteriorate.
PART
II - OTHER INFORMATION
Item 1. Legal Proceedings
We are
not a party to any pending legal proceeding as at February 29, 2008. We are not
aware of any pending legal proceeding to which any of our officers, directors,
or any beneficial holders of 5% or more of our voting securities are adverse to
us or have a material interest adverse to us.
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
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended February
29, 2008.
Item
5. Other Information
None
Exhibit
No.
|
Description
|
3.1*
|
Articles
of Incorporation
|
3.2*
|
Bylaws
|
4.1*
|
Specimen
ordinary share certificate
|
31.1
|
Rule
13(a) - 14 (a)/15(d) - 14(a) Certifications
|
32.1
|
Section
1350 Certifications
|
*Incorporated
by reference to same exhibit filed with the Company's Registration Statement on
Form SB-2 dated
January
10, 2006.
In
accordance with the requirements of the Exchange Act, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
GOLDEN ARIA
CORP. |
|
|
|
|
|
Dated:
March 31, 2008
|
By:
|
/s/ " Robert McAllister
" |
|
|
|
Robert
McAllister, |
|
|
|
President
(Principal Executive Officer) |
|
|
|
04/07/2008
|
|
|
By:
|
/s/ "Chris
Bunka" |
|
|
|
Chris
Bunka, |
|
|
|
Chairman,
Chief Executive Officer and member of the Board of Directors |
|
|
|
04/07/2008
|
|
I, Robert
McAllister, the President (Principal Executive Officer) of Golden Aria Corp.,
certify that:
1. I have
reviewed this quarterly report on Form 10-QSB of GOLDEN ARIA CORP.;
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 quarterly 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 small business issuer as
of, and for, the periods presented in this quarterly report;
4. The
small business issuer's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15e 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
small business issuer 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 small business issuer, 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 small business issuer'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 small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The
small business issuer's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
small business issuer's auditors and the audit committee of the small business
issuer's board of directors (or persons performing the equivalent
functions):
(a) all
significant deficiencies and material weakness in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the small business issuer'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 small business issuer's internal control over
financial reporting.
Date
April 7, 2008 |
By:
|
/s/ "Robert
McAllister"
Robert
McAllister,
President
(Principal Executive Officer)
|
Rule
13a-14(a)/15d-14(a)
CERTIFICATIONS
I, Chris
Bunka, Principal Financial Officer (Principal Accounting Officer), Secretary,
Treasurer and Director of Golden Aria Corp., certify that:
1. I have
reviewed this quarterly report on Form 10-QSB of GOLDEN ARIA CORP.;
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 quarterly 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 small business issuer as
of, and for, the periods presented in this quarterly report;
4. The
small business issuer's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15e 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
small business issuer 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 small business issuer, 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 small business issuer'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 small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The
small business issuer's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
small business issuer's auditors and the audit committee of the small business
issuer's board of directors (or persons performing the equivalent
functions):
(a) all
significant deficiencies and material weakness in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the small business issuer'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 small business issuer's internal control over
financial reporting.
Date:
April 7, 2008 |
By:
|
/s/ "Chris
Bunka"
Chris
Bunka,
Principal
Financial Officer (Principal Accounting Officer), Secretary, Treasurer and
member of the Board of Directors
|
Rule
13a-14(a)/15d-14(a)
CERTIFICATIONS
I, Chris
Bunka, the Chairman, Chief Executive Officer and Director of Golden Aria Corp.,
certify that:
1. I have
reviewed this quarterly report on Form 10-QSB of GOLDEN ARIA CORP.;
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 quarterly 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 small business issuer as
of, and for, the periods presented in this quarterly report;
4. The
small business issuer's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15e 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
small business issuer 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 small business issuer, 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 small business issuer'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 small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The
small business issuer's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
small business issuer's auditors and the audit committee of the small business
issuer's board of directors (or persons performing the equivalent
functions):
(a) all
significant deficiencies and material weakness in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the small business issuer'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 small business issuer's internal control over
financial reporting.
Date:
April 7, 2008 |
By:
|
/s/ "Chris
Bunka"
Chris
Bunka,
Chairman,
Chief Executive Officer and member of the Board of
Directors
|
Section
1350 Certifications
CERTIFICATE
OF PRINCIPAL EXECUTIVE OFFICER
Pursuant
to 18 U.S.C. Section 1350
As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Robert
McAllister, President, (Principal Executive Officer) of Golden Aria Corp.
certify that the Quarterly Report on Form 10-QSB (the "Report") for the quarter
ended February 29, 2008, filed with the Securities and Exchange Commission on
the date hereof:
(i) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and
(ii) the
information contained in the Report fairly presents in all material respects,
the financial condition and results of operations of Golden Aria
Corp.
Date:
April 7, 2008 |
By:
|
/s/ "Robert
McAllister"
Robert
McAllister
President
(Principal Executive Officer)
|
A signed
original of this written statement required by Section 906 has been provided to
Golden Aria Corp. and will be retained by Golden Aria Corp. and furnished to the
Securities and Exchange Commission or its staff upon request.
Section
1350 Certifications
CERTIFICATE
OF CHIEF FINANCIAL OFFICER
Pursuant
to 18 U.S.C. Section 1350
As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Chris
Bunka, Chief Financial Officer (Principal Accounting Officer), Secretary,
Treasurer and Director of Golden Aria Corp. certify that the Quarterly Report on
Form 10-QSB (the "Report") for the quarter ended February 29, 2008, filed with
the Securities and Exchange Commission on the date hereof:
(i) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and
(ii) the
information contained in the Report fairly presents in all material respects,
the financial condition and results of operations of Golden Aria
Corp.
Date:
April 7, 2008 |
By:
|
/s/ "Chris
Bunka"
Chris
Bunka
Principal
Financial Officer (Principal Accounting Officer), Secretary, Treasurer and
a member of the Board of Directors
|
A signed
original of this written statement required by Section 906 has been provided to
Golden Aria Corp. and will be retained by Golden Aria Corp. and furnished to the
Securities and Exchange Commission or its staff upon request.