NOTE 2 - DEVELOPMENT STAGE ACTIVITIES AND GOING CONCERN
The Company is currently in the development stage and has conducted minimal operations to date. While pursuing the development and marketing of hydrogen/electric hybrid automobiles, the Company has focused on the process of acquiring oil producing properties and on April 23 entered into an agreement with Pemco, LLC, to acquire thirteen oil producing properties.
As reflected in the accompanying consolidated financial statements, the Company had a deficit accumulated during development stage of $4,216,238 at January 31, 2011 and had a net loss of $1,164,593 for the six months ended January 31, 2011 with minimal revenues since inception. Although the Company has recorded minimal revenues through January 31, 2011, these revenues pertain to sales of purchased oil and gas inventory, as opposed to oil and gas removed from the ground by the Company.
While the Company is attempting to grow operations and generate a reliable flow of revenues, the Company’s cash position is not sufficient enough to support the Company’s operations. Management intends to raise additional funds by way of a public or private offering. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that these efforts will succeed and that the Company will continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise capital and to generate sufficient revenues. The consolidated financial statements do not include any adjustments that would be necessary if the Company is unable to continue as a going concern.