UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ______________.
Commission File Number 1-32955
HOUSTON AMERICAN ENERGY CORP.
(Exact name of registrant as specified in its charter)
Delaware 76-0675953
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
801 Travis Street, Suite 1425, Houston, Texas 77002
(Address of principal executive offices)(Zip Code)
(713) 222-6966
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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 whether the registrant is a large accelerated filer,
an accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of May 1, 2007, we had 27,920,172 shares of $.0001 par value Common
Stock outstanding.
HOUSTON AMERICAN ENERGY CORP.
-----------------------------
FORM 10-Q
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets as of March 31, 2007 and December 31, 2006 . . . . . 3
Statements of Operations for the three months
ended March 31, 2007 and 2006 . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flows for the three months
ended March 31, 2007 and 2006 . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . . 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk. . . 11
Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
HOUSTON AMERICAN ENERGY CORP.
BALANCE SHEET
(Unaudited)
March 31, 2007 December 31, 2006
---------------- -------------------
ASSETS
------
CURRENT ASSETS:
Cash $ 354,107 $ 409,008
Marketable securities 12,000,000 14,000,000
Accounts receivable 559,789 325,436
Prepaid expenses 137,402 -
---------------- -------------------
Total current assets 13,051,298 14,734,444
---------------- -------------------
PROPERTY, PLANT AND EQUIPMENT
Oil and gas properties - full cost method
Costs subject to amortization 8,977,796 6,796,308
Costs not being amortized 596,563 700,549
Office equipment 11,878 11,878
---------------- -------------------
Total property, plant and equipment 9,586,237 7,508,735
Accumulated depreciation and depletion (2,532,242) (2,260,463)
---------------- -------------------
Total property, plant and equipment, net 7,053,995 5,248,272
---------------- -------------------
OTHER ASSETS 3,167 3,167
---------------- -------------------
Total Assets $ 20,108,460 $ 19,985,883
================ ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 448,601 $ 399,159
Accrued expenses 12,018 11,909
Foreign income taxes payable 139,349 121,216
---------------- -------------------
Total current liabilities 599,968 532,284
---------------- -------------------
LONG-TERM LIABILITIES:
Asset retirement obligation 39,443 38,816
---------------- -------------------
Total long-term liabilities 39,443 38,816
---------------- -------------------
SHAREHOLDERS' EQUITY:
Common stock, $0.001 par value; 100,000,000 shares
authorized; 27,920,172 shares outstanding 27,920 27,920
Additional paid-in capital 22,097,513 22,042,624
Treasury stock, at cost; 100,000 shares (85,834) (85,834)
Accumulated deficit (2,570,550) (2,569,927)
---------------- -------------------
Total shareholders' equity 19,469,049 19,414,783
---------------- -------------------
Total liabilities and shareholders' equity $ 20,108,460 $ 19,985,883
================ ===================
The accompanying notes are an integral part of these financial statements
3
HOUSTON AMERICAN ENERGY CORP.
STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months Ended March 31,
---------------------------------------
2007 2006
------------------- -------------------
Revenue
Oil and gas $ 1,025,422 $ 666,172
------------------- -------------------
Total revenue 1,025,422 666,172
------------------- -------------------
Expenses of operations
Lease operating expense and severance taxes 406,566 194,651
Joint venture expenses 39,620 49,478
General and administrative expense 353,639 211,579
Depreciation and depletion 271,779 89,479
------------------- -------------------
Total operating expenses 1,071,604 545,187
------------------- -------------------
Income from operations (46,182) 120,985
------------------- -------------------
Other (income) expenses
Interest income (173,320) (16,219)
Interest expense - derivative - 16,890
Net change in fair value of derivative liabilities - 103,077
Interest expense - 42,500
Interest expense on shareholder debt - 16,200
Financing fees - 6,386
------------------- -------------------
Total other (income) expenses, net (173,320) 168,834
------------------- -------------------
Income (loss) before taxes 127,138 (47,849)
Income tax expense 127,761 62,153
------------------- -------------------
Net income (loss) $ (623) $ (110,002)
=================== ===================
Basic and diluted income (loss) per share $ (0.00) $ (0.01)
=================== ===================
Basic and diluted weighted average shares 27,920,172 19,970,589
=================== ===================
The accompanying notes are an integral part of these financial statements
4
HOUSTON AMERICAN ENERGY CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31,
------------------------------------------
2007 2006
-------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (623) $ (110,002)
Adjustments to reconcile net loss
to net cash from operations
Depreciation and depletion 271,779 89,479
Accretion expense - asset retirement obligation 627 -
Derivative activity - 119,967
Stock based compensation 54,888 -
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (234,353) 307,882
(Increase) decrease in prepaid expense (137,402) 9,965
Decrease in other assets - 6,386
Increase in accounts payable and accrued expenses 67,685 181,269
-------------------- --------------------
Net cash provided by operations 22,601 604,946
-------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of marketable securities 2,000,000 -
Acquisition of oil and gas properties (2,077,502) (1,066,235)
-------------------- --------------------
Net cash used by investing activities (77,502) (1,066,235)
-------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES - -
-------------------- --------------------
(Decrease) in cash and equivalents (54,901) (461,289)
Cash, beginning of period 409,008 1,724,100
-------------------- --------------------
Cash, end of period $ 354,107 $ 1,262,811
==================== ====================
SUPPLEMENT CASH FLOW INFORMATION:
Interest paid $ - $ 16,200
Taxes paid $ - $ -
==================== ====================
The accompanying notes are an integral part of these financial statements
5
HOUSTON AMERICAN ENERGY CORP.
Notes to Financial Statements
March 31, 2007
(Unaudited)
NOTE 1. - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Houston American Energy
Corp., a Delaware corporation (the "Company") have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q. They
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for a complete
financial presentation. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, considered necessary for a fair
presentation, have been included in the accompanying unaudited financial
statements. Operating results for the periods presented are not necessarily
indicative of the results that may be expected for the full year.
These financial statements should be read in conjunction with the financial
statements and footnotes, which are included as part of the Company's Form
10-KSB for the year ended December 31, 2006.
NOTE 2. - CHANGES IN PRESENTATION
Certain financial presentations for the periods presented for 2006 have been
reclassified to conform to the 2007 presentation.
NOTE 3. - RECENT ACCOUNTING PRONOUNCEMENTS
On February 15, 2007, the Financial Accounting Standards Board issued SFAS No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities,"
which gives companies the option to measure eligible financial assets, financial
liabilities and firm commitments at fair value (i.e., the fair value option), on
an instrument-by-instrument basis, that are otherwise not permitted to be
accounted for at fair value under other accounting standards. The election to
use the fair value option is available when an entity first recognizes a
financial asset or financial liability or upon entering into a firm commitment.
Subsequent changes in fair value must be recorded in earnings. SFAS No. 159 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007. We are in the process of evaluating the impacts, if any, of
adopting this pronouncement.
NOTE 4. - MARKETABLE SECURITIES
There were no unrealized gains or losses associated with marketable securities
held by the Company during the quarter ended March 31, 2007. At March 31, 2007
the Company held $12,000,000 in marketable securities.
NOTE 5. - STOCK-BASED COMPENSATION EXPENSE
On January 1, 2006, the Company adopted Statement of Financial Accounting
Standards 123R, "Share-Based Payments", or SFAS 123R. The Company periodically
grants options to employees, directors and consultants under the Company's 2005
Stock Option Plan. These are accounted for in accordance with the provisions of
SFAS 123R and Emerging Issues Task Force Abstract No. 96-18, "Accounting for
Equity Instruments That are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services" as well as other authoritative
accounting pronouncements. The Company is required to make estimates of the fair
value of the related instruments and recognize expense over the period
benefited, usually the vesting period.
6
No stock options were granted during the quarter ended March 31, 2007.
The following table reflects share-based compensation recorded by the Company
for the three months ended March 31, 2007 and 2006:
Three Months Ended March 31,
--------------------------------------------
2007 2006
--------------------- ---------------------
(in thousands, except per share amounts)
Share-based compensation expense included in reported net loss $ 54,888 $ 0
Earnings per share effect of share-based compensation expense. $ (0.00) $ (0)
===================== =====================
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
This Form 10-Q quarterly report of Houston American Energy Corp. (the "Company")
for the three months ended March 31, 2007, contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbors created thereby. To the
extent that there are statements that are not recitations of historical fact,
such statements constitute forward-looking statements that, by definition,
involve risks and uncertainties. In any forward-looking statement, where the
Company expresses an expectation or belief as to future results or events, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will be achieved or accomplished.
The actual results or events may differ materially from those anticipated and as
reflected in forward-looking statements included herein. Factors that may cause
actual results or events to differ from those anticipated in the forward-looking
statements included herein include the Risk Factors described in Item 1 of the
Company's Form 10-KSB for the year ended December 31, 2006.
Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. The
Company believes the information contained in this Form 10-Q to be accurate as
of the date hereof. Changes may occur after that date, and the Company will not
update that information except as required by law in the normal course of its
public disclosure practices.
Additionally, the following discussion regarding the Company's financial
condition and results of operations should be read in conjunction with the
financial statements and related notes contained in Item 1 of Part 1 of this
Form 10-Q, as well as the Risk Factors in Item 1 and the financial statements in
Item 7 of Part II of the Company's Form 10-KSB for the fiscal year ended
December 31, 2006.
7
CRITICAL ACCOUNTING POLICIES
The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The Company believes certain critical accounting
policies affect its more significant judgments and estimates used in the
preparation of its financial statements. A description of the Company's
critical accounting policies is set forth in the Company's Form 10-KSB for the
year ended December 31, 2006. As of, and for the quarter ended, March 31, 2007,
there have been no material changes or updates to the Company's critical
accounting policies other than the following updated information relating to
Unevaluated Oil and Gas Properties:
-- UNEVALUATED OIL AND GAS PROPERTIES. Unevaluated oil and gas properties not
subject to amortization include the following at March 31, 2007:
March 31, 2007
---------------
Acquisition costs $ 217,697
Evaluation costs 357,426
Retention costs 21,440
---------------
Total $ 596,563
===============
The carrying value of unevaluated oil and gas prospects include $354,726
expended for properties in the South American country of Colombia at March 31,
2007. We are maintaining our interest in these properties and development has
or is anticipated to commence within the next twelve months.
CURRENT YEAR DEVELOPMENTS
Drilling Activity
During the quarter ended March 31, 2007, the Company drilled six international
wells in Colombia, as follows:
- two wells were drilled on concessions in which the Company holds a 12.5%
working interest, of which one was in production at March 31, 2007 and one
was abandoned prior to reaching its target sands.
- three wells were drilled on concessions in which the Company holds a 1.6%
working interest, of which two were in production at March 31, 2007 and one
was a dry hole.
One domestic well was being drilled during the quarter ended March 31, 2007.
At March 31, 2007, one 12.5% working interest well had been drilled in Colombia
and was awaiting a completion rig. In addition, one domestic well was being
drilled at March 31, 2007.
At March 31, 2007, the Company planned to drill one domestic well and 24
additional international wells over the balance of 2007.
Leasehold Activity
During the quarter ended March 31, 2007, the Company acquired no additional oil
and gas interests.
8
Seismic Activity
During the quarter ended March 31, 2007, the Company conducted no new seismic
activity.
RESULTS OF OPERATIONS
Oil and Gas Revenues. Total oil and gas revenues increased 53.9% to $1,025,422
in the three months ended March 31, 2007 when compared to the three months ended
March 31, 2006. The increase in revenue is principally due to increased
production resulting from the development of the Columbian fields. The Company
had interests in 22 producing wells in Colombia and 8 producing wells in the
U.S. during the 2007 quarter as compared to 17 producing wells in Columbia and
14 producing wells in the U.S. during the 2006 quarter. Average prices from
sales were $50.00 per barrel of oil and $9.04 per mcf of gas during the 2007
quarter as compared to $50.85 per barrel of oil and $8.38 per mcf of gas during
the 2006 quarter.
Columbia U.S. Total
--------- -------- --------
2007 Quarter
Oil sales $ 963,920 $ 27,646 $991,566
Gas sales - 33,856 33,856
2006 Quarter
Oil sales 446,476 18,038 464,514
Gas sales - 201,658 201,658
Lease Operating Expenses. Lease operating expenses, excluding joint venture
expenses relating to our Columbian operations discussed below, increased 108.9%
to $406,566 in the 2007 quarter from $194,651 in the 2006 quarter. The increase
in lease operating expenses was attributable to the increase in the number of
Colombian wells we operated during the 2007 period (22 wells as compared to 17
wells). Following is a summary comparison of lease operating expenses for the
periods.
Columbia U.S. Total
--------- ------- --------
2007 Quarter $ 384,043 $22,523 $406,566
2006 Quarter 146,904 47,747 194,651
Joint Venture Expenses. The Company's allocable share of joint venture expenses
attributable to the Colombian Joint Venture totaled $39,620 during the 2007
quarter and $49,478 for the first quarter of 2006. The decrease in joint
venture expenses was attributable to a decrease in operational activities of the
joint venture in acquiring new concessions.
Depreciation and Depletion Expense. Depreciation and depletion expense was
$271,779 and $89,479 for the quarter ended March 31, 2007 and 2006,
respectively. The increase is due to increases in Colombian production.
General and Administrative Expenses. General and administrative expense
increased by 67.1% to $353,639 during the first quarter 2007 from $211,579 in
the first quarter 2006. The increase in general and administrative expense was
primarily attributable to increases in compensation expense relating to the
hiring of our chief financial officer in mid-2006, an increase in salary to our
President in mid-2006, an increase in compensation to directors in mid-2006 and
stock-based compensation expense associated with the 2006 grant of stock options
in connection with the hiring of our chief financial officer.
Other Income (Expense). Other income (expense) consists of interest earned on
cash balances and marketable securities, net of financing costs in the nature of
interest and deemed interest associated with outstanding shareholder loans and
convertible notes and warrants issued in May 2005 and outstanding during the
2006 period. Certain features of the convertible notes and warrants resulted in
the recording of
9
a deemed derivative liability on the balance sheet and periodic interest
associated with the deemed derivative liabilities and changes in the fair market
value of those deemed liabilities.
Other income (expense), net totaled $173,320 of income during the first quarter
of 2007 as compared to net other expenses of $168,834 during the 2006 first
quarter. The improvement in net other income (expense) resulted from (1)
increased interest income during the 2007 period ($173,320 in 2007 compared to
$16,219 in 2006) attributable to substantial increases in cash and marketable
securities held during the 2007 period following a 2006 private placement of
common stock, and (2) the absence of interest expense, financing fees and
derivative related expense during the 2007 period attributable to the
retirement, or conversion, during 2006 of all outstanding shareholder loans and
convertible notes.
Income Tax Expense. Income tax expense increased by 105.6% to $127,761 during
the 2007 quarter compared to the 2006 quarter. The increase in income tax
expense during the 2007 quarter was attributable to the increase in revenue in
Colombia. Income tax expense during the 2007 quarter and the 2006 quarter was
entirely attributable to operations in Colombia. The Company recorded no U.S.
income tax liability in the 2007 or 2006 quarters.
FINANCIAL CONDITION
Liquidity and Capital Resources. At March 31, 2007 the Company had a cash
balance of $354,107 and working capital of $12,451,330 compared to a cash
balance of $409,008 and working capital of $14,202,160 at December 31, 2006. The
decrease in cash and working capital during the period was primarily
attributable to payment of drilling cost in Colombia and domestically in the
United States.
Operating cash flows for the 2007 quarter totaled $22,601 as compared to cash
provided by operations during the 2006 quarter of $604,946. The decrease in
operating cash flow was primarily attributable to increases in prepaid expenses
and accounts receivable
Investing activities used $77,502 during the 2007 quarter as compared to
$1,066,235 used during the 2006 quarter. The decrease in funds used in
investing activities during the current quarter was primarily attributable to
the receipt of proceeds from the sale of marketable securities of $2,000,000,
offset by payments for oil and gas properties of $2,077,502.
The Company had no financing activities during either the 2007 quarter or the
2006 quarter.
Long-Term Liabilities. At March 31, 2007, the Company had an asset retirement
obligation of $39,443 as compared to $38,816 at December 31, 2006. The asset
retirement obligation at March 31, 2007 and December 31, 2006 consisted of a
reserve for plugging costs.
Capital and Exploration Expenditures and Commitments. The Company's principal
capital and exploration expenditures relate to our ongoing efforts to acquire,
drill and complete prospects. With the receipt of additional equity financing
in 2006 and prior years, and the increase in our revenues, profitability and
operating cash flows, the Company expects that future capital and exploration
expenditures will be funded principally through funds on hand and funds
generated from operations.
During the first quarter of 2007, the Company invested approximately $2,077,502
for the acquisition and development of oil and gas properties, primarily
consisting of (1) drilling of 6 wells in Colombia for $1,143,590, and (2) the
drilling of one domestic well in the United States for $830,890.
At March 31, 2007, the Company's only material contractual obligation requiring
determinable future payments was a lease relating to the Company's executive
offices which was unchanged when compared to the 2006 Form 10-KSB.
10
At March 31, 2007, the Company's acquisition and drilling budget for the balance
of 2007 totaled approximately $4,414,500, which consisted of the drilling of 24
wells in Colombia. The Company's acquisition and drilling budget has
historically been subject to substantial fluctuation over the course of a year
based upon successes and failures in drilling and completion of prospects and
the identification of additional prospects during the course of a year.
Management anticipates that the Company's current financial resources combined
with increases in revenues over the past year will meet the Company's
anticipated objectives and business operations, including planned property
acquisitions and drilling activities, for at least the next 12 months without
the need for additional capital. Management continues to evaluate producing
property acquisitions as well as a number of drilling prospects. It is
possible, although not anticipated, that the Company may require and seek
additional financing if additional drilling prospects are pursued beyond those
presently under consideration.
OFF-BALANCE SHEET ARRANGEMENTS
The Company had no off-balance sheet arrangements or guarantees of third party
obligations at March 31, 2007.
INFLATION
The Company believes that inflation has not had a significant impact on
operations since inception.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
COMMODITY PRICE RISK
The price we receive for our oil and gas production heavily influences our
revenue, profitability, access to capital and future rate of growth. Crude oil
and natural gas are commodities and, therefore, their prices are subject to wide
fluctuations in response to relatively minor changes in supply and demand.
Historically, the markets for oil and gas have been volatile, and these markets
will likely continue to be volatile in the future. The prices we receive for
production depends on numerous factors beyond our control.
We have not historically entered into any hedges or other transactions designed
to manage, or limit exposure to oil and gas price volatility.
INTEREST RATE RISK
We invest funds in excess of projected short-term needs in interest rate
sensitive securities, primarily fixed maturity securities. While it is generally
our intent to hold our fixed maturity securities to maturity, we have classified
a majority of our fixed maturity portfolio as available-for-sale. In accordance
with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," our available-for-sale fixed maturity securities are carried at
fair value on the balance sheet with unrealized gains or losses reported net of
tax in accumulated other comprehensive income.
11
Increases and decreases in prevailing interest rates generally translate into
decreases and increases in fair values of fixed maturity securities.
Additionally, fair values of interest rate sensitive instruments may be affected
by the creditworthiness of the issuer, prepayment options, relative values of
alternative investments, the liquidity of the instrument and other general
market conditions. Because of the short-term nature of the interest bearing
investments, the quality of the issuers and the intent to hold those investments
to maturity, we do not believe we face any material interest rate risk with
respect to such investments.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures under the supervision and with the participation of our chief
executive officer ("CEO") and chief financial officer ("CFO"). Based on this
evaluation, our management, including the CEO and CFO, concluded that our
disclosure controls and procedures were not effective at March 31, 2007.
During the quarter ended March 31, 2007, there were no changes in our internal
controls over financial reporting that materially affected, or are reasonably
likely to materially affect, internal controls over financial reporting.
In connection with the quarterly review for the period ended March 31, 2006, our
independent registered public accounting firm informed us that we have
significant deficiencies constituting material weaknesses as defined by the
standards of the Public Company Accounting Oversight Board. The material
weaknesses identified consisted of a lack of certain procedures to properly
account for non-routine transactions and preparation of certain financial
statement disclosures in accordance with U.S. GAAP.
In addition to the weaknesses identified by our independent registered public
accounting firm, management notes that the Company continues to lack adequate
segregation of duties in our financial reporting process, as our CFO serves as
our only internal accounting and financial reporting personnel and, as such,
performs all accounting and financial reporting functions. Accordingly, the
preparation of financial statements and the related monitoring controls
surrounding this process were not segregated.
We plan to increase our emphasis on identification of, and accounting for,
non-routine transactions, in particular SFAS 123R accounting, and timely
preparation of closing and adjusting entries. We have no current plans to add
accounting or financial reporting personnel and, accordingly, expect to continue
to lack segregation of accounting, financial reporting and oversight functions.
As operations increase in scope, we intend to evaluate hiring additional
in-house accounting personnel so as to provide for appropriate segregation of
duties within the accounting function.
12
PART II
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
31.1 Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
31.2. Certification of CFO 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
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.
HOUSTON AMERICAN ENERGY CORP.
By: /s/ John Terwilliger
--------------------
John Terwilliger
CEO and President
By: /s/ James J. Jacobs
-------------------
James J. Jacobs
Chief Financial Officer
Date: May 15, 2007
13