Delaware
|
20-0065053
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification
No.)
|
Page
|
|
Item
1 - Financial Statements – Unaudited
|
|
|
|
Balance
Sheets - March 31, 2008 and December 31, 2007
|
1
|
|
|
Statements
of Operations for the three months ended March 31, 2008 and 2007
and the
period from April 6, 2000 (inception) to March 31, 2008
|
2
|
|
|
Statements
of Changes in Stockholders' Equity for the three months ended March
31,
2008 and the period from April 6, 2000 (inception) to March 31,
2008
|
3
|
|
|
Statements
of Cash Flows for the three months ended March 31, 2008 and 2007
and the
period from April 6, 2000 (inception) to March 31, 2008
|
11
|
|
|
Notes
to Unaudited Interim Financial Statements
|
13
|
|
|
Item
2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
|
32
|
|
|
Item
4(T) - Controls and Procedures
|
38
|
|
|
PART
II — OTHER INFORMATION
|
|
|
|
Item
2 - Unregistered Sales of Equity Securities and Use of
Proceeds
|
38
|
|
|
Item
3 - Defaults upon Senior Securities
|
39
|
|
|
Item
5 - Other Information
|
39
|
|
|
Item
6 – Exhibits
|
39
|
|
|
SIGNATURES
|
40
|
March
31
|
December
31
|
||||||
2008
|
2007
|
||||||
US$ thousands
|
US$ thousands
|
||||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
3,220
|
4,590
|
|||||
Prepaid
expenses and other
|
83
|
61
|
|||||
Deferred
offering costs
|
51
|
-
|
|||||
Refundable
Value-Added Tax
|
71
|
65
|
|||||
Total
current assets
|
3,425
|
4,716
|
|||||
Unproved
oil and gas properties, full cost method
|
3,156
|
2,590
|
|||||
Property
and equipment
|
|||||||
Net
of accumulated depreciation of $40 thousand and $33 thousand
|
105
|
73
|
|||||
Other
assets
|
|||||||
Assets
held for severance benefits
|
48
|
42
|
|||||
Total
other assets
|
48
|
42
|
|||||
Total
assets
|
6,734
|
7,421
|
|||||
Liabilities
and Stockholders’ Equity
|
|||||||
Current
liabilities
|
|||||||
Accounts
payable
|
132
|
128
|
|||||
Accrued
liabilities
|
176
|
172
|
|||||
Deferred
officers compensation
|
1,219
|
1,017
|
|||||
Total
current liabilities
|
1,527
|
1,317
|
|||||
Provision
for severance pay
|
319
|
316
|
|||||
Total
liabilities
|
1,846
|
1,633
|
|||||
Commitments
and contingencies(see Note 5)
|
|
|
|||||
Stockholders’
equity
|
|||||||
Common
stock, par value $.01; 20,000,000 shares authorized:
|
|||||||
2008
and 2007 – 10,120,893 shares
|
|||||||
issued
and outstanding
|
101
|
101
|
|||||
Additional
paid-in capital
|
26,213
|
26,074
|
|||||
Deficit
accumulated in development stage
|
(21,426
|
)
|
(20,387
|
)
|
|||
Total
stockholders’ equity
|
4,888
|
5,788
|
|||||
Total
liabilities and stockholders' equity
|
6,734
|
7,421
|
Period
from
|
||||||||||
April
6, 2000
|
||||||||||
For
the three month period
|
(inception)
to
|
|||||||||
ended
March 31
|
March
31
|
|||||||||
2008
|
2007
|
2008
|
||||||||
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||
Revenues
|
-
|
-
|
-
|
|||||||
General
and administrative expenses
|
||||||||||
Legal
and professional
|
323
|
271
|
4,402
|
|||||||
Salaries
|
454
|
236
|
4,499
|
|||||||
Other
|
293
|
191
|
2,550
|
|||||||
Impairment
of unproved oil and gas properties
|
-
|
-
|
9,494
|
|||||||
Loss
from operations
|
(1,070
|
)
|
(698
|
)
|
(20,945
|
)
|
||||
Other
expense, net
|
||||||||||
Termination
of initial public offering
|
-
|
-
|
(507
|
)
|
||||||
Other
income, net
|
-
|
-
|
4
|
|||||||
Interest
income, net
|
31
|
31
|
22
|
|||||||
Loss
before income taxes
|
(1,039
|
)
|
(667
|
)
|
(21,426
|
)
|
||||
Income
taxes
|
-
|
-
|
-
|
|||||||
Net
loss
|
(1,039
|
)
|
(667
|
)
|
(21,426
|
)
|
||||
Net
loss per share of common stock - basic
and diluted (in US$)
|
(0.10
|
)
|
(0.07
|
)
|
(4.00
|
)
|
||||
Weighted-average
shares outstanding – basic
and diluted (in thousands)
|
10,121
|
9,040
|
5,361
|
Deficit
|
||||||||||||||||||||||
Additional
|
Accumulated
|
|||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-in
|
in development
|
|||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
Total
|
||||||||||||||||
Thousands
|
US$ thousands
|
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||||||
Balances
April 6, 2000
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Issued
for cash ($0.001 per share)
|
-
|
-
|
2,400
|
*
-
|
2
|
-
|
2
|
|||||||||||||||
Issuance
of shares and warrants in a private offering ($1 per
share)
|
-
|
-
|
100
|
*
-
|
100
|
-
|
100
|
|||||||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
-
|
-
|
(24
|
)
|
-
|
(24
|
)
|
|||||||||||||
Waived
interest on conversion of debt
|
-
|
-
|
-
|
-
|
*
-
|
-
|
*
-
|
|||||||||||||||
Value
of warrants granted to employees
|
-
|
-
|
-
|
-
|
2
|
-
|
2
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(5
|
)
|
(5
|
)
|
|||||||||||||
Balances,
December 31, 2000
|
-
|
-
|
2,500
|
*
-
|
80
|
(5
|
)
|
75
|
||||||||||||||
Issuance
of shares and warrants in a private offering in January 2001 ($1
per
share)
|
-
|
-
|
135
|
*
-
|
135
|
-
|
135
|
|||||||||||||||
Issuance
of shares and warrants in a private offering which closed in September
2001 ($1 per share)
|
-
|
-
|
125
|
*
-
|
125
|
-
|
125
|
|||||||||||||||
Payment
of accounts payable through issuance of shares and
warrants
|
-
|
-
|
40
|
*
-
|
40
|
-
|
40
|
|||||||||||||||
Payment
of note payable through issuance of shares and warrants
|
-
|
-
|
25
|
*
-
|
25
|
-
|
25
|
|||||||||||||||
Issuance
of shares and warrants in a private offering which closed in November
2001
($1 per share)
|
-
|
-
|
175
|
*
-
|
175
|
-
|
175
|
|||||||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
-
|
-
|
(85
|
)
|
-
|
(85
|
)
|
|||||||||||||
Waived
interest on conversion of debt
|
-
|
-
|
-
|
-
|
1
|
-
|
1
|
|||||||||||||||
Value
of warrants granted to employees
|
-
|
-
|
-
|
-
|
37
|
-
|
37
|
|||||||||||||||
Value
of warrants granted to directors and consultants
|
-
|
-
|
-
|
-
|
3
|
-
|
3
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(207
|
)
|
(207
|
)
|
|||||||||||||
Balances,
December 31, 2001
|
-
|
-
|
3,000
|
*
-
|
536
|
(212
|
)
|
324
|
Deficit
|
||||||||||||||||||||||
Additional
|
Accumulated
|
|||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-in
|
in development
|
|||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
Total
|
||||||||||||||||
Thousands
|
US$ thousands
|
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||||||
Change
in par value of common shares from $ 0.0001 per share to $0.01 per
share
|
-
|
-
|
-
|
30
|
(30
|
)
|
-
|
-
|
||||||||||||||
Issuance
of shares and warrants in a private offering which closed in January
2002
($1 per share)
|
-
|
-
|
20
|
*
-
|
20
|
-
|
20
|
|||||||||||||||
Issuance
of shares and warrants in a private offering which closed in November
2002
($10 per share)
|
25
|
*
-
|
22
|
*
-
|
254
|
-
|
254
|
|||||||||||||||
Payment
of accounts payable through issuance of preferred shares and
warrants
|
13
|
*
-
|
-
|
-
|
127
|
-
|
127
|
|||||||||||||||
Payment
of accounts payable through issuance of common shares and
warrants
|
-
|
-
|
111
|
1
|
131
|
-
|
132
|
|||||||||||||||
Payment
of note payable through issuance of shares and warrants
|
5
|
*
-
|
-
|
-
|
50
|
-
|
50
|
|||||||||||||||
Payment
of accounts payable to employee through issuance of shares upon exercise
of warrants
|
-
|
-
|
400
|
4
|
76
|
-
|
80
|
|||||||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
-
|
-
|
(160
|
)
|
-
|
(160
|
)
|
|||||||||||||
Waived
interest on conversion of debt
|
-
|
-
|
-
|
-
|
3
|
-
|
3
|
|||||||||||||||
Deferred
financing costs on debt conversions / modifications
|
-
|
-
|
-
|
-
|
21
|
-
|
21
|
|||||||||||||||
Value
of warrants granted to employees
|
-
|
-
|
-
|
-
|
1
|
-
|
1
|
|||||||||||||||
Value
of warrants granted to directors and consultants
|
-
|
-
|
-
|
-
|
13
|
-
|
13
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(403
|
)
|
(403
|
)
|
|||||||||||||
Balances,
December 31, 2002
|
43
|
*
-
|
3,553
|
35
|
1,042
|
(615
|
)
|
462
|
Deficit
|
||||||||||||||||||||||
Additional
|
Accumulated
|
|||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-in
|
in development
|
|||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
Total
|
||||||||||||||||
Thousands
|
US$ thousands
|
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||||||
Issuance
of shares in connection with executive employment
|
-
|
-
|
50
|
1
|
49
|
-
|
50
|
|||||||||||||||
Issuance
of share on warrants exercise
|
-
|
-
|
165
|
2
|
31
|
-
|
33
|
|||||||||||||||
Issuance
of dividend shares to record holders as of December 31,
2002
|
4
|
*
-
|
-
|
-
|
*
-
|
-
|
-
|
|||||||||||||||
Issuance
of shares and warrants in a private offering which closed in February
2003
($10 per share):
|
||||||||||||||||||||||
for
cash consideration
|
10
|
*
-
|
-
|
-
|
105
|
-
|
105
|
|||||||||||||||
for
reduction of accounts payable
|
5
|
*
-
|
-
|
-
|
45
|
-
|
45
|
|||||||||||||||
Issuance
of shares and warrants as compensation for extension of $100,000
line of
credit
|
1
|
*
-
|
-
|
-
|
10
|
-
|
10
|
|||||||||||||||
Payment
of account payable through issuance of shares and warrants
|
*
-
|
*
-
|
-
|
-
|
1
|
-
|
1
|
|||||||||||||||
Conversion
of preferred shares to common shares in reincorporation
merger
|
(63
|
)
|
*(-
|
)
|
763
|
7
|
(7
|
)
|
-
|
-
|
||||||||||||
Issuance
of shares in a private offering which closed in July 2003 ($3 per
share):
|
||||||||||||||||||||||
for
cash consideration
|
-
|
-
|
33
|
*
-
|
99
|
-
|
99
|
|||||||||||||||
for
reduction of accounts payable
|
-
|
-
|
3
|
*
-
|
9
|
-
|
9
|
|||||||||||||||
Issuance
of shares upon exercise of warrants:
|
||||||||||||||||||||||
for
cash consideration
|
-
|
-
|
25
|
*
-
|
25
|
-
|
25
|
|||||||||||||||
for
reduction of accounts payable
|
-
|
-
|
124
|
1
|
142
|
-
|
143
|
|||||||||||||||
Issuance
of shares upon exercise of warrants for cash consideration
|
-
|
-
|
63
|
1
|
82
|
-
|
83
|
|||||||||||||||
Payment
of account payable through issuance of shares
|
-
|
-
|
80
|
1
|
139
|
-
|
140
|
|||||||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
-
|
-
|
(58
|
)
|
-
|
(58
|
)
|
|||||||||||||
Value
of warrants granted to employees
|
-
|
-
|
-
|
-
|
47
|
-
|
47
|
|||||||||||||||
Deferred
financing costs on debt conversions / modifications
|
-
|
-
|
-
|
-
|
(10
|
)
|
-
|
(10
|
)
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(873
|
)
|
(873
|
)
|
|||||||||||||
Balances
as at December 31, 2003
|
-
|
-
|
4,859
|
48
|
1,751
|
(1,488
|
)
|
311
|
Deficit
|
||||||||||||||||
Additional
|
accumulated
|
|||||||||||||||
Common
Stock
|
paid-in
|
in
development
|
||||||||||||||
Shares
|
Amounts
|
capital
|
stage
|
Total
|
||||||||||||
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||
Issuance
of shares on warrants exercise
|
123
|
1
|
183
|
-
|
184
|
|||||||||||
Issuance
of shares and warrants in a private offering
|
251
|
3
|
1,002
|
-
|
1,005
|
|||||||||||
Payment
of officer salaries through issuance of shares and
warrants
|
46
|
1
|
184
|
-
|
185
|
|||||||||||
Payment
of accounts payable to officers and consultants upon exercise of
warrants
|
80
|
1
|
99
|
-
|
100
|
|||||||||||
Payment
of director honorariums through issuance of shares and
warrants
|
11
|
*
-
|
45
|
-
|
45
|
|||||||||||
Payment
of account payable through issuance of shares and warrants
|
13
|
*
-
|
50
|
-
|
50
|
|||||||||||
Payment
of bridge loan through issuance of shares and warrants
|
125
|
1
|
499
|
-
|
500
|
|||||||||||
Payment
of bridge loan interest and commitment fee through issuance of shares
and
warrants
|
8
|
*
-
|
30
|
-
|
30
|
|||||||||||
Payment
of bridge loan finders fee through issuance of shares and
warrants
|
2
|
*
-
|
7
|
-
|
7
|
|||||||||||
Payment
of service bonus through issuance of shares and warrants
|
20
|
*
-
|
20
|
-
|
20
|
|||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
(59
|
)
|
-
|
(59
|
)
|
|||||||||
Value
of warrants granted to employees
|
-
|
-
|
41
|
-
|
41
|
|||||||||||
Deferred
financing costs on debt conversions / modifications
|
-
|
-
|
30
|
-
|
30
|
|||||||||||
Net
loss
|
-
|
-
|
-
|
(1,737
|
)
|
(1,737
|
)
|
|||||||||
Balances,
December 31, 2004
|
5,538
|
55
|
3,882
|
(3,225
|
)
|
712
|
Deficit
|
||||||||||||||||
Additional
|
accumulated
|
|||||||||||||||
Common
Stock
|
paid-in
|
in
development
|
||||||||||||||
Shares
|
Amounts
|
capital
|
stage
|
Total
|
||||||||||||
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||
Issuance
of shares on warrants exercised:
|
||||||||||||||||
For
cash
|
493
|
5
|
872
|
-
|
877
|
|||||||||||
For
payment of deferred officer salaries
|
17
|
*
-
|
21
|
-
|
21
|
|||||||||||
For
exchange of shares of common stock
|
120
|
1
|
(1
|
)
|
-
|
-
|
||||||||||
Issuance
of shares and warrants in a private offering that closed in March
2005:
|
||||||||||||||||
For
cash
|
519
|
5
|
2,070
|
-
|
2,075
|
|||||||||||
For
payment of deferred officer salaries
|
10
|
*
-
|
40
|
-
|
40
|
|||||||||||
For
payment of accounts payable
|
6
|
*
-
|
25
|
-
|
25
|
|||||||||||
Issuance
of shares and warrants in a private offering that closed in June
2005:
|
||||||||||||||||
For
cash
|
259
|
3
|
1,292
|
-
|
1,295
|
|||||||||||
For
payment of directors honoraria
|
14
|
*
-
|
70
|
-
|
70
|
|||||||||||
For
payment of accounts payable
|
3
|
*
-
|
15
|
-
|
15
|
|||||||||||
Issuance
of shares in a private offering that closed in October
2005:
|
||||||||||||||||
For
cash
|
584
|
6
|
2,914
|
-
|
2,920
|
|||||||||||
For
payment of deferred officer salaries
|
40
|
*
-
|
200
|
-
|
200
|
|||||||||||
For
payment of accounts payable
|
22
|
*
-
|
110
|
-
|
110
|
|||||||||||
Issuance
of shares in a private offering that closed in December
2005
|
80
|
1
|
439
|
-
|
440
|
|||||||||||
Shares
to be issued for services provided by director
|
-
|
-
|
42
|
-
|
42
|
|||||||||||
Value
of warrants and options granted to employees
|
-
|
-
|
216
|
-
|
216
|
|||||||||||
Value
of warrants granted to directors and consultants
|
-
|
-
|
16
|
-
|
16
|
|||||||||||
Deferred
financing costs on debt conversions /modifications
|
-
|
-
|
44
|
-
|
44
|
|||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
(275
|
)
|
-
|
(275
|
)
|
|||||||||
Net
loss
|
-
|
-
|
-
|
(1,605
|
)
|
(1,605
|
)
|
|||||||||
Balances,
December 31, 2005
|
7,705
|
76
|
11,992
|
(4,830
|
)
|
7,238
|
Deficit
|
||||||||||||||||
Additional
|
accumulated
|
|||||||||||||||
Common
Stock
|
paid-in
|
in development
|
||||||||||||||
Shares
|
Amounts
|
capital
|
stage
|
Total
|
||||||||||||
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||
Issuance
of shares on warrants exercised:
|
||||||||||||||||
For
cash
|
253
|
3
|
1,151
|
-
|
1,154
|
|||||||||||
For
debt
|
60
|
1
|
276
|
-
|
277
|
|||||||||||
Issuance
of shares and warrants in private offering closings in first quarter
2006:
|
||||||||||||||||
For
cash
|
66
|
1
|
362
|
-
|
363
|
|||||||||||
For
payment of accounts payable
|
3
|
*
-
|
14
|
-
|
14
|
|||||||||||
Shares
issued for services provided by officer
|
200
|
2
|
248
|
-
|
250
|
|||||||||||
Issuance
of shares and warrants in a private offering that closed in September
2006
for cash
|
23
|
*
-
|
126
|
-
|
126
|
|||||||||||
Value
of options granted to employees
|
-
|
-
|
162
|
-
|
162
|
|||||||||||
Value
of warrants granted to underwriter
|
-
|
-
|
20
|
-
|
20
|
|||||||||||
Value
of shares gifted to directors, employees and service
providers
|
-
|
-
|
147
|
-
|
147
|
|||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
(681
|
)
|
-
|
(681
|
)
|
|||||||||
Funds
received from public offering for subscription shares:
|
||||||||||||||||
For
cash
|
410
|
4
|
2,867
|
-
|
2,871
|
|||||||||||
For
debt
|
27
|
*
-
|
188
|
-
|
188
|
|||||||||||
Net
loss
|
-
|
-
|
-
|
(2,510
|
)
|
(2,510
|
)
|
|||||||||
Balances
December 31, 2006
|
8,747
|
87
|
16,872
|
(7,340
|
)
|
9,619
|
Deficit
|
||||||||||||||||
Additional
|
accumulated
|
|||||||||||||||
Common
Stock
|
paid-in
|
in development
|
||||||||||||||
Shares
|
Amounts
|
capital
|
stage
|
Total
|
||||||||||||
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||
Funds
received from public offering for subscription shares:
|
||||||||||||||||
For
cash
|
1,336
|
14
|
9,338
|
-
|
9,352
|
|||||||||||
For
debt
|
33
|
*
-
|
235
|
-
|
235
|
|||||||||||
Compensation
in respect of shares previously issued for services provided by
officer
|
-
|
-
|
208
|
-
|
208
|
|||||||||||
Value
of options granted to employees
|
-
|
-
|
337
|
-
|
337
|
|||||||||||
Value
of warrants granted to underwriter
|
-
|
-
|
79
|
-
|
79
|
|||||||||||
Value
of shares granted to employees
|
5
|
*-
|
25
|
-
|
25
|
|||||||||||
Value
of shares gifted to employees
|
-
|
-
|
7
|
-
|
7
|
|||||||||||
Costs
associated with the issuance of shares
|
-
|
-
|
(1,027
|
)
|
-
|
(1,027
|
)
|
|||||||||
Net
loss
|
-
|
-
|
-
|
(13,047
|
)
|
(13,047
|
)
|
|||||||||
Balances
December 31, 2007
|
10,121
|
101
|
26,074
|
(20,387
|
)
|
5,788
|
Deficit
|
||||||||||||||||
Additional
|
accumulated
|
|||||||||||||||
Common
Stock
|
paid-in
|
in development
|
||||||||||||||
Shares
|
Amounts
|
capital
|
stage
|
Total
|
||||||||||||
Thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||
Value
of options granted to employees
|
-
|
-
|
139
|
-
|
139
|
|||||||||||
Net
loss
|
-
|
-
|
-
|
(1,039
|
)
|
(1,039
|
)
|
|||||||||
Balances
March 31, 2008
|
10,121
|
101
|
26,213
|
(21,426
|
)
|
4,888
|
Period
from
|
||||||||||
April
6, 2000
|
||||||||||
For
the three month
|
(inception)
to
|
|||||||||
period ended March
31
|
March
31
|
|||||||||
2008
|
2007
|
2008
|
||||||||
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||
Cash
flows from operating activities
|
||||||||||
Net
loss
|
(1,039
|
)
|
(667
|
)
|
(21,426
|
)
|
||||
Adjustments
required to reconcile net loss to net cash
|
||||||||||
used
in operating activities:
|
||||||||||
Depreciation
|
7
|
4
|
44
|
|||||||
Officer,
director and other fees, paid via common stock
|
-
|
63
|
2,061
|
|||||||
Cost
of warrants issued to employees, directors & others
|
139
|
78
|
1,191
|
|||||||
Interest
paid through issuance of common stock
|
-
|
-
|
17
|
|||||||
Write-off
of costs associated with public offering
|
-
|
-
|
507
|
|||||||
Loss
on disposal of equipment
|
-
|
-
|
4
|
|||||||
Impairment
of unproved oil and gas properties
|
-
|
-
|
9,494
|
|||||||
Change
in assets and liabilities, net:
|
||||||||||
Decrease
in inventories
|
-
|
-
|
150
|
|||||||
Prepaid
expenses and other
|
(22
|
)
|
(318
|
)
|
(83
|
)
|
||||
Increase
in deferred offering costs
|
(51
|
)
|
-
|
(51
|
)
|
|||||
Refundable
value-added tax
|
(6
|
)
|
(76
|
)
|
(71
|
)
|
||||
Severance
pay, net
|
(3
|
)
|
(1
|
)
|
271
|
|||||
Accounts
payable
|
4
|
(158
|
)
|
775
|
||||||
Accrued
liabilities
|
4
|
(865
|
)
|
177
|
||||||
Increase
in deferred officers' compensation
|
202
|
63
|
1,219
|
|||||||
Net
cash used in operating activities
|
(765
|
)
|
(1,877
|
)
|
(5,721
|
)
|
||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of property and equipment
|
(39
|
)
|
(3
|
)
|
(153
|
)
|
||||
Investment
in unproved oil and gas properties
|
(566
|
)
|
(339
|
)
|
(12,800
|
)
|
||||
Net
cash used in investing activities
|
(605
|
)
|
(342
|
)
|
(12,953
|
)
|
||||
Cash
flows from financing activities
|
||||||||||
Deferred
financing costs on debt conversions and modification
|
-
|
-
|
89
|
|||||||
Loan
proceeds – related party
|
-
|
-
|
259
|
|||||||
Loan
principal repayments – related party
|
-
|
(107
|
)
|
(259
|
)
|
|||||
Loan
proceeds – other
|
-
|
-
|
500
|
|||||||
Proceeds
from sale of stock
|
-
|
6,519
|
23,775
|
|||||||
Financing
costs of issuing stock
|
-
|
(602
|
)
|
(2,470
|
)
|
|||||
Net
cash provided by financing activities
|
-
|
5,810
|
21,894
|
|||||||
Net
increase in cash
|
1,370
|
3,591
|
3,220
|
|||||||
Cash
– beginning of period
|
4,590
|
3,370
|
-
|
|||||||
Cash
– end of period
|
3,220
|
6,961
|
3,220
|
Period
from
|
||||||||||
April
6, 2000
|
||||||||||
For
the three month
|
(inception)
to
|
|||||||||
period
ended March 31
|
March
31
|
|||||||||
2008
|
2007
|
2008
|
||||||||
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||
Supplemental
information
|
||||||||||
Cash
paid for interest
|
-
|
1
|
58
|
|||||||
Cash
paid for income taxes
|
-
|
-
|
-
|
|||||||
Non-cash
operating, investing and financing activities:
|
||||||||||
Payment
of accounts payable through issuance
of preferred and common stock
|
-
|
24
|
1,186
|
|||||||
Payment
of note payable through issuance
of common stock
|
-
|
-
|
575
|
|||||||
Payment
of accounts payable through issuance
of note payable
|
-
|
-
|
35
|
|||||||
Financing
costs paid through issuance of common stock
|
-
|
-
|
25
|
|||||||
Increase
in accounts payable for financing costs
|
-
|
-
|
382
|
|||||||
Waived
interest on debt conversions
|
-
|
-
|
4
|
|||||||
Shares
issued for debt conversion
|
-
|
-
|
188
|
|||||||
Shares
issued for services provided by officer
|
-
|
63
|
500
|
|||||||
Value
of warrants and options granted to employees
|
139
|
18
|
981
|
|||||||
Value
of warrants granted to directors and consultants
|
-
|
-
|
33
|
|||||||
Value
of warrants granted to underwriters
|
-
|
60
|
79
|
|||||||
Value
of shares granted to employees
|
-
|
-
|
20
|
|||||||
Value
of shares gifted to directors, employees
and
service providers
|
-
|
-
|
154
|
|||||||
Deferred
financing costs
|
-
|
-
|
89
|
|||||||
Transfer
of inventory to oil and gas properties
|
-
|
-
|
150
|
A. |
Nature
of Operations
|
A. |
Nature
of Operations (cont’d)
|
B. |
Management
Presentation and Liquidity
|
B. |
Management
Presentation and Liquidity
(cont’d)
|
C. |
Basis
of Presentation
|
C. |
Basis
of Presentation (cont’d)
|
A. |
Oil
and Gas Properties and
Impairment
|
A. |
Oil
and Gas Properties and Impairment
(cont’d)
|
A. |
Oil
and Gas Properties and Impairment
(cont’d)
|
March
31
2008
|
December 31
2007
|
||||||
US$ thousands
|
US$ thousands
|
||||||
Excluded
from amortization base:
|
|||||||
Drilling
operations, completion costs and other related costs
|
2,063
|
2,035
|
|||||
Capitalized
salary costs
|
252
|
145
|
|||||
Legal
costs and license fees
|
612
|
220
|
|||||
Other
costs
|
229
|
190
|
|||||
$
|
3,156
|
$
|
2,590
|
Period
Ended
March 31
2008
|
Year
Ended
December
31 2007
|
Period from
April 6, 2000
(inception)
to March 31,
2008
|
||||||||
US$
thousands
|
US$
thousands
|
US$ thousands
|
||||||||
Drilling
operations, completion costs and other related costs
|
-
|
7,959
|
7,959
|
|||||||
Capitalized
salary costs
|
-
|
683
|
683
|
|||||||
Legal
costs and license fees
|
-
|
509
|
509
|
|||||||
Other
costs
|
-
|
343
|
343
|
|||||||
|
- |
9,494
|
9,494
|
B. |
Recently
Issued Accounting
Pronouncements
|
B. |
Recently
Issued Accounting Pronouncements
(cont’d)
|
C. |
Recently
adopted accounting
pronouncements
|
C. |
Recently
adopted accounting pronouncements
(cont’d)
|
D. |
Certain
prior year’s amounts have been reclassified to conform to the current year
presentation.
|
A. |
Private
Placement Offerings
|
A. |
Private
Placement Offerings
(cont’d)
|
B. |
Initial
Public Offering
|
C. |
2005
Stock Option Plan
|
C. |
2005
Stock Option Plan (cont’d)
|
D. |
Fair
Value of Warrants and Options
|
Exercise
|
Number of
|
Expiration
|
Warrants or
|
||||||||||
Price
|
shares
|
date
|
Options
|
||||||||||
To
non-employees
|
|||||||||||||
5.00
|
10,000
|
December 31, 2008 | Warrants | ||||||||||
8.75
|
46,621
|
September 26, 2009 | Warrants | ||||||||||
To
employees and directors
|
|||||||||||||
5.00
|
85,000
|
December 31, 2008 | Warrants | ||||||||||
5.00
|
50,000
|
December 31, 2008 | Options | ||||||||||
5.00
|
66,667
|
December 31, 2010 | Options | ||||||||||
5.60
|
50,000
|
December 31, 2012 | Options | ||||||||||
0.01
|
83,882
|
December 3, 2017 | Options | ||||||||||
To
investors
|
|||||||||||||
5.50
|
19,625
|
December 31, 2008 | Warrants | ||||||||||
|
4.50*
|
411,795
|
Number
of
|
Weighted
Average
|
||||||
shares
|
exercise
price
|
||||||
US$
|
|||||||
Granted
from April 6, 2000 (inception) to December 31, 2006 to:
|
|||||||
Employees,
officers and directors
|
1,750,936
|
1.73
|
|||||
Underwriters
(in connection with IPO)
|
11,590
|
8.75
|
|||||
Private
placement investors and others
|
1,105,492
|
2.84
|
|||||
Expired/canceled
|
(587,726
|
)
|
2.68
|
||||
Exercised
|
(1,984,077
|
)
|
1.59
|
||||
Outstanding,
December 31, 2006
|
296,215
|
5.18
|
|||||
Granted
to:
|
|||||||
Employees,
officers and directors as part compensation
|
133,882
|
2.10
|
|||||
Underwriters
(in connection with IPO)
|
35,031
|
8.75
|
|||||
Private
placement investors and others
|
-
|
-
|
|||||
Expired/Canceled
|
(53,333
|
)
|
5.00
|
||||
Exercised
|
-
|
-
|
|||||
Outstanding,
December 31, 2007
|
411,795
|
4.50
|
|||||
Outstanding,
March 31, 2008
|
411,795
|
4.50
|
|||||
Exercisable,
March 31, 2008
|
321,795
|
4.74
|
D. |
Fair
Value of Warrants and Options
(cont’d)
|
Shares underlying outstanding
|
Shares underlying outstanding
|
||||||||||||||
warrants and options (nonvested)
|
warrants and options (all fully vested)
|
||||||||||||||
Weighted
|
Weighted
|
||||||||||||||
average
|
Weighted
|
average
|
Weighted | ||||||||||||
Range of
|
remaining
|
average
|
remaining
|
Average
|
|||||||||||
exercise
|
Number
|
contractual
|
Exercise
|
Range of
|
Number
|
contractual
|
Exercise
|
||||||||
price
|
outstanding
|
life (years)
|
price
|
exercise price
|
Outstanding
|
life (years)
|
price
|
||||||||
US$
|
US$
|
US$
|
US$
|
||||||||||||
0.01
|
30,000
|
9.68
|
0.01
|
0.01
|
53,882
|
9.68
|
0.01
|
||||||||
5.00
|
10,000
|
2.75
|
5.00
|
5.00
|
201,667
|
1.24
|
5.00
|
||||||||
5.60
|
50,000
|
4.75
|
5.60
|
5.50
|
19,625
|
0.75
|
5.50
|
||||||||
-
|
-
|
-
|
-
|
8.75
|
46,621
|
1.49
|
8.75
|
||||||||
0.01-5.60
|
90,000
|
3.67
|
0.01-8.75
|
321,795
|
4.74
|
For the three month period
|
Period from April 6,
|
|||||||||
ended
March 31,
|
2000 (inception) to
|
|||||||||
2008
|
2007
|
March 31,
2008
|
||||||||
US$
|
US$
|
US$
|
||||||||
Weighted-average
fair value of underlying stock at grant date
|
-
|
-
|
3.00
– 6.13
|
|||||||
Dividend
yields
|
-
|
-
|
-
|
|||||||
Expected
volatility
|
-
|
-
|
28.2%
- 40.0%
|
|
||||||
Risk-free
interest rates
|
-
|
-
|
2.1%
- 5.15%
|
|
||||||
Expected
lives
|
-
|
-
|
1.74
– 4.63 years
|
|||||||
Weighted-average
grant date fair
market
value
|
-
|
-
|
0.76
- 2.83
|
D. |
Fair
Value of Warrants and Options
(cont’d)
|
For the three month period
|
Period from April 6,
|
|||||||||
ended March 31,
|
2000 (inception) to
|
|||||||||
2008
|
2007
|
March 31, 2008
|
||||||||
US$
|
US$
|
US$
|
||||||||
Weighted-average
fair value of underlying stock at grant date
|
-
|
8.75
|
1.00
– 8.75
|
|||||||
Dividend
yields
|
-
|
-
|
-
|
|||||||
Expected
volatility
|
-
|
40.0
|
%
|
32.2%
- 99.8%
|
|
|||||
Risk-free
interest rates
|
-
|
5.50
|
%
|
2.8%
- 5.50%
|
|
|||||
Contractual
lives
|
-
|
2.67
– 2.38 years
|
0.56
– 3.17 years
|
|||||||
Weighted-average
grant date fair market value
|
-
|
1.
98 – 2.74
|
0.68
– 2.74
|
E. |
Compensation
Cost for Warrant and Option Issuances
|
US$
thousands
|
||||
April
1 - December 31, 2008
|
125
|
|||
For
the year ended December 31, 2009
|
22
|
|||
For
the year ended December 31, 2010
|
6
|
|||
153
|
F. |
Warrant
Descriptions
|
Period
of Grant
|
US$
|
Expiration
Date
|
||||||||
A
Warrants
|
January
2001 – December 2001
|
1.00
|
January
31, 2005
|
|||||||
B
Warrants
|
November
2001 – February 2003
|
1.50
|
January
31, 2005
|
|||||||
C
Warrants
|
July
2003 – March 2004
|
3.00
|
December
31, 2005
|
|||||||
$3.00
Warrants
|
June
2004 – August 2004
|
3.00
|
December
31, 2006
|
|||||||
D
Warrants
|
September
2004 – April 2005
|
4.00
|
December
31, 2006
|
|||||||
E
Warrants
|
September
2004 – June 2005
|
5.00
|
December
31, 2006
|
|||||||
F
and FF Warrants
|
October
2005
|
5.00
|
December
31, 2008
|
|||||||
G
Warrants
|
December
2005 – January 2006
|
5.50
|
December
31, 2008
|
|||||||
H
Warrants
|
December
2006 –May 2007
|
8.75
|
September
26, 2009
|
G. |
Gift
Shares
|
A. |
Cimarron
Resources, Inc.
|
B. |
Rappaport
loan
|
C. |
Robert
E. Render
|
D. |
Richard
J. Rinberg
|
E. |
Other
issuances
|
A. |
Environmental
Matters
|
B. |
Royalty
Commitments
|
C. |
Long-term
Incentive Plan
|
D. |
Charitable
Foundations
|
E. |
Surface
Rights of Drilling
Operations
|
F. |
Payments
to executives and deferral of
compensation
|
G. |
Underwriting
Agreement
|
G. |
Underwriting
Agreement (cont’d)
|
H. |
Lease
Commitments
|
H. |
Lease
Commitments (cont’d)
|
US$
thousands
|
||||
April
1 – December 31 2008
|
55
|
|||
2009
|
3
|
|||
58
|
I. |
Contract
with Geophysical Institute of
Israel
|
·
|
exploration,
development, and drilling plans;
|
·
|
future
general and administrative expenses;
|
·
|
future
exploration;
|
·
|
future
geophysical and geological data;
|
·
|
generation
of additional properties, reserves;
|
·
|
new
prospects and drilling locations;
|
·
|
future
capital expenditures;
|
·
|
sufficiency
of working capital;
|
·
|
plans
regarding and ability to raise additional capital;
|
·
|
drilling
plans;
|
·
|
availability
and costs of drilling rigs;
|
·
|
timing
or results of any wells;
|
·
|
interpretation
and results of seismic surveys or seismic data;
|
·
|
permit,
license and lease rights;
|
·
|
participation
of operating partners;
|
·
|
legislative
and regulatory initiatives, their potential results and effects;
and
|
·
|
any
other statements regarding future operations, financial results,
opportunities, growth, business plans, and strategies.
|
In
US$ 000
|
||||
Underwriting
Commissions
|
$
|
653
|
||
Expenses
Paid to Underwriter
|
326
|
|||
Other
expenses as follows:
|
||||
Accounting
Fees and Expenses
|
111
|
|||
Legal
Fees and Expenses
|
167
|
|||
Printing
Fees and Advertising
|
207
|
|||
Listing
Fees (including SEC filing fees)
|
82
|
|||
Transfer
and Escrow Agent Fees
|
42
|
|||
Other
Expenses
|
120
|
|||
TOTAL
EXPENSES
|
$
|
1,708
|
In
US$ 000
|
||||
a.
|
Completion
of Ma’anit #1 well
|
$ |
1,242
|
(1)
|
b.
|
Preparation
for drilling of Ma’anit-Rehoboth well
|
$ |
2,068
|
|
c.
|
Exploration
Costs
|
$ |
845
|
|
d.
|
Compensation
to officers and directors
|
$ |
2,422
|
(2)
|
e.
|
Repayment
of indebtedness
|
$ |
144
|
(3)
|
f.
|
Temporary
investments
|
$ |
3,082
|
(4)
|
g.
|
Other
|
$ |
996
|
(5)
|
(1)
|
The
$900 thousand originally (exclusive of contingencies) estimated for
the
Ma’anit #1 well completion costs was exceeded as a result of the loss
and
partial recovery of tubing and an isolation packer that were stuck
in the
well.
|
|
(2)
|
Includes
repayment of indebtedness in an amount of $1,053 thousand, including
$434
thousand previously deferred compensation paid to the company’s former
Chief Executive Officer (in the amount of $352 thousand) and to the
company’s former Chief Financial Officer (in the amount of $82 thousand)
in the connection with their retirement and resignation, respectively.
Also includes conversions of deferred compensation into shares by
certain
officers in the IPO in an amount of $204 thousand, along with normal
payments to officers in the amount of $983 thousand and to directors
in an
amount of $157 thousand.
|
|
(3)
|
Does
not include repayment of indebtedness to officers and directors which
is
included in note (2) above.
|
|
(4)
|
U.S.
money market account balances and Israeli interest bearing deposits
at
March 31, 2008.
|
|
(5)
|
Including
a $60 thousand financial advisory and investment banking fee to
Underwriter pursuant to an investment banking/consulting agreement
entered
into pursuant to the Underwriting Agreement, $51 thousand in deferred
offering costs related to the follow-on offering , which has not
yet been
declared effective, and working
capital.
|
1.1
|
Amended
and Restated Underwriting Agreement, attached as an exhibit to Amendment
No.2 to the Registration Statement on Form S-3 (File No. 333-148982)
filed
on May 2, 2008
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 under the Exchange Act
|
31.2
|
Certification
of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (furnished only).
|
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only). |
ZION
OIL & GAS, INC.
|
||||
(Registrant)
|
||||
By:
|
/s/ Richard J. Rinberg
|
By:
|
/s/ Martin M. Van Brauman
|
|
Richard J. Rinberg
Chief Executive Officer
(Principal Executive Officer)
|
Martin M. Van Brauman,
Senior Vice-President and Chief Financial Officer
(Principal Financial Officer)
|
|||
Date:
|
May 15, 2008
|
Date:
|
May 15 , 2008
|