Delaware
|
20-0065053
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨ (Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
Page
|
||
Item
1 - Financial Statements – Unaudited
|
||
Balance
Sheets - March 31, 2009 and December 31, 2008
|
1
|
|
Statements
of Operations for the three months ended March 31, 2009 and 2008 and the
period from April 6, 2000 (inception) to March 31, 2009
|
2
|
|
Statements
of Changes in Stockholders' Equity for the three months ended March 31,
2009 and the period from April 6, 2000 (inception) to March 31,
2009
|
3
|
|
Statements
of Cash Flows for the three months ended March 31, 2009 and 2008 and the
period from April 6, 2000 (inception) to March 31, 2009
|
12
|
|
Notes
to Unaudited Interim Financial Statements
|
14
|
|
Item
2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
|
41
|
|
Item
4(T) - Controls and Procedures
|
46
|
|
PART
II — OTHER INFORMATION
|
||
Item
1 – Legal Proceedings
|
47
|
|
Item
2 - Unregistered Sales of Equity Securities and Use of
Proceeds
|
47
|
|
Item
3 - Defaults upon Senior Securities
|
48
|
|
Item
4 – Submission of Matters to a Vote of Security Holders
|
48
|
|
Item
5 - Other Information
|
48
|
|
Item
6 – Exhibits
|
48
|
|
SIGNATURES
|
49
|
March
31
|
December
31
|
|||||||
2009
|
2008
|
|||||||
US$
thousands
|
US$
thousands
|
|||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
2,425 | 1,726 | ||||||
Prepaid
expenses and other
|
639 | 523 | ||||||
Prepaid
offering costs
|
29 | 14 | ||||||
Refundable
Value-Added Tax
|
262 | 26 | ||||||
Total
current assets
|
3,355 | 2,289 | ||||||
Unproved
oil and gas properties, full cost method
|
5,830 | 5,246 | ||||||
Property
and equipment
|
||||||||
Net
of accumulated depreciation of $65,000 and $60,000
|
79 | 83 | ||||||
Other
assets
|
||||||||
Assets
held for severance benefits
|
58 | 58 | ||||||
Total
other assets
|
58 | 58 | ||||||
Total
assets
|
9,322 | 7,676 | ||||||
Liabilities
and Stockholders’ Equity
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
125 | 117 | ||||||
Accrued
liabilities
|
197 | 223 | ||||||
Deferred
officers compensation
|
1,506 | 1,487 | ||||||
Total
current liabilities
|
1,828 | 1,827 | ||||||
Provision
for severance pay
|
172 | 174 | ||||||
Deferred
officers’ compensation
|
100 | 120 | ||||||
Total
liabilities
|
2,100 | 2,121 | ||||||
Commitments
and contingencies (see Note 5)
|
||||||||
Stockholders’
equity
|
||||||||
Common
stock, par value $.01; 30,000,000 shares authorized: 2009 – 10,825,589 shares and 2008
– 10,541,563 shares issued and
outstanding
|
108 | 105 | ||||||
Additional
paid-in capital
|
32,435 | 29,855 | ||||||
Deficit
accumulated in development stage
|
(25,321 | ) | (24,405 | ) | ||||
Total
stockholders’ equity
|
7,222 | 5,555 | ||||||
Total
liabilities and stockholders' equity
|
9,322 | 7,676 |
Period
from
|
||||||||||||
April
6, 2000
|
||||||||||||
For
the three month period
|
(inception)
to
|
|||||||||||
ended
March 31
|
March
31
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
US$
thousands
|
US$
thousands
|
US$
thousands
|
||||||||||
Revenues
|
- | - | - | |||||||||
General
and administrative expenses
|
||||||||||||
Legal
and professional
|
234 | 323 | 5,328 | |||||||||
Salaries
|
500 | 454 | 6,208 | |||||||||
Other
|
261 | 293 | 3,915 | |||||||||
Impairment
of unproved oil and gas properties
|
- | - | 9,494 | |||||||||
Loss
from operations
|
(995 | ) | (1,070 | ) | (24,945 | ) | ||||||
Other
expense, net
|
||||||||||||
Termination
of initial public offering
|
- | - | (527 | ) | ||||||||
Other
income, net
|
76 | - | 80 | |||||||||
Interest
income, net
|
3 | 31 | 71 | |||||||||
Loss
before income taxes
|
(916 | ) | (1,039 | ) | (25,321 | ) | ||||||
Income
taxes
|
- | - | - | |||||||||
Net
loss
|
(916 | ) | (1,039 | ) | (25,321 | ) | ||||||
Net
loss per share of common stock - basic and diluted (in
US$)
|
(0.08 | ) | (0.10 | ) | (4.28 | ) | ||||||
Weighted-average
shares outstanding – basic and diluted (in thousands)
|
10,800 | 10,121 | 5,917 |
Deficit
|
||||||||||||||||||||||||||||
Additional
|
accumulated
|
|||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
paid-in
|
in
development
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
Total
|
||||||||||||||||||||||
Thousands
|
US$
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
|
||||||||||||||||
Funds
received from Unit Offering
for subscription shares:
|
||||||||||||||||||||
For
cash
|
405 | 4 | 4,040 | - | 4,044 | |||||||||||||||
For
debt
|
12 | *- | 120 | - | 120 | |||||||||||||||
Value
of warrants granted to employees
|
- | - | 266 | - | 266 | |||||||||||||||
Value
of options granted to directors and consultants
|
- | - | 44 | - | 44 | |||||||||||||||
Value
of shares granted to employees
|
4 | *- | 25 | - | 25 | |||||||||||||||
Value
of shares gifted to employees
|
- | - | 101 | - | 101 | |||||||||||||||
Costs
associated with the issuance of shares
|
- | - | (815 | ) | - | (815 | ) | |||||||||||||
Net
loss
|
- | - | - | (4,018 | ) | (4,018 | ) | |||||||||||||
Balances
December 31, 2008
|
10,542 | 105 | 29,855 | (24,405 | ) | 5,555 |
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 Unit Offering for subscription shares:
|
||||||||||||||||||||
For
cash
|
237 | 3 | 2,370 | - | 2,373 | |||||||||||||||
For
debt
|
13 | *- | 126 | - | 126 | |||||||||||||||
Funds
received from warrant exercises
|
21 | *- | 147 | - | 147 | |||||||||||||||
Underwriter
warrants exercised in cashless exercise
|
13 | - | - | - | - | |||||||||||||||
Value
of warrants granted to employees
|
- | - | 156 | - | 156 | |||||||||||||||
Costs
associated with the issuance of shares
|
- | - | (219 | ) | - | (219 | ) | |||||||||||||
Net
loss
|
- | - | - | (916 | ) | (916 | ) | |||||||||||||
Balances
March 31, 2009
|
10,826 | 108 | 32,435 | (25,321 | ) | 7,222 |
Period
from
|
||||||||||||
April
6, 2000
|
||||||||||||
For
the three month
|
(inception)
to
|
|||||||||||
period ended
March 31
|
March
31
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
US$
thousands
|
US$
thousands
|
US$
thousands
|
||||||||||
Cash
flows from operating activities
|
||||||||||||
Net
loss
|
(916 | ) | (1,039 | ) | (25,321 | ) | ||||||
Adjustments
required to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Depreciation
|
5 | 7 | 71 | |||||||||
Officer,
director and other fees, paid via common stock
|
6 | - | 2,271 | |||||||||
Cost
of warrants issued to employees, directors & others
|
156 | 139 | 1,440 | |||||||||
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
|
(116 | ) | (22 | ) | (639 | ) | ||||||
Increase
in deferred offering costs
|
(15 | ) | (51 | ) | (29 | ) | ||||||
Refundable
value-added tax
|
(236 | ) | (6 | ) | (262 | ) | ||||||
Severance
pay, net
|
(2 | ) | (3 | ) | 114 | |||||||
Accounts
payable
|
8 | 4 | 768 | |||||||||
Accrued
liabilities
|
(26 | ) | 4 | 198 | ||||||||
Increase
in deferred officers' compensation
|
119 | 202 | 1,846 | |||||||||
Net
cash used in operating activities
|
(1,017 | ) | (765 | ) | (9,371 | ) | ||||||
Cash
flows from investing activities
|
||||||||||||
Acquisition
of property and equipment
|
(1 | ) | (39 | ) | (154 | ) | ||||||
Investment
in unproved oil and gas properties
|
(584 | ) | (566 | ) | (15,474 | ) | ||||||
Net
cash used in investing activities
|
(585 | ) | (605 | ) | (15,628 | ) | ||||||
Cash
flows from financing activities
|
||||||||||||
Deferred
financing costs on debt conversions and modification
|
- | - | 89 | |||||||||
Loan
proceeds – related party
|
- | - | 259 | |||||||||
Loan
principal repayments – related party
|
- | - | (259 | ) | ||||||||
Loan
proceeds – other
|
- | - | 500 | |||||||||
Proceeds
from sale of stock
|
2,520 | - | 30,339 | |||||||||
Costs
associated with the issuance of shares
|
(219 | ) | - | (3,504 | ) | |||||||
Net
cash provided by financing activities
|
2,301 | - | 27,424 | |||||||||
Net
increase (decrease) in cash
|
699 | (1,370 | ) | 2,425 | ||||||||
Cash
– beginning of period
|
1,726 | 4,590 | - | |||||||||
Cash
– end of period
|
2,425 | 3,220 | 2,425 |
Period
from
|
||||||||||||
April
6, 2000
|
||||||||||||
For
the three month
|
(inception)
to
|
|||||||||||
period ended
March 31
|
March
31
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
US$
thousands
|
US$
thousands
|
US$
thousands
|
||||||||||
Supplemental
information
|
||||||||||||
Cash
paid for interest
|
1 | - | 59 | |||||||||
Cash
paid for income taxes
|
- | - | - | |||||||||
Non-cash
operating, investing and financing activities:
|
||||||||||||
Payment
of accounts payable through issuance of preferred and common
stock
|
6 | - | 956 | |||||||||
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
|
120 | - | 940 | |||||||||
Shares
issued for services provided by officer
|
- | 500 | ||||||||||
Value
of warrants and options granted to employees
|
156 | 139 | 1,264 | |||||||||
Value
of warrants granted to directors and consultants
|
- | - | 77 | |||||||||
Value
of warrants granted to underwriters
|
- | - | 99 | |||||||||
Value
of shares granted to employees
|
- | - | 50 | |||||||||
Value
of shares gifted to directors, employees and service
providers
|
- | - | 255 | |||||||||
Deferred
financing costs
|
- | - | 85 | |||||||||
Transfer
of inventory to oil and gas properties
|
- | - | 150 |
|
A.
|
Nature
of Operations
|
|
A.
|
Nature
of Operations (cont’d)
|
|
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
2009
|
December 31
2008
|
|||||||
US$
thousands
|
US$
thousands
|
|||||||
Excluded
from amortization base:
|
||||||||
Drilling
operations, completion costs and other related costs
|
4,098 | 3,641 | ||||||
Capitalized
salary costs
|
685 | 582 | ||||||
Legal
costs and license fees
|
693 | 684 | ||||||
Other
costs
|
354 | 339 | ||||||
$ | 5,830 | $ | 5,246 |
Period
ended
March 31
2009
|
Year
ended
December
31 2008
|
Period from
April 6, 2000
(inception)
to March 31,
2009
|
||||||||||
US$
thousands
|
US$
thousands
|
US$
thousands
|
||||||||||
Drilling
operations, completion costs and other related costs
|
- | - | 7,959 | |||||||||
Capitalized
salary costs
|
- | - | 683 | |||||||||
Legal
costs and license fees
|
- | - | 509 | |||||||||
Other
costs
|
- | - | 343 | |||||||||
- | - | 9,494 |
|
B.
|
Recently
Issued Accounting Pronouncements
|
|
1.
|
FSP
FAS 157-4 – Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly. (FAS
157-4)
|
|
In
April 2009, the Financial Accounting Standards Board (FASB) issued Staff
Position (“FSP”) FAS 157-4, Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly (“FAS 157-4”) to provide
additional guidance for estimating fair value in accordance with FASB
Statement No. 157, Fair Value Measurements, when the volume and level of
activity for the asset or liability have significantly
decreased. FSP 157-4 also includes guidance on identifying
circumstances that indicate a transaction is not orderly. FSP
157-4 also emphasizes that even if there has been a significant decrease
in the volume and level of activity for the asset or liability and
regardless of the valuation technique(s) used, the objective of a fair
value measurement remains the same. Fair value is the price
that would be received to sell an asset or paid to transfer a liability in
an orderly transaction (that is, not a forced liquidation or distressed
sale) between market participants at the measurement date under current
market conditions. FSP 157-4 is effective for interim and
annual reporting periods ending after June 15, 2009 and shall be applied
prospectively. Early adoption is permitted for periods ending
after March 15, 2009.
|
|
B.
|
Recently
Issued Accounting Pronouncements
(cont’d)
|
|
The
Company does not expect the adoption of FAS 157-4 to have a material
impact on its balance sheet or statement of
operations.
|
|
2.
|
FSP
FAS 115-2 and FAS 124-2 – Recognition and Presentation of
Other-Than-Temporary Impairments (“FAS 115-2” and “FAS
124-2”)
|
|
In
April 2009, FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments (“FAS 115-2” and “FAS 124-2”) provides
that the objective of an other-than-temporary impairment analysis under
existing U.S. GAAP is to determine whether the holder of an investment in
a debt or equity security for which changes in fair value are not
regularly recognized in earnings (such as securities classified as
held-to-maturity or available-for-sale) should recognize a loss in
earnings when the investment is impaired. An investment is
impaired if the fair value of the investment is less than its amortized
cost basis. FAS 115-2 and FAS 124-2 also amend the
other-than-temporary impairment guidance in U.S. GAAP for debt securities
to make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity
securities in the financial statements. FAS 115-2 and FAS 124-2
do not amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity
securities.
|
|
FAS
115-2 and FAS 124-2 shall be effective for interim and annual reporting
periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. Earlier adoption for
periods ending before March 15, 2009, is not permitted. If an
entity elects to adopt early either FAS 157-4 or FAS 107-1 and APB 28-1,
the entity also is required to adopt FAS 115-2 and FAS 124-2
early. Additionally, if an entity elects to adopt FAS 115-2 and
FAS 124-2 early, it is required to adopt FAS 157-4. Disclosures
for earlier periods presented for comparative purposes at initial adoption
is not required. In periods after initial adoption, comparative
disclosures are required for periods ending after initial
adoption.
|
|
B.
|
Recently
Issued Accounting Pronouncements
(cont’d)
|
|
2.
|
FSP
FAS 115-2 and FAS 124-2 – Recognition and Presentation of
Other-Than-Temporary Impairments (“FAS 115-2” and “FAS 124-2”)
(cont’d)
|
|
The
Company does not expect the adoption of FAS 115-2 and FAS 124-2 to have a
material impact on its balance sheet or statement of
operations.
|
|
3.
|
FSP
FAS 107-1 and APB 28-1 – Interim Disclosures about Fair Value of Financial
Instruments (“FAS 107-1” and “APB
28-1”)
|
|
In
April 2009, the FASB amended SFAS 107, Disclosures about Fair Value of
Financial Instruments, to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements. APB 28-1
also amended APB Opinion No. 28, Interim Financial Reporting, to require
those disclosures in summarized financial information at interim reporting
periods.
|
|
FAS
107-1 and APB 28-1 are effective for interim reporting periods ending
after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009. An entity may early adopt only if it also
elects to early adopt FAS 157-4 and FAS 115-2 and FAS
124-2. Disclosures for earlier periods presented for
comparative purposes at initial adoption is not required. In
periods after initial adoption, comparative disclosures are required only
for periods ending after initial
adoption.
|
|
The
Company does not expect the adoption of FAS 107-1 and APB 28-1 to have a
material impact on its balance sheet or statement of
operations.
|
|
C.
|
Recently
Adopted Accounting Pronouncements
|
|
1.
|
SFAS
157 – Fair Value Measurements
(SFAS 157)
|
|
On
January 1, 2008, the Company adopted the provisions FASB SFAS No. 157,
Fair Value Measurements (“SFAS 157”) for fair value measurements of
financial assets and financial liabilities and for fair value measurements
of nonfinancial items that are recognized or disclosed at fair value in
the financial statements on a recurring basis. SFAS 157 defines fair value
as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. SFAS 157 also establishes a framework for measuring fair
value and expands disclosures about fair value measurements. FASB Staff
Position SFAS 157-2, Effective Date of FASB SFAS No. 157 (“SFAS 157-2)
delays the effective date of Statement 157 until fiscal years beginning
after November 15, 2008 for all nonfinancial assets and nonfinancial
liabilities that are recognized or disclosed at fair value in the
financial statements on a nonrecurring basis. Zion does not currently have
any assets or liabilities of this
nature.
|
|
C.
|
Recently
Adopted Accounting Pronouncements
(cont’d)
|
|
1.
|
SFAS
157 – Fair Value Measurements (SFAS 157)
(cont’d)
|
|
On
January 1, 2009, the Company was required to apply the provisions of SFAS
157 to fair value measurements of nonfinancial assets and nonfinancial
liabilities that are recognized or disclosed at fair value in the
financial statements on a nonrecurring basis. The adoption of this
standard has had no significant impact on the Company’s balance sheet or
statement of operations.
|
|
In
October 2008, the FASB issued FASB Staff Position SFAS 157-3, Determining
the Fair Value of a Financial Asset When the Market for That Asset is Not
Active (“SFAS 157-3”) which was effective immediately. SFAS
157-3 clarifies the application of SFAS 157 in cases where the market for
a financial instrument is not active and provides an example to illustrate
key considerations in determining fair value in those circumstances. The
Company has considered the guidance provided by SFAS 157-3 in its
application of SFAS 157 during the first quarter of
2009.
|
|
2.
|
SFAS
162 – The Hierarchy of Generally Accepted Accounting Principles (SFAS
162)
|
|
In
May 2008, the FASB issued FASB Statement No. 162, The Hierarchy of
Generally Accepted Accounting Principles (“SFAS 162”). SFAS 162
identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements
of non-governmental entities that are presented in conformity with
generally accepted accounting principles (GAAP) in the United States (the
GAAP hierarchy). It became effective on November 15, 2008,
which was 60 days following the approval by the SEC of the Public Company
Accounting Oversight Board (PCAOB) amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles.
|
|
The
adoption of SFAS 162 did not have a material impact on the Company’s
balance sheet or statement of
operations.
|
|
3.
|
SFAS
141R - Business Combinations (SFAS
141R)
|
|
In
December 2007, the FASB issued FASB Statement No. 141R, Business
Combinations (“SFAS 141R”). SFAS 141R requires most
identifiable assets, liabilities, noncontrolling interests, and goodwill
acquired in a business combination to be recorded at “full fair
value”. SFAS 141R is effective for periods beginning on or
after December 15, 2008, and earlier adoption is
prohibited. SFAS 141R will be applied to business combinations
occurring after the effective date.
|
|
C.
|
Recently
Adopted Accounting Pronouncements
(cont’d)
|
|
3.
|
SFAS
141R - Business Combinations (SFAS 141R)
(cont’d)
|
|
On
January 1, 2009, the Company adopted SFAS 141R but it did not have a
material impact on its balance sheet or statement of
operations.
|
|
4.
|
SFAS
160 – Noncontrolling Interest in Consolidated Financial Statements (SFAS
160)
|
|
In
December 2007, the FASB issued FASB Statement No. 160, Noncontrolling
Interests in Consolidated Financial Statements – an amendment to ARB No.
51 (“SFAS 160”). SFAS 160 requires noncontrolling interests
(previously referred to as minority interests) to be reported as a
component of equity, which changes the accounting for transactions with
noncontrolling interest holders. SFAS 160 is effective for
periods beginning on or after December 15, 2008, and earlier adoption is
prohibited. SFAS 160 will be applied prospectively to all
non-controlling interests, including any that arose before the effective
date.
|
|
On
January 1, 2009, the Company adopted SFAS 160 but it did not have a
material impact on its balance sheet or statement of
operations.
|
|
5.
|
SFAS
161 – Disclosures about Derivative Instruments and Hedging Activities
(SFAS 161)
|
|
In
March 2008, the FASB issued FASB Statement No. 161, Disclosures about
Derivative Instruments and Hedging Activities (“SFAS
161”). SFAS 161 is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand the effects of the
derivative instruments on an entity’s financial position, financial
performance, and cash flows. It is effective for financial
statements issued for fiscal years and interim periods beginning on or
after November 15, 2008, with early adoption
encouraged.
|
|
The
Company adopted SFAS 161 on January 1, 2009 but it did not have a material
impact on its balance sheet or statement of
operations.
|
|
C.
|
Recently
Adopted Accounting Pronouncements
(cont’d)
|
|
6.
|
FSP
FAS 142-3 – Determination of the Useful Life of Intangible Assets (FAS
142-3)
|
|
In
April 2008, FASB Staff Position (“FSP”) FAS 142-3, Determination of the
Useful Life of Intangible Assets (“FAS 142-3”) was issued. FAS
142-3 amends the factors that should be considered in developing renewal
or extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, Goodwill and Other
Intangible Assets. FAS 142-3’s intent is to improve the
consistency between the useful life of a recognized intangible asset under
Statement 142 and the period of expected cash flows used to measure the
fair value of the asset under FASB Statement No. 141, Business
Combinations, and other U.S. generally accepted accounting
principles. It shall be effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years. Early adoption is
prohibited.
|
|
The
Company adopted FAS 142-3 on January 1, 2009 but the adoption did not have
a material impact on its balance sheet or statement of
operations.
|
|
7.
|
FSP
APB 14-1 – Accounting for Convertible Debt Instruments That May be Settled
in Cash upon Conversion (Including Partial Cash Settlement) (APB
14-1)
|
|
In
May 2008, FASB Staff Position (“FSP”) APB 14-1, Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement) (“APB 14-1”) was issued clarifying that
convertible debt instruments that may be settled in cash upon conversion
(including partial cash settlement) are not addressed by paragraph 12 of
APB Opinion No. 14, Accounting for Convertible Debt and Debt Issued with
Stock Purchase Warrants. Additionally, it specifies that
issuers of such instruments should separately account for the liability
and equity components in a manner that will reflect the entity’s
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. APB 14-1 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal
years.
|
|
On
January 1, 2009, the Company adopted APB 14-1 but the adoption has not had
a material effect on its balance sheet or statement of
operations.
|
|
C.
|
Recently
Adopted Accounting Pronouncements
(cont’d)
|
|
8.
|
FSP
EITF 99-20-1 – Amendments to the Impairment Guidance of EITF Issue No.
99-20 (EITF 99-20-1)
|
|
The
adoption of EITF 99-20-1 has not had a material impact on the Company’s
balance sheet or statement of
operations.
|
|
9.
|
EITF
07-5 – Determining Whether an Instrument (or Embedded Feature) is Indexed
to an Entity’s Own Stock (EITF
07-5)
|
|
In
June 2008, the FASB issued EITF Issue 07-5, Determining whether an
Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock
(“EITF 07-5”). This Issue is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. Early application is not permitted. Paragraph 11(a) of
SFAS 133 “Accounting for Derivatives and Hedging Activities” specifies
that a contract that would otherwise meet the definition of a derivative
but is both (a) indexed to the Company’s own stock and (b) classified in
stockholders’ equity in the statement of financial position would not be
considered a derivative financial instrument. EITF 07-5 provides a new
two-step model to be applied in determining whether a financial instrument
or an embedded feature is indexed to an issuer’s own stock and thus able
to qualify for the SFAS 133 paragraph 11(a) scope
exception.
|
|
In
January 1, 2009, the Company adopted EITF 07-5 but it has not had a
material impact on its balance sheet or statement of
operations.
|
|
A.
|
Private
Placement Offerings
|
|
A.
|
Private
Placement Offerings (cont’d)
|
|
B.
|
Initial
Public Offering
|
|
C.
|
Follow
on Public Offering
|
|
C.
|
Follow
on Public Offering (cont’d)
|
|
D.
|
2005
Stock Option Plan
|
(A
Development Stage Company)
|
|
D.
|
2005
Stock Option Plan (cont’d)
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
|
E.
|
Fair
Value of Warrants and Options
|
Exercise
|
Number
of
|
Expiration | Warrants or | ||||||||
price
|
shares
|
Date | Options | ||||||||
To employees and directors | |||||||||||
5.00 | 50,000 |
December
31, 2009
|
Warrants
|
||||||||
5.00 | 50,000 |
December
31, 2009
|
Options
|
||||||||
5.00 | 66,667 |
December
31, 2010
|
Options
|
||||||||
5.60 | 35,000 |
December
31, 2012
|
Options
|
||||||||
7.97 | 50,000 |
December
31, 2014
|
Options
|
||||||||
0.01 | 123,882 |
December
3, 2017
|
Options
|
||||||||
To
investors
|
|||||||||||
7.00 | 645,268 |
January
31, 2012
|
Warrants
|
||||||||
5.82 | * | 1,020,817 |
Number
of
|
Weighted Average
|
|||||||
shares
|
exercise
price
|
|||||||
US$
|
||||||||
Granted
from April 6, 2000 (inception) to December 31, 2007 to:
|
||||||||
Employees,
officers and directors
|
1,884,818 | 1.76 | ||||||
Underwriters
(in connection with IPO)
|
46,621 | 8.75 | ||||||
Private
placement investors and others
|
1,105,492 | 2.84 | ||||||
Expired/Canceled
|
(641,059 | ) | 2.87 | |||||
Exercised
|
(1,984,077 | ) | 1.59 | |||||
Outstanding,
December 31, 2007
|
411,795 | 4.52 | ||||||
Granted
to:
|
||||||||
Investors
in Follow On Public Offering
|
416,404 | 7.00 | ||||||
Expired/Canceled
|
(64,625 | ) | 5.15 | |||||
Outstanding,
December 31, 2008
|
763,574 | 5.81 |
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
|
E.
|
Fair
Value of Warrants and Options
(cont’d)
|
Granted
to:
|
||||||||
Employees,
officers and directors
|
90,000 | 4.43 | ||||||
Investors
in Follow On Public Offering
|
249,939 | 7.00 | ||||||
Expired/Canceled
|
(15,000 | ) | 5.60 | |||||
Exercised
|
(67,696 | ) | 8.21 | |||||
Outstanding,
March 31, 2009
|
1,020,817 | 5.82 | ||||||
Exercisable,
March 31, 2009
|
925,817 | 5.90 |
Shares
underlying outstanding
|
Shares
underlying outstanding
|
|||||||||||||||||||||||||||
warrants
and options (nonvested)
|
warrants
and options (all fully vested)
|
|||||||||||||||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||||||||||||||
average
|
average
|
|||||||||||||||||||||||||||
remaining
|
Weighted
|
remaining
|
Weighted
|
|||||||||||||||||||||||||
Range
of
|
Number
|
contractual
|
Average
|
Range
of
|
Number
|
contractual
|
Average
|
|||||||||||||||||||||
exercise
price
|
outstanding
|
life
(years)
|
Exercise
|
exercise
|
outstanding
|
Life
(years)
|
exercise
|
|||||||||||||||||||||
price
|
price
|
price
|
||||||||||||||||||||||||||
US$
|
US$
|
US$
|
US$
|
|||||||||||||||||||||||||
0.01
|
30,000 | 8.68 | 0.01 | 0.01 | 93,882 | 8.68 | 0.01 | |||||||||||||||||||||
-
|
- | - | - | 5.00 | 100,000 | 0.75 | 5.00 | |||||||||||||||||||||
-
|
- | - | - | 5.00 | 66,667 | 1.75 | 5.00 | |||||||||||||||||||||
5.60
|
15,000 | 3.75 | 5.60 | 5.60 | 20,000 | 3.75 | 5.60 | |||||||||||||||||||||
7.97
|
50,000 | 5.76 | 7.97 | 7.00 | 645,268 | 2.83 | 7.00 | |||||||||||||||||||||
0.01-7.97
|
95,000 | 5.08 | 0.01-7.00 | 925,817 | 5.90 |
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
E.
|
Fair
Value of Warrants and Options
(cont’d)
|
For
the three month period
|
Period
from April 6,
|
|||||||||||
ended
March 31,
|
2000
(inception) to
|
|||||||||||
2009
|
2008
|
March
31, 2009
|
||||||||||
US$
|
US$
|
US$
|
||||||||||
Weighted-average
fair value of underlying stock at grant date
|
7.54 | - | 3.00 – 7.54 | |||||||||
Dividend
yields
|
- | - | - | |||||||||
Expected
volatility
|
59.2 | % | - | 28.2% - 59.2 | % | |||||||
Risk-free
interest rates
|
2.13 | % | - | 2.1% - 5.15 | % | |||||||
Expected
lives
|
4.23 | - |
1.74
– 4.63 years
|
|||||||||
Weighted-average
grant date fair market
value
|
5.58 | - | 0.76 - 5.58 |
For
the three month period
|
Period
from April 6,
|
|||||||||||
ended
March 31,
|
2000
(inception) to
|
|||||||||||
2009
|
2008
|
March
31, 2009
|
||||||||||
US$
|
US$
|
US$
|
||||||||||
Weighted-average
fair value of underlying stock at grant date
|
- | - | 1.00 – 8.75 | |||||||||
Dividend
yields
|
- | - | - | |||||||||
Expected
volatility
|
- | - | 32.2% - 99.8 | % | ||||||||
Risk-free
interest rates
|
- | - | 2.8% - 5.50 | % | ||||||||
Contractual
lives
|
- | - |
0.56
– 3.17 years
|
|||||||||
Weighted-average
grant date fair market value
|
- | - | 0.68 – 2.74 |
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
E.
|
Fair
Value of Warrants and Options
(cont’d)
|
F.
|
Compensation
Cost for Warrant and Option
Issuances
|
US$
thousands
|
||||
April
1 - December 31, 2009
|
285 | |||
For
the year ended December 31, 2010
|
82 | |||
For
the year ended December 31, 2011
|
32 | |||
For
the year ended December 31, 2012
|
2 | |||
401 |
G.
|
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
|
||||
$3.00
Warrants
|
June
2004 – August 2004
|
3.00 |
December
31, 2006
|
||||
D
Warrants
|
September
2004 – April 2005
|
4.00 |
December
31, 2006
|
||||
E
Warrants
|
September
2004 – June 2005
|
5.00 |
December
31, 2006
|
||||
F
and FF Warrants
|
October
2005
|
5.00 |
*
December 31, 2008
|
||||
G
Warrants
|
December
2005 – January 2006
|
5.50 |
December
31, 2008
|
||||
H
Warrants
|
December
2006 –May 2007
|
8.75 |
September
26, 2009
|
||||
Unit
Warrants
|
October
2008 – December 2008
|
7.00 |
January
31, 2012
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
|
H.
|
Gift
Shares
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
A.
|
Environmental
Matters
|
B.
|
Royalty
Commitments
|
C.
|
Long-term
Incentive Plan
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
D.
|
Charitable
Foundations
|
E.
|
Payments
to executives and deferral of
compensation
|
F.
|
Underwriting
Agreement
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
F.
|
Underwriting
Agreement (cont’d)
|
G.
|
Lease
Commitments
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
G.
|
Lease
Commitments (cont’d)
|
US$
Thousands
|
||||
2009
|
89 | |||
2010
|
58 | |||
2011
|
47 | |||
194 |
H.
|
Contract
with Geophysical Institute of
Israel
|
I.
|
Drilling
Contract
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
I.
|
Drilling
Contract (cont’d)
|
J.
|
Settlement
Agreement
|
K.
|
Employment
Agreement with Executive
|
Zion
Oil & Gas Inc
|
(A
Development Stage Company)
|
Notes to the Unaudited Interim Financial
Statements as of March 31,
2009
|
K.
|
Employment
Agreement with Executive
(cont’d)
|
·
|
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.
|
ITEM
4 (T).
|
CONTROLS AND
PROCEDURES
|
ITEM 1.
|
LEGAL
PROCEEDINGS
|
ITEM 2.
|
UNREGISTERED SALES OF
SECURITIES AND USE OF
PROCEEDS
|
In US$
(000)
|
||||
Underwriting
Commissions
|
$ | 321 | ||
Expenses
Paid to Underwriter
|
193 | |||
Other
expenses as follows:
|
||||
Accounting
Fees and Expenses
|
66 | |||
Legal
Fees and Expenses
|
50 | |||
Printing
Fees and Advertising
|
321 | |||
Listing
Fees (including SEC filing fees)
|
63 | |||
Transfer
and Escrow Agent Fees
|
14 | |||
Other
Expenses
|
6 | |||
TOTAL
EXPENSES
|
$ | 1,034 |
In US$
|
||||||
a.
|
Preparation
for drilling of Ma'anit-Rehoboth #2 well
|
$ | 1,845 | |||
b.
|
Exploration
costs
|
$ | 43 | |||
c.
|
Compensation
to officers and directors
|
$ | 687 | (1) | ||
d.
|
Legal,
accounting and professional fees
|
$ | 189 | |||
e.
|
Temporary
investments
|
$ | 1,563 | (2) | ||
f.
|
Other
|
$ | 440 | (3) |
(1)
|
Includes
$240,000 of debt conversion by two officers during the unit
offering
|
(2)
|
Balance
in US money market account at March 31, 2009
|
(3)
|
Includes
$6,000 debt conversion by two vendors in the offering and also includes
refundable VAT (value added
tax)
|
ITEM 3.
|
DEFAULTS UPON SENIOR
SECURITIES
|
ITEM 4.
|
SUBMISSION OF MATTERS
TO A VOTE OF SECURITY
HOLDERS
|
ITEM 5.
|
OTHER
INFORMATION
|
ITEM
6.
|
EXHIBITS
|
10.1
|
Employment
Agreement dated February 1, 2009 between Zion Oil & Gas, Inc. and
Sandra F. Green (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K as filed with the SEC on February 5,
2009)
|
|
10.2
|
Settlement
Agreement dated as of January 9, 2009, between Zion Oil & Gas, Inc.
and Philip Mandelker (incorporated by reference to Exhibit 10.7 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008,
as filed with the SEC on March 31, 2009)
|
|
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 o4f the Sarbanes-Oxley
Act of 2002 (furnished
only).
|
ZION
OIL & GAS, INC.
|
||||
(Registrant)
|
||||
By:
|
/s/
Richard J. Rinberg
|
By:
|
/s/
Sandra F. Green
|
|
Richard
J. Rinberg
Chief
Executive Officer
(Principal
Executive Officer)
|
Sandra
F. Green,
Senior
Vice-President and Chief Financial Officer
(Principal
Financial Officer)
|
|||
Date:
|
May
15, 2009
|
Date:
|
May
15, 2009
|