x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended August 31, 2008
|
|
OR
|
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
333-97201
|
98-0360062
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
File Number)
|
(IRS
Employer Identification
Number)
|
World
Trade Center 14th Floor
Jl.
Jenderal Sudirman Kav. 29-31
Jakarta,
Indonesia
|
12920
|
(Address
of principal executive offices)
|
(Zip
Code)
|
81
Clemenceau Ave., 04-15/16 UE Square Suite 23 Singapore
239917
|
(former
name, former address and former fiscal year, if changed from last
report)
|
Large accelerated Filer ¨
|
Accelerated Filer ¨
|
Non-accelerated Filer ¨
(Do not check if a smaller reporting company)
|
Smaller reporting company x
|
|
|
Page No.
|
Part I.
|
Financial
Information
|
|
Item 1.
|
Financial
Statements (unaudited)
|
3
|
|
Consolidated
Balance Sheet — August 31, 2008
|
3
|
|
Consolidated
Statements of Operations — Three Month Periods Ended August 31, 2008 and
2007 and the Period From February 21, 2001 (Inception) to August
31,
2008
|
4
|
|
Consolidated
Statements of Cash Flows — Three Month Periods Ended August 31, 2008 and
2007 and the Period From February 21, 2001 (Inception) to August
31,
2008
|
5
|
|
Consolidated
Statements of Stockholders’ Equity/(Deficit) - From February 21, 2001
(Inception) to August 31, 2008
|
6
|
|
Notes
to Unaudited Consolidated Financial Statements
|
7
|
Item 2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
16
|
Item 3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
19
|
Item 4.
|
Controls
and Procedures
|
19
|
Part II.
|
|
|
Item 2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
|
Item 6.
|
Exhibits
|
21
|
Signatures
|
22
|
|
Exhibit Index
|
ASSETS
|
|
|||
|
|
|||
Current
Assets
|
|
|||
Cash
and cash equivalents
|
$
|
1,190,573
|
||
Other
receivable
|
75,450
|
|||
Prepaid
expenses and other current assets
|
246,427
|
|||
Total
Current Assets
|
1,512,450
|
|||
Intangible
assets, net
|
6,524,754
|
|||
Total
Assets
|
$
|
8,037,204
|
||
|
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|||
|
|
|||
Current
Liabilities
|
|
|||
Accounts
payable
|
$
|
462,597
|
||
Accrued
liabilities
|
520,928
|
|||
Total
Current Liabilities
|
983,525
|
|||
|
|
|||
Stockholders’
Equity
|
||||
Common
Stock
|
||||
Authorized:
|
||||
500,000,000
voting common shares, par value $0.0001 Issued and
outstanding:
|
||||
143,175,272
common shares
|
14,342
|
|||
Additional
paid-in capital
|
22,813,435
|
|||
Subscription
receivable
|
(20,000
|
)
|
||
Deficit
Accumulated During The Exploration Stage
|
(15,754,098
|
)
|
||
Total
Stockholders' Equity
|
7,053,680
|
|||
|
||||
Total
Liabilities and Stockholders' Equity
|
$
|
8,037,204
|
|
|
FOR THE CUMULATIVE
|
||||||||
|
|
PERIOD FROM
|
||||||||
|
|
FEBRUARY 21
|
||||||||
|
FOR THE THREE MONTH PERIODS ENDED
|
2001 (INCEPTION) TO
|
||||||||
|
AUGUST 31
|
AUGUST 31
|
||||||||
|
2008
|
2007
|
2008
|
|||||||
|
|
|
|
|||||||
Net
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
|
|
|
||||||||
Operating
Expenses
|
|
|
||||||||
Exploration
expenditures
|
379,916
|
1,425,746
|
4,769,571
|
|||||||
Stock
based compensation expense
|
209,992
|
1,527,396
|
6,394,423
|
|||||||
General
and administrative expenditures
|
411,760
|
376,317
|
2,953,989
|
|||||||
Professional
and consulting fees
|
398,051
|
210,277
|
1,821,183
|
|||||||
Total
Operating Expenses
|
1,399,719
|
3,539,736
|
15,939,156
|
|||||||
|
|
|
|
|||||||
Other
income:
|
||||||||||
Consulting
services
|
53,305
|
-
|
125,185
|
|||||||
Interest
income
|
10,417
|
12,835
|
59,873
|
|||||||
Total
other income
|
63,722
|
185,058
|
||||||||
|
||||||||||
Net
Loss
|
$
|
(1,335,997
|
)
|
$
|
(3,526,901
|
)
|
$
|
(15,754,098
|
)
|
|
|
||||||||||
Net
Loss Per Common Share, basic and diluted
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
||||
*Basic
and Diluted Weighted Average Number Of Common Shares
Outstanding
|
141,803,173
|
97,884,923
|
|
FOR THE CUMULATIVE
|
|||||||||
|
PERIOD FROM
|
|||||||||
|
FOR THE THREE MONTH PERIODS ENDED
|
FEBRUARY 21, 2001
|
||||||||
|
AUGUST 31
|
(INCEPTION) TO
|
||||||||
|
2008
|
2007
|
AUGUST 31, 2008
|
|||||||
Cash
Flows In Operating Activities:
|
|
|||||||||
|
||||||||||
Net
loss for the period
|
$
|
(1,335,997
|
)
|
$
|
(3,526,901
|
)
|
$
|
(15,754,098
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
Stock
based compensation expense
|
209,992
|
1,527,396
|
6,394,423
|
|||||||
Stock
issued for consulting services
|
-
|
-
|
261,250
|
|||||||
Amortization
expense
|
88,572
|
88,572
|
560,952
|
|||||||
Allowance
for Bad Debt - Note Receivable
|
-
|
-
|
362,656
|
|||||||
(Increase)
/ decrease in accounts receivable
|
495
|
-
|
(75,450
|
)
|
||||||
Increase
in prepaid expenses and other current assets
|
(123,121
|
)
|
(13,584
|
)
|
(251,752
|
)
|
||||
Increase
in accounts payable and accrued liabilities
|
406,065
|
875,033
|
721,428
|
|||||||
Net
cash used in operating activities
|
(753,994
|
)
|
(1,049,484
|
)
|
(7,780,590
|
)
|
||||
|
||||||||||
Cash
Flows In Investing Activities:
|
||||||||||
Cash
of acquired subsidiary
|
-
|
-
|
201,054
|
|||||||
Cash
investment in subsidiary
|
-
|
-
|
(10,000
|
)
|
||||||
Net
cash provided by investing activities
|
-
|
-
|
191,054
|
|||||||
Cash
Flows In Financing Activities:
|
||||||||||
Advances
from shareholder
|
-
|
-
|
117,820
|
|||||||
Payments
to shareholders
|
-
|
-
|
(117,820
|
)
|
||||||
Issuance
of notes payable
|
-
|
-
|
-
|
|||||||
Debt
repayments
|
-
|
-
|
(198,000
|
)
|
||||||
Advances
on notes receivable
|
-
|
(50,000
|
)
|
(753,995
|
)
|
|||||
Proceeds
from issuance of common stock
|
-
|
725,000
|
9,732,103
|
|||||||
Net
cash provided by financing activities
|
-
|
675,000
|
8,780,108
|
|||||||
Increase/(Decrease)
In Cash & cash equivalents
|
(753,994
|
)
|
(374,484
|
)
|
1,190,573
|
|||||
Cash
And Cash Equivalents, Beginning Of Period
|
1,944,567
|
729,626
|
-
|
|||||||
Cash
And Cash Equivalents, End Of Period
|
$
|
1,190,573
|
$
|
355,142
|
1,190,573
|
|||||
|
||||||||||
Supplemental
Disclosure Of Cash Flow Information
|
||||||||||
Cash
paid during the period
|
||||||||||
Interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Income
Taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Supplemental
Disclosure of Non Cash Transactions
|
||||||||||
Shares
issued to acquire subsidiary
|
6,400,000
|
ACCUMULATED
|
|||||||||||||||||||
COMMON STOCK
|
DEFICIT
|
||||||||||||||||||
|
ADDITIONAL
|
DURING THE
|
|||||||||||||||||
PAID-IN
|
SUBSCRIPTION
|
EXPLORATION
|
|||||||||||||||||
NUMBER
|
AMOUNT
|
CAPITAL
|
RECEIVABLE
|
STAGE
|
TOTAL
|
||||||||||||||
Issuance
of common stock for cash
|
|||||||||||||||||||
Founders’
shares
|
40,000,000
|
$
|
1,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,000.00
|
||||||||
Initial
shares
|
6,875,272
|
3,688
|
47,877
|
-
|
-
|
51,565
|
|||||||||||||
Net
loss for the period
|
-
|
-
|
-
|
-
|
(35,809
|
)
|
(35,809
|
)
|
|||||||||||
Balance,
May 31, 2001
|
46,875,272
|
4,688
|
47,877
|
-
|
(35,809
|
)
|
16,756
|
||||||||||||
Net
income for the year
|
-
|
-
|
-
|
-
|
15,723
|
15,723
|
|||||||||||||
Balance,
May 31, 2002
|
46,875,272
|
4,688
|
47,877
|
-
|
(20,086
|
)
|
32,479
|
||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(16,847
|
)
|
(16,847
|
)
|
|||||||||||
Balance,
May 31, 2003
|
46,875,272
|
4,688
|
47,877
|
-
|
(36,933
|
)
|
15,632
|
||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(18,846
|
)
|
(18,846
|
)
|
|||||||||||
Balance,
May 31, 2004
|
46,875,272
|
4,688
|
47,877
|
-
|
(55,779
|
)
|
(3,214
|
)
|
|||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(11,544
|
)
|
(11,544
|
)
|
|||||||||||
Balance,
May 31, 2005
|
6,875,272
|
4,688
|
47,877
|
-
|
(67,323
|
)
|
(14,758
|
)
|
|||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(10,348
|
)
|
(10,348
|
)
|
|||||||||||
Balance,
May 31, 2006
|
46,875,272
|
4,688
|
47,877
|
-
|
(77,671
|
)
|
(25,106
|
)
|
|||||||||||
Merger
with Thatcher Mining Pte. Ltd.
|
32,000,000
|
3,200
|
6,396,800
|
-
|
6,400,000
|
||||||||||||||
Stock
issued for cash
|
17,615,000
|
1,762
|
3,501,239
|
-
|
3,503,000
|
||||||||||||||
Stock
issued for services
|
1,112,500
|
111
|
222,389
|
-
|
222,500
|
||||||||||||||
Issuance
of shares under stock compensation plan
|
125,000
|
13
|
342,488
|
-
|
342,500
|
||||||||||||||
Stock
based compensation expense
|
-
|
-
|
958,872
|
-
|
958,872
|
||||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
|
(3,693,152
|
)
|
(3,693,152
|
)
|
|||||||||||
Balance,
May 31, 2007
|
97,727,772
|
9,773
|
11,469,664
|
-
|
(3,770,823
|
)
|
7,708,614
|
||||||||||||
Stock
issued for cash
|
34,957,600
|
3,496
|
5,473,042
|
-
|
-
|
5,476,528
|
|||||||||||||
Stock
issued for services
|
55,000
|
6
|
38,745
|
-
|
-
|
38,750
|
|||||||||||||
Issuance
of shares under stock compensation plan
|
1,946,700
|
195
|
674,909
|
(40,000
|
)
|
-
|
635,104
|
||||||||||||
Stock
options granted to employees
|
-
|
-
|
4,247,957
|
-
|
-
|
4,247,957
|
|||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(10,647,276
|
)
|
(10,647,276
|
)
|
|||||||||||
Balance,
May 31, 2008
|
134,687,072
|
$
|
13,469
|
$
|
21,904,316
|
$
|
(40,000
|
)
|
$
|
(14,418,100
|
)
|
$
|
7,459,685
|
||||||
Stock
issued for cash
|
8,729,100
|
873
|
699,127
|
-
|
-
|
700,000
|
|||||||||||||
Stock
options granted to employees
|
-
|
-
|
209,992
|
20,000
|
-
|
229,992
|
|||||||||||||
Net
loss for the three month period ended August 31, 2008
|
-
|
-
|
-
|
-
|
(1,335,997
|
)
|
(1,335,997
|
)
|
|||||||||||
Balance,
August 31, 2008
|
143,416,172
|
$
|
14,342
|
$
|
22,813,435
|
$
|
(20,000
|
)
|
$
|
(15,754,098
|
)
|
$
|
7,053,680
|
Loan
advances
|
325,000
|
|||
Accrued
interest
|
44,409
|
|||
Loan
balance
|
369,409
|
|||
Reserve
|
(369,409
|
)
|
||
Total
|
-
|
Prepaid
expenses
|
$
|
211,158
|
||
Deposits
|
35,269
|
|||
Total
Prepaid expenses
|
$
|
246,427
|
Accounts
payable
|
$
|
462,597
|
||
Accrued
expenses
|
520,928
|
|||
Total
Accounts payable and accrued expenses
|
$
|
983,525
|
Officers
& Directors
|
||||
Jorge
Nigaglioni
|
$
|
35,735
|
||
William
Bloking
|
70,051
|
|||
Andrew
Caminschi
|
22,540
|
|||
Antonio
Varano
|
9,698
|
|||
Related
Parties
|
||||
Mining
House Ltd.
|
15,087
|
|||
$
|
153,112
|
Gross
Value of Agreements
|
$
|
7,085,706
|
||
Amortization
|
(560,952
|
)
|
||
Net
Intangible assets
|
$
|
6,524,754
|
2008
|
$
|
265,714
|
||
2009
|
354,285
|
|||
2010
|
354,285
|
|||
2011
|
354,285
|
|||
2012,
|
354,285
|
|||
After
|
4,841,900
|
|||
Total
|
$
|
6,524,754
|
Three Months Ended
August 31, 2008
|
||||
Manpower
|
$
|
322,910
|
||
Site
Expenses
|
29,044
|
|||
Equipment
|
12,027
|
|||
Travel
|
15,935
|
|||
$
|
379,916
|
Stock
Option Plan
|
||||
Risk-free
interest rate
|
1.69
|
%
|
||
Dividend
yield
|
0
|
%
|
||
Volatility
|
113.0
|
%
|
||
Expected
life
|
10
years
|
|
Available For
Grant
|
Shares
|
Weighted
Average Exercise
Plan
|
|||||||
Outstanding
at May 31, 2007
|
1,225,000
|
10,650,000
|
$
|
1.44
|
||||||
Granted
|
-2,865,000
|
2,865,000
|
$
|
0.29
|
||||||
Exercised
|
-
|
-2,001,667
|
$
|
0.38
|
||||||
Cancelled
|
4,081,667
|
-4,081,667
|
||||||||
Plan
Shares Expired
|
-
|
|||||||||
Outstanding
at May 31, 2008
|
2,441,667
|
7,431,667
|
$
|
1.28
|
||||||
Granted
|
-1,250,000
|
1,250,000
|
$
|
0.12
|
||||||
Exercised
|
-
|
-
|
$
|
-
|
||||||
Cancelled
|
4,063,750
|
-4,063,750
|
-
|
|||||||
Plan
Shares Expired
|
-
|
-
|
-
|
|||||||
Outstanding
at August 31, 2008
|
5,255,417
|
4,617,917
|
$
|
0.40
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||||||
Range of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in thousands)
|
Number
Exercisable
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||||||||||||||
$
0.12-$0.50
|
2,306,250
|
9.4
|
$
|
0.40
|
$
|
10
|
1,317,333
|
9.25
|
$
|
0.46
|
$
|
2
|
Year
Ending August 31, 2009
|
$
|
60,852
|
Exhibit
Number
|
Description
|
|
10.1
|
Form
of Amended and Restated Subscription Agreement (incorporated by reference
to Exhibit 10.1 to our Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 30, 2008).
|
|
31.1
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
under
the Securities Exchange Act of 1934.*
|
|
31.2
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
under
the Securities Exchange Act of 1934.*
|
|
32.1
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b)
under
the Securities Exchange Act of 1934 and 18 U.S.C. Section
1350.*(1)
|
|
32.2
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b)
under
the Securities Exchange Act of 1934 and 18 U.S.C. Section
1350.*(1)
|
|
|
KAL
ENERGY, INC.
|
Dated:
October 20, 2008
|
|
/s/
William Bloking
|
|
|
William
Bloking
President
and Chairman of the Board of Directors
(Principal
Executive Officer)
|
Dated:
October 20, 2008
|
|
/s/
Jorge Nigaglioni
|
|
|
Jorge
Nigaglioni
Chief
Financial Officer
(Principal
Financial Officer)
|
(Principal Financial and Accounting Officer) |