ENXNET : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Exchange Act which represent the expectations or beliefs
concerning future events that involve risks and uncertainties, including but not
limited to the demand for Company products and services and the costs associated
with such goods and services. All other statements other than statements of
historical fact included in this Quarterly Report including, without limitation,
the statements under "Management's Discussion and Analysis or Plan of
Operations" and elsewhere in the Quarterly Report, are forward-looking
statements. While the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct.
The following discussion of the results of operations and financial conditions
should be read in conjunction with the financial statements and related notes
appearing in this report.
and its wholly owned subsidiary,
a natural gas and petroleum exploitation, development and production company
engaged in locating and developing hydrocarbon resources, primarily in the
stockholder value by generating and developing high-potential exploitation
resources in these areas. The Company's principal business is the acquisition of
leasehold interests in petroleum and natural gas rights, either directly or
indirectly, and the exploitation and development of properties subject to these
leases. The Company has leased property in
for additional opportunities in the natural gas and petroleum industry. Our goal
is to lease the oil and gas properties of acreage that has a high likelihood of
becoming a producing property. We will require additional funding to drill and
complete a producing natural gas and petroleum well.
The Company currently can satisfy its current cash requirements for
approximately 90 days and will raise additional working capital by the sale of
shares of the Company common stock to select perspective individuals and from
additional borrowings. This plan should provide the additional necessary funds
required to enable the Company to initiate its drilling program on the oil and
gas lease properties.
The Company does not anticipate any significant cash requirements for the
purchase of any facilities. The Company currently has no full-time employee on
Results of Operations - Three months ended
The Company incurred operating expenses of
During the three months ended
Liquidity and Capital Resources.
From inception through
of its Common Stock to officers, directors and outside shareholders. The Company
has little operating history and no material assets other than the oil and gas
cash bond and 22,507 acres of mineral lease properties. The Company has
of unrestricted cash and
The Company has incurred operating losses each year since its inception and has
a working capital deficit at
the working capital deficit was
working capital deficit and operating losses raise substantial doubt about the
Company's ability to continue as a going concern. As a result of these factors,
the Company's independent certified public accountants have included an
explanatory paragraph in their reports on the Company's
statements which expressed substantial doubt about the Company's ability to
continue as a going concern.
At the present time, the Company has no material commitments for capital
expenditures. If capital expenditures are required after operations commence,
the Company will pay for the same through the sale of common stock, or through
loans from third
parties. There is no assurance, however, that such financing will be available
and in the event such financing is not available, the Company may have to cease
CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
Management's discussion and analysis of financial condition and results of
operations are based upon our consolidated financial statements. These
statements have been prepared in accordance with generally accepted accounting
Use of estimates in preparation of financial statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates, judgments
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, based on
historical experience, and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The following critical
accounting policies rely upon assumptions, judgments and estimates and were used
in the preparation of our consolidated financial statements:
Cash and cash equivalents
Cash equivalents are highly liquid investments with an original maturity of
three months or less.
Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in
estimates and assumptions that affect the amounts reported in the financial
statements. We regularly evaluate estimates and judgments based on historical
experience and other relevant facts and circumstances. Actual results could
differ from those estimates.
Fair Value of Financial Instruments
Under FASB ASC 825 the Company is required to disclose the fair value of
financial instruments for which it is practicable to estimate value.
The Company's financial instruments consist of cash, accounts receivable,
accounts payable, accrued liabilities and debt. The Company believes that the
carrying amounts approximate fair value for all such instruments.
FASB ASC 820 defines fair value, establishes a framework for measurement, and
expands disclosure about fair value measurements. Topic No. 820 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 (exit price). Topic No. 820 classifies the inputs used to
measure fair value into the following hierarchy:
Level 1: Quoted prices for identical assets or liabilities in active markets.
Level 2: Quoted market prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in markets
that are not active; and model-derived valuations whose inputs are observable or
whose significant value drivers are observable.
Level 3: Pricing inputs are unobservable for the assets and liabilities,
including situations in which there is little to no market activity.
Stock Based Compensation
FASB ASC 718 requires that measurement of the cost of employee services received
in exchange for an award of equity instruments be based on the grant-date fair
value of the award. Such costs are recorded over the periods employees are
required to render services in exchange for the awards.
Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. These assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which the
temporary differences are expected to reverse.
We have net operating loss carryforwards available to reduce future taxable
income. Future tax benefits for these net operating loss carryforwards are
recognized to the extent that realization of these benefits is considered more
likely than not. To the extent that we will not realize a future tax benefit, a
valuation allowance is established.
Basic and diluted net loss per share
Basic loss per share is computed using the weighted average number of shares of
common stock outstanding during each period. Diluted loss per share includes the
dilutive effects of common stock equivalents on an "as if converted" basis. For
the periods ended
anti-dilutive effect and were not included in the calculation of diluted net
loss per common share
Unaudited Financial Statements
The accompanying unaudited financial statements for the three months ended
principles for interim financia1 information. In the opinion of management all
adjustments considered necessary for a fair presentation, which consist of
normal recurring adjustments, have been included. The accompanying unaudited
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's
Off Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES.
Currently the Company's stock is traded under the symbol "EXNT" on the OTC PINK.
There can be no assurance that an active or regular trading market for the
common stock will develop or that, if developed, will be sustained. Various
factors, such as operating results, changes in laws, rules or regulations,
general market fluctuations, changes in financial estimates by securities
analysts and other factors may have a significant impact on the market of the
Company securities. The market price for the securities of public companies
often experience wide fluctuations that are not necessarily related to the
operating performance of such public companies such as high interest rates or
impact of overseas markets.
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