item 14 principal accounting fees services years ended december 31 2013 2012 total fees charged company audit services including quarterly reviews 8750 7500 respectfully years ended december 31 2013 2012 fees charged audit related services tax services 33 part iv item 15 item 14 principal accounting fees services total fees charged company audit services including quarterly reviews 7500 auditrelated services 0 tax services 0 services 0 year ended december 31 2012 total fees charged company audit services including quarterly reviews 5000 auditrelated services 0 tax services 0 services 0 year ended december 31 2011 part iv item 15 item 7 managements discussion analysis financial condition results operations 11 results operations years ended december 31 2013 december 31 2012 december 31 2013 company 289 cash equivalents compared 1253 december 31 2012 believe funds sufficient effectuate plans respect company’s proposed operation next twelve months need seek additional capital purpose effectuating business plan revenues company generate significant revenues period august 31 2009 inception december 31 2013 year ended december 31 2013 4087 income compared 5266 income year ended december 31 2012 income collected east coast power llc lexington power light llc total operating expenses year ended december 31 2013 total operating expenses 32715 consisted primarily 15546 professional fees 11341 transfer agent fees 2100 rent utilities compared 28098 operating expenses year ended december 31 2012 consisted 21578 professional fees 2100 rent utilities increase operating expenses primarily result increase transfer agent fees net loss net loss year ended december 31 2013 28628 compared net loss 22832 year ended december 31 2012 increase net loss primarily result increase amount transfer agent fees liquidity capital resources december 31 2013 company cash balance 289 twelve months ended december 31 2013 company sell shares common stock assurance additional capital available company may 10 2012 company executed 5 promissory note payable anthony p muratore former president director september 13 2013 holder sold promissory note unrelated third party beacon capital llc face value purchaser company agreed extend due date additional six months march 12 2014 “maturity date” terms conditions november 25 2013 note amended add conversion feature whereby note convertible whole part sole discretion holder beginning maturity date shares common stock conversion price 0025 per share march 4 2014 company beacon capital llc agreed extend maturity date convertible promissory note additional six months august 12 2014see note 3 company currently agreements arrangements understandings person obtain funds bank loans lines credit sources since company significant arrangement plan currently effect inability raise funds purposes severe negative impact ability remain viable company currently commitments person capital expenditures offbalance sheet arrangements offbalance sheet arrangements going concern auditor issued going concern opinion means substantial doubt continue ongoing business next twelve months unless obtain additional capital pay bills generated revenues assurance ever reach point 12 item 8 item 7 managements discussion analysis financial condition results operations results operations years ended december 31 2012 december 31 2011 december 31 2012 company 1253 cash equivalents compared 16922 december 31 2011 believe funds sufficient effectuate plans respect company’s proposed operation next twelve months need seek additional capital purpose effectuating business plan revenues company generate significant revenues period august 31 2009 inception december 31 2012 year ended december 31 2012 5266 income compared 7683 income year ended december 31 2011 income collected east coast power llc total operating expenses year ended december 31 2012 total operating expenses 28098 consisted primarily 21578 professional fees 2100 rent utilities compared 24274 operating expenses year ended december 31 2011 consisted 20500 professional fees 2100 rent utilities increase operating expenses primarily result increase professional fees net loss net loss year ended december 31 2012 22832 compared net loss 16591 year ended december 31 2011 increase net loss primarily result increase amount professional fees retain sec reporting status liquidity capital resources december 31 2012 company cash balance 1253 twelve months ended december 31 2012 company sell shares common stockthere assurance additional capital available company may 10 2012 company executed promissory note payable tony muratore president director note provides may 10 2013 upon two business days prior written notice mr muratore may borrow time amounts increments 5000 provided aggregate principal amount outstanding note exceed 25000 note bears interest rate 5 default rate 15 due later may 10 2013 company currently agreements arrangements understandings person obtain funds bank loans lines credit sources since company significant arrangement plan currently effect inability raise funds purposes severe negative impact ability remain viable company currently commitments person capital expenditures offbalance sheet arrangements offbalance sheet arrangements going concern auditor issued going concern opinion means substantial doubt continue ongoing business next twelve months unless obtain additional capital pay bills generated revenues assurance ever reach point item 8  item 8 financial statements report independent registered public accounting firm board directors stockholders xr energy inc audited accompanying balance sheets xr energy inc company december 31 2013 2012 related statements operations stockholders equity cash flows years ended financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects financial position xr energy inc december 31 2013 2012 results operations cash flows years ended conformity accounting principles generally accepted united states accompanying financial statements referred prepared assuming company continue going concern discussed note 1 financial statements companys present financial situation raises substantial doubt ability continue going concern managements plans regard matter also described note 1 financial statements include adjustments might result outcome uncertainty michael studer cpa pc april 4 2014 freeport new york 13 see accompanying notes financial statements 14 see accompanying notes financial statements 15 xr energy inc statement stockholders equity years ended december 31 2013 see accompanying notes financial statements 16 see accompanying notes financial statements 17 xr energy inc notes financial statements years ended december 31 2012 1 organization business description xr energy inc “xr” “company” incorporated laws state nevada august 31 2009 xr offers energy consulting services smaller sized middle market companies new york metropolitan area company also earns commission related utility energy services brokered sold customers going concern uncertainty accompanying financial statements prepared conformity generally accepted accounting principles united states america contemplates company continuing going concern december 31 2013 company cash 289 working capital deficit 35238 period august 31 2009 inception december 31 2013 company minimal revenues cumulative net loss 96688 factors raise substantial doubt ability company continue going concern however company plans improve financial condition entering reverse merger transaction see note 9 company better potential improved operating results company prior reverse acquisition transaction financial statements include adjustments might necessary company unable continue going concern 2 summary significant accounting policies use estimates preparation financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses periods presented actual results could differ estimates cash equivalents purposes reporting within statement cash flows company considers cash hand cash accounts subject withdrawal restrictions penalties highly liquid debt instruments purchased maturity three months less cash equivalents revenue recognition company recognizes revenues consulting fees commissions earned various utilities related sales energy services customers new york metropolitan area revenues recognized financial reporting purposes utility delivers energy services customer acceptance approved customer fee fixed determinable collection related receivable probable loss per common share basic loss per share computed dividing net loss attributable common stockholders weightedaverage number shares common stock outstanding period diluted loss per share computed similar basic loss per share except denominator increased include number additional common shares would outstanding potentially dilutive common shares stock options convertible securities issued additional common shares dilutive financial instruments issued outstanding periods presented 18 income taxes company accounts income taxes provisions financial accounting standards board’s “fasb” accounting standards codification “asc” 740 “income tax” asc 740 requires recognition deferred tax assets liabilities expected future tax consequences events included financial statements tax returns method deferred tax assets liabilities determined based differences financial statement carrying amounts tax bases certain assets liabilities using enacted tax rates effect years differences expected reverse deferred tax assets liabilities classified according financial statement classification assets liabilities generating differences valuation allowances established necessary reduce deferred tax assets amount expected realized company adopted provisions fasb asc 7401005 “accounting uncertainty income taxes” asc clarifies accounting uncertainty income taxes recognized enterprise’s financial statements asc prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return asc provides guidance derecognition classification interest penalties accounting interim periods disclosure transition december 31 2012 2013 company material unrecognized tax benefits stockbased compensation stockbased compensation accounted fair value accordance fasb asc 718 “compensation stock compensation” company recognizes stockbased compensation expense fair value shares stock options ultimately expected vest requisite service period respective awards date company granted stock options recent accounting pronouncements management believe recently issued yet effective accounting standard currently adopted would material effect accompanying financial statements 3 note payable officer may 10 2012 company executed promissory note payable chief executive officer “holder” promissory note provided may 10 2013 upon two business days prior written notice holder company could borrow holder time amount increments 5000 provided aggregate principal amount outstanding note shall exceed 25000 holder shall obligated make advances event default occurred continuing promissory note accrued interest rate 5 per annum default rate 15 per annum due later september 13 2013 one year date loan first made september 13 2013 company borrowed 25000 accrued interest amount 808 related promissory note september 13 2013 holder sold promissory note unrelated third party beacon capital llc face value purchaser company agreed extend due date additional six months march 12 2014 “maturity date” terms conditions november 25 2013 note amended add conversion feature whereby note convertible whole part sole discretion holder beginning maturity date shares common stock conversion price 0025 per share since common stock yet begun trading company recognize beneficial conversion feature debt discount november 25 2013 amendment 4 due former officer balance december 31 2012 2013 1250 4750 respectively represents monies advanced company chief executive officer also major shareholder company purpose providing working capital business amount due noninterest bearing payable demand balance classified longterm liability demand payment expected currently 19 5 income taxes provision benefit income taxes years ended december 31 2012 2013 follows assuming combined effective tax rate approximately 40 company deferred tax income tax assets december 31 2012 2013 follows company maintained full valuation allowance total deferred tax assets periods due uncertainty future utilization december 31 2013 company net operating loss carry forwards 96688 expire 14625 2029 14012 2030 16591 2031 22832 2032 28628 2033 6 common stock except 25000 convertible note payable december 31 2013 convertible 10000000 shares company’s common stock dilutive financial instruments issued outstanding december 31 2012 2013 7 related party transactions included accounts payable accrued expenses december 31 2012 2013 6300 8400 respectively due company owned founding shareholder former chief executive officer xr rent related costs office space utilized xr verbal monthtomonth agreement 20 8 commitments contingencies rental agreement company rents office space related party see note 7 monthtomonth agreement provides rent 175 per month registration statement november 23 2011 company filed registration statement form s1 securities exchange commission “sec” register sale 2818800 shares common stock issued consultants 2009 sold investors series private placements 2010 2011 july 19 2012 registration statement declared effective sec company receive proceeds shares sold selling shareholders consulting agreement may 30 2012 company entered agreement advisory services “agreement” consulting firm “advisor” agreement provided advisor introduce company qualified market maker would submit form 211 application finra quote trade shares company’s common stock assist company preparing obtaining finra approval form 211 application consulting fee 4000 company paid advisor june 11 2012 agreement term beginning may 30 2012 expired upon finra approval form 211 application major source revenue one utility accounted 100 96 commissions revenue years ended december 31 2012 2013 respectively conflicts interests chief executive officer company currently involved business activities may become involved additional business opportunities future may face conflict selecting company business interests company formulated policy resolution conflicts 9 subsequent events convertible note payable march 4 2014 company beacon capital llc agreed extend maturity date convertible promissory note additional six months august 12 2014 see note 3 xrt acquisition agreement march 11 2014 company executed acquisition agreement “agreement” xr energy texas inc “xrt” shareholders holding 100 issued outstanding shares” dated february 28 2014 agreement calls company deliver xrt 30000000 newly issued shares name xrt shareholders exchange 100 xrt shares concurrently company’s controlling shareholders deliver assign total 19000000 shares registered names company cancellation closing agreement expected occur april 2014 xrt represent company texas corporation owns certain oil natural gas leases located texas effective march 20 2014 tara muratore resigned director chief financial officer company replaced david taylor effective april 4 2014 anthony muratore resigned director chief executive officer company replaced akram chaudhary chief executive officer xrt a8k march 24 2014 21 item 201 completion acquisition disposition assets xr energy inc “xreg” entered definitive acquisition agreement “agreement” xr energy texas inc “xrt” shareholders holding 100 issued outstanding shares” dated february 28 2014 executed march 11 2014 agreement calls xreg deliver xrt 30000000 newly issued shares name xrt shareholders exchange 100 xrt shares concurrently xreg controlling shareholder deliver assign 19000000 shares registered name xreg cancellation item 502 departure directors certain officers election directors appointment certain officers compensation arrangements certain officers effective march 20 2014 tara muratore resigned following positions company including limited director secretary treasurer principal financial accounting officer resignation involve disagreement company matter relating company’s operations policies practices effective march 20 2014 david taylor appointed director president secretary treasurer principal financial accounting officer company mr taylor since 2009 consultant various companies oil gas industry texas louisiana primarily accounting field operations 2005 2009 mr taylor president oilfield service operating company louisiana mr taylor currently director egpi firecreek inc publicly traded company officer one subsidiaries taylor 40 years experience mineral extraction industry canada united states america private publicly traded companies resident dallas area bschedule 14f1 april 1 2014 notice proposed change majority board directors introduction information statement furnished holders record common stock xr energy inc “company” close business march 31 2014 accordance requirements section 14f securities exchange act 1934 amended “act” rule 14f1 act prior effecting change majority companys directors meeting stockholders change majority directors appointment new members company’s board directors “board” expected take place earlier 10 days date information statement filed securities exchange commission “sec” transmitted stockholders accordance sec rule 14f1 information statement mailed stockholders march 31 2014 vote action companys stockholders required response information statement proxies solicited xr energy inc “xreg” entered definitive acquisition agreement “agreement” xr energy texas inc “xrt” shareholders holding 100 issued outstanding shares” dated february 28 2014 executed march 11 2014 agreement calls xreg deliver xrt 30000000 newly issued shares name xrt shareholders exchange 100 xrt shares concurrently xreg controlling shareholder deliver assign 19000000 shares registered name xreg cancellation acquisition includes following oil assets 22 chrane leases located taylor county west texas 7 producing wells pdp 193 bopd 123112 2 nonproducing wells 9 undeveloped locations current engineering 4 probable behind pipe zones 360 acres held production 75 net revenue interest depth wells 2100 feet lf taylor lease located haskell county west texas lease one producing well another well bore intend equip bring production well produced 20 years burnett tidewater lease located wichita county texas lease 7 wells shallow production lease total 30 wells put production primarily connected installation new flow lines lease 400 plus acres 14 undeveloped locations depth wells 480 1800 feet brown snyder lease located jones county texas lease 480 plus acres one producible well 5 shut wells two injection wells lease 12 probable undeveloped locations wells approximately 3000 feet depth effective march 20 2014 tara muratore resigned following positions company including limited director secretary treasurer principal financial accounting officer resignation involve disagreement company matter relating company’s operations policies practices also effective march 20 2014 david taylor appointed director secretary treasurer principal financial accounting officer company mr taylor since 2009 consultant various companies oil gas industry texas louisiana primarily accounting field operations 2005 2009 mr taylor president oilfield service operating company louisiana mr taylor currently director egpi firecreek inc publicly traded company officer one subsidiaries taylor 40 years experience mineral extraction industry canada united states america private publicly traded companies resident dallas area effective april 4 2014 anthony p muratore resign following positions company including limited director president chief executive officer resignation involve disagreement company matter relating company’s operations policies practices also effective april 4 2014 akram chaudhary appointed director president chief executive officer march 28 2014 authorized capital stock company immediately prior share exchange consists 100000000 shares common stock 00001 par value 22818800 shares common stock issued outstanding share common stock entitled one vote respect matters acted stockholders directors executive officers following table sets forth names ages position positions held officers director prior resignation executive officer director company follows name age position date elected anthony p muratore president director august 31 2009 tara muratore treasurer secretary director august 31 2009 anthony p muratore president company since august 31 2009 since 2001 mr muratore president consumer one mortgage arranging loans commercial residential markets 2003 2007 23 retail account executive gunnallen financial inc serving individual investors mr muratore graduated suny oneonta 1991 bs business economics believe mr muratores qualifications sit board directors include extensive experience analyzing negotiating loan documentation tara muratore secretary treasurer company since august 31 2009 since 2006 mrs muratore worked accountant slp financial solutions mrs muratore graduated li university cw post 1992 bs accounting believe mrs muratores qualifications sit board directors include many years accountant small privately held companies set forth biographical information new director executive officer mr chaudhary president chief operating officer chanwest oil corporation texas corporation since 1989 company operates oil gas leases texas oklahoma new mexico 2002 mr chaudhary formed capco resources teas inc purchases sales oil gas leases president chief operating officer mr chaudhary also operating manager sterling royalties llc holds oil gas interests mr chaudhary 40 years experience oil gas industry canada united states america officer director public trading companies mr chaudhary resident dallas area mr taylor since 2009 consultant various companies oil gas industry texas louisiana primarily accounting field operations 2005 2009 mr taylor president oilfield service operating company louisiana mr taylor currently director egpi firecreek inc publicly traded company officer one subsidiaries taylor 40 years experience mineral extraction industry canada united states america private publicly traded companies resident dallas area security ownership certain beneficial owners management following table sets forth certain information regarding beneficial ownership companys common stock march 31 2014 stockholder known company beneficial owner 5 company’s common stock “5 shareholder” ii directors executive officers company person named table sole voting investment power respect shares beneficially owned reported date percentages calculated based 22818800 shares common stock issued outstanding december 31 2013 outstanding options warrants securities exercisable convertible shares common stock unless otherwise indicated address person listed co xr energy inc 373 smithtown bypass hauppauge ny 11788 holders 5 common stock 24 following table sets forth certain information regarding beneficial ownership companys common stock giving effect closing directors executive officers company ii 5 shareholder person named table sole voting investment power respect shares beneficially owned unless otherwise indicated section 16a beneficial ownership reporting compliance except set forth person year ended december 31 2013 director officer beneficial owner ten percent company’s common stock class securities company registered section 12 act failed file timely basis reports required section 16 act fiscal year prior years foregoing based solely upon review company forms 3 4 amendments thereto fiscal year furnished company rule 16a3e act forms 5 amendments thereto furnished company respect fiscal year written representation received company reporting person form 5 required compensation directors officers currently mr muratore receives compensation services president director formal employment consulting agreement mr muratore september 8 2009 mr muratore issued 12000000 shares common stock consideration services officer company valued amount 1200 currently mrs muratore receives compensation services treasurer secretary director formal employment consulting agreement mrs muratore september 8 2009 mrs muratore issued 8000000 shares common stock consideration services officer company valued amount 800 currently benefits health life insurance available employees officers directors summary compensation table 1 september 8 2009 mr muratore issued 12000000 shares common stock consideration services officer company valued amount 1200 2 september 8 2009 mrs muratore issued 8000000 shares common stock consideration services officer company valued amount 800 25 since incorporation august 31 2009 stock options stock appreciation rights granted directors executive officers none directors executive officers exercised stock options stock appreciation rights none hold unexercised stock options longterm incentive plans outstanding equity awards directors officers unexercised options stock vested equity incentive plan awards compensation directors period august 31 2009 inception december 31 2013 none directors received compensation services rendered capacity director arrangements presently place regarding compensation directors services directors committee participation special assignments annuity pension retirement benefits proposed paid officer director employee event retirement normal retirement date pursuant presently existing plan provided contributed company subsidiaries options outstanding director independence securities listed national securities exchange interdealer quotation system requirements directors independent directors committees companys board directors standing nominating compensation audit committee rather board performs functions committees also “audit committee financial expert” board term defined item 401d5ii regulation sk believe necessary board appoint committees volume matters come board consideration permits board give sufficient time attention matters involved decision making additionally common stock listed trading quotation national securities exchange required committees meetings board directors fiscal year ended december 31 2013 board meetings compensation paid companys directors attendance meetings last fiscal year stockholder communication board directors defined policy procedural requirements stockholders submit recommendations nomination directors board believe defined policy regard consideration candidates recommended stockholders necessary time believes given limited scope company’s operations specific nominating policy would premature little assistance company’s business operations advanced level specific minimum qualifications board believes must met candidate recommended board currently entire board decides nominees recommendation member board followed board’s review candidates’ resumes interview candidates based information gathered board makes decision whether recommend candidates nominees director company pay fee third party parties identify evaluate assist identifying evaluating potential nominee 26 company restrictions shareholder nominations articles incorporation bylaws restrictions applicable generally nevada corporate law federal proxy rules extent rules become applicable board consider suggestions individual shareholders subject evaluation persons merits stockholders may communicate nominee suggestions directly board accompanied biographical details statement support nominees suggested nominee must also provide statement consent considered nomination formal criteria nominees board determined adopt formal methodology communications shareholders certain relationships related transactions director independence september 8 2009 issued 12000000 shares common stock anthony muratore shares issued exchange services provided us officer company valued 1200 shares issued section 42 securities act 1933 amended mr muratore founder company access information would required included registration statement transaction involve public offering september 8 2009 issued 8000000 shares common stock tara muratore shares issued consideration services provided us officer company valued amount 800 shares issued section 42 securities act 1933 amended mrs muratore founder company access information would required included registration statement transaction involve public offering rent office space mr muratore monthtomonth oral agreement pursuant pay 175 per month anthony muratore tara muratore husband wife persons considered promoter rules regulations sec none promoters received receive anything company either directly indirectly shares company stated legal proceedings knowledge company pending threatened litigation proceedings company find additional information company subject information reporting requirements act accordance act files periodic reports documents information sec relating business financial statements matters reports information may inspected available copying offices sec 100 f street ne washington dc 20549 available secs website wwwsecgov 27 signatures pursuant requirements securities exchange act 1934 registrant duly caused information statement signed behalf undersigned hereunto duly authorized 28 item 9a item 8 financial statements report independent registered public accounting firm board directors stockholders xr energy inc audited accompanying balance sheets xr energy inc company december 31 2012 2011 related statements operations stockholders equity cash flows years ended financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects financial position xr energy inc december 31 2012 2011 results operations cash flows years ended conformity accounting principles generally accepted united states accompanying financial statements referred prepared assuming company continue going concern discussed note 1 financial statements companys present financial situation raises substantial doubt ability continue going concern managements plans regard matter also described note 1 financial statements include adjustments might result outcome uncertainty michael studer cpa pc march 19 2013 freeport new york see accompanying notes financial statements see accompanying notes financial statements xr energy inc statement stockholders equity years ended december 31 2012 see accompanying notes financial statements see accompanying notes financial statements xr energy inc notes financial statements years ended december 31 2011 2012 1 organization business description xr energy inc “xr” “company” incorporated laws state nevada august 31 2009 xr offers energy consulting services smaller sized middle market companies new york metropolitan area company also earns commission related utility energy services brokered sold customers going concern uncertainty accompanying financial statements prepared conformity generally accepted accounting principles united states america contemplates company continuing going concern december 31 2012 company cash 1253 working capital deficit 10110 period august 31 2009 inception december 31 2012 company minimal revenues cumulative net loss 68060 factors raise substantial doubt ability company continue going concern however company plans improve financial condition raising additional capital selling shares common stock also company plans pursue new customers acquisition prospects order attain profitable operations however assurance company successful accomplishing objectives financial statements include adjustments might necessary company unable continue going concern 2 summary significant accounting policies use estimates preparation financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses periods presented actual results could differ estimates cash equivalents purposes reporting within statement cash flows company considers cash hand cash accounts subject withdrawal restrictions penalties highly liquid debt instruments purchased maturity three months less cash equivalents revenue recognition company recognizes revenues consulting fees commissions earned various utilities related sales energy services customers new york metropolitan area revenues recognized financial reporting purposes utility delivers energy services customer acceptance approved customer fee fixed determinable collection related receivable probable loss per common share basic loss per share computed dividing net loss attributable common stockholders weightedaverage number shares common stock outstanding period diluted loss per share computed similar basic loss per share except denominator increased include number additional common shares would outstanding potentially dilutive common shares stock options convertible securities issued additional common shares dilutive financial instruments issued outstanding periods presented income taxes company accounts income taxes provisions financial accounting standards board’s “fasb” accounting standards codification “asc” 740 “income tax” asc 740 requires recognition deferred tax assets liabilities expected future tax consequences events included financial statements tax returns method deferred tax assets liabilities determined based differences financial statement carrying amounts tax bases certain assets liabilities using enacted tax rates effect years differences expected reverse deferred tax assets liabilities classified according financial statement classification assets liabilities generating differences valuation allowances established necessary reduce deferred tax assets amount expected realized company adopted provisions fasb asc 7401005 “accounting uncertainty income taxes” asc clarifies accounting uncertainty income taxes recognized enterprise’s financial statements asc prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return asc provides guidance derecognition classification interest penalties accounting interim periods disclosure transition december 31 2011 2012 company material unrecognized tax benefits stockbased compensation stockbased compensation accounted fair value accordance fasb asc 718 “compensation stock compensation” company recognizes stockbased compensation expense fair value shares stock options ultimately expected vest requisite service period respective awards date company granted stock options recent accounting pronouncements management believe recently issued yet effective accounting standard currently adopted would material effect accompanying financial statements 3 note payable officer may 10 2012 company executed promissory note payable chief executive officer “holder” promissory note provides may 10 2013 upon two business days prior written notice holder company may borrow holder time amount increments 5000 provided aggregate principal amount outstanding note shall exceed 25000 holder shall obligated make advances event default occurred continuing promissory note accrues interest rate 5 per annum default rate 15 per annum due later may 10 2013 december 31 2012 company borrowed 5000 promissory note 4 due officer 1250 balance december 31 2011 2012 represents monies advanced company chief executive officer also major shareholder company purpose providing working capital business amount due noninterest bearing payable demand balance classified longterm liability demand payment expected currently 5 income taxes provision benefit income taxes years ended december 31 2011 2012 follows assuming combined effective tax rate approximately 40 company deferred tax income tax assets december 31 2011 2012 follows company maintained full valuation allowance total deferred tax assets periods due uncertainty future utilization december 31 2012 company net operating loss carry forwards 68060 expire 14625 2029 14012 2030 16591 2031 22832 2032 6 common stock 2011 company sold issued total 52000 shares restricted common stock series private placements 25 per share gross proceeds 13000 dilutive financial instruments issued outstanding december 31 2011 2012 7 related party transactions included accounts payable accrued expenses december 31 2011 2012 4200 6300 respectively due company owned founding shareholder chief executive officer xr rent related cost office space utilized xr verbal monthtomonth agreement 8 commitments contingencies rental agreement company rents office space related party see note 7 monthtomonth agreement provides rent 175 per month registration statement november 23 2011 company filed registration statement form s1 securities exchange commission “sec” register sale 2818800 shares common stock issued consultants 2009 sold investors series private placements 2010 2011 july 19 2012 registration statement declared effective sec company receive proceeds shares sold selling shareholders consulting agreement may 30 2012 company entered agreement advisory services “agreement” consulting firm “advisor” agreement provided advisor introduce company qualified market maker would submit form 211 application finra quote trade shares company’s common stock assist company preparing obtaining finra approval form 211 application consulting fee 4000 company paid advisor june 11 2012 agreement term beginning may 30 2012 expired upon finra approval form 211 application june 30 2012 4000 payment classified prepaid consulting balance sheet expensed three months ended september 30 2012 major source revenue one utility accounted 100 commissions revenue years ended december 31 2011 2012 respectively conflicts interests chief executive officer company currently involved business activities may become involved additional business opportunities future may face conflict selecting company business interests company formulated policy resolution conflicts 9 subsequent events january 312013 company advanced 15000 chief executive officer promissory note dated may 10 2012 see note 3 increasing balance note payable 5000 december 31 2012 20000 january 30 2013 company paid transfer agent 9500 connection application filed depository trust company “dtc” dtc eligibility company’s common stock item 9a item 15 exhibits following exhibits included filing filed herewith furnished herewith 34 signatures pursuant requirements section 13a 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized april 14 2014 xr energy inc registrant santhony p muratore anthony p muratore president chief executive officer accordance exchange act report signed following persons behalf registrant capacities dates indicated april 14 2014 xr energy inc registrant tara muratore tara muratore principal accounting officer chief financial officer item 15 exhibits following exhibits included filing filed herewith furnished herewith signatures pursuant requirements section 13a 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized march 22 2013 xr energy inc registrant date march 21 xr energy anthony p muratore anthony p muratore president chief executive officer accordance exchange act report signed following persons behalf registrant capacities dates indicated date march 21 xr energy tara muratore tara muratore president accounting officer chief financial officer