UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A
Amendment No. 1
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ______________.
Commission File Number 0-33027.
HOUSTON AMERICAN ENERGY CORP.
(Exact name of small business issuer as specified in its charter)
Delaware 76-0675953
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
801 Travis Street, Suite 2020, Houston, Texas 77002
(Address of principal executive offices)(Zip Code)
(713) 222-6966
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 month (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of May 10, 2005, we had 19,970,089 shares of $.0001 par value Common
Stock outstanding.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [X]
EXPLANTORY NOTE
This Amendment No. 1 on Form 10-QSB/A hereby amends Part I, Item 3. Controls and
Procedures of Houston American Energy Corp's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 2005, which was filed on May 13, 2005. This
Amendment No. 1 is being filed for the purpose of providing additional details
to our disclosures in the original report pursuant to comments we received from
the Staff of the U.S. Securities and Exchange Commission. This Amendment No. 1
is not intended to revise other information presented in our quarterly report on
Form 10-QSB for the quarter ended March 31, 2005 as originally filed and all
such other information in the original filing, which remains unchanged.
This Amendment No. 1 on Form 10-QSB/A does not reflect events occurring after
the filing of the original Form 10-QSB and does not modify or update the
disclosure therein in any way other than as required to reflect the amendments
discussed above.
HOUSTON AMERICAN ENERGY CORP.
-----------------------------
FORM 10-QSB/A
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet as of March 31, 2005. . . . . . . . . . . . . . 3
Statements of Operations for the three months
ended March 31, 2005 and March 31, 2004. . . . . . . . . . . 4
Statements of Cash Flows for the three months
ended March 31, 2005 and March 31, 2004. . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . 7
Item 3. Controls and Procedures . . . . . . . . . . . . . . . . 11
PART II OTHER INFORMATION
Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . 12
2
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
HOUSTON AMERICAN ENERGY CORP.
BALANCE SHEET
March 31, 2005
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash $ 282,930
Accounts receivable 334,575
Prepaid expenses 24,400
------------
Total current assets 641,905
------------
PROPERTY, PLANT AND EQUIPMENT
Oil and gas properties - full cost method
Costs subject to amortization 2,600,391
Costs not being amortized 314,758
Office equipment 10,878
------------
Total property, plant and equipment 2,926,027
Accumulated depreciation and depletion (1,071,982)
------------
Total property, plant and equipment, net 1,854,045
------------
OTHER ASSETS 3,167
------------
Total Assets $ 2,499,117
============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 272,085
Accrued expenses 41,452
Accrued interest on shareholder's loan 4,400
------------
Total current liabilities 317,937
------------
LONG-TERM DEBT:
Notes payable to principal shareholder 1,000,000
------------
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value; 100,000,000 shares
Authorized; 19,968,089 shares outstanding 19,968
Additional paid-in capital 2,800,027
Treasury stock, at cost; 100,000 shares (85,834)
Accumulated deficit (1,552,981)
------------
Total shareholders' equity 1,181,180
------------
Total liabilities and shareholders' equity $ 2,499,117
============
The accompanying notes are an integral part of these financial statements
3
HOUSTON AMERICAN ENERGY CORP.
STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months Ended March 31,
-------------------------------------
2005 2004
----------------- ------------------
Revenue $ 445,510 $ 122,808
Oil and gas 2,204 2,766
----------------- ------------------
Interest 447,714 125,574
----------------- ------------------
Total revenue
Expenses of operations
Lease operating expense and severance taxes 182,099 53,642
Joint venture expenses 13,823 -
General and administrative expense
Accounting and legal 95,915 20,318
Salary expense 48,742 -
Rent 10,244 10,372
Shareholder relations 1,203 2,442
Miscellaneous 11,992 12,626
Depreciation and depletion 62,627 22,806
Interest expense 18,000 18,000
----------------- ------------------
Total expenses 444,645 140,206
----------------- ------------------
Net income (loss) $ 3,069 $ (14,632)
================= ==================
Basic and diluted income (loss) per share $ 0.00 $ (0.01)
================= ==================
Basic and diluted weighted average shares 19,968,089 19,509,304
================= ==================
The accompanying notes are an integral part of these financial statements
4
HOUSTON AMERICAN ENERGY CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31,
------------------------------------
2005 2004
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations $ 3,069 $ (14,632)
Adjustments to reconcile net loss
to net cash from operations
Depreciation and depletion 62,627 22,806
Changes in operating assets and liabilities:
(Increase) in accounts receivable (94,433) (9,070)
(Increase) decrease in prepaid expense 65,546 (138,400)
Decrease in other assets - 36,864
Increase in accounts payable and accrued expenses 36,129 89,453
----------------- -----------------
Net cash provided (used) by operations 72,938 (12,979)
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of oil and gas properties (511,621) (210,391)
----------------- -----------------
Net cash used by investing activities (511,621) (210,391)
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock - net of costs - 91,193
----------------- -----------------
Net cash provided by financing activities - 91,193
----------------- -----------------
Decrease in cash (438,683) (132,177)
Cash, beginning of period 721,613 663,422
----------------- -----------------
Cash, end of period $ 282,930 $ 531,245
================= =================
SUPPLEMENT CASH FLOW INFORMATION:
Interest paid $ 18,000 $ 18,000
================= =================
SUPPLEMENT NON-CASH INVESTING AND
FINANCING ACTIVITIES
Stock issued for oil and gas activity $ - $ 47,500
================= =================
The accompanying notes are an integral part of these financial statements
5
HOUSTON AMERICAN ENERGY CORP.
Notes to Financial Statements
March 31, 2005
(Unaudited)
NOTE 1. - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Houston American Energy
Corp., a Delaware corporation (the "Company") have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S-B. They do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for a complete financial presentation. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
considered necessary for a fair presentation, have been included in the
accompanying unaudited financial statements. Operating results for the periods
presented are not necessarily indicative of the results that may be expected for
the full year.
These financial statements should be read in conjunction with the financial
statements and footnotes, which are included as part of the Company's Form
10-KSB for the year ended December 31, 2004.
NOTE 2. - CHANGES IN PRESENTATION
Certain financial presentations for the periods presented for 2004 have been
reclassified to conform to the 2005 presentation.
NOTE 3. - SUBSEQUENT EVENTS
On May 4, 2005, the Company entered into Purchase Agreements (the "Purchase
Agreements") with multiple investors pursuant to which the Company sold
$2,125,000 of 8% Subordinated Convertible Notes Due 2010 (the "Notes").
The Notes bear interest at 8%, provide for semi-annual interest payments and
mature May 1, 2010. The Notes are convertible, at the option of the holders,
into common stock of the Company at a price of $1.00 per share (the "Conversion
Price"), subject to standard anti-dilution provisions relating to splits,
reverse splits and other transactions, including issuances of common stock at
prices below the Conversion Price. The Notes are subject to automatic
conversion in the event the Company conducts an underwritten public offering of
its common stock from which the Company receives at least $5 million and the
public offering price is at least 150% of the then applicable Conversion Price.
The Company has the right to cause the Notes to be converted into common stock
after May 1, 2006 if the price of the Company's common stock exceeds 200% of the
then applicable Conversion Price on the date of conversion and for at least 20
trading days over the preceding 30 trading days. The Company has the right to
repurchase the Notes after May 1, 2007 at 103% of the face amount during 2007,
102% of the face amount during 2008, 101% of the face amount during 2009 and
100% of the face amount thereafter. The Notes are unsecured general obligations
of the Company and are subordinated to all other indebtedness of the Company
unless the other indebtedness is expressly made subordinate to the Notes.
The Notes were offered and sold in private placement transaction pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act of
1933 and Rule 506 promulgated thereunder. Each of the investors is either an
"accredited investor", as defined in Rule 501 promulgated under the Securities
Act, or a "qualified institutional buyer", as defined in Rule 144A promulgated
under the Securities Act.
6
Pursuant to the terms of the Purchase Agreements, the Company and the investors
entered into Registration Rights Agreements under which the Company agreed to
file with the Securities and Exchange Commission, within 90 days, a registration
statement covering the Notes and the common stock underlying the Notes and to
use its best efforts to cause the registration statement to become effective
within 180 days.
In connection with the placement of the Notes, the Company issued to the
placement agent in the offering a three year warrant (the "Placement Agent
Warrant") to purchase 191,250 shares of the Company's common stock at $1.00 per
share and paid commissions totaling $127,500. The Registration Rights
Agreements provide that the shares of common stock underlying the Placement
Agent Warrant are to be included in the registration statement required to be
filed.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
FORWARD-LOOKING INFORMATION
This Form 10-QSB quarterly report of Houston American Energy Corp. (the
"Company") for the three months ended March 31, 2005, contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, which are intended to be covered by the safe harbors created
thereby. To the extent that there are statements that are not recitations of
historical fact, such statements constitute forward-looking statements that, by
definition, involve risks and uncertainties. In any forward-looking statement,
where the Company expresses an expectation or belief as to future results or
events, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the statement of
expectation or belief will be achieved or accomplished.
The following are factors that could cause actual results or events to differ
materially from those anticipated, and include, but are not limited to: general
economic, financial and business conditions; the Company's ability to minimize
expenses and exposures related to its oil and gas properties in which other
companies have control over the operations conducted on such properties; changes
in and compliance with governmental laws and regulations, including various
state and federal environmental regulations; the Company's current dependency on
John F. Terwilliger, its sole director and executive officer; and the Company's
ability to obtain additional necessary financing from outside investors and/or
bank and mezzanine lenders.
Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. The
Company believes the information contained in this Form 10-QSB to be accurate as
of the date hereof. Changes may occur after that date, and the Company will not
update that information except as required by law in the normal course of its
public disclosure practices.
The oil and gas industry is subject to volatile price movements based on various
factors including supply and demand and other factors beyond the control of the
Company. While the industry has generally benefited from higher prices during
the past two years, sudden and/or sustained decreases in energy prices can
occur, which could limit our ability to fund planned levels of capital
expenditures.
Additionally, the following discussion regarding the Company's financial
condition and results of operations should be read in conjunction with the
financial statements and related notes contained in Item 1 of Part 1 of this
Form 10-QSB, as well as the financial statements in Item 7 of Part II of the
Company's Form 10-KSB for the fiscal year ended December 31, 2004.
7
CRITICAL ACCOUNTING POLICIES
The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The Company believes certain critical accounting
policies affect its more significant judgments and estimates used in the
preparation of its financial statements. A description of the Company's
critical accounting policies is set forth in the Company's Form 10-KSB for the
year ended December 31, 2004. As of, and for the quarter ended, March 31, 2005,
there have been no material changes or updates to the Company's critical
accounting policies other than the following updated information relating to
Unevaluated Oil and Gas Properties:
UNEVALUATED OIL AND GAS PROPERTIES. Unevaluated oil and gas properties not
subject to amortization include the following at March 31, 2005:
31-Mar-05
---------
Acquisition costs $ 58,756
Evaluation costs 256,002
---------
Total $ 314,758
---------
The carrying value of unevaluated oil and gas prospects include $242,628
expended for properties in the South American country of Colombia at March 31,
2005. We are maintaining our interest in these properties and development has
or is anticipated to commence within the next twelve months.
CURRENT YEAR DEVELOPMENTS
Drilling of a 10,600-foot well, the first well, on the South Sibley Prospect in
Webster Parish, Louisiana began in April 2005 with drilling ongoing as of May
11, 2005. The Company has a 7.5% working interest at an 8.3% net revenue
interest carried to point of sales for the well.
Drilling of a 12,100-foot well, the Baronet #2 well, on the Crowley Prospect in
Acadia Parish, Louisiana was completed in April 2005. The well tested the Hayes
Sand and flanks a natural gas well that produced 1.6 BCF of natural gas from the
Hayes Sand. After logging 21-feet of apparent net pay, hole conditions
deteriorated before logging could be completed. A completion attempt is planned
in May 2005. The Company has a 3% working interest and 2.25% net revenue
interest until payout for the well.
Drilling of 2 offset wells on the Cara Cara concession in Colombia was completed
with production commencing on the Bengala #4 in January 2005 and the Jaguar #5
in February 2005. The Company holds a 1.59% working interest in each of the
wells subject to a 30% reversionary interest to Ecopetrol at payout.
The Tambaqui #5 well commenced drilling, and production, in March 2005. The
Company holds a 12.6% working interest in the well.
Seismic surveying began on our Cara Cara concession in Colombia as part of our
planned delineation of additional drilling prospects on the concession. Seismic
surveying also began on our Dorotea and Cabiona concessions to establish
drilling prospect locations.
8
RESULTS OF OPERATIONS
Oil and Gas Revenues. Total oil and gas revenues increased 263% to $445,510 in
the three months ended March 31, 2005 when compared to the three months ended
March 31, 2004. The increase in revenue is due to (1) increased production
resulting from the development of the Columbian fields and the new domestic
wells that have come on line during 2004, and (2) increases in oil prices. The
Company had interests in 11 producing wells in Colombia and 7 producing wells in
the U.S. during the 2005 quarter as compared to 3 producing wells in Columbia
and 6 producing wells in the U.S. during the 2004 quarter. Average prices from
sales were $42.12 per barrel of oil and $5.33 per mcf of gas during the 2005
quarter as compared to $26.89 per barrel of oil and $5.24 per mcf of gas during
the 2004 quarter.
Columbia U.S. Total
--------- ------- --------
2005 Quarter
Oil sales $ 323,892 $21,855 $345,747
Gas sales - 99,763 99,763
2004 Quarter
Oil sales 47,100 2,656 49,756
Gas sales - 73,052 73,052
Lease Operating Expenses. Lease operating expenses, excluding joint venture
expenses relating to our Columbian operations discussed below, increased 239% to
$182,099 in the 2005 quarter from $53,642 in the 2004 quarter. The increase in
lease operating expenses was attributable to the increase in the number of wells
operated during the 2005 period (18 wells as compared to 9 wells). Following is
a summary comparison of lease operating expenses for the periods.
Columbia U.S. Total
--------- ------ --------
2005 Quarter $ 174,930 $7,169 $182,099
2004 Quarter 47,786 5,856 53,642
Joint Venture Expenses. The Company's allocable share of joint venture expenses
attributable to the Colombian Joint Venture totaled $13,823 during the 2005
quarter and $0 for the first quarter of 2004. The increase in joint venture
expenses was attributable to an increase in operational activities of the joint
venture in acquiring new concessions.
Depreciation and Depletion Expense. Depreciation and depletion expense was
$62,627 and $22,806 for the quarter ended March 31, 2005 and 2004, respectively.
The increase is due to increases in domestic and Colombian production.
Interest Expense. Interest expense was $18,000 in the 2005 and 2004 quarter.
The interest expense has been steady since the conversion of certain loans by
shareholders to equity in December 2003. Interest expense will increase
commencing in the second quarter of 2005 with the issuance of $2,125,000 of 8%
Subordinated Convertible Notes.
General and Administrative Expenses. General and administrative expense
increased by 267% to $168,096 during the first quarter 2005 from $45,758 in the
first quarter 2004. The increase in general and administrative expense was
primarily attributable to the payment of salary (up $48,742 from $0) to the
Company's principal officer beginning in the fourth quarter of 2004 and
increases in professional fees (up $75,597, or 372%) relating primarily to legal
fees associated with the ongoing Moose Oil litigation.
9
FINANCIAL CONDITION
Liquidity and Capital Resources. At March 31, 2005 we had a cash balance of
$282,930 and working capital of $323,968 compared to a cash balance of $721,613
and working capital of $771,392 at December 31, 2004. The decline in cash and
working capital during the period was primarily attributable to investing
activities relating to oil and gas properties that were partially offset by
improved operating cash flow.
Operating cash flows for the 2005 quarter totaled $72,938 as compared to cash
used in operations during the 2004 quarter of $12,979. The improvement in
operating cash flow was primarily attributable to improved profitability and
increases in depreciation and depletion.
Investing activities used $511,621 during the 2005 quarter as compared to
$210,391 used during the 2004 quarter. The increase in funds used in investing
activities during the current quarter was primarily attributable to the payment
of the Company's portion of seismic survey costs on Colombian prospects totaling
$261,918.
Financing activities provided $91,193 during the 2004 quarter attributable to
the issue of 227,983 shares of its common stock for cash consideration of
$91,193. The Company had no financing activities during the 2005 quarter.
Subsequent to March 31, 2005, the Company completed a sale of $2,125,000 of 8%
Subordinated Convertible Notes due 2010 (the "Convertible Notes") pursuant to
which the Company received net proceeds of approximately $1,950,000 after
commissions and offering costs.
Notes Payable. At March 31, 2005, our long-term debt was $1,000,000, unchanged
from December 31, 2004. Notes payable at that date consisted of loans from our
principal shareholder bearing interest at 7.2% and maturing January 1, 2007.
Effective May 4, 2005, we sold $2,125,000 in principal amount of Convertible
Notes. The Convertible Notes bear interest at 8%, provide for semi-annual
interest payments and mature May 1, 2010. The Convertible Notes are
convertible, at the option of the holders, into common stock of the Company at a
price of $1.00 per share (the "Conversion Price"), subject to standard
anti-dilution provisions relating to splits, reverse splits and other
transactions, including issuances of common stock at prices below the Conversion
Price. The Convertible Notes are subject to automatic conversion in the event
the Company conducts an underwritten public offering of its common stock from
which the Company receives at least $5 million and the public offering price is
at least 150% of the then applicable Conversion Price. The Company has the right
to cause the Convertible Notes to be converted into common stock after May 1,
2006 if the price of the Company's common stock exceeds 200% of the then
applicable Conversion Price on the date of conversion and for at least 20
trading days over the preceding 30 trading days. The Company has the right to
repurchase the Convertible Notes after May 1, 2007 at 103% of the face amount
during 2007, 102% of the face amount during 2008, 101% of the face amount during
2009 and 100% of the face amount thereafter. The Convertible Notes are
unsecured general obligations of the Company and are subordinated to all other
indebtedness of the Company unless the other indebtedness is expressly made
subordinate to the Convertible Notes.
Capital and Exploration Expenditures and Commitments. Our principal capital and
exploration expenditures relate to our ongoing efforts to acquire, drill and
complete prospects. Historically, we funded our capital and exploration
expenditures from funds borrowed from John F. Terwilliger, our principal
shareholder and officer. With the receipt of additional equity financing in
2003, 2004 and the May 2005 sale of convertible notes, and the increase in our
revenues, profitability and operating cash flows, we expect that future capital
and exploration expenditures will be funded principally through funds on hand
and funds generated from operations.
10
During the first quarter of 2005, we invested approximately $511,000 for the
acquisition and development of oil and gas properties, consisting of (1) seismic
surveying in Colombia ($262,000), (2) drilling the well on the Crowley Prospect,
and (3) drilling 3 wells in Colombia.
At March 31, 2005, our only material contractual obligations requiring
determinable future payments on our part were a note payable to our principal
shareholder and our lease relating to our executive offices which were unchanged
when compared to the 2004 Form 10-K.
In addition to the contractual obligations requiring that we make fixed
payments, in conjunction with our efforts to secure oil and gas prospects,
financing and services, we have, from time to time, granted overriding royalty
interests (ORRI) in various properties, and may grant ORRIs in the future,
pursuant to which we will be obligated to pay a portion of our interest in
revenues from various prospects to third parties.
Management anticipates that our current financial resources, including funding
received from the May 2005 Convertible Note offering, combined with our
increases in revenues over the past year will meet our anticipated objectives
and business operations, including our planned property acquisitions and
drilling activities, for at least the next 12 months without the need for
additional capital. Management continues to evaluate producing property
acquisitions as well as a number of drilling prospects. It is possible,
although not anticipated, that the Company may require and seek additional
financing if additional drilling prospects are pursued beyond those presently
under consideration.
OFF-BALANCE SHEET ARRANGEMENTS
We had no off-balance sheet arrangements or guarantees of third party
obligations at March 31, 2005.
INFLATION
We believe that inflation has not had a significant impact on our operations
since inception.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures under the supervision and with the participation of our chief
executive officer ("CEO") who also serves as chief financial officer. Based on
this evaluation, our management, including the CEO, concluded that our
disclosure controls and procedures were effective.
In connection with the audit of our financial statements for the fiscal year
ended December 31, 2004, our independent registered public accounting firm
informed us that we have significant deficiencies constituting material
weaknesses as defined by the standards of the Public Company Accounting
Oversight Board.
The weaknesses in question were detected during the audit of the company's
financial statements for the fiscal year ended December 31, 2004, which audit
occurred in February/March 2005.
The weaknesses were detected in the routine course of the audit review of
accounting for certain non-routine transactions.
The specific problems identified by the auditor to the company were (1) the lack
of segregation of duties necessary to maintain proper checks and balances
between functions and (2) the failure of internal personnel to adequately
communicate the scope and nature of non-routine transactions. The absence of
qualified full time accounting personnel in the company was a contributing
factor to the problems identified by the auditor. The specific circumstances
giving rise to the weaknesses include the company's President serving as both
Chief Executive Officer and as Chief Financial Officer and the company's
utilizing the services of contract accountants on a part time basis in the
absence of internal accounting personnel. As a result of the absence of full
time in-house accounting personnel and the failure of in-house personnel to
adequately communicate information to the company's outside contract
accountants, certain journal entries were not made until the time of the audit
when the need for such entries was identified by the auditor.
Because the company lacks the financial resources to support in-house accounting
personnel at this time, no formal steps have as yet been taken to resolve the
weaknesses identified by the auditor. The company is, however, emphasizing
improvement in its communications with its outside accounting personnel to
assure that non-routine transactions are accounted for in a timely manner.
Management concluded that the company's disclosure controls and procedures were
effective because the relevant information and data in question were known to
proper members of management to allow proper and timely disclosure in its
reports filed with the SEC and was, in fact, timely reported. The weaknesses in
question relate to internal control over financial reporting and not weaknesses
in disclosure controls and procedures.
During the quarter ended March 31, 2005, there were no changes in our internal
controls over financial reporting that materially affected, or are reasonably
likely to materially affect, internal controls over financial reporting.
11
PART II
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
31.1 Certification of CEO and CFO pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.
HOUSTON AMERICAN ENERGY CORP.
By: /s/ John Terwilliger
John Terwilliger
CEO and President
Date: November 4, 2005
12