Going Concern and Continuance of Operations

9 Months Ended

Oct. 31, 2014

Going Concern And Continuance Of Operations

Going Concern and Continuance of Operations

Note 3

Going Concern and Continuance of Operations

The Company was incorporated in October 2003 in the State of Nevada and has established its corporate offices in Shawnee, Oklahoma. The Company is engaged primarily in the acquisition, development, production, exploration for, and the sale of oil, gas and natural gas liquids. All business activities are conducted in Texas and Oklahoma and the Company sells its oil and gas to a limited number of domestic purchasers.

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.

At October 31, 2014, the Company had losses for the three months ended in the amount of $293,540 and loss for nine months ended $31,988 and has accumulated losses of $6,949,484 since its inception, had a working capital deficiency of $262,799 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

During the nine months ended October 31, 2014, Company sold eleven (11) percent working interest in producing well, Quinlan # 2 in exchange of cash payment of $20,000, settlement of long-term debt and its accrued interest and working interest oil and gas property. Management has no formal plan in place to address this concern but believes that the Company will be able to obtain additional funds through equity financing and/or related party advances; however there is no assurance of additional funding being available.

NITRO PETROLEUM INC. 10-Q