U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED March 31, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (the "Act")
Commission file number: 0-9336
STANDARD ENERGY CORPORATION
(Name of Small Business Issuer as specified in its charter)
Utah 87-0338149
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
447 Bearcat Drive
Salt Lake City, Utah 84115-2517
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 364-9000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: $.01
Par Value Common Stock
Check whether the Issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Act during the preceding 12
months (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 .
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of Issuer's knowledge,
in definitive proxy or information statement incorporated by
reference in Part III of this Form 10-KSB, or any amendment to
this Form 10-KSB .
The Issuer's revenue for the fiscal year ended March 31, 2005 was
approximately $76,147.
1
As of June 28, 2005, 150,036,974 shares of the Issuer's common
stock were issued and outstanding of which 52,848,761 shares were
held by non-affiliates. As of June 28, 2005, the aggregate market
value of shares held by non-affiliates, based upon the closing
price reported by the Bulletin Board market reporting system,
operated by Nasdaq of $0.04 bid, was approximately $2,113,950.
TABLE OF CONTENTS
Page
PART I.................................................. 4
Item 1. DESCRIPTION OF BUSINESS......................... 4
General............................................... 4
Oil and Gas Leases.................................... 4
Geologic Information Services......................... 6
Overriding Royalty Interests.......................... 7
Competition........................................... 7
Research and Development of the Biofuels Technology... 8
Government Regulations................................ 8
Insurance............................................. 9
Environmental Matters................................. 9
Employees............................................. 9
Item 2. PROPERTIES...................................... 9
Headquarters.......................................... 9
Oil and Gas Leaseholds................................ 10
Item 3. LEGAL PROCEEDINGS............................... 10
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS................................ 10
PART II................................................. 11
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS............. 11
Price Range of Common Stock........................... 11
Approximate Number of Equity Security Holders......... 11
Dividends............................................. 12
Shares Issued in Unregistered Transactions............ 12
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.............. 13
General............................................... 13
Results of Operations................................. 14
Financial Condition................................... 15
Plan of Operation..................................... 17
Inflation............................................. 18
Recent Accounting Pronouncements...................... 17
Off-Balance Sheet Arrangements........................ 18
Management's Conflicts of Interest.................... 18
Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..... 18
Item 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE............. 19
2
Table of Contents Continued
PART III................................................ 19
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT............................. 19
Identification of Directors and Executive Officers.... 19
Significant Employees................................. 20
Family Relationships.................................. 21
Other Involvement in Certain Legal Proceedings........ 21
Administration Actions................................ 21
Compliance with Section 16(a)......................... 21
Code of Ethics........................................ 21
Audit Committee Financial Reports..................... 21
Item 10. EXECUTIVE COMPENSATION......................... 22
Summary Annual Compensation Table..................... 22
Compensation Pursuant to Plans........................ 22
Other Compensation.................................... 22
Compensation of Directors............................. 23
Termination of Employment and Change of Control
Arrangements........................................ 23
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.......................... 23
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 23
Transactions with Management and Others............... 23
Forward Looking Statements............................ 24
Indebtedness of Management............................ 25
Parents of Company.................................... 25
PART IV................................................. 25
Item 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K............................ 25
Exhibits to Form 10-KSB............................. 25
Reports to Form 8-K................................. 25
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES......... 26
Exhibit 30.......................................... 27
Exhibit 31.......................................... 28
Exhibit 32 Chief Executive Officer Certification.... 30
Reports on Form 8-K................................. 30
SIGNATURE PAGE.......................................... 31
FINANCIAL STATEMENTS.................................... 32
3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Standard Energy Corporation's ("the Company") principal
business is, and historically has been, the acquisition of
unproven oil and gas leaseholds, primarily with the intent of
reselling such leaseholds to third-parties. Historically, the
Company has acquired primarily federal oil and gas leaseholds
through the Bureau of Land Management's ("BLM") leasing program.
The Company also obtains leases through purchases in competitive
bidding programs offered by various state agencies, principally
the States of Utah and Wyoming (the "Leasing Programs").
Fundamentally, the Company has three principal businesses.
They are its traditional oil and gas lease activities, its
royalty holdings and its Biofuels Project.
The Company evaluates the geologic potential of the leases,
which it proposes to acquire, based primarily upon geologic
information available through the Company's wholly-owned
subsidiary, Petroleum Investment Company ("PIC"). The Company's
President, Dean W. Rowell ("Rowell"), is materially involved in
such evaluations which are based, among other factors, upon the
results of prior exploratory and developmental activities on
adjacent and contiguous properties, current lease sale trends and
Rowell's 40+ years of experience in the domestic oil and gas
business.
The Company, which is known within the industry as a buyer
and seller of leases, typically is approached by a potential
buyer for one or more of its leasehold interests. Negotiations
generally ensue and a dollar price and retained royalty interest
is agreed upon and a sale concludes.
Oil and Gas Leases
The Company had limited participation in the Leasing
Programs from 1986 through the year ended March 31, 2005, except
through its participation agreements with certain unrelated third
parties on a limited basis. The Company presently has limited
funds available to participate in the Leasing Programs. The
Company believes that the deposit feature of the Leasing Programs
have made the Company's participation in such Leasing Programs
very difficult as the deposit feature penalizes many of the less
capitalized participants and provides a substantial advantage to
Leasing Program participants which have greater financial
resources than the Company. (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations")
4
The location and gross and net acreage of the Company's
inventory of oil and gas leaseholds at March 31, 2005 were
approximately as follows:
Location Gross Acres Net Acres
Utah 3,465 2,207
Wyoming 1,243 1,243
Total 4,708 3,450
A gross acre consists of 100% of the working interest. A net
acre is calculated by gross acres multiplied by the percentage of
working interest owned.
The above chart does not include the Company's interest in
unrelated third-party leasehold acquisitions and leasehold sales.
Third-party leasehold inventory was approximately 10,000 gross
(5,000) net acres at fiscal year ended March 31, 2005. Also
during the fiscal period, the Company's ability to acquire
additional leaseholds was adversely affected. Because the Company
has no financial basis in such leaseholds, the Company's
financial statements and the foregoing acreage charts do not
reflect the acquisition of such newly acquired leaseholds. As
third-party leasehold sales take place, revenue is recorded under
line item "Oil and gas activities".
Management has adopted a policy of periodically evaluating
each of the leaseholds held by the Company to determine whether
the current market value of a leasehold justifies making
additional rental payments with respect thereto. Based upon such
evaluation, the Company abandons (writes off) those leaseholds
for which it does not wish to continue making rental payments.
The amount of acreage abandoned and sold by the Company in each
of the last two fiscal years has caused the Company's balance of
inventory to decline over the course of such period, primarily
due to past downturns in the domestic oil industry. No
independent appraisals are obtained by the Company on leases
purchased, nor is there an independent committee of the Board of
Directors which evaluates any of its leases.
The Company's policy is to acquire and hold leaseholds in
inventory for a period generally not longer than five years in
order to maximize the gain to the Company on such leasehold
costs. The Company does not advertise for the sale of leases
owned by it, but rather believes that most of its leasehold
purchasers become aware of the Company's leaseholds through an
examination of BLM records or other means. During the Company's
two fiscal years ended March 31, 2005 and 2004, revenues from oil
and gas lease royalties during such period were approximately
$71,300 and $97,000 respectively, reflecting the upturn in the
domestic oil industry. (See "Consolidated Financial Statements")
5
The Company's oil and gas leasehold inventory remains at
approximately 8,000 net acres at the year ended March 31, 2005,
including leaseholds acquired under third-party agreements.
Although its leasing activity was reduced substantially due to
the sharp decline in oil and gas activities during the last five
fiscal years, the Company believes it can continue its present
lines of business, including the purchase and sale of newly
acquired oil and gas leaseholds, due to the increase in price of
domestic oil and gas during the past two years.
The majority of the Company's inventory of undeveloped
leases are subject to the jurisdiction of the BLM, with the
balance being leased from agencies of various Rocky Mountain
states. As a result of the advance lease deposits required under
the Leasing Programs, and the Company's current working capital
difficulties, it may be expected that the percentage of leases
acquired in the future from such states may increase. BLM
leaseholds granted under the Leasing Program are leased by the
BLM at an annual rental of $1.50 per acre, and $2.00 per acre for
leases acquired and held for more than five years.
The majority of the Company's BLM leasehold inventory at
March 31, 2005 consists of BLM leaseholds granted after January
1, 1994, and generally have an initial term of ten years, which
may be extended for an additional two years if during the initial
term such leasehold is "improved" by the commencement of drilling
activities thereupon. Aggregate rentals paid by the Company
during the years ended March 31, 2005 and 2004 for all oil and
gas properties leased by it were approximately zero and zero,
respectively. The Company retains the right to reacquire the
lease if the purchaser fails to make rental payments due to the
BLM on leases sold to unrelated third-parties by the Company.
Geological Information Services
The Company, through its wholly-owned subsidiary, PIC,
provides a variety of geologic lease evaluation services. PIC
makes available to subscribers monthly reports containing
information which evaluates leases offered in the Leasing
Programs. Such information includes comprehensive geologic data,
recommendations and reports with respect to leaseholds offered in
the Leasing Programs, including PIC's evaluation of the
production prospects of such leaseholds and, frequently, an
estimated resale value for such leaseholds, the names of selected
participants, results of auction sales and drawings, and other
information. In addition to such monthly reports, PIC also sells
information with respect to individual oil and gas properties
throughout the Rocky Mountain area.
6
The geologic and other information which PIC makes available
through its reporting services is obtained from different
sources, including PIC's internal files which contain well and
land oil and gas exploration data on a historical basis in the
nine-state area comprising the Rocky Mountain region. Such data
is interpreted and summarized by PIC's part-time in-house
geologists and landmen. The information which PIC makes
available for sell to subscribers is also used internally to
determine which parcels of land the Company would be interested
in make competitive offers on.
PIC, through a wholly-owned subsidiary, also provides oil
and gas mapping services with respect to properties located
throughout the Rocky Mountain region. PIC prepares base survey
and geologic maps on various scales, reflecting significant oil
and gas well drilling activity in a particular area.
During the Company's two fiscal years ended March 31, 2005
and 2004, revenues contributed to the Company's consolidated
revenues by PIC were approximately $4,800 and $5,400,
respectively. The decrease in revenue contributed by PIC for such
fiscal periods, as compared to prior fiscal years, reflects the
depth of the downturn in the domestic oil and gas industry.
Should higher oil prices hold for several years it is possible
that PIC could again produce higher revenues for the consolidated
business of the Company. (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations")
Overriding Royalty Interests
The Company retains a royalty interest, ranging from 1% to
6% in substantially all leaseholds which it has resold. The
Company receives substantial all its current earnings from
retained royalty interests in resold leaseholds. Since the upturn
in the oil and gas prices worldwide, the Company has seen an
increase in its revenues for its royalty interests and forecast
increased income in the future from third-party leasehold
developed since 1995. The majority of the leases acquired by the
Company are leaseholds granted by the BLM subject to a 12-1/2%
gross royalty interest in favor of the federal government's BLM.
Competition
The Company experiences substantial competition in its
business of buying and selling oil and gas leaseholds. The
Company's competitors include oil companies, as well as numerous
independent operators, many of whom have substantially greater
resources than the Company and its affiliates. The Leasing
Programs, and in particular, the feature which requires advance
deposit of annual lease rentals at the time of applying for such
leases, has the effect of favoring companies with financial
resources greater than the Company's and its affiliates'.
7
Research and Development of the Biofuels Technology
Fundamentally, the Company has three principal businesses.
They are its traditional oil and gas lease and information
activities, its royalty holdings and its investment over 20 years
in Research and Development ("R&D") on its Biofuels Project. The
Company continues to research and develop its biofuels
technologies (the "Biofuels Technology") for the recycle of
ordinary municipal solid waste, garbage, trash, paper and plastic
material streams ("Municipal Waste") into recycled saleable
products and the recovery of cellulosic materials ("Celmat")
believed by the Company to be convertible into electric power and
ethanol transportation fuel.
The Company's former Biofuels Research Center provided the
Company with sufficient data to design and construct an 8-Module
design for a Biofuels Project for the 100% recycle solution to
the disposal of Municipal Waste. The 8-Module proprietary design
package data is available to entities expressing a written desire
to invest funds in a Biofuels Project. Written materials include
flow sheets, mass and energy balance, vendor equipment suppliers,
construction design, operating plans, insurance guarantees and
qualification of the selected construction contractors.
A Biofuels Project, fundamentally, is only an engineering
concept where the Company is contemplating the construction
retrofit of an existing industrial Municipal Waste plant complex
utilizing the Company's Biofuels Technology to manufacture
electricity, ethanol transportation fuel and other saleable
products derived and harvested from the contents of Municipal
Waste.
The Company is pursuing financing ideas through its wholly-
owned subsidiaries. Final engineering plans and final financial
arrangements with unrelated third-parties for financing and
engineering contracts on a Biofuels Project were not finalized or
completed as of June 28, 2005.
Government Regulations
The Company's business is subject to extensive federal,
state and local regulation. Management believes that the Company
operations are in material compliance with applicable laws, but
is unable to predict what additional government regulations, if
any, affecting the Company's business, may be enacted in the
future; how existing or future laws and regulations might be
interpreted; or whether the Company will be able to comply with
such laws and regulations either in the markets in which it
presently conducts business or wishes to commence business.
8
There can be no assurance that either the states or the
federal government would not impose additional regulations upon
the Company's activities which might adversely affect the
Company's business.
Insurance
The Company does not currently have in force general
liability insurance coverage but does have renters liability
coverage on its headquarters office space. There can be no
assurance the coverage limits of the Company's policy would be
adequate, or that the Company can obtain liability insurance in
the future on acceptable terms, or at all.
Environmental Matters
The Company is not aware of any pending or threatened claim,
investigation, or enforcement action regarding environmental
issues which if determined adversely to the Company, would have
an adverse effect upon the capital expenditures, earnings, or
competitive position of the Company.
Employees
As of June 28, 2005, the Company had three employees,
including two executive officers and one part time employee. In
addition, the Company's practice in connection with the Leasing
Programs is to contract with geologists and landmen to assist the
Company in the preparation of geologic information reports, etc.
as needed. None of the Company's employees are represented by a
union or subject to a collective bargaining agreement and the
Company has never experienced a work stoppage. The Company
believes its employee relations to be good.
Item 2. PROPERTIES
Headquarters
The Company's executive offices are located in a 2,500
square foot building. The premises are on a month to month
payment from a non-affiliated party, at an annual rental of
approximately $18,000 per year. Management is of the opinion that
such cost is comparable to or below normal rates in the area and
believes that such facilities are adequate for the Company needs
in the proximate future.
9
Oil and Gas Leaseholds
The location and gross and net acreage of the Company's
inventory of oil and gas leaseholds at March 31, 2005 was
approximately as follows:
Location Gross Acres Net Acres
Utah 3,465 2,207
Wyoming 1,243 1,243
Total 4,708 3,450
A gross acre consists of 100% of the working interest. A net
acre is calculated by gross acres multiplied by the percentage of
working interest owned.
Item 3. LEGAL PROCEEDINGS
NONE
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the Company's shareholders for
a vote during the fiscal year ended March 31, 2005.
10
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
Price Range of Common Stock
The Company's shares of Common Stock are traded on the over
the counter Bulletin Board ("OTCBB") electronic quotation
service, operated by The Bulletin Board, Inc., an affiliate of
The Nasdaq Stock Market, Inc. The following table sets forth the
high and low bid quotations of the Company's common stock for the
periods indicated, as reported by the OTCBB. The quotations set
forth below represent prices between dealers and do not include
retail markups, markdowns or commissions and may not represent
actual transactions.
Bid Price
High Low
Fiscal Year 2004
First Quarter .......... $ 0.02 $ 0.01
Second Quarter .......... 0.11 0.02
Third Quarter .......... 0.05 0.01
Fourth Quarter .......... 0.04 0.02
Fiscal Year 2005
First Quarter .......... $ 0.03 $ 0.02
Second Quarter .......... 0.05 0.02
Third Quarter .......... 0.03 0.01
Fourth Quarter .......... 0.03 0.01
Fiscal Year 2006
First Quarter .......... $ 0.03 $ 0.09
(through June 28, 2005)
Approximate Number of Equity Security Holders:
Title of Class holders as of June 28, 2005
Common Stock, par value $0.01 per share: 1,500
Preferred Stock, par value $0.01 per share: None Issued
As of June 28, 2005, there were 150,036,974 shares of common
stock outstanding and approximately 1,500 stockholders of record.
The number of stockholders of record does not include an
indeterminate number of stockholders whose shares are held by
brokers and fiduciary depositories in "street name". Management
believes there are in excess of 3,000 beneficial stockholders of
the Company's common stock, including fiduciary depository firms.
11
Dividends
The Company has neither declared nor paid any dividends on
its Common Stock since the inception of the Company, and the
Board of Directors does not contemplate the payment of dividends
in the foreseeable future. Any decision as to the future payment
of dividends will depend on the earnings and financial position
of the Company and such other factors as the Board of Directors
may deem relevant. It is the present intention of management to
utilize all available funds for the development of the Company's
business.
Shares Issued in Unregistered Transactions
The Company issued common stock in unregistered transactions
from 2002 through 2005. All common stock issued was issued in
non registered transactions in reliance on Section 4(2)of the
Securities Act of 1933, as amended (the "Securities Act"). The
shares issued in 2005 were issued pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933, as
amended. The shares of common sock issued were as follows:
Fiscal Year 2004
There were no common shares issued in 2004.
Fiscal Year 2005
On December 17, 2004, James R. Jones bought 100,000 newly
issued shares of the Company's common stock at $0.01 per share in
exchange for $1,000 cash. These share are to be held for
investment purposes.
On February 10, 2005, Trachyte agreed to accept 29,000,000
newly issued shares of the Company's common stock in exchange for
$290,000 of partial debt settlement of cash loans to the Company
through February 9, 2005 and to accept a replacement note for the
balance owed to Trachyte in the amount of $10,258 with interest
at 12% per annum dated February 10, 2005. The shares were issued
at $0.01 per share, which was the closing market bid price on
February 9, 2005. The shares are required to be held for at
least two years for investment purposes.
On March 1, 2005 the Company entered into a Heads of
Agreement ("HOA") with Trachyte to purchase approximately 75
acres of land owned by Trachyte for $375,000 to be paid for in
common shares at $0.01 per share totalling 37,000,000 shares.
The Company intends to use the land to construct a Biofuels
Project. (See Managements Discussion).
12
On March 4, 2005, Marc C. Wallace bought 100,000 newly
issued shares of the Company's common stock at $0.01 per share in
exchange for $1,000 cash. These share are to be held for
investment purposes.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The Company's principal business is, and historically has
been, the acquisition of unproven oil and gas leaseholds,
primarily with the intent of reselling such leaseholds to third-
parties. Historically, the Company has acquired primarily federal
oil and gas leaseholds through the BLM leasing program. The
Company also obtains leases through purchases in competitive
bidding programs offered by various state agencies, principally
the States of Utah and Wyoming.
Fundamentally, the Company has three principal businesses.
They are its traditional oil and gas lease activities, its
royalty holdings and its Biofuels Project.
During the 2005 fiscal period, the Company continues to
research and develop its biofuels technologies for the recycle of
ordinary MSW, garbage, trash, paper and plastic material streams
into recycled saleable products and the recovery of celmat
materials believed by the Company to be convertible into electric
power and ethanol transportation fuel.
As a result of its R&D efforts management believes that the
Company has developed what appears to be a commercial application
of the Biofuels Technology for the future recovery of inorganic
materials and Celmat from the recycle of Municipal Waste
("Biofuels Project"). A Biofuels Project would be located in the
Northeast U.S. where Municipal Waste landfills and transfer
stations charge the highest dump rates ("Tip Fee") in the U.S.
for the disposal of Municipal Waste.
There can be no assurance that the required capital will be
available to construct a Biofuels Project and there can be no
assurance that the Biofuels Technology will perform on a
commercial basis. The Company's future operating results will
depend on its ability to obtain adequate financing to construct a
Biofuels Project. Expenses incurred for a Biofuels Project would
be accounted for under line item "Biofuel Project Costs".
13
Results of Operations
The Company realized revenues of approximately $76,100 for
the fiscal year ended March 31, 2005, compared with approximately
$102,400 for the corresponding period ended March 31, 2004. Cash
requirements during the period were obtained from a combination
of internally generated cash flow from operations, loans, asset
sales, and the sale of Rule 144 investment stock to private
individuals.
Revenues from the sale of the Company's oil and gas lease
services were approximately $4,800 for the fiscal period ended
March 31, 2005, compared with approximately $5,400 for the
corresponding period ended March 31, 2004. Recent world crude oil
and natural gas price increases may stimulate domestic drilling
activity which would, once again, create a need for the Company's
geologic information services. Revenue from oil production was
approximately $71,300 for the fiscal period ended March 31, 2005,
compared to approximately $97,000 for the corresponding period
ended March 31, 2004. Oil production revenues are up as a result
of world crude oil and natural gas price fluctuations.
The Company incurred expenses related to its oil and gas
activities were approximately $4,700 for the fiscal period ended
March 31, 2005, compared to approximately $3,300 for the
comparable period ended March 31, 2004. General and
administrative expense for the fiscal month period ended March
31, 2005 were approximately $48,798, compared to approximately
$104,000 for the comparable period ended March 31, 2004. These
low figures reflect the Company's basic inactivity in its oil and
gas sector.
During the previous two year period all of the Company's R&D
costs were expensed under line item General and Administrative
expense. During the 2005 fiscal period, the Company created a
line item for R&D costs to better distinguish expenses between
general and administrative expenses and the expenses related to
its various biofuels plant projects. These costs are being
accounted for under line item "Biofuel Project Costs" and were
approximately $12,303 for the fiscal period ended March 31, 2005,
compared to $12,049 for the comparable period ended March 31,
2004.
The Company's net loss for the 2005 fiscal period ended
March 31, 2005 was approximately $48,800, compared to
approximately $1,700 for comparable 2004 fiscal period and it
expects to operate at a loss for the 2005 fiscal period, due to
continued R&D costs incurred for a Biofuels Project, and costs
related to its oil and gas business. Biofuel Project costs when
appropriate will be accounted for under line item "Biofuel
Project Costs". (See "Consolidated Financial Statements")
14
The Company does not expect to realize significant cash
flows from its oil and gas activities during fiscal 2006, nor
does it expect significant leasehold sales in the foreseeable
future, as the domestic oil industry activity continues unchanged
due to uncertain world crude oil and natural gas prices.
The Company has available at March 31, 2005, unused tax
operating loss carry forward of approximately $2,002,000 that may
be applied against future taxable income through 2025. No tax
benefit has been reported in the financial statements, because
the Company believes there is a 50% or greater chance the carry
forwards will expire unused. Accordingly, the potential tax
benefits of the loss carry forwards are offset by a valuation
account of the same amount.
Financial Condition
Management continues to explore additional financing
alternatives for ongoing and future operations of the Company.
There is no assurance that the efforts of management to locate
and secure additional financing will be successful, and the
failure to secure a Biofuels Project financing would
substantially alter management's assumptions as herein presented.
(See "Consolidated Financial Statements").
Revenue increased in the Company's overall oil and gas lease
royalties are related to effects of the worldwide increase of
crude oil prices.
The Company had limited participation in the Leasing
Programs for the year ended March 31, 2005, except through its
participation agreements with certain unrelated third parties on
a limited basis. The Company presently has limited funds
available to participate in the Leasing Programs. The Company's
limited ability to participate in the BLM's leasing program and
to obtain oil and gas leaseholds for resale due to a lack of
funds could continue to effect its future operations.
The Company's most significant assets are its oil and gas
production income, its oil and gas leaseholds held for resale,
approximating 8,000 net acres at June 28, 2005, including
leaseholds acquired under its unrelated third-party agreements
and its plan for the full development of a Biofuels Project.
15
In order to continue in existence the Company is in need of
additional financing from outside sources or from internal
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management can
give no assurances that it will be successful in its endeavors to
resolve its cash flow difficulties or that it will be able to
retain and ultimately recover its costs in oil and gas leaseholds
held for resale. The financial statements do not include any
adjustments relating to the amounts and classification of assets,
liabilities, income or expenses that might be necessary should
the Company be unable to successfully resolve these uncertainties
and continue in existence.
The Company foresees a need for additional equity financing
in order to continue in existence, and may, in the future, seek
to raise additional funds through asset sales, bank and/or other
loans, debt, or equity offerings. Any such equity offerings,
asset sales, or other financing may either be private or public
and may result in substantial dilution to the then existing
shareholders of the Company. Because of uncertainties existing in
the domestic oil and gas industry and a Biofuels Project, the
Company is not in a position to forecast future earnings or cash
flow. The Company's future is very fluid and largely dependent on
factors outside of its management's control.
For the fiscal period ended March 31, 2005, Dean W. Rowell,
the President of the Company, continues to secure and guarantee
loans for the Company: (1) He has guaranteed one credit card up
to approximately $76,000 with an outstanding balance of
approximately $76,000 at the end of the period, currently in
default, and (2) he continues to loan the Company funds through
his 100% owned privately-held Utah corporation, Trachyte with an
outstanding loan balance of $7,497 for the period ended March 31,
2005. Expenses incurred under the use of the credit cards are
being accounted for under line item "Revolving Line of Credit"
and expenses incurred under the loan agreement are being
accounted for under line item "Notes payable - Related party".
Since fiscal 1991, Trachyte has materially supported the
Company financially largely due to Mr. Rowell's efforts to secure
loans from Trachyte for the Company and contribute the value of
an assumed salary of $50,000 per year to additional paid in
capital. The several transactions with Trachyte have provided the
financial means for the Company to pursue its R&D of the Biofuels
Technology and the commercialization of a Biofuels Project.
Without such additional contributions by Mr. Rowell the Company
would have been unable to pursue these goals. Final plans and
final financial arrangements had not been completed for a
Biofuels Project at June 28, 2005.
16
On March 1, 2005 the Company entered into a HOA with
Trachyte to purchase approximately 75 acres of land owned by
Trachyte, reserving to Trachyte all mineral rights. Trachyte
under the agreement would sell the acreage to the Company for
$375,000 representing approximately $5,000 per acre. The acreage
would allow the Company to move forward on its Green River Utah
Ethanol and Power Plant Project. The land is suitable for a
power plant, due to its location on the banks of the Green River,
one mile downstream from the town of Green River, Utah. It also
has potential rail and truck access to accept incoming natural
gas and lignin as feedstocks. Under the HOA Trachyte has 120
days to record title in the Emery County Recorders office and
upon document recording the Company will issue 37,500,000 shares
of the Company's newly issued shares based on the purchase amount
of $0.01 per share. These shares are to be held for at least a
two year investment period and were unissued as of June 28, 2005.
Plan of Operation
There have been no significant changes in capitalization or
financial status during the past two years that are not reflected
in the financial statements. The Company's plan of operation
during the next twelve (12) months includes the following:
1. Pursue financing for a Biofuels Project.
2. Continue R&D, testing Municipal Waste processing
equipment and testing existing and newly developed
cellulose enzymes.
3. Continue the design and development of a Biofuels
Project into three businesses -- Municipal Waste
recycle, ethanol fuel production and electric power
generation.
4. Pursue oil and gas lease acquisition with
third party investors and investigate the possibility
of entering into the wholesale electric power
generation business.
5. Continue to receive royalty payments through
its overriding royalty interests.
Inflation
Inflation continues to apply moderate upward pressure on the
cost of goods and services including those purchased by the
Company. Management believes the net effect of inflation on
operations has been minimal during the past two years.
17
Recent Accounting Pronouncements
The recent accounting pronouncements adopted by the Company
are referred to as Note 9 of the Financial Statements.
Off-Balance Sheet Arrangements
The only off-balance sheet arrangement pending is an
agreement entered into on March 1, 2005, by the Company whereby,
the Company entered into a HOA with Trachyte to purchase
approximately 75 acres of land owned by Trachyte for $375,000 to
be paid for in common shares at $0.01 per share totalling
37,000,000 shares. The Company intends to use the land to
construct a Biofuels Project. (See Managements Discussion).
Management's Conflicts of Interest
Material conflicts of interest exist and will continue to
exist between the Company, Trachyte, and Mr. Rowell, who is also
the President of Trachyte, a privately-held Utah corporation,
whose current major activities are the exploration and production
of oil and gas resources. The Company's policy is to offer any
new oil and gas property purchase first to the Company and then
to Trachyte if the Company is unable to accept the financial
obligation of any transaction. At June 28, 2005, Mr. Rowell
beneficially owned approximately 56% of the common stock of the
Company and 100% of the common stock of Trachyte.
Mr. Rowell owes a duty of due care and fair dealing to both
the Company and Trachyte and the resolution of duties and
conflicts in favor of one company over the other may impair his
duties to each company. It is likely that any conflict of
interest between the Company and Trachyte requiring a
determination may have to be settled in favor of the Company to
the detriment of Trachyte, as well as to the detriment of the
current and future shareholders of Trachyte.
Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is submitted as a
separate section at the rear of this Form 10-KSB report.
18
Item 8. CONTROL AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the
participation of Management, as of a date within 90 days of the
filing date of this Annual Report on Form 10-KSB, the Company's
principal executive officer and principal financial officer have
concluded that the Company disclosures controls and procedures
(as defined in Rule 13a-14(c) and 25d-14(c) and 15d-14(c) under
the Securities Act of 1934, are effective to ensure the
information required to be disclosed in reports that the Company
file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time specified in SEC rules
and forms.
(b) Changes in Internal Controls
There were no significant changes in the Company's internal
controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation. There
were no significant deficiencies or material weaknesses, and
therefore there were no corrective actions taken. However, the
design of any system of controls is based on part upon certain
assumptions about the likelihood of future events and there is no
certainty that any design will succeed in achieving its stated
goal under all potential future considerations, regardless of how
remote.
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT
Identification of Directors and Executive Officers
The current directors and executive officers of the Company,
who will serve until the next annual meeting of shareholders or
until their successors are elected or appointed and qualified,
are set forth below:
Name Age Position
Dean W. Rowell 67 CEO/President/Chairman
Pamela K. Nelson 47 Vice President/Secretary
Michael M. Cannon 57 Director
19
Dean W. Rowell has been Chairman of the Board, President and
Chief Executive Officer and Chief Financial Officer of the
Company since its inception in April 1978 and was last elected by
shareholders in 1996. Mr. Rowell has been involved in the oil and
gas exploration and production industries for over 40 years.
Prior to serving in his present capacities with the Company, he
served as the president of a number of privately-held energy
related companies. Mr. Rowell is also a director and President of
the Company's wholly-owned subsidiaries, PIC, EnviroSystems and
Biofuels. Mr. Rowell devotes approximately 90% of his time to the
Company.
Pamela K. Nelson was last elected in 1996 and has been a
Director of the Company since September 1978 and became a Vice
President of the Company in 1979 and Corporate Secretary in 1983.
Ms. Nelson has been involved in landwork and leasing services to
the oil and gas industry for the last 29 years. Ms. Nelson is
also a director, Vice President, Corporate Secretary and Manager
of land and lease operations for the Company's wholly-owned
subsidiary, PIC. She is a director, Vice President, Corporate
Secretary of EnviroSystems, and Biofuels, all wholly-owned
subsidiaries of the Company. She devotes all of her paid time to
the Company.
Michael M. Cannon, a cum laude graduate of the University of
Utah, joined the Company in March 1982 and in September 1982
became a Vice President and Director, with responsibility for
marketing and corporate communications. From January 1979 to
March 1982, Mr. Cannon was President of an advertising and public
relations agency, Cannon Communications, a substantial number of
whose clients were members of the United States House of
Representatives and the Senate. From November 1976 to January
1979, Mr. Cannon served as the press secretary for Gunn McKay, a
United States Representative from the State of Utah. In 1985 Mr.
Cannon served as a state director of the Independent Petroleum
Association of Mountain States and was. Mr. Cannon is presently
self-employed as a consultant in the Communications industry.
Mr. Cannon resigned as an Officer of the Company, effective July
1, 1985, but remains as an outside Director being last elected in
1996, Mr. Cannon has been associated with the Company for over
15-years, and is a director of the Company's wholly-owned
subsidiaries, PIC, and EnviroSystems.
Each Director shall hold office until the next annual
meeting of shareholders or until his successor shall have been
duly elected and qualified. Officers are elected annually by, and
serve at the pleasure of, the Board of Directors.
Significant Employees
None
20
Family Relationships
There are no family relationships among the Company's
officers and directors.
Other Involvement in Certain Legal Proceedings
There have been no events under the bankruptcy act, no
criminal proceedings and no judgements or injunctions material to
the evaluation of the ability and integrity of any executive
officer of the Company in last five years.
Administration Action
None
Compliance With Section 16(a)
Section 16 of the Securities Act of 1934 requires the filing
of reports for sales of the Company's common stock made by
officers, directors and 10% or greater shareholders. A Form 3,
and Form 4 must be filed within two days after the sale or
purchase transaction. Based upon the review of Form 4, Form 3,
and/or Form 5 filed with the Company, the Company is not aware of
any delinquent filings of such forms by any reporting person.
Code of Ethics
The Company has not adopted a formal ethics policy for the
Company's chief executive officer or senior financial officers,
due to the Company's status as a Bulletin Board company with few
management personnel. The Company believes its Board can
successfully oversee and manage its existing officers and
employees. However, the Company believes an ethics policy is
important and intend to consider adopting such a policy in the
future.
Audit Committee Financial Expert
The Board of Directors have determined that the company does
not require an audit committee financial expert serving on an
audit committee, due to its status as a Bulletin Board company
with few management personnel.
21
Item 10. EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation
paid by the Company for services rendered during the last three
years to the Company's Chief Executive Officer and to the
Company's most highly compensated executive officers other than
the CEO, whose annual salary and bonus exceeded $100,000:
Summary of Annual Compensation Table
Other Annual
Compensation Restricted
Name of Principal Commissions Awards Stock Option
Position Year Salary & Bonuses (Auto) Awards Awards
Dean W. Rowell 2005 $50,000(1) -0- $4,000 -0- -0-
President/CEO 2004 $50,000(1) -0- $4,000 -0- -0-
2003 $44,000(1) -0- $4,000 -0- -0-
__________
(1) Represents the value of Mr. Rowell's contributed services.
None of the Company's executive officers received aggregate
cash and cash equivalent compensation exceeding $100,000 in any
of the last three fiscal years. No options to purchase any of the
Company's securities were granted to any reporting person during
the fiscal year ended March 31, 2005. During the same period,
Rowell elected to sell stock in the Company due to limited
corporate cash flow to partially compensate Rowell in absence of
a salary.
Compensation Pursuant to Plans
None of the executive officers of the Company are parties to
an employment agreement with the Company. Dean W. Rowell, the
Company's Chairman of the Board, President, Chief Executive and
Chief Financial Officer will continue to serve the Company as
determined by the Board of Directors without a salary or
employment agreement. On April 1, 1997, the Company discontinued
the practice of providing Rowell a credit card but continues to
provide Rowell with an automobile at a cost of approximately
$4,000 per year.
The Company has no other "plans" (as such term is used in
Item 402 of Regulation S-K) with respect to further executive
compensation.
Other Compensation
Not applicable.
22
Compensation of Directors
Directors of the Company receive no compensation for
services as such.
Termination of Employment and Change of Control Arrangements
Not applicable.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth the number of shares
beneficially owned, as of June 28, 2005, by each Director of the
Company, by all officers and Directors as a group and by all
persons known to the Company as owning or possessing voting
control over five (5%) percent or more of the Company's
outstanding shares of Common Stock:
Number Percentage
of Shares of Shares
Name and Address Owned Outstanding
Dean W. Rowell (1) 83,467,113 56.0%
Pamela K. Nelson 13,708,100 9.0%
Michael M. Cannon 13,000 .0%
All Officers and Directors
as a group 97,188,213 65.0%
___________
(1) This figure includes all of the shares owned by Trachyte.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
Geologic and other information which PIC has or develops is
available to Rowell as an officer of the Company, and he may use
such information for the benefit of the Company in determining
which leases to buy or sell. Such information is also available
to Rowell, without cost, in connection with Rowell's
participation in the Leasing Programs.
23
During the twelve year period since fiscal 1991, Trachyte
has helped financially support the Company largely due to
Rowell's efforts to secure loans from Trachyte for the Company
during periodic cash flow difficulties. During such periods, the
several transactions with Trachyte have provided the financial
means for the Company to pursue commercialization of a Biofuels
Project, otherwise the Company would have been unable to pursue
this goal. Final plans and final financial arrangements had not
been completed for a Biofuels Project as of June 28, 2005.
During the fiscal period ended March 31, 2005, the Company
continued to experience severe cash flow difficulties which have
continued into the 2006 fiscal period. Since the Company has been
unable to repay any of the loans from Trachyte during the past
two fiscal periods, Trachyte has received a demand note from the
Company, including interest at 12% per annum, with a principal
and interest balance at March 31, 2005 of approximately $7,497.
On July 15, 1996, the Company formed Biofuels, Inc.
("Biofuels"), a wholly-owned subsidiary, for the purpose of
investing in and developing the Biofuels Technology for a
Biofuels Project. This effort was centered on management's belief
that a Celmat to ethanol technology could be commercialized,
based on the Company's extensive experience at its former
research center from 1982 through 1992, and its experience in
developing a Biofuels Project.
Forward Looking Statements
The forgoing discussion in "Management's Discussion and
Analysis of Financial Condition and Results of Operation" contain
forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Act") and Section
21E of the Act, which reflect Managements current views with
respect to the future events and financial performance. The
Company cautions that words used in this document such as
"experts", "anticipates", "believes" and "may" as well as similar
words and expressions identify and refer to statements describing
events that may or may not occur in the future, including among
other things, statements relating to anticipated growth and
increased profitability, as well as to statements relating to the
Company's strategic plan, including plans to develop a Biofuels
Project and to selectively acquire other companies. These
forward-looking statements and the matters to which they refer to
are subject to considerable risks and uncertainties that may
cause actual results to be materially different from those
described in this document, including, but not limited to future
financial performance and future events, competitive pricing for
services, costs of obtaining capital as well as national,
24
regional and local economic conditions. Actual results
could differ materially from those addressed in the forward-
looking statements. Due to such uncertainties and risks, readers
are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date of this Form 10-KSB
report.
Indebtedness of Management
Reference is made to Section above entitled "Transactions
with Management and Others".
Parents of Company
The only parents of the Company, as defined in 12b-2 of the
Exchange Act, are the officers and directors of the Company. For
information regarding the share holdings of the Company's
officers and directors, see Item 11.
PART IV
Item 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
Exhibits to Form 10-KSB
Exhibits filed with this Report are incorporated by
reference and set forth below:
Exhibit 30: Heads of Agreement between the Company and
Trachyte Oil Company, dated March 1, 2005.
Exhibit 31: Entitled "Certificate of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002".
Exhibit 32: Entitled "Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002".
The financial statement information required by this portion
of Item 13 is submitted as a separate section at the rear of this
Report entitled "Independent Auditors' Report".
Reports on Form 8-K
There were no Form 8-K's filed by the Company during the
fiscal year ended March 31, 2005.
25
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees - The aggregate fees billed by HJ & Associates
for professional services rendered for the audit of the Company
annual financial statements included in the Company Annual Report
on Form 10-KSB for the fiscal years ended March 31, 2005 and
March 31, 2004 and for the quarterly financial statements on Form
10-QSB were approximately $7,600 and $5,950, respectively. There
were no other fees charged to the Company by HJ & Associates. In
addition, the Company paid Weaver & Call, L.C. an Independent
CPA, approximately $3,000 for non-audit accounting services
during the same period.
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
26
Exhibit "30"
TRACHYTE OIL COMPANY
P. O. Box 11206
Salt Lake City, Utah 84147-0206
(801) 364-9000
March 1, 2005
Standard Energy Corporation
Dean W. Rowell, President
447 Bearcat Drive
Salt Lake City, Utah 84115
Re: Heads of Agreement ("HOA")
Dear Mr. Rowell:
This letter is to be hereinafter considered as a Heads of
Agreement ("HOA") from Trachyte Oil Company ("TOC") to Standard
Energy Corporation ("STDE").
TOC agrees to sell to STDE a parcel of land located in
T 21 S, R 16 E, Section 27, Lots 2, 3 and 7, Emery County, Utah
containing 74.85 acres, more or less, reserving unto Assignor all
mineral rights.
TOC agrees to sell the parcel of land to STDE for the
purpose of STDE using the property to construct buildings and
otherwise commercial develop the STDE Biofuels Technologies. TOC
hereby agrees to sell said property to STDE for $375,000 for a
period of 120 days. TOC further agrees to exchange said $375,000
for common stock in STDE at the closing market bid price on
February 28, 2005 of $0.01 per share, provided TOC receives and
executes the appropriate documents to hold the stock for
investment purposes.
Additionally, STDE agrees to exchange the common stock of
STDE to TOC at $0.01 per share payable upon execution and the
recording of the Quit Claim Deed to STDE and recorded in the
Emery County Recorders office within the 120 day time frame.
This HOA is the only contract between said parties and will
remain in force for said 120 day period.
Respectfully submitted, Accepted by:
TRACHYTE OIL COMPANY STANDARD ENERGY CORPORATION
By:/s/ Dean W. Rowell By:/s/Dean W. Rowell
Dean W. Rowell, President Dean W. Rowell, President
27
Exhibit "31"
Item 7. CERTIFICATE OF CHIEF EXECUTIVE AND CHIEF EXECUTIVE
OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dean W. Rowell, certify that:
1. I have reviewed this annual report on Form 10KSB of Standard
Energy Corporation;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition results
of operations and cash flows of the registrant as of, and for,
the periods presented in this Annual report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and the Company have;
(a) designed such disclosure controls and procedures to
ensure hat material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days of
this annual report) the "Evaluation Date"); and
(c) presented in this annual report the Company
conclusions about the effectiveness of the disclosure controls
and procedures based on the Company evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on the Company's most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function);
28
(a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's auditors
any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involved
management or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
date of the Company's most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
STANDARD ENERGY CORPORATION
By: /s/ Dean W. Rowell
Dean W. Rowell
President
June 28, 2005
Salt Lake City, Utah
29
EXHIBIT "32"
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBAN ES-OXLEY ACT OF 2002
In connection with the Annual Report of Standard Energy (the
"Company") on Form 10-KSB for the period ending March 31, 2005,
as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, Dean W. Rowell, Chief Executive Officer
(Chief Financial Officer) of the Company, certify, pursuant to 18
U.S.C. subsection 1350, as adopted pursuant to subsection 906 of
the Sarbanes-Oxley Act of 2002, that to the best of my knowledge
and belief:
(1) The Report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
(2) The information contained in the Report fairly
presents, in all material respects, the financial
condition and result of operations of the Company.
/s/Dean W. Rowell
Dean W. Rowell
Chief Executive Officer (Chief Financial Officer)
Date: June 28, 2005
30
SIGNATURE PAGE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
STANDARD ENERGY CORPORATION
By: /s/ Dean W. Rowell
Dean W. Rowell
President
June 28, 2005
Salt Lake City, Utah
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the date indicated:
Signature Capacity Date
/s/ Dean W. Rowell President and Director June 28, 2005
Dean W. Rowell (Principal Executive,
Financial and Accounting
Officer)
/s/ Pamela K. Nelson Vice President June 28, 2005
Pamela K. Nelson Corporate Secretary,
Treasurer and Director
/s/ Michael M. Cannon Director June 28, 2005
Michael M. Cannon
31
STANDARD ENERGY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2005
32
C O N T E N T S
Report of Independent Registered Public Accounting Firm.... 34
Consolidated Balance Sheet................................. 35
Consolidated Statements of Operations...................... 37
Consolidated Statements of Stockholders Equity (Deficit)... 38
Consolidated Statements of Cash Flows...................... 39
Notes to the Consolidated Financial Statements............. 41
33
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Standard Energy Corporation and Subsidiaries
Salt Lake City, Utah
We have audited the accompanying consolidated balance sheet of
Standard Energy Corporation and Subsidiaries as of March 31,
2005, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the years ended
March 31, 2005 and 2004. These consolidated financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Standard Energy Corporation and
Subsidiaries as of March 31, 2005, and the results of their
operations and their cash flows for the years ended March 31,
2005 and 2004, in conformity with United States generally
accepted accounting principles.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 6 the Company has generated
significant losses from operations, has an accumulated deficit of
$9,462,940 and has a working capital deficit of $114,226, which
together raises substantial doubt about its ability to continue
as a going concern. Management s plans with regard to these
matters are also described in Note 6. The consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
June 21, 2005
34
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
ASSETS
March 31,
CURRENT ASSETS 2005
Cash $ 6,592
Total Current Assets 6,592
PROPERTY AND EQUIPMENT, net (Note 2) 8,572
OTHER ASSETS
Cash surrender value life insurance 8,807
Oil and gas leases held for resale (Note 3) 42,043
Pledged drilling bonds (Note 3) 25,000
Total Other Assets 75,850
TOTAL ASSETS $ 91,014
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 33,945
Revolving line of credit (Note 11) 75,664
Note payable current portion (Note 10) 3,712
Note payable - related party (Note 5) 7,497
Total Current Liabilities 120,818
LONG TERM DEBT
Note payable (Note 10) 4,947
Total Long Term Debt 4,947
Total Liabilities $ 125,765
The accompanying notes are an integral part of these consolidated
financial statements.
35
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet (Continued)
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS EQUITY (DEFICIT)
Preferred stock, par value $0.01 per share:
10,000,000 shares authorized, no shares issued
and outstanding $ 0
Common stock, par value $0.01 per share:
200,000,000 shares authorized, 150,036,974 shares
issued and outstanding 1,500,369
Additional paid-in capital 8,011,073
Treasury stock (83,253)
Accumulated deficit (9,462,940)
Total Stockholders' Equity (Deficit) (34,751)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 91,014
The accompanying notes are an integral part of these consolidated
financial statements.
36
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations
For the Years Ended
March 31,
2005 2004
REVENUES
Oil and gas services $ 4,800 $ 5,400
Oil and gas lease royalties 71,347 97,030
Total Revenues 76,147 102,430
EXPENSES
Oil and gas activities (See Note 8) 4,745 3,271
Depreciation, depletion/amortization 3,660 3,660
Biofuel project costs 12,303 12,049
General and administrative 87,995 84,696
Total Expenses 108,703 103,676
OPERATING LOSS (32,556) (1,246)
OTHER INCOME (EXPENSE)
Gain on Leasehold held for resale 0 0
Interest and other income 7,230 31,136
Interest expense (31,303) (31,624)
Total Other Income (Expense) (24,073) (488)
NET LOSS $ (56,629) $ (1,734)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 124,756,974 120,836,974
The accompanying notes are an integral part of these consolidated
financial statements.
37
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity (Deficit)
For the Years Ended March 31, 2005 and 2004
Additional
Treasury Stock Common
Stock Paid-In Accumulated
Shares Amount Shares
Amount Capital Deficit
Balance, March 31, 2003 1,037,420 (83,253) 120,836,369
1,208,369 7,911,073 (9,404,577)
Contributed capital for
services rendered by an
officer 0 0 0
0 50,000 0
Net loss for the year
ended March 31, 2004 0 0 0
0 0 (1,734)
Balance, March 31, 2004 1,037,420 $ (83,253) 120,836,974
$ 1,208,369 $ 7,961,073 $ (9,406,311)
Common Stock issued for
cash at $0.01, per share 0 0 200,000
2,000 0 0
Common stock issued for
extinguishment of debt
at $0.01, per share 0 0 29,000,000
290,000 0 0
Contributed capital for
services rendered by an
officer 0 0 0
0 50,000 0
Net loss for the year
ended March 31, 2005 0 0 0
0 0 (56,629)
Balance, March 31, 2005 1,037,420 $ (83,253) 150,036,974
$ 1,500,369 $ 8,011,073 $ (9,462,940)
The accompanying notes are an integral part of these consolidated
financial statements.
38
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows
For the Years Ended
March 31,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (56,629) $ (1,734)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation, depletion and
amortization 3,660 3,660
Contributed capital for services
rendered by an officer 50,000 50,000
Changes in assets and liabilities:
Increase in accounts payable and
accrued expenses 0 (21,276)
Increase in deferred lease income 0 (942)
Net Cash Used by Operating Activities (2,969) 29,708
CASH FLOWS FROM INVESTING ACTIVITIES
Cash value life insurance (7,999) 4,893
Net Cash Provided (Used) by Investing
Activities (7,999) 4,893
CASH FLOWS FROM FINANCING ACTIVITIES
Common Stock issued for cash 2,000 0
Payments on notes payable
- related parties (47,387) (42,400)
Proceeds from notes payable
- related parties 72,892 23,500
Net change to lines of credit (10,862) (15,657)
Net Cash Provided (Used) by Financing
Activities 16,643 (34,557)
NET INCREASE (DECREASE) IN CASH 5,675 44
CASH AT BEGINNING OF YEAR 917 873
CASH AT END OF YEAR $ 6,592 $ 917
The accompanying notes are an integral part of these consolidated
financial statements
39
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Continued)
For the Years Ended
March 31,
2005 2004
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
CASH PAID FOR:
Interest $ 1,951 $ 0
Income taxes $ 0 $ 0
NON-CASH INVESTING AND FINANCING ACTIVITIES
Vehicle acquired through note payable $ 0 $ 0
Common stock issued for payment on note
payable and accrued interest
related party $ 290,000 $ 0
Contributed capital for services
rendered by an officer $ 50,000 $ 50,000
Common stock issued for services
related party $ 0 $ 0
The accompanying notes are an integral part of these consolidated
financial statements
40
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was organized under the laws of the State of Utah on
April 3, 1978. The Company's principal business activity is the
acquisition and resale of unproven oil and gas leaseholds. The
Company also provides a variety of oil and gas leasehold
services. Further, the Company receives royalty income from
leasehold interests held by the Company. The Company has ongoing
R&D efforts relating to its Biofuels Project.
Principles of Consolidation
The consolidated financial statements include the accounts of
Standard Energy Corporation and its wholly-owned subsidiaries,
Standard EnviroSystems, Inc., Petroleum Investment Company and
Biofuels, Inc. "(collectively the Company)". Significant
intercompany accounts and transactions have been eliminated in
consolidation.
Oil and Gas Leasehold Interests Held for Resale
The Company's inventory of oil and gas leasehold interests held
primarily for resale to other parties is valued at the lower of
the costs to acquire the interests or market. Cost of sales is
based on the cost of the specific leasehold interest sold.
Oil and Gas Activities
The Company recognizes its oil and gas activities as a line item.
Oil and Gas Overriding Royalties
The Company recognizes its oil and gas lease royalties as a line
item.
Biofuels Project
The Company recognizes its Biofuels Project development as a line
item.
Property and Equipment
Property and equipment are valued at cost and, are depreciated or
amortized principally by the straight-line method over their
estimated useful lives. The useful lives of property and
equipment for purposes of financial reporting range from five to
seven years.
41
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Provision for Taxes
Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary
differences and operating loss and tax credit carryforwards and
deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely that not
that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of
enactment.
Net deferred tax assets consist of the following components as of
March 31, 2005 and 2004:
2005 2004
Deferred tax assets
NOL Carryover $ (774,335) $ (771,750)
Contribution Carryover (4,311) (4,311)
Total Deferred Tax Asset 0 0
Deferred tax liabilities: 0 0
Valuation allowance 778,666 776,061
Net deferred tax asset $ 0 $ 0
The income tax provision differs from the amount of income tax
determined by applying the U.S. federal income tax rate of 39% to
pretax income from continuing operations for the years ended
March 31, 2005 and 2004 due to the following:
2005 2004
Book income $ (22,085) $ (675)
Services 19,500 19,500
Other 2,585 12,293
NOL Utilization 0 (31,118)
Valuation allowance 0 0
$ 0 $ 0
At March 31, 2005, the Company had net operating loss
carryforwards of approximately $2,002,000 that may be offset
against future taxable income from the year 2005 through 2025.
No tax benefit has been reported in the March 31, 2005
consolidated financial statements since the potential tax benefit
is offset by a valuation allowance of the same amount.
42
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Provision for Taxes (Continued)
Due to the change in ownership provisions of the Tax Reform Act
of 1986, net operating loss carryforwards for Federal income tax
reporting purposes are subject to annual limitations. Should a
change in ownership occur, net operating loss carryforwards may
be limited as to use in the future.
Basic Loss Per Share
The computation of basic loss per share of common stock is based
on the weighted average number of shares of common stock
outstanding during the periods presented. Common stock
equivalents have not been included because they are antidilutive
in nature.
For the Year Ended
March 31, 2005
Loss Shares Per Share
(Numerator) (Denominator) Amount
$ (56,629) 124,756,974 $ (0.00)
For the Year Ended
March 31, 2004
Loss Shares Per Share
(Numerator) (Denominator) Amount
$ (1,734) 120,836,974 $ (0.00)
Cash Flows Statement
For purposes of statements of cash flows, the Company considers
all highly liquid debt investments purchased with a maturity of
three months or less to be cash equivalents.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
43
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 2 - PROPERTY AND EQUIPMENT
The following is a summary of property and equipment - at cost,
less accumulated depreciation as of March 31, 2005:
Vehicle $ 18,556
Computers 7,711
Furniture and fixtures 51,393
Printing systems 35,648
Well and land files and maps 305,000
Total 418,308
Less: accumulated depreciation (409,736)
Total $ 8,572
Depreciation expense for the years ended March 31, 2005 and 2004
was $3,660 and $3,660, respectively.
NOTE 3 - OIL AND GAS PROPERTIES
The Company's principal business is, and historically has been,
the acquisition of unproven oil and gas leaseholds, primarily
with the intent of reselling such leaseholds to third-parties. At
March 31, 2005, the Company was holding of oil and gas leases for
resale with a cost basis of $42,043.
The Company has negotiated agreements with certain non affiliates
to provide capital to jointly participate in a leasing program
for oil and gas leases. Under these agreements, the Company
provides raw data and services to identify potential leases. The
Company earns approximately 50% gross interest in each leasehold
obtained. If a joint lease is sold the Company would receive 50%
of the purchase price together with 50% of a negotiated royalty
as part of a lease sale. Because the Company has no cost in the
leases, its share of the net proceeds is recognized as revenue
when the leases are sold and are recorded as sales of oil and gas
leasehold interests.
In connection with its Oil and gas lease activities, the Company
has included in other assets pledged certificates of deposit in
the amount of $25,000 which are to secure a statewide oil and gas
lease bond in the State of Utah.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Office Lease
The Company entered into a lease extension agreement for office
space which commenced December 15, 2002 for a term of one year
with monthly lease payments of $1,500 per month. The lease is
currently on a month-to-month basis at $1,500 per month.
44
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 5 - RELATED PARTY TRANSACTIONS
On February 10, 2005, Trachyte agreed to accept 29,000,000 newly
issued shares of the Company's common stock in exchange for
$290,000 of partial debt settlement of cash loans to the Company
through February 9, 2005 and to accept a replacement note for the
balance owed to Trachyte in the amount of $10,258 with interest
at 12% per annum dated February 10, 2005. The shares were issued
at $0.01 per share, which was the closing market bid price on
February 9, 2005. The shares are required to be held for at
least two years for investment purposes.
On March 1, 2005 the Company entered into a HOA with Trachyte to
purchase approximately 75 acres of land owned by Trachyte for
$375,000 to be paid for in common shares at $0.01 per share
totalling 37,000,000 shares. The Company intends to use the land
to construct a Biofuels Project. (See Managements Discussion).
During the years ended March 31, 2005 and 2004, an officer of the
Company contributed services valued at $50,000 and $50,000,
respectively, which is recorded as an increase in additional
paid-in capital.
NOTE 6 - GOING CONCERN
These financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has
incurred significant losses in the past which have resulted in
working capital and accumulated deficits. These deficits have
significantly reduced revenues from sales of its oil and gas
activities. Because of the currently changing conditions in the
oil and gas industry, coupled with the Company's cash flow
difficulties, the Company's ability to retain and ultimately
recover its investments in oil and gas leaseholds held for resale
and other assets of the Company, is uncertain at this time.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in
this regard are to seek additional financing through loans or
through the issuance of equity securities and to seek increased
sales related to its oil and gas businesses. However, management
can give no assurance that it will be successful in its endeavor
to resolve its cash flow difficulties or that it will be able to
retain and ultimately recover its cost in oil and gas leaseholds
held for resale and the other assets of the Company. The
financial statements do not include any adjustments relating to
the recoverability and classification of liabilities, income or
expenses that might be necessary should the Company be unable to
continue as a going concern.
45
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 7 - CAPITAL STOCK
Preferred Stock
The Company has authorized 10,000,000 shares of preferred stock,
$0.01 par value with such rights, preferences and designations
and to be issued in such series as determined by the Board of
Directors. No shares are issued and outstanding at March 31,
2005.
NOTE 8 - INDUSTRY SEGMENTS
The Company operates in three principal industries: oil and gas
activities, royalty holdings and Biofuel Projects:
Information as to the Company's segments is summarized below as
of March 31 for the years then ended:
2005 2004
Revenues
Oil and gas services $ 4,800 $ 5,400
Oil and gas lease royalties 71,347 97,030
$ 76,147 $ 102,430
Operating Loss
Oil and gas services $ 55 $ 2,014
Oil and gas royalties 71,347 97,030
Biofuel project costs (12,303) (12,049)
Corporation and investment (91,655) (88,241)
$ (32,556) $ (1,246)
Identifiable Assets
Oil and gas leases held for resale $ 42,043 $ 42,043
Pledged drilling bonds 25,000 25,000
Corporation and investment 23,971 13,957
$ 91,014 $ 81,000
Depreciation, Depletion and Amortization
Corporation and investment $ 3,660 $ 3,660
The Company has no intersegment sales or sales to affiliated
customers. Operating loss consists of total revenues less total
expenses, except for interest expense which has not been
allocated to any segment. Identifiable assets by segment
represent those assets that are used in the Company's operations
in each industry. Corporate assets which are not allocated to
any segment are principally cash, short-term investments,
marketable securities and a portion of property and equipment.
Capital expenditures in fiscal 2005 and 2004 were insignificant.
The Company's oil and gas activity operations are presently
insignificant and no reserve information is available. The
Biofuel Project costs are shown on line item Biofuel Project
Costs. In the fiscal period ended March 31, 2005 there were
$12,303 in Biofuel Project costs and $12,049 for the comparable
period ended March 31, 2004.
46
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 9 - New Accounting Pronouncements
New Accounting Pronouncements
On December 16, 2004 the FASB issued SFAS No. 123(R), Share-Based
Payment, which is an amendment to SFAS No. 123, Accounting for
Stock-Based Compensation. This new standard eliminates the
ability to account for share-based compensation transactions
using Accounting Principles Board ("ABP") Opinion No. 25,
Accounting for Stock Issued to Employees, and generally requires
such transactions to be accounted for using a fair-value-based
method and the resulting cost recognized in our financial
statements. This new standard is effective for awards that are
granted, modified or settled in cash in interim and annual
periods beginning after June 15, 2005. In addition, this new
standard will apply to unvested options granted prior to the
effective date. We will adopt this new standard effective for
the fourth fiscal quarter of 2005, and have not yet determined
what impact this standard will have on our financial position or
results of operations.
In November 2004, the FASB issued SFAS No. 151, Inventory Costs -
an amendment of ARB No. 43, Chapter 4. This Statement amends the
guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to
clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage).
Paragraph 5 of ARB 43, Chapter 4, previously stated that ". . .
under some circumstances, items such as idle facility expense,
excessive spoilage, double freight, and rehandling costs may be
so abnormal as to require treatment as current period charges. .
. ." This Statement requires that those items be recognized as
current-period charges regardless of whether they meet the
criterion of "so abnormal." In addition, this Statement requires
that allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production
facilities. This statement is effective for inventory costs
incurred during fiscal years beginning after June 15, 2005.
Management does not believe the adoption of this Statement will
have any immediate material impact on the Company.
In December 2004, the FASB issued SFAS No. 152, Accounting for
Real Estate Time-sharing Transactions, which amends FASB
statement No. 66, Accounting for Sales of Real Estate, to
reference the financial accounting and reporting guidance for
real estate time-sharing transactions that is provided in AICPA
Statement of Position (SOP) 04-2, Accounting for Real Estate
Time-Sharing Transactions. This statement also amends FASB
Statement No. 67, Accounting for Costs and Initial Rental
Operations of Real Estate Projects, to state that the guidance
for (a) incidental operations and (b) costs incurred to sell real
estate projects does not apply to real estate time-sharing
47
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 9 - New Accounting Pronouncements (Continued)
transactions. The accounting for those operations and costs is
subject to the guidance in SOP 04-2. This Statement is effective
for financial statements for fiscal years beginning after June
15, 2005. Management believes the adoption of this Statement will
have no impact on the financial statements of the Company.
In December 2004, the FASB issued SFAS No.153, Exchange of
Nonmonetary Assets. This Statement addresses the measurement of
exchanges of nonmonetary assets. The guidance in ABP Opinion No.
29, Accounting for Nonmonetary Transactions, is based on the
principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. The guidance in
that Opinion, however, included certain exceptions to that
principle. This Statement amends Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. A
nonmonetrary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a
result of the exchange. This Statement is effective for financial
statements for fiscal years beginning after June 15, 2005.
Earlier application is permitted for nonmonetary asset exchanges
incurred during fiscal years beginning after the date of this
statement is issued. Management believes the adoption of this
Statement will have no impact on the financial statements of the
Company.
The implementation of the provisions of these pronouncements are
not expected to have a significant effect on the Company's
consolidated financial statement presentation.
48
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2005 and 2004
NOTE 10 - NOTE PAYABLE
Note payable to vehicle financing agency,
bearing no interest, monthly payments of
$309, secured by vehicle $ 8,659
Less current portion (3,712)
Long Term portion $ 4,947
Future maturities of long term debt are as follows:
For the year ended
March 31,
2006 $ 3,712
2007 3,712
2008 1,235
Total $ 8,659
NOTE 11 - REVOLVING LINE OF CREDIT
Unsecured credit card due to Wells Fargo
Bank, currently in default, bearing
interest at 12.5%. $ 75,664
$ 75,664
49