United States
Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
March 31, 2002 0-27849
BASIC ENERGY, INC.
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(Exact name of registrant as specified in its charter)
UTAH
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(State or other jurisdiction of incorporation or organization)
00001748413
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(I.R.S. Employer Identification No.)
3771 South State Street
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Salt Lake City, Utah 84115
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(Address of principal executive offices)
(801) 262-8429
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
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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 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.
X Yes No
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State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date.
Common stock, par value $0.10; 7,952,443 shares outstanding
as of March 31, 2002
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Basic Energy, Inc.
(A Development Stage Company)
Financial Statements
March 31, 2002
Basic Energy, Inc.
(A Development Stage Company)
Balance Sheets
March June
31, 2002 30, 2001
----------- -----------
(Unaudited)
Assets
Current Assets
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Cash $ 894 $ 1,694
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Total Current Assets $ 894 $ 1,694
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Liabilities & Stockholders' Equity
Current Liabilities
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Accounts Payable $ 30,707 $ 14,324
Due to Officers 18,517 22,452
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Total Current Liabilities 49,224 36,776
Stockholders' Equity
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Common Stock, 20,000,000 Shares
Authorized at $0.10 Par Value;
7,952,443 & 7,339,030 Shares
Issued & Outstanding Respectively 795,244 733,903
Paid In Capital 42,741 42,741
Deficit Accumulated During the Development Stage (886,315) (811,726)
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Total Stockholders' Equity (48,330) (35,082)
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Total Liabilities & Stockholders' Equity $ 894 $ 1,694
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The accompanying notes are an integral part of these financial statements.
Basic Energy, Inc.
(A Development Stage Company)
Statements of Operations
Unaudited
For the Three For the Nine
Months Ended Months Ended
March March March March
31, 2002 31, 2001 31, 2002 31, 2001
----------- ----------- ----------- -----------
Revenue $ - $ - $ - $ -
------- ----------- ----------- ----------- -----------
Expenses
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General &
Administrative Expense 17,878 16,664 57,768 46,018
Professional Fees 1,820 - 16,821 12,709
----------- ----------- ----------- -----------
Total Expenses 19,698 16,664 74,589 58,727
Net Loss $ (19,698) $ (16,664) $ (74,589) $ (58,727)
=========== =========== =========== ===========
Basic & Diluted Loss
Per Share $ (0.00) $ (0.00) $ (0.01) $ (0.00)
Weighted Average
Shares Outstanding 7,752,765 7,200,500 7,615,357 7,200,500
The accompanying notes are an integral part of these financial statements.
Basic Energy, Inc.
(A Development Stage Company)
Statements of Cash Flows
Unaudited
For the Nine Months Ended
March March
31, 2002 31, 2001
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Cash Flows from Operating Activities
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Net Loss $ (74,589) $ (58,727)
Adjustment to Reconcile Net Loss to Net
Cash Used by Operating Activities;
Shares Issued for Services 61,341 39,243
(Increase) in Accounts Payable 16,383 31,608
(Increase) in Due to Officers (3,935) (12,124)
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Net Cash Used by Operating Activities (800) -
Cash Flows from Investing Activities - -
------------------------------------ ----------- -----------
Cash Flows from Financing Activities - -
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Increase in Cash & Cash Equivalents (800) -
Cash at Beginning of Period 1,694 -
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Cash at End of Period $ 894 $ -
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Disclosures from Operating Activities
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Interest $ - $ -
Taxes - -
The accompanying notes are an integral part of these financial statements.
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Organization
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The Company was organized on June 4, 1926 under the laws of the state of
Utah using the name of M.M. Lead Company. On February 22, 1980 a
Certificate of Amendment was filed with the state of Utah changing the name
to Basic Energy, Inc. The Company has been dormant for many years and is
considered to be a development stage company.
NOTE #2 - Significant Accounting Policies
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A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that
are readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
E. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
NOTE #3 - Stockholders' Equity
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During the nine months ended March 31, 2002, the Company issued 613,413
shares of common stock at $.10 per share for services and out of pocket
expense to its officers and directors.
NOTE #4 - Going Concern
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The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has had recurring
operating losses for the past several years and is dependent upon financing
to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. It is
management's plan to find an operating company to merge with, thus creating
necessary operating revenue.
ITEM 2. PLAN OF OPERATIONS
Safe Harbor Statement
This Form 10-QSB contains certain forward-looking statements. For
this purpose any statements contained in this Form 10-QSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of factors.
Plan of Operations
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The Company has little cash and has experienced losses. As of March
31, 2002, the Company had $ 894 cash on hand. As of that date the Company
had $49,224 in outstanding liabilities. The Company has no material
commitments for capital expenditures for the next twelve months.
As of the date of this report, the Company has yet to generate
positive cash flow. The Company has financed its operations primarily
through the sale of common stock.
The Company believes that its current cash needs can be met either
through the sale of additional stock or through loans. Should the Company
obtain a business opportunity, however, it may be necessary to raise
additional capital. This may be accomplished by selling common stock of
the Company.
Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
No instruments defining the rights of the holders of any class of
registered securities have been materially modified, limited or qualified.
On January 23, 2002, the Company issued 198,178 shares of its
restricted common stock to its officers and directors for services rendered
to the Company during the quarter ended December 31, 2001. The number of
shares received by each such individual was based on a compensation rate of
$40.00 per hour for services rendered and $0.31 per mile as compensation
for mileage. The shares issued were valued at $.10 per share. Shares
issued were issued as follows:
Number of Shares Value of Services
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Jay W. Gibson 138,115 $13,811.50
Ron Burnett 9,948 994.80
Karl Seljass 12,076 1,207.60
Joyce Sigler 8,219 821.90
Joe Graubard 29,820 2,982.00
The Company made no public offers or sale of these securities. All of
the shares listed above were issued pursuant to an exemption from
registration set forth in Section 4(2) of the Securities Act of 1933. No
cash was received by the Company.
Also on January 23, 2002, the Company issued 1,500 restricted common
shares to Carriage Motor Company as payment for rents due at a rate of
$50.00 per month for the preceding three months. The Company made no
public offers or sales of these securities. The shares were issued
pursuant to an exemption from registration provided by Section 4(2) of the
'33 Act. No cash was received by the Company. Mr. Burnett is the owner of
Carriage Motor Company and may be deemed to be the beneficial owner of
these shares.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
No reports on Form 8-K were filed or required to be filed during the
quarter ended March 31, 2002.
(B) Exhibits.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
Basic Energy, Inc.
May 7, 2002 /s/ Jay W. Gibson
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Jay W. Gibson
Chairman of the Board and President
May 7, 2002 /s/ Joseph M. Graubard
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Joseph M. Graubard
Treasurer and Director