As filed with the Securities and Exchange Commission on ______, 2007
Commission File No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
Registration Statement Under
THE SECURITIES ACT OF 1933
GAS SALVAGE CORP.
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(Exact name of registrant as specified in charter)
Nevada 1311 36-4613360
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(State or other jurisdiction (Primary Standard Classi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)
Suite 153, 333 River Front Ave., S.E.
Calgary, Alberta
Canada T2G 5R1
(866) 822 - 0325
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(Address and telephone number of principal executive offices)
Suite 153, 333 River Front Ave., S.E.
Calgary, Alberta
Canada T2G 5R1
(866) 822 - 0325
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(Address of principal place of business or intended principal place of business)
Nolan Weir
Suite 153, 333 River Front Ave., S.E.
Calgary, Alberta
Canada T2G 5R1
(866) 822 - 0325
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(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration
Statement
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box [X].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
- ---------- ---------- ----------- --------- ------------
Common Stock (2) 2,680,000 $0.20 $536,000 $21
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(1) Offering price computed in accordance with Rule 457.
(2) Shares of common stock offered by selling shareholders
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
GAS SALVAGE CORP.
Common Stock
By means of this prospectus a number of Gas Salvage's shareholders are
offering to sell up to 2,680,000 shares of Gas Salvage's common stock at a price
of $0.20 per share. If and when Gas Salvage's common stock becomes quoted on the
OTC Bulletin Board, the shares owned by the selling shareholders may be sold in
the over-the-counter market, or otherwise, at prices and terms then prevailing
or at prices related to the then-current market price, or in negotiated
transactions.
Gas Salvage will not receive any proceeds from the sale of the common
stock by the selling stockholders. Gas Salvage will pay for the expenses of this
offering which are estimated to be $35,000, of which approximately $16,000 has
been paid as of the date of this prospectus.
As of the date of this prospectus there was no public market for Gas
Salvage's common stock. Although Gas Salvage plans to have its shares listed on
the OTC Bulletin Board, Gas Salvage may not be successful in establishing any
public market for its common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A
DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE __ OF THIS
PROSPECTUS.
The date of this prospectus is January __, 2008.
PROSPECTUS SUMMARY
Gas Salvage was incorporated in Nevada on June 5, 2007.
Gas Salvage plans to be involved in the exploration and development of oil
and gas. Gas Salvage's activities will be primarily be dependent upon available
financing.
As of December 31, 2007 Gas Salvage had an interest in one oil and gas
property.
As of December 31, 2007 Gas Salvage had 5,280,000 outstanding shares of
common stock.
Gas Salvage does not have a website. Gas Salvage is not a blank check
company required to comply with Rule 419 of the Securities and Exchange
Commission.
Gas Salvage's offices are located at Suite 153, 333 River Front Ave.,
S.E., Calgary, Alberta, Canada T2G 5R1. Gas Salvage's telephone number is (866)
822-0325 and its facsimile number is (866) 822-0325.
See the "Glossary" section of this prospectus for the definition of terms
pertaining to the oil and gas industry which are used in this prospectus.
Forward Looking Statements
This Prospectus contains various forward-looking statements that are based
on Gas Salvage's beliefs as assumptions made by and information currently
available to Gas Salvage. When used in this Prospectus, the words "believe",
"expect", "anticipate", "estimate" "intend", "project", "predict" and similar
expressions are intended to identify forward-looking statements. These
statements may involve projections, capital requirements, operating expenses,
and the like, and are subject to certain risks, uncertainties and assumptions
which could cause actual results to differ materially from projections or
estimates. Factors which could cause actual results to differ materially are
discussed at length under the heading "Risk Factors". Should one or more of the
enumerated risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. Investors should not place undue reliance on
forward-looking statements, all of which speak only as of the date made.
The Offering
By means of this prospectus a number of Gas Salvage's shareholders are
offering to sell up to 2,680,000 shares of its common stock at a price of $.20
per share. If and when Gas Salvage's common stock becomes quoted on the OTC
Bulletin Board or listed on a securities exchange, the shares owned by the
selling shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions.
1
The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of any relevant operating history,
losses since Gas Salvage was incorporated, and the possible need for Gas Salvage
to sell shares of its common stock to raise additional capital. See "Risk
Factors" beginning on page 2 of this prospectus for additional Risk Factors.
RISK FACTORS
The securities being offered involve a high degree of risk. Prospective
investors should consider the following risk factors which affect Gas Salvage's
business and this offering. These risk factors discuss all material risks which
pertain to an investment in Gas Salvage's common stock. If any of the risks
discussed below materialize, Gas Salvage's common stock could decline in value
or become worthless.
Risk Factors Related to Gas Salvage's Business.
Gas Salvage has a history of losses and may never be profitable. Gas Salvage has
never earned a profit. Gas Salvage expects to incur losses during the
foreseeable future and may never be profitable.
The failure of Gas Salvage to obtain capital may significantly restrict Gas
Salvage's proposed operations. Gas Salvage needs additional capital to fund its
operating losses and to explore for oil and gas. Gas Salvage's issuance of
equity or equity-related securities to raise capital will dilute the ownership
interest of existing shareholders.
Gas Salvage does not know what the terms of any future capital raising may
be but any future sale of Gas Salvage's equity securities would dilute the
ownership of existing stockholders and could be at prices substantially below
the price of the shares of common stock sold in this offering. The failure of
Gas Salvage to obtain the capital which it requires will result in the slower
implementation of Gas Salvage's business plan or its inability of Gas Salvage to
implement its business plan. There can be no assurance that Gas Salvage will be
able to obtain any capital which it will need.
To enable Gas Salvage to continue in business Gas Salvage will eventually
need to earn a profit or obtain additional financing until Gas Salvage is able
to earn a profit. As a result of Gas Salvage's short operating history it is
difficult for potential investors to evaluate its business. There can be no
assurance that Gas Salvage can implement its business plan, that it will be
profitable, or that the shares which may be sold in this offering will have any
value.
Gas Salvage will not receive any proceeds from the sale of the shares
offered by the selling shareholders.
Oil and gas exploration is not an exact science, and involves a high degree of
risk. The primary risk lies in the drilling of dry holes or drilling and
completing wells which, though productive, do not produce gas and/or oil in
sufficient amounts to return the amounts expended and produce a profit. Hazards,
such as unusual or unexpected formation pressures, downhole fires, blowouts,
loss of circulation of drilling fluids and other conditions are involved in
drilling and completing oil and gas wells and, if such hazards are encountered,
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completion of any well may be substantially delayed or prevented. In addition,
adverse weather conditions can hinder or delay operations, as can shortages of
equipment and materials or unavailability of drilling, completion, and/or
work-over rigs. Even though a well is completed and is found to be productive,
water and/or other substances may be encountered in the well, which may impair
or prevent production or marketing of oil or gas from the well.
Exploratory drilling involves substantially greater economic risks than
development drilling because the percentage of wells completed as producing
wells is usually less than in development drilling. Exploratory drilling itself
can be of varying degrees of risk and can generally be divided into higher risk
attempts to discover a reservoir in a completely unproven area or relatively
lower risk efforts in areas not too distant from existing reservoirs. While
exploration adjacent to or near existing reservoirs may be more likely to result
in the discovery of oil and gas than in completely unproven areas, exploratory
efforts are nevertheless high risk activities.
Although the completion of oil and gas wells is, to a certain extent, less
risky than drilling for oil and gas, the process of completing an oil or gas
well is nevertheless associated with considerable risk. In addition, even if a
well is completed as a producer, the well for a variety of reasons may not
produce sufficient oil or gas in order to repay Gas Salvage's investment in the
well.
The acquisition, exploration and development of oil and gas properties, and the
production and sale of oil and gas are subject to many factors which are outside
Gas Salvage's control. These factors include, among others, general economic
conditions, proximity to pipelines, oil import quotas, supply, demand, and price
of other fuels and the regulation of production, refining, transportation,
pricing, marketing and taxation by Federal, state, and local governmental
authorities.
Buyers of Gas Salvage's gas, if any, may refuse to purchase gas from Gas Salvage
in the event of oversupply. If wells which may be drilled by Gas Salvage are
productive of natural gas, the quantities of gas that Gas Salvage may be able to
sell may be too small to pay for the expenses of operating the wells. In such a
case, the wells would be "shut-in" until such time, if ever, that economic
conditions permit the sale of gas in quantities which would be profitable.
Interests that Gas Salvage may acquire in oil and gas properties may be subject
to royalty and overriding royalty interests, liens incident to operating
agreements, liens for current taxes and other burdens and encumbrances,
easements and other restrictions, any of which may subject Gas Salvage to future
undetermined expenses. Gas Salvage does not intend to purchase title insurance,
title memos, or title certificates for any leasehold interests it will acquire.
It is possible that at some point Gas Salvage will have to undertake title work
involving substantial costs. In addition, it is possible that Gas Salvage may
suffer title failures resulting in significant losses to Gas Salvage.
The drilling of oil and gas wells involves hazards such as blowouts, unusual or
unexpected formations, pressures or other conditions which could result in
substantial losses or liabilities to third parties. Although Gas Salvage intends
to acquire adequate insurance, or to be named as an insured under coverage
acquired by others (e.g., the driller or operator), Gas Salvage may not be
3
insured against all such losses because such insurance may not be available,
premium costs may be deemed unduly high, or for other reasons. Accordingly,
uninsured liabilities to third parties could result in the loss of Gas Salvage's
funds or property.
Gas Salvage's operations are dependent upon the continued services of its
officers. The loss of any of these officers, whether as a result of death,
disability or otherwise, may have a material adverse effect upon the business of
Gas Salvage.
Gas Salvage's operations will be affected from time to time and in varying
degrees by political developments and Federal and state laws and regulations
regarding the development, production and sale of crude oil and natural gas.
These regulations require permits for drilling of wells and also cover the
spacing of wells, the prevention of waste, and other matters. Rates of
production of oil and gas have for many years been subject to Federal and state
conservation laws and regulations and the petroleum industry is subject to
Federal tax laws. In addition, the production of oil or gas may be interrupted
or terminated by governmental authorities due to ecological and other
considerations. Compliance with these regulations may require a significant
capital commitment by and expense to Gas Salvage and may delay or otherwise
adversely affect Gas Salvage's proposed operations.
From time to time legislation has been proposed relating to various
conservation and other measures designed to decrease dependence on foreign oil.
No prediction can be made as to what additional legislation may be proposed or
enacted. Oil and gas producers may face increasingly stringent regulation in the
years ahead and a general hostility towards the oil and gas industry on the part
of a portion of the public and of some public officials. Future regulation will
probably be determined by a number of economic and political factors beyond the
control of Gas Salvage or the oil and gas industry.
Gas Salvage's activities will be subject to existing federal and state laws and
regulations governing environmental quality and pollution control. Compliance
with environmental requirements and reclamation laws imposed by Federal, state,
and local governmental authorities may necessitate significant capital outlays
and may materially affect the earnings of Gas Salvage. It is impossible to
predict the impact of environmental legislation and regulations (including
regulations restricting access and surface use) on Gas Salvage's operations in
the future although compliance may necessitate significant capital outlays,
materially affect Gas Salvage's earning power or cause material changes in its
intended business. In addition, Gas Salvage may be exposed to potential
liability for pollution and other damages.
Since Gas Salvage's officers plan to devote only a portion of their time to Gas
Salvage's business, its chances of being profitable will be less than if it had
full time management. As of the date of this prospectus Gas Salvage had two
officers. With the exception of Philip Grey, the officers of Gas Salvage are
employed full-time at other companies and the officers' other responsibilities
could take precedence over the officer's duties to Gas Salvage.
Risk Factors Related to this Offering
As of the date of this prospectus there was no public market for Gas Salvage's
common stock and if no public market develops, purchasers of the shares offered
4
by this prospectus may be unable to sell their shares. If purchasers are unable
to sell their shares, purchasers may never be able to recover any amounts which
they paid for Gas Salvage's shares.
Because there is no public market for Gas Salvage's common stock, the price for
its shares was arbitrarily established, does not bear any relationship to Gas
Salvage's assets, book value or net worth, and may be greater than the price
which investors in this offering may receive when they resell their shares.
Accordingly, the offering price of Gas Salvage's common stock should not be
considered to be any indication of the value of its shares. The factors
considered in determining the offering price included Gas Salvage's future
prospects and the likely trading price for its common stock if a public market
ever develops.
Should a market for Gas Salvage's common stock ever develop, disclosure
requirements pertaining to penny stocks may reduce the level of trading activity
in the market for Gas Salvage's common stock and investors may find it difficult
to sell their shares. If a market ever develops for the common stock of Gas
Salvage, trades of Gas Salvage's common stock will be subject to Rule 15g-9 of
the Securities and Exchange Commission, which rule imposes certain requirements
on broker/dealers who sell securities subject to the rule to persons other than
established customers and accredited investors. For transactions covered by the
rule, brokers/dealers must make a special suitability determination for
purchasers of the securities and receive the purchaser's written agreement to
the transaction prior to sale. The Securities and Exchange Commission also has
rules that regulate broker/dealer practices in connection with transactions in
"penny stocks". Penny stocks generally are equity securities with a price of
less than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in that security is provided by the
exchange or system). The penny stock rules require a broker/ dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Commission that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker/dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker/dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation.
DILUTION AND COMPARATIVE SHARE DATA
As of December 31, 2007 Gas Salvage had 5,280,000 outstanding shares of
common stock, which had a net tangible book value of $0.06 per share. These
shares were issued for cash of $266,301 and as payment for Gas Salvage's working
interest in an oil and gas lease.
The following table illustrates per share dilution and the comparative
stock ownership of Gas Salvage's stockholders as compared to the investors in
this offering, assuming all shares offered by this prospectus are sold.
5
Shares outstanding as of December 31, 2007 5,280,000
Shares offered by selling shareholders 2,680,000
Net tangible book value per share at as of December 31, 2007 $0.06
Offering price, per share $0.20
Dilution to purchasers of shares offered by this prospectus $0.14
Equity ownership by purchasers of shares offered by this prospectus 51%
The following table shows the cash amount paid by the present shareholders
of Gas Salvage for their shares of Gas Salvage's common stock:
Name Price Paid Per Share
---- --------------------
Officer and Director $0.01
Futures Investment Corp. (1)
Investors in private offering $0.10 CDN$
(1) In consideration for its interest in its oil and gas property, Gas Salvage
paid Futures Investment Corp. $100,000 in cash plus 900,000 shares of its
restricted common stock.
MARKET FOR GAS SALVAGE'S COMMON STOCK.
Gas Salvage's common stock is not quoted on any exchange and there is no
public trading market.
As of December 31, 2007, Gas Salvage had 5,280,000 outstanding shares of
common stock and 63 shareholders. Gas Salvage does not have any outstanding
options, warrants or other arrangements providing for the issuance of additional
shares of its capital stock.
All of the outstanding shares of Gas Salvage are restricted securities and
if not sold by means of this prospectus may be sold in accordance with Rule 144
of the Securities and Exchange Commission beginning in March 2008.
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. Gas Salvage's Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.
Gas Salvage's Articles of Incorporation authorize its Board of Directors
to issue up to 5,000,000 shares of preferred stock. The provisions in the
Articles of Incorporation relating to the preferred stock allow Gas Salvage's
directors to issue preferred stock with multiple votes per share and dividend
rights which would have priority over any dividends paid with respect to the
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holders of Gas Salvage's common stock. The issuance of preferred stock with
these rights may make the removal of management difficult even if the removal
would be considered beneficial to shareholders generally, and will have the
effect of limiting shareholder participation in certain transactions such as
mergers or tender offers if these transactions are not favored by Gas Salvage's
management.
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION
The following discussion of financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
notes to the consolidated financial statements, which are included elsewhere in
this prospectus.
Gas Salvage was incorporated on June 5, 2007. In September 2007 Gas
Salvage acquired a 44.5% working interest (35.6% net revenue interest) in a gas
well located in Lincoln County, Oklahoma. The gas well was put into production
in November 2007. As of December 31, 2007 the well was producing, net to Gas
Salvage's net revenue interest, 30 MCF of gas per day.
RESULTS OF OPERATIONS
The factors that most significantly affect Gas Salvage's results of
operations will be (i) the sale prices of crude oil and natural gas, (ii) the
amount of production from oil or gas wells in which Gas Salvage has an interest,
and (iii) and lease operating expenses. Gas Salvage's revenues will also be
significantly impacted by its ability to maintain or increase oil or gas
production through exploration and development activities.
Prices received by Gas Salvage for sales of crude oil and natural gas may
fluctuate significantly from period to period. The fluctuations in oil prices
during these periods reflect market uncertainty regarding the inability of the
Organization of Petroleum Exporting Countries ("OPEC") to control the production
of its member countries, as well as concerns related to the global supply and
demand for crude oil. Gas prices received by Gas Salvage will fluctuate with
changes in the spot market price for gas.
Changes in natural gas and crude oil prices will significantly affect the
revenues and cash flow of the wells and the value of the oil and gas properties.
Declines in the prices of crude oil and natural gas could have a material
adverse effect on the success of Gas Salvage's operations and activities,
recoupment of the costs of acquiring, developing and producing its wells and
profitability. Gas Salvage is unable to predict whether the prices of crude oil
and natural gas will rise, stabilize or decline in the future.
Other than the foregoing, Gas Salvage does not know of any trends, events
or uncertainties that have had or are reasonably expected to have a material
impact on Gas Salvage's net sales, revenues or expenses.
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LIQUIDITY AND CAPITAL RESOURCES
It is expected that Gas Salvage's principal source of cash flow will be
from the production and sale of crude oil and natural gas reserves which are
depleting assets. Cash flow from the sale of oil and gas production depends upon
the quantity of production and the price obtained for the production. An
increase in prices will permit Gas Salvage to finance its operations to a
greater extent with internally generated funds, may allow Gas Salvage to obtain
equity financing more easily or on better terms, and lessens the difficulty of
obtaining financing. However, price increases heighten the competition for oil
and gas prospects, increase the costs of exploration and development, and,
because of potential price declines, increase the risks associated with the
purchase of producing properties during times that prices are at higher levels.
A decline in oil and gas prices (i) will reduce the cash flow internally
generated by Gas Salvage which in turn will reduce the funds available for
exploring for and replacing oil and gas reserves, (ii) will increase the
difficulty of obtaining equity and debt financing and worsen the terms on which
such financing may be obtained, (iii) will reduce the number of oil and gas
prospects which have reasonable economic terms, (iv) may cause Gas Salvage to
permit leases to expire based upon the value of potential oil and gas reserves
in relation to the costs of exploration, (v) may result in marginally productive
oil and gas wells being abandoned as non-commercial, and (vi) may increase the
difficulty of obtaining financing. However, price declines reduce the
competition for oil and gas properties and correspondingly reduce the prices
paid for leases and prospects.
Between June and September 2007 Gas Salvage sold 2,580,000 shares of its
common stock at a price of $0.10 CDN per share to a group of private investors.
In September 2007 Gas Salvage acquired a 44.5% working interest (35.6% net
revenue interest) in a gas well for $100,000 in cash and 900,000 shares of its
restricted common stock. At the time it acquired its interest in the gas well,
Gas Salvage also acquired, for $100,000, a 50% interest in a portable unit which
reduces the amount of nitrogen and oxygen from the gas produced by the well.
Gas Salvage's material sources and (uses) of cash during the period from
its inception (June 5, 2007) to December 31, 2007:
Sale of common stock $ 276,000
Purchase of oil and gas property 100,000
Purchase of equipment 100,000
Legal and accounting expenses 15,800
Other 5,000
As of December 31, 2007 Gas Salvage had cash on hand of approximately
$50,000.
Gas Salvage's plan of operation is described in more detail in the
"Business" section of this prospectus.
Gas Salvage does not anticipate that it will need to hire any employees
during the twelve month period following the date of this prospectus.
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Gas Salvage's future plans will be dependent upon the amount of capital
Gas Salvage is able to raise. Gas Salvage may attempt to raise additional
capital through the private sale of its equity securities or borrowings from
third party lenders. Gas Salvage does not have any commitments or arrangements
from any person to provide Gas Salvage with any additional capital. If
additional financing is not available when needed, Gas Salvage may continue to
operate in its present mode or Gas Salvage may need to cease operations. Gas
Salvage does not have any plans, arrangements or agreements to sell its assets
or to merge with another entity.
Gas Salvage plans to generate profits by drilling productive oil or gas
wells. However, Gas Salvage will need to raise the funds required to drill new
wells from third parties willing to pay Gas Salvage's share of drilling and
completing the wells. Gas Salvage may also attempt to raise needed capital
through the private sale of its securities or by borrowing from third parties.
Gas Salvage may not be successful in raising the capital needed to drill oil or
gas wells. In addition, any future wells which may be drilled by Gas Salvage may
not be productive of oil or gas. The inability of Gas Salvage to generate
profits may force Gas Salvage to curtail or cease operations.
Contractual Obligations
- -----------------------
As of December 31, 2007 Gas Salvage did not have any material capital
commitments, other than funding its operating losses. It is anticipated that any
capital commitments that may occur will be financed principally through the sale
of shares of Gas Salvage's common stock or other equity securities. However,
there can be no assurance that additional capital resources and financings will
be available to Gas Salvage on a timely basis, or if available, on acceptable
terms.
BUSINESS
Gas Salvage was incorporated in Nevada on June 5, 2007 and plans to be
involved in the exploration and development of oil and gas.
Gas Salvage plans to evaluate undeveloped oil and gas prospects and
participate in drilling activities on those prospects which in the opinion of
management are favorable for the production of oil or gas. If, through its
review, a geographical area indicates geological and economic potential, Gas
Salvage will attempt to acquire leases or other interests in the area. Gas
Salvage will then attempt to sell portions of its leasehold interests in a
prospect to unrelated third parties, thus sharing risks and rewards of the
exploration and development of the prospect with the joint owners pursuant to an
operating agreement. One or more exploratory wells may be drilled on a prospect,
and if the results indicate the presence of sufficient oil and gas reserves,
additional wells may be drilled on the prospect.
Gas Salvage may also:
o acquire a working interest in one or more prospects from others and
participate with the other working interest owners in drilling, and if
warranted, completing oil or gas wells on a prospect, and
o purchase producing oil or gas properties.
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Gas Salvage's activities will primarily be dependent upon available
financing.
In September 2006 Gas Salvage acquired a 44.5% working interest (35.6% net
revenue interest) in an oil and gas lease covering 40 acres in Lincoln County,
Oklahoma. In November 2007 the gas well drilled on the lease was placed into
production. As of December 31, 2007 the well was producing approximately 30 MCF
of gas per day, net to Gas Salvage's net revenue interest.
At the time it acquired its interest in the oil and gas lease, Gas Salvage
also acquired, for $100,000, a 50% interest in a portable nitrogen rejection
unit. The unit removes excessive nitrogen and oxygen from the gas produced from
the well and allows the gas to be sold to buyers who will not always purchase
gas with a high level of contaminants.
The following table shows, as of December 31, 2007, by state or region,
Gas Salvage's producing wells, Developed Acreage and Undeveloped Acreage,
excluding service (injection and disposal) wells:
State Productive Wells (1) Developed Acreage Undeveloped Acreage (1)
- ----- -------------------- ----------------- -----------------------
Gross Net Gross Net Gross Net
----- --- ----- --- ----- ---
Oklahoma 1 35.6 40 17.8 -- --
(1) "Undeveloped Acreage" includes leasehold interests on which wells have not
been drilled or completed to the point that would permit the production of
commercial quantities of natural gas and oil regardless of whether the
leasehold interest is classified as containing proved undeveloped reserves.
The following table shows, as of December 15, 2007 the status of Gas
Salvage's gross developed and undeveloped acreage.
State Gross Acreage Held by Production Not Held by Production
- ----- ------------- ------------------ ----------------------
Oklahoma 40 40 --
Acres Held By Production remain in force so long as oil or gas is produced
from the well on the particular lease. Leased acres which are not Held By
Production require annual rental payments to maintain the lease until the first
to occur of the following: the expiration of the lease or the time oil or gas is
produced from one or more wells drilled on the lease acreage. At the time oil or
gas is produced from wells drilled on the leased acreage the lease is considered
to be Held By Production.
Gas Salvage does not own any Overriding Royalty Interests.
Title to properties is subject to royalty, overriding royalty, carried,
net profits, working and other similar interests and contractual arrangements
customary in the oil and gas industry, to liens for current taxes not yet due
and to other encumbrances. As is customary in the industry in the case of
undeveloped properties, little investigation of record title is made at the time
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of acquisition (other than a preliminary review of local records). Drilling
title opinions are always prepared before commencement of drilling operations;
however, as is customary in the industry.
Gas Salvage is not obligated to provide a fixed and determined quantity of
oil or gas in the future. During the last three fiscal years, Gas Salvage has
not had, nor does it now have, any long-term supply or similar agreement with
any government or governmental authority.
GOVERNMENT REGULATION
Various state and federal agencies regulate the production and sale of oil
and natural gas. All states in which Gas Salvage plans to operate impose
restrictions on the drilling, production, transportation and sale of oil and
natural gas.
The Federal Energy Regulatory Commission (the "FERC") regulates the
interstate transportation and the sale in interstate commerce for resale of
natural gas. The FERC's jurisdiction over interstate natural gas sales has been
substantially modified by the Natural Gas Policy Act under which the FERC
continued to regulate the maximum selling prices of certain categories of gas
sold in "first sales" in interstate and intrastate commerce.
FERC has pursued policy initiatives that have affected natural gas
marketing. Most notable are (1) the large-scale divestiture of interstate
pipeline-owned gas gathering facilities to affiliated or non-affiliated
companies; (2) further development of rules governing the relationship of the
pipelines with their marketing affiliates; (3) the publication of standards
relating to the use of electronic bulletin boards and electronic data exchange
by the pipelines to make available transportation information on a timely basis
and to enable transactions to occur on a purely electronic basis; (4) further
review of the role of the secondary market for released pipeline capacity and
its relationship to open access service in the primary market; and (5)
development of policy and promulgation of orders pertaining to its authorization
of market-based rates (rather than traditional cost-of-service based rates) for
transportation or transportation-related services upon the pipeline's
demonstration of lack of market control in the relevant service market. Gas
Salvage does not know what effect the FERC's other activities will have on the
access to markets, the fostering of competition and the cost of doing business.
Gas Salvage's sales of oil and natural gas liquids will not be regulated
and will be at market prices. The price received from the sale of these products
will be affected by the cost of transporting the products to market. Much of
that transportation is through interstate common carrier pipelines.
Federal, state, and local agencies have promulgated extensive rules and
regulations applicable to Gas Salvage's oil and natural gas exploration,
production and related operations. Most states require permits for drilling
operations, drilling bonds and the filing of reports concerning operations and
impose other requirements relating to the exploration of oil and natural gas.
Many states also have statutes or regulations addressing conservation matters
including provisions for the unitization or pooling of oil and natural gas
properties, the establishment of maximum rates of production from oil and
natural gas wells and the regulation of spacing, plugging and abandonment of
such wells. The statutes and regulations of some states limit the rate at which
oil and natural gas is produced from Gas Salvage's properties. The federal and
state regulatory burden on the oil and natural gas industry increases Gas
Salvage's cost of doing business and affects its profitability. Because these
11
rules and regulations are amended or reinterpreted frequently, Gas Salvage is
unable to predict the future cost or impact of complying with those laws.
COMPETITION AND MARKETING
Gas Salvage will be faced with strong competition from many other
companies and individuals engaged in the oil and gas business, many are very
large, well established energy companies with substantial capabilities and
established earnings records. Gas Salvage may be at a competitive disadvantage
in acquiring oil and gas prospects since it must compete with these individuals
and companies, many of which have greater financial resources and larger
technical staffs. It is nearly impossible to estimate the number of competitors;
however, it is known that there are a large number of companies and individuals
in the oil and gas business.
Exploration for and production of oil and gas are affected by the
availability of pipe, casing and other tubular goods and certain other oil field
equipment including drilling rigs and tools. Gas Salvage depends upon
independent drilling contractors to furnish rigs, equipment and tools to drill
its wells. Higher prices for oil and gas may result in competition among
operators for drilling equipment, tubular goods and drilling crews which may
affect Gas Salvage's ability expeditiously to drill, complete, recomplete and
work-over its wells. However, Gas Salvage has not experienced and does not
anticipate difficulty in obtaining supplies, materials, drilling rigs, equipment
or tools.
Gas Salvage does not refine or otherwise process crude oil and condensate
production. Substantially all of the crude oil and condensate production from
Gas Salvage's well is sold at posted prices under short-term contracts, which is
customary in the industry.
The market for oil and gas is dependent upon a number of factors beyond
Gas Salvage's control, which at times cannot be accurately predicted. These
factors include the proximity of wells to, and the capacity of, natural gas
pipelines, the extent of competitive domestic production and imports of oil and
gas, the availability of other sources of energy, fluctuations in seasonal
supply and demand, and governmental regulation. In addition, there is always the
possibility that new legislation may be enacted which would impose price
controls or additional excise taxes upon crude oil or natural gas, or both.
Oversupplies of natural gas can be expected to recur from time to time and may
result in the gas producing wells being shut-in. Increased imports of natural
gas, primarily from Canada, have occurred and are expected to continue. Such
imports may adversely affect the market for domestic natural gas.
The market price for crude oil is significantly affected by policies
adopted by the member nations of Organization of Petroleum Exporting Countries
("OPEC"). Members of OPEC establish prices and production quotas among
themselves for petroleum products from time to time with the intent of
controlling the current global supply and consequently price levels. Gas Salvage
is unable to predict the effect, if any, that OPEC or other countries will have
on the amount of, or the prices received for, crude oil and natural gas produced
and sold from Gas Salvage's wells.
Gas prices, which were once effectively determined by government
regulations, are now largely influenced by competition. Competitors in this
market include producers, gas pipelines and their affiliated marketing
12
companies, independent marketers, and providers of alternate energy supplies,
such as residual fuel oil. Changes in government regulations relating to the
production, transportation and marketing of natural gas have also resulted in
significant changes in the historical marketing patterns of the industry.
Generally, these changes have resulted in the abandonment by many pipelines of
long-term contracts for the purchase of natural gas, the development by gas
producers of their own marketing programs to take advantage of new regulations
requiring pipelines to transport gas for regulated fees, and an increasing
tendency to rely on short-term contracts priced at spot market prices.
GENERAL
Gas Salvage has never been a party to any bankruptcy, receivership,
reorganization, readjustment or similar proceedings. Since Gas Salvage is
engaged in the oil and gas business, it does not allocate funds to product
research and development in the conventional sense. Gas Salvage does not have
any patents, trade-marks, or labor contracts. With the exception of Gas
Salvage's oil and gas leases, Gas Salvage does not have any licenses,
franchises, concessions or royalty agreements. Backlog is not material to an
understanding of Gas Salvage's business. Gas Salvage's business is not subject
to renegotiation of profits or termination of contracts or subcontracts at the
election of federal government.
Gas Salvage's offices are located at Suite 153, 333 River Front Ave.,
S.E., Calgary, Alberta, Canada T2G 5R1. The 500 square feet of office space is
occupied under a lease requiring rental payments of $500 per month until July 1,
2008.
As of December 31, 2007 Gas Salvage did not have any full time
employees.
MANAGEMENT
Gas Salvage's officers and directors are listed below. Gas Salvage's
directors are generally elected at the annual shareholders' meeting and hold
office until the next annual shareholders' meeting or until their successors are
elected and qualified. Gas Salvage's executive officers are elected by its board
of directors and serve at its discretion.
Name Age Position
- ---- --- --------
Nolan Weir 34 President, Chief Executive Officer, Secretary and a
Director
The following is a brief description of Mr. Weir's business background:
Nolan Weir. Mr. Weir has been an officer and director of Gas Salvage since
June 2007. Since December 2002 Mr. Weir has been the President of Makin Rain
Irrigation Corp., a Company involved with residential landscaping and irrigation
in the Alberta area.
13
Gas Salvage does not have a compensation committee. Gas Salvage's Directors
serve as its Audit Committee. Gas Salvage does not have a financial expert. Mr.
Weir is not independent as that term is defined Section 121(A) of the Listing
Standards of the American Stock Exchange.
Executive Compensation.
- -----------------------
The following table shows the compensation paid or accrued to Gas
Salvage's officer during the period from Gas Salvage's inception (June 5, 2007)
to October 31, 2007:
All
Other
Annual
Stock Option Compen-
Name and Principal Fiscal Salary Bonus Awards Awards sation
Position Year (1) (2) (3) (4) (5) Total
- ------------------ ------ ------ ----- ------ ------ ------- ---------
Nolan Weir, 2007 -- -- -- -- -- --
President, Chief
Executive Officer
and Secretary
(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) During the periods covered by the table, the value of Gas Salvage's shares
issued as compensation for services to the persons listed in the table.
(4) The value of all stock options granted during the periods covered by the
table.
(5) All other compensation received that Gas Salvage could not properly report
in any other column of the table.
Stock Options. Gas Salvage has not granted any stock options and does not
have any stock option plans in effect as of the date of this prospectus. In the
future, Gas Salvage may grant stock options to its officers, directors,
employees or consultants.
Long-Term Incentive Plans. Gas Salvage does not provide its officers or
employees with pension, stock appreciation rights, long-term incentive or other
plans and has no intention of implementing any of these plans for the
foreseeable future.
Employee Pension, Profit Sharing or other Retirement Plans. Gas Salvage
does not have a defined benefit, pension plan, profit sharing or other
retirement plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. Gas Salvage's directors do not receive any
compensation pursuant to any standard arrangement for their services as
directors.
14
Mr. Weir plans to spend approximately 50% of his time on the business of
Gas Salvage.
Gas Salvage does not have any employment agreements with its officers or
employees. Gas Salvage does not maintain any keyman insurance on the life or in
the event of disability of any of its officers.
Transactions with Related Parties and Recent Sales of Securities
The following lists all shares of Gas Salvage's common stock since its
incorporation:
Consideration
Shareholder Date of Sale Shares Issued Paid for Shares
----------- ------------ ------------- ---------------
Nolan Weir 6-06-07 1,800,000 $18,000
Futures Investment Corp. 9-01-07 900,000 Assignment of interest
in oil and gas prospect
Private Investors 6/07 - 9/07 2,580,000 CDN$0.10 per share
----------
5,280,000
==========
PRINCIPAL SHAREHOLDERS
The following table shows the ownership of Gas Salvage's common stock as
of the date of this prospectus by each shareholder known by Gas Salvage to be
the beneficial owner of more than 5% of Gas Salvage's outstanding shares, each
director and executive officer and all directors and executive officers as a
group. Except as otherwise indicated, each shareholder has sole voting and
investment power with respect to the shares they beneficially own.
Name and Address Number of Shares Percent of Class
- ---------------- ---------------- ----------------
Nolan Weir 1,800,000 34%
Suite 153
333 River Front Ave., S.E.
Calgary, Alberta
Canada T2G 5R1
Futures Investment Corp. 900,000 17%
31 Tusslewood View, N.W.
Calgary, Alberta
Canada T3L 2Y3
All officers and directors 1,800,000 34%
as a group (one person)
15
SELLING SHAREHOLDERS
The persons listed in the following table plan to offer the shares shown
opposite their respective names by means of this prospectus. The owners of the
shares to be sold by means of this prospectus are referred to as the "selling
shareholders". The selling shareholders acquired their shares from Gas Salvage
in private transactions for cash at a price of $0.10 CDN per share and, in the
case of Futures Investment Corp., for an interest in an oil and gas property.
Gas Salvage will not receive any proceeds from the sale of the shares by
the selling shareholders. Gas Salvage will pay all costs of registering the
shares offered by the selling shareholders. These costs, based upon the time
related to preparing this section of the prospectus, are estimated to be $2,000.
The selling shareholders will pay all sales commissions and other costs of the
sale of the shares offered by them.
Shares to Share
Be Sold Ownership
Shares in this After Percentage
Name Owned Offering Offering Ownership
Nolan Weir 1,800,000 50,000 1,750,000 33.1%
Futures Investment Corp. 900,000 50,000 850,000 16.1%
James Rutter 50,000 50,000 -- --
Jeanette Rutter 50,000 50,000 -- --
Charles Chebry 50,000 50,000 -- --
Aaron Cain Professional Corp 50,000 50,000 -- --
Don Campbell 50,000 50,000 -- --
Jay Funk 50,000 50,000 -- --
Glen Hubick 50,000 50,000 -- --
Jean Mark Boucher 50,000 50,000 -- --
Shawn Mccord 20,000 20,000 -- --
Trent Gahan 20,000 20,000 -- --
Don Rasmussen 50,000 50,000 -- --
Will Wagner 98,000 98,000 -- --
Brian Mattis 50,000 50,000 -- --
Lisa Maclellan 50,000 50,000 -- --
Kenn Amman 50,000 50,000 -- --
Terry Ammann 50,000 50,000 -- --
Jed Dreifke 50,000 50,000 -- --
Colleen Dreifke 50,000 50,000 -- --
Warren Killen 40,000 40,000 -- --
Corinne Killeen 40,000 40,000 -- --
Derek Chernicki 20,000 20,000 -- --
Peter Richards 20,000 20,000 -- --
Trimour Capital Group 100,000 100,000 -- --
Robbi Ann Black 30,000 30,000 -- --
Curtis Beswick 50,000 50,000 -- --
Chris MAcClellan 30,000 30,000 -- --
Olga Mcclennan 50,000 50,000 -- --
16
Shares to Share
Be Sold Ownership
Shares in this After Percentage
Name Owned Offering Offering Ownership
Alfred Himmelspeck 50,000 50,000 -- --
Krista Mainprise 50,000 50,000 -- --
Deborah Mainprise 50,000 50,000 -- --
Joesphine Berscheid 50,000 50,000 -- --
Ryan Beamin 50,000 50,000 -- --
Ross Black 35,000 35,000 -- --
Kimberly Black 65,000 65,000 -- --
Grand Lion Investment 100,000 100,000 -- --
Jeff Sands 100,000 100,000 -- --
Maureen Sands 100,000 100,000 -- --
Shelley Rainforth 20,000 20,000 -- --
Kerry Wilde 10,000 10,000 -- --
Ken Prusky 20,000 20,000 -- --
Troy Prusky 20,000 20,000 -- --
Daryl Ries 10,000 10,000 -- --
James MacLellan 40,000 40,000 -- --
Randy Steinley 50,000 50,000 -- --
Berscheid Ventures Inc 50,000 50,000 -- --
Don Homer 20,000 20,000 -- --
Rob Turner 50,000 50,000 -- --
1098701 Alberta Ltd 50,000 50,000 -- --
Jamie McNaughton 50,000 50,000 -- --
Sandra Dosdall 50,000 50,000 -- --
John Laqourgue 20,000 20,000 -- --
Reynoudt Jalink 10,000 10,000 -- --
Mary Wagner 10,000 10,000 -- --
Chris Jones 20,000 20,000 -- --
James Bijl 12,000 12,000 -- --
Rudolf Wagner 10,000 10,000 -- --
Gary Soost 30,000 30,000 -- --
Craig Beamin 10,000 10,000 -- --
Charlotte Soost 50,000 50,000 -- --
William Lawson 30,000 30,000 -- --
Betty Ann Horbay 20,000 20,000 -- --
Except as noted above, no selling shareholder has, or had, any material
relationship with Gas Salvage, or Gas Salvage's officers or directors. To Gas
Salvage's knowledge, no selling shareholder is affiliated with a broker dealer.
Manner of Sale.
The shares of common stock owned by the selling shareholders may be offered
and sold by means of this prospectus from time to time as market conditions
17
permit. Since as of the date of this prospectus no market exists for Gas
Salvage's common stock, sales by the selling shareholders, until Gas Salvage's
common stock becomes quoted on the OTC Bulletin Board or listed on a securities
exchange, will be made at a price of $.20 per share. If and when Gas Salvage's
common stock becomes quoted on the OTC Bulletin Board or listed on a securities
exchange, the shares owned by the selling shareholders may be sold in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then-current market price, or in negotiated transactions.
These shares may be sold by one or more of the following methods, without
limitation:
o a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o face-to-face transactions between sellers and purchasers without a
broker/dealer.
In competing sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither Gas Salvage nor the selling
stockholders can presently estimate the amount of such compensation.
Notwithstanding the above, no NASD member will charge commissions that exceed 8%
of the total proceeds from the sale.
The selling shareholders and any broker/dealers who act in connection with
the sale of the shares may be deemed to be "underwriters" within the meaning of
ss.2(11) of the Securities Acts of 1933, and any commissions received by them
and any profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
If any selling shareholder enters into an agreement to sell his or her
shares to a broker-dealer as principal, and the broker-dealer is acting as an
underwriter, Gas Salvage will file a post-effective amendment to the
registration statement, of which this prospectus is a part, identifying the
broker-dealer, providing required information concerning the plan of
distribution, and otherwise revising the disclosures in this prospectus as
needed. Gas Salvage will also file the agreement between the selling shareholder
and the broker-dealer as an exhibit to the post-effective amendment to the
registration statement.
The selling stockholders may also sell their shares pursuant to Rule 144
under the Securities Act of 1933.
18
Gas Salvage has advised the selling shareholders that they and any
securities broker/dealers or others who may be deemed to be statutory
underwriters will be subject to the prospectus delivery requirements under the
Securities Act of 1933. Gas Salvage has also advised each selling shareholder
that in the event of a "distribution" of the shares owned by the selling
shareholder, such selling shareholder, any "affiliated purchasers", and any
broker/dealer or other person who participates in the distribution may be
subject to Rule 102 of Regulation M under the Securities Exchange Act of 1934
("1934 Act") until their participation in that distribution is completed. Rule
102 makes it unlawful for any person who is participating in a distribution to
bid for or purchase stock of the same class as is the subject of the
distribution. A "distribution" is defined in Rule 102 as an offering of
securities "that is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling efforts and
selling methods". Gas Salvage has also advised the selling shareholders that
Rule 101 of Regulation M under the 1934 Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of the common stock in connection with this offering.
DESCRIPTION OF SECURITIES
Common Stock
Gas Salvage is authorized to issue 50,000,000 shares of common stock. As
of the date of this prospectus Gas Salvage had 5,280,000 outstanding shares of
common stock. Holders of common stock are each entitled to cast one vote for
each share held of record on all matters presented to shareholders. Cumulative
voting is not allowed; hence, the holders of a majority of the outstanding
common stock can elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available for dividends
and, in the event of liquidation, to share pro rata in any distribution of Gas
Salvage's assets after payment of liabilities. The Board of Directors is not
obligated to declare a dividend and it is not anticipated that dividends will
ever be paid.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by Gas Salvage. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock. All of the
outstanding shares of common stock are fully paid and non-assessable and all of
the shares of common stock offered by this prospectus will be, upon issuance,
fully paid and non-assessable.
Preferred Stock
Gas Salvage is authorized to issue 5,000,000 shares of preferred stock.
Shares of preferred stock may be issued from time to time in one or more series
as may be determined by Gas Salvage's Board of Directors. The voting powers and
preferences, the relative rights of each such series and the qualifications,
limitations and restrictions of each series will be established by the Board of
Directors. Gas Salvage's directors may issue preferred stock with multiple votes
per share and dividend rights which would have priority over any dividends paid
with respect to the holders of Gas Salvage's common stock. The issuance of
preferred stock with these rights may make the removal of management difficult
19
even if the removal would be considered beneficial to shareholders generally,
and will have the effect of limiting shareholder participation in transactions
such as mergers or tender offers if these transactions are not favored by Gas
Salvage's management. As of the date of this prospectus Gas Salvage had not
issued any shares of preferred stock.
Transfer Agent
As of the date of this prospectus Gas Salvage had not appointed a transfer
agent for its common stock.
LEGAL PROCEEDINGS
Gas Salvage is not involved in any legal proceedings and Gas Salvage does
not know of any legal proceedings which are threatened or contemplated.
INDEMNIFICATION
The Nevada Revised Statutes authorize indemnification of a director,
officer, employee or agent of Gas Salvage against expenses incurred in
connection with any action, suit, or proceeding to which he is named a party by
reason of his having acted or served in such capacity, except for liabilities
arising from his own misconduct or negligence in performance of his duty. In
addition, even a director, officer, employee, or agent of Gas Salvage who was
found liable for misconduct or negligence in the performance of his duty may
obtain such indemnification if, in view of all the circumstances in the case, a
court of competent jurisdiction determines such person is fairly and reasonably
entitled to indemnification. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers, or
persons controlling Gas Salvage pursuant to the foregoing provisions, Gas
Salvage has been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
AVAILABLE INFORMATION
Gas Salvage has filed with the Securities and Exchange Commission a
Registration Statement on Form SB-2 (together with all amendments and exhibits)
under the Securities Act of 1933, as amended, with respect to the Securities
offered by this prospectus. This prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Securities and
Exchange Commission. For further information, reference is made to the
Registration Statement which may be read and copied at the Commission's Public
Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The registration statement is also available at
www.sec.gov, the website of the Securities and Exchange Commission.
20
GLOSSARY
BBL. One stock tank barrel, or 42 U.S. gallons liquid volume, usually used
herein in reference to crude oil or other liquid hydrocarbons.
BOE. Equivalent barrels of oil, using the ratio of six MCF of natural gas
to one Bbl of crude oil, condensate or natural gas liquids.
BTU. A British thermal unit which is the amount of heat required to raise
the temperature of one avoirdupois pound of pure water form 58.5 degrees to 59.5
degrees Fahrenheit under standard conditions.
CDN$. Canadian Dollars.
DEVELOPED ACREAGE. The number of acres which are allocated or assignable
to producing wells or wells capable of production.
DEVELOPMENT WELL. A well drilled as an additional well to the same
reservoir as other producing wells on a Lease, or drilled on an offset Lease not
more than one location away from a well producing from the same reservoir.
EXPLORATORY WELL. A well drilled in search of a new undiscovered pool of
oil or gas, or to extend the known limits of a field under development.
GROSS ACRES OR WELLS. A well or acre in which a working interest is owned.
The number of gross wells is the total number of wells in which a working
interest is owned.
LEASE. Full or partial interests in an oil and gas lease, authorizing the
owner thereof to drill for, reduce to possession and produce oil and gas upon
payment of rentals, bonuses and/or royalties. Oil and gas leases are generally
acquired from private landowners and federal and state governments. The term of
an oil and gas lease typically ranges from three to ten years and requires
annual lease rental payments of $1.00 to $2.00 per acre. If a producing oil or
gas well is drilled on the lease prior to the expiration of the lease, the lease
will generally remain in effect until the oil or gas production from the well
ends. The Company is required to pay the owner of the leased property a royalty
which is usually between 12.5% and 16.6% of the gross amount received from the
sale of the oil or gas produced from the well.
MCF. One thousand cubic feet.
NET ACRES OR WELLS. A net well or acre is deemed to exist when the sum of
fractional ownership working interests in gross wells or acres equals one. The
number of net wells or acres is the sum of the fractional working interests
owned in gross wells or acres expressed as whole numbers and fractions.
OPERATING COSTS. The expenses of producing oil or gas from a formation,
consisting of the costs incurred to operate and maintain wells and related
equipment and facilities, including labor costs, repair and maintenance,
supplies, insurance, production, severance and other production excise taxes.
21
PRODUCING PROPERTY. A property (or interest therein) producing oil or gas
in commercial quantities or that is shut-in but capable of producing oil or gas
in commercial quantities, to which Producing Reserves have been assigned.
Interests in a property may include Working Interests, production payments,
Royalty Interests and other non-working interests.
PRODUCING RESERVES. Proved Developed Reserves expected to be produced from
existing completion intervals open for production in existing wells.
PROSPECT. An area in which a party owns or intends to acquire one or more
oil and gas interests, which is geographically defined on the basis of
geological data and which is reasonably anticipated to contain at least one
reservoir of oil, gas or other hydrocarbons.
PROVED DEVELOPED RESERVES. Proved developed oil and gas reserves are
reserves that can be expected to be recovered through existing wells with
existing equipment and operating methods. Additional oil and gas expected to be
obtained through the application of fluid injection or other improved recovery
techniques for supplementing the natural forces and mechanisms of primary
recovery may be included as "proved developed reserves" only after testing by a
pilot project or after the operation of an installed program has confirmed
through production response that increased recovery will be achieved.
PROVED RESERVES. Proved oil and gas reserves are the estimated quantities
of crude oil, natural gas, and natural gas liquids which geological and
engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating
conditions, i.e., prices and costs as of the date the estimate is made. Prices
include consideration of changes in existing prices provided only by contractual
arrangements, but not on escalations based upon future conditions.
(i) Reservoirs are considered proved if economic producibility is
supported by either actual production or conclusive formation testing. The area
of a reservoir considered proved includes (a) that portion delineated by
drilling and defined by gas-oil and/or oil-water contacts, if any; and (b) the
immediately adjoining portions not yet drilled, but which can be reasonably
judged as economically productive on the basis of available geological and
engineering data. In the absence of information on fluid contacts, the lowest
known structural occurrence of hydrocarbons controls the lower proved limit of
the reservoir.
(ii) Reserves which can be produced economically through application of
improved recovery techniques (such as fluid injection) are included in the
"proved" classification when successful testing by a pilot project, or the
operation of an installed program in the reservoir, provides support for the
engineering analysis on which the project or program was based.
(iii) Estimates of proved reserves do not include the following: (a) oil
that may become available from known reservoirs but is classified separately as
"indicated additional reserves", (b) crude oil, natural gas, and natural gas
liquids, the recovery of which is subject to reasonable doubt because of
uncertainty as to geology, reservoir characteristics, or economic factors; (c)
crude oil, natural gas, and natural gas liquids, that may occur in undrilled
prospects; and (d) crude oil, natural gas, and natural gas liquids, that may be
recovered from oil shales, coal, gilsonite and other such sources.
22
PROVED UNDEVELOPED RESERVES. Proved undeveloped oil and gas reserves
are reserves that are expected to be recovered from new wells on undrilled
acreage, or from existing wells where a relatively major expenditure is required
for recompletion. Reserves on undrilled acreage are limited to those drilling
units offsetting productive units that are reasonably certain of production when
drilled. Proved reserves for other undrilled units can be claimed only where it
can be demonstrated with certainty that there is continuity of production from
the existing productive formation. Proved undeveloped reserves are not
attributable to any acreage for which an application of fluid injection or other
improved recovery technique is contemplated, unless such techniques have been
proved effective by actual tests in the area and in the same reservoir.
ROYALTY INTEREST. An interest in an oil and gas property entitling the
owner to a share of oil and gas production free of Operating Costs.
UNDEVELOPED ACREAGE. Lease acres on which wells have not been drilled
or completed to a point that would permit the production of commercial
quantities of oil and gas regardless of whether or not such acreage contains
proved reserves. Undeveloped acreage should not be confused with undrilled
acreage which is "Held by Production" under the terms of a lease.
WORKING INTEREST. The operating interest under a Lease which gives the
owner the right to drill, produce and conduct operating activities on the
property and a share of production, subject to all Royalty Interests and other
burdens and to all costs of exploration, development and operations and all
risks in connection therewith.
23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: The Board of Directors and Shareholders
Gas Salvage Corporation
333 Riverfront Avenue S.E., Suite 153
Calgary, Alberta
CANADA
I have audited the accompanying balance sheet of Gas Salvage Corporation as of
October 31, 2007 and the related statements of operations and cash flows for the
period then ended. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit 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 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. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Gas Salvage Corporation as of
October 31, 2007, and the results of its operations and its cash flows for the
period then ended, in conformity with United States generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered a loss of $13,363 since inception
June 5, 2007 and has not yet commenced operations. This raises substantive doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
The Company has determined that it is not required to have, nor was I engaged to
perform, an audit of the effectiveness of its documented internal controls over
financial reporting.
John Kinross-Kennedy
Certified Public Accountant
Irvine, California
December 19, 2007
Gas Salvage Auditor Opinion 12-18-07
GAS SALVAGE CORPORATION
(A Development Stage Company)
BALANCE SHEET
October 31, 2007
ASSETS
Current Assets
Cash at bank $ 36,169
Subscriptions Receivable 18,000
--------------
Total Current Assets 54,169
--------------
Property and Equipment
Equipment 100,000
-------------
Other Assets
Oil & Gas Leasehold Interest 190,000
------------
TOTAL ASSETS $ 344,169
==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current Liabilities
Accounts Payable 1,231
----------------
TOTAL LIABILITIES 1,231
----------------
Shareholders' Equity (Deficit)
Common Stock, par value $0.001,
authorized 50,000,000 shares; issued
and outstanding 5,280,000 shares 5,280
Additional Paid-In Capital 351,021
Deficit accumulated during the development stage (13,363)
--------------
TOTAL SHAREHOLDERS' EQUITY 342,938
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 344,169
============
The accompanying Notes are an integral part of these financial statements
F-1
GAS SALVAGE CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Period of Inception
from June 5, 2007, through
October 31, 2007
Revenue $ -
--------------------
Cost of Sales -
---------------------
Operating Income -
---------------------
General and Administrative Expenses:
Professional Fees 11,500
Repairs & Maintenance 1,231
Other General and Administrative Expenses 632
--------------------
Total General and Administrative
Expenses 13,363
------------------
Net Loss $ (13,363)
=================
Loss Per Common Share:
Basic and Diluted $ (0.005)
==================
Weighted Average Shares Outstanding,
Basic and Diluted: 2,551,216
=================
The accompanying Notes are an integral part of these financial statements
F-2
GAS SALVAGE CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period of Inception
from June 5, 2007, through
October 31, 2007
Cash flows from operating activities:
Net (Loss) $ (13,363)
Adjustments to reconcile net loss to
net cash used by operating activities:
Non-cash depreciation
Change in operating assets and liabilities:
Increase (Decrease) in Accounts Payable 1,231
-----------------
Net cash (used by) operating activities (12,132)
-----------------
Cash flows from investing activities
Acquisition of equipment (100,000)
Acquistion of oil & gas working interest (190,000)
--------------
Net cash (used by) investing activities (290,000)
--------------
Cash flows from financing activities:
(Increase) in Subscriptions Receivable (18,000)
Non cash issue of stock for assets 90,000
Common stock issued for cash 266,301
--------------
Net cash (used) provided by financing activitiies 338,301
--------------
Net increase (decrease) in cash 36,169
Cash, beginning of the period --
-------------
Cash, end of the period $ 36,169
=============
Supplemental cash flow disclosure:
Interest paid $ --
=============
Taxes paid $ --
=============
The accompanying Notes are an integral part of these financial statements
F-3
GAS SALVAGE CORPORATION
(A Development Stage Company)
STATEMENT OF SHARHEOLDERS' EQUITY
(Unaudited)
Deficit
Accumulated Total
Common Stock Additional during the Shareholders'
Number of Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
----------- ------ -------------- ----------- -------------
Inception, June 5, 2007 - $ - $ - $ - $ -
Common stock issued for 1,800,000 1,800 16,200 18,000
cash at $0.01 per share
June 6, 2007
Common stock issued for 2,580,000 2,580 245,721 248,301
cash at $0.096 per share
September 5, 2007
Common stock issued for oil 900,000 900 89,100 90,000
and gas working interest at
$0.10 per share September 5,
2007
Net loss for the period ended (13,363) (13,363)
----------- -------- --------- --------- ---------
Oct. 31, 2007
Balances, October 31, 2007 5,280,000 $ 5,280 $ 351,021 $(13,363) $342,938
========== ========= ========= ======== ========
F-4
GAS SALVAGE, INC.
(A Developmental Stage Company)
Notes to Financial Statements
October 31, 2007
1. Organization
Gas Salvage Inc. (the "Company") was incorporated under the laws of the
State of Nevada June 5, 2007. The Company was organized for the purpose of
engaging in any activity or business not in conflict with the laws of the
State of Nevada or of the United States of America. The company became
engaged in the oil and gas industry.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Company have been prepared using the accrual
basis of accounting in accordance with generally accepted accounting
principles in the United States. Because a precise determination of many
assets and liabilities is dependent upon future events, the preparation of
financial statements for a period necessarily involves the use of estimates
which have been made using careful judgment.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements, and reported amounts of revenue and expenses during the
reporting period. Actual results could differ materially from those
estimates. Significant estimates made by management are, among others,
realizability of long-lived assets, deferred taxes and stock option
valuation.
The financial statements have, in management's opinion, been properly
prepared within the reasonable limits of materiality and within the
framework of the significant accounting.
Income Taxes
The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which
requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax assets
and liabilities are determined based on the difference between the tax basis
of assets and liabilities and their financial reporting amounts based on
enacted tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce
F-5
2. Summary of Significant Accounting Policies (Continued)
Income Taxes (cont'd)
deferred tax assets to the amount expected to be realized. The Company
generated a deferred tax credit through net operating loss carryforward.
However, a valuation allowance of 100% has been established, as the
realization of the deferred tax credits is not reasonably certain, based on
going concern considerations outlined as follows.
Going Concern
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. The ability of the
Company to continue as a going concern is dependent on the Company obtaining
adequate capital to fund operating losses until it becomes profitable. If
the Company is unable to obtain adequate capital, it could be forced to
cease development of operations.
The ability of the Company to continue as a going concern is dependent upon
its ability to successfully accomplish its plans to generate revenue form
well head machinery and oil and gas leases. The accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amount and classifications
or liabilities or other adjustments that might be necessary should the
Company be unable to continue as a going concern.
Development-Stage Company
The Company is considered a development-stage company, with limited
operating revenues during the periods presented, as defined by Statement of
Financial Accounting Standards ("SFAS") No. 7. SFAS. No. 7 requires
companies to report their operations, shareholders deficit and cash flows
since inception through the date that revenues are generated from
management's intended operations, among other things. Management has defined
inception as June 5, 2007. Since inception, the Company has incurred an
operating loss of $13,363. The Company's working capital has been generated
through the sales of common stock. Management has provided financial data
since June 5, 2007, "Inception", in the financial statements, as a means to
provide readers of the Company's financial information to make informed
investment decisions.
Basic and Diluted Net Loss Per Share
Net loss per share is calculated in accordance with SFAS 128, Earnings Per
Share for the period presented. Basic net loss per share is based upon the
weighted average number of common shares outstanding. Diluted net loss per
share is based on the assumption that all dilative convertible shares and
F-6
2. Summary of Significant Accounting Policies (Continued)
Basic and Diluted Net Loss Per Share (cont'd)
------------------------------------
stock options were converted or exercised. Dilution iscomputed by applying
the treasury stock method. Under this method, options and warrants are
assumed exercised at the beginning of the period (or at the time of
issuance, if later), and as if funds obtained thereby we used to purchase
common stock at the average market price during the period.
The Company has no potentially dilutive securities outstanding as of August
31, 2007.
The following is a reconciliation of the numerator and denominator of the
basic and diluted earnings per share computations for the period since
Inception, June 5, 2007 ending October 31, 2007
Numerator:
Basic and diluted net loss per share:
Net Loss $ (13,363)
Denominator
Basic and diluted weighted average
number of shares outstanding 2,551,216
Basic and Diluted Net Loss Per Share $ (0.005)
-------------------------------------
3. Property and Equipment
Equipment $ 100,000
The Company purchased a 50% interest in a skid mounted Nitrogen
Rejection unit. The unit strips out excessive nitrogen and oxygen from
a gas well to an acceptable level of contaminants in the gas stream.
The unit is intended for use on the Company's gas wells.
4. Oil & Gas Leasehold Interest
The Company purchased a 44.5% leasehold interest in a producing gas
well on 40 acres in Lincoln County, Oklahoma, known as Holmes #1. The
well was shut-in awaiting repairs to the Nitrogen Rejection Unit. The
well was subsequently put into production in November, 2007. Volumetric
calculations of the Holmes Lease reservoir have not yet been performed.
F-7
4. Oil & Gas Leasehold Interest (Continued)
Property Acquisition Costs: Unproved
Homes Lease $190,000
5. Capital Structure
During the period from inception through August 31, 2007, the Company
entered into the following equity transactions:
June 6, 2007: Sold 1,800,000 shares of common stock at $.01 per share
realizing $18,000.
September 5, 2007: Sold 2,580,000 shares of common stock at $.096 per share
realizing $248,301.
September 5, 2007: Issued 900,000 shares of common stock at $.10 per share
in payment of $90,000 toward 44.5% working interest in an
oil and gas lease.
As at October 31, 2007, the Company was authorized to issue 50,000,000
shares of $0.001 par common stock, of which 5,280,000 shares were issued and
outstanding.
The Company was also authorized to issue 5,000,000 shares of preferred
stock, of which nil shares were issued and outstanding.
6. Legal Proceedings
There are no significant legal proceedings against the Company with respect
to matters arising in the ordinary course of business.
7. Subsequent Event
The gas well, Holmes No. 1, in which the Company holds an interest, was put
into production in November 2007 with the use of the Nitrogen Rejection unit
under the control of the Operator, Southside Oil and Gas, Inc.
F-8
TABLE OF CONTENTS Page
PROSPECTUS SUMMARY ..................................................
RISK FACTORS ........................................................
DILUTION AND COMPARATIVE SHARE DATA..................................
MARKET FOR GAS SALVAGE'S COMMON STOCK ...............................
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION ..........................................
BUSINESS.............................................................
MANAGEMENT ..........................................................
PRINCIPAL SHAREHOLDERS...............................................
SELLING SHAREHOLDERS.................................................
DESCRIPTION OF SECURITIES............................................
LEGAL PROCEEDINGS....................................................
INDEMNIFICATION .....................................................
AVAILABLE INFORMATION................................................
GLOSSARY ............................................................
FINANCIAL STATEMENTS.................................................
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by Gas Salvage. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any of the securities
offered in any jurisdiction to any person to whom it is unlawful to make an
offer by means of this prospectus.
Until _______, 2008 all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II
Information Not Required in Prospectus
Item 24. Indemnification of Officers and Directors The Nevada Revised Statutes
provide that the Company may indemnify any and all of its officers, directors,
employees or agents or former officers, directors, employees or agents, against
expenses actually and necessarily incurred by them, in connection with the
defense of any legal proceeding or threatened legal proceeding, except as to
matters in which such persons shall be determined to not have acted in good
faith and in the Company's best interest.
Item 25. Other Expenses of Issuance and Distribution.
The following table show the costs and expenses payable by the Company in
connection with this registration statement.
SEC Filing Fee $ 21
Blue Sky Fees and Expenses 500
Printing Expenses 500
Legal Fees and Expenses 30,000
Accounting Fees and Expenses 800
Miscellaneous Expenses 3,179
---------
TOTAL $35,000
=========
All expenses other than the SEC filing fee are estimated.
Item 26. Recent Sales of Unregistered Securities.
The following lists all shares issued by the Company since its inception.
Name Date Shares Consideration (1)
- ---- ---- ------ -----------------
Nolan Weir 6-6-07 1,800,000 $18,000
Futures Investment Corp. 9-5-07 900,000 Interest in oil and
gas property
James Rutter 9-5-07 50000 $5,000
Jeanette Rutter 9-5-07 50000 $5,000
Charles Chebry 9-5-07 50000 $5,000
Aaron Cain Professional Corp 9-5-07 50000 $5,000
Don Campbell 9-5-07 50000 $5,000
Jay Funk 9-5-07 50000 $5,000
Glen Hubick 9-5-07 50000 $5,000.
Jean Mark Boucher 9-5-07 50000 $5,000
Shawn Mccord 9-5-07 20000 $2,000
Trent Gahan 9-5-07 20000 $2,000
Don Rasmussen 9-5-07 50000 $5,000
Will Wagner 9-5-07 98000 $9,800
Brian Mattis 9-5-07 50000 $5,000
1
Name Date Shares Consideration (1)
- ---- ---- ------ -----------------
Lisa Maclellan 9-5-07 50000 $5,000
Kenn Amman 9-5-07 50000 $5,000
Terry Ammann 9-5-07 50000 $5,000
Jed Dreifke 9-5-07 50000 $5,000
Colleen Dreifke 9-5-07 50000 $5,000
Warren Killen 9-5-07 40000 $4,000
Corinne Killeen 9-5-07 40000 $4,000
Derek Chernicki 9-5-07 20000 $2,000
Peter Richards 9-5-07 20000 $2,000
Trimour Capital Group 9-5-07 100000 $10,000
Robbi Ann Black 9-5-07 30000 $3,000
Curtis Beswick 9-5-07 50000 $5,000
Chris MAcClellan 9-5-07 30000 $3,000
Olga Mcclennan 9-5-07 50000 $5,000
Alfred Himmelspeck 9-5-07 50000 $5,000
Krista Mainprise 9-5-07 50000 $5,000
Deborah Mainprise 9-5-07 50000 $5,000
Joesphine Berscheid 9-5-07 50000 $5,000
Ryan Beamin 9-5-07 50000 $5,000
Ross Black 9-5-07 35000 $3,500
Kimberly Black 9-5-07 65000 $6,500
Grand Lion Investment 9-5-07 100000 $10,000
Jeff Sands 9-5-07 100000 $10,000
Maureen Sands 9-5-07 100000 $10,000
Shelley Rainforth 9-5-07 20000 $2,000
Kerry Wilde 9-5-07 10000 $1,000
Ken Prusky 9-5-07 20000 $2,000
Troy Prusky 9-5-07 20000 $2,000
Daryl Ries 9-5-07 10000 $1,000
James MacLellan 9-5-07 40000 $4,000
Randy Steinley 9-5-07 50000 $5,000
Berscheid Ventures Inc 9-5-07 50000 $5,000
Don Homer 9-5-07 20000 $2,000
Rob Turner 9-5-07 50000 $5,000
1098701 Alberta Ltd 9-5-07 50000 $5,000
Jamie McNaughton 9-5-07 50000 $5,000
Sandra Dosdall 9-5-07 50000 $5,000
John Laqourgue 9-5-07 20000 $2,000
Reynoudt Jalink 9-5-07 10000 $1,000
Mary Wagner 9-5-07 10000 $1,000
Chris Jones 9-5-07 20000 $2,000
James Bijl 9-5-07 12000 $1,200
Rudolf Wagner 9-5-07 10000 $1,000
Gary Soost 9-5-07 30000 $3,000
Craig Beamin 9-5-07 10000 $1,000
Charlotte Soost 9-5-07 50000 $5,000
2
Name Date Shares Consideration (1)
- ---- ---- ------ -----------------
William Lawson 9-5-07 30000 $3,000
Betty Ann Horbay 9-5-07 20000 $2,000
(1) The consideration received from Nolan Weir is expressed in U.S. $. The
amounts received from all other shareholders is expressed in Canadian $.
The shares listed above were all issued to non-U.S. persons who reside
outside of the United States. The negotiations and agreements relating to
the issuance of these shares were made by the Company's officers (who were
non-U.S. persons) from Canada. The shares are restricted from resale in the
public markets for a period of one year from the date of their issuance.
There is no market for the Company's securities in the United States and
none of the securities have been transferred since their issuance. The
Company relied upon the exemption provided by Rule 901 of the Securities and
Exchange Commission with respect to the sale of these shares.
Item 27. Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit
Number Exhibit Name
3.1 Articles of Incorporation, as amended
3.2 Bylaws
5 Opinion of Counsel
10.1 Agreement pertaining to acquisition of interest in oil and gas lease
in Oklahoma.
23.1 Consent of Attorneys
23.2 Consent of Accountants
Item 28. Undertakings
(a) The small business issuer will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to.
(i) Include any Prospectus required by Section l0 (a)(3) of the
Securities Act:
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of
3
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(4) For determining liability of the undersigned small business issuer
under the Securities Act to any purchaser in the initial distribution of the
securities, the undersigned small business issuer undertakes that in a primary
offering of securities of the undersigned small business issuer pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned small
business issuer will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned
small business issuer relating to the offering required to be filed pursuant to
Rule 424;
(ii) Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned small business issuer or used or referred to
by the undersigned small business issuer;
(iii) The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned small
business issuer or its securities provided by or on behalf of the undersigned
small business issuer; and
(iv) Any other communication that is an offer in the offering made
by the undersigned small business issuer to the purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of l933 (the "Act") may be permitted to directors, officers and controlling
persons of the Small Business Issuer pursuant to the foregoing provisions or
otherwise, the Small Business Issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Small Business Issuer of expenses incurred or paid by a director, officer or
controlling person of the Small Business Issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
4
person in connection with the securities being registered, the Small Business
Issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(c) That, for the purpose of determining liability under the Securities
Act to any purchaser:
(1) If the small business issuer is relying on Rule 430B:
(i) Each prospectus filed by the undersigned small business issuer
pursuant to Rule 424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and included in
the registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or
(x) for the purpose of providing the information required by section 10(a) of
the Securities Act shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date; or
(2) If the small business issuer is subject to Rule 430C, include the
following:
Each prospectus filed pursuant to Rue 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
5
SIGNATURES
In accordance with the requirements of the Securities Act of l933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in Calgary, Alberta,
Canada on the 31st day of December 2007.
GAS SALVAGE CORP.
By: /s/ Nolan Weir
------------------------------------------
Nolan Weir, President, Principal Financial
Officer and Principal Accounting Officer
In accordance with the requirements of the Securities Act of l933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Nolan Weir Director December 31, 2007
- -------------------------
Nolan Weir
EXHIBITS
GAS SALVAGE CORP.
REGISTRATION STATEMENT ON FORM SB-2