As filed with the Securities and Exchange Commission on July 29, 2008
Registration No.333-151398
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
Amendment No. 1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BEDROCK ENERGY, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 1381 02-0511381
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(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
8950 Scenic Pine Drive, Suite 100, Parker, Colorado 80134/ Phone (303) 794-4398
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(Address and telephone number of principal executive offices)
W. Edward Nichols, President
8950 Scenic Pine Drive, Suite 100, Parker, Colorado 80134/ Phone (303) 794-4398
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(Name, address and telephone number of agent for service)
COPIES OF ALL COMMUNICATIONS TO:
Michael A. Littman, Attorney at Law
7609 Ralston Road, Arvada, CO, 80002 phone 303-422-8127 / fax 303-431-1567
Approximate date of commencement of proposed sale to the public: As soon as
possible after this Registration Statement becomes effective.
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, 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 this Form is a post effective amendment filed pursuant to Rule 462(d) 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. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer [___] Accelerated filer [___]
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Non-accelerated filer [___] Smaller reporting company [_X_]
(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING REGISTRATION
PRICE(1) FEE
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Common Stock by Selling 2,490,816 $0.50 $1,245,408 $48.94 (2)
Shareholders
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Common shares for Sale 500,000 $0.50 $250,000 $9.83 (2)
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(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act.
(2) Amount previously paid with Form S-1 filing, June 3, 2008.
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 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
ii
(SUBJECT TO COMPLETION)
PROSPECTUS
BEDROCK ENERGY, INC.
2,490,816 SHARES OF COMMON STOCK OF SELLING SHAREHOLDERS
500,000 SHARES TO THE PUBLIC
We are registering 2,490,816 shares listed for sale on behalf of selling
shareholders and 500,000 shares for sale on behalf of our Company. We intend to
offer the 500,000 shares at $0.50 per share on behalf of our Company to the
public for up to 60 days after the effectiveness of the Registration Statement,
thereafter deregistering any shares of such 500,000 shares remaining unsold to
the public by a post-effective amendment to the Registration Statement, prior to
the commencement of the secondary offering on behalf of the selling
shareholders. There is no minimum amount of shares that must be sold in the
offering. Accordingly, all funds received in the offering with regards to the
500,000 shares being offering will be retained by our Company regardless of the
amount of shares sold. There are no arrangements to place any funds received in
escrow and our Company WILL NOT return funds received at the end of the
expiration of the offering period. The Company WILL NOT sell the shares through
a third party and therefore does not anticipate paying any fees or commissions
in connection with the offering. The Company expects to receive a maximum of
$250,000, if all of the shares are sold.
After our offering of 500,000 shares to the public, our selling shareholders
plan to sell common shares at $0.50, until such time as a market develops for
any of the securities and thereafter at such prices as the market may dictate
from time to time. There is no market price for the stock and our pricing is
arbitrary with no relation to market value, liquidation value, earnings or
dividends. The price was arbitrarily set at $0.50 per share, based on
speculative concept unsupported by any other comparables. We have set the
initial fixed price as follows:
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TITLE PER SECURITY
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Common Stock $0.50
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At any time after a market develops, our security holders may sell their
securities at market prices or at any price in privately negotiated
transactions.
There is no assurance that the Company will be able to sell any or all of the
shares offered. If the Company is unable to sell all of the shares it could
affect its plan of operations.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK; SEE "RISK FACTORS" BEGINNING ON
PAGE 7 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF THE
COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") OR ANY STATE OR PROVINCIAL SECURITIES
COMMISSION, NOR HAS THE SEC OR ANY STATE OR PROVINCIAL SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
We intend to have an application filed on our behalf by a market maker for
approval of common stock for quotation on the Over-the Counter/Bulletin Board
quotation system tradable separately, subject to effectiveness of the
Registration Statement. It has not yet been filed, nor is there any selected
broker/dealer as yet. Our common stock is presently not listed on any national
securities exchange or the NASDAQ Stock Market or any other venue.
1
We are conducting this offering as a "self-underwriting" through our officers
and directors, and therefore, we will pay no underwriting fees or commissions
1. We are not using an underwriter for this offering of shares.
2. We have no arrangement to place the proceeds from this offering in
an escrow, trust or similar account. Any funds raised from sales of
shares to the public pursuant to this offering will be immediately
available to us for our use and retained by us regardless of whether or
not there are any additional sales under this offering. Only funds
raised from sales in the primary offering will be available for Company
use.
This offering will be on a delayed and continuous basis only for sales of
selling shareholders shares. Shares offered by us to the public of up to 500,000
shares at a price of $0.50 per share will only be offered for a period of up to
60 days after effectiveness of the Registration Statement, with any unsold
shares from such 500,000 shares offered, being deregistered thereafter by a
post-effective amendment to the Registration Statement, prior to the
commencement of the secondary offering on behalf of the selling shareholders.
The selling shareholders are not paying any of the offering expenses and we will
not receive any of the proceeds from the sale of the shares by the selling
shareholders (See "Description of Securities - Shares"). We will receive
proceeds at $0.50 per share from sale of up to 500,000 shares to be offered by
the Company for the first 60 days after the effectiveness of the Registration
Statement.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the date that the registration statement
relating to these securities, which has been filed with the Securities and
Exchange Commission, becomes effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
The date of this Prospectus is July 29, 2008.
2
TABLE OF CONTENTS
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PART I - INFORMATION REQUIRED IN Page No.
PROSPECTUS
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ITEM 1. Front of Registration Statement and Outside Front Cover Page
of Prospectus
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ITEM 2. Prospectus Cover Page 1
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ITEM 3. Prospectus Summary Information, Risk Factors and Ratio of 4
Earnings to Fixed Charges
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ITEM 4. Use of Proceeds 17
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ITEM 5. Determination of Offering Price 18
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ITEM 6. Dilution 18
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ITEM 7. Selling Security Holders 19
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ITEM 8. Plan of Distribution 37
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ITEM 9. Description of Securities 38
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ITEM 10. Interest of Named Experts and Counsel 38
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ITEM 11. Information with Respect to the Registrant 39
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a. Description of Business 39
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b. Description of Property 49
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c. Legal Proceedings 49
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d. Market for Common Equity and Related Stockholder Matters 49
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e. Financial Statements 50
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f. Selected Financial Data 51
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g. Supplementary Financial Information 51
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h. Management's Discussion and Analysis of Financial Condition 51
and Results of Operations
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i. Changes In and Disagreements With Accountants on Accounting 54
and Financial Disclosure
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j. Quantitative and Qualitative Disclosures About Market Risk 54
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k. Directors and Executive Officers 55
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l. Executive and Directors Compensation 56
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m. Security Ownership of Certain Beneficial Owners and 58
Management
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n. Certain Relationships, Related Transactions, Promoters And 59
Control Persons
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ITEM 11 A. Material Changes 59
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ITEM 12. Incorporation of Certain Information by Reference 59
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ITEM 12 A. Disclosure of Commission Position on Indemnification for 59
Securities Act Liabilities
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PART II - INFORMATION NOT REQUIRED IN
PROSPECTUS
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ITEM 13. Other Expenses of Issuance and Distribution 61
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ITEM 14. Indemnification of Directors and Officers 61
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ITEM 15. Recent Sales of Unregistered Securities 62
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ITEM 16. Exhibits and Financial Statement Schedules 63
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ITEM 17. Undertakings 63
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Signatures 65
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3
Securities offered through this prospectus will not be sold through dealers, but
will be sold on a direct participation basis only.
ITEM 3. PROSPECTUS SUMMARY INFORMATION, RISK FACTORS AND RATIO OF EARNINGS TO
FIXED CHARGES
OUR COMPANY
Bedrock Energy, Inc. (formerly EnviroMart.com, Inc.) ("We," "Us," "Our") was
initially formed on March 17, 1999, as an Internet based distributor of
environmental safety products. The Company was created through a share
distribution from its parent company, General Environmental Corporation, a
publicly traded entity. It was a New Hampshire corporation until 2004. In 2004,
the Company reincorporated itself as a Colorado Corporation when it merged with
Cell Touch, Inc. We subsequently entered into a letter of intent to acquire
CellTouch Inc., a Nevada corporation. For business reasons that plan was
abandoned later in that year. From 2004 to the present the business had no
viable operations. The Company's name was changed to Bedrock Energy, Inc. in
October 2007 to reflect its new business model.
We are an oil and gas exploration and development company focused on creating a
portfolio of North American assets, located in the central and Western United
States that exhibit consistent, predictable, and long-lived production
capabilities. We plan to build value for its shareholders through the
acquisition and development of gas and oil assets that contain proven reserves
in domestic areas where reserves can be economically produced at a low risk to
us relying on joint venture partners to supply most of the funds needed to
explore or develop these properties.
We intend to participate in oil and gas prospects located in the states of Utah,
Wyoming, Kansas, New Mexico, and Colorado. Our main emphasis will be to acquire
production or revenue generating opportunities either by lease purchase or
farmout, when available, with third parties and industry partners.
We have no revenues at this time and anticipate that we will need additional
capital to support the execution of our business plan. Decisions regarding
future participation in acquisitions or other business development activities
will be made on a case-by-case basis.
We have begun initial minimal operations and are currently without revenue. We
have no employees at the present time. During the years ended December 31, 2007
and 2006, two of our officers each earned fees for services rendered in the
amount of $6,000 and $18,000, respectively, and these fees were recorded as
accounts payable. Thus, as of April 30, 2007, we had an accounts payable balance
of $84,000 or a total of $42,000 per officer. Subsequently, we issued promissory
notes ("Notes") dated May 1, 2007 to each of our two officers in exchange for
payment of these accounts payable as of April 30, 2007 in the amount of $42,000
for a total of $84,000 in Notes. Each of these seven percent (7%) unsecured
convertible Notes, due on April 30, 2008, could be converted into shares of
common stock at the rate of ten (10) shares for each dollar of principal
converted. Thereafter, on September 24, 2007, our Company and the officers
mutually agreed pursuant to the terms of the Notes to issue 840,000 shares of
common stock in exchange for payment of the $84,000 in Notes.
In addition, as of December 31, 2007 and 2006, we owe the officers a total of $0
and $4,430, respectively plus as of December 31, 2007, a total of $2,368 in
accrued interest relative to the Notes.
We are in the developmental stage of our business, and we anticipate that
operations will begin in mid 2008.
Our Auditors have issued a going concern opinion and the reasons noted for
issuing the opinion are our lack of revenues and modest capital.
Factors that make this offering highly speculative or risky are:
4
o There is no market for any securities;
o We have no revenues or sales;
o We are a start up company;
o We have no experience in the energy exploration business as a company;
o We are undercapitalized.
Our executive offices are located at 8950 Scenic Pine Drive, Suite 100, Parker,
Colorado 80134 and the telephone number is (303) 794-4398 and the facsimile
number is (303) 794-4676.
SUMMARY OF FINANCIAL INFORMATION
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As at June 30, 2008
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Total Assets $27,167
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Current Liabilities $40,548
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Shareholders' Equity ($13,381)
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From March 17, 1999 to June 30, 2008
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Revenues $0
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Net Loss at June 30, 2008 ($394,656)
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As of June 30, 2008, accumulated deficit for our business was ($394,656). We
anticipate that we will operate in a deficit position and continue to sustain
net losses for the foreseeable future.
THE OFFERING
We are registering 2,490,816 shares listed for sale on behalf of selling
shareholders and 500,000 shares for sale to the public on behalf of our Company.
We intend to complete the sale of the 500,000 shares being offered to the public
within 60 days after the effectiveness of the Registration Statement,
deregistering thereafter any shares remaining unsold to the public, by a
post-effective amendment to the Registration Statement, prior to the
commencement of the secondary offering on behalf of the selling shareholders.
A total of $250,000 may be raised by us if all shares offered by us are sold.
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Common shares Outstanding Before This Offering 2,525,524
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Maximum common shares being offered by selling shareholders 2,490,816
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Maximum common shares offered to public by our Company 500,000
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We are authorized to issue 200,000,000 shares of common stock. Our current
shareholders, officers and directors collectively own 2,525,524 shares of
restricted common stock.
There is currently no public market for our shares as it is presently not traded
on any market or securities exchange.
5
GLOSSARY
The following are definitions of terms used in this Memorandum:
BBL. An abbreviation for the term "barrel" which is a unit of
measurement of volume of oil or related petroleum products. One barrel (one bbl)
is the equivalent of 42 U.S. gallons or approximately 159 liters.
BONUS PAYMENT. Usually one time payment made to a mineral owner as
consideration for the execution of an oil and gas lease.
CASING POINT. That point in time during the drilling of an oil well at
which a decision is made to install well casing and to attempt to complete the
well as an oil producer.
COMPLETION. The procedure used in finishing and equipping an oil or gas
well for production.
DELAY RENTAL. Payment made to the lessor under a nonproducing oil and
gas lease at the end of each year to continue the lease in force for another
year during its primary term.
DEVELOPMENT WELL. A well drilled to a known producing formation in a
previously discovered field, usually offsetting a producing well on the same or
an adjacent oil and gas lease.
EXPLORATORY WELL. A well drilled either (a) in search of a new and as
yet undiscovered pool of oil or gas or (b) with the hope of significantly
extending the limits of a pool already developed (also known as a "wildcat
well").
FARMIN. An agreement which allows a party earn a full or partial
working interest (also known as an "earned working interest") in an oil and gas
lease in return for providing exploration or development funds.
FARMOUT. An agreement whereby the owner of the leasehold or working
interest agrees to assign a portion of his interest in certain acreage subject
to the drilling of one or more specific wells or other performance by the
assignee as a condition of the assignment. Under a farmout, the owner of the
leasehold or working interest may retain some interest such as an overriding
royalty interest, an oil and gas payment, offset acreage or other type of
interest.
GROSS ACRE. An acre in which a working interest is owned. The number of
gross acres is the total number of acres in which an interest is owned (see "Net
Acre" below).
GROSS WELL. A well 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.
LANDOWNER ROYALTY. That interest retained by the holder of a mineral
interest upon the execution of an oil and gas lease which usually ranges from
1/8 to 1/4 of all gross revenues from oil and gas production unencumbered with
an expenses of operation, development or maintenance.
LEASES. Full or partial interests in oil or gas properties authorizing
the owner of the lease to drill for, produce and sell oil and gas upon payment
of rental, bonus, royalty or any of them. Leases generally are acquired from
private landowners (fee leases) and from federal and state governments on
acreage held by them.
LEASE PLAY. A term used to describe lease acquisition activity in a
prospect or geologically defined area.
MCF. An abbreviation for "1,000 cubic feet," which is a unit of
measurement of volume for natural gas.
6
NET WELL OR ACRE. A net well or acre exists when the sum of the
fractional ownership working interests in gross wells or acres equals one. The
number of net wells or acres is the sum of the factional working interests owned
in gross wells or acres expressed as whole number and fractions thereof.
NET REVENUE INTEREST. The fractional undivided interest in the oil or
gas or in the revenues from the sale of oil or gas attributable to a particular
working interest after reduction for a proportionate share of landowner's
royalty interest and overriding royalty interest.
OVERRIDING ROYALTY. An interest in the gross revenues or production
over and above the landowner's royalty carved out of the working interest and
also unencumbered with any expenses of operation, development or maintenance.
PAYOUT. The point in time when the cumulative total of gross income
from the production of oil and gas from a given well (and any proceeds from the
sale of such well) equals the cumulative total cost and expenses of acquiring,
drilling, completing and operating such well, including tangible and intangible
drilling and completion costs.
PROSPECT. A geological area which is believed to have the potential for
oil or gas production.
PROVED DEVELOPED RESERVES. The reserves which can be expected to be
recovered through existing wells with existing equipment and operating methods.
Such reserves include the reserves which are expected to be produced from the
existing completion interval(s) now open for production in existing wells and in
addition to those reserves which exist behind the casing (pipe) of existing
wells, or at minor depths below the present bottom of such wells, which are
expected to be produced through these wells in the predictable future where the
cost of making such oil and gas available for production is relatively small
compared to the cost of drilling a new well.
PROVED UNDEVELOPED RESERVES. Proved reserves which are expected to be
recovered from new wells on undrilled acreage, or from existing wells where a
relatively major expenditure is required for a recompletion. Reserves on
undrilled acreage are limited to those drilling tracts offsetting productive
units which are reasonable certain of production when drilled. Proved reserves
for other undrilled tracts are claimed only where it can be demonstrated with
certainty that there is continuity of production from the existing productive
formation.
REVERSIONARY INTEREST. The portion of the working interest in an oil
and gas lease which will be returned to its former owner when payout occurs or
after a predetermined amount of production and income has been produced.
UNDEVELOPED LEASEHOLD ACREAGE. Leased acreage on which wells have not
been drilled or completed to a point that would permit the production of
commercial quantities of oil and gas.
WORKING INTEREST. An interest in an oil and gas lease entitling the
holder at its expense to conduct drilling and production operations on the
leased property and to receive the net revenues attributable to such interest,
after deducting the landowner's royalty, any overriding royalties, production
costs, taxes and other costs.
OUR COMPANY RISK FACTORS
Our securities, as offered hereby, are highly speculative and should be
purchased only by persons who can afford to lose their entire investment in us.
Each prospective investor should carefully consider the following risk factors,
as well as all other information set forth elsewhere in this prospectus, before
purchasing any of the shares of our common stock.
7
OUR BUSINESS IS A DEVELOPMENT STAGE COMPANY AND UNPROVEN AND THEREFORE RISKY.
We have only very recently adopted the business plan described herein-above.
Potential investors should be made aware of the risk and difficulties
encountered by a new enterprise in the energy business, especially in view of
the intense competition from existing businesses in the industry.
WE HAVE A LACK OF REVENUE HISTORY AND INVESTORS CANNOT VIEW OUR PAST PERFORMANCE
SINCE WE ARE A START-UP COMPANY.
We were formed on March 17, 1999 for the purpose of engaging in any lawful
business and have adopted a plan to engage the acquisition, exploration, and if
warranted, development of natural resource properties. We have had no revenues
in the last five years. We are not profitable and the business effort is
considered to be in an early development stage. We must be regarded as a new or
development venture with all of the unforeseen costs, expenses, problems, risks
and difficulties to which such ventures are subject.
WE CAN GIVE NO ASSURANCE OF SUCCESS OR PROFITABILITY TO OUR INVESTORS.
There is no assurance that we will ever operate profitably. There is no
assurance that we will generate revenues or profits, or that the market price of
our common stock will be increased thereby.
WE MAY HAVE A SHORTAGE OF WORKING CAPITAL IN THE FUTURE WHICH COULD JEOPARDIZE
OUR ABILITY TO CARRY OUT OUR BUSINESS PLAN.
Our capital needs consist primarily of expenses related to geological
evaluation, general and administrative and potential exploration participation
and could exceed $250,000 in the next twelve months. Such funds are not
currently committed, and we have cash as of the date of this Registration
Statement of approximately $23,567.
We have no operating history and no revenues and it may be unlikely that we will
raise that additional working capital from this Registration.
OUR OFFICERS AND DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE
RESOLVED FAVORABLY TO US.
Certain conflicts of interest may exist between us and our officers and
directors. Our Officers and Directors have other business interests to which
they devote their attention and may be expected to continue to do so although
management time should be devoted to our business. As a result, conflicts of
interest may arise that can be resolved only through exercise of such judgment
as is consistent with fiduciary duties to us. See "Directors and Executive
Officers" (page 55), and "Conflicts of Interest" (page 55). Our officers are
spending part-time in this business - up to 15 hours per week.
WE WILL NEED ADDITIONAL FINANCING FOR WHICH WE HAVE NO COMMITMENTS, AND THIS MAY
JEOPARDIZE EXECUTION OF OUR BUSINESS PLAN.
We have limited funds, and such funds may not be adequate to carryout the
business plan in the energy business. Our ultimate success depends upon our
ability to raise additional capital. We have not investigated the availability,
source, or terms that might govern the acquisition of additional capital and
will not do so until it determines a need for additional financing. If we need
additional capital, we have no assurance that funds will be available from any
source or, if available, that they can be obtained on terms acceptable to us. If
not available, our operations will be limited to those that can be financed with
our modest capital.
8
WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY
OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS.
We may issue further shares as consideration for the cash or assets or services
out of our authorized but unissued common stock that would, upon issuance,
represent a majority of the voting power and equity of our Company. The result
of such an issuance would be those new stockholders and management would control
our Company, and persons unknown could replace our management at this time. Such
an occurrence would result in a greatly reduced percentage of ownership of our
Company by our current shareholders, which could present significant risks to
investors.
WE HAVE A MINIMAL OPERATING HISTORY, SO INVESTORS HAVE NO WAY TO GAUGE OUR LONG
TERM PERFORMANCE.
We were formed on March 17, 1999, and only recently adopted a business plan in
the energy industry. As evidenced by the financial reports we have had no
revenue. We must be regarded as a new or development venture with all of the
unforeseen costs, expenses, problems, and difficulties to which such ventures
are subject. Our venture must be considered highly speculative.
WE ARE NOT DIVERSIFIED AND WE WILL BE DEPENDENT ON ONLY ONE BUSINESS.
Because of the limited financial resources that we have, it is unlikely that we
will be able to diversify our operations. Our probable inability to diversify
our activities into more than one area will subject us to economic fluctuations
within the energy industry and therefore increase the risks associated with our
operations due to lack of diversification.
WE WILL DEPEND UPON MANAGEMENT BUT WE WILL HAVE LIMITED PARTICIPATION OF
MANAGEMENT.
We currently have two individuals who are serving as our officers and directors
for up to 15 hours per week each on a part-time basis. Our directors are also
acting as our officers. We will be heavily dependent upon their skills, talents,
and abilities, as well as several consultants to us, to implement our business
plan, and may, from time to time, find that the inability of the officers,
directors and consultants to devote their full-time attention to our business
results in a delay in progress toward implementing our business plan. Once we
receive the proceeds from this offering, other consultants may be employed on a
part-time basis under a contract to be determined. See "Management." Because
investors will not be able to manage our business, they should critically assess
all of the information concerning our officers and directors.
OUR OFFICERS AND DIRECTORS ARE NOT EMPLOYED FULL-TIME BY US WHICH COULD BE
DETRIMENTAL TO THE BUSINESS.
Our directors and officers are, or may become, in their individual capacities,
officers, directors, controlling shareholder and/or partners of other entities
engaged in a variety of businesses. Thus, our officers and directors may have
potential conflicts including their time and efforts involved in participation
with other business entities. Each officer and director of our business is
engaged in business activities outside of our business, and the amount of time
they devote as Officers and Directors to our business will be up to 15 hours per
week. As such time as the Company is financially capable of paying salaries, it
is anticipated that management will assume full time roles in the Company's
operations. (See "Executive Team")
We do not know of any reason other than outside business interests that would
prevent them from devoting full-time to our Company, when the business may
demand such full-time participation.
9
OUR OFFICERS AND DIRECTORS MAY HAVE CONFLICTS OF INTERESTS AS TO CORPORATE
OPPORTUNITIES WHICH WE MAY NOT BE ABLE OR ALLOWED TO PARTICIPATE IN.
Presently there is no requirement contained in our Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of our business to
disclose to us business opportunities which come to their attention. Our
officers and directors do, however, have a fiduciary duty of loyalty to us to
disclose to us any business opportunities which come to their attention, in
their capacity as an officer and/or director or otherwise. Excluded from this
duty would be opportunities which the person learns about through his
involvement as an officer and director of another company. We have no intention
of merging with or acquiring business opportunity from any affiliate or officer
or director. (See "Conflicts of Interest" at page 55)
RISK FACTORS RELATING TO OUR COMPANY AND OUR BUSINESS
Any person or entity contemplating an investment in the securities offered
hereby should be aware of the high risks involved and the hazards inherent
therein. Specifically, the investor should consider, among others, the following
risks:
OUR BUSINESS, THE OIL AND GAS BUSINESS, HAS NUMEROUS RISKS WHICH COULD RENDER US
UNSUCCESSFUL.
The search for new oil and gas reserves frequently results in unprofitable
efforts, not only from dry holes, but also from wells which, though productive,
will not produce oil or gas in sufficient quantities to return a profit on the
costs incurred. There is no assurance we will find or produce oil or gas from
any of the undeveloped acreage farmed out to us or which may be acquired by us,
nor are there any assurances that if we ever obtain any production it will be
profitable. (See "Business and Properties")
WE HAVE SUBSTANTIAL COMPETITORS WHO HAVE AN ADVANTAGE OVER US IN RESOURCES AND
MANAGEMENT.
We are and will continue to be an insignificant participant in the oil and gas
business. Most of our competitors have significantly greater financial
resources, technical expertise and managerial capabilities than us and,
consequently, we will be at a competitive disadvantage in identifying and
developing or exploring suitable prospects. Competitors resources could
overwhelm our restricted efforts to acquire and explore oil and gas prospects
and cause failure of our business plan.
WE WILL BE SUBJECT TO ALL OF THE MARKET FORCES IN THE ENERGY BUSINESS, MANY OF
WHICH COULD POSE A SIGNIFICANT RISK TO OUR OPERATIONS.
The marketing of natural gas and oil which may be produced by our prospects will
be affected by a number of factors beyond our control. These factors include the
extent of the supply of oil or gas in the market, the availability of
competitive fuels, crude oil imports, the world-wide political situation, price
regulation, and other factors. Recently, there have been dramatic fluctuations
in oil prices. Any significant decrease in the market prices of oil and gas
could materially affect our profitability of oil and gas activities.
There generally are only a limited number of gas transmission companies with
existing pipelines in the vicinity of a gas well or wells. In the event that
producing gas properties are not subject to purchase contracts or that any such
contracts terminate and other parties do not purchase our gas production, there
is assurance that we will be able to enter into purchase contracts with any
transmission companies or other purchasers of natural gas and there can be no
assurance regarding the price which such purchasers would be willing to pay for
such gas. There may, on occasion, be an oversupply of gas in the marketplace or
in pipelines, the extent and duration may affect prices adversely. Such
oversupply may result in reductions of purchases and prices paid to producers by
principal gas pipeline purchasers. (See "Our Business and Competition, Markets,
Regulation and Taxation.")
10
OUR BUSINESS IS SUBJECT TO SIGNIFICANT WEATHER INTERRUPTIONS.
Our activities may be subject to periodic interruptions due to weather
conditions. Weather-imposed restrictions during certain times of the year on
roads accessing properties could adversely affect our ability to benefit from
production on such properties or could increase the costs of drilling new wells
because of delays.
WE WILL HAVE SIGNIFICANT ADDITIONAL FINANCING REQUIREMENTS TO FUND OUR FUTURE
ACTIVITIES.
If we find oil and gas reserves to exist on a prospect we will need substantial
additional financing to fund the necessary exploration and development work.
Furthermore, if the results of that exploration and development work are
successful, we will need substantial additional funds for continued development.
We will not have sufficient proceeds from this offering to conduct such work
and, therefore, we will need to obtain the necessary funds either through debt
or equity financing, some form of cost-sharing arrangement with others, or the
sale of all or part of the property. There is no assurance that we will be
successful in obtaining any financing. These various financing alternatives may
dilute the interest of our shareholders and/or reduce our interest in the
properties. (See "Use of Proceeds" and "Our Business")
WE WILL HAVE WORKING CAPITAL NEEDS FOR WHICH WE HAVE NO FUNDING COMMITMENTS.
Our working capital needs of consist primarily of: lease acquisitions,
geological data acquisition and interpretation, title examination activities and
administration and are estimated to total over $250,000 in the next twelve
months, none of which funds are committed. We have only minimal cash as of the
date of this prospectus.
WE ARE SUBJECT TO SIGNIFICANT OPERATING HAZARDS AND UNINSURED RISK IN THE ENERGY
INDUSTRY.
Our proposed operations will be subject to all of the operating hazards and
risks normally incident to exploring, drilling for and producing oil and gas,
such as encountering unusual or unexpected formations and pressures, blowouts,
environmental pollution and personal injury. We will maintain general liability
insurance but we have not obtained insurance against such things as blowouts and
pollution risks because of the prohibitive expense. Should we sustain an
uninsured loss or liability, or a loss in excess of policy limits, our ability
to operate may be materially adversely affected.
WE ARE SUBJECT TO FEDERAL INCOME TAX LAWS AND CHANGES THEREIN WHICH COULD
ADVERSELY IMPACT US.
Federal income tax laws are of particular significance to the oil and gas
industry in which we intend to engage. Legislation has eroded various benefits
of oil and gas producers and subsequent legislation could continue this trend.
Congress is continually considering proposals with respect to Federal income
taxation which could have a material adverse effect on our future operations and
on our ability to obtain risk capital which our industry has traditionally
attracted from taxpayers in high tax brackets.
WE ARE SUBJECT TO SUBSTANTIAL GOVERNMENT REGULATION IN THE ENERGY INDUSTRY WHICH
COULD ADVERSELY IMPACT US.
The production and sale of oil and gas are subject to regulation by state and
federal authorities, the spacing of wells and the prevention of waste. There are
both federal and state laws regarding environmental controls which may
necessitate significant capital outlays, resulting in extended delays,
materially affect our earnings potential and cause material changes in the in
our proposed business. We cannot predict what legislation, if any, may be passed
by Congress or state legislatures in the future, or the effect of such
legislation, if any, on us. Such regulations may have a significant affect on
our operating results.
WE BELIEVE INVESTORS SHOULD CONSIDER CERTAIN NEGATIVE ASPECTS OF OUR PROPOSED
OPERATIONS.
Dry Holes: We may expend substantial funds acquiring and potentially
participating in exploring properties which we later determine not to be
productive. All funds so expended will be a total loss to us.
11
Technical Assistance: We will find it necessary to employ technical assistance
in the operation of our business. As of the date of this Prospectus, we have not
contracted for any technical assistance. When we need it such assistance is
likely to be available at compensation levels we would be able to pay.
Uncertainty of Title: We will attempt to acquire leases or interests in leases
by option, lease, farmout or by purchase. The validity of title to oil and gas
property depends upon numerous circumstances and factual matters (many of which
are not discoverable of record or by other readily available means) and is
subject to many uncertainties of existing law and our application. We intend to
obtain an oil and gas attorney's opinion of valid title before any significant
expenditure upon a lease.
Government Regulations: The area of exploration of natural resources has become
significantly regulated by state and federal governmental agencies, and such
regulation could have an adverse effect on our operations. Compliance with
statutes and regulations governing the oil and gas industry could significantly
increase the capital expenditures necessary to develop our prospects.
Nature of our Business: Our business is highly speculative, involves the
commitment of high-risk capital, and exposes us to potentially substantial
losses. In addition, we will be in direct competition with other organizations
which are significantly better financed and staffed than we are.
General Economic and Other Conditions: Our business may be adversely affected
from time to time by such matters as changes in general economic, industrial and
international conditions; changes in taxes; oil and gas prices and costs; excess
supplies and other factors of a general nature.
WE WILL EXPERIENCE SUBSTANTIAL COMPETITION FOR SUPPLIES IN THE ENERGY INDUSTRY.
We will be required to compete with a large number of entities which are larger,
have greater resources and more extensive operating histories than we do.
Shortages of supplies may result from this competition and will lead to
increased costs and delays in operations which will have a material adverse
effect on us.
WE WILL BE SUBJECT TO MANY FACTORS BEYOND OUR CONTROL.
The acquisition, exploration, development, production and sale of oil and gas
are subject to many factors which are outside our control. These factors include
general economic conditions, proximities to pipelines, oil import quotas, supply
and price of other fuels and the regulation of transportation by federal and
state governmental authorities.
We anticipate substantial competition in our effort to explore oil and gas
properties and may have difficulty in putting together drilling participants and
getting prospects drilled and explored. Established companies have an advantage
over us because of substantially greater resources to devote to property
acquisition and to obtain drilling rigs, equipment and personnel. If we are
unable to compete for capital, participation and drilling rigs, equipment and
personnel, our business will be adversely affected.
WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY
COLORADO STATUTE.
Colorado Statutes provide for the indemnification of our directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or on activities our behalf. We will also
bear the expenses of such litigation for any of our directors, officers,
employees, or agents, upon such person's promise to repay us therefore if it is
ultimately determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by us that we will be unable to recoup.
12
OUR DIRECTORS' LIABILITY TO US AND SHAREHOLDERS IS LIMITED
Colorado Revised Statutes exclude personal liability of our directors and our
stockholders for monetary damages for breach of fiduciary duty except in certain
specified circumstances. Accordingly, we will have a much more limited right of
action against our directors than otherwise would be the case. This provision
does not affect the liability of any director under federal or applicable state
securities laws.
WE MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON REASONABLE
TERMS AND AS NEEDED.
To supplement the business experience of our officers and directors, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. Our Board without any input from stockholders
will make the selection of any such advisors. Furthermore, we anticipate that
such persons will be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates, if they
are able to provide the required services.
RISK FACTORS RELATED TO OUR STOCK
THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY DISCOURAGE THE TRADABILITY
OF OUR SECURITIES.
We are a "penny stock" company. None of our securities currently trade in any
market and, if ever available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Effectively, this discourages broker-dealers from executing trades in
penny stocks. Consequently, the rule will affect the ability of purchasers in
this offering to sell their securities in any market that might develop
therefore because it imposes additional regulatory burdens on penny stock
transactions.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
13
WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE.
We have not paid dividends on our common stock and do not ever anticipate paying
such dividends in the foreseeable future.
NO PUBLIC MARKET EXISTS FOR OUR COMMON STOCK AT THIS TIME, AND THERE IS NO
ASSURANCE OF A FUTURE MARKET.
There is no public market for our common stock, and no assurance can be given
that a market will develop or that a shareholder ever will be able to liquidate
his investment without considerable delay, if at all. If a market should
develop, the price may be highly volatile. Factors such as those discussed in
the "Risk Factors" section may have a significant impact upon the market price
of the shares offered hereby. Due to the low price of our securities, many
brokerage firms may not be willing to effect transactions in our securities.
Even if a purchaser finds a broker willing to effect a transaction in our
shares, the combination of brokerage commissions, state transfer taxes, if any,
and any other selling costs may exceed the selling price. Further, many lending
institutions will not permit the use of our shares as collateral for any loans.
RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.
All of the outstanding shares of common stock held by our present officers,
directors, and affiliate stockholders are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted
Shares, these shares may be resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or other applicable exemptions
from registration under the Act and as required under applicable state
securities laws. We are registering all of our outstanding shares so officers,
directors and affiliates will be able to sell their shares if this Registration
Statement becomes effective. Rule 144 provides in essence that a person who has
held restricted securities for six months, under certain conditions, may sell
every three months, in brokerage transactions, a number of shares that does not
exceed the greater of 1.0% of a company's outstanding common stock or the
average weekly trading volume during the four calendar weeks prior to the sale.
There is no limit on the amount of restricted securities that may be sold by a
nonaffiliate after the owner has held the restricted securities for a period of
two years. A sale under Rule 144 or under any other exemption from the Act, if
available, or pursuant to subsequent registration of shares of common stock of
present stockholders, may have a depressive effect upon the price of the common
stock in any market that may develop.
OUR INVESTORS MAY SUFFER FUTURE DILUTION DUE TO ISSUANCES OF SHARES FOR VARIOUS
CONSIDERATIONS IN THE FUTURE.
There may be substantial dilution to our shareholders purchasing in this
Offering as a result of future decisions of the Board to issue shares without
shareholder approval for cash, services, or acquisitions.
OUR STOCK WILL IN ALL LIKELIHOOD BE THINLY TRADED AND AS A RESULT YOU MAY BE
UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR
SHARES.
The shares of our common stock, if listed, may be thinly-traded on the OTC
Bulletin Board, meaning that the number of persons interested in purchasing our
common shares at or near ask prices at any given time may be relatively small or
non-existent. This situation is attributable to a number of factors, including
the fact that we are a small company which is relatively unknown to stock
analysts, stock brokers, institutional investors and others in the investment
community that generate or influence sales volume, and that even if we came to
the attention of such persons, they tend to be risk-averse and would be
reluctant to follow an unproven, early stage company such as ours or purchase or
recommend the purchase of any of our Securities until such time as we became
more seasoned and viable. As a consequence, there may be periods of several days
or more when trading activity in our Securities is minimal or non-existent, as
compared to a seasoned issuer which has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect
on Securities price. We cannot give you any assurance that a broader or more
active public trading market for our common Securities will develop or be
sustained, or that any trading levels will be sustained. Due to these
conditions, we can give investors no assurance that they will be able to sell
their shares at or near ask prices or at all if they need money or otherwise
desire to liquidate their securities of our Company.
14
OUR COMMON STOCK MAY BE VOLATILE, WHICH SUBSTANTIALLY INCREASES THE RISK THAT
YOU MAY NOT BE ABLE TO SELL YOUR SECURITIES AT OR ABOVE THE PRICE THAT YOU MAY
PAY FOR THE SECURITY.
Because of the limited trading market expected to develop for our common stock
and because of the possible price volatility, you may not be able to sell your
shares of common stock when you desire to do so. The inability to sell your
Securities in a rapidly declining market may substantially increase your risk of
loss because of such illiquidity and because the price for our Securities may
suffer greater declines because of our price volatility.
The price of our common stock that will prevail in the market after this
offering may be higher or lower than the price you may pay. Certain factors,
some of which are beyond our control, that may cause our share price to
fluctuate significantly include, but are not limited to the following:
o Variations in our quarterly operating results;
o Loss of a key relationship or failure to complete significant
transactions;
o Additions or departures of key personnel; and
o Fluctuations in stock market price and volume.
Additionally, in recent years the stock market in general, and the
over-the-counter markets in particular, have experienced extreme price and
volume fluctuations. In some cases, these fluctuations are unrelated or
disproportionate to the operating performance of the underlying company. These
market and industry factors may materially and adversely affect our stock price,
regardless of our operating performance. In the past, class action litigation
often has been brought against companies following periods of volatility in the
market price of those companies common stock. If we become involved in this type
of litigation in the future, it could result in substantial costs and diversion
of management attention and resources, which could have a further negative
effect on your investment in our stock.
MANY OF OUR SHARES OF COMMON STOCK WILL IN THE FUTURE BE AVAILABLE FOR RESALE.
ANY SALES OF OUR COMMON STOCK, IF IN SIGNIFICANT AMOUNTS, ARE LIKELY TO DEPRESS
THE MARKET PRICE OF OUR SECURITIES.
Assuming all of the shares of common stock we are offering under this
Registration Statement are sold and all of the shares of common stock held by
the selling security holders registered hereby are sold, we would have 2,990,816
shares that are freely tradable. Our officers and directors are registering
their shares for sale under this prospectus.
Unrestricted sales of 2,990,816 shares of stock by our selling stockholders
could have a huge negative impact on our share price, and the market for our
shares.
OUR NEW INVESTORS WILL SUFFER A DISPROPORTIONATE RISK AND THERE WILL BE
IMMEDIATE DILUTION OF PURCHASERS' INVESTMENTS.
Our present shareholders have acquired their securities at a cost significantly
less than that which the investors purchasing pursuant to shares will pay for
their stock holdings or at which future purchasers in the market may pay.
Therefore, new investors will bear most of the risk of loss. Further, assuming
all of the shares offered hereby are sold, of which there can be no assurance,
an investment in our common stock by the purchaser will result in an immediate
dilution (in excess of 95%) of the net tangible book value of the common stock
from the offering price which the purchasers will have paid for their shares.
OUR BUSINESS IS HIGHLY SPECULATIVE AND THE INVESTMENT IS THEREFORE RISKY.
Due to the speculative nature of our business, it is probable that the
investment in shares offered hereby will result in a total loss to the investor.
Investors should be able to financially bear the loss of their entire
investment. Investment should, therefore, be limited to that portion of
discretionary funds not needed for normal living purposes or for reserves for
disability and retirement.
15
OUR PUBLIC INVESTORS WILL BEAR MOST OF THE BURDEN IF THE SHARES OFFERED HEREIN
ARE SOLD.
The financial risk of our proposed activities will be borne primarily by the
public investors, who, upon purchase of the shares in this offering, will have
contributed the largest portion of our capital.
WE ARE NOT A REPORTING COMPANY AT THIS TIME, BUT WILL BECOME ONE DUE TO THIS
REGISTRATION.
There is no trading market for our common stock. We will be subject to the
reporting requirements under the Securities and Exchange Act of 1934, Section
13a, after the effectiveness of this offering, pursuant to Section 15d of the
Securities Act and we intend to be registered under Section 12(g). As a result,
shareholders will have access to the information required to be reported by
publicly held companies under the Exchange Act and the regulations thereunder.
We intend to provide our shareholders with quarterly unaudited reports and
annual reports containing financial information prepared in accordance with
generally accepted accounting principles audited by independent certified public
accountants and intend to register under the Securities Exchange Act, Section
12(g).
OUR PRESENT AND FUTURE SHAREHOLDERS WILL SUFFER DILUTION BY SALE OF THIS
OFFERING AND BY NEW ISSUANCES IN THE FUTURE WHICH MAY OCCUR.
Upon the sales of Shares, there may be substantial dilution to our Security
holders. The sale price of our shares is substantially higher than the pro forma
current net tangible book value per share of our outstanding common stock. The
net tangible book value attributable to our shares as of December 31, 2006 was
less than $.01 per share, and at December 31, 2007 was less than $.01. Net
tangible book value per share of common stock is determined by dividing the
number of outstanding shares of common stock into the net tangible book value
attributable to our common stock, which is our total tangible assets less our
total liabilities. After giving effect to possible sale of all of our shares
registered herein, and after deducting the offering expenses payable, the
adjusted net tangible book value attributable to our common stock will increase.
This represents an immediate increase in net tangible book value per share to
the holders of our existing common stock and an immediate dilution per share to
shareholders purchasing shares of stock at the offering price of $0.50 per
share. See "Dilution" hereinafter on page 18.
- ------------------------------------------ ----------------------------------- ----------------------------------
Book Value per share Dilution
- ------------------------------------------ ----------------------------------- ----------------------------------
Existing shareholders 2,525,524 shares $.01 -
- ------------------------------------------ ----------------------------------- ----------------------------------
Sale of 500,000 new shares $.08 84%
- ------------------------------------------ ----------------------------------- ----------------------------------
* Post offering - Assumes 100% sale to public of new shares registered, after
deduction of offering costs.
WE HAVE DETERMINED AN ARBITRARY OFFERING PRICE OF OUR SHARES.
Our offering price of our shares has been determined arbitrarily by us with no
established criteria of value. There is no direct relationship between these
prices and our assets, book value, lack of earnings, shareholder's equity, or
any other recognized standard of value of our business.
WE MAY NOT SELL ANY OR ALL OF THE SHARES BEING OFFERED IN THIS PROSPECTUS.
We are selling upto a maximum of 500,000 of our shares at a price of $0.50 per
share. We are selling the Shares directly to the public and are not using a
third party to place the Shares. As a result, we have not set a minimum on the
the number of shares we may sell and therefore may not sell all 500,000 shares
nor have we set a basis that if all of the Shares are not sold, then none of the
shares will be sold. Not selling all of the Shares will result in the Company
receiving less than the anticipated funds and that will affect the proposed plan
of operations. In addition, those investors, who do invest in the Shares, if all
the shares are not sold, will share a greater amount of any losses incurred.
16
ITEM 4. USE OF PROCEEDS
Our intended use of the proceeds from our Offering of 500,000 shares to the
public is shown in Table 2.
Table 2: Use of Proceeds if the Maximum Amount is Sold
REQUIREMENTS AND UTILIZATION OF FUNDS: We initially seek to raise approximately
$250,000 during the upcoming three to six months from the sale of our Company's
common shares. These monies will be used to acquire undeveloped acreage,
properties with known production and for operating expenses. Phase Two funds
will be used for the acquisition of oil and gas properties containing proven
reserves production enhancements on our existing producing properties and
operating expenses. Additional capital may be raised for the acquisition of
profitable, privately held exploration and production businesses. As set forth
in the chart below, the estimated breakdown of the utilization of funds is as
follows:
TABLE 2
Bedrock Energy, Inc. - Requirements & Utilization of Funds
Phase I Phase II Phase III
----------------- ----------------- ----------------
Lease Acq & Development costs $100,000 $500,000 $1,500,000
Working Capital 50,000 400,000 550,000
General & Administrative 75,000 175,000 200,000
Financing Costs 0 125,000 175,000
Audit/SEC Filing Fees 25,000 50,000 75,000
----------------- ----------------- ----------------
Total $250,000 $1,250,000 $2,500,000
================= ================= ================
We may change any or all of the budget categories in the execution of our
business attempts in the energy industry. None of the line items is to be
considered fixed or unchangeable. The total amount of the money raised from the
sale of the shares we are offering will be used for the purpose of furthering
our plan of operation, as detailed under the heading "PLAN OF OPERATION" below.
In the event that our Offering is not fully subscribed, we anticipate using the
funds raised by our Offering to pay listed categories in the order and priority
set forth in "Use of Proceeds". The net proceeds of our Offering will be applied
to general corporate funds. Our management will have complete discretionary
control over the actual utilization of said funds and there can be no assurance
as to the manner or time in which said funds will be utilized.
Although we reserve the right to reallocate the funds according to changing
events, we believe that the net proceeds from this Offering will be sufficient
to fund our initial general and administrative capital requirements for a period
of twelve months. The foregoing assumes our Offering will be fully subscribed.
We can assure that we will require additional funds to carry out our business
plan. The availability and terms of any future financing will depend on market
and other conditions. Our use of proceeds are based upon the projections by our
Management, which may also change according to unforeseen future events and
market changes.
If less than the maximum offering is sold, we will have inadequate working
capital and funds to fund any expansion of operations. This lack of funds could
and would severely limit our operations, and might render us unable to carry out
our business plan with resulting business failure.
17
ITEM 5. DETERMINATION OF OFFERING PRICE
We have no established market for our common stock.
Our selling shareholders plan to sell shares at $0.50, until such time as a
market develops for any of the securities and thereafter at such prices as the
market may dictate from time to time. There is no market price for the stock and
our pricing is arbitrary with no relation to market value, liquidation value,
earnings or dividends.
----------------------- ------------------------------
TITLE PER SECURITY
----------------------- ------------------------------
Common Stock $0.50
----------------------- ------------------------------
We have arbitrarily determined our offering price for shares to be sold pursuant
to this offering at $0.50. The Company is authorized to issue 200,000,000 shares
of $.001 voting common stock. There were a total of 100,000 and 1,245,000 shares
of common stock issued during the three months ended June 30, 2008 and during
the year ended December 31, 2007, respectively, and, therefore, as of June 30,
2008 and December 31, 2007 there are a total of 2,525,524 and 2,235,525 shares
issued and outstanding, respectively.
In April 2008, the Company sold 100,000 shares as part of a private placement at
$0.10 per share.
During the year ended December 31, 2007, the 1,245,000 additional shares were
comprised of 300,000 shares sold as part of a private placement at $.10 per
share, 420,000 shares issued as payment of debt in the amount of $84,000 and
525,000 shares issued to consultants for services valued at $52,500.
On August 2, 2007, the Company authorized the sale in a private placement of
1,000,000 shares of common stock at a price of $.05 per share under an exemption
from registration provision of the Securities Act of 1933. The funds will be
used to pay the costs associated with its administration and payment of
professional fees to bring the Company to a fully reporting company within
compliance of the Securities Act of 1933 and 1934.
On October 17, 2007, the Company authorized up to a one for two reverse split of
the Company's common stock. On March 31, 2008 the reverse split became
effective. Financial Statements have been adjusted to reflect the reverse split.
The additional major factors that were included in determining the initial sales
price to our founders and private investors were the lack of liquidity since
there was no present market for our stock and the high level of risk considering
our lack of operating history.
The share price bears no relationship to any criteria of goodwill value, asset
value, market price or any other measure of value and were arbitrarily
determined in the judgment of our Board of Directors.
ITEM 6. DILUTION
We are registering 2,490,816 shares of our outstanding common stock as of July
29, 2008. Since our inception on March 17, 1999, our original officers and
directors purchased 210,030 shares @ $.40 per share and 75,000 shares at $.20
per share. A total of 264,986 shares were distributed in 1999 as a spin-off
dividend to EnviroMart shareholders.
COMPARATIVE DATA
The following table sets forth with respect to existing shareholders and new
investors, a comparison of the number of our shares of common stock purchased
the percentage ownership of such Shares, the total consideration paid, the
percentage of total consideration paid and the average price per Share. All
percentages are computed based upon cumulative shares and consideration assuming
sale of all shares in the line item as compared to maximum in each previous
line.
18
SHARES PURCHASED(1) TOTAL CONSIDERATION AVERAGE
NUMBER PERCENT (2) AMOUNT PERCENT PRICE/SHARE
(3)
-------------------------------------------------------
1) Existing Shareholders 2,525,524 - - - $0.15
2) New Shareholders 500,000 100% 250,000 100% $0.50
375,000 75% 187,500 75% $0.50
250,000 50% 125,000 50% $0.50
125,000 25% 62,500 25% $0.50
"Net tangible book value" is the amount that results from subtracting the total
liabilities and intangible assets from the total assets of an entity. Dilution
occurs because we determined the offering price based on factors other than
those used in computing book value of our stock. Dilution exists because the
book value of shares held by existing stockholders is lower than the offering
price offered to new investors.
(1) 2,525,524 shares were issued at $0.15 per share average.
(2) Percentage relates to total percentage of shares sold up to such
increment in the offering.
(3) Percentage relates to total percentage of capital raised post offering.
Following is a table detailing dilution to investors if 25%, 50%, 75%, or 100%
of the shares in the offering are sold.
25% 50% 75% 100%
============================================ =============== =============== ============== ===============
Net tangible book value per share prior to .006 .006 .006 .006
stock sale
- -------------------------------------------- --------------- --------------- -------------- ---------------
Net tangible book value per share after .020 .042 .061 .080
stock sale(1)
- -------------------------------------------- --------------- --------------- -------------- ---------------
Average cost of shares owned by current .15 .15 .15 .15
stockholders per share
- -------------------------------------------- --------------- --------------- -------------- ---------------
(1) Computation of net tangible book value per share prior to stock sale
includes the deduction of offering costs of $25,000.
As at December 31, 2006, the net tangible book value of our stock was $(0.04)
per share and at December 31, 2007 was $.003 per share. If we are successful in
achieving selling shares at the exercise price, the pro forma net tangible book
value of our stock after deducting the offering costs of $25,000 would be as
shown in chart above. That would represent an immediate increase in net tangible
book value per share and per share dilution to new investors as shown in chart
above, assuming the shares are sold at the offering price of $0.50 for 500,000
shares. The book value of the stock held by our existing stockholders will
increase per share, while new purchaser's book value will decrease from purchase
price, as shown in chart above, to the net tangible book value.
ITEM 7. SELLING SECURITY HOLDERS
Most of the selling shareholders, with the exception of the officers and
directors, obtained their shares of our stock as a spin-off dividend in 1999.
The officers and directors who also received shares in the spin off also
purchased shares as set forth on page 63 and were issued shares for services and
in certain cases converted notes into common stock certain other persons
purchased in a private placements in 1999 and 2000 and another private placement
in 2007.
19
We are authorized to issue 200,000,000 shares of $.001 voting common stock.
There were a total of 1,245,000 shares of common stock issued during the year
ended December 31, 2007 and, therefore, as of December 31, 2007 and 2006 there
are a total of 2,235,524 and 990,524 shares issued and outstanding,
respectively. These additional shares were comprised of 300,000 shares sold as
part of a private placement at $0.10 per share, 420,000 shares issued as payment
of debt in the amount of $84,000 and 525,000 shares issued to consultants for
services valued at $52,500.
On August 2, 2007, we authorized the sale in a private placement of 1,000,000
shares of common stock at a price of $.05 per share under an exemption from
registration provision of the Securities Act of 1933. The funds will be used to
pay the costs associated with its administration and payment of professional
fees to bring us to a fully reporting company within compliance of the
Securities Act of 1933 and 1934.
On October 17, 2007, we authorized up to a one for two reverse split of our
common stock. The reverse split became effective March 31, 2008. Financial
Statements have been adjusted to reflect the reverse split.
Other than the stock transactions discussed above, we have not entered into any
transaction nor are there any proposed transactions in which any founder,
director, executive officer, significant shareholder of our Company or any
member of the immediate family of any of the foregoing had or is to have a
direct or indirect material interest.
No person who may, in the future, be considered a promoter of this offering,
will receive or expect to receive assets, services or other considerations from
us except those persons who are our salaried employees or directors. No assets
will be, nor expected to be, acquired from any promoter on behalf of us. We have
not entered into any agreements that require disclosure to the shareholders.
All of the securities listed below are being registered in this Registration
Statement, which include all of the securities outstanding as of June 30, 2008.
SHARE SHARE PERCENTAGE PERCENTAGE
OWNERSHIP OWNERSHIP OWNERSHIP OWNERSHIP
REGISTERED HOLDER'S NAME BEFORE AFTER BEFORE AFTER
(BENEFICIAL HOLDER'S NAME) ISSUE DATE OFFERING OFFERING OFFERING OFFERING
- --------------------------------------------------- -------------- ----------------- -------------- --------------- ----------------
Abate, Mario Andrew & Rita Anne Abate 8/1/1999 27 0 0.0011% 0%
ADP Clearing & Outsourcing Services (Charles R. Crippen) 8/1/1999 19 0 0.0007% 0%
Adrizzone, Anthony 8/1/1999 9 0 0.0003% 0%
Albro, Sally O. 8/1/1999 1 0 0.0000% 0%
Alexander, Donna 8/1/1999 71 0 0.0028% 0%
Alpine, Geyza G. 8/1/1999 10 0 0.0004% 0%
American Waste Management Co. (Peter Cavallo) 8/1/1999 3,921 0 0.1553% 0%
Anderson, Arthur W.R. & Marjorie H. Andersen 8/1/1999 1 0 0.0000% 0%
Arbeiter, Earl E. 8/1/1999 1 0 0.0000% 0%
Babbs, John 8/1/1999 20 0 0.0008% 0%
Baccala, Aldo 8/1/1999 10 0 0.0004% 0%
Baker, Dorthy 8/1/1999 127 0 0.0050% 0%
Baldi Corporation 8/1/1999 4 0 0.0002% 0%
Banks, Howard 8/1/1999 1 0 0.0000% 0%
Barbaro, Robert A. 8/1/1999 2 0 0.0001% 0%
Bassey, James L. 8/1/1999 5 0 0.0002% 0%
Bauer, Paul L. 8/1/1999 15 0 0.0006% 0%
20
Beaudry, Haley 8/1/1999 13 0 0.0005% 0%
Bergmann, M. Greg & Shannon Bergmann 8/1/1999 26 0 0.0010% 0%
Bergmann, Todd J. 8/1/1999 44 0 0.0017% 0%
Bergstein, Lester & Susan Bergstein 8/1/1999 2 0 0.0001% 0%
Beshany, Charlene M. 8/1/1999 44 0 0.0017% 0%
Beverly, Wayne A. 8/1/1999 15 0 0.0006% 0%
Bjorkman, Elizabeth 8/1/1999 196 0 0.0078% 0%
Bjorkman, Henry C. 8/1/1999 196 0 0.0078% 0%
Bjorkman, Thomas M. 8/1/1999 20 0 0.0008% 0%
Blackhall, Bernice 8/1/1999 3 0 0.0001% 0%
Blackhall, Patty 8/1/1999 14 0 0.0005% 0%
Block, Joyce M. and Kelley Shea 8/1/1999 5 0 0.0002% 0%
Block, Joyce M. and Kelley Shea 8/1/1999 1 0 0.0000% 0%
Bockhorst, Susan 8/1/1999 174 0 0.0069% 0%
Bolander, Larry& Linda bolander 8/1/1999 654 0 0.0259% 0%
Bongard, Thomas 8/1/1999 2,035 0 0.0806% 0%
Bosworth, Karen S. 8/1/1999 10 0 0.0004% 0%
Bradley, William 8/1/1999 1,111 0 0.0440% 0%
Bradley, William 8/1/1999 1,307 0 0.0518% 0%
Brammer, Shelly 8/1/1999 65 0 0.0026% 0%
Bratton, Jason 8/1/1999 2 0 0.0001% 0%
Briggs, Edward 8/1/1999 1 0 0.0000% 0%
Briggs, James F 8/1/1999 5 0 0.0002% 0%
Bronk, Ralph 8/1/1999 3 0 0.0001% 0%
Brown, Gordon H. 8/1/1999 3 0 0.0001% 0%
Brown, Gordon H. 8/1/1999 10 0 0.0004% 0%
Brykman, Arthur & Ester 8/1/1999 17 0 0.0007% 0%
Bullard, Billy D. 8/1/1999 5 0 0.0002% 0%
Butler, Johnnie 8/1/1999 2 0 0.0001% 0%
Byrom, Ronald K. 8/1/1999 9 0 0.0003% 0%
Carefree Trust 8/1/1999 915 0 0.0362% 0%
Carey, Robert E. 8/1/1999 1 0 0.0000% 0%
Carl, III Harold E. 8/1/1999 1 0 0.0000% 0%
Carraro, Angela 8/1/1999 5 0 0.0002% 0%
Carraro, Robert & Deborah Carraro 8/1/1999 10 0 0.0004% 0%
Case, Lindsay 8/1/1999 1 0 0.0000% 0%
Cassidy, George, M.D. 8/1/1999 585 0 0.0232% 0%
Cavallo, Peter 8/1/1999 2,418 0 0.0957% 0%
Cerven, Benedict 8/1/1999 2 0 0.0001% 0%
Chandler, Alan R. 8/1/1999 79 0 0.0031% 0%
Chandler, Larry L. 8/1/1999 436 0 0.0172% 0%
Chang, William J. & Ellen M. Chang 8/1/1999 15 0 0.0006% 0%
21
Charlesworth, Forest 8/1/1999 504 0 0.0199% 0%
Chvila, Miles 8/1/1999 1,307 0 0.0518% 0%
CJP Living Trust 8/1/1999 738 0 0.0292% 0%
Clayman DC, Lawrence 8/1/1999 22 0 0.0009% 0%
Clayman, Franklin Z. 8/1/1999 26 0 0.0010% 0%
Clayman, Franklin Z. & Lawrence Clayman 8/1/1999 65 0 0.0026% 0%
Coats, William 8/1/1999 500 0 0.0198% 0%
Coats, William M. & Nancy R. Manderson 8/1/1999 654 0 0.0259% 0%
Coffe, Dena 8/1/1999 30 0 0.0012% 0%
Cohen, Samuel 8/1/1999 39 0 0.0015% 0%
Cook, Robert A. 8/1/1999 11 0 0.0004% 0%
Copeland, Jimmie A. 8/1/1999 3 0 0.0001% 0%
Coral Reef Financial LLC (Elmer Parsons) 8/1/1999 915 0 0.0362% 0%
Cornell, Charles H. 8/1/1999 65 0 0.0026% 0%
Cornell, Debra J. & Charles H. 8/1/1999 131 0 0.0052% 0%
Costello, Ronald T. 8/1/1999 1 0 0.0000% 0%
Courtney Brown Pension & Profit Sharing 8/1/1999 53 0 0.0021% 0%
(Courtney Brown)
Cowie, David A. 8/1/1999 4,078 0 0.1615% 0%
Crabtree, George W. 8/1/1999 1 0 0.0000% 0%
Creger, James R. 8/1/1999 1 0 0.0000% 0%
Crippen, Chris R. 8/1/1999 44 0 0.0017% 0%
Crippen, Chris R. Sep-IRA c/o ADP Clearing 8/1/1999 35 0 0.0014% 0%
Cruver & Associates (Donald Cruver) 8/1/1999 523 0 0.0207% 0%
Curators-University of Missouri (The University 8/1/1999 784 0 0.0310% 0%
of Missouri)
Cutler, William R. 8/1/1999 24 0 0.0009% 0%
Dallarosa, Vincent K. 8/1/1999 50 0 0.0020% 0%
Dalrymple, Carl 8/1/1999 392 0 0.0155% 0%
Daniel, Melissa 8/1/1999 1 0 0.0000% 0%
Dardani, John 8/1/1999 65 0 0.0026% 0%
Davidian, Jr. Harry 8/1/1999 1,795 0 0.0711% 0%
Davis, Judy A. 8/1/1999 3 0 0.0001% 0%
Davis, Ralph W. 8/1/1999 19 0 0.0008% 0%
Davis, Richard 8/1/1999 4 0 0.0002% 0%
Davis, Timothy A. 8/1/1999 10 0 0.0004% 0%
Deline, Robert E. & Annabelle M. Deline 8/1/1999 131 0 0.0052% 0%
Denali International LTD (William Bradley) 8/1/1999 729 0 0.0289% 0%
Dennis Trescott Co., Profit Sharing Plan 8/1/1999 24 0 0.0009% 0%
(Dennis Trescott)
DeVoe, James 8/1/1999 507 0 0.0201% 0%
DeVoe, James H. 8/1/1999 447 0 0.0177% 0%
Dionisio, Thomas M. and Kimberly A. Dionisio 8/1/1999 5 0 0.0002% 0%
Dittus, Alma IRA 8/1/1999 1 0 0.0000% 0%
Dittus, Charles & Alma Dittus 8/1/1999 7 0 0.0003% 0%
22
Dittus, Donald C. 8/1/1999 12 0 0.0005% 0%
Dittus, Donald C. & Charles A. Dittus 8/1/1999 25 0 0.0010% 0%
Dobbs, Joe D. 8/1/1999 24 0 0.0009% 0%
Dobesh, M.H. 8/1/1999 218 0 0.0086% 0%
Doran, Michael J. 8/1/1999 3 0 0.0001% 0%
Doris L.Nichols Estate (Helen Hays) 8/1/1999 20 0 0.0008% 0%
Dorris, Ronald P. c/f Carissa Dorris 8/1/1999 1 0 0.0000% 0%
Dorris, Ronald P. c/f Erics Dorris 8/1/1999 1 0 0.0000% 0%
Douglas, Rosamond 8/1/1999 1 0 0.0000% 0%
Dunn, Glenn 8/1/1999 87 0 0.0034% 0%
Eakle, Barbara H. 8/1/1999 4 0 0.0002% 0%
Early, Alison R. 8/1/1999 9 0 0.0003% 0%
Early, Donald L. & Beverly H. 8/1/1999 175 0 0.0069% 0%
Eaton, William C. 8/1/1999 1,370 0 0.0542% 0%
Eckelberger, Jerrie F. 8/1/1999 5 0 0.0002% 0%
Eickhoff, Rainer 8/1/1999 10,071 0 0.3988% 0%
Elsburg, Majorie T. 8/1/1999 1 0 0.0000% 0%
Enea, Vesty F. 8/1/1999 6 0 0.0002% 0%
Erving, III Bruce A. 8/1/1999 2,039 0 0.0807% 0%
Estate of Harold A. Snyder 8/1/1999 64 0 0.0025% 0%
Estate of Harold R. Horner 8/1/1999 1,307 0 0.0518% 0%
Falke, Pat 8/1/1999 20 0 0.0008% 0%
Farmer, Bob 8/1/1999 436 0 0.0172% 0%
Farmer, Hilda 8/1/1999 1 0 0.0000% 0%
Farrow, Kenton G. 8/1/1999 436 0 0.0172% 0%
Favero, Valentine & Patricia Favero 8/1/1999 1 0 0.0000% 0%
FCS FBO Donna S. Saunders IRA 8/1/1999 9 0 0.0003% 0%
FCS FBO Donna S. Saunders IRA 8/1/1999 9 0 0.0003% 0%
FCS FBO William F. Saunders IRA 8/1/1999 13 0 0.0005% 0%
Feder, Harlan 8/1/1999 2 0 0.0001% 0%
Feder, Janet 8/1/1999 2 0 0.0001% 0%
Feder, Sharon 8/1/1999 2 0 0.0001% 0%
Feldman, Dave & Blance Feldman 8/1/1999 1 0 0.0000% 0%
Feldman, Leonid A. 8/1/1999 2 0 0.0001% 0%
Ferguson, Lisa 8/1/1999 19 0 0.0008% 0%
Fernmins-Velaroe, Rebecca 8/1/1999 359 0 0.0142% 0%
Finfrock, Jan 8/1/1999 10 0 0.0004% 0%
Finkler, Arthur & Marion 8/1/1999 1 0 0.0000% 0%
Fiorio, Lisa 8/1/1999 13 0 0.0005% 0%
Fioro, John R. 8/1/1999 26 0 0.0010% 0%
Fioro, John R. IRA 8/1/1999 72 0 0.0029% 0%
First Trust Corp FBO William Marcus Cooke 8/1/1999 79 0 0.0031% 0%
(Marcus Cooke)
23
Fischer, Bruce 8/1/1999 26 0 0.0010% 0%
Fiserv Securities, Inc. FBO Fred L. Scudder IRA 8/1/1999 26 0 0.0010% 0%
Fiserv Securities, Inc. FBO William Saunders II 8/1/1999 13 0 0.0005% 0%
Fiss, Logan 8/1/1999 196 0 0.0078% 0%
Florey, Sidney R. 8/1/1999 5 0 0.0002% 0%
Floyd James Wilkes Trust (Floyd James Wilkes) 8/1/1999 436 0 0.0172% 0%
Ford, Richard 8/1/1999 42 0 0.0017% 0%
Formby, Emmett & Cathy 8/1/1999 9 0 0.0004% 0%
Formby, Emmett & Cathy 8/1/1999 74 0 0.0029% 0%
Formby, Generieve M. 8/1/1999 75 0 0.0029% 0%
Frank, Carl 8/1/1999 28 0 0.0011% 0%
Frank, Vicky L. 8/1/1999 9 0 0.0003% 0%
Frank, Vicky L. 8/1/1999 19 0 0.0007% 0%
Franks, Richard 8/1/1999 436 0 0.0172% 0%
Franz, Bruce E. 8/1/1999 3 0 0.0001% 0%
Freedman, Saul & Helen Freedman 8/1/1999 1 0 0.0000% 0%
Friedman, Jeri 8/1/1999 5 0 0.0002% 0%
G.H. Husko Charitable Remainder Trust (Gayle H. Husko) 8/1/1999 457 0 0.0181% 0%
Gager, Wayne A. & Brucie V. 8/1/1999 1 0 0.0000% 0%
Gallant, Robert 8/1/1999 22 0 0.0009% 0%
Gamroth, Neil 8/1/1999 105 0 0.0041% 0%
Gartland, Maureen 8/1/1999 1 0 0.0000% 0%
Gateley, Barbara S. 8/1/1999 96 0 0.0038% 0%
Gateley, Edward Y. 8/1/1999 96 0 0.0038% 0%
Gately, Edward 8/1/1999 100 0 0.0040% 0%
Gay, Donald Lee 8/1/1999 82 0 0.0032% 0%
Geiermann, Richard N. 8/1/1999 198 0 0.0078% 0%
Gerolimatos, Spiro G. 8/1/1999 294 0 0.0116% 0%
Gerren, Gary D. 8/1/1999 1 0 0.0000% 0%
Gervais, Forest 8/1/1999 1 0 0.0000% 0%
Gilmore, Erika 8/1/1999 48 0 0.0019% 0%
Gilmore, F. William 8/1/1999 100 0 0.0040% 0%
Golembeski, Lawrence & Betty Golembeski 8/1/1999 5 0 0.0002% 0%
Goodhand, O. Glenn 8/1/1999 119 0 0.0047% 0%
Graeser, Ken 8/1/1999 65 0 0.0026% 0%
Graeser, Ken 8/1/1999 44 0 0.0017% 0%
Gregarek, R.L. 8/1/1999 4 0 0.0002% 0%
Grote, David C.J. 8/1/1999 17 0 0.0007% 0%
Ground, Scott & Marilyn Ground 8/1/1999 1 0 0.0000% 0%
Groves, Karen c/o Brian Healey 8/1/1999 2,690 0 0.1065% 0%
Groves, Richard c/o Brian Healey 8/1/1999 2,690 0 0.1065% 0%
Guardiani, Edward P. 8/1/1999 1 0 0.0000% 0%
24
Hale, James & Carol Hale 8/1/1999 2 0 0.0001% 0%
Hale, Kathy J. 8/1/1999 35 0 0.0014% 0%
Hallett, Michael Curtis 8/1/1999 7 0 0.0003% 0%
Hanson, Marie 8/1/1999 16 0 0.0006% 0%
Harold A. Feder Trust 8/1/1999 5 0 0.0002% 0%
Harper, Helen 8/1/1999 4 0 0.0002% 0%
Harrison, Wendy H. & Bruce R. 8/1/1999 4 0 0.0002% 0%
Hawke, Robert H. & Dolores L. 8/1/1999 58 0 0.0023% 0%
Hays, Mary E. 8/1/1999 3 0 0.0001% 0%
Healey, Brian 8/1/1999 2,157 0 0.0854% 0%
Heath, Roderic & Dorthy M. 8/1/1999 1 0 0.0000% 0%
Heersink, Myron H. 8/1/1999 5 0 0.0002% 0%
Heiblum, Philip & Marcy Heiblum 8/1/1999 10 0 0.0004% 0%
Heim, Botert B. IRA 8/1/1999 5 0 0.0002% 0%
Helm, Patti 8/1/1999 100 0 0.0040% 0%
Hendrix, Richard 8/1/1999 3 0 0.0001% 0%
Herbst, Lori 8/1/1999 48 0 0.0019% 0%
His Cust FBO IRA Carl L. Seletto 8/1/1999 11 0 0.0004% 0%
HiWay, Pennington III 8/1/1999 187 0 0.0074% 0%
Hohl, E. David 8/1/1999 14 0 0.0005% 0%
Holbrook, Richard C. & Jane 8/1/1999 40 0 0.0016% 0%
Holl, Margaret D. 8/1/1999 14 0 0.0005% 0%
Holt, Elvin 8/1/1999 2 0 0.0001% 0%
Howes, Peter 8/1/1999 1,394 0 0.0552% 0%
Huntoon, C. Gary 8/1/1999 4 0 0.0002% 0%
Huppman, Ludwig 8/1/1999 10 0 0.0004% 0%
Huttner, Ann 8/1/1999 445 0 0.0176% 0%
Huttner, Frederick 8/1/1999 22 0 0.0009% 0%
Huttner, Frederick 8/1/1999 154 0 0.0061% 0%
Huttner, Richard A. 8/1/1999 10 0 0.0004% 0%
Huttner, Robert 8/1/1999 37 0 0.0015% 0%
Hylton, Michael F. 8/1/1999 1 0 0.0000% 0%
HZ Inc. Pension Trust 8/1/1999 88 0 0.0035% 0%
Ingram, Charles A. 8/1/1999 436 0 0.0172% 0%
Ingram, Charles A. 8/1/1999 81 0 0.0032% 0%
Irving, III Bruce A. 8/1/1999 2,039 0 0.0807% 0%
Ito, James O. & Toshiko N. 8/1/1999 4 0 0.0001% 0%
J. Lincoln Spaulding IRA 8/1/1999 5 0 0.0002% 0%
J.R. Levy Family Partners 8/1/1999 327 0 0.0129% 0%
(Robert, Darren and Candace Levy)
Jack L. Company % Bonnie Andrikopoulos 8/1/1999 296 0 0.0117% 0%
(Bonnie Andrikopoulos)
Jacobsen, Mat 8/1/1999 14 0 0.0006% 0%
Jacobson, Irvin & Doris F. Jacobson 8/1/1999 1 0 0.0000% 0%
25
Jelling, Jonathan P. 8/1/1999 24 0 0.0009% 0%
Jelling, Murray 8/1/1999 10 0 0.0004% 0%
Jone, K. Bruce 8/1/1999 4,360 0 0.1726% 0%
Jones, K. Bruce 8/1/1999 436 0 0.0172% 0%
Jones, K. Bruce 8/1/1999 445 0 0.0176% 0%
Justus, C. H. 8/1/1999 719 0 0.0285% 0%
Karraker, Gregory R. 8/1/1999 22 0 0.0009% 0%
Karsh, Lewis 8/1/1999 8 0 0.0003% 0%
Karsh, Lewis 8/1/1999 10 0 0.0004% 0%
Katchen, Stephen D. 8/1/1999 8 0 0.0003% 0%
Kathol, Lea A. 8/1/1999 3 0 0.0001% 0%
Keleshian, Noreen Mary 8/1/1999 3 0 0.0001% 0%
Kellis, Dr. Augustine J. 8/1/1999 4,379 0 0.1734% 0%
Kellis, Dr. George J. 8/1/1999 3,921 0 0.1552% 0%
Kellis, Dr. Michael J. Kellis 8/1/1999 3,529 0 0.1397% 0%
Kelly, Kevin 8/1/1999 654 0 0.0259% 0%
King, Steven 8/1/1999 3 0 0.0001% 0%
Kleberger, Kenneth A. & L. June 8/1/1999 8 0 0.0003% 0%
Kleinschmidt, Paul 8/1/1999 1 0 0.0000% 0%
Knutson IRA, Owen 8/1/1999 24 0 0.0009% 0%
Koehler, William 8/1/1999 51 0 0.0020% 0%
Kopicko, Joseph 8/1/1999 784 0 0.0310% 0%
Kopp, David & Margaret 8/1/1999 1 0 0.0000% 0%
Kowaleski, John A. 8/1/1999 1 0 0.0000% 0%
Krist, Peter 8/1/1999 327 0 0.0129% 0%
Kuhren, Michael 8/1/1999 1 0 0.0000% 0%
Langer, Patrick F. and Kathryn R. 8/1/1999 2 0 0.0001% 0%
Langston, Jack 8/1/1999 24 0 0.0009% 0%
Larko 8/1/1999 6 0 0.0002% 0%
Lathrop, Martha 8/1/1999 6 0 0.0002% 0%
Lavey, Lewis & Genevieve 8/1/1999 2 0 0.0001% 0%
Lead J. Land Company, Inc. 8/1/1999 100 0 0.0040% 0%
Lecompte, III MD, Benjamin 8/1/1999 797 0 0.0316% 0%
Lee, David W. 8/1/1999 1 0 0.0000% 0%
Lee, Stephen 8/1/1999 19 0 0.0008% 0%
Leibold, Val W. 8/1/1999 5 0 0.0002% 0%
LeMasters, D. Larry 8/1/1999 67 0 0.0026% 0%
Lemerise, Gary L. 8/1/1999 872 0 0.0345% 0%
Leve, Michael B. 8/1/1999 4 0 0.0001% 0%
Levy, Darren 8/1/1999 109 0 0.0043% 0%
Levy, Robert E. & Candace A. 8/1/1999 2,614 0 0.1035% 0%
Lillie I. Bratton Family Trust (Martha Farmer) 8/1/1999 44 0 0.0017% 0%
26
Locke, Charles E. 8/1/1999 100 0 0.0040% 0%
Long, Donald 8/1/1999 20 0 0.0008% 0%
Lopez, Paul E. & Enea 8/1/1999 10 0 0.0004% 0%
Loucher, Frederick G. 8/1/1999 4 0 0.0001% 0%
Loughlin, Terrence R. 8/1/1999 4 0 0.0001% 0%
Lucey, Harold & Barbara 8/1/1999 24 0 0.0009% 0%
Lufkin, Donaldson & Jenrette 8/1/1999 290 0 0.0115% 0%
Lufkin, Donaldson & Jenrette 8/1/1999 95 0 0.0037% 0%
Lufkin, Donaldson & Jenrette 8/1/1999 1,229 0 0.0487% 0%
Lunnon, Thomas E. 8/1/1999 5 0 0.0002% 0%
Lyons, Richard 8/1/1999 10 0 0.0004% 0%
Madda MD, Frank C. 8/1/1999 262 0 0.0104% 0%
Major, Granville E.; Mason 2 8/1/1999 4 0 0.0002% 0%
Mandarino, Joseph 8/1/1999 503 0 0.0199% 0%
Marshall, Art 8/1/1999 20 0 0.0008% 0%
Martin, George 8/1/1999 41 0 0.0016% 0%
Maslin, Paul E. & Louisa L. Maslin 8/1/1999 14 0 0.0006% 0%
Mason, George T. 8/1/1999 653 0 0.0259% 0%
Mason, Martha 8/1/1999 1,307 0 0.0518% 0%
Mason, Shipley C. 8/1/1999 653 0 0.0259% 0%
Mason, Thomas J. 8/1/1999 653 0 0.0259% 0%
Massey, Michael G. 8/1/1999 52 0 0.0021% 0%
May, Frank & Mary 8/1/1999 11 0 0.0004% 0%
McCalman, Hardy 8/1/1999 2 0 0.0001% 0%
McCoy, William C. & Tanya McCoy 8/1/1999 19 0 0.0008% 0%
McCue, Robert 8/1/1999 19 0 0.0008% 0%
McDonald, William E. 8/1/1999 14 0 0.0006% 0%
McDonaough, Patrick & Karen 8/1/1999 30 0 0.0012% 0%
Mcginnis, Elizabeth 8/1/1999 458 0 0.0181% 0%
Mcgovern, M. Marguertie 8/1/1999 3 0 0.0001% 0%
McGuire, Denis 8/1/1999 125 0 0.0049% 0%
McLain, Francis L. 8/1/1999 10 0 0.0004% 0%
McLaughlin, Colin R. & Carol J. 8/1/1999 3 0 0.0001% 0%
McPheison, Terald 8/1/1999 255 0 0.0101% 0%
Meeks, Frank M. 8/1/1999 40 0 0.0016% 0%
Mehta, Hina 8/1/1999 503 0 0.0199% 0%
Meinerz, J. Michael 8/1/1999 53 0 0.0021% 0%
Meinerz, Jeffrey J. 8/1/1999 14 0 0.0006% 0%
Meinerz, Lois C. FBO Heathre M. Minerz 8/1/1999 11 0 0.0004% 0%
Meinerz, Lois C. FBO Heathre M. Minerz 8/1/1999 10 0 0.0004% 0%
Meltzer, Gerald E. 8/1/1999 11 0 0.0004% 0%
Menconi, Bernardo & Dina Menconi 8/1/1999 1 0 0.0000% 0%
27
Milechtaich, Abram & Ursula Milechtaich 8/1/1999 5 0 0.0002% 0%
Mims, Fern H. 8/1/1999 19 0 0.0008% 0%
Mitchell, Jr. George W. 8/1/1999 20 0 0.0008% 0%
Mohan, Piare 8/1/1999 218 0 0.0086% 0%
Monahan, Connie 8/1/1999 2 0 0.0001% 0%
Moore, Homer L & Bettye L. Moore 8/1/1999 20 0 0.0008% 0%
Morgan Sr., William S. 8/1/1999 1 0 0.0000% 0%
Muinck, Andre R. 8/1/1999 12 0 0.0005% 0%
Mukarkar, Sarn 8/1/1999 51 0 0.0020% 0%
Myers, James J. 8/1/1999 2 0 0.0001% 0%
Napolitano, Phillip 8/1/1999 6,598 0 0.2612% 0%
Nastasi, Robert 8/1/1999 1 0 0.0000% 0%
National Financial Services LLC 8/1/1999 53 0 0.0021% 0%
National Financial Services LLC 8/1/1999 131 0 0.0052% 0%
National Investor Services 8/1/1999 105 0 0.0041% 0%
Neal, William Russell 8/1/1999 22 0 0.0009% 0%
Nelson, Bruce & Barbara E. Nelson 8/1/1999 22 0 0.0009% 0%
Nelson, Robert 8/1/1999 3 0 0.0001% 0%
Nelson, Robert 8/1/1999 72 0 0.0028% 0%
Nichols, Karen 8/1/1999 2,269 0 0.0898% 0%
Nichols, Karen 8/1/1999 632 0 0.0250% 0%
Nichols, Richard E. 8/1/1999 262 0 0.0104% 0%
Nichols, W. Edward (1) 8/1/1999 570 0 0.0226% 0%
Nichols, W. Edward (1) 8/1/1999 65 0 0.0026% 0%
Nichols, W. Edward & Karen (1) 8/1/1999 17,478 0 0.6920% 0%
Nikki Stolee 8/1/1999 963 0 0.0381% 0%
Nino, Jose 8/1/1999 22 0 0.0009% 0%
Octagon Wordwide Ltd. 8/1/1999 2,287 0 0.0906% 0%
Ogilive, Steward 8/1/1999 5 0 0.0002% 0%
Ohlrich, Gary L. 8/1/1999 3 0 0.0001% 0%
Olsen, D. Kay 8/1/1999 5 0 0.0002% 0%
Olson, David A. 8/1/1999 9 0 0.0004% 0%
Omicron Holdings (Company out of business mid 1990's) 8/1/1999 218 0 0.0086% 0%
O'Neal, Merrill 8/1/1999 654 0 0.0259% 0%
Otra Clearing,Inc. 8/1/1999 14 0 0.0006% 0%
Paddison, Walter & Alice 8/1/1999 4 0 0.0002% 0%
Pagel, Irene H. 8/1/1999 2 0 0.0001% 0%
Pagliari, Terry 8/1/1999 20 0 0.0008% 0%
Pan Enterprises, LLC (Michael Pearce) 8/1/1999 2,287 0 0.0906% 0%
Panchal, Kanu MD 8/1/1999 4 0 0.0002% 0%
Park, Antoinette M. 8/1/1999 2 0 0.0001% 0%
Park, David S. 8/1/1999 1 0 0.0000% 0%
Parker Howry Family Trust (Eugene Howry) 8/1/1999 458 0 0.0181% 0%
Parker, John E. 8/1/1999 131 0 0.0052% 0%
Patterson Jr., Richard M. 8/1/1999 2,285 0 0.0905% 0%
Peacock, Gordon P. & Mary L. 8/1/1999 9 0 0.0003% 0%
28
Pearlman, Stuart 8/1/1999 3 0 0.0001% 0%
Pears, Michael A. 8/1/1999 654 0 0.0259% 0%
Pefley, David R. 8/1/1999 2 0 0.0001% 0%
Peterson, Jane B. 8/1/1999 53 0 0.0021% 0%
Peterson, Norman 8/1/1999 44 0 0.0017% 0%
Phillips, Patrick E. 8/1/1999 14 0 0.0006% 0%
Pierce Family Trust (Jackie Pierce) 8/1/1999 460 0 0.0182% 0%
Pinehurst Holdings (Sterling Kerr) 8/1/1999 364 0 0.0144% 0%
Pizzoferrato, John 8/1/1999 3 0 0.0001% 0%
Platte, Rodney H. 8/1/1999 2 0 0.0001% 0%
Ploshnick, Morton 8/1/1999 40 0 0.0016% 0%
Podwell, Edward and Mildred 8/1/1999 2 0 0.0001% 0%
Pollack, Robert 8/1/1999 4 0 0.0002% 0%
Posnanski, Charles 8/1/1999 327 0 0.0129% 0%
Pratt, Glenn 8/1/1999 66 0 0.0026% 0%
Pratt, Robert J. 8/1/1999 5 0 0.0002% 0%
Pratt, Ronald, A. 8/1/1999 6 0 0.0002% 0%
Price, Haywood 8/1/1999 5 0 0.0002% 0%
Prior, Harold 8/1/1999 2 0 0.0001% 0%
Pruitt, Al 8/1/1999 1 0 0.0000% 0%
Pusey, Jill 8/1/1999 10 0 0.0004% 0%
Randall B. McDonald Life Insurance Trust 8/1/1999 261 0 0.0103% 0%
(Randall B. McDonald)
Randall B. McDonald Life Insurance Trust 8/1/1999 207 0 0.0082% 0%
(Randall B. McDonald)
Ray, Michael 8/1/1999 164 0 0.0065% 0%
Reed, Harold D. 8/1/1999 27 0 0.0010% 0%
Reed, Joe G. 8/1/1999 27 0 0.0010% 0%
Reilly, Jeffrey P. 8/1/1999 196 0 0.0078% 0%
ReKart, Ado 8/1/1999 1,242 0 0.0492% 0%
Rekart, Ado 8/1/1999 815 0 0.0323% 0%
ReKart, Ado J.& Marilyn R. ReKart 8/1/1999 110 0 0.0044% 0%
Reliance Trust FOB Nels W. Schlander 8/1/1999 436 0 0.0172% 0%
Renk, Russell R. Cust. Travis J. Renk 8/1/1999 5 0 0.0002% 0%
Richards, R. Mark 8/1/1999 71 0 0.0028% 0%
Richards, Robert Alan 8/1/1999 45 0 0.0018% 0%
Rinard, Jackie R. 8/1/1999 2 0 0.0001% 0%
Ripple, Harvey 8/1/1999 1 0 0.0000% 0%
Robert White Irrevocable Life Insurance (Robert White) 8/1/1999 307 0 0.0121% 0%
Robinson Environmental Corp (Larry Robinson) 8/1/1999 50 0 0.0020% 0%
Rogers, Gloria S. 8/1/1999 1 0 0.0000% 0%
Rogers, Lawrence 8/1/1999 18 0 0.0007% 0%
Roland, Luella J. 8/1/1999 458 0 0.0181% 0%
Romanelli, Frank H. 8/1/1999 654 0 0.0259% 0%
29
Rosa, Michael R. 8/1/1999 6,740 0 0.2669% 0%
Rose Trust Partnership 8/1/1999 218 0 0.0086% 0%
Rosshandler, Susan 8/1/1999 182 0 0.0072% 0%
Rothstein, Steven A. 8/1/1999 41 0 0.0016% 0%
Rucinski, Jennifer L. 8/1/1999 25 0 0.0010% 0%
Rucinski, Robert O. 8/1/1999 10 0 0.0004% 0%
Rumbaugh, Rhonda 8/1/1999 3 0 0.0001% 0%
Rumbaugh, Zona 8/1/1999 3 0 0.0001% 0%
Ruth E. Young & Company 8/1/1999 31 0 0.0012% 0%
Salandra, Anthony Thomas 8/1/1999 87 0 0.0034% 0%
Salandra, Peter and Rachael Salandra, JT TEN 8/1/1999 26 0 0.0010% 0%
Sand Dollar Ventures Ltd. (Ronald Hadam) 8/1/1999 910 0 0.0360% 0%
Sandow, Leonard A. & Helen 8/1/1999 436 0 0.0172% 0%
Sapirstein, Eric 8/1/1999 22 0 0.0009% 0%
Saughnessy, Linda A. 8/1/1999 962 0 0.0381% 0%
Schaefer, Richard P & Rose Marie 8/1/1999 2 0 0.0001% 0%
Schandler, Neis 8/1/1999 608 0 0.0241% 0%
Schlander, Neis W. IRA 8/1/1999 39 0 0.0015% 0%
Schlander, Nels W. 8/1/1999 567 0 0.0224% 0%
Schrader, Doris Ann 8/1/1999 10 0 0.0004% 0%
Sears, Ann M. 8/1/1999 653 0 0.0259% 0%
Sears, Ann M. TTEE Ann Sears Family Nominee Trust 8/1/1999 182 0 0.0072% 0%
Sears, Edith C. TTEE FBO Edith C. Sears 8/1/1999 349 0 0.0138% 0%
Sears, Hannah 8/1/1999 262 0 0.0104% 0%
Sears, Herbert T. (2) 8/1/1999 16,574 0 0.6562% 0%
Sears, Herbert T. TTEE Herbert Mason Sears 8/1/1999 262 0 0.0104% 0%
Sears, Herbert T. TTEE Herbert S. Family 8/1/1999 436 0 0.0172% 0%
Sears, Herbert T. TTEE Herbert W. Sears 8/1/1999 175 0 0.0069% 0%
Sears, Herbert T.& Ann TTEES Herbert Sears (2) 8/1/1999 2,178 0 0.0862% 0%
Sears, Herbert T.c/f Emily G. Sears (2) 8/1/1999 262 0 0.0104% 0%
Sears, Herbert W. 8/1/1999 175 0 0.0069% 0%
Seminaro, Elizabeth B. 8/1/1999 10 0 0.0004% 0%
Shea, Kelley J. & Heather Roesener 8/1/1999 1 0 0.0000% 0%
Shenton, William C. & Deborah L. Shenton 8/1/1999 504 0 0.0199% 0%
Showalter, Catherine L. 8/1/1999 3 0 0.0001% 0%
Showalter, Mark C. 8/1/1999 3 0 0.0001% 0%
Showalter, Robert D. 8/1/1999 246 0 0.0097% 0%
Showalter, Steven D. 8/1/1999 3 0 0.0001% 0%
Simpher, Robert G. 8/1/1999 6 0 0.0002% 0%
Simpher, Robert G. 8/1/1999 10 0 0.0004% 0%
Simpson, Michael W. 8/1/1999 262 0 0.0104% 0%
Siskiyou Investors (Tom Lindley) 8/1/1999 1 0 0.0000% 0%
30
Slayton, Maritta L. 8/1/1999 6 0 0.0002% 0%
Smith, Andrew 8/1/1999 1 0 0.0000% 0%
Smith, Darryl 8/1/1999 1 0 0.0000% 0%
Smith, Dave & Julie Bongard 8/1/1999 7 0 0.0003% 0%
Smith, George L. 8/1/1999 182 0 0.0072% 0%
Smith, Hugh 8/1/1999 67 0 0.0026% 0%
Sorrese, Henry & Joyce Sorrese 8/1/1999 1 0 0.0000% 0%
Souran, Karen N. 8/1/1999 33 0 0.0013% 0%
Specialty Funders Ltd. (William Gibney) 8/1/1999 2,137 0 0.0846% 0%
Speck, George A. 8/1/1999 3 0 0.0001% 0%
Sperling, Leroy A. 8/1/1999 2 0 0.0001% 0%
St. Onge, Baca 8/1/1999 44 0 0.0017% 0%
Stan, Otha 7 Cheryl Anderson 8/1/1999 1 0 0.0000% 0%
Stein, Wayne 8/1/1999 4 0 0.0002% 0%
Steiner, Jon E. & Ruth V. Steiner 8/1/1999 336 0 0.0133% 0%
Steiner, Jon FBO Travis W. Steiner 8/1/1999 44 0 0.0017% 0%
Steiner, Ruth V. FBO Maura J. Steiner 8/1/1999 22 0 0.0009% 0%
Stendebach, Bernharda 8/1/1999 109 0 0.0043% 0%
Stephens, Clint 8/1/1999 5 0 0.0002% 0%
Sterne, Agee & Leach, Brenda M. Sensenig 8/1/1999 196 0 0.0078% 0%
Sterne, Agee & Leach, Earl A. Sensenig 8/1/1999 216 0 0.0085% 0%
Stolee, Nikki 8/1/1999 106 0 0.0042% 0%
Strause, Jann T. 8/1/1999 107 0 0.0042% 0%
Strawmyre, Michael 8/1/1999 2 0 0.0001% 0%
Stubbs, Richard 8/1/1999 1,013 0 0.0401% 0%
Suburban Plastic Surgery Association (Philip Bushnik) 8/1/1999 109 0 0.0043% 0%
Sudler, Louis C. 8/1/1999 1,329 0 0.0526% 0%
Svacina, Leigh R. 8/1/1999 131 0 0.0052% 0%
Swain, Charles r. & Linda A. 8/1/1999 428 0 0.0169% 0%
Tafoya, J.M. & L.S. Tafoya 8/1/1999 21 0 0.0008% 0%
TD Investor Company, TD Bank Toronto 8/1/1999 1,005 0 0.0398% 0%
Teague, Cleve 8/1/1999 5 0 0.0002% 0%
Ten Kid Trust Martha Farmer Trustee 8/1/1999 436 0 0.0172% 0%
Tenzel, David M.D. 8/1/1999 458 0 0.0181% 0%
Tenzel, Richard M.D. 8/1/1999 458 0 0.0181% 0%
Thorsen, Richard P. & Nancy Thorsen 8/1/1999 262 0 0.0104% 0%
Till, Paul 8/1/1999 42 0 0.0017% 0%
Tollett, Norman D. 8/1/1999 7 0 0.0003% 0%
Trafton, Larry T. & Deborah J. Tafton 8/1/1999 6 0 0.0002% 0%
Tsengas, Steven 8/1/1999 5,446 0 0.2156% 0%
Turner, Wilma 8/1/1999 2 0 0.0001% 0%
Unity Church of Christianity (Church in Houston) 8/1/1999 98 0 0.0039% 0%
31
US Bancorp FBO Gerald Bongard 8/1/1999 166 0 0.0066% 0%
US Bancorp FBO M. Greg Bergmann 8/1/1999 26 0 0.0010% 0%
Usrey, Amy 8/1/1999 48 0 0.0019% 0%
Vaccaro, paul V. 8/1/1999 19 0 0.0008% 0%
Van Orman, Judith H. 8/1/1999 12 0 0.0005% 0%
Van Westreeneen, Dirk 8/1/1999 363 0 0.0144% 0%
Van Westreenen, Dirk 8/1/1999 1,869 0 0.0740% 0%
Varcoe, Vernon 8/1/1999 16 0 0.0006% 0%
VenBanc Inc. (Fritz Voelker) 8/1/1999 3,897 0 0.1543% 0%
VenBanc Inc. (Fritz Voelker) 8/1/1999 162 0 0.0064% 0%
Vespa, Jon 8/1/1999 1,013 0 0.0401% 0%
Vinton Nissler Allen & Vellore 401K 8/1/1999 1,307 0 0.0518% 0%
Voelker, Fritz 8/1/1999 1,308 0 0.0518% 0%
Voelker, Fritz C. 8/1/1999 261 0 0.0103% 0%
Volkman, Michael 8/1/1999 44 0 0.0017% 0%
Wagner, Larry L. & Jane M. 8/1/1999 109 0 0.0043% 0%
Walker, James D. 8/1/1999 30 0 0.0012% 0%
Walsh, William & Jane Walsh 8/1/1999 11 0 0.0004% 0%
Ward, Doug & Carol Ward 8/1/1999 87 0 0.0034% 0%
Watson, David & Kimberly Watson 8/1/1999 26 0 0.0010% 0%
Weingrad, Michael B & Eileen R. 8/1/1999 11 0 0.0004% 0%
Werner, Mardi 8/1/1999 22 0 0.0009% 0%
Werth, Elmer O. 8/1/1999 284 0 0.0112% 0%
Whisler, Curtis R. MD 8/1/1999 218 0 0.0086% 0%
Whisler, Katherine J. 8/1/1999 87 0 0.0034% 0%
Whisler, Laura C. 8/1/1999 89 0 0.0035% 0%
Whisler, Walter W. 8/1/1999 270 0 0.0107% 0%
White, James 8/1/1999 27 0 0.0010% 0%
Wilcox, David W. Educational Trust 8/1/1999 1 0 0.0000% 0%
Wiley, Jack 8/1/1999 4 0 0.0001% 0%
Wiley, Joseph I. 8/1/1999 431 0 0.0170% 0%
Willett, Helen M. 8/1/1999 2 0 0.0001% 0%
Williamson, Julie 8/1/1999 11 0 0.0004% 0%
Wolf, Martin 8/1/1999 30 0 0.0012% 0%
Wolfson, Howard M. IRA 8/1/1999 22 0 0.0009% 0%
Wood, David W. IRA (David W. Wood) 8/1/1999 327 0 0.0129% 0%
Woolf, Marc W. & Cynthia R. Woolf 8/1/1999 10 0 0.0004% 0%
Wright, Jay E & Jeanne 8/1/1999 23 0 0.0009% 0%
Yatros, George 8/1/1999 105 0 0.0041% 0%
Zeitlin, Michael 8/1/1999 2 0 0.0001% 0%
Zelle, Patricia S. 8/1/1999 1 0 0.0000% 0%
Zieback, Kathryn M. 8/1/1999 7 0 0.0003% 0%
32
Zoeller, Henry A. 8/1/1999 2 0 0.0001% 0%
Healey, Brian 8/4/1999 20,585 0 0.8151% 0%
Healey, Brian 8/4/1999 13,723 0 0.5434% 0%
Rosa, Michael 8/4/1999 20,585 0 0.8151% 0%
Groves, Jared 9/7/1999 20,585 0 0.8151% 0%
Healey, Brian 9/7/1999 205,846 0 8.1506% 0%
Sears, Herbert T. (2) 9/7/1999 140,661 0 5.5696% 0%
Dixon, Giles 9/21/1999 1,373 0 0.0543% 0%
Sawyer, Peter 11/1/1999 2,745 0 0.1087% 0%
Carlton, Mark L. 12/20/1999 2,745 0 0.1087% 0%
Mason, Thomas 12/20/1999 2,745 0 0.1087% 0%
Rosshandler, Jonathan 12/20/1999 1,373 0 0.0543% 0%
Cullinane, Robert W. 1/26/2000 2,745 0 0.1087% 0%
Kozak, Scott L. & Christiane W.Kozak 1/26/2000 2,745 0 0.1087% 0%
Groves, Jared c/o Brian Healey 2/2/2000 110 0 0.0044% 0%
Clark, Charles R. Jr. and Claire P. Clark 2/7/2000 2,745 0 0.1087% 0%
Mason, Shipley C. 2/7/2000 2,745 0 0.1087% 0%
Mason, Thomas 2/7/2000 2,745 0 0.1087% 0%
Clifford, John 2/11/2000 1,373 0 0.0543% 0%
Clifford, John and Kathy 2/11/2000 1,373 0 0.0543% 0%
Hays, Helen 2/11/2000 1,373 0 0.0543% 0%
Healey, Daniel and Celine Healey 2/11/2000 1,373 0 0.0543% 0%
Healey, Donald & Mauren 2/11/2000 1,373 0 0.0543% 0%
Healey, John and Carolyn 2/11/2000 1,373 0 0.0543% 0%
Healey, Lisa 2/11/2000 1,373 0 0.0543% 0%
Marco, Ed and Cherly 2/11/2000 1,373 0 0.0543% 0%
Nichols, John W. 2/11/2000 4,803 0 0.1902% 0%
Nichols, Karen A. 2/11/2000 13,723 0 0.5434% 0%
Nichols, Richard E. 2/11/2000 4,803 0 0.1902% 0%
Nichols, W. Edward (1) 2/11/2000 9,606 0 0.3804% 0%
McCue, Robert C 2/14/2000 275 0 0.0109% 0%
Cruver and Associates P.C. (Donald Cruver) 2/15/2000 1,373 0 0.0543% 0%
Sears, Ann M. 2/17/2000 6,862 0 0.2717% 0%
Sears, Emily G. 2/17/2000 4,117 0 0.1630% 0%
Sears, Hannah T. 2/17/2000 4,117 0 0.1630% 0%
Sears, Herbert M. 2/17/2000 4,117 0 0.1630% 0%
Sears, Herbert T. (2) 2/17/2000 8,234 0 0.3260% 0%
Coppa, Thomas P. & Melinda M. 2/22/2000 1,373 0 0.0543% 0%
Rhuda, Glen 2/22/2000 1,373 0 0.0543% 0%
Davidian, Harry Jr. 3/5/2000 2,745 0 0.1087% 0%
Davidian, Robert 3/5/2000 1,373 0 0.0543% 0%
Jones, K. Bruce 3/5/2000 1,373 0 0.0543% 0%
33
Dream Girl LLC (Darlene D. Daren) 5/19/2000 3,202 0 0.1268% 0%
Software International LLC (Robert J. Britton) 5/19/2000 2,745 0 0.1087% 0%
Burlingame, Hal 8/2/2000 80 0 0.0032% 0%
Baker, Brian 8/26/2000 26 0 0.0010% 0%
Beechko, Andrew J. 8/26/2000 15 0 0.0006% 0%
Bergmann, Marvin E. & Sally Bergmann 8/26/2000 29 0 0.0011% 0%
Charles Schwab & Co. FBO Bruce E. Fisc 8/26/2000 22 0 0.0009% 0%
Charles Schwab & Co. FBO James Alan H 8/26/2000 83 0 0.0033% 0%
Charles Schwab & Co. FBO Julie Catherine 8/26/2000 13 0 0.0005% 0%
Charles Schwab FBO K. Bruce Jones & Associates 8/26/2000 84 0 0.0033% 0%
Chheda, Vasant & Shobha Chheda 8/26/2000 1,278 0 0.0506% 0%
CIBC World Markets Corp. 8/26/2000 915 0 0.0362% 0%
Collins, Michael A. 8/26/2000 13 0 0.0005% 0%
Crawford, Sandra 8/26/2000 43 0 0.0017% 0%
Cuprisin, Nancy L. 8/26/2000 262 0 0.0104% 0%
Danbury Cap. Corp. PTY LTD (Neil and Mark Ohlson) 8/26/2000 3,960 0 0.1568% 0%
Danbury Investments PTY Limited (Neil and Mark Ohlson) 8/26/2000 2,235 0 0.0885% 0%
Danbury PTY Limited (Neil and Mark Ohlson) 8/26/2000 1,089 0 0.0431% 0%
Davidian, Harry Jr. 8/26/2000 653 0 0.0259% 0%
Davidian, Robert H. 8/26/2000 983 0 0.0389% 0%
Emmett A. Larkin IRA Cust FBO Glenn G. 8/26/2000 22 0 0.0009% 0%
Fabiano, Michael P. 8/26/2000 1,331 0 0.0527% 0%
Felthoven, Karen M. IRA 8/26/2000 67 0 0.0027% 0%
Gerberding, Willi 8/26/2000 35 0 0.0014% 0%
Gill, Brandon G. 8/26/2000 141 0 0.0056% 0%
Gockeler, Arthur C. & Ann Marie Goeckeler 8/26/2000 22 0 0.0009% 0%
Goodwin, Mona S. 8/26/2000 9 0 0.0003% 0%
Goodwin, Walter F. & Elisa Bernardi-Goodwin 8/26/2000 81 0 0.0032% 0%
Graham, Max Y. IRA 8/26/2000 9 0 0.0003% 0%
Hallett, Michael J. 8/26/2000 100 0 0.0040% 0%
Ho, Mark IRA 8/26/2000 240 0 0.0095% 0%
Hsueh - Hsiung Liu 8/26/2000 131 0 0.0052% 0%
Huffman, Sandy 8/26/2000 33 0 0.0013% 0%
Huot, James & Lois J. Huot 8/26/2000 2 0 0.0001% 0%
Hutchinson, F. Fred & Loren Hutchison 8/26/2000 39 0 0.0015% 0%
J.C. Williamson Productions PTY (Neil and Mark Ohlson) 8/26/2000 1,024 0 0.0405% 0%
Kellis, Augustine 8/26/2000 131 0 0.0052% 0%
Kenneth F. Levin General Partner 8/26/2000 72 0 0.0029% 0%
Lawrence, Steven R. & Marjory B. Lawrence 8/26/2000 65 0 0.0026% 0%
Lazar, Randal & Candy Lazar 8/26/2000 29 0 0.0011% 0%
Lou, Chee 8/26/2000 113 0 0.0045% 0%
Lyon, Lawrence G. & Maryanne J. Lyon 8/26/2000 35 0 0.0014% 0%
Mehta, Hina 8/26/2000 194 0 0.0077% 0%
34
Memmer, Mary T. IRA 8/26/2000 44 0 0.0017% 0%
Nichols, W. Edward & Karen A. Nichols (1) 8/26/2000 118 0 0.0047% 0%
Olsen, Matthew Z. 8/26/2000 32 0 0.0013% 0%
Orlick, Marty & Gail Ann Orlich 8/26/2000 44 0 0.0017% 0%
Posnanski, Charles J. FBO CJP Living Trust 8/26/2000 684 0 0.0271% 0%
Rekart, Stuart T. 8/26/2000 39 0 0.0015% 0%
Robinson, Lois Annelle 8/26/2000 1,198 0 0.0474% 0%
Robinson, Travis K. 8/26/2000 305 0 0.0121% 0%
Rogers, Larry 8/26/2000 26 0 0.0010% 0%
Roos, Dirk W. IRA 8/26/2000 22 0 0.0009% 0%
Saad, Diane & George Saad 8/26/2000 17 0 0.0007% 0%
Sarkisian, Gregory C. & Colleen Sarkisian 8/26/2000 196 0 0.0078% 0%
Seeker I, Shell 8/26/2000 92 0 0.0036% 0%
Sensenig, Andrew 8/26/2000 131 0 0.0052% 0%
Shah, Tarun & Jayshree Shah 8/26/2000 139 0 0.0055% 0%
Tandon, Rajeen 8/26/2000 207 0 0.0082% 0%
US Securities & Futures Corp. c/o John Hing 8/26/2000 83 0 0.0033% 0%
US Securities & Futures Corp. c/o John Hing 8/26/2000 65 0 0.0026% 0%
Van Sickle, Kari Lynn 8/26/2000 9 0 0.0003% 0%
Yeager, Cedile Fields 8/26/2000 588 0 0.0233% 0%
Amburgey, Andrea 9/12/2000 15 0 0.0006% 0%
Amunategui, Rosalind 9/12/2000 5 0 0.0002% 0%
Charles Schwab & Co. FBO Carol Ann V 9/12/2000 2 0 0.0001% 0%
Charles Schwab & Co. FBO Dana Susan 9/12/2000 56 0 0.0022% 0%
Charles Schwab & Co. FBO Jeffrey H. Sto 9/12/2000 13 0 0.0005% 0%
Charles Schwab & Co. FBO Robert John 9/12/2000 31 0 0.0012% 0%
Charles Schwab & Co., FBO Tom Withorn 9/12/2000 762 0 0.0302% 0%
Charles Schwab FBO Carroll E. Taylor IRA 9/12/2000 371 0 0.0147% 0%
Constance Clark TTEE Shadow Talk Trust U/A DTD 9/12/2000 102 0 0.0040% 0%
Durrett, Bryan P. 9/12/2000 48 0 0.0019% 0%
Hadam, Chester & Goldie Hadam 9/12/2000 53 0 0.0021% 0%
Hayes, Harry D. 9/12/2000 69 0 0.0027% 0%
Javeri, Dinesh 9/12/2000 273 0 0.0108% 0%
Kanarek, Michael 9/12/2000 44 0 0.0017% 0%
McGiven, James W. IRA Rollover 9/12/2000 87 0 0.0034% 0%
McGivern, Patrick F. 9/12/2000 13 0 0.0005% 0%
Meninno, Albert J. Jr. 9/12/2000 21 0 0.0008% 0%
Moody, Mark L. & Mary L. Moody 9/12/2000 26 0 0.0010% 0%
Nasser, William M. 9/12/2000 16 0 0.0006% 0%
Quinlan, Kenneth P. & Marguerite W.Quinlan 9/12/2000 13 0 0.0005% 0%
Rae, Dennis 9/12/2000 1 0 0.0000% 0%
Robinson, Chantelle R. 9/12/2000 411 0 0.0163% 0%
35
Robinson, Larry L. & Lois Annelle Robinson 9/12/2000 4,346 0 0.1721% 0%
Roger, Francina Maria 9/12/2000 11 0 0.0004% 0%
Sears, Herbert t. TTEES Sears Family Non (2) 9/12/2000 192 0 0.0076% 0%
Stanchich, Lino 9/12/2000 22 0 0.0009% 0%
Stockfish, Jeffrey H. 9/12/2000 53 0 0.0021% 0%
Stockfish, Jeffrey H. Cust for Jason Matthew 9/12/2000 65 0 0.0026% 0%
Stockfish, Jeffrey H. Cust for Kevin Michael 9/12/2000 65 0 0.0026% 0%
Stockfish
Taylor, Carroll E. TTEE Taylor Family Trust U?A 9/12/2000 205 0 0.0081% 0%
DTD
Tsengas, S. & Constance M. 9/12/2000 22 0 0.0009% 0%
Tsengas, Steven & Evangelia S. Tesengas 9/12/2000 523 0 0.0207% 0%
Valenzeula III, Mike G. 9/12/2000 96 0 0.0038% 0%
Voss, Brian C. 9/12/2000 697 0 0.0276% 0%
Wax, Robert 9/12/2000 6 0 0.0002% 0%
Weiss, Keith Howard 9/12/2000 65 0 0.0026% 0%
Withorn, Tom Jr. 9/12/2000 523 0 0.0207% 0%
Withorn, Tom Jr. C/F Melissa Darby Withol 9/12/2000 342 0 0.0135% 0%
Withorn, Tom Jr. C/F Taylor N. Withorn 9/12/2000 134 0 0.0053% 0%
Withorn, Tom Jr. C/F Thomas S. Withorn, 9/12/2000 305 0 0.0121% 0%
Bushnick, Philip N. TTEE Philip N. Buschnick 10/16/2000 3 0 0.0001% 0%
Clark, James E. & Betty E. Clark 10/16/2000 9 0 0.0004% 0%
Ebert, Mrs. Barbara L. & Mr. John F. Ebert 10/16/2000 7 0 0.0003% 0%
Farrell, Robert & Lauren Farrell 10/16/2000 17 0 0.0007% 0%
Kelley, Dwight & Carolyn June Kelley TOD 10/16/2000 2 0 0.0001% 0%
Mahakian, Leon 10/16/2000 2 0 0.0001% 0%
Marshall, Brian & Irene Marshall 10/16/2000 87 0 0.0034% 0%
MLPF & S Cust FBO Gloria Hale Withorn 10/16/2000 17 0 0.0007% 0%
MLPF & S cust FBO Tom Withorn IRA 10/16/2000 48 0 0.0019% 0%
Poulos, John A. 10/16/2000 4 0 0.0002% 0%
Ronca, Barbara 10/16/2000 103 0 0.0041% 0%
Saito, Eric Y. 10/16/2000 9 0 0.0003% 0%
Liu, Frank 5/18/2007 25,000 0 0.9899% 0%
Nichols, Karen A. 6/1/2007 82,339 0 3.2603% 0%
Nichols, W. Edward (1) 6/1/2007 61,754 0 2.4452% 0%
Weiss, Glenda 6/1/2007 48,031 0 1.9018% 0%
Littman, Michael 9/27/2007 250,000 0 9.8989% 0%
Nichols. W. Edward (1) 9/27/2007 210,000 0 8.3151% 0%
Sears, Herbert T. (2) 9/27/2007 210,000 0 8.3151% 0%
Hatkoff, Reed 12/10/2007 50,000 0 1.9798% 0%
Hussey, Stan 12/10/2007 100,000 0 3.9596% 0%
Nichols, W. Edward (1) 12/10/2007 50,000 0 1.9798% 0%
Sears, Herbert T. & Ann M. Sears TR'S FBO Herbert 12/10/2007 50,000 0 1.9798% 0%
Sears Family Trust UA Mar 6 1993 (2)
Nichols, W. Edward (1) 1/4/2008 5,000 0 0.1980% 0%
36
Sears, Herbert T. (2) 1/4/2008 5,000 0 0.1980% 0%
Lincoln America Investments, LLC (Paul Williams) 2/5/2008 100,000 0 3.9596% 0%
Raymond James & Associates, Inc.CSDN FBO Douglas 3/21/2008 44 0 0.0017% 0%
K. McCain IRA UAD 10/20/98 Acct 71803444
(Douglas K. McCain)
Blekicki, Ronald 3/24/2008 25,000 0 0.9899% 0%
Blekicki, Susan 3/24/2008 305,000 0 12.0767% 0%
Nichols, W. Edward (1) 3/24/2008 25,000 0 0.9899% 0%
Sears, Herbert T. (2) 3/24/2008 25,000 0 0.9899% 0%
B.I.M.S. (Kevin Wood) 4/4/08 100,000 0 3.956% 0%
-----------------
TOTAL 2,490,816
MATERIAL RELATIONSHIPS
(1) President since 2008 and Director since 1999.
(2) Chief Financial Officer since 2008 and Director since 1999.
None of the above listed shareholders are registered broker-dealers or are
associates of a registered broker-dealer.
ITEM 8. PLAN OF DISTRIBUTION
Upon effectiveness of the registration statement, of which this prospectus is a
part, we will conduct the sale of shares by the Company on a self-underwritten
basis. After 60 days from date of effectiveness of this Registration Statement
we will cease our offering of our shares by the Company and file a
post-effective amendment to the Registration Statement to deregister any unsold
shares of the Offering to the public and our selling shareholders may then
commence to sell their securities in market sales, if a market ever develops
hereafter. There will be no underwriters used on sales of the 500,000 shares to
the public, no dealers' commissions paid on sales of the 500,000 shares to the
public, and no passive market making. Our officers and directors, Edward Nichols
and Herbert Sears will sell securities on our behalf in this offering. Edward
Nichols and Herbert Sears are not subject to a statutory disqualification as
such term is defined in Section (a)(39) of the Securities Exchange Act of 1934.
They will rely on Rule 3a4-1 to sell our securities without registering as
broker-dealers. Messrs. Nichols and Sears will not offer any of their shares for
sale until the offering to the public of our shares has been closed. They are
serving as our officers and directors otherwise than in connection with
transactions in securities and will continue to do so at the conclusion of this
offering. They have not been a broker or dealer, or an associated person of a
broker or dealer, within the preceding 12 months, and have not nor will not
participate in the sale of securities for any issuer more than once every twelve
months. Our officers and directors will not receive commissions or other
remuneration in connection with their participation in this offering based
either directly or indirectly on transactions in securities. We will only use
this prospectus in connection with this offering and no other sales materials.
There is no market for the securities at this time and our pricing is arbitrary
with no relation to market value, liquidation value, earnings or dividends.
Until a public market develops, we are registering our shares for sale at the
following price:
----------------------- ------------------------------
TITLE PER SECURITY
----------------------- ------------------------------
Common Stock $0.50
----------------------- ------------------------------
After effectiveness of this registration statement, at any time after a market
develops, our selling shareholders may sell their securities at market prices or
at any price in privately negotiated transactions.
The prices for sale of shares were arbitrarily set at $0.50 per share, and bear
no relationship to any quantification of value.
37
Our selling shareholders may be deemed underwriters in this offering.
Any funds from sale of shares from the company not immediately used for
corporate purposes will be deposited into an interest bearing account in our
name, and interest accrued on such funds will be retained by us.
ITEM 9. DESCRIPTION OF SECURITIES
The securities being registered and/or offered by this Prospectus are shares.
COMMON STOCK
We are presently authorized to issue two hundred million (200,000,000) shares of
our common stock. A total of two million, five hundred twenty five thousand,
five hundred twenty four (2,525,524) common shares are issued and outstanding as
of July 29, 2008.
COMMON SHARES
All shares are equal to each other with respect to voting, liquidation, and
dividend rights. Special shareholders' meetings may be called by the officers or
director, or upon the request of holders of at least one-tenth (1/10th) of the
outstanding shares. Holders of shares are entitled to one vote at any
shareholders' meeting for each share they own as of the record date fixed by the
board of directors. There is no quorum requirement for shareholders' meetings.
Therefore, a vote of the majority of the shares represented at a meeting will
govern even if this is substantially less than a majority of the shares
outstanding. Holders of shares are entitled to receive such dividends as may be
declared by the board of directors out of funds legally available therefore, and
upon liquidation are entitled to participate pro rata in a distribution of
assets available for such a distribution to shareholders. There are no
conversion, pre-emptive or other subscription rights or privileges with respect
to any shares. Reference is made to our Articles of Incorporation and our
By-Laws as well as to the applicable statutes of the State of Colorado for a
more complete description of the rights and liabilities of holders of shares. It
should be noted that the board of directors without notice to the shareholders
may amend the By-Laws. Our shares do not have cumulative voting rights, which
means that the holders of more than fifty percent (50%) of the shares voting for
election of directors may elect all the directors if they choose to do so. In
such event, the holders of the remaining shares aggregating less than fifty
percent (50%) of the shares voting for election of directors may not be able to
elect any director.
PREFERRED SHARES
We are presently authorized to issue ten million (10,000,000) Shares of
Preferred Stock, no par value per share. As of July 29, 2008 we had no shares of
Preferred Stock issued and outstanding.
TRANSFER AGENT
Effective upon the completion of this offering, the transfer agent for our
securities is Mountain Share Transfer, Inc., 1625 Abilene, Broomfield, Colorado
80020.
ITEM 10. INTEREST OF NAMED EXPERTS AND COUNSEL
We have not hired or retained any experts or counsel on a contingent basis, who
would receive a direct or indirect interest in us, or who is, or was, our
promoter, underwriter, voting trustee, director, officer or employee.
38
ITEM 11. INFORMATION WITH RESPECT TO THE REGISTRANT
A. DESCRIPTION OF BUSINESS
------------------------
HISTORY OF BEDROCK ENERGY, INC.
CellTouch, Inc., now known as Bedrock Energy, Inc., was incorporated in Colorado
on August 11, 2004 with its name changed to Bedrock Energy, Inc. on October 18,
2007. Enviromart.com, Inc. was incorporated in New Hampshire in March 1999. On
September 21, 2004 CellTouch, Inc. and Enviromart.com, Inc. were merged under
the laws of the State of Colorado and CellTouch, Inc. became the surviving
entity. We have been in the development stage since our inception. Activities
through December 31, 2007 include the raising of equity capital and the
formation of a previous business plan to sell environmental products over the
Internet as well as the current business plan to merge with or acquire and
develop assets from a company in the oil and gas industry.
COMPANY OVERVIEW
We have been inactive during the last 5 years. We have no recent operating
history and no representation is made, nor is any intended, that we will able to
carry on our activities profitably. The viability of the proposed business
effort is dependent upon sufficient funds being realized from this offering, of
which there is no assurance. Edward Nichols, President, Chief Executive Officer
and director, has prior experience in the acquisition, evaluation, exploration
and development of oil and gas properties. Edward Nichols and Herbert Sears
devote part-time efforts to our affairs.
We are an oil and gas exploration and development company focused on creating a
portfolio of North American assets, located in the Central and Western United
States that exhibit consistent, predictable, and long-lived production
capabilities. We plan to build value for our shareholders through the
acquisition and development of gas and oil assets that contain proven reserves
in domestic areas where reserves can be economically produced at a low risk to
the Company relying on joint venture partners to supply most of the funds needed
to explore or develop these properties.
Our main emphasis will be to acquire production or revenue generating
opportunities either by lease purchase or farmout, when available, with third
parties and industry partners.
We have no revenues at this time and anticipate that we will need additional
capital to support the execution of our business plan. Decisions regarding
future participation in acquisitions or other business development activities
will be made on a case-by-case basis.
Our Goals for the next year are as follows:
MILESTONES
- ----------------------------------- -- ----------------------------------------
3rd Quarter 2008 Completion of Registration Statement
- ----------------------------------- -- ----------------------------------------
4th Quarter 2008 Closure of Registration Statement;
- ----------------------------------- -- ----------------------------------------
1st Quarter 2009 Commence revenue from operations
- ----------------------------------- -- ----------------------------------------
2nd Quarter 2009 Acquire additional producing properties
- ----------------------------------- -- ----------------------------------------
PLAN OF OPERATIONS: We plan to engage in the exploration, acquisition,
development, production, and sale of natural gas and crude oil, although the
Company expects to generate most of its initial revenue from the production and
sale of natural gas.
39
Our overall growth strategy is to continue building value in our Company through
the development and acquisition of gas and oil assets that exhibit consistent,
predictable, and long-lived production. Our current focus is Coal Bed Methane
("CBM") reservoirs in the Central and Western region of the United States which
produce both Coal Bed Methane, and at times, conventional gas.
We plan on acquiring properties that contain proven gas reserves, some of which
are adjacent to interstate pipeline systems which provide ready access to sales
markets for the gas produced. The major natural gas corridors in the United
States and Canada are shown in Exhibit 99.1(a).
Please see graphic on Exhibit 99.1(a).
We believe our path to success will be built around a three phase growth
strategy as described below:
PHASE ONE of our business plan calls for investing in various lease holdings and
properties with no current production. This program is consistent with our
principal strategy which is to acquire and farm-out large land positions in
major oil and natural gas basins while retaining substantial carried interests.
Surface geology will be reviewed along with seismic data, when available, which
will aid in subsurface structural interpretation and lead generation for new
acquisition opportunities in areas of interest.
PHASE TWO of our business plan calls for purchasing interests in properties
which contain proven reserves. This growth strategy is partially based on
participation, as it intends to team up with outside strategic partners, and
investors who will assume part or all of the costs associated with the drilling
of additional wells in exchange for part of the revenues derived from the wells
they finance. We expect that implementation of this strategy will reduce the
financial risk to us while retaining an overriding net royalty interest in each
successful well drilled.
PHASE THREE of our business plan calls for originating, developing and managing
balanced, low-risk, highly-focused developmental drilling programs, with
accredited investors and qualified partners, in areas with low drilling costs
and high success rates. This stage further balances our approach to profitable
energy asset development through low risk, highly focused, predominantly
"development" drilling projects.
This business development plan is expected to be executed in multiple phases.
The pace of the development will obviously depend on the availability of a
viable financing program, lender restrictions, general economic conditions, and
potential other factors relevant to this type of program.
THE MARKET: NATURAL GAS SUPPLY AND DEMAND: We believe that the rising oil and
gas prices, combined with geopolitical instability and soaring demand from
burgeoning economies in China and India, have increased the intrinsic value of
predictable, secure, North American reserves, and we expect this trend to
continue in light of tensions in the Middle East and certain other foreign
countries (e.g., Venezuela, Nigeria).
The National Petroleum council estimates the U.S. demand for natural gas to
increase from 22 trillion cubic feet (TCF) in 1998 to over 31 TCF by 2015. This
nearly 50% increase in demand for natural gas, coupled with constrained supplies
from conventional sources and storage facilities, suggests an urgent need for
new gas sources. Although conventional gas sources such as high permeability
sandstones supply about 60% of the U.S. demand (13 TCF in 1998), projections
indicate a flat to declining supply through year 2015. The shortfall in
40
conventional gas supply is expected to be taken up by production from
un-conventional sources such as tight gas sandstones/shales, associated gas, and
Coal Bed Methane (CBM). CBM shows great promise as a future source of natural
gas, with the US Geological Survey estimating some 700 TCF contained in 6 major
CBM basins in the continental US. This constitutes an enormous reserve, almost
the entire US demand for the next 25 years. The Western Interior Basin covering
portions of Oklahoma, Kansas, and Missouri is one of those 6 major basins. The
Gas Research Institute estimates CBM gas reserves in the Forrest City and
Cherokee basin, the two sub-basins of the Western Interior Basin, contain
approximately 7 TCF.
We plan to acquire leases that lie within one or both of these sub-basins. We
believe the current supply and demand fundamentals will lead to a strengthening
in prices. Consequently, we intend to continually seek out potential producing
properties in these regions of the U.S.
Please see graphic on Exhibit 99.1(b).
CBM PRODUCTION: CBM production is similar to conventional natural gas production
in terms of the physical production facilities and the product produced.
However, surface mechanics and some production characteristics of CBM wells are
quite different from traditional natural gas production wells. Methane gas is
created as part of the coalification process. Coals vary in their methane gas
content which is defined by the industry as cubic feet of gas per ton of coal.
Conventional natural gas wells assume a porous and permeable reservoir,
hydrocarbon migration and a natural structural or stratigraphic trap. However,
CBM is trapped in the molecular structure of the coal itself until it is
released by pressure changes, resulting from water removal from the coal-bed.
Water completely permeates coal-beds and the natural fracture system or cleats
as they are normally referred. In good production areas, the cleats are
pervasive throughout the coal-beds. CBM gas, principally methane, is adsorbed
onto the grain surfaces of the coal. To produce CBM, the water must be drawn off
first, lowering the pressure so that the methane gas will desorb from the coal
thus allowing gas to flow from the coal into the de-watered cleats that act as
high permeable conduits to the well bore, where gas can be produced at the well
head. These cleats are assumed to have been formed during the coalification and
uplifting processes. If cleat permeability is adequately developed, it may allow
commercial quantities of methane gas to be produced from the well. The qualities
of productive CBM wells include coal quality, the content of natural gas per ton
of coal, thickness of the coal-beds, reservoir pressure, existence of natural
fractures, and overall permeability of the coal-bed.
Please see graphic on Exhibit 99.1(c).
CBM production also differs from conventional gas production that normally
starts at its highest production rate and then declines with time. Because
coal-beds have water residing within the cleats, the water needs to be withdrawn
in order to promote production of the adsorbed gases. Thus, for the case of CBM,
initial water production is high and diminishes with time. CBM gas production,
however, starts at a relatively low rate, reaching a peak some months later and
then begins to decline.
CBM production is attractive due to several geological factors: Coal stores six
or seven times as much gas as a conventional natural gas reservoir of equal rock
41
volume due to the large internal surface area of coal; significant amounts of
coal are accessible at shallow depths, making well drilling and completion
relatively inexpensive; exploration costs are also low since methane occurs in
coal deposits, and the location of the Nation's coal resources is well defined
as indicated in the prominent Western Natural gas fields map shown to the right.
Please see graphic on Exhibit 99.1(d).
Estimates of the in-place gas resources of the principal coal-bearing basins of
the United States exceed 700 trillion cubic feet. Economically recoverable
resources of coal bed gas are probably less than 100 Tcf. This represents about
a five-year supply at current U.S. consumption rates.
GLOBAL OIL SUPPLY AND DEMAND: World demand for oil is expected to increase by 54
percent in the first 25 years of the 21st century, according to the Energy
Information Agency of the U.S. government. To meet that demand, the world's
oil-producing countries will have to pump out an additional 44 million barrels
of oil each and every day by 2025.
Much of the growth in demand - about 40 percent will come from Asia, where
demand is expected to double by 2025, thanks mainly to rapidly growing economies
in China and India. In 2004, China passed Japan as the world's second-largest
consumer of oil. It ate up an average of 6.63 million barrels of oil every day -
about twice what it produces. Its oil imports doubled between 1999 and 2004.
China's demand for oil is expected to continue to increase by five to seven
percent a year. If that happens, China will surpass the United States as the
world's largest consumer of oil by 2025. Similarly, India's oil needs are
expected to grow by four to seven per cent a year.
Up to this point, the world's oil producers have generally been able to meet
demand. However, should demand increase substantially, or production decrease
for any reason, there could be a significant spike in the price of oil and
possible shortages. The London-based Oil Depletion Analysis Centre recently
released a study that predicted tight oil supplies through the rest of this
decade, even if all of the new major oil recovery projects scheduled to come on
stream over the next six years meet their targets. The only way to avoid it, the
study said, is for demand to drop sharply.
INCREASING SUPPLY: There are two ways to increase oil supply: getting more oil
out of existing wells and finding new sources. Extraction from existing wells
has been getting steadily more efficient; according to The Economist, "A few
decades ago, the average oil recovery rate from reservoirs was 20%; thanks to
remarkable advances in technology, this has risen to about 35%," with future
increases expected (19). Methods for recovering oil from shale are notable for
continuing to improve. Furthermore new sources, including the ocean, continue to
be opened for exploration.
42
AREAS OF INTEREST AND PROPERTY: We will consider the following criteria when
evaluating whether to acquire an oil and gas prospect:
1) Proximity to existing production;
2) Target zone is less than 4,000 feet in depth;
3) Location in a known producing region;
4) Whether there is well control data from nearby drill sites;
5) Favorable geologic evaluations by local geologists of production potential;
6) Reasonable cost of acquisition;
7) Term of lease and drilling commitment, if any; and
8) Reasonable drilling cost estimates.
Upon selecting a lease for purchase, a geochemical survey of the property will
be initiated.
COMPETITION, MARKETS, REGULATION AND TAXATION
COMPETITION: There is a large number of companies and individuals engaged in the
exploration for minerals and oil and gas; accordingly, there is a high degree of
competition for desirable properties. Many of the companies and individuals so
engaged have substantially greater technical and financial resources than us.
Most of the domestic natural gas reserves are concentrated in larger U.S. based
companies. In 2005, the top twenty operators (Class 1-10 and 11-20) had sixty
percent of the proven reserves of natural gas. The next two size classes contain
80 and 400 companies and account for 24 and 10 percent of the U.S. natural gas
proved reserves, respectively. The top 20 operators had a 23 percent increase in
their reserves from 200 to 2005. The rest of the operators had a three percent
increase in their reserves during the same period. There were 859 active gas
producing fields in 2005 and approximately 15,000 domestics oil and gas
operators.
Please see graphic on Exhibit 99.1(e).
MARKETS: The availability of a ready market for oil and gas discovered, if any,
will depend on numerous factors beyond the control of us, including the
proximity and capacity of refineries, pipelines, and the effect of state
regulation of production and of federal regulations of products sold in
interstate commerce, and recent intrastate sales. The market price of oil and
gas are volatile and beyond our control. The market for natural gas is also
unsettled, and gas prices have increased dramatically in the past four years
with substantial fluctuation, seasonally and annually.
There generally are only a limited number of gas transmission companies with
existing pipelines in the vicinity of a gas well or wells. In the event that
producing gas properties are not subject to purchase contracts or that any such
contracts terminate and other parties do not purchase our gas production, there
is no assurance that we will be able to enter into purchase contracts with any
transmission companies or other purchasers of natural gas and there can be no
assurance regarding the price which such purchasers would be willing to pay for
such gas. There presently exists an oversupply of gas in the certain areas of
the marketplace due to pipeline capacity, the extent and duration of which is
43
not known. Such oversupply may result in restrictions of purchases by principal
gas pipeline purchasers.
GOVERNMENTAL REGULATIONS: Regulation of Oil and Natural Gas Production. Our oil
and natural gas exploration, production and related operations, when developed,
are subject to extensive rules and regulations promulgated by federal, state,
tribal and local authorities and agencies. For example, some states in which we
may operate require permits for drilling operations, drilling bonds and reports
concerning operations and impose other requirements relating to the exploration
and production of oil and natural gas. Such states may 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 wells, and the regulation of spacing, plugging
and abandonment of such wells. Failure to comply with any such rules and
regulations can result in substantial penalties. The regulatory burden on the
oil and gas industry will most likely increase our cost of doing business and
may affect our profitability. Although we believe we are currently in
substantial compliance with all applicable laws and regulations, because such
rules and regulations are frequently amended or reinterpreted, we are unable to
predict the future cost or impact of complying with such laws. Significant
expenditures may be required to comply with governmental laws and regulations
and may have a material adverse effect on our financial condition and results of
operations.
FEDERAL REGULATION OF NATURAL GAS: The Federal Energy Regulatory Commission
("FERC") regulates interstate natural gas transportation rates and service
conditions, which may affect the marketing of natural gas produced by us, as
well as the revenues that may be received by us for sales of such production.
Since the mid-1980s, FERC has issued a series of orders, culminating in Order
Nos. 636, 636-A and 636-B ("Order 636"), that have significantly altered the
marketing and transportation of natural gas. Order 636 mandated a fundamental
restructuring of interstate pipeline sales and transportation service, including
the unbundling by interstate pipelines of the sale, transportation, storage and
other components of the city-gate sales services such pipelines previously
performed. One of FERC's purposes in issuing the order was to increase
competition within all phases of the natural gas industry. The United States
Court of Appeals for the District of Columbia Circuit largely upheld Order 636
and the Supreme Court has declined to hear the appeal from that decision.
Generally, Order 636 has eliminated or substantially reduced the interstate
pipelines' traditional role as wholesalers of natural gas in favor of providing
only storage and transportation service, and has substantially increased
competition and volatility in natural gas markets.
The price we may receive from the sale of oil and natural gas liquids will be
affected by the cost of transporting products to markets. Effective January 1,
1995, FERC implemented regulations establishing an indexing system for
transportation rates for oil pipelines, which, generally, would index such rates
to inflation, subject to certain conditions and limitations. We are not able to
predict with certainty the effect, if any, of these regulations on our intended
operations. However, the regulations may increase transportation costs or reduce
well head prices for oil and natural gas liquids.
COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS: Our operations are subject
to local, state and federal laws and regulations governing environmental quality
and pollution control. To date our compliance with these regulations has had no
material effect on our operations, capital, earnings, or competitive position,
and the cost of such compliance has not been material. We are unable to assess
or predict at this time what effect additional regulations or legislation could
have on our activities.
EFFECT OF CHANGING INDUSTRY CONDITIONS ON DRILLING ACTIVITY: Lower oil and gas
prices have caused a decline in drilling activity in the U.S. from time to time.
However, such reduced activity has also resulted in a decline in drilling costs,
lease acquisition costs and equipment costs, and an improvement in the terms
under which drilling prospects are generally available. We cannot predict what
oil and gas prices will be in the future and what effect those prices may have
on drilling activities in general, or on its ability to generate economic
drilling prospects and to raise the necessary funds with which to drill them.
44
REGULATION AND PRICING OF NATURAL GAS: Our operations may be subject to the
jurisdiction of the Federal Energy Regulatory Commission (FERC) with respect to
the sale of natural gas for resale in interstate and intrastate commerce. State
regulatory agencies may exercise or attempt to exercise similar powers with
respect to intrastate sales of gas. Because of its complexity and broad scope,
the price impact of future legislation on the operation of us cannot be
determined at this time.
CRUDE OIL AND NATURAL GAS LIQUIDS PRICE AND ALLOCATION REGULATION: Pursuant to
Executive Order Number 12287, issued January 28, 1981, President Reagan lifted
all existing federal price and allocation controls over the sale and
distribution of crude oil and natural gas liquids. Executive Order Number 12287
was made effective as of January 28, 1981, and consequently, sales of crude oil
and natural gas liquids after January 27, 1981 are free from federal regulation.
The price for such sales and the supplier-purchaser relationship will be
determined by private contract and prevailing market conditions. As a result of
this action, oil which may be sold by us will be sold at deregulated or free
market prices. At various times, certain groups have advocated the
reestablishment of regulations and control on the sale of domestic oil and gas.
STATE REGULATIONS: Our production of oil and gas, if any, will be subject to
regulation by state regulatory authorities in the states in which we may produce
oil and gas. In general, these regulatory authorities are empowered to make and
enforce regulations to prevent waste of oil and gas and to protect correlative
rights and opportunities to produce oil and gas as between owners of a common
reservoir. Some regulatory authorities may also regulate the amount of oil and
gas produced by assigning allowable rates of production.
PROPOSED LEGISLATION: A number of legislative proposals have been and probably
will continue to be introduced in Congress and in the legislatures of various
states, which, if enacted, would significantly affect the petroleum industries.
Such proposals and executive actions involve, among other things, the imposition
of land use controls such as prohibiting drilling activities on certain federal
and state lands in roadless wilderness areas. At present, it is impossible to
predict what proposals, if any, will actually be enacted by Congress or the
various state legislatures and what effect, if any, such proposals will have.
However, President Clinton's establishment of numerous National Monuments by
executive order has had the effect of precluding drilling across vast areas of
the Rocky Mountain West.
ENVIRONMENTAL LAWS: Oil and gas exploration and development are specifically
subject to existing federal and state laws and regulations governing
environmental quality and pollution control. Such laws and regulations may
substantially increase the costs of exploring for, developing, or producing oil
and gas and may prevent or delay the commencement or continuation of a given
operation.
All of our operations involving the exploration for or the production of any
minerals are subject to existing laws and regulations relating to exploration
procedures, safety precautions, employee health and safety, air quality
standards, pollution of stream and fresh water sources, odor, noise, dust, and
other environmental protection controls adopted by federal, state and local
governmental authorities as well as the right of adjoining property owners. We
may be required to prepare and present to federal, state or local authorities
data pertaining to the effect or impact that any proposed exploration for or
production of minerals may have upon the environment. All requirements imposed
by any such authorities may be costly, time consuming, and may delay
commencement or continuation of exploration or production operations.
It may be anticipated that future legislation will significantly emphasize the
protection of the environment, and that, as a consequence, our activities may be
more closely regulated to further the cause of environmental protection. Such
legislation, as well as future interpretation of existing laws, may require
substantial increases in equipment and operating costs to us and delays,
interruptions, or a termination of operations, the extent to which cannot now be
predicted.
LEASING ACTIVITIES: As of March 1, 2008, we have reviewed a variety of
acquisition opportunities. In the event that we are successful in Phase One of
our plan, we intend to acquire mineral rights, to the extent that we believe
such land will further our exploration and development activities and provide us
increased value.
45
All of the mineral leases that we have executed or plan to execute will grant it
the exclusive right to explore for and develop oil, gas and other hydrocarbons
and minerals that may be produced from wells drilled on the leased property
without any depth restrictions. Each lease also grants us rights of way to
easements for laying pipelines and servicing or drilling other wells in the
vicinity of the leased property.
Our lease agreements will vary both in term and price paid per acre. Some leases
are for 2 year periods with extensions for 3 additional years, and others are
for 10 years with extensions for additional years.
Our leases will be on a paid up basis. We will agree to pay each lessor a
royalty equal to approximately 12.5% of any oil, gas or other minerals that may
be produced from wells drilled on their leased property. In the event of a
shut-in well capable of producing oil or gas, we may agree to pay the lessor a
royalty per net mineral acre. All potential lease agreements will provide that
we maintain the lease with production. We will continually review our lease
obligations to determine which leases we will not, or may not choose to renew.
Under our leases, we will have the right to pool the leased property with other
land owned or leased by it in the immediate vicinity for the production of oil
or gas. With respect to shallow gas and associated hydrocarbons produced in
conjunction therewith, we may have the right to pool or unitize the leased
properties into a development pool of a maximum of 3,000 acres if we have
drilled at least 2 wells within the pooled unit no later than 1 year after the
expiration of the primary term of the lease.
We will always initiate a standard due diligence process on all potential
properties to be acquired, including obtaining a title or title insurance to
confirm our rights to any oil, gas or other minerals produced pursuant to our
leases. Our final interest in any oil, gas or other mineral that we produce may
vary depending upon negotiations with the mineral owners, financers, if any, as
well as organizations that we may contract to perform drilling, completion and
operating activities on our wells.
We will seek an industry standard 100% working interest in all of our leased
acreage. A "working interest" is the operating interest that gives us, as the
operator, the right to drill, produce and conduct operating activities on the
property and a share of production. We will seek a Net Revenue Interest (NRI) of
between 79.5% and 84.375% on all leased acreage.
Most of our initial capital expenditures will be associated with the acquisition
of oil and gas mineral leases, raising capital and administrative costs. Upon
raising the required capital to pursue our lease acquisition program, our
strategy will then shift towards realizing value from those expenditures through
the drilling and production of the acquired properties, starting in our proven
reserve areas. We intend to continue to expand our lease base, as appropriate.
The rate of development will be carefully designed to blend external financing
with income from existing production and other sources.
GAS PURCHASE AND SALE AGREEMENT: To reduce our exposure to unfavorable changes
in natural gas prices we plan to utilize energy swaps in order to have a
fixed-price contract. These contracts allow us to be able to predict with
greater certainty the effective natural gas prices to be received for hedged
production and benefit operating cash flows and earnings when market prices are
less than the fixed prices provided under the contracts. However, we will not
benefit from market prices that are higher than fixed prices in contracts for
hedged production. If we are unable to provide the quantity that we will have
contracted for, we may need to go to the open market to purchase the required
amounts that we have contracted to provide.
RECENT TRANSACTION: We recently entered in a farmout agreement with Sun River
Energy, Inc. on 640 acres in Hot Springs County, Wyoming. The lands covered by
this agreement include Section 36, T41N, R81W, lease number 06-00256. The terms
and conditions of the farm out agreement were not disclosed.
EXTERNAL GROWTH STRATEGY: Oil and gas production companies are subject to
international competition, particularly as businesses in this industry becomes
more global in nature.
46
As a result of these and other factors affecting industry today, such as
deregulation, capital market intervention, and new developments in recovery
technologies, small businesses and large corporations are being forced to adapt
quickly to such transformations in order to thrive or even merely survive.
Many private company managers have concluded that it is timely and prudent to
look at being acquired by a properly capitalized strategic partner in order to
remain competitive in this type of economic environment. This new strategic
alliance could come from a publicly traded company or a privately held
competitor with greater access to equity or debt capital, or one that possesses
enhanced advertising and marketing capabilities, and has capital intensive,
expansive product engineering, and sales and support capabilities.
For these and other reasons, there has been significant energy involving mergers
and acquisitions in the oil and gas industries at present. Many large firms
involved in this industry have established corporate growth strategies that
consistently include acquisitions. These experienced buyers search for companies
that fit their well-defined acquisition criteria, often attempting to buy
companies that are not actively for sale, seeking to generate exponential growth
through the purchase of complimentary businesses.
Production companies are obvious targets of interest partly because they have
established revenue streams and are compatible with our core revenue generating
business model. Service related businesses, such as drillers, are also of
interest because they will allow us to control our recompletion and drilling
schedules on our leased acreage. Therefore, during the coming months, in an
effort to broaden our revenue generating capabilities, we plan to aggressively
explore and pursue these types of strategic acquisition opportunities.
TITLE TO PROPERTIES: We are not the record owner of our interest in our
properties and rely instead on contracts with the owner or operator of the
property, pursuant to which, among other things, we have the right to have our
interest placed of record. As is customary in the oil and gas industry, a
preliminary title examination will be conducted at the time unproved properties
or interests are acquired by us. Prior to commencement of drilling operations on
such acreage and prior to the acquisition of proved properties, we will conduct
a title examination and attempt extremely significant defects before proceeding
with operations or the acquisition of proved properties, as we may deem
appropriate.
Our properties are subject to royalty, overriding royalty and other interests
customary in the industry, liens incident to agreements, current taxes and other
burdens, minor encumbrances, easements and restrictions. Although we are not
aware of any material title defects or disputes with respect to its undeveloped
acreage, to the extent such defects or disputes exist, we would suffer title
failures.
BACKLOG OF ORDERS: We currently have no orders for sales at this time.
GOVERNMENT CONTRACTS: We have no government contracts.
COMPANY SPONSORED RESEARCH AND DEVELOPMENT: We are not conducting any research.
NUMBER OF PERSONS EMPLOYED: As of July 29, 2008, we had no full-time employees.
Officers and Directors work on an as needed part-time basis up to 15 hours per
week.
PLAN OF OPERATIONS
We had no operations prior to and we did not have any revenues during the fiscal
year ended December 31, 2007. We did not recognize any income in the year ended
December 31, 2006. We have minimal capital, minimal cash, and only our
intangible assets consist of our business plan, relationships, contacts and
farmout mineral prospect. We are illiquid and need cash infusions from investors
or shareholders to provide capital, or loans from any sources.
47
Our plan of operations is as follows:
MILESTONES
- ----------------------------------- -- ----------------------------------------
3rd Quarter 2008 Completion of Registration Statement
- ----------------------------------- -- ----------------------------------------
4th Quarter 2008 Closure of Registration Statement;
- ----------------------------------- -- ----------------------------------------
1st Quarter 2009 Commence revenue from operations
- ----------------------------------- -- ----------------------------------------
2nd Quarter 2009 Acquire additional producing properties
- ----------------------------------- -- ----------------------------------------
Our Budget for operations in next year is as follows:
REQUIREMENTS AND UTILIZATION OF FUNDS: We initially seek to raise approximately
$250,000 during the upcoming three to six months, from the sale of our Company's
common stock.. These monies will be used to acquire undeveloped acreage,
properties with known production and for operating expenses. Phase Two funds
will be used for the acquisition of oil and gas properties containing proven
reserves, production enhancements on our existing producing properties and
operating expenses. Phase Three funds will be used for the acquisition of
additional oil and gas leases, production enhancements and operating expenses.
Additional capital may be raised for the acquisition of profitable, privately
held exploration and production businesses. As set forth in the chart below, the
estimated breakdown of the utilization of funds is as follows:
Bedrock Energy, Inc. - Requirements & Utilization of Funds
Phase I Phase II Phase III
Lease Acq & Development costs $100,000 $500,000 $1,500,000
Working Capital 50,000 400,000 550,000
General & Administrative 75,000 175,000 200,000
Financing Costs 0 125,000 175,000
Audit/SEC Filing Fees 25,000 50,000 75,000
------------ ----------------- ---------------
Total $250,000 $1,250,000 $2,500,000
============ ================= ===============
We will need substantial additional capital to support our proposed future
energy operations. We have NO revenues. We have NO committed source for any
funds as of date here. No representation is made that any funds will be
available when needed. In the event funds cannot be raised when needed, we may
not be able to carry out our business plan, may never achieve sales or royalty
income, and could fail in business as a result of these uncertainties.
Decisions regarding future participation in exploration wells or geophysical
studies or other activities will be made on a case-by-case basis. We may, in any
particular case, decide to participate or decline participation. If
participating, we may pay our proportionate share of costs to maintain our
proportionate interest through cash flow or debt or equity financing. If
participation is declined, we may elect to farmout, non-consent, sell or
otherwise negotiate a method of cost sharing in order to maintain some
continuing interest in the prospect.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
48
B. DESCRIPTION OF PROPERTY
DESCRIPTION OF PROPERTIES/ASSETS/OIL AND GAS PROSPECTS
- --------- ----------------------------- ----------------------------------------------------------------------------
(a) Real Estate None.
(b) Title to properties. None.
(c) Oil and Gas Prospects. Farmout Agreement with Sun River Energy, Inc. on 640 acres in
Johnson/Natrona, Wyoming. The lands covered by this agreement include
Section 36, T41N, R81W, lease number 06-00256.
(d) Patents. None.
- --------- ----------------------------- ----------------------------------------------------------------------------
We do not own any property, real or otherwise.
C. LEGAL PROCEEDINGS
We are not a party to any pending legal proceedings, nor are we aware of any
civil proceeding or government authority contemplating any legal proceeding.
D. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Currently there is no public trading market for our stock, and we have not
applied to have the common stock quoted for trading in any venue. We intend to
apply to have the common stock quoted on the OTC Bulletin Board ("OTC/BB")
immediately after filing this registration statement. No trading symbol has yet
been assigned.
The offering of the shares registered hereby could have a material negative
effect on the market price for the stock if it is approved for quotation on the
OTC/BB.
RULES GOVERNING LOW-PRICE STOCKS THAT MAY AFFECT OUR SHAREHOLDERS' ABILITY TO
RESELL SHARES OF OUR COMMON STOCK
Our stock currently is not traded on any stock exchange or quoted on any stock
quotation system. After filing the registration statement in which this
prospectus is included, we intend to solicit a broker to apply for quotation of
common stock on the FINRA's OTC/BB.
Quotations on the OTC/BB reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not reflect actual transactions. Our common stock
will be subject to certain rules adopted by the SEC that regulate broker-dealer
practices in connection with transactions in "penny stocks." Penny stocks
generally are securities with a price of less than $5.00, other than securities
registered on certain national exchanges or quoted on the Nasdaq system,
provided that the exchange or system provides current price and volume
information with respect to transaction in such securities. The additional sales
practice and disclosure requirements imposed upon broker-dealers are and may
discourage broker-dealers from effecting transactions in our shares which could
severely limit the market liquidity of the shares and impede the sale of shares
in the secondary market.
The penny stock rules require broker-dealers, prior to a transaction in a penny
stock not otherwise exempt from the rules, to make a special suitability
determination for the purchaser to receive the purchaser's written consent to
the transaction prior to sale, to deliver standardized risk disclosure documents
prepared by the SEC that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer must also
provide the customer with current bid and offer quotations for the penny stock.
In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the SEC relating to the penny stock market, unless the broker-dealer or the
49
transaction is otherwise exempt. A broker-dealer is also required to disclose
commissions payable to the broker-dealer and the registered representative and
current quotations for the securities. Finally, a broker-dealer is required to
send monthly statements disclosing recent price information with respect to the
penny stock held in a customer's account and information with respect to the
limited market in penny stocks.
HOLDERS
As of the filing of this prospectus, we have 783 shareholders of record of our
common stock. Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public information
about us. Under Rule 144(k), a person who has not been one of our affiliates at
any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least 6 months, is entitled to sell
shares without complying with the manner of sale, volume limitation or notice
provisions of Rule 144.
As of the date of this prospectus, our selling shareholders hold 2,525,524
Shares, 2,490,816 of which may be sold pursuant to this Registration Statement,
including,those of affiliates who are also officers/directors who own 785,060 in
the aggregate.
DIVIDENDS
As of the filing of this prospectus, we have not paid any dividends to
shareholders. There are no restrictions which would limit our ability to pay
dividends on common equity or that are likely to do so in the future. The
Colorado Revised Statutes, however, do prohibit us from declaring dividends
where, after giving effect to the distribution of the dividend; we would not be
able to pay our debts as they become due in the usual course of business; or our
total assets would be less than the sum of the total liabilities plus the amount
that would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
E. FINANCIAL STATEMENTS
The financial statements of Bedrock Energy, Inc. appear on pages F-1 through
F-19.
50
BEDROCK ENERGY, INC.
(A DEVELOPMENT STAGE COMPANY)
Financial Statements
December 31, 2007
(with Report of Independent Registered Public Accounting Firm Thereon)
F-1
Larry O'Donnell, CPA, P.C.
Telephone (303) 745-4545 2228 South Fraser Street
Unit 1
Aurora, Colorado 80014
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Bedrock Energy, Inc.
I have audited the accompanying balance sheets of Bedrock Energy, Inc. (formerly
Celltouch, Inc.) as of December 31, 2007 and 2006, and the related statements of
operations, changes in stockholders' equity and cash flows for each of the years
then ended and for the period from inception February 28, 1997 to December 31,
2007. 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 audits.
I conducted my audits in accordance with 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 audits provide 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 Bedrock Energy, Inc. (formerly
Celltouch, Inc.) as of December 31, 2007 and 2006, and the results of its
operations and their cash flows for each of the years then ended and for the
period from inception March 17, 1999 to December 31, 2007, in conformity with
generally accepted accounting principles in the United States of America.
/s/Larry O'Donnell, CPA, P.C.
____________________________
LARRY O'DONNELL, CPA, P.C.
February 19, 2008
F-2
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEETS
December 31,
2007 2006
---------------------- ---------------------
ASSETS
CURRENT ASSETS
Cash in Bank $ 18,771 -
---------------------- ---------------------
TOTAL ASSETS $ $18,771 -
====================== =====================
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts Payable $2,368 $72,000
Loan from Affiliate 37,50 3,750
Loan from Shareholders 4,430 4,430
---------------------- ---------------------
TOTAL LIABILITIES 10,548 80,180
---------------------- ---------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred shares, no par value, non voting; 10,000,000 shares - -
authorized; no shares issued and outstanding
Common shares, $.001 par value, voting, 200,000,000 shares 2,235 990
authorized; 2,235,524 and 990,524 shares issued and outstanding
respectively
Additional paid in capital 350,040 184,785
Deficit accumulated during the development stage (344,052) (265,955)
---------------------- ---------------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 8,223 (80,180)
---------------------- ---------------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 18,771 $ -
====================== =====================
The accompanying notes are an integral part of these statements.
F-3
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENTS OF OPERATIONS
Year Ended Year Ended Period From
December 31, 2007 December 31, 2006 Inception - March
17, 1999 Through
December 31, 2007
------------------- -------------------- --------------------
OPERATING EXPENSES:
Salaries and related expenses $ - $ - $ 112,128
Professional fees 36,052 - 65,230
Rent - - 3,801
Service fees 39,500 36,000 171,275
Travel and entertainment - - 23,595
General and administrative 173 - 28,164
------------------- -------------------- --------------------
TOTAL OPERATING EXPENSES 75,729 36,000 404,193
------------------- -------------------- --------------------
OPERATING (LOSS) (75,729) (36,000) (404,193)
OTHER INCOME (EXPENSE):
Other, net (2,368) - 60,141
------------------- -------------------- --------------------
NET INCOME (LOSS) BEFORE INCOME TAXES (78,097) (36,000) (344,052)
Provision for income taxes - - -
------------------- -------------------- --------------------
NET LOSS $ (78,097) $ (36,000) $ (344,052)
=================== ==================== ====================
Basic and diluted income (loss) per common $ (0.06) $ (0.04) $ (0.41)
share
=================== ==================== ====================
Basic and diluted weighted-average number of 1,207,832 990,524 833,570
common shares outstanding
=================== ==================== ====================
The accompanying notes are an integral part of these statements.
F-4
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
COMMON SHARES ADDITIONAL TOTAL
$.001 PAR VALUE PAID-IN CAPITAL SHAREHOLDERS'
SHARES AMOUNT DEFICIT EQUITY (DEFICIT)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, Inception, March 17, 1999 - $ - $ - $ - $ -
Issuance of shares for services and cash 685,861 686 44,089 - 44,775
Net loss - - - (29,784) (29,784)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 1999 685,720 686 44,089 (29,784) 14,991
Issuance of shares for debt, services and 39,818 39 140,961 - 141,000
cash
Net loss - - - (215,994) (215,994)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2000 725,538 725 185,050 (245,778) (60,003)
Net income - - - 9,233 9,233
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2001 725,538 725 185,050 (236,545) (50,770)
Net income - - - 49,137 49,137
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2002 725,538 725 185,050 (187,408) (1,633)
Net loss - - - (890) (890)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2003 990,524 990 184,785 (188,298) (2,523)
Net loss - - - (5,657) (5,657)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2004 990,524 990 184,785 (193,955) (8,180)
Net loss - - - (36,000) (36,000)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2005 990,524 990 184,785 (229,955) (44,180)
Net loss - - - (36,000) (36,000)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2006 990,524 990 184,785 (265,955) (80,180)
Issuance of shares for debt, services and 1,245,000 1,245 165,255 - 166,500
cash
Net loss - - - (78,097) (78,097)
--------------- ---------- ------------------- -------------------- -------------------
BALANCES, December 31, 2007 2,235,524 $ 2,235 $ 350,040 $ (344,052) $ 8,223
=============== ========== =================== ==================== ===================
The accompanying notes are an integral part of these statements.
F-5
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENTS OF CASH FLOWS
Year Ended Year Ended Period From Inception
December 31, 2007 December 31, 2006 - March 17, 1999
Through December 31,
2007
------------------------ -------------------- ------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $ (78,097) $ (36,000) $ (344,052)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Issuance of common shares for services 52,500 - 112,275
Issuance of debt for services 12,000 - 12,000
Debt forgiveness - - (62,509)
(Decrease) increase in accounts payable and 2,368 34,230 125,945
accrued expenses
------------------------ -------------------- ------------------------
NET CASH USED IN OPERATING ACTIVITIES (11,229) (1,780) (156,341)
------------------------ -------------------- ------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party payable - 1,780 19,112
Sale of common shares 30,000 - 156,000
------------------------ -------------------- ------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 30,000 1,780 175,112
------------------------ -------------------- ------------------------
NET INCREASE (DECREASE) IN CASH 18,771 - 18,771
CASH, BEGINNING OF PERIOD - - -
CASH, END OF PERIOD $ 18,771 $ - $ 18,771
======================== ==================== ========================
NONCASH ACTIVITIES:
Issuance of common shares for debt $ 84,000 $ - $ 84,000
======================== ==================== ========================
The accompanying notes are an integral part of these statements.
F-6
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
CellTouch, Inc., now known as Bedrock Energy Inc., was incorporated in Colorado
on August 11, 2004 with its name changed to Bedrock Energy, Inc. on October 18,
2007. Enviromart.com, Inc. was incorporated in New Hampshire in March 1999. On
September 21, 2004 CellTouch, Inc. and Enviromart.com, Inc. (collectively the
"Company") were merged under the laws of the State of Colorado and CellTouch,
Inc. became the surviving entity. The Company has been in the development stage
since its inception. Activities through December 31, 2007 include the raising of
equity capital and the formation of a previous business plan to sell
environmental products over the Internet as well as the current business plan to
merge with or acquire and develop assets from a company in the oil and gas
industry.
STATEMENT OF CASH FLOWS
For purposes of the statements of cash flows, cash includes deposits in
commercial bank accounts.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under the asset and
liability method of SFAS No. 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.
INCOME PER SHARE
Income per share requires presentation of both basic and diluted income per
common share. Common share equivalents are not included in the weighted average
calculation since their effect would be anti-dilutive.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates,
and such differences may be material to the financial statements.
F-7
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments, including cash, other assets and payables
approximate fair value due to the short-term nature of those instruments.
NOTE 2 - SHAREHOLDERS' EQUITY
COMMON SHARE
The Company is authorized to issue 200,000,000 shares of $.001 voting common
stock. There were a total of 1,245,000 shares of common stock issued during the
year ended December 31, 2007 and, therefore, as of December 31, 2007 and 2006
there are a total of 2,235,524 and 990,524 shares issued and outstanding,
respectively. These additional shares were comprised of 300,000 shares sold as
part of a private placement at $.10 per share, 420,000 shares issued as payment
of debt in the amount of $84,000 (See Note 3) and 525,000 shares issued to
consultants for services valued at $52,500.
On August 2, 2007, the Company authorized the sale in a private placement of
1,000,000 shares of common stock at a price of $.05 per share under an exemption
from registration provision of the Securities Act of 1933. The funds will be
used to pay the costs associated with its administration and payment of
professional fees to bring the Company to a fully reporting company within
compliance of the Securities Act of 1933 and 1934.
On October 17, 2007, the Company authorized up to a one for two reverse split of
the Company's common stock. As of December 31, 2007, the Company has taken no
action to institute the reverse split. The reverse split was effective on March
31, 2008.
The Company has restated its total number of outstanding and issued shares of
common stock as of December 31, 2006 from 1,000,000 shares to 990,524 shares and
as a result has adjusted the par value dollar amount of common stock from $2,000
to $1,981 with the difference of $19 being recorded as an increase in Additional
paid in capital.
PREFERRED SHARE
The Company is authorized to issue 10,000,000 shares of no par value preferred
stock. As of December 31, 2007 and 2006, the Company has no shares issued and
outstanding.
F-8
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY TRANSACTIONS
During the years ended December 31, 2007 and 2006, two officers of the Company
each earned for services rendered fees in the amount of $6,000 and $18,000
respectively and these fees were recorded as accounts payable. Thus, as of April
30, 2007, the Company had an accounts payable balance of $84,000 or a total of
$42,000 per officer. Subsequently, the Company issued promissory notes ("Notes")
dated May 1, 2007 to each of its two officers in exchange for payment of these
accounts payable as of April 30, 2007 in the amount of $42,000 for a total of
$84,000 in Notes. Each of these seven percent (7%) unsecured convertible Notes
due April 30, 2008 could be converted into shares of common stock at the rate of
ten (10) shares for each dollar of principal converted. Thereafter, on September
24, 2007, the Company and the officers mutually agreed pursuant to the terms of
the Notes to issue 420,000 shares of common stock in exchange for payment of the
$84,000 in Notes.
In addition, the Company as of December 31, 2007 and 2006 owes the officers a
total of $0 and $4,430, respectively plus as of December 31, 2007 a total of
$2,368 in accrued interest relative to the Notes.
NOTE 4 - INCOME TAXES
As of December 31, 2007 and 2006, the Company had net operating loss
carryforwards for income tax and financial reporting purposes of approximately
$346,000 and $266,000, respectively, expiring in the years 2017 through 2027.
The deferred tax assets that result from such operating loss carryforwards of
approximately $111,000 and $87,000 at December 31, 2007 and 2006, respectively
have been fully reserved for in the accompanying financial statements. During
the years ended December 31, 2007 and 2006, the valuation allowance established
against the net operating loss carryforwards increased by $24,000 and $14,000,
respectively.
NOTE 5 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONTINGENCIES
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has suffered recurring losses from
operations that raise substantial doubt about the Company's ability to continue
as a going concern. Management's plans in this regard are to raise capital
through the issuance of common shares as well as seek a merger partner. The
accompanying financial statement do not include any adjustments relating to the
recovery and classification of recorded asset amounts or the amount and
classification of liabilities that might be necessary should the Company
discontinue operations.
F-9
BEDROCK ENERGY, INC.
(FORMERLY CELLTOUCH, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - RECENT ACCOUNTING PRONOUCEMENTS
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment
of ARB No. 43, Chapter 4." This statement amends the guidance in ARB No. 43,
Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts
of idle factory expense, freight, handling costs and wasted material. The
effective date of this statement is for inventory costs incurred during fiscal
years beginning after June 15, 2005. The Company adopted this statement during
the year ended December 31, 2006 and it had no effect on the Company.
In December 2004, the FASB issued SFAS No. 152, "Accounting for Real Estate
Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67. This
statement references the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA SOP 04-2. The
effective date of this statement is for fiscal years beginning after June 15,
2005. The Company adopted this statement during the year ended December 31, 2006
and it had no effect on the Company.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- - an amendment of APB Opinion No. 29." This statement amends APB Opinion No. 29
to eliminate the exception for nonmonetary exchanges of similar productive
assets that do not have commercial substance. The effective date of this
statement is for fiscal year beginning after June 15, 2005. The Company adopted
this statement during the year ended December 31, 2006 and it had no effect on
the Company.
NOTE 7 - SUBSEQUENT EVENTS
On January 4, 2008, the Company authorized the issuance of 10,000 shares of
restricted common stock to each of its four Board of Director members for
services rendered during the year 2008 in the amount of $500 or $.05 per share.
On February 8, 2008, the Company executed a Farmout Agreement with Sun River
Energy, Inc., effective as of November 10, 2007, for an oil and gas lease
described as Lease No. 06-00256, State of Wyoming, Section 36, T41N, R81W ("the
Property"). In accordance with the terms of the Farmout Agreement the Company
shall pay for and drill one well on the Property on or before November 10, 2008
to earn its interest in the lease. As a result, the Company will earn an 80
percent Net Royalty Interest in the lease with Sun River Energy, Inc. retaining
a two percent Overriding Royalty Interest.
F-10
BEDROCK ENERGY, INC.
(A DEVELOPMENT STAGE COMPANY)
JUNE 30, 2008
(UNAUDITED)
F-11
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
BALANCE SHEETS
December 31,
June 30, 2008 2007
--------------- ---------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash in Bank $ 23,567 18,771
Prepaid Expense 3,600 -
--------------- ---------------
TOTAL ASSETS $ 27,167 $ 18,771
=============== ===============
LIABILITIES AND SHAREHOLDERS' (DEFICT) EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 2,368 $ 2,368
Accrued Fees 30,000 -
Loan from Affiliates 3,750 3,750
Loan from Shareholders 4,430 4,430
--------------- ---------------
TOTAL LIABILITIES 40,548 10,548
--------------- ---------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY:
Preferred shares, no par value, non voting: 10,000,000
shares authorized; no shares issued and outstanding - -
Common shares, $.001 par value, voting: 200,000,000
shares authorized; 2,525,524 and 2,235,525, issued and
outstanding, June 30, 2008 and December 31, 2007, respectively 2,525 2,235
Additional paid in capital 378,750 350,040
Deficit accumulated during the development stage (394,656) (344,052)
--------------- ---------------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (13,381) 8,223
--------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 27,167 $ 18,771
=============== ===============
The accompanying notes are an integral part of these statements.
F-12
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENT OF OPERATIONS
(Unaudited)
Period From
(Inception)
Three Months Three Months Six Months Six Months March 17, 1999
Ended Ended Ended Ended Through
June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007 June 30, 2008
--------------- ---------------- ---------------- --------------- -----------------
OPERATING EXPENSES:
Salaries and related expenses $ - $ - $ - $ - $ 112,128
Professional fees 2,807 - 9,292 - 74,522
Rent - - - - 3,801
Service fees 32,025 18,000 35,400 27,000 206,675
Travel 1,821 2,500 3,110 2,500 25,416
General and administrative 2,477 - 2,802 32,255
--------------- ---------------- ---------------- --------------- -------------
TOTAL OPERATING EXPENSES 39,130 20,500 50,604 29,500 454,797
--------------- ---------------- ---------------- --------------- -------------
OPERATING LOSS (39,130) (20,500) (50,604) (29,500) (454,797)
OTHER INCOME:
Other, net - - - 60,141
--------------- ---------------- ---------------- --------------- -------------
NET LOSS
BEFORE INCOME TAXES (39,130) (20,500) (50,604) (29,500) (394,656)
Provision for income taxes - - -
--------------- ---------------- ---------------- --------------- -------------
NET LOSS $ (39,130) $ (20,500) $ (50,604) $ (29,500) $ (394,656)
=============== ================ ================ =============== =============
Basic and diluted
loss per common share $ (0.02) $ (0.01) $ (0.02) $ (0.01)
=============== ================ ================ ===============
Basic and diluted
weighted-average number
of common shares outstanding 2,525,524 2,239,381 2,414,810 2,054,858
=============== ================ ================ ===============
The accompanying notes are an integral part of these statements.
F-13
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
March 17, 1999 (Inception) through June 30, 2008
(Unaudited)
TOTAL
COMMON SHARES ADDITIONAL SHAREHOLDERS'
$.001 PAR VALUE PAID-IN EQUITY
SHARES AMOUNT CAPITAL DEFICIT (DEFICIT)
-------------- ----------- ------------ ------------ -----------------
BALANCES, INCEPTION, MARCH 17, 1999 $ - $ - $ - $ -
-
Issuance of shares for services and cash 950,706 950 43,825 - 44,775
Net loss - - - (29,784) (29,784)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 1999 950,706 950 43,825 (29,784) 14,991
Issuance of shares for debt, services and cash 39,818 40 140,960 - 141,000
Net loss - - - (215,994) (215,994)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2000 990,524 990 184,785 (245,778) (60,003)
Net income - - - 9,233 9,233
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2001 990,524 990 184,785 (236,545) (50,770)
Net income - - - 49,137 49,137
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2002 990,524 990 184,785 (187,408) (1,633)
Net loss - - - (890) (890)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2003 990,524 990 184,785 (188,298) (2,523)
Net loss - - - (5,657) (5,657)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2004 990,524 990 184,785 (193,955) (8,180)
Net loss - - - (36,000) (36,000)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2005 990,524 990 184,785 (229,955) (44,180)
Net loss - - - (36,000) (36,000)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2006 990,524 990 184,785 (265,955) (80,180)
Issuance of shares for debt, services and cash 1,245,000 1,245 165,255 - 166,500
Net loss - - - (78,097) (78,097)
-------------- ----------- ------------ ------------ -----------------
BALANCES, DECEMBER 31, 2007 2,235,524 2,235 350,040 (344,052) 8,223
Issuance of shares for services and cash 290,000 290 28,710 - 29,000
Net loss - - - (50,604) (50,604)
-------------- ----------- ------------ ------------ -----------------
BALANCES, JUNE 30, 2008 2,525,524 $ 2,525 $ 378,750 $ (394,656) $ (13,381)
============== =========== ============ ============ =================
The accompanying notes are an integral part of these statements.
F-14
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period From
(Inception)
March 17, 1999
Six Months Ended Six Months Ended Through
June 30, 2008 June 30, 2007 June 30, 2008
---------------------- ----------------------- -----------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $ (50,604) $ (29,500) $ (394,656)
Adjustments to reconcile net loss to net cash
used in operating activities:
Issuance of common shares for services 9,000 - 121,275
Issuance of debt for services - 20,500 12,000
Debt forgiveness - - (62,509)
Increase in current assets (3,600) - (3,600)
Increase in accounts payable and accrued fees 30,000 9,000 155,945
---------------------- ----------------------- -----------------
NET CASH USED IN OPERATING ACTIVITIES (15,204) - (171,545)
---------------------- ----------------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party payable - - 19,112
Sale of common shares 20,000 - 176,000
---------------------- ----------------------- -----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,000 - 195,112
---------------------- ----------------------- -----------------
NET INCREASE IN CASH 4,796 - 23,567
CASH, BEGINNING OF PERIOD 18,771 - -
---------------------- ----------------------- -----------------
CASH, END OF PERIOD $ 23,567 $ - $ 23,567
====================== ======================= =================
NONCASH ACTIVITIES:
Issuance of common shares for debt $ - $ - $ 84,000
====================== ======================= =================
The accompanying notes are an integral part of these statements.
F-15
BEDROCK ENERGY, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(UNAUDITED)
NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
ORGANIZATION
The Company was incorporated in Colorado on August 11, 2004 with its name
changed to Bedrock Energy, Inc. on October 18, 2007, from CellTouch, Inc.
Enviromart.com, Inc. was incorporated in New Hampshire in March of 1999. On
September 21, 2004 CellTouch, Inc. and Enviromart.com, Inc. (collectively the
"Company") were merged under the laws of the State of Colorado and CellTouch,
Inc. became the surviving entity. The Company has been in the development stage
since its inception. Activities through June 30, 2008 include the raising of
equity capital and the formation of a previous business plan to sell
environmental products over the Internet as well as the current business plan to
merge with or acquire and develop assets from a company in the oil and gas
industry.
BASIS OF PRESENTATION
DEVELOPMENT STAGE COMPANY
The Company has not earned significant revenues from planned operations.
Accordingly, the Company's activities have been accounted for as those of a
"Development Stage Company", as set forth in Statement of Financial Accounting
Standards No. 7 ("SFAS"). Among the disclosures required by SFAS No. 7 are that
the Company's financial statements of operations, stockholders' equity and cash
flows disclose activity since the date of the Company's inception.
INTERIM PRESENTATION
In the opinion of the management of the Company, the accompanying unaudited
financial statements include all material adjustments, including all normal and
recurring adjustments, considered necessary to present fairly the financial
position and operating results of the Company for the periods presented. The
financial statements and notes do not contain certain information included in
the Company's financial statements for the year ended December 31, 2007. It is
the Company's opinion that when the interim financial statements are read in
conjunction with the December 31, 2007 Audited Financial Statements, the
disclosures are adequate to make the information presented not misleading.
Interim results are not necessarily indicative of results for a full year or any
future period.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
STATEMENT OF CASH FLOWS
For purposes of the statements of cash flows, cash includes deposits in
commercial bank accounts.
F-16
BEDROCK ENERGY, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under the asset and
liability method of SFAS No. 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.
INCOME PER SHARE
Income per share requires presentation of both basic and diluted income per
common share. Common share equivalents are not included in the weighted average
calculation since their effect would be anti-dilutive.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates,
and such differences may be material to the financial statements.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments, including cash, other assets and payables
approximate fair value due to the short-term nature of those instruments.
NOTE 2 - SHAREHOLDERS' (DEFICIT) EQUITY
COMMON SHARE
The Company is authorized to issue 200,000,000 shares of $.001 voting common
stock. Effective March 24, 2008, the Company, as a result of shareholder
approval, implemented a one for two share reverse stock split and therefore as
of June 30, 2008 there were a total of 2,525,524 shares of common stock issued
and outstanding.
During the six months ended June 30, 2008, the Company issued a total of 290,000
shares. The Company issued 90,000 of these shares services rendered at a value
of $9,000 (See Note 3) and the remaining 200,000 shares were issued as part of a
private placement in the amount of $20,000 in cash.
F-17
BEDROCK ENERGY, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(UNAUDITED)
NOTE 2 -SHAREHOLDERS' (DEFICIT) EQUITY (CONTINUED)
On August 2, 2007, the Company authorized the sale in a private placement of
1,000,000 shares of common stock (pre-reverse stock split) at a price of $.05
per share under an exemption from registration provision of the Securities Act
of 1933. The funds will be used to pay the costs associated with its
administration and payment of professional fees to bring the Company to a fully
reporting company within compliance of the Securities Act of 1933 and 1934. As
of June 30, 2008, the company has sold a total of 900,000 shares of common stock
(pre reverse stock split) as part of this private placement for a total of
$45,000 in cash.
PREFERRED SHARE
The Company is authorized to issue 10,000,000 shares of no par value preferred
stock. As of June 30, 2008, the Company has no shares issued and outstanding.
NOTE 3 - RELATED PARTY TRANSACTIONS
As of June 30, 2008, the Company owes officers a total $4,430, plus a total of
$2,368 in accrued interest relative to previously issued promissory notes.
In addition, during the six months ended June 30, 2008, the Company authorized
the issuance 30,000 shares of common stock respectively (post reverse stock
split) to each of its three Board members or a total of 90,000 shares of common
stock in exchange for services rendered during the year 2007 in the amount of
$500 per Board member and during the year 2008 in the amount of $2,500 per Board
member for a total value of $9,000. As of June 30, 2008, the Company has prepaid
expense of $3,600 in consulting fees as a result of the issuance of these above
shares of common stock.
NOTE 4 - INCOME TAXES
As of June 30, 2008, the Company had net operating loss carryforwards for income
tax and financial reporting purposes of approximately $395,000 expiring in the
years 2017 through 2027. The deferred tax assets that result from such operating
loss carryforwards of approximately $126,000 as of June 30, 2008 have been fully
reserved for in the accompanying financial statements. During the six months
ended June 30, 2008, the valuation allowance established against the net
operating loss carryforwards increased by $15,000.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has suffered recurring losses from
operations that raise substantial doubt about the Company's ability to continue
as a going concern. Management's plans in this regard are to raise capital
through the issuance of common shares as well as seek a merger partner. The
accompanying financial statement do not include any adjustments relating to the
recovery and classification of recorded asset amounts or the amount and
classification of liabilities that might be necessary should the Company
discontinue operations.
F-18
BEDROCK ENERGY, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
(UNAUDITED)
NOTE 6 - AGREEMENT
On February 8, 2008, the Company executed a Farmout Agreement with Sun River
Energy, Inc., effective as of November 10, 2007, for an oil and gas lease
described as Lease No. 06-00256, State of Wyoming, Section 36, T41N, R81W ("the
Property"). In accordance with the terms of the Farmout Agreement the Company
shall pay for and drill one well on the Property on or before November 10, 2008
to earn its interest in the lease. As a result, the Company will earn an 80% Net
Royalty Interest in the lease with Sun River Energy, Inc. retaining a two
percent Overriding Royalty Interest. As of June 30, 2008, the Company has not
paid any amounts towards this Agreement.
F-19
F. SELECTED FINANCIAL INFORMATION
Not applicable.
G. SUPPLEMENTARY FINANCIAL INFORMATION
Not applicable.
H. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL
STATEMENTS AND NOTES THERETO AND THE OTHER FINANCIAL INFORMATION INCLUDED
ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING STATEMENTS AS A RESULT OF ANY
NUMBER OF FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" ON PAGE 7 AND
ELSEWHERE IN THIS REPORT.
PLAN OF OPERATIONS
We had no operations prior to and we had no revenues during the fiscal year
ended December 31, 2007. We have minimal capital and minimal cash. We are
illiquid and need cash infusions from investors or shareholders to provide
capital, or loans from any sources.
We are an oil and gas exploration and development company focused on creating a
portfolio of North American assets, located in the central and Western United
States that exhibit consistent, predictable, and long-lived production
capabilities. We plan to build value for its shareholders through the
acquisition and development of gas and oil assets that contain proven reserves
in domestic areas where reserves can be economically produced at a low risk to
us relying on joint venture partners to supply most of the funds needed to
explore or develop these properties.
We intend to participate in oil and gas prospects located in the states of Utah,
Wyoming, Kansas, New Mexico, and Colorado. Our main emphasis will be to acquire
production or revenue generating opportunities either by lease purchase or
farmout, when available, with third parties and industry partners.
We will need substantial additional capital to support our proposed future
energy operations. We have NO revenues. We have NO committed source for any
funds as of date here. No representation is made that any funds will be
available when needed. In the event funds cannot be raised when needed, we may
not be able to carry out our business plan, may never achieve sales or royalty
income, and could fail in business as a result of these uncertainties.
Decisions regarding future participation in exploration wells or geophysical
studies or other activities will be made on a case-by-case basis. We may, in any
particular case, decide to participate or decline participation. If
participating, we may pay our proportionate share of costs to maintain our
proportionate interest through cash flow or debt or equity financing. If
participation is declined, we may elect to farmout, non-consent, sell or
otherwise negotiate a method of cost sharing in order to maintain some
continuing interest in the prospect.
51
RESULTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007 COMPARED TO THE YEAR ENDED DECEMBER 31,
2006
During the years ended December 31, 2007 and 2006, we did not recognize any
revenues from our business activities.
During the year ended December 31, 2007, we incurred total operating expenses of
$75,729 compared to $36,000 during the year ended December 31, 2006. The
increase of $39,729 was a result of the $36,056 increase in professional fees, a
result of our efforts to develop our business plan in the oil and gas
exploration industries.
During the year ended December 31, 2007, we incurred a net loss of $78,097
compared to a net loss of $36,000 during the year ended December 31, 2006. The
increase of $42,097 is a result of the $39,729 increase in operational expenses
due to our increased activity as discussed above.
LIQUIDITY
At December 31, 2007, we had total assets of $18,771, consisting solely of cash
on hand. At December 31, 2007, we had total liabilities of $10,548, consisting
of $2,368 in accounts payables and $8,180 in loans from affiliates and
shareholders. At December 31, 2007, we had an accumulated deficit of $344,052.
During the year ended December 31, 2007, we used net cash of $11,229 in
operational activities. During the year ended December 31, 2007, cash of $30,000
from the sale of our common stock. During the year ended December 31, 2007, we
did not use or receive any funds from investing activities.
During the year ended December 31, 2007, we issued 525,000 shares of our
restricted common stock at a price of $0.10 per share in order to pay for
services totaling $52,500 of our professionals.
During the year ended December 31, 2007, we issued 420,000 shares of our
restricted common stock, at a price of $0.20 per share as payment on outstanding
debt of $84,000. During the years ended December 31, 2007 and 2006, two officers
of the Company had each provided services for the Company, which were accrued by
the Company. In May 2007, the Company issued each of the officers a 7% unsecured
note for the outstanding amounts owed to them of $42,000 each for a total of
$84,000. The notes had a due date of April 30, 2008. In September 2007, the
officers agreed to accept 420,000 shares of common stock each as payment, in
full, of the notes.
During the year ended December 31, 2007, we issued 300,000 shares of restricted
common stock in exchange for cash of $30,000. The shares were sold as part of
the private placement of our common stock. The shares had a purchase price of
$0.10 per share.
We have minimal cash at December 31, 2007 and no other assets, and we will be
reliant upon shareholder loans or private placements of equity to fund any kind
of operations. We have secured no sources of loans or private placements at this
time.
SHORT TERM.
On a short-term basis, we do not generate any revenue or revenues sufficient to
cover operations. Based on prior history, we will continue to have insufficient
revenue to satisfy current and recurring liabilities. For short term needs we
will be dependent on receipt, if any, of offering proceeds.
CAPITAL RESOURCES
We have only common stock as our capital resource.
52
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.
NEED FOR ADDITIONAL FINANCING
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2008 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2007
During the three months ended June 30, 2008 and 2007, we did not recognize any
revenues from our business activities.
During the three months ended June 30, 2008, we incurred total operating
expenses of $39,130 compared to $20,500 during the three months ended June 30,
2007. The increase of $18,630 was a result of the $6,485 increase in
professional fees and the $14,025 increase in service fees offset by a decrease
of $679 in travel expenses. The increase in professional fees and service fees
is a result of our efforts to develop our business plan in the oil and gas
exploration industries and our efforts to file a Form 10 with the Securities and
Exchange Commission.
During the three months ended June 30, 2008, we incurred a net loss of $39,130
compared to a net loss of $20,500 during the three months ended June 30, 2007.
The increase of $18,630 is a result of the $18,630 increase in operational
expenses due to our increased activity as discussed above.
FOR THE SIX MONTHS ENDED JUNE 30, 2008 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2007
During the six months ended June 30, 2008 and 2007, we did not recognize any
revenues from our business activities.
During the six months ended June 30, 2008, we incurred total operating expenses
of $50,604 compared to $29,500 during the six months ended June 30, 2007. The
increase of $21,104 was a result of the $9,292 increase in professional fees and
the $8,400 increase in service fees and the $2,802 increase in general and
administrative expenses. The increase in total operating expenses is a result of
our efforts to develop our business plan in the oil and gas exploration
industries and our efforts to file a Form 10 with the Securities and Exchange
Commission.
During the six months ended June 30, 2008, we incurred a net loss of $50,604
compared to a net loss of $29,500 during the six months ended June 30, 2007. The
increase of $21,104 is a result of the $21,104 increase in operational expenses
due to our increased activity as discussed above.
LIQUIDITY
At June 30, 2008, we had total assets of $27,167, consisting of cash of $23,567
and a prepaid expense of $3,600. At June 30, 2008, we had total liabilities of
$40,548, consisting of $2,368 in accounts payables, $30,000 in accrued fees and
$8,180 in loans from affiliates and shareholders. At June 30, 2008, we had an
accumulated deficit of $394,656.
53
During the six months ended June 30, 2008, we used net cash of $15,204 in
operational activities. During the six months ended June 30, 2007, we neither
used nor were provided cash from our operational activities. During the six
months ended June 30, 2008, we recognized a net loss of $50,604, which was
adjusted for a non-cash activity of $20,000 in common stock that was issued for
services.
During the six months ended June 30, 2008, we issued 90,000 shares of our
restricted common stock at a price of $0.10 per share in order to pay for
services totaling $9,000 of directors. We authorized the issuance of 30,000
shares of common stock to each of our three Board members in exchange for
services rendered during the year 2007 in the amount of $1,500 and during the
year 2008 in the amount of $7,500 for a total of $9,000. As of June 30, 2008, we
have a prepaid expense of $3,600 in consulting fees as a result of the issuance
of the above shares of common stock and during the six months ended June 30,
2008 expensed $5,400.
During the six months ended June 30, 2008, we issued 100,000 shares of
restricted common stock in exchange for cash of $10,000. The shares were sold as
part of the private placement of our common stock. The shares had a purchase
price of $0.10 per share.
We have minimal cash at June 30, 2008 and no other assets, and we will be
reliant upon shareholder loans or private placements of equity to fund any kind
of operations. We have secured no sources of loans or private placements at this
time.
SHORT TERM.
On a short-term basis, we do not generate any revenue or revenues sufficient to
cover operations. Based on prior history, we will continue to have insufficient
revenue to satisfy current and recurring liabilities. For short term needs we
will be dependent on receipt, if any, of offering proceeds.
CAPITAL RESOURCES
We have only common stock as our capital resource.
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.
NEED FOR ADDITIONAL FINANCING
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
I. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
Not applicable.
J. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
54
K. DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE POSITION TERM
- ----------------------- ----------------- ---------------------------- ---------
W. Edward Nichols 65 President, CEO, Annual
Secretary/Treasurer and
Chairman
Herbert T. Sears 61 Chief Financial Officer Annual
and Director
W. EDWARD NICHOLS: PRESIDENT, CEO SECRETARY/TREASURER AND CHAIRMAN OF THE BOARD:
Mr. Nichols is currently a practicing attorney with Nichols & Nichols in Denver,
Colorado. He is authorized to practice in the states of Colorado and Kansas, the
United States Federal Courts, and Supreme Court of the United States. He is also
Managing Director of Nichols & Company LLC, a management consulting firm and has
worked as a private investment banker and consultant with venture capital
companies in the U.S. and Europe. Mr. Nichols grew up in the oil patch and has
owned and operated gas processing plants in Kansas and Wyoming. He has also
co-owned and operated oil drilling, production and gas gathering companies in
Kansas.
HERBERT T. SEARS: CHIEF FINANCIAL OFFICER AND DIRECTOR: Mr. Sears is a seasoned
attorney with more than thirty years of international experience specializing in
contracts, claims, and corporate restructuring. He was formerly a Vice President
and Counsel to Stone & Webster, an international multi-billion dollar
engineering and construction firm. Mr. Sears currently is the court appointed
Trustee for the Stone and Webster Liquidating Trust with responsibility for
liquidating the global assets of the former Stone & Webster operating companies.
In addition, he advises global engineering companies with respect to their
international legal activities. He has also been actively involved in a variety
of major engineering and construction projects during the past two decades in
Europe, Scandinavia, Asia and the Middle East.
Mr. Sears graduated from Boston University School of Management with a B.S/B.A
in International Business and earned his law degree from Washington University
School of Law.
Our officers are spending up to 15 hours per week on our business at this time.
At such time as the Company is financially capable of paying salaries, it is
anticipated that management will assume full time roles in the Company's
operations and be paid accordingly.
CONFLICTS OF INTEREST - GENERAL.
Our directors and officers are, or may become, in their individual capacities,
officers, directors, controlling shareholder and/or partners of other entities
engaged in a variety of businesses. Thus, there exist potential conflicts of
interest including, among other things, time, efforts and corporation
opportunity, involved in participation with such other business entities. While
each officer and director of our business is engaged in business activities
outside of our business, the amount of time they devote to our business will be
up to approximately 15 hours per week.
CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES
Presently no requirement contained in our Articles of Incorporation, Bylaws, or
minutes which requires officers and directors of our business to disclose to us
business opportunities which come to their attention. Our officers and directors
do, however, have a fiduciary duty of loyalty to us to disclose to us any
business opportunities which come to their attention, in their capacity as an
officer and/or director or otherwise. Excluded from this duty would be
opportunities which the person learns about through his involvement as an
55
officer and director of another company. We have no intention of merging with or
acquiring an affiliate, associate person or business opportunity from any
affiliate or any client of any such person.
PROJECTED STAFF
STAFFING
Currently, we have no employees aside from the President who is part time. This
lean staffing is possible in this phase because of our determination to
outsource all operating functions. Our staff positions will be filled as budget
allows and business demands require, and the positions may be altered in
response to business needs.
L. EXECUTIVE AND DIRECTORS COMPENSATION
COMPENSATION
The following table sets forth certain information concerning compensation of
the President and our most highly compensated executive officers for the years
ended December 31, 2007 and 2006 ("Named Executive Officers"):
SUMMARY EXECUTIVES COMPENSATION TABLE
NON-EQUITY NON-QUALIFIED
INCENTIVE DEFERRED
STOCK OPTION PLAN COMPENSATION ALL OTHER
SALARY BONUS AWARDS AWARDS COMPENSATION EARNINGS COMPENSATION TOTAL
NAME & POSITION YEAR ($) ($) ($) ($) ($) ($) ($) ($)
- ------------------- -------- ---------- ------- -------- -------- --------------- -------------- -------------- ------------
W. Edward 2006 $6,000 0 0 0 0 0 0 $6,000
Nichols,
President, 2007 $18,000 0 0 0 0 0 0 $18,000
Secretary/
Treasurer and CEO
- ------------------- -------- ---------- ------- -------- -------- --------------- -------------- -------------- ------------
Herbert T. Sears, 2006 $6,000 0 0 0 0 0 0 $6,000
CFO
2007 $18,000 0 0 0 0 0 0 $18,000
- ------------------- -------- ---------- ------- -------- -------- --------------- -------------- -------------- ------------
(REMAINDER OF PAGE LEFT BLANK INTENTIONALLY)
56
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth certain information concerning outstanding equity
awards held by the President and our most highly compensated executive officers
for the year ended December 31, 2007 (the "Named Executive Officers"):
OPTION AWARDS STOCK AWARDS
- ------------- ------------ ------------- ------------- --------- ----------- --------- --------- ---------- ----------
Equity
incentive
Equity plan
incentive Equity awards:
plan incentive Market
awards: plan or
Number of Number of Number of Number Market awards: payout
securities securities securities of value Number value of
underlying underlying underlying shares of of unearned
unexercised unexercised unexercised Option Option or shares unearned shares,
options options (#) unearned exercise expiration units of shares, units or
Name (#) unexercisable options price date of units units or others
exercisable (#) ($) stock of other rights
that stock rights that
have that that have not
not have have not vested
vested not vested ($)
(#) vested (#)
($)
- ------------- ------------ ------------- ------------- --------- ----------- --------- --------- ---------- ----------
W. Edward 0 0 0 0 0 0 0 0 0
Nichols,
President
- ------------- ------------ ------------- ------------- --------- ----------- --------- --------- ---------- ----------
Herbert T. 0 0 0 0 0 0 0 0 0
Sears, CFO
- ------------- ------------ ------------- ------------- --------- ----------- --------- --------- ---------- ----------
DIRECTOR COMPENSATION
The following table sets forth certain information concerning compensation paid
to our directors for services as directors, but not including compensation for
services as officers reported in the "Summary Executives Compensation Table"
during the year ended December 31, 2007:
Non-qualified
Non-equity deferred
Fees earned incentive compensation All other
or paid in Stock Option plan earnings compensation Total
Name cash awards ($) awards ($) compensation ($) ($) ($)
($) ($)
- ---------------- ------------- ------------- ------------- --------------- -------------- -------------- -------------
W. Edward $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Nichols
Herbert T. $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Sears
All of our officers and/or directors will continue to be active in other
companies. All officers and directors have retained the right to conduct their
own independent business interests.
57
It is possible that situations may arise in the future where the personal
interests of the officers and directors may conflict with our interests. Such
conflicts could include determining what portion of their working time will be
spent on our business and what portion on other business interest. To the best
ability and in the best judgment of our officers and directors, any conflicts of
interest between us and the personal interests of our officers and directors
will be resolved in a fair manner which will protect our interests. Any
transactions between us and entities affiliated with our officers and directors
will be on terms which are fair and equitable to us. Our Board of Directors
intends to continually review all corporate opportunities to further attempt to
safeguard against conflicts of interest between their business interests and our
interests.
We have no intention of merging with or acquiring an affiliate, associated
person or business opportunity from any affiliate or any client of any such
person.
Directors receive no compensation for serving.
M. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS OF JULY 29,
2008
(a) Beneficial owners of five percent (5%) or greater, of our common stock.
There are currently 200,000,000 common shares authorized of which 2,525,524 are
outstanding at July 29, 2008.
The following sets forth information with respect to ownership by holders of
more than five percent (5%) of our common stock:
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE PRE-OFFERING PERCENT POST-OFFERING
BENEFICIAL OWNER OF BENEFICIAL OWNER OF CLASS PERCENT OF CLASS
(POST RESALE)
- --------------------- ----------------------------- -------------------- ---------------------- ----------------------
Common shares Susan Blekicki (1) 305,000 12% 10%
Common shares Brian Healey (1) 205,846 8% 6%
Common shares Michael A. Littman 250,000 10% 8%
7609 Ralston Road
Arvada, CO 80002
Common shares W. Edward Nichols (1) 379,591 15% 12%
Common shares Herbert T. Sears (1) 405,469 16% 13%
--------------------
TOTAL 1,545,906
(1) Address is c/o Bedrock Energy, Inc., 8950 Scenic Pine Drive,
Suite 100, Parker, Colorado 80134.
58
(b) The following sets forth information with respect to our common
stock beneficially owned by each Officer and Director, and by all Directors and
Officers as a group as of July 29, 2008.
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNER BENEFICIAL OWNER
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Common shares W. Edward Nichols, 379,591 15%
President, CEO,
Secretary/Treasurer and
Director (1)
Common shares Herbert T. Sears, CFO and 405,469 16%
Director (1)
---------------------------- ----------------------------
All Directors and Executive 785,060 31%
Officers as a Group (2 persons)
(1) Address is c/o Bedrock Energy, Inc., 8950 Scenic Pine Drive,
Suite 100, Parker, Colorado 80134.
N. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, PROMOTERS AND CONTROL PERSONS
Other than the stock transactions discussed above, we have not entered into any
transaction nor are there any proposed transactions in which any of our
founders, directors, executive officers, shareholders or any members of the
immediate family of any of the foregoing had or is to have a direct or indirect
material interest.
There are no promoters being used in relation to this offering. No person who
may, in the future, be considered a promoter of this offering, will receive or
expect to receive assets, services or other considerations from us. No assets
will be, nor expected to be, acquired from any promoter on behalf of us. We have
not entered into any agreements that require disclosure to the shareholders.
ITEM 11A. MATERIAL CHANGES
Not applicable.
ITEM 12. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Not applicable.
ITEM 12A. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
The Colorado Business Corporation Act requires us to indemnify officers and
directors for any expenses incurred by any officer or director in connection
with any actions or proceedings, whether civil, criminal, administrative, or
investigative, brought against such officer or director because of his or her
status as an officer or director, to the extent that the director or officer has
been successful on the merits or otherwise in defense of the action or
proceeding. The Colorado Business Corporation Act permits a corporation to
indemnify an officer or director, even in the absence of an agreement to do so,
for expenses incurred in connection with any action or proceeding if such
officer or director acted in good faith and in a manner in which he or she
reasonably believed to be in or not opposed to the best interests of us and such
indemnification is authorized by the stockholders, by a quorum of disinterested
directors, by independent legal counsel in a written opinion authorized by a
59
majority vote of a quorum of directors consisting of disinterested directors, or
by independent legal counsel in a written opinion if a quorum of disinterested
directors cannot be obtained.
The Colorado Business Corporation Act prohibits indemnification of a director or
officer if a final adjudication establishes that the officer's or director's
acts or omissions involved intentional misconduct, fraud, or a knowing violation
of the law and were material to the cause of action. Despite the foregoing
limitations on indemnification, the Colorado Business Corporation Act may permit
an officer or director to apply to the court for approval of indemnification
even if the officer or director is adjudged to have committed intentional
misconduct, fraud, or a knowing violation of the law.
The Colorado Business Corporation Act also provides that indemnification of
directors is not permitted for the unlawful payment of distributions, except for
those directors registering their dissent to the payment of the distribution.
According to our bylaws, we are authorized to indemnify our directors to the
fullest extent authorized under Colorado Law subject to certain specified
limitations.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and persons controlling
us pursuant to the foregoing provisions or otherwise, we are 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.
60
[OUTSIDE BACK COVER PAGE OF PROSPECTUS]
DEALER PROSPECTUS DELIVERY REQUIREMENTS
Until ninety (90) days from the effective date of this registration statement,
all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers' obligation 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 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We have expended, or will expend fees in relation to this registration statement
as detailed below:
============================================================= ===============
EXPENDITURE ITEM AMOUNT
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
Attorney Fees $13,000
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
Audit Fees $7,500
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
Transfer Agent Fees $2,000
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
SEC Registration and Blue Sky Registration fees (estimated) $1,000
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
Printing Costs and Miscellaneous Expenses (estimated) $1,500
------
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
TOTAL $25,000
============================================================= ===============
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Bedrock Energy, Inc. officers and directors are indemnified as provided by the
Colorado Revised Statutes and the bylaws.
Under the Colorado Revised Statutes, director immunity from liability to a
company or its shareholders for monetary liabilities applies automatically
unless it is specifically limited by a company's Articles of Incorporation. Our
Articles of Incorporation do not specifically limit the directors' immunity.
Excepted from that immunity are: (a) a willful failure to deal fairly with us or
our shareholders in connection with a matter in which the director has a
material conflict of interest; (b) a violation of criminal law, unless the
director had reasonable cause to believe that his or her conduct was lawful or
no reasonable cause to believe that his or her conduct was unlawful; (c) a
transaction from which the director derived an improper personal profit; and (d)
willful misconduct.
Our bylaws provide that it will indemnify the directors to the fullest extent
not prohibited by Colorado law; provided, however, that we may modify the extent
of such indemnification by individual contracts with the directors and officers;
and, provided, further, that we shall not be required to indemnify any director
or officer in connection with any proceeding, or part thereof, initiated by such
person unless such indemnification: (a) is expressly required to be made by law,
(b) the proceeding was authorized by the board of directors, (c) is provided by
us, in sole discretion, pursuant to the powers vested under Colorado law or (d)
is required to be made pursuant to the bylaws.
Our bylaws provide that it will advance to any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of us, or is or was
serving at the request of us as a director or executive officer of another
company, partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request therefore, all
expenses incurred by any director or officer in connection with such proceeding
61
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under the bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer except by
reason of the fact that such officer is or was our director in which event this
paragraph shall not apply, in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, if a determination is reasonably and
promptly made: (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or (b) if such
quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, that
the facts known to the decision-making party at the time such determination is
made demonstrate clearly and convincingly that such person acted in bad faith or
in a manner that such person did not believe to be in or not opposed to the best
interests of us.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
We have sold securities within the past three years without registering the
securities under the Securities Act of 1933 as shown in the following table:
- ---------------------------------- --------------------- ----------------------------- --------------------
NAME COMMON SHARES CONSIDERATION DATE OF PURCHASE
- ---------------------------------- --------------------- ----------------------------- --------------------
Frank Liu 25,000 Services of $2,500 5/18/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
Herbert T. Sears (2) 210,000 Payment of $42,000 Debt 9/27/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
Michael Littman 250,000 * Services of $25,000 9/27/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
W. Edward Nichols (2) 210,000 * Payment of $42,000 Debt 9/27/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
Hanover Financial Services 300,000* Services of $30,000 9/27/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
W. Edward Nichols (2) 50,000 * Services of $5,000 12/10/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
Stan Hussey 100,000 * Services of $5,000 12/10/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
Reed Hatkoff 50,000 * Services of $5,000 12/10/2007
- ---------------------------------- --------------------- ----------------------------- --------------------
Herbert T. Sears and Anne M. 50,000 * Services of $5,000 12/10/2007
Sears, TR'S FBO Herbert Sears
Family Trust UA Mar 6 1993 (2)
- ---------------------------------- --------------------- ----------------------------- --------------------
W. Edward Nichols (2) 5,000 * Services of $500 1/4/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
Herbert T. Sears (2) 5,000 * Services of $500 1/4/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
Lincoln America Investments LLC 100,000 * $10,000 Cash 2/5/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
W. Edward Nichols (2) 25,000 * Services of $2,500 3/24/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
Herbert T. Sears (2) 25,000 * Services of $2,500 3/24/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
Ronald Blekicki 25,000 * Services of $2,500 3/24/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
B.I.M.S. 100,000 $10,000 Cash 4/4/2008
- ---------------------------------- --------------------- ----------------------------- --------------------
* Adjusted for the reverse split of one for two - authorized October 17, 2007
but not effective until March 31, 2008.
62
EXEMPTIONS FROM REGISTRATION FOR UNREGISTERED SALES
1. Common shares were issued at $.10 per share pursuant to an exemption under
Section 4(2).
2. Officer and Director of Company
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
------------ --------------------------------------- ---------------------
NUMBER DESCRIPTION
3.1 Articles of Incorporation (1)
3.2 Amended Articles of Incorporation (1)
3.3 Bylaws (1)
5.1 Opinion re: Legality Filed Herewith
10.1 Farmout Agreement (1)
23.1 Consent of Attorney Filed Herewith
23.2 Consent of Accountant (1)
99.1 Graphs and Pictures (1)
------------ --------------------------------------- ---------------------
(1)Incorporated by reference from the exhibits included in the Company's S-1
Registration Statement filed with the Securities and Exchange Commission
(www.sec.gov), on June 3, 2008. A copy can be provided by mail, free of charge,
by sending a written request to Bedrock Energy, Inc., 8950 Scenic Pine Drive,
Suite 100, Parker, Colorado 80134.
ITEM 17. UNDERTAKINGS
Bedrock Energy, Inc. hereby undertakes the following:
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement, or most
recent post-effective amendment, which, individually or in the
aggregate, represent a fundamental change in the information
set forth in this registration statement; and
(c) To include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement.
That, for the purpose of determining any liability under the Securities Act,
each post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
To remove from registration by means of a post-effective amendment any of the
securities being registered hereby which remain unsold at the termination of the
Offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to the directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
63
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of the directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of the directors, officers, or controlling
persons in connection with the securities being registered, we will unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
For determining liability under the Securities Act, to treat the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant under Rule 424(b) (1) or (4) or 497(h) under the Securities Act as
part of this Registration Statement as of the time the Commission declared it
effective.
(REMAINDER OF PAGE LEFT BLANK INTENTIONALLY)
64
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-1/A and authorized this Registration
Statement to be signed on our behalf by the undersigned, thereunto duly
authorized, in the City of Parker, State of Colorado, on July 29, 2008.
BEDROCK ENERGY, INC.
/s/W. Edward Nichols July 29, 2008
- -------------------------------------------------------------
W. Edward Nichols
(Principal Executive Officer, President, Chief Executive
Officer and Secretary/Treasurer)
/s/Herbert T. Sears July 29, 2008
- -------------------------------------------------------------
Herbert T. Sears
(Chief Financial Officer/Principal
Accounting Officer)
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
/s/W. Edward Nichols July 29, 2008
- -------------------------------------------------------------
W. Edward Nichols, Director
/s/Herbert T. Sears July 29, 2008
- -------------------------------------------------------------
Herbert T. Sears, Director
65