UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10Q
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(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended September 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 333-151398
BEDROCK ENERGY, INC.
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(Exact name of registrant as specified in its charter)
Colorado 02-0511381
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(State of Incorporation) (IRS Employer ID Number)
8950 Scenic Pine Drive, Suite 100, Parker, Colorado 80134
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(Address of principal executive offices)
303-794-4398
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(Registrant's Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated file, 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.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do
not check if a smaller reporting company) Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 5, 2009, there were 3,905,525 shares of the registrant's common
stock issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Balance Sheets -September 30, 2009 and December 31, 2008 F-1
Statements of Operations -
Three and Nine months ended September 30, 2009 and 2008 and
From March 17, 1999 (Inception) to September 30, 2009 F-2
Statements of Cash Flows -
Nine months ended September 30, 2009 and 2008 and
From March 17, 1999 (Inception) to September 30, 2009 F-4
Notes to the Financial Statements F-5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk - Not Applicable 4
Item 4. Controls and Procedures 4
Item 4T. Controls and Procedures 4
PART II - OTHER INFORMATION
Item 1. Legal Proceedings -Not Applicable 5
Item 1A. Risk Factors - Not Applicable 5
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 5
Item 3. Defaults Upon Senior Securities - Not Applicable 5
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable 5
Item 5. Other Information - Not Applicable 6
Item 6. Exhibits 6
SIGNATURES 7
PART I
ITEM 1. FINANCIAL STATEMENTS
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
BALANCE SHEETS
September 30, December 31,
2009 2008
------------------ -----------------
ASSETS (Unaudited) (Audited)
------
CURRENT ASSETS:
Cash $ 794 $ 11,662
Prepaid Expenses 5,250 -
------------------ -----------------
Total Current Assets 6,044 11,662
PROPERTY:
Oil and Gas Lease 1,122 -
------------------ -----------------
TOTAL ASSETS $ 7,166 $ 11,662
================== =================
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts Payable $ 4,879 $ 2,368
Loan from Affiliates 3,750 3,750
Loan from Shareholders 6,930 6,930
------------------ -----------------
Total Liabilities 15,559 13,048
------------------ -----------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' 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 authorized; 3,905,525 and 2,845,524 issued
and outstanding, respectively 3,905 2,845
Additional paid in capital 444,870 387,930
Deficit accumulated during the development stage (457,168) (392,161)
------------------ -----------------
Total Shareholders' Deficit (8,393) (1,386)
------------------ -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 7,166 $ 11,662
================== =================
The accompanying notes are an integral part of these statements.
F-1
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, 2009 September 30, 2008 September 30, 2009 September 30, 2008
----------------------- ----------------------- -------------------- ----------------
OPERATING EXPENSES:
Salaries and related expenses $ - $ - $ $ -
Professional fees 8,609 8,659 17,445 17,951
Service fees 5,250 4,025 42,750 39,425
Travel and entertainment 146 4,741 2,751 7,851
General and administrative 152 399 2,061 3,201
----------------------- ----------------------- -------------------- ------------
Total Operating Expenses 14,157 17,824 65,007 68,428
----------------------- ----------------------- -------------------- ------------
Operating loss (14,157) (17,824) (65,007) (68,428)
OTHER INCOME:
Other, net - - - -
----------------------- ----------------------- ------------------- ------------
NET LOSS
BEFORE INCOME TAXES (14,157) (17,824) (65,007) (68,428)
Provision for income taxes - - - -
----------------------- ----------------------- ------------------- ------------
NET LOSS $ (14,157) $ (17,824) $ (65,007) $ (68,428)
======================= ======================= ==================== ============
Basic and diluted
(loss) per common share $ (0.01) $ (0.01) $ (0.02) $ (0.03)
======================= ======================= ==================== ============
Basic and diluted
weighted-average number
of common shares outstanding 3,905,525 2,525,524 3,421,302 2,107,121
======================= ======================= ==================== ============
The accompanying notes are an integral part of these statements.
F-2
(continued)
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
(Unaudited)
Period From
(Inception)
March 17, 1999
Through
September 30, 2009
--------------------
OPERATING EXPENSES:
Salaries and related expenses $ 112,128
Professional fees 106,727
Service fees 225,025
Travel and entertainment 35,947
General and administrative 37,482
--------------------
Total Operating Expenses 517,309
--------------------
Operating loss (517,309)
OTHER INCOME:
Other, net 60,141
--------------------
NET LOSS
BEFORE INCOME TAXES (457,168)
Provision for income taxes -
--------------------
NET LOSS $ (457,168)
Basic and diluted
(loss) per common share
Basic and diluted
weighted-average number
of common shares outstanding
The accompanying notes are an integral part of these statements.
F-3
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
Common Shares Preferred Shares Additional
$.001 Par Value No Par Value Paid-in
Shares Amount Shares Amount Capital
----------------------------- ------------------------------ ------------
BALANCES, Inception, March 17, 1999 - $ - - $ - $ -
Issuance of shares for services and cash 950,706 950 - - 43,825
Net loss - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 1999 950,706 950 - - 43,825
Issuance of shares for debt, services and cash 39,818 40 - - 140,960
Net loss - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2000 990,524 990 - - 184,785
Net income - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2001 990,524 990 - - 184,785
Net income - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2002 990,524 990 - - 184,785
Net loss - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2003 990,524 990 - - 184,785
Net loss - - - - -
------------------ ----------------------------- ---------- ------------
BALANCES, December 31, 2004 990,524 990 - - 184,785
Net loss - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2005 990,524 990 - - 184,785
Net loss - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2006 990,524 990 - - 184,785
Issuance of shares for debt, services and cash 1,245,000 1,245 - - 165,255
Net loss - - - - -
------------------ ----------------------------- ---------- ------------
BALANCES, December 31, 2007 2,235,524 2,235 - - 350,040
Issuance of shares for services and cash 610,000 610 - - 37,890
Net loss - - - - -
----------------- ----------------------------- ---------- ------------
BALANCES, December 31, 2008 2,845,524 2,845 - - 387,930
Issuance of shares for services and cash 1,060,000 1,060 - - 56,940
Rounding 1 - - - -
Net loss - - - - -
----------------- ---------- ------------------ ---------- -----------
BALANCES, September 30, 2009 3,905,525 $ 3,905 - $ - $ 444,870
================= ========== ================== ========================
The accompanying notes are an integral part of these statements.
F-4
(continued)
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
Total
Shareholders'
Equity
Deficit (Deficit)
------------ ----------------
BALANCES, Inception, March 17, 1999 $ - $ -
Issuance of shares for services and cash - 44,775
Net loss (29,784) (29,784)
-------------- ----------------
BALANCES, December 31, 1999 (29,784) 14,991
Issuance of shares for debt, services and cash - 141,000
Net loss (215,994) (215,994)
-------------- ----------------
BALANCES, December 31, 2000 (245,778) (60,003)
Net income 9,233 9,233
-------------- ----------------
BALANCES, December 31, 2001 (236,545) (50,770)
Net income 49,137 49,137
-------------- ----------------
BALANCES, December 31, 2002 (187,408) (1,633)
Net loss (890) (890)
-------------- ----------------
BALANCES, December 31, 2003 (188,298) (2,523)
Net loss (5,657) (5,657)
-------------- ----------------
BALANCES, December 31, 2004 (193,955) (8,180)
Net loss (36,000) (36,000)
-------------- ----------------
BALANCES, December 31, 2005 (229,955) (44,180)
Net loss (36,000) (36,000)
-------------- ----------------
BALANCES, December 31, 2006 (265,955) (80,180)
Issuance of shares for debt, services and cash - 166,500
Net loss (78,097) (78,097)
-------------- ----------------
BALANCES, December 31, 2007 (344,052) 8,223
Issuance of shares for services and cash - 38,500
Net loss (48,109) (48,109)
-------------- ----------------
BALANCES, December 31, 2008 (392,161) (1,386)
Issuance of shares for services and cash - 58,000
Rounding - -
Net loss (65,007) (65,007)
-------------- ----------------
BALANCES, September 30, 2009 $(457,168) $ (8,393)
============== ================
The accompanying notes are an integral part of these statements.
F-5
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period From
(Inception)
March 17, 1999
For the Nine Months Ended Through
September 30, 2009 September 30, 2008 September 30, 2009
-----------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net (loss) $ (65,007) $ (68,428) $ (457,168)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Issuance of common shares for services 48,000 11,000 171,275
Issuance of debt for services - - 12,000
Debt forgiveness - - (62,509)
(Increase) in current assets (5,250) (1,575) (5,250)
Increase in accruals/payables 2,511 30,000 128,456
-------------------- --------------------- ---------------------
Net cash used in operating activities (19,746) (29,003) (213,196)
-------------------- --------------------- ---------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Lease (1,122) - (1,122)
-------------------- --------------------- ---------------------
Net cash used in investing activities (1,122) - (1,122)
-------------------- --------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party payable - - 21,612
Sale of common shares 10,000 20,000 193,500
-------------------- --------------------- ---------------------
Net cash provided by financing activities 10,000 20,000 215,112
-------------------- --------------------- ---------------------
NET (DECREASE) INCREASE IN CASH (10,868) (9,003) 794
CASH, BEGINNING OF PERIOD 11,662 18,771 -
-------------------- --------------------- ---------------------
CASH, END OF PERIOD $ 794 $ 9,768 $ 794
==================== ===================== =====================
NONCASH ACTIVITIES:
Issuance of common shares for debt $ - $ - $ 84,000
==================== ===================== =====================
The accompanying notes are an integral part of these statements.
F-6
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
September 30, 2009
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated in Colorado on August 11, 2004 and 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 September 30, 2009 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.
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 are presented as permitted by Form 10-Q, and do
not contain certain information included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2008. It is the Company's opinion
that when the interim financial statements are read in conjunction with the
December 31, 2008 Annual Report on Form 10-K, the disclosures are adequate to
make the information presented not misleading. Interim results are not
indicative of results for a full year or any future period.
Statement of Cash Flows
For purposes of the statements of cash flows, cash includes deposits in
commercial bank accounts.
Income Taxes
Under the asset and liability method, 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.
(A Company in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
September 30, 2009
(Unaudited)
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.
Going Concern
The Company's financial statements for the three and nine months ended September
30, 2009 have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business. The Company reported an accumulated deficit in the
development stage of $457,168 as of September 30, 2009. The Company did not
recognize revenues from its activities during the three and nine months ended
September 30, 2009. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
Recent Accounting Pronouncements
In June 2009, the Financial Accounting Standard Board ("FASB") issued Accounting
Standards Codification ("ASC") 105, "Generally Accepted Accounting Principals"
(formerly Statement of Financial Accounting Standards ("SFAS") No. 168, "The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles"). ASC 105 establishes the FASB ASC as the single source
of authoritative nongovernmental U.S. GAAP. The standard is effective for
interim and annual periods ending after September 15, 2009. We adopted the
provisions of the standard on September 30, 2009 which did not have a material
impact on our financial statements.
There were various other accounting standards and interpretations issued in
2009, none of which are expected to have a material impact on the Company's
financial position, operations or cash flows.
NOTE 2 - SHAREHOLDERS' EQUITY
Preferred Share
The Company is authorized to issue 10,000,000 shares of no par value preferred
stock. As of September 30, 2009, the Company has no shares issued and
outstanding.
Common Share
The Company is authorized to issue 200,000,000 shares of $.001 voting common
stock. On March 24, 2008 the Company, as a result of shareholder approval,
implemented a one share for two share reverse stock split. As of September 30,
2009 and 2008 there were a total of 3,905,525 (including 1 additional share for
rounding) and 2,545,524 shares of common stock issued and outstanding
respectively.
During the three and nine months ended September 30, 2009, the Company issued
300,000 and 960,000 shares of its common stock for services valued at $15,000
and $48,000 respectively (See Note 3) or $.05 per share as well as 100,000 and
100,000 shares of its common stock for cash at $10,000 and $10,000 respectively
or $.10 per share.
F-8
BEDROCK ENERGY, INC.
(A Company in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
September 30, 2009
(Unaudited)
NOTE 2 - SHAREHOLDERS' EQUITY (continued)
Common Share (continued)
During the three and nine months ended September 30, 2008, the Company issued
20,000 and 110,000 shares of its common stock for services valued at $2,000 and
$11,000 respectively (See Note 3) or $.10 per share as well as 0 and 200,000
shares of its common stock for cash at $0 and $20,000 respectively or $.10 per
share as part of a private placement.
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 were 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
September 30, 2008, the Company 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.
NOTE 3 - RELATED PARTY TRANSACTIONS
As of September 30, 2009, the Company owes the officers and directors a total
$6,930 plus a total of $2,368 in accrued interest relative to previously issued
promissory notes.
During the nine months ended September 30, 2009, the Company issued 350,000
shares of common stock to its two Board members in exchange for services valued
at $17,500 of which the $17,500 is for services to be rendered during the period
March 1, 2009 through December 31, 2009. As of September 30, 2009, the Company
has prepaid expense of $5,250 in consulting fees as a result of the issuance of
the above shares of common stock to its directors.
During the nine months ended September 30, 2008, the Company authorized the
issuance of 90,000 shares of common stock to its three Board members in exchange
for services valued at $9,000 of which the $9,000 was comprised of services
rendered during the year 2007 in the amount of $1,500 and during the year 2008
in the amount of $7,500.
NOTE 4 - INCOME TAXES
As of September 30, 2009, the Company had net operating loss carryforwards for
income tax and financial reporting purposes of approximately $372,000 expiring
in the years 2014 through 2028. The deferred tax assets that result from such
operating loss carryforwards of approximately $122,000 as of September 30, 2009
have been fully reserved for in the accompanying financial statements. During
the nine months ended September 30, 2009, the valuation allowance established
against the net operating loss carryforwards increased by $20,000.
F-9
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
F-10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
OPERATIONS
----------
We had no operations prior to and we had no revenues during the nine months
ended September 30, 2009. 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.
On February 12, 2009, we acquired a 100% net revenue interest in 240 acres in
Morgan County Colorado which is located approximately forty five miles north of
Denver, Colorado and lies in what is called the Denver, Julesberg Basin (DJ
Basin). The DJ Basin is the predominant geological structure in Northern
Colorado. The shallow "J" and "D" sand formations of the DJ Basin constitutes a
common source of oil and gas. The acreage in Morgan County has forty (40) acre
drilling and spacing units for the production of oil and gas from the "D" and
"J" sand formations.
1
The acreage contained within these leases have a 10-year "primary term" (2018),
but may be extended if drilling operations are in progress, or if other
conditions are met. The term of a lease can continue as long as the lessee
produces oil and gas in paying quantities during the term of the lease.
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 hereof. 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.
RESULTS OF OPERATIONS
For the Three Months Ended September 30, 2009 Compared to the Three Months Ended
September 30, 2008
During the three months ended September 30, 2009 and 2008, we did not recognize
any revenues from our business activities.
During the three months ended September 30, 2009, we incurred total operating
expenses of $14,157 compared to $17,824 during the three months ended September
30, 2008. The decrease of $3,667 was a result of $4,595 decrease in travel and
entertainment expenses offset by an increase of $1,225 in service fees.
During the three months ended September 30, 2009, we incurred a net loss of
$14,157 compared to a net loss of $17,824 during the three months ended
September 30, 2008. The decrease of $3,667 is a result of the $4,595 decrease in
travel and entertainment expenses offset by an increase of $1,225 in service
fees, as discussed above.
For the Nine Months Ended September 30, 2009 Compared to the Nine Months Ended
September 30, 2008
During the nine months ended September 30, 2009 and 2008, we did not recognize
any revenues from our business activities.
During the nine months ended September 30, 2009, we incurred operational
expenses of $65,007 compared to $68,428 for the nine months ended September 30,
2008. The decrease of $3,421 was a result of $3,325 increase in service fees
offset by a $5,100 decrease in travel and entertainment expenses and a $1,140
decrease in general and administrative expenses.
During the nine months ended September 30, 2009, we incurred a net loss of
$65,007 compared to $68,428 for the nine months ended September 30, 2009. The
decrease of $3,421 was a result of $3,325 increase in service fees offset by a
$5,100 decrease in travel and entertainment expenses and a $1,140 decrease in
general and administrative expenses.
2
LIQUIDITY
At September 30, 2009, we had total current assets of $6,044, consisting of cash
of $794 and a prepaid expense of $5,250. At September 30, 2009, we had total
liabilities of $15,559, consisting of $4,879 in accounts payables and $10,680 in
loans from affiliates and shareholders. At September 30, 2009, we had an
accumulated deficit of $457,168.
During the nine months ended September 30, 2009, we used net cash of $19,746 in
operational activities. During the nine months ended September 30, 2008, we used
net cash of $29,003 in operational activities. During the nine months ended
September 30, 2009, we recognized a net loss of $65,007, which was adjusted for
a non-cash activity of $48,000 in common stock that was issued for services.
During the nine months ended September 30, 2009, the Company issued 350,000
shares of common stock to its two Board members in exchange for services valued
at $17,500 respectively of which the $17,500 is for services to be rendered
during the period March 1, 2009 through December 31, 2009. As of September 30,
2009, the Company has prepaid expense of $5,250 in consulting fees as a result
of the issuance of the above shares of common stock to its directors.
During the nine months ended September 30, 2009, the Company used $1,122 in its
investing activities. The funds were used to purchase a 100% net revenue
interest in 240 acres in Morgan County, Colorado as discussed in Operations.
During the nine months ended September 30, 2008, the Company neither received
nor used funds in its investing activities.
During the nine months ended September 30, 2009, the Company received $10,000
from its financing activities. During the nine months ended September 30, 2009,
Company issued 100,000 shares of its restricted stock for cash of $10,000 ($0.10
per share).
During the nine months ended September 30, 2008, the Company received $20,000
from its financing activities. The $20,000 was from the sale of 200,000 shares
of the Company's restricted common stock.
We have minimal cash at September 30, 2009 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.
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.
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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.
In addition, the United States is experiencing severe instability in the
commercial and investment banking systems which is likely to continue to have
far-reaching effects on the economic activity in the country for an
indeterminable period. The long-term impact on the United States economy and the
Company's operating activities and ability to raise capital cannot be predicted
at this time, but may be substantial.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b), our Chief Executive Officer and Chief
Financial Officer for the quarter ended September 30, 2009, carried out an
evaluation under the supervision and with the participation of our management,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation, Messrs. Nichols and
Sears have concluded that our disclosure controls and procedures are effective
in timely alerting them to material information required to be included in our
periodic SEC filings and to ensure that information required to be disclosed in
our periodic SEC filings is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosure as a result of the deficiency in
our internal control over financial reporting discussed below.
ITEM 4T. CONTROLS AND PROCEDURES
Management's Report on Internal Control over Financial Reporting
This quarterly report does not include a report of management's assessment
regarding internal control over financial reporting or an attestation report of
the Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission of newly public
companies.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 1A. RISK FACTORS
NONE
ITEM 2. CHANGES IN SECURITIES
The Company made the following unregistered sales of its securities from July 1,
2009 through September 30, 2009.
DATE OF SALE TITLE OF SECURITIES NO. OF SHARES CONSIDERATION CLASS OF PURCHASER
- ------------------ -------------------- ---------------- ----------------------- -----------------------------
September 2009 Common Stock 100,000 $10,000 Business Associate
- ------------------ -------------------- ---------------- ----------------------- -----------------------------
September 2009 Common Stock 300,000 $15,000 in Services Business Associates
- ------------------ -------------------- ---------------- ----------------------- -----------------------------
Exemption From Registration Claimed
All of the sales by the Company of its unregistered securities were made by the
Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended
(the "1933 Act"). All of the individuals and/or entities listed above that
purchased the unregistered securities were almost all existing shareholders, all
known to the Company and its management, through pre-existing business
relationships, as long standing business associates and employees. All
purchasers were provided access to all material information, which they
requested, and all information necessary to verify such information and were
afforded access to management of the Company in connection with their purchases.
All purchasers of the unregistered securities acquired such securities for
investment and not with a view toward distribution, acknowledging such intent to
the Company. All certificates or agreements representing such securities that
were issued contained restrictive legends, prohibiting further transfer of the
certificates or agreements representing such securities, without such securities
either being first registered or otherwise exempt from registration in any
further resale or disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE.
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ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act 5
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BEDROCK ENERGY, INC.
(Registrant)
Dated: November 6, 2009 By: /s/ W. Edward Nichols
---------------------
W. Edward Nichols, President, Chief
Executive Officer
November 6, 2009 By: /s/Herbert T. Sears
-------------------
Herbert T. Sears, Chief Financial
Officer
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