þ
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Nevada
(State
or other jurisdiction of
incorporation
or organization)
|
22
-
3342379
(I.R.S.
Employer Identification No.)
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600
Meadowlands Parkway #20, Secaucus, N.J. 07094
(Address
of principal executive offices)
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(800)
327-3456
(Registrant's
telephone number, including area
code)
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Large
accelerated filer
¨
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Accelerated
filer
¨
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Non-accelerated
filer
¨
(Do
not check if a smaller reporting company)
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Smaller
reporting company
þ
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December
31,
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March
31,
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|||||||
2010
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2010
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
CURRENT
ASSETS:
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||||||||
Cash
and cash equivalents
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$66,890 | $311,506 | ||||||
Accounts
receivable, net of allowance for doubtful
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||||||||
accounts
of $72,719 and $77,211, respectively
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86,271 | 190,915 | ||||||
Inventory
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93,840 | 80,870 | ||||||
Prepaid
expenses and other current assets
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35,233 | 62,827 | ||||||
Loan
receivable, net of reserve of $25,000
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25,000 | 25,000 | ||||||
Total
current assets
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307,234 | 671,118 | ||||||
PROPERTY
AND EQUIPMENT, net of accumulated
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||||||||
depreciation
and amortization of $472,303 and
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||||||||
$492,121
respectively
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63,320 | 79,050 | ||||||
OTHER
ASSETS:
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||||||||
Goodwill,
net
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15,499 | 15,499 | ||||||
Patents,
net of accumulated amortization of $309,367
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||||||||
and
$280,306, respectively
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292,263 | 317,318 | ||||||
Loans
receivable
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38,519 | 35,793 | ||||||
Deposits
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14,185 | 1,385 | ||||||
Total
assets
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$731,020 | $1,120,163 |
December
31,
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March
31,
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|||||||
2010
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2010
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|||||||
(Unaudited)
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||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||||||
CURRENT
LIABILITIES:
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||||||||
Accounts
payable
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$248,158 | $234,948 | ||||||
Accrued
expenses
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283,817 | 362,925 | ||||||
Convertible
term note
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30,000 | 30,000 | ||||||
Due
to related parties
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463,883 | 453,781 | ||||||
Total
current liabilities
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1,025,858 | 1,081,654 | ||||||
STOCKHOLDERS'
EQUITY (DEFICIT):
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||||||||
Preferred
Stock: 100,000 shares authorized;
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||||||||
Series
A Convertible Preferred Stock: $8,000
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||||||||
stated
value, 3 shares issued and outstanding
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||||||||
as
of December 31, 2010 and March 31, 2010
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24,000 | 24,000 | ||||||
Common
stock: $0.01 par value 100,000,000 shares
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||||||||
authorized;
31,504,449
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||||||||
shares
issued and outstanding as of
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||||||||
December
31, 2010 and March 31, 2010
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315,045 | 315,045 | ||||||
Additional
paid-in capital
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23,307,774 | 23,245,536 | ||||||
Accumulated
deficit
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(23,941,657 | ) | (23,546,072 | ) | ||||
Total
stockholders' equity (deficit)
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(294,838 | ) | 38,509 | |||||
Total
liabilities and stockholders' equity (deficit)
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$731,020 | $1,120,163 |
For
the Three Months
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For
the Nine Months
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|||||||||||||||
Ended
December 31,
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Ended
December 31,
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|||||||||||||||
2010
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2009
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2010
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2009
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|||||||||||||
(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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|||||||||||||
REVENUES,
net
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$109,953 | $437,075 | $992,779 | $1,444,281 | ||||||||||||
COST
OF GOODS SOLD
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60,624 | 153,228 | 398,003 | 538,787 | ||||||||||||
Gross
profit
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49,329 | 283,847 | 594,776 | 905,494 | ||||||||||||
OPERATING
EXPENSES:
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||||||||||||||||
Selling,
general and administrative
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235,487 | 762,183 | 813,562 | 1,903,821 | ||||||||||||
Research
and development
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35,541 | 58,665 | 106,510 | 174,304 | ||||||||||||
Gain
on sale of asset
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- | - | (8,000 | ) | - | |||||||||||
Depreciation
and amortization
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11,620 | 11,971 | 34,784 | 36,483 | ||||||||||||
Total
operating expenses
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282,648 | 832,819 | 946,856 | 2,114,608 | ||||||||||||
Loss
from operations
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(233,319 | ) | (548,972 | ) | (352,080 | ) | (1,209,114 | ) | ||||||||
OTHER
INCOME (EXPENSE), net:
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||||||||||||||||
Interest
income
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- | 6 | 7 | 20 | ||||||||||||
Interest
expense
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(13,377 | ) | (14,528 | ) | (42,432 | ) | (33,951 | ) | ||||||||
Total
other income (expense), net
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(13,377 | ) | (14,522 | ) | (42,425 | ) | (33,931 | ) | ||||||||
Net
loss
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(246,696 | ) | (563,494 | ) | (394,505 | ) | (1,243,045 | ) | ||||||||
PREFERRED
DIVIDENDS
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(360 | ) | (360 | ) | (1,080 | ) | (1,080 | ) | ||||||||
Net
loss applicable to common shareholders
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$(247,056 | ) | $(563,854 | ) | $(395,585 | ) | $(1,244,125 | ) | ||||||||
BASIC
AND DILUTED LOSS PER SHARE:
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$(0.01 | ) | $(0.02 | ) | $(0.01 | ) | $(0.04 | ) | ||||||||
BASIC
AND DILUTED WEIGHTED AVERAGE
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||||||||||||||||
NUMBER
OF SHARES OUTSTANDING:
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31,504,449 | 31,328,587 | 31,504,449 | 31,279,746 |
Additional
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||||||||||||||||||||||||
Common Stock
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Preferred
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Paid-In
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Accumulated
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|||||||||||||||||||||
Shares
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Amount
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Stock
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Capital
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Deficit
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Total
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|||||||||||||||||||
BALANCE,
April 1, 2010
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31,504,449 | $315,045 | $24,000 | $23,245,536 | $(23,546,072 | ) | $38,509 | |||||||||||||||||
Compensation
expense associated
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. | |||||||||||||||||||||||
with
options
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- | - | - | 1,068 | - | 1,068 | ||||||||||||||||||
Compensation
expense associated
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||||||||||||||||||||||||
with
warrants
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- | - | - | 61,170 | - | 61,170 | ||||||||||||||||||
Dividends
accrued on
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||||||||||||||||||||||||
preferred
shares
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- | - | - | - | (1,080 | ) | (1,080 | ) | ||||||||||||||||
Net
loss
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- | - | - | - | (394,505 | ) | (394,505 | ) | ||||||||||||||||
BALANCE,
Dectember 31, 2010
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31,504,449 | $315,045 | $24,000 | $23,307,774 | $(23,941,657 | ) | $(294,838 | ) |
2010
|
2009
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|||||||
(Unaudited)
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||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net
loss from continuing operations
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$(394,505 | ) | $(1,243,045 | ) | ||||
Adjustments
to reconcile net loss to net cash used in operating
activities
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||||||||
Depreciation
and amortization
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44,791 | 51,492 | ||||||
Allowance
for doubtful accounts
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(4,492 | ) | 18,680 | |||||
Gain
on sale of asset
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(8,000 | ) | - | |||||
Compensation
expense associated with warrants
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61,170 | 975,411 | ||||||
Compensation
expense associated with options
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1,068 | 1,068 | ||||||
Changes
in operating assets and liabilities
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||||||||
Accounts
receivable
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109,136 | 12,887 | ||||||
Inventory
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(12,970 | ) | 60,417 | |||||
Prepaid
expenses and other current assets
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26,730 | 47,620 | ||||||
Deposits
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(12,800 | ) | - | |||||
Accounts
payable and accrued expenses
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(65,898 | ) | 117,490 | |||||
Net
cash (used in) provided by operating activities
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(255,770 | ) | 42,020 | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
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||||||||
Employee
loans
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(1,863 | ) | (16,100 | ) | ||||
Proceeds
from sale of asset
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8,000 | - | ||||||
Payments
for acquisition of property and equipment
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- | (985 | ) | |||||
Payments
for patents
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(4,006 | ) | (3,699 | ) | ||||
Cash
provided by (used in) investing activities
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2,131 | (20,784 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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||||||||
Proceeds
from related party payable
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10,103 | 303,781 | ||||||
Preferred
stock dividend
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(1,080 | ) | (1,080 | ) | ||||
Net
cash provided by financing activities
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9,023 | 302,701 | ||||||
Net
(decrease) increase in cash and cash equivalents
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(244,616 | ) | 323,937 | |||||
CASH
AND CASH EQUIVALENTS, beginning of period
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311,506 | 56,372 | ||||||
CASH
AND CASH EQUIVALENTS, end of period
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$66,890 | $380,309 |
2010
|
2009
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|||||||
(Unaudited)
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||||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
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||||||||
Cash
paid during the period
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||||||||
Interest
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$1,300 | $1,160 | ||||||
Income
taxes
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$2,412 | $2,080 | ||||||
SUPPLEMENTAL
DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
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||||||||
Conversion
of note payable into common stock
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$ | - | $35,000 |
December
31,
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March
31,
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|||||||
2010
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2010
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|||||||
Blended
chemicals
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$22,301 | $29,734 | ||||||
Raw
materials
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71,539 | 51,136 | ||||||
Total
inventory
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$93,840- | $80,870 |
2010
|
2009
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|||||||
Expected
life (in
years)
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10
|
10 | ||||||
Risk-free
interest rate
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4.54 | % | 4.54 | % | ||||
Volatility
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199.9 | 175.3 | ||||||
Dividend
yield
|
0 | % | 0 | % |
Number
of
Shares
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Weighted
Average
Exercise
Price
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Weighted
Average
Remaining
Contractual
Life
(Years)
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Aggregate
Intrinsic
Value
|
|||||||||||||
Options
outstanding April 1, 2010
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3,287,500 | $1.05 | 4.67 | |||||||||||||
Granted
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-- | |||||||||||||||
Expired
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(60,000 | ) | ||||||||||||||
Options
outstanding December 31, 2010
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3,227,500 | $1.06 | 3.91 | |||||||||||||
Vested
and expected to vest–end of quarter
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3,227,500 | $1.06 | 3.91 | $ | -- | |||||||||||
Exercisable–end
of quarter
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3,165,000 | $1.08 | 3.86 | $ | -- |
Item
2
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Management's Discussion and
Analysis of Financial Condition and Results of
Operations
|
|
10.1
|
Agreement,
dated as of January 21, 2011, among the Company, Ronald Wilen and Hilltop
Holding Company, L.P. incorporated herein by reference to Exhibit 10.1 of
the Registrant’s Current Report on Form 8-K filed on January 28,
2011.
|
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31.1
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Chief
Executive Officer’s Certificate, pursuant to Rule 13a-14(a)/ 15d-14(a) of
the Exchange Act.
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31.2
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Chief
Financial Officer’s Certificate, pursuant to Rule 13a-14(a)/ 15d-14(a) of
the Exchange Act
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32.1
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Chief
Executive Officer’s Certificate, pursuant to Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C.
1350).
|
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32.2
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Chief
Financial Officer’s Certificate, pursuant to Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C.
1350).
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Dated:
February 14, 2011
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UNITED
ENERGY CORP.
|
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By:
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/s/ Ronald Wilen
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Ronald
Wilen,
|
||
Chief
Executive Officer
|
||
(as
principal executive officer)
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||
By:
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/s/ James McKeever
|
|
James
McKeever,
|
||
Interim
Chief Financial Officer
|
||
(as
principal financial and accounting
officer)
|
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Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
Evaluated
the effectiveness of the Registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
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Disclosed
in this report any change in the Registrant's internal control over
financial reporting that occurred during the Registrant's most recent
fiscal quarter (the Registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial
reporting; and
|
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All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant's ability to record,
process, summarize and report financial information;
and
|
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Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control
over financial reporting.
|
Dated:
February 14, 2011
|
By:
|
/s/ Ronald Wilen | |
Ronald Wilen | |||
Chief
Executive Officer
|
|||
|
a.
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b.
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c.
|
Evaluated
the effectiveness of the Registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d.
|
Disclosed
in this report any change in the Registrant's internal control over
financial reporting that occurred during the Registrant's most recent
fiscal quarter (the Registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial
reporting; and
|
|
a.
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant's ability to record,
process, summarize and report financial information;
and
|
|
b.
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control
over financial reporting.
|
Dated:
February 14, 2011
|
By:
|
/s/ James McKeever | |
James
McKeever
|
|||
Interim
Chief Financial Officer
|
|||
Dated:
February 14, 2011
|
By:
|
/s/ Ronald Wilen | |
Ronald Wilen | |||
Chief
Executive Officer
|
|||
Dated:
February 14, 2011
|
By:
|
/s/ James McKeever | |
James McKeever | |||
Interim
Chief Financial Officer
|
|||