SECURITIES AND EXCHANGE COMMISSION
(Addressaof PrincipalbExecutivesO(Issuer'seTelephone Number,rincluding Area
Code) (Zip Code)
WASHINGTON, D.C. 20549
(949) 489-2400
Indicate by check mark whether the RegistrantR(i)0hasBfiled all reports
required to be filed1by8Section 13, or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (of for such shorter period that the
Registrant was required to file such reports) and (ii) has been
subjectotoosuch filingirequirements for the past 90 days.
I.R.S. Employer Identi-
IncorporationTorLOrganizationSUANT TO SECTION 13 OR 15(d) OF THE
SficationSNo.)HANGE ACT OF 1934 For the quarterly period ended DecYeser
3X, 2002 No
555 Anton Boulevard, Suite 1200, Costa Mesa
California 92626
[ ] IndicateOtheEnumberUofUshares outstandingOof1each ofFtheEissuer'sI
classesAofEcommonFequity,oastof thenlatest practicable date._____________ to
__________________
Common Stock,i$.10nparlvalueber 0-27849
8,454,134
Title of Classumber 0001097900 Number of Shares outstanding
at December 31, 2002
BASIC ENERGY, INC.
Transitional Small Business Format Yes No X
No exhibits included.
Basic Energy, Inc.
(A Development Stage Company)
Financial Statements
December 31, 2002
Basic Energy, Inc.
(A Development Stage Company)
Balance Sheets
December 31, June 30,
2002 2002
--------- ------------
(Unaudited)
Assets
Current Assets
Cash $ 894 $ 894
- ----------- -----------------
Total Assets $ 894 $ 894
--------- --------------------------------------------------------=-------------------=========== =================
Liabilities & Stockholders= Equity
Current Liabilities
Accounts Payable $ 36,279 $ 35,898
Due to Officers 26,792 800
------------- ----------------
Total Current Liabilities 63,071 36,698
--------- ---------------------------------------------------------------------------- ----------------
Stockholders= Equity
Common Stock, 20,000,000 Shares
Authorized at $0.10 Par Value;
8,131,226 Shares Issued and Outstanding 813,122 813,122
Paid In Capital 42,741 42,741
Deficit Accumulated During the Development Stage (918,040) (891,667)
------------------ -------------
Total Stockholders= Equity (62,177) (35,804)
--------- --------------------------------------------------------------------------- ----------------
Total Liabilities & Stockholders= Equity $ 894 $ 894
--------- ------------------------------------------------================== ========
The accompanying notes are an integral part of these financial statements
3
Basic Energy, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the Period
For the Three For the Six June 24, 1926
Months Ended Months Ended (Inception)
December December December December to December
31, 2002 31, 2001 31, 2002 30, 2001 31, 2002
Revenue $ - $ - $- $ - $ -
---------------------------- ------------------- --------- ------------------ ---------
Expenses
General &
Administrative 12,104 19,968 26,373 39,889 858,040
Professional Fees - 3,541 - 15,001 -
Loss on Mining
Claims - - - - 60,000
--------- ------------ --------- ------------------ --------------
Total Expenses 12,104 23,509 26,373 54,890 918,040
------------------------------ --------------- ---------------- ------------------------ ----------------
Income (Loss)
From Operations (12,104) (23,509) (26,373) (54,890) (918,040)
--------- -----------------------------------------------
Other Income (Expenses)
Interest Expense - - - - -
--------- ------------------ --------- ------------------ --------
Total Other Income
(Expenses) - - - - -
----------------------------- ------------------ --------- ------------------ ---------
Income (Loss)
Before Taxes (12,104) (23,509) (26,373) (54,890) (918,040)
--------- ------------------------
Taxes - - - - -
--------- ------------------ --------- ------------------ ---------
Net Income (Loss) $ (12,104) $ (23,509) $ (26,373) $ (54,890) $ (918,040)
--------------------------============= =========================== ================ ========== ==============
Loss Per
Common Share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted Average
Outstanding Shares 8,131,226 7,722,765 8,131,226 7,548,146
Basic Energy, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the Period
June 4, 1926
For the Six Months Ended (Inception) to
December 31, December 31, December 31,
2002 2001 2002
--------- ------------------ -------------
Cash Flows from Operating Activities
Net Loss $ (26,373) $ (54,890) $ (918,040)
----- ---------------------------------------------------- ---------------------------------------
Adjustments to Reconcile Net Loss to
Cash Used by Operating Activities;
Non Cash - 41,373 783,925
Loss on Mining Claim - - 60,000
Increase (Decrease) in Accounts Payable 381 14,552 36,279
Increase (Decrease) Due to Officers 25,992 (2,635) 12,904
----------------- ----------- ----------
Cash Used from Operating Activities - (1,600) (24,932)
--------- -------------------------------------------------------------
Cash Flows from Investing Activities - - -
---------------- --------- ----------- -------
Cash Provided from Investing Activities - - -
--------- ----------------------------------------------------------
Cash Flows from Financial Activities
Proceeds from Sale of Common Stock - - 25,826
--------- ---------- ---------
Cash Provided from Financing Activities - - 25,826
--------- ------------------------------------------------ --------- ---------
Increase (Decrease) in Cash - (1,600) 894
--------- ---------------------------------------------------------------------
Cash at Beginning of Period 894 1,694 -
----------- ------------ ---------
Cash at End of Period $ 894 $ 94 $ 894
= =========== ============ ===========
Disclosures for Operating Activities
Interest $ - $ - $ -
===== ===================================================== =======================================
Taxes - - -
The accompanying notes are an integral part of these financial statements
4
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2002
NOTE 1 - Organization
The Company was organized on June 4, 1926 under the laws of the state of Utah
using the name of M.M. Lead Company. On February 22, 1980 a Certificate of
Amendment was filed with the state of Utah changing the name to Basic Energy,
Inc. The Company has been dormant for many years and is
considered to be a development stage company.
NOTE 2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that
are readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements. Fully
Diluted Earnings Per Shares shall be shown on stock options and other
convertible issues that may be exercised within ten years of the
financial statement dates.
E. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
NOTE 3 - Stockholders= Equity - Common Stock
During the year ended June 30, 2002, the Company issued 792,196 shares to
officers and directors for services and out of pocket expenses. The shares
were issued at $0.10 per share.
NOTE 4 - Going Concern
The Company has had recurring operating losses since inception and is dependent
upon financing to continue operations. These factors indicate that the Company
may be unable to continue in existence. These financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue its existence. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. It is the intent of the Company to find additional
capital funding and/or a profitable business venture to acquire or merge.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Safe Harbor Statement
This Form 10-QSB contains certain forward-looking statements. For this
purpose any statements contained in this Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors.
Plan of Operations
------------------
The Company has little cash and has experienced losses. The Company has no
material commitments for capital expenditures for the next twelve months.
As of the date of this report, the Company has yet to generate positive
cash flow. The Company has financed its operations primarily through the sale of
common stock.
The Company believes that its current cash needs can be met either through
the sale of additional stock or through loans. Should the Company obtain a
business opportunity, however, it may be necessary to raise additional capital.
This may be accomplished by selling common stock of the Company.
Management of the Company intends to actively seek business opportunities
for the Company during the next twelve months.
Item 3. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures. The Company?s
principal executive officer and its principal financial officer, based on their
evaluation of the Company?s disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14(c) and 15d -14 (c) as of a date within 90 days prior
to the filing of this Quarterly Report on Form 10Q, have concluded that the
Company?s disclosure controls and procedures are adequate and effective for the
purposes set forth in the definition in Exchange Act rules.
(b) Changes in internal controls. There were no significant changes in
the Company?s internal controls or in other factors that could significantly
affect the Company?s internal controls subsequent to the date of their
evaluation.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES - None
---------------------
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
-------------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
---------------------------------------------------
Item 5. OTHER INFORMATION - None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits--None
Reports on Form 8-K--None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BASIC ENERGY, INC.
Basic Energy, Inc.
January 27, 2003 /s/ Jay W. Gibson
--------------------------------
Jay W. Gibson
Chairman of the Board and President
(duly authorized officer)
January 27, 2003 /s/ Joseph M. Graubard
--------------------------------
Joseph M. Graubard
Treasurer and Director
(principal accounting and financial officer)
CERTIFICATIONS
I, Jay W. Gibson, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Basic Energy,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant?s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures 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 quarterly report is being prepared;
b) evaluated the effectiveness of the registrant?s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the ?Evaluation Date?); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant?s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant?s auditors and the audit
committee of registrant?s board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant?s ability to record,
process, summarize and report financial data and have identified for the
registrant?s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant?s internal controls; and
6. The registrant?s other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 27, 2003
/s/ Jay W. Gibson
President and Chief Executive Officer
I, Joseph M. Graubard, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Basic Energy, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant?s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures 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 quarterly report is being prepared;
b) evaluated the effectiveness of the registrant?s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the ?Evaluation Date?); and
c) presented in this quarterly report our conclusions about the efectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant?s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant?s auditors and the audit
committee of registrant?s board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant?s ability to record,
process, summarize and report financial data and have identified for the
registrant?s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant?s internal controls; and
6. The registrant?s other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 27, 2003
/s/ Joseph M. Graubard
Treasurer