<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-27849
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BASIC ENERGY, INC.
--------------------------------------------
(Name of small business issuer in its chapter)
Utah 00001748413
------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3771 South State Street, Salt Lake City, Utah 84115
--------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (801) 262-8429
----------------
Securities registered pursuant to section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
$0.10 par value, common voting shares
-------------------------------------
(Title of class)
Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
report(s), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this form
10-KSB or any amendment to this Form 10-KSB. [ ]
The issuer's revenue for its most recent fiscal year was $ -0- .
The aggregate market value of the issuer's voting stock held as of November
1, 2000, by non-affiliates of the issuer was $17,851,652. As of November
7, 2000, issuer had 7,200,250 shares of its $0.10 par value common stock
outstanding.
</Page>
<PAGE>
BASIC ENERGY, INC.
Annual Report on Form 10-KSB for the Fiscal Year ended June 30, 2000
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INDEX TO FORM 10-KSB
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PART I
ITEM 1 DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . . . .3
ITEM 2 DESCRIPTION OF PROPERTY. . . . . . . . . . . . . . . . . . . . .6
ITEM 3 LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . .6
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS. . . . . .6
PART II
ITEM 5 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . .6
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. . . .7
ITEM 7 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . .8
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . . . . . .8
PART III
ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS; COMPLIANCE WITH SECTION
16(a) OF THE EXCHANGE ACT . . . . . . . . . . . . . . . . . . .8
ITEM 10 EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . 11
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . 12
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . 13
PART IV
ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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</Page>
<PAGE>
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PART I
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FORWARD LOOKING INFORMATION
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This Form 10-KSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. For
this purpose any statements contained in this Form 10-KSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limited 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,
many of which are not within the Company's control. These factors include
but are not limited to economic conditions generally and in the industries
in which the Company and its customers participate; competition within the
Company's industry, including competition from much larger competitors;
technological advances which could render the Company's products less
competitive or obsolete; failure by the Company successfully to develop new
products or to anticipate current or prospective customers' product needs;
price increase or supply limitations for components purchased by the
Company for use in its products; and delays, reductions, or cancellations
of orders previously placed with the Company.
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ITEM 1. DESCRIPTION OF BUSINESS
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Basic Energy, Inc was originally organized on June 4, 1926 in the
State of Utah under the name The M.M. Lead Company. The Company was
established to pursue and develop mining operations. On February 28, 1979,
the Company changed its name to M.M. Lead Company and again changed its
name to Basic Energy, Inc., on February 22, 1980.
The Company was unsuccessful in its pursuit of mining ventures and has
been dormant. The Company has focused its efforts on seeking,
investigating, and if warranted, acquiring an interest in a business
opportunity. The Company does not propose to restrict its search for a
business opportunity to any particular industry or geographical area and
may, therefore, engage in essentially any business in any industry. The
Company has unrestricted discretion in seeking and participating in a
business opportunity; subject to the availability of such opportunities,
economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its best judgment. There is no assurance that the Company will be able
to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.
3
</Page>
<PAGE>
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act
without the consent, vote, or approval of the Company's shareholders. The
risks faced by the Company are further increased as a result of its lack of
resources and its inability to provide a prospective business opportunity
with capital.
REPORTS TO SECURITY HOLDERS
Prior to filing of the registration statement on Form 10-SB, the
Company was not subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act. Upon effectiveness of this registration
statement, the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The public may read and copy
materials filed by the Company with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The Company is an electronic filer and the SEC
maintains an Internet site that contains reports and other information
regarding the Company which may be viewed at http://www.sec.gov.
SOURCES OF OPPORTUNITIES
It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other
businesses and professional people. Although the Company does not
anticipate engaging professional firms specializing in business
acquisitions or reorganizations, if management deems it in the best
interest of the Company, such firms may be retained. In some instances,
the Company may publish notices or advertisements seeking a potential
business opportunity in financial or trade publications.
CRITERIA
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity involving
a "start up" or new company. The Company may acquire a business
opportunity in various stages of its operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.
4
</Page>
<PAGE>
<PAGE>
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations; prospects for the future; the nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of the management; the potential for further
research, development or exploration; the potential for growth and
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the
other firm's management and personnel, the ability to market products, and
numerous other factors which are difficult if not impossible to analyze
through the application of any objective criteria. In many instances, it
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially augment management, or other factors.
Generally, the Company will analyze all factors in the circumstances
and make a determination based upon a composite of available facts, without
reliance upon any single fact as controlling.
METHODS OF PARTICIPATION OF ACQUISITION
Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by
management to be suitable will be selected. The Company may consider
structures and methods such as leases, purchase and sale agreements,
licenses, joint ventures, or other contractual arrangements and may involve
a reorganization, merger or consolidation transaction. The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.
PROCEDURES
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as: a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon
which they are based; an explanation of proprietary products and services;
present and proposed forms of compensation to management; a description of
transactions between the prospective entity and its affiliates; relevant
analysis of risks and competitive conditions; a financial plan of operation
and estimated capital requirements; and other information deemed relevant.
COMPETITION
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is from
other companies, organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals who are interested in a business opportunity. Many
of these companies and groups have substantial financial and personal
resources which give such companies considerable advantage over the
Company.
5 </Page>
<PAGE>
EMPLOYEES
The Company does not currently have any employees but relies upon the
efforts of its officers and directors to conduct the business of the
Company.
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ITEM 2. DESCRIPTION OF PROPERTY
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The Company leases 600 square feet of office space at 3771 South State
Street, Salt Lake City, Utah. The lease terms are $50.00 per month,
renewable at the same rate every twelve months.
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ITEM 3. LEGAL PROCEEDINGS
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No legal proceedings are threatened or pending against the Company or
any of its officers or directors. Further, none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.
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ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
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No matters were submitted to a vote of the security holders during the
fourth quarter of the fiscal year ended June 30, 2000.
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PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
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At present, the Company's shares are not publicly traded. There is no
assurance that a trading market will develop, or if developed, that it can
be sustained. The Company intends to apply for listing on the NASD OTC
Bulletin Board. As of the date of this Form 10-KSB, the Company has not
yet been listed. Typically, it takes about three months after the filing
of the application for listing before the Company is actually listed. As
of November 7, 2000 the Company had 177 shareholders holding7,200,250
common shares. Of the issued and outstanding common stock, 1,182,910 are
free trading, the balance are "restricted securities" shares as that term
is defined in Rule 144 promulgated by the Securities and Exchange
Commission . The Company has never paid, nor declared a dividend on its
common shares since its inception and does not intend to declare any such
dividend in the foreseeable future. The Company's ability to pay dividends
is subject to limitations imposed by Utah law.
6</Page>
<PAGE>
On October 31, 2000, the Company issued 706,557 shares of its
restricted common stock to its past and present officers, directors and
consultants for services rendered to the Company during the past 18 months.
The number of shares received by each such individual was based on a
compensation rate of $40.00 per hour for services rendered and $0.31 per
mile as compensation for mileage. The shares issued were valued at $.10
per share. Shares issued were issued as follows:
<TABLE>
<CAPTION>
Number of Shares Value of Services
---------------- -----------------
<S> <C> <C>
Jay Gibson 569,065 $56,906.50
Ron Burnett 9,653 965.30
Karl Seljass 6,813 681.30
Joyce Sigler 2,472 247.20
Joe Graubard 32,074 3,207.40
Frank Dorman 8,434 843.40
David W. Kleise 10,360 1,036.00
Ronald L. Poulton 56,886 5,688.60
J.R. Bullock 10,800 1,080.00
</TABLE>
All of the shares listed above were issued pursuant to an exemption
from registration set forth in Section 4(2) of the Securities Act of 1933.
On October 31, 2000, the Company issued 40,000 shares of its
restricted common stock to Rainbow Meal Worm Company as repayment for
moneys loaned to the Company during the past 18 months. The loans were for
approximately $4,000. The shares were issued pursuant to an exemption from
registration set forth in Section 4(2) of the Securities Act of 1933.
On October 31, 2000, the Company issued 9,000 shares of its restricted
common stock to Carriage Motor Company. The Company rents office space
from Carriage Motor Company at a cost of $50.00 per month. The shares were
issued in lieu of payment of rent for the past 18 months. The shares were
issued pursuant to an exemption from registration set forth in Section 4(2)
of the Securities Act of 1933.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
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The Company has little cash and has experienced losses. As of June
30, 2000 the Company has -0- cash on hand. As of that date the Company
had no outstanding liabilities. The Company has no material commitments
for capital expenditures for the next twelve months.
As of the date of this Form 10-KSB, 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. However, should the
Company obtain a business opportunity, 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.
7
</Page>
<PAGE>
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ITEM 7. FINANCIAL STATEMENTS
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The following financial statements of the Company are filed as a part
of this report:
Report of Couch, Bierwolf and Chisholm, Certified Public
Accountant;
Balance Sheets as of June 30, 2000 and June 30, 1999;
Statements of Stockholders' Equity for the years ended June 30,
2000, 1999, and 1998;
Statements of Cash Flows for the years ended June 30, 2000, 1999,
and 1998;
Notes to Financial Statements.
There are no financial statement schedules included as part of this
report. The financial statements of the Company are set forth immediately
following the signature page to this Form 10-KSB.
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
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Due to the recent and unexpected death of the Company's independent
accountant, Darrell Schvaneveldt, the Company has been forced to retain new
independent accountants. Schvaneveldt & Company has been acquired by
Crouch, Bierwolf & Associates. The board of directors has elected to
retain Crouch Bierwolf & Associates as its independent accountants. The
Company had no disagreements with Schvaneveldt & Company as to any matter
regarding accounting or financial disclosure.
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PART III
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ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT
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The following table sets forth as of June 30, 2000 the name, age, and
position of each executive officer and director and the term of office of
each director of the Corporation.
8
</Page>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME AGE POSITION DIRECTOR OR OFFICER SINCE
Jay W. Gibson 75 President & June 25, 1980
Chairman of the
Board of Directors
Ron Burnett 63 Vice-President September 15, 1990
& Director
Karl Seljaas 55 Assistant March 7, 1999
Vice President
& Director
Joyce Sigler 55 Secretary March 7, 1999
& Director
Joe Graubard 77 Treasurer February 5, 1997
& Director
</TABLE>
Each Director serves for a period of one year or until his successor
is duly elected and qualified. Officers serve at the will of the Board of
Directors.
JAY W. GIBSON, PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS. Mr.
Gibson attended Occidental College in Los Angeles, California. While
serving in the United States Marine Corps Reserve, he attended Officer's
Candidate School and Officer's School. In 1961, he accepted a general
management position with Continental Laboratories, Inc., in Denver,
Colorado. After leaving Continental, he worked for the Adolf Coors
Corporation in Golden, Colorado, where he spent his tenure on the
development and marketing of the Golden Choice line of pet foods. Mr.
Gibson left the Adolf Coors Corporation in 1968. For the next three years
he served as President and Chairman of the Board of Southwestern
Diversified Investors, Inc., of Salt Lake City, Utah. He then accepted a
position as the General Manager of Industrial Design for Polaris Battery
Company, Industrial Commercial Batteries, in Garden Grove, California. He
held this position until 1977. Mr. Gibson served as Vice President and
General Manager of United Energy for twelve years, he continued his tenure
when the company changed its name to Basic Energy, Inc., of California. In
1984, Mr. Gibson accepted the Presidency of Basic Energy, Inc., of Utah, he
also serves as Chairman of the Board of Directors.
RONALD D. BURNETT, VICE PRESIDENT AND DIRECTOR. Mr. Burnett began his
career in 1958 as a sales associate with Wood Motor Oldsmobile/Cadillac of
Ogden, Utah. In 1964, he accepted a management position with Burnett's
Furniture and Appliance located in Murray, Utah. He left Burnett's and
became the owner and operator of Burnett's Furniture & Appliance. In 1970,
he joined the management team of the Bountiful, Utah, location Menlove
Dodge Toyota as the used car manager. Just two years later he accepted the
same position with Bountiful Lincoln Mercury, where he was employed until
1978. Since that time Mr. Burnett has been the owner/operator of Carriage
Motors & Trailer Sales.
9
</Page>
<PAGE>
JOSEPH M. GRAUBARD, SECRETARY/TREASURER AND DIRECTOR. Mr. Graubard is
a graduate of the University of Pittsburgh and is a Registered Professional
Engineer in the State of Florida and the Commonwealth of Pennsylvania. His
40 year career in management, engineering, product management and
construction management has included comprehensive experience in industry
and management consulting in the United States and internationally. During
his extensive consulting career Mr. Graubard has maintained a high
professional perspective, having prepared and presented seminars throughout
the world on the subject of project management and control, construction
management, claims avoidance and contract administration. He has published
various articles on the subject and presented papers at international
professional conferences.
Mr. Graubard's corporate line management and consulting experience has
included the development of long range planning functions, corporate
organizations, maintenance and production management systems as well as
senior in line management of a major steel corporation's engineering
function and vice president of a major United States consulting firm. In
addition to project and construction management and control experience, he
has carried out successful consulting assignments in strategic planning,
organization, production planning and control, material management,
manpower planning, inventory control, maintenance and work force reduction.
He has participated in over 100 assignments as a consultant, managing a
majority of them. Mr. Graubard's experience covers both private and public
sectors and a variety of industries, including: utility, steel, mining,
paper, glass, petroleum, transportation, medical, educational, health
products, pharmaceutical and commercial building. He has worked
domestically throughout the United States and has been a resident and
managed assignments in Italy, Zimbabwe, Venezuela and Brazil. Other
assignments have been performed in Mexico, Argentina, Sweden, England,
Portugal, Switzerland, United Arab Emirates, France and Thailand.
Employers have included U.S. Steel Corporation, Booz Allen & Hamilton,
International Reliance Financial Group and O'Brien Kreitzberg & Associates,
Inc.
JOYCE SIGLER. SECRETARY & DIRECTOR. Ms. Sigler has worked for Basic
Energy, Inc. of California since 1992 as the office secretary. Ms. Sigler
acts as receptionist, secretary, record keeper, and does both payroll and
accounts payable and receivable for the Company. Previous to working at
Basic Energy Ms. Sigler worked as General Office manager and in data
processing for two companies.
KARL SELJAAS. ASSISTANT VICE PRESIDENT & DIRECTOR. Mr. Seljaas
brings vast experience in mining operations. He served as a smelter worker
for Kennecott Copper and as Mine Superintendent for South Hecla Mining for
twelve years. He was office manager for Shogun Oil for four years and most
recently was owner and operator of Quality Emission in Salt Lake City.
There are no family relationships between any of the Company's
officers and directors. In addition, none of the officers and directors
have been involved in legal proceeding which require disclosure in this
annual report of the Company.
10
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<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and executive officers are required to comply with Section
16(a) of the Securities Exchange Act of 1934, which requires generally that
such persons file reports regarding ownership of and transactions in
securities of the Company on Forms 3, 4, and 5. A Form 3 is an initial
statement of ownership of securities, which is to be filed by the officers
and directors owning shares in the Company within 10 days after the
effective date of the Company's filing on Form 10-SB. Form 4 is to
report changes in beneficial ownership and is due on or before the tenth
day of the month following any month in which they engage in any
transaction in the Company's common stock. Form 5 covers annual statement
of changes in beneficial ownership which is due 90 days after the fiscal
year end of the Company.
Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5
and amendments thereto furnished to the Company with respect to the most
recent fiscal year, it appears that all forms were timely filed.
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ITEM 10. EXECUTIVE COMPENSATION
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The following table sets forth certain summary information concerning
the compensation paid or accrued over each of the Registrant's last three
completed fiscal years to the Company's, or its principal subsidiaries,
chief executive officers during such period (as determined at June 30, 2000
the end of the Registrant's last completed fiscal year).
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
Restr
Name and icted All
Principal Bonus Compen Stock Options Other
Position Year Salary $ sation Awards /SARs LTIP Payouts
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jay W. Gibson 2000 $ - $ - $ - $ - $ - $ - $ -
President & Chairman 1999 - - - - - - -
of the Board 1998 - - - - 6,548 - -
Ronald D. Burnett 2000 - - - - - - -
Vice President & 1999 - - - - - - -
Director 1998 - - - - 820 - -
Karl Seljaas 2000 - - - - - - -
Assitant Vice President 1999 - - - - - - -
& Director 1998 - - - - 2,600 - -
Joseph M. Graubard 2000 - - - - - - -
Treasurer & Director 1999 - - - - - - -
1998 - - - - 620 - -
Joyce Sigler 2000 - - - - - - -
Secretary & Director 1999 - - - - - - -
</TABLE> 11
</Page>
<PAGE>
COMPENSATION OF DIRECTORS
Compensation of Directors, Officers, and other agents is awarded by
the issuance of Common Capital Restricted Shares of Stock of the Company,
having a par value of ten cents per share. Stock issued is fully paid and
non-assessable. The rate of compensation is $40.00 per hour for labor,
thirty cents per mile for miles traveled while working for the Company, and
any out of pocket expenses are also compensated at the rate of ten cents
per share. All stock issued for compensation is issued by the Board of
Directors.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
There are no employment contracts between the Company and any of its
Officers or Directors.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the Company or its subsidiaries, or any
change in control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
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The following table sets forth as of November 1, 2000, the name and
the number of shares of the Registrant's Common Stock, par value $0.10 per
share, held of record or beneficially by each person who held of record, or
was known by the Registrant to own beneficially, more than 5% of the
7,200,250 outstanding shares of the Registrant's Common Stock, and the name
and shareholdings of each director and of all officers and directors as a
group.
<TABLE>
<CAPTION>
Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership Percentage of Class
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Ron Burnett (1) 108,893 .015%
155 W. American Avenue
Murray, Utah 84108
Common Joe Graubard (1) 48,674 .007%
23886 Corte Cajon
Murrieta, CA 92562
Common Jay W. Gibson (1),(3) 3,275,033 45.5%
2405 South Poplar
Santa Ana, CA 92704
Common Karl Seljass (1) 32,813 .005%
2179 Blaine Avenue
Salt Lake City, UT 84108
12
</Page>
<PAGE>
<PAGE>
Common Joyce Seigler (1) 28,752 .004%
1305 So. Shelly St.
Santa Ana, CA 92704
Common Janet Gibson (4) 3,275,033 45.5%
2405 South Poplar
Santa Ana, CA 92704
Common Richard S. Phillips 360,000 .05%
1065 S. Main
Cedar City, UT
Common Fred Rhyme & Winifred 801,600 .111%
B. Rhyme
P.O. Box 4907
Compton, CA 90224
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Common Officers, Directors and 3,494,165 48.5%
Nominees as a Group:
5 persons
------------------------------------------------------------------------------------
</TABLE>
(1) Officer and/or director of the Company
(2) The term "beneficial owner" refers to both the power of investment (the
right to buy and sell) and rights of ownership (the right to received
distributions from the company and proceeds from sales of the shares).
Inasmuch as these rights or shares may be held by more than one person,
each person who has a beneficial ownership interest in shares is deemed the
beneficial owners of the same shares because there is shared power of
investment or share rights of ownership.
(3) Includes 601,654 held by Janet Gibson, his wife and 750,000 held by Jay
and Janet Gibson as joint tenants.
(4) Includes 1,923,379 held by Jay Gibson, her husband and 750,000 held by
Jay and Janet Gibson as joint tenants.
There are no contracts or other arrangements that could result in a
change of control of the Company.
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ITEM 12. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
--------------------------------------------------------------------------
None.
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PART IV
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------
(a) Reports on Form 8-K.
None.
13
</Page>
<PAGE>
(b) Exhibits. The following exhibits are included as part of this report:
SEC Exhibit
<TABLE>
<CAPTION>
Exhibit Reference
Number Number Title of Document Location
---------- --------- ----------------------------------- --------------
<S> <C> <C> <C>
3.01 3 Articles of Amendment to the Incorporated
Articles of Incorporationby reference*
3.02 3 Articles of Incorporation Incorporated
by reference*
3.03 3 Bylaws Incorporated
by reference*
16.01 16 Letter on Change in Certifying Attached
Accountant
23.01 23 Consent of Accountant Attached
27.01 27 Financial Data Schedule Attached
</TABLE>
* Incorporated by reference from the Registrant's registration statement on
Form 10-SB, as amended, filed with the Commission, SEC File No. 0-27849.
14
</Page>
<PAGE>
--------------------------------------------------------------------------
SIGNATURES
--------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
Basic Energy, Inc.
December 12, 2000 /S/ Jay W. Gibson
----------------------------------
Jay W. Gibson
Chairman of the Board and President
December 12, 2000 /S/ Joseph W. Graubard
----------------------------------
Joseph W. Graubard
Treasurer and Director
15
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Financial Statements
June 30, 2000, 1999 and 1998
</Page>
<PAGE>
/Letterhead/
Independent Auditors Report
----------------------------
To the Board of Directors & Stockholders
of Basic Energy, Inc.
We have audited the accompanying balance sheets of Basic Energy, Inc., (a
development stage company) as of June 30, 2000, and the related statements
of operations, stockholders' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Basic Energy,
Inc., as of June 30, 1999 and 1998, and the period June 30, 1926
(inception) to June 30, 1999 were audited by other auditors whose report
dated July 14, 1999, included an explanatory paragraph that described the
going concern as discussed in Note #4 to the financial statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatements. 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 the significant estimates made by management, as well as
evaluating the overall financial statements presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the June 30, 2000 financial statements referred to above
present fairly, in all material respects, the financial position of Basic
Energy, Inc., as of June 30, 2000, and the results of its operations and
its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #4 to the
financial statements, the Company has an accumulated deficit and a negative
net worth at June 30, 2000. Those conditions raise substantial doubt about
it's ability to continue as a going concern. Management's plans regarding
those matters are also discussed in Note #4. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/S/ Crouch, Bierwolfr & Associates
Salt Lake City, Utah
November 9, 2000
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Balance Sheets
June 30, 2000, 1999 and 1998
<TABLE>
<CAPTION>
June June June
30, 2000 30, 1999 30, 1998
---------- ---------- ----------
<S> <C> <C> <C>
Assets
Current Assets $ -0- $ -0- $ -0-
-------------- ---------- ---------- ----------
$ -0- $ -0- $ -0-
========== ========== ==========
Liabilities & Stockholders' Equity
Current Liabilities
-------------------
Accounts Payable $ 31,077 $ -0- $ -0-
Due to Officers 7,385 -0- -0-
---------- ---------- ----------
Total Current Liabilities 38,462 -0- -0-
---------- ---------- ----------
Stockholders' Equity
--------------------
Common Stock, 20,000,000 Shares
Authorized at $0.10 Par Value;
6,444,693 Shares, 6,444,693
Shares, and 5,545,203 Shares
Issued and Outstanding Respectively 644,469 644,469 554,520
Paid In Capital 42,741 42,741 42,741
Deficit Accumulated During the
Development Stage (725,672) (687,210) (597,261)
---------- ---------- ----------
Total Stockholders' Equity (38,462) -0- -0-
---------- ---------- ----------
Total Liabilities &
Stockholders' Equity $ -0- $ -0- $ -0-
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Statement of Operations
Accumulated from the Period June 4, 1926 (Inception) to June 30, 2000
and for the years June 30, 2000, 1999 and 1998
<TABLE>
<CAPTION>
Accumulated 2000 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
--------
Expenses
--------
General &
Administrative Expenses 665,672 38,462 89,949 78,227
Loss on Mining Claims 60,000 -0- -0- -0-
---------- ---------- ---------- ----------
Total Expenses 725,672 38,462 89,949 78,227
---------- ---------- ---------- ----------
Net Loss $(725,672) $ (38,462) $ (89,949) $ (78,227)
========== ========== ========== ==========
Loss Per Share $ (.01) $ (.01) $ (.02)
Weighted Average Shares
Outstanding 6,444,693 5,994,958 4,718,766
</TABLE>
The accompanying notes are an integral part of these financial statements
4
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
June 4, 1926 (Inception) to June 30, 2000
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
---------------------------------------------
<S> <C> <C> <C> <C>
Balance, June 4, 1926 (Inception) -0- $ -0- $ -0- $ -0-
Shares Issued for Mining Claims 600,000 60,000
Shares Issued for Cash 8,475 848
Loss for Year Ended June 30, 1927 ( 848)
Shares Issued for Cash 10,750 1,075
Loss for Year Ended June 30, 1928 ( 1,075)
Shares Issued for Cash 93,311 9,331
Loss for Year Ended June 30, 1929 ( 9,331)
Shares Issued For Cash 112,456 11,246
Loss for Year Ended June 30, 1930 ( 11,245)
Loss for Year Ended June 30, 1931 ( 35)
Loss for Year Ended June 30, 1932 ( 35)
Loss for Year Ended June 30, 1933 ( 35)
Loss for Year Ended June 30, 1934 ( 35)
Loss for Year Ended June 30, 1935 ( 35)
Loss for Year Ended June 30, 1936 ( 35)
Cash Received from Share Assessment 363
Shares Canceled for Non Payment of
Assessment ( 423,780) ( 42,378) 42,378
Shares Issued for Cash 26,144 2,614
</TABLE>
The accompanying notes are an integral part of these financial statements
5
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
June 4, 1926 (Inception) to June 30, 2000
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
---------------------------------------------
<S> <C> <C> <C> <C>
Loss for Year Ended June 30, 1937 ( 62,767)
Loss for Year Ended June 30, 1938 ( 35)
Loss for Year Ended June 30, 1939 ( 35)
Shares Issued for Cash 1,000 100
Loss for Year Ended June 30, 1940 ( 35)
Shares Issued for Cash 2,500 250
Loss for Year Ended June 30, 1941 ( 245)
No Activity from 1942 to 1979
Taxes Paid by Officer ( 1,330)
Shares Issued for Debt & Services 80,000 8,000
Loss for Year Ended June 30, 1980 ( 6,670)
Shares issued for Debt & Services 898,200 89,820
Loss for Year Ended June 30, 1981 ( 89,820)
Shares Issued for Debt & Services 210,000 21,000
Loss for Year Ended June 30, 1982 ( 21,000)
Shares Issued for Debt & Services 26,244 2,624
Loss for Year Ended June 30, 1983 ( 2,624)
Loss for Year Ended June 30, 1984 ( 110)
Loss for Year Ended June 30, 1985 ( 110)
Shares Issued for Debt & Services 1,140,500 114,050
</TABLE>
The accompanying notes are an integral part of these financial statements
6
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
June 4, 1926 (Inception) to June 30, 2000
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
---------------------------------------------
<S> <C> <C> <C> <C>
Loss for Year Ended June 30, 1986 ( 113,830)
Loss for Year Ended June 30, 1987 ( 110)
Shares Issued for Debt & Services 425,000 42,500
Loss for Year Ended June 30, 1988 ( 42,390)
Loss for Year Ended June 30, 1989 ( 110)
Shares Issued for Debt & Services 262,410 26,241
Loss for Year Ended June 30, 1990 ( 26,155)
Loss for Year Ended June 30, 1991 ( 110)
Loss for Year Ended June 30, 1992 ( 110)
Loss for Year Ended June 30, 1993 ( 110)
Loss for Year Ended June 30, 1994 ( 110)
Loss for Year Ended June 30, 1995 ( 110)
Loss for Year Ended June 30, 1996 ( 110)
Shares Issued for Debt & Services 1,289,723 128,972
Loss for Year Ended June 30, 1997 ( 128,289)
---------------------------------------------
Balance, June 30, 1997 4,762,933 476,293 42,741 ( 519,034)
Shares Issued for Debt & Services 782,270 78,227
Loss for Year Ended June 30, 1998 ( 78,227)
---------------------------------------------
Balance, June 30, 1998 5,545,203 554,520 42,741 ( 597,261)
Shares Issued for Cost & Services 899,490 89,949
</TABLE>
The accompanying notes are an integral part of these financial statements
7
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
June 4, 1926 (Inception) to June 30, 2000
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
---------------------------------------------
<S> <C> <C> <C> <C>
Loss for Year Ended June 30, 1999 ( 89,949)
---------------------------------------------
Balance, June 30, 1999 6,444,693 644,469 42,741 ( 687,210)
Loss for Year Ended June 30, 2000 ( 38,462)
---------------------------------------------
Balance, June 30, 2000 6,444,693 $ 644,469 $ 42,741 ($ 725,672)
=============================================
</TABLE>
The accompanying notes are an integral part of these financial statements
8
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Statements of Cash Flows
Accumulated from June 4, 1926 (Inception) to June 30, 2000
and the Years Ended June 30, 2000, 1999 and 1998
<TABLE>
<CAPTION>
Accumulated 2000 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
------------------------------------
Net Loss ($725,672) ($ 38,462) ($ 89,949) ($165,288)
Adjustments to Reconcile Net Loss to
Cash Used by Operating Activities;
Non Cash 639,846 38,462 89,949 165,288
Loss on Mining Claim 60,000 -0- -0- -0-
---------- ---------- ---------- ----------
Cash Used from Operating Activities ( 25,826) -0- -0- -0-
Cash Flows from Investing Activities -0- -0- -0- -0-
------------------------------------ ---------- ---------- ---------- ----------
Cash Flows from Financial Activities
------------------------------------
Proceeds from Sale of Common Stock 25,463 -0- -0- -0-
Proceeds from Assessment on
Common Stock 363 -0- -0- -0-
---------- ---------- ---------- ----------
Cash Provided from Financing
Activities 25,826 -0- -0- -0-
---------- ---------- ---------- ----------
Increase (Decrease) in Cash -0- -0- -0- -0-
Cash at Beginning of Period -0- -0- -0- -0-
Cash at End of Period $ -0- $ -0- $ -0- $ -0-
========== ========== ========== ==========
Disclosures for Operating Activities
------------------------------------
Interest $ -0- $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
</TABLE>
The accompanying notes are an integral part of these financial statements
9
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements
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
Upon Incorporation the Company had 1,000,000 shares of common stock
authorized with a par value of $0.10 per share. On February 28, 1979 the
Articles of Incorporation were changed authorizing 20,000,000 shares with a
par value of $0.10 per share.
The Company issued 600,000 shares of its common stock to acquire mining
claims in 1926. In 1937, the Company wrote the claims off as having no
value.
The Company has issued 6,013,837 shares at $0.10 per share for services and
out of pocket expense to its officers and directors from time to time.
The shares issued in 1926 were assessable, and in 1937 the 600,000 shares
were assessed at $.001 per share, 423,780 shares did not pay the assessment
and were canceled.
10
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #4 - Going Concern
-----------------------
The Company has no assets and no operations from which it can obtain
working capital. The Company recognizes that it must find a source of
working capital or the Company may not be able to continue its existence.
NOTE #5 - Income Taxes
----------------------
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax
assets in future years. Due to the uncertainty as to the utilization of
net operating loss carryforwards an evaluation allowance has been made to
the extent of any tax benefit that net operating losses may generate.
Changes in majority control of the Company will have negative impact upon
the Company's ability to utilize net operations loss carryforwards.
The Company has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal revenue Codes are met. These
losses are as follows:
Year of Loss Amount Expiration Date
--------------- ---------- ----------------
1985 to 2000 $ 518,292 2000 to 2020
Current Tax Asset Value of Net Operating Loss Carryforwards
at Current Prevailing Federal Tax Rate $ 176,219
Evaluation Allowance ( 176,219)
----------
Net Tax Asset $ -0-
Current Income Tax Expense -0-
Deferred Income Tax Benefit -0-
NOTE #6 - New Technical Pronouncements
--------------------------------------
In February 1997, SFAS No. 129, "Disclosure of Information about Capital
Structure" was issued effective for periods ending after December 15, 1997.
The Company has adopted the disclosure provisions of SFAS No. 129 effective
with the fiscal year ended December 31, 1998.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was issued
effective for fiscal years beginning after December 31, 1997, with earlier
application permitted. The Company has elected to adopt SFAS No. 130
effective with the fiscal year ended December 31, 1998. Adoption of SFAS
No. 130 is not expected to have a material impact on the Company's
financial statements.
11
</Page>
<PAGE>
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #6 - New Technical Pronouncements -Continued-
--------------------------------------------------
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information" was issued for fiscal year beginning after
December 31, 1997, with earlier application permitted. The Company has
elected to adopt SFAS No. 131, effective with the fiscal years ended
December 31, 1998. Adoption of SFAS No. 131 is not expected to have a
material impact on the Company's financial statements.
NOTE #7 - Subsequent Event
--------------------------
In October of 2000, Basic Energy, Inc., issued 755,557 shares of its
"Restricted Common Stock" at $0.10 per share, as payment for services
rendered.
12
</Page>
