United States Securities and Exchange
Commission
Washington, D.C.
20549
[X]
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
fiscal year ended
December 31,
2006
[ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission
File No.
002-76219NY
VICTORY ENERGY
CORPORATION
(Name of
Small Business Issuer in its Charter)
NEVADA
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87-0564472
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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112 N. Curry
Street
Carson City, Nevada
89703-4934
(Address
of Principal Executive Offices)
Issuer’s
Telephone Number:
(866) 279-9257
Securities
Registered under Section 12(b) of the Exchange Act: None.
Securities
Registered under Section 12(g) of the Exchange Act: None.
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 reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes
[X]
No [
]
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes [ ] No
[X]
State
Issuer’s revenues for its most recent fiscal year: $- 0 -
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days: On March 9, 2007, $3,894,800. There are
8,655,290 shares of common voting stock of the Registrant held by
non-affiliates. During the past year, there has been a limited “public market”
for shares of common stock of the Registrant, so the Registrant has arbitrarily
valued these shares on the basis of the closing bid price on this
date.
State the
number of shares outstanding of each of the Issuer’s classes of common equity,
as of the latest practicable date: On March 9, 2007 there were 14,941,766 shares
of common stock issued and outstanding
A
description of “Documents Incorporated by Reference” is contained in Part III,
Item 14.
Transitional Small Business Issuer
Format Yes [ ] No [X ]
PART I
ITEM 1. DESCRIPTION OF
BUSINESS
Forward-Looking
Statements
This
annual report on Form 10-KSB and other statements issued or made from time to
time by Victory Energy Corporation, a Nevada corporation, contain statements
which may constitute “Forward-Looking Statements” within the meaning of the
Securities Act of 1933, as amended (the “Act”) and the Securities Exchange Act
of 1934 (the “Exchange Act”) by the Private Securities Litigation Reform Act of
1995, 15 U.S.C.A. Sections 77Z-2 and 78U-5 (SUPP. 1996). Those statements
include statements regarding the intent, belief or current expectations of
Victory Energy Corporation and its officers/directors as well as the assumptions
on which such statements are based. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements. Victory Energy
Corporation is sometimes referred to herein as “we”, “us”, “our” and the
“Company.”
General
Background
Victory
Energy Corporation, formerly known as New Environmental Technologies Corporation
(our “Company”) was organized under the laws of the State of Nevada on January
7, 1982, under the name “All Things, Inc.” Our Company was formed for the
purpose of engaging in all lawful businesses. Our Company’s authorized capital
consists of 200,000,000 shares of $0.001 par value common voting
stock.
On March
21, 1985, our Company’s name was changed to “New Environmental Technologies
Corporation” and on April 28, 2006, our Company’s name was changed again to
Victory Energy Corporation.
Historical Information about our
Business
Our
Company has had no material business operations since 1989. In 2004, our Company
began the search for the acquisition of assets, property or businesses that may
benefit our Company and its shareholders. Our goal has been to bring value to
the Company and to its shareholders through such acquisitions. Each merger and
acquisition we approach is done with the intention to position the Company into
markets and sectors where excellent growth is anticipated.
Current Business of the
Company
Management
has determined that the Company should focus on projects in the oil and gas
industry. This is based upon a belief that this industry is becoming an
economically viable sector in which to conduct business operations. The Company
has targeted specific prospects and intends to engage in the drilling for oil
and gas. Jon Fullenkamp, the Company’s President, has a great deal of experience
in the oil and gas industry and has already recruited additional experience with
the addition of a new director and adviso
ry board
member. Management has recently negotiated the mineral rights on 138,000
acres
in Valley
County Montana with a Letter of Intent that sets out the substantive terms of a
Formal Agreement. The Company intends to commence drilling the first well to
test one of the Lodgepole Reef prospects within three months of the execution of
the final Agreement. A second well is intended to be started within four and
half months to test a 34,000-acre shallow gas prospect on the leases. The third
well under the Agreement is intended to be drilled to test a second Lodgepole
Reef prospect, which will begin within eight months of the Agreement. We will
earn a 50% working interest in the spacing unit covered by each well. We will
also earn an undivided 1/6th working interest in all of the Valley County Leases
after each well is drilled. An additional prospect for Victory is the Palo Duro
Basin located in Floyd and Briscoe Counties Texas. Victory has established a
letter of intent, which sets out the substantive terms of a Formal Agreement
(“Agreement”) that Victory intends to complete and execute within 60 days. Under
the Agreement, we will be required to commit up to one hundred thousand dollars
($100,000.00) for seismic evaluation to determine the first three drilling
targets. In exchange, we will receive 50% of the mineral rights of all
hydrocarbon deposits on the first eight sections, approximately 5,000 acres of
land. During the evaluation of the drilling targets, and including the time to
drill the first three wells, we will have the ability to exercise its
irrevocable option to lease up to a total of 100,000 acres of mineral rights
within the Palo Duro Basin.
We also
hold an interest as a joint venture partner in the Mesa Gas Prospect located in
Roosevelt County New Mexico. Additionally, the Company holds 1,960 acres in a
prospective oilfield identified as N.E. Glasgow Prospect located in Montana
which plans to be incorporated into the Company’s developments in Valley County
Montana. We had taken on the evaluation of a prospect in Oklahoma identified as
the Skedee Prospect.
As we
progressed into the due diligence of these prospects and the potential
production, management determined that the development of the prospect was not
worth the required investment capital. Even with the potential reduction in
investment dollars, the prospects had an unacceptable pay back time for the
initial investment. Management felt the shareholders would be better served by
seeking other prospects.
We have
no other employees at this time and it will seek to retain independent
contractors to assist in operating and managing the prospects as well as to
carry out the principal and necessary functions incidental to the oil and gas
business. With the intended acquisition of oil and natural gas, we intend to
establish ourself as an industry partner within the industry. Once we can
establish a revenue base with cash flow, we will seek opportunities more
aggressive in nature.
Marketing Considerations of our
Product
The
marketing of our prospects’ oil and gas production, if any, are affected by
numerous factors beyond our control such as the availability and proximity of
adequate pipelines or other transportation facilities, local, state and federal
regulations affecting production, and fluctuations of supply and demand. Our
production may be competing with crude oil imports and other energy sources such
as coal and nuclear energy. Crude oil and natural gas must compete on a free
market basis. Potential proposed legislation could decrease the demand for oil
and gas in the future, however, management believes we are well poised to
compete effectively in today’s market.
Competition
The oil
and gas industry is highly competitive. We will be competing with other oil and
gas companies with financial resources and staffs greater than those available
to us, not only in the acquisition of oil and gas leases having potential for
development, but also in the securing of funds to finance such operations. The
production and sale of oil and gas are subject to the availability of a ready
market, proximity to pipelines, and to the regulation of production,
transportation and marketing by governmental authorities. There can also be
competition among operators for drilling equipment, tubular goods, and drilling
crews. Such competition may affect our ability to expeditiously develop our
prospects.
Effect of Existing Governmental
Regulations
The
Company’s prospects are located on federal lands in various states. The U.S.
Government and various states have statutory provisions regulating the
exploration, production and sale of oil and/or gas. Such statutes and the
regulations promulgated in connection thereto, protect correlative rights and
opportunities to produce oil and gas as between owners of a common reservoir.
The U.S. Government and various states may or may not regulate the amount of oil
and gas produced by limiting the rate of allowable production from oil and/or
gas wells or the spacing of wells. Local, State and Federal environmental
controls can affect the Operator and its operations through regulations enacted
to protect against waste. Conserve natural resources, and prevent pollution.
This could necessitate the Company spending money on environmental protection
measures, in addition to drilling operations. Penalties or prohibitions imposed
on operators for violating such regulations could seriously inhibit operations.
Limits on production allowable by the state law could materially affect the
income of the Company; no projections on allowables will be made until the wells
are tested. State agencies often set allowables in order to maximize oil and gas
recovery over time. The Company is not aware of any production limits in the
various states at this time.
Additionally,
the United States Bureau of Land Management and the various states impose
certain restrictions such as terrain and archaeological restraints, habitat
mating, non-drilling periods and other restrictions which could prohibit or
hamper the Operator’s right to drill. Normally these restrictions can be
satisfied and the proposed wells can be drilled; nevertheless, the granting of a
drilling permit is at the sole discretion of the governmental
authority.
Sarbanes-Oxley
Act
On July
30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”). The Sarbanes-Oxley Act imposes a wide variety of new
regulatory requirements on publicly-held companies and their insiders. Many of
these requirements will affect us. For example:
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Our
chief executive officer and chief financial officer must now certify the
accuracy of all of our periodic reports that contain financial
statements;
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·
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Our
periodic reports must disclose our conclusions about the effectiveness of
our disclosure controls and procedures;
and
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We
may not make any loan to any director or executive officer and we may not
materially modify any existing
loans.
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The
Sarbanes-Oxley Act has required us to review our current procedures and policies
to determine whether they comply with the Sarbanes-Oxley Act and the new
regulations promulgated thereunder. We will continue to monitor our compliance
with all future regulations that are adopted under the Sarbanes-Oxley Act and
will take whatever actions are necessary to ensure that we are in
compliance.
Penny Stock
Our
common stock is “penny stock” as defined in Rule 3a51-1 of the Securities and
Exchange Commission. Penny stocks are stocks:
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·
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with
a price of less than five dollars per
share;
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·
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that
are not traded on a “recognized” national
exchange;
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·
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whose
prices are not quoted on the NASDAQ automated quotation system;
or
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·
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in
issuers with net tangible assets less than $2,000,000, if the issuer has
been in continuous operation for at least three years, or $5,000,000, if
in continuous operation for less than three years, or with average
revenues of less than $6,000,000 for the last three
years.
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Section
15(g) of the Exchange Act and Rule 15g-2 of the Securities and Exchange
Commission require broker/dealers dealing in penny stocks to provide potential
investors with a document disclosing the risks of penny stocks and to obtain a
manually signed and dated written receipt of the document before making any
transaction in a penny stock for the investor’s account. You are urged to obtain
and read this disclosure carefully before purchasing any of our
shares.
Rule
15g-9 of the Securities and Exchange Commission requires broker/dealers in penny
stocks to approve the account of any investor for transactions in these stocks
before selling any penny stock to that investor.
This
procedure requires the broker/dealer to:
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·
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get
information about the investor’s financial situation, investment
experience and investment goals;
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reasonably
determine, based on that information, that transactions in penny stocks
are suitable for the investor and that the investor can evaluate the risks
of penny stock transactions;
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provide
the investor with a written statement setting forth the basis on which the
broker/dealer made his or her determination;
and
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receive
a signed and dated copy of the statement from the investor, confirming
that it accurately reflects the investors’ financial situation, investment
experience and investment goals.
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Compliance
with these requirements may make it harder for our stockholders to resell their
shares.
Reporting
Obligations
Section
14(a) of the Exchange Act requires all companies with securities registered
pursuant to Section 12(g) of the Exchange Act to comply with the rules and
regulations of the Securities and Exchange Commission regarding proxy
solicitations, as outlined in Regulation 14A. Matters submitted to stockholders
of our Company at a special or annual meeting thereof or pursuant to a written
consent will require our Company to provide our stockholders with the
information outlined in Schedules 14A or 14C of Regulation 14; preliminary
copies of this information must be submitted to the Securities and Exchange
Commission at least 10 days prior to the date that definitive copies of this
information are forwarded to our stockholders.
We are
also required to file annual reports on Form 10-KSB and quarterly reports on
Form 10-QSB with the Securities Exchange Commission on a regular basis, and will
be required to timely disclose certain material events (e.g., changes in
corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
current report on Form 8-K.
Employees
The
Company presently has one employee who is an officer and director of the
Company. Additional staffing levels will be determined based on the Company’s
growth. The board of directors will determine the compensation of all new
employees based upon job description.
ITEM 2
. DESCRIPTION OF
PROPERTY
Our
Company has no property and limited assets; its principal executive office
address and telephone number are provided to us by Jon Fullenkamp, our
CEO.
ITEM 3. LEGAL
PROCEEDINGS
The
Company is currently not involved in any material pending or threatened
litigation.
ITEM 4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
On
October 26, 2006, a majority of the shares entitled to vote elected to complete
a reverse split of our common stock on a 25 to 1 basis.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
A.
Market
Information
The
Company’s common stock is traded on the OTCBB under the symbol “VYEY.” The
Company’s common stock consists of 200,000,000 shares authorized of which, as of
March 9, 2007, there are 14,941,766 shares issued and outstanding. The following
is the high and low prices of our stock for the last two fiscal
years.
Quarterly
Common Stock Price Ranges
2005
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High
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Low
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First
Quarter
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$
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0.27
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$
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0.05
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Second
Quarter
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0.15
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0.03
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Third
Quarter
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0.15
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0.03
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Fourth
Quarter
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0.12
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0.04
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2006
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High
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Low
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First
Quarter
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$
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0.15
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$
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0.03
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Second
Quarter
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0.10
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0.03
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Third
Quarter
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0.04
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0.03
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Fourth
Quarter
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0.50
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0.02
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B.
Holders of Common
Stock
As of
March 31, 2007, there were approximately 898 holders of the Company’s common
stock.
C.
Dividends
We
currently intend to retain any future earnings for use in the expansion of the
business, and therefore do not intend to pay shareholder dividends in the near
future. The declaration and payment of cash dividends, if any, will be at the
discretion of the Board of Directors of the Company and will depend, among other
things, upon our earnings, capital requirements and financial
condition.
ITEM 6. MANAGEMENT’S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
Introduction
The
following discussion of our financial condition and results of our operations
should be read in conjunction with the Financial Statements and Notes thereto.
Our fiscal year ends December 31. This document contains certain forward-looking
statements including, among others, anticipated trends in our financial
condition and results of operations and our business strategy. These
forward-looking statements are based largely on our current expectations and are
subject to a number of risks and uncertainties. Actual results could differ
materially from these forward-looking statements. Important factors to consider
in evaluating such forward-looking statements include (i) changes in external
factors or in our internal budgeting process which might impact trends in our
results of operations; (ii) unanticipated working capital or other cash
requirements; (iii) changes in our business strategy or an inability to execute
our strategy due to unanticipated changes in the industries in which we operate;
and (iv) various competitive market factors that may prevent us from competing
successfully in the marketplace.
Plan of Operation
Our plan
of operation for the next 12 months will be the continued acquisition of
economically viable oil and gas prospects. Once acquired, we intend to develop
and produce the prospects assuming they are commercially economical to produce.
In that case, we can expect to derive revenues from operations. We intend to
diversify our holdings in both oil and gas producing wells to take advantage of
what we believe is a potentially strong window of opportunity that currently
exists in the oil and gas industry.
Management
has determined that the Company should focus on projects in the oil and gas
industry. This is based upon a belief that this industry is becoming an
economically viable sector in which to conduct business operations. The Company
has targeted specific prospects and intends to engage in the drilling for oil
and gas. Jon Fullenkamp, the Company’s President, has a great deal of experience
in the oil and gas industry and has already recruited additional experience with
the addition of a new director and adviso
ry board
member. Management has recently negotiated the mineral rights on 138,000
acres
in Valley
County Montana with a Letter of Intent that sets out the substantive terms of a
Formal Agreement. Victory will commence drilling the first well to test one of
the Lodgepole Reef prospects within three months of the execution of the
Agreement. A second well will be started within four and half months to test a
34,000-acre shallow gas prospect on the leases. The third well under the
Agreement will be drilled to test a second Lodgepole Reef prospect, which will
begin within eight months of the Agreement. Victory will earn a 50% working
interest in the spacing unit covered by each well. Victory will also earn an
undivided 1/6th working interest in all of the Valley County Leases after each
well is drilled. An additional prospect for Victory is the Palo Duro Basin
located in Floyd and Briscoe Counties Texas. Victory has established a letter of
intent, which sets out the substantive terms of a Formal Agreement (“Agreement”)
that Victory will complete and execute within 60 days. Under the Agreement,
Victory will be required to conduct up to one hundred thousand dollars
($100,000.00) for seismic evaluation to determine the first three drilling
targets. In exchange, Victory will receive 50% of the mineral rights of all
hydrocarbon deposits on the first eight sections, approximately 5,000 acres of
land. During the evaluation of the drilling targets, and including the time to
drill the first three wells, Victory will have the ability to exercise its
irrevocable option to lease up to a total of 100,000 acres of mineral rights
within the Palo Duro Basin.
The
Company also holds interest as a joint venture partner in the Mesa Gas Prospect
located in Roosevelt County New Mexico. Additionally, the Company holds 1,960
acres in a prospective oilfield identified as N.E. Glasgow Prospect located in
Montana which plans to be incorporated into the Company’s developments in Valley
County Montana. The Company had taken on the evaluation of a prospect in
Oklahoma identified as the Skedee Prospect.
As the
Company progressed into the due diligence of these prospects and the potential
production, management determined that the development of the prospect was not
worth the required investment capital. Even with the potential reduction in
investment dollars, the prospects had an unacceptable pay back time for the
initial investment. At that point, management felt the shareholders would be
better served by seeking other prospects.
The
Company has no other employees at this time and it will seek to retain
independent contractors to assist in operating and managing the prospects as
well as to carry out the principal and necessary functions incidental to the oil
and gas business. With the intended acquisition of oil and natural gas, the
Company intends to establish itself as an industry partner within the industry.
Once the Company can establish a revenue base with cash flow, it will seek
opportunities more aggressive in nature.
Results of Operations for Period
Ended December 31, 2006
As of
December 31, 2006, the Company has not earned any revenues and has incurred a
net loss to date of $1,745.364. Operations have been primarily seeking potential
opportunities in the oil and gas industry through the location of commercially
economical prospects, and raising capital and developing revenue generating
opportunities and strategic relationships.
During
the year ended December 31, 2006, we incurred operating expenses in the amount
of $1,745,364. These operating expenses included due diligence expenses,
consulting fees, professional fees and office and general expenses.
Results of Operation Subsequent to
December 31, 2006
Based
upon our efforts in seeking business opportunities in the oil and gas industry,
we have agreed to move forward on all prospects.
Liquidity and Capital
Resources
To date,
we have financed our operations from funds put into the Company by our CEO. We
intend to raise future capital from the sale of a percentage of our prospects to
fund development and production or through the sale of our common stock to raise
from $3 million to $8 million to finance the prospects in their
entirety.
Off Balance Sheet
Arrangements
The
Company has no off balance sheet arrangements for the year ended December 31,
2006.
Impact of Recently Issued Accounting
Pronouncements
In
December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment.”
This statement replaces FASB Statement No. 123 and supersedes APB Opinion No.
25. Statement No. 123(R) will require the fair value of all stock option awards
issued to employees to be recorded as an expense over the related vesting
period. The statement also requires the recognition of compensation expense for
the fair value of any unvested stock option awards outstanding at the date of
adoption. We do not expect the adoption of this statement to have a material
impact on our financial condition or results of operations.
In
November 2004, the FASB issued SFAS No. 151 “Inventory Costs, an amendment of
ARB No. 43, Chapter 4. The amendments made by Statement 151 clarify that
abnormal amounts of idle facility expense, freight, handling costs, and wasted
materials (spoilage) should be recognized as current-period charges and require
the allocation of fixed production overheads to inventory based on the normal
capacity of the production facilities. The guidance is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. Earlier
application is permitted for inventory costs incurred during fiscal years
beginning after November 23, 2004. The Company has evaluated the impact of the
adoption of SFAS 151, and does not believe the impact will be significant to the
Company’s overall results of operations or financial position.
In
December 2004, the FASB issued SFAS No.152, “Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67” (“SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. The Company has evaluated the impact
of the adoption of SFAS 152, and does not believe the impact will be significant
to the Company’s overall results of operations or financial
position.
In
December 2004, the FASB issued SFAS No.153, “Exchanges of Nonmonetary Assets, an
amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions.” The
amendments made by Statement 153 are based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of the assets
exchanged. Further, the amendments eliminate the narrow exception for
nonmonetary exchanges of similar productive assets and replace it with a broader
exception for exchanges of nonmonetary assets that do not have commercial
substance. Previously, Opinion 29 required that the accounting for an exchange
of a productive asset for a similar productive asset or an equivalent interest
in the same or similar productive asset should be based on the recorded amount
of the asset relinquished. Opinion 29 provided an exception to its basic
measurement principle (fair value) for exchanges of similar productive assets.
The Board believes that exception required that some nonmonetary exchanges,
although commercially substantive, be recorded on a carryover basis. By focusing
the exception on exchanges that lack commercial substance, the Board believes
this Statement produces financial reporting that more faithfully represents the
economics of the transactions. The Statement is effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier
application is permitted for nonmonetary asset exchanges occurring in fiscal
periods beginning after the date of issuance. The provisions of this Statement
shall be applied prospectively. The Company has evaluated the impact of the
adoption of SFAS 153, and does not believe the impact will be significant to the
Company’s overall results of operations or financial position.
In
December 2004, the FASB issued SFAS No.123 (revised 2004), “Share-Based
Payment”. Statement 123(R) will provide investors and other users of financial
statements with more complete and neutral financial information by requiring
that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. Statement 123(R) covers a
wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. Statement 123(R) replaces FASB Statement No. 123,
Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees. Statement 123, as originally issued in
1995, established as preferable a fair-value-based method of accounting for
share-based payment transactions with employees. However, that Statement
permitted entities the option of continuing to apply the guidance in Opinion 25,
as long as the footnotes to financial statements disclosed what net income would
have been had the preferable fair-value-based method been used. Public entities
(other than those filing as small business issuers) will be required to apply
Statement 123(R) as of the first interim or annual reporting period that begins
after June 15, 2005. The Company adopted Statement 123(R) in December of
2005.
In
December 2004, the Financial Accounting Standards Board issued two FASB Staff
Positions - FSP FAS 109-1, Application of FASB Statement 109 “Accounting for
Income Taxes” to the Tax Deduction on Qualified Production Activities Provided
by the American Jobs Creation Act of 2004, and FSP FAS 109-2 Accounting and
Disclosure Guidance for the Foreign Earnings Repatriation Provision within the
American Jobs Creation Act of 2004. Neither of these affected the Company as it
does not participate in the related activities.
In March
2005, the SEC released Staff Accounting Bulletin No. 107, “Share-Based Payment”
(“SAB 107”), which provides interpretive guidance related to the interaction
between SFAS 123(R) and certain SEC rules and regulations. It also provides the
SEC staff’s views regarding valuation of share-based payment arrangements. In
April 2005, the SEC amended the compliance dates for SFAS 123(R), to allow
companies to implement the standard at the beginning of their next fiscal year,
instead of the next reporting period beginning after June 15, 2005. Management
is currently evaluating the impact SAB 107 will have on our consolidated
financial statements.
In March
2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional
Asset Retirement Obligations” (“FIN 47”). FIN 47 provides guidance relating to
the identification of and financial reporting for legal obligations to perform
an asset retirement activity. The Interpretation requires recognition of a
liability for the fair value of a conditional asset retirement obligation when
incurred if the liability’s fair value can be reasonably estimated. FIN 47 also
defines when an entity would have sufficient information to reasonably estimate
the fair value of an asset retirement obligation. The provision is effective no
later than the end of fiscal years ending after December 15, 2005. The Company
will adopt FIN 47 beginning the first quarter of fiscal year 2006 and does not
believe the adoption will have a material impact on its consolidated financial
position or results of operations or cash flows.
In May
2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error
Corrections.” This new standard replaces APB Opinion No. 20, “Accounting
Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim
Financial Statements,” and represents another step in the FASB’s goal to
converge its standards with those issued by the IASB. Among other changes,
Statement 154 requires that a voluntary change in accounting principle be
applied retrospectively with all prior period financial statements presented on
the new accounting principle, unless it is impracticable to do so. Statement 154
also provides that (1) a change in method of depreciating or amortizing a
long-lived non-financial asset be accounted for as a change in estimate
(prospectively) that was effected by a change in accounting principle, and (2)
correction of errors in previously issued financial statements should be termed
a “restatement.” The new standard is effective for accounting changes and
correction of errors made in fiscal years beginning after December 15, 2005.
Early adoption of this standard is permitted for accounting changes and
correction of errors made in fiscal years beginning after June 1, 2005 . The
Company has evaluated the impact of the adoption of Statement 154 and does not
believe the impact will be significant to the Company’s overall results of
operations or financial position.
In
February of 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
Financial Instruments”, which is intended to simplify the accounting and improve
the financial reporting of certain hybrid financial instruments (i.e.,
derivatives embedded in other financial instruments). The statement amends SFAS
No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and
SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities--a replacement of FASB Statement No. 125.” SFAS
No. 155 is effective for all financial instruments issued or acquired after the
beginning of an entity’s first fiscal year that begins after September 15,
2006.. The Company is currently evaluating the impact SFAS No. 155 will have on
its consolidated financial statements, if any.
ITEM 7. FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To: the
Board of Directors and Shareholders
Victory
Capital Holdings Corporation
Ladera
Ranch, California 92694
I have
audited the accompanying consolidated balance sheet of Victory Capital Holdings
Corporation as of December 31, 2006 and 2005 and the related consolidated
statements of operations and of cash flows for the years
then
ended. These consolidated financial statements are the responsibility of the
Company’s management. My responsibility is to express an opinion on these
financial statements based on my audit.
I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses and has not yet commenced
operations. This raises substantive doubt about the Company’s ability to
continue as a going concern.
Management’s
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
In my
opinion, based on my audit, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Victory Energy Corporation as of December 31, 2006 and 2005, and the results of
its operations and its cash flows for each of the periods ended December 31,
2006 and 2006, in conformity with United States generally accepted accounting
principles.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses and has not yet commenced
operations. This raises substantive doubt about the Company’s ability to
continue as a going concern.
Management’s
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/
John
Kinross-Kennedy
Certified
Public Accountant
Irvine,
California
April 18,
2008
VICTORY
ENERGY CORPORATION AND SUBSIDIARIES
|
|
|
|
|
|
|
|
(A
Development Stage Company)
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December 31,
|
|
|
|
|
2006
|
|
|
2005
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
-
|
|
$
|
4,074
|
|
Note
Receivable
|
|
|
|
|
|
88,300
|
|
Total
Curent Assets
|
|
|
-
|
|
|
92,374
|
|
|
|
|
|
|
|
|
|
FIXED
ASSETS, NET
|
|
|
-
|
|
|
1,096
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
Investment in Joint
Venture
|
|
|
50,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
50,000
|
|
$
|
93,470
|
|
LIABILITIES & STOCKHOLDERS'
DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITES
|
|
|
|
|
|
|
|
Bank
Overdraft
|
|
$
|
79
|
|
$
|
-
|
|
Accounts
Payable
|
|
|
19,142
|
|
|
330,970
|
|
Accrued
Liabilities
|
|
|
|
|
|
11,416
|
|
Credit Line - WFB
Business Line
|
|
|
56,961
|
|
|
|
|
Prepaid
Subscriptions
|
|
|
203,500
|
|
|
|
|
Accrued
Payroll
|
|
|
|
|
|
240,000
|
|
Total
Current Liabilities
|
|
|
279,682
|
|
|
582,386
|
|
|
|
|
|
|
|
|
|
LONG
TERM LIABILITIES
|
|
|
|
|
|
|
|
Notes
Payable
|
|
|
-
|
|
|
146,431
|
|
|
|
|
|
|
|
|
|
OTHER
LIABILITIES
|
|
|
|
|
|
|
|
Loan from
Officer
|
|
|
690,085
|
|
|
83,367
|
|
Account Payable -
Related Party
|
|
|
-
|
|
|
172,179
|
|
Accrued Liabilities
- Related
|
|
|
-
|
|
|
121,000
|
|
Other Loans
Payable
|
|
|
-
|
|
|
|
|
Total
Other Liabilities
|
|
|
690,085
|
|
|
376,546
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
969,767
|
|
|
1,105,363
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
|
|
|
|
Preferred Stock,
$0.001 par value, 10,000,000 shares
|
|
|
|
|
|
|
|
authorized,
715,517 issued and outstanding
|
|
|
716
|
|
|
|
|
Common Stock,
$0.001 par value, 200,000,000 shares
|
|
|
|
|
|
|
|
authorized,
4,518,515
issued
and outstanding
|
|
|
4,518
|
|
|
41,960
|
|
Additional paid-in
capital
|
|
|
4,566,320
|
|
|
2,692,104
|
|
Deficit accumulated
in the development stage
|
|
|
(5,491,321
|
)
|
|
(3,745,957
|
)
|
|
|
|
|
|
|
|
|
Total
Stockholders' Deficit
|
|
|
(919,767
|
)
|
|
(1,011,893
|
)
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
50,000
|
|
$
|
93,470
|
|
|
|
|
|
|
|
|
|
VICTORY
ENERGY CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
Consolidated
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
Inception
,
|
|
|
|
|
For
the
|
|
|
For the
|
|
|
from January
2,
|
|
|
|
|
Three Months
Ended
|
|
|
Year Ended
|
|
|
1982
through
|
|
|
|
|
December
31,
|
|
|
December 31,
|
|
|
December
31,
|
|
|
|
|
2006
|
|
|
2005
|
|
|
2006
|
|
|
2005
|
|
|
2006
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
20,207
|
|
$
|
20,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
Expense
|
|
|
58,284
|
|
|
418,004
|
|
|
1,252,923
|
|
|
1,042,110
|
|
|
3,989,354
|
|
Land
Leases
|
|
|
|
|
|
|
|
|
24,040
|
|
|
-
|
|
|
|
|
Wages
and Salaries
|
|
|
|
|
|
|
|
|
22,500
|
|
|
-
|
|
|
270,500
|
|
General
& Administrative
|
|
|
66,290
|
|
|
92,543
|
|
|
445,901
|
|
|
250,972
|
|
|
1,154,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
124,574
|
|
|
510,547
|
|
|
1,745,364
|
|
|
1,293,082
|
|
|
5,414,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss
|
|
|
(124,574
|
)
|
|
(510,547
|
)
|
|
(1,745,364
|
)
|
|
(1,272,875
|
)
|
|
(5,394,154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income and (expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on abandonment of subsidiary
|
|
|
|
|
|
(50,900
|
)
|
|
|
|
|
(50,900
|
)
|
|
(50,900
|
)
|
Loss
from reduction in debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(48,363
|
)
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
Other
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income and (expenses)
|
|
|
0
|
|
|
(50,900
|
)
|
|
0
|
|
|
(50,900
|
)
|
|
(97,167
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(124,574
|
)
|
$
|
(561,447
|
)
|
$
|
(1,745,364
|
)
|
$
|
(1,323,775
|
)
|
$
|
(5,491,321
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Dilutive net loss per share
|
|
|
($0.00
|
)
|
|
($0.01
|
)
|
|
($0.02
|
)
|
|
($0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding,
basic and diluted
|
|
|
75,862,006
|
|
|
41,960,258
|
|
|
74,647,672
|
|
|
24,582,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive
effect of preferred stock
|
|
|
71,551,200
|
|
|
|
|
|
71,551,200
|
|
|
|
|
|
|
|
VICTORY ENERGY CORPORATION AND
SUBSIDIARIES
|
(A Development Stage
Company)
Consolidated Statements of Cash
Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the
|
|
|
For the
|
|
|
Inception
on
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
Jan. 7,
1982
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
through
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
|
2006
|
|
|
2005
|
|
|
Dec. 31,
2006
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Unaudited
|
|
Net
Loss
|
|
$
|
(124,574
|
)
|
$
|
(561,447
|
)
|
$
|
(1,745,364
|
)
|
$
|
(1,323,775
|
)
|
$
|
(5,280,337
|
)
|
Adjustments
to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
used
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
198
|
|
|
207
|
|
|
1,096
|
|
|
828
|
|
|
2,294
|
|
Loss
on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,363
|
|
Loss
on abandonment of subsidiary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,900
|
|
Issuance
of common stock for services rendered
|
|
|
560,710
|
|
|
545,323
|
|
|
1,261,805
|
|
|
575,940
|
|
|
3,454,136
|
|
Increase
in Short Term Receivables
|
|
|
|
|
|
|
|
|
210,984
|
|
|
|
|
|
|
|
Decrease
(Increase) in Prepaid Expenses
|
|
|
|
|
|
|
|
|
|
|
|
246
|
|
|
|
|
Increase
(Decrease) in Deposits
|
|
|
|
|
|
(2,020
|
)
|
|
|
|
|
|
|
|
|
|
Incrrease
(Decrease) in Prepaid Subscriptions
|
|
|
(43,450
|
)
|
|
|
|
|
203,500
|
|
|
|
|
|
203,500
|
|
Increase
(Decrease) in accounts payable
|
|
|
9,966
|
|
|
|
|
|
(311,828
|
)
|
|
312,900
|
|
|
19,142
|
|
Increase
(Decrease) in accounts payable -related
|
|
|
(169,679
|
)
|
|
|
|
|
(172,179
|
)
|
|
|
|
|
|
|
Increase
(Decrease) in accrued liabilities
|
|
|
(16,006
|
)
|
|
416
|
|
|
(11,416
|
)
|
|
416
|
|
|
|
|
Increase
( ) in Accrued Payroll and Payroll Taxes
|
|
|
(750,970
|
)
|
|
(129,792
|
)
|
|
(240,000
|
)
|
|
102,208
|
|
|
|
|
Repayment
of long term debt
|
|
|
|
|
|
(11,100
|
)
|
|
(146,431
|
)
|
|
(13,569
|
)
|
|
|
|
Increase
(decrease) in Accrued Liabilities - Related
|
|
|
(125,500
|
)
|
|
11,000
|
|
|
(121,000
|
)
|
|
11,000
|
|
|
|
|
Non-cash
contributed capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(524
|
)
|
Net
Cash provided by (used by)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
$
|
(659,305
|
)
|
$
|
(147,413
|
)
|
|
(1,070,833
|
)
|
$
|
(333,806
|
)
|
$
|
(1,502,526
|
)
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of Fixed Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,294
|
)
|
Purchase
and Sale of Marketable Securities
|
|
|
|
|
|
|
|
|
|
|
|
(88,300
|
)
|
|
|
|
Investment
in Joint Venture
|
|
|
|
|
|
|
|
|
(50,000
|
)
|
|
|
|
|
(50,000
|
)
|
Net
Cash (used by) Investing Activities
|
|
$
|
0
|
|
$
|
0
|
|
$
|
(50,000
|
)
|
$
|
(88,300
|
)
|
$
|
(52,294
|
)
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
of Note Payable
|
|
|
|
|
|
|
|
|
122,684
|
|
|
160,000
|
|
|
|
|
Proceeds
(Repayment) of Loans
|
|
|
(149,458
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in Credit Line
|
|
|
(4,167
|
)
|
|
|
|
|
56,961
|
|
|
|
|
|
56,961
|
|
Proceeds
(Repayment) of Loan from Officer
|
|
|
565,054
|
|
|
|
|
|
690,085
|
|
|
83,367
|
|
|
690,085
|
|
Proceeds
(Repayment) of Note Payable-Related Party
|
|
|
|
|
|
|
|
|
|
|
|
24,252
|
|
|
|
|
Increase
(Decrease) in Other Loans Payable
|
|
|
(19,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
capital for rent and officers' compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,438
|
|
Proceeds
from the sale of Preferred Stock
|
|
|
246,950
|
|
|
|
|
|
246,950
|
|
|
|
|
|
|
|
Issuance
of Common Stock for Cash
|
|
|
|
|
|
|
|
|
|
|
|
19,860
|
|
|
41,960
|
|
Proceeds
from the sale of Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,231
|
|
Proceeds
from the sale of Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
246,950
|
|
Contributed
Capital by shareholders
|
|
|
|
|
|
138,701
|
|
|
|
|
|
138,701
|
|
|
216,116
|
|
Net
Cash provided by Financing Activities
|
|
$
|
639,379
|
|
$
|
138,701
|
|
$
|
1,116,680
|
|
$
|
426,180
|
|
$
|
1,554,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE IN CASH
|
|
|
(19,926
|
)
|
|
(8,712
|
)
|
|
(4,153
|
)
|
|
4,074
|
|
|
(79
|
)
|
CASH
AT BEGINNING OF PERIOD
|
|
|
19,847
|
|
|
12,786
|
|
|
4,074
|
|
|
-
|
|
|
-
|
|
CASH
AT END OF PERIOD
|
|
$
|
(79
|
)
|
$
|
4,074
|
|
$
|
(79
|
)
|
$
|
4,074
|
|
$
|
(79
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
PAID FOR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
|
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Income
Taxes
|
|
$
|
-
|
|
|
|
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VICTORY
ENERGY CORPORATION AND SUBSIDIARIES
|
(A
Development Stage Company)
|
Consolidated
Statement of Stockholders' Equity (Deficit)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Preferred
|
|
|
|
Additional
|
|
Deficit
During
|
|
|
|
|
|
Common Stock
|
|
Stock
|
|
|
|
Paid-in
|
|
Development
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Stage
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
at January 7, 1982
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Common
stock for cash at $7.50/sh
|
|
|
6,000
|
|
|
6
|
|
|
|
|
|
|
|
|
45,000
|
|
|
-
|
|
|
45,006
|
|
Common
stock for cash at $0.39/sh.
|
|
|
168,503
|
|
|
169
|
|
|
|
|
|
|
|
|
65,819
|
|
|
-
|
|
|
65,988
|
|
Net
loss from inception Jan 7, 1982 to Dec. 31, 1982
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(39,597
|
)
|
|
(39,597
|
)
|
Balances
at Dec. 31, 1982
|
|
|
174,503
|
|
|
175
|
|
|
|
|
|
|
|
|
110,819
|
|
|
(39,597
|
)
|
|
71,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, year ended Dec. 31, 1983
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(71,397
|
)
|
|
(71,397
|
)
|
Balances
at Dec. 31, 1983
|
|
|
174,503
|
|
|
175
|
|
|
|
|
|
|
|
|
110,819
|
|
|
(110,994
|
)
|
|
(0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock for cash at $25.00/sh.
|
|
|
57
|
|
|
0
|
|
|
|
|
|
|
|
|
1,425
|
|
|
-
|
|
|
1,425
|
|
Common
stock for cash at $25.00/sh. per share
|
|
|
3
|
|
|
0
|
|
|
|
|
|
|
|
|
75
|
|
|
-
|
|
|
75
|
|
Common
stock for cash at $0.025/sh. per share
|
|
|
1,580,000
|
|
|
1,580
|
|
|
|
|
|
|
|
|
38,373
|
|
|
-
|
|
|
39,953
|
|
Net
loss - year ended Dec. 31, 1984
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1984
|
|
|
1,754,563
|
|
|
1,755
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
41,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation
of common stock
|
|
|
(1,296,132
|
)
|
|
(1,297
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,297
|
)
|
Net
loss - year ended Dec. 31, 1985
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1985
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1986
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1986
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1987
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1987
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1988
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1988
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1989
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1989
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1990
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1990
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1991
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1991
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1992
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1992
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1993
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balances
at Dec. 31, 1993
|
|
|
458,431
|
|
|
458
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(110,994
|
)
|
|
40,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation
of common stock
|
|
|
(316,000
|
)
|
|
(316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(316
|
)
|
Net
loss - year ended Dec. 31, 1994
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(6,656
|
)
|
|
(6,656
|
)
|
Balances
at Dec. 31, 1994
|
|
|
142,431
|
|
|
142
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(117,650
|
)
|
|
33,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock for cash at $0.001/sh.
|
|
|
2,357,895
|
|
|
2,359
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
2,359
|
|
Net
loss - year ended Dec. 31, 1995
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(49,097
|
)
|
|
(49,097
|
)
|
Balances
at Dec. 31, 1995
|
|
|
2,500,326
|
|
|
2,500
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(166,747
|
)
|
|
(13,555
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock for cash at $0.001/sh.
|
|
|
120,000
|
|
|
120
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
120
|
|
Net
loss - year ended Dec. 31, 1996
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(1,681
|
)
|
|
(1,681
|
)
|
Balances
at Dec. 31, 1996
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(168,428
|
)
|
|
(15,116
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1997
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(3,517
|
)
|
|
(3,517
|
)
|
Balances
at Dec. 31, 1997
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(171,945
|
)
|
|
(18,633
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1998
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(2,479
|
)
|
|
(2,479
|
)
|
Balances
at Dec. 31, 1998
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(174,424
|
)
|
|
(21,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 1999
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(6,307
|
)
|
|
(6,307
|
)
|
Balances
at Dec. 31, 1999
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(180,731
|
)
|
|
(27,419
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 2000
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(9,011
|
)
|
|
(9,011
|
)
|
Balances
at Dec. 31, 2000
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(189,742
|
)
|
|
(36,430
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss - year ended Dec. 31, 2001
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(19,461
|
)
|
|
(19,461
|
)
|
Balances
at Dec. 31, 2001
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
150,692
|
|
|
(209,203
|
)
|
|
(55,891
|
)
|
Contributed
capital for rent and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other
compensation
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
1,950
|
|
|
-
|
|
|
1,950
|
|
Net
loss - year ended Dec. 31, 2002
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(13,960
|
)
|
|
(13,960
|
)
|
Balances
at Dec. 31, 2002
|
|
|
2,620,326
|
|
|
2,620
|
|
|
|
|
|
|
|
|
152,642
|
|
|
(223,163
|
)
|
|
(67,901
|
)
|
Contributed
capital for rent and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
officer
compensation
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
488
|
|
|
-
|
|
|
488
|
|
Capital
contributed by shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
via
accounts payable and interest
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
77,415
|
|
|
-
|
|
|
77,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services $0.025/sh.
|
|
|
13,389,932
|
|
|
13,390
|
|
|
|
|
|
|
|
|
321,358
|
|
|
-
|
|
|
334,748
|
|
Stock
issued for services at $0.61/sh.
|
|
|
100,000
|
|
|
100
|
|
|
|
|
|
|
|
|
60,900
|
|
|
-
|
|
|
61,000
|
|
Stock
for consulting at $0.47/share
|
|
|
10,000
|
|
|
10
|
|
|
|
|
|
|
|
|
4,690
|
|
|
-
|
|
|
4,700
|
|
Net
loss - year ended Dec. 31, 2003
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
(592,962
|
)
|
|
(592,962
|
)
|
Balances
at Dec. 31, 2003
|
|
|
16,120,258
|
|
|
16,120
|
|
|
|
|
|
|
|
|
617,493
|
|
|
(816,125
|
)
|
|
(182,512
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services at $0.16/sh
|
|
|
1,000,000
|
|
|
1,000
|
|
|
|
|
|
|
|
|
159,000
|
|
|
-
|
|
|
160,000
|
|
Stock
issued for services at $0.17/sh.
|
|
|
1,800,000
|
|
|
1,800
|
|
|
|
|
|
|
|
|
304,200
|
|
|
-
|
|
|
306,000
|
|
Stock
issued for services at $0.165/sh
|
|
|
800,000
|
|
|
800
|
|
|
|
|
|
|
|
|
131,200
|
|
|
-
|
|
|
132,000
|
|
Stock
issued for services at $0.215/sh.
|
|
|
30,000
|
|
|
30
|
|
|
|
|
|
|
|
|
6,420
|
|
|
-
|
|
|
6,450
|
|
Stock
issued for debt at $0.45 per sh.
|
|
|
150,000
|
|
|
150
|
|
|
|
|
|
|
|
|
67,350
|
|
|
-
|
|
|
67,500
|
|
Stock
issued for services at $0.40/sh
|
|
|
300,000
|
|
|
300
|
|
|
|
|
|
|
|
|
119,700
|
|
|
-
|
|
|
120,000
|
|
Stock
issued for services at $0.34/sh.
|
|
|
700,000
|
|
|
700
|
|
|
|
|
|
|
|
|
237,300
|
|
|
-
|
|
|
238,000
|
|
Stock
issued for services at $0.41/sh.
|
|
|
300,000
|
|
|
300
|
|
|
|
|
|
|
|
|
122,700
|
|
|
-
|
|
|
123,000
|
|
Stock
issued for services at $0.27/sh.
|
|
|
300,000
|
|
|
300
|
|
|
|
|
|
|
|
|
80,700
|
|
|
-
|
|
|
81,000
|
|
Stock
issued for services at $0.22/sh.
|
|
|
600,000
|
|
|
600
|
|
|
|
|
|
|
|
|
131,400
|
|
|
-
|
|
|
132,000
|
|
Net
loss - year ended Dec. 31, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,606,057
|
)
|
|
(1,606,057
|
)
|
Balances
at Dec. 31, 2004
|
|
|
22,100,258
|
|
|
22,100
|
|
|
|
|
|
|
|
|
1,977,463
|
|
|
(2,422,182
|
)
|
|
(422,619
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
capital for general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,701
|
|
|
|
|
|
138,701
|
|
Stock
issued for services at $0.03/sh.
|
|
|
19,860,000
|
|
|
19,860
|
|
|
|
|
|
|
|
|
575,940
|
|
|
|
|
|
595,800
|
|
Net
loss - year ended Dec. 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,323,775
|
)
|
|
(1,323,775
|
)
|
Balances
at December 31, 2005
|
|
|
41,960,258
|
|
$
|
41,960
|
|
|
-
|
|
$
|
-
|
|
$
|
2,692,104
|
|
$
|
(3,745,957
|
)
|
$
|
(1,011,893
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services at $0.027/sh.
|
|
|
17,583,334
|
|
|
17,583
|
|
|
|
|
|
|
|
|
459,917
|
|
|
|
|
|
477,500
|
|
Common
stock issued in debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
restructuring
at $0.06 and $0.03
|
|
|
10,666,667
|
|
|
10,667
|
|
|
|
|
|
|
|
|
429,333
|
|
|
|
|
|
440,000
|
|
Stock
issued for debt at $0.06/ sh.
|
|
|
5,000,000
|
|
|
5,000
|
|
|
|
|
|
|
|
|
295,000
|
|
|
|
|
|
300,000
|
|
Stock
issued for services at $0.03/sh.
|
|
|
2,500,000
|
|
|
2,500
|
|
|
|
|
|
|
|
|
72,500
|
|
|
|
|
|
75,000
|
|
Stock
issued for services at $0.05/sh.
|
|
|
500,000
|
|
|
500
|
|
|
|
|
|
|
|
|
24,500
|
|
|
|
|
|
25,000
|
|
Stock
issued for services at $0.008/sh.
|
|
|
10,000,000
|
|
|
10,000
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
|
80,000
|
|
Stock
for consulting at $0.008/sh.
|
|
|
4,500,000
|
|
|
4,500
|
|
|
|
|
|
|
|
|
31,500
|
|
|
|
|
|
36,000
|
|
Stock
for consulting at $0.008/sh.
|
|
|
500,000
|
|
|
500
|
|
|
|
|
|
|
|
|
3,500
|
|
|
|
|
|
4,000
|
|
Stock
for consulting at $0.008/sh.
|
|
|
4,000,000
|
|
|
4,000
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
|
32,000
|
|
Stock
for consulting at $0.008/sh.
|
|
|
700,000
|
|
|
700
|
|
|
|
|
|
|
|
|
4,900
|
|
|
|
|
|
5,600
|
|
Stock
for consulting at $0.008/sh.
|
|
|
300,000
|
|
|
300
|
|
|
|
|
|
|
|
|
2,100
|
|
|
|
|
|
2,400
|
|
Stock
for consulting at $0.008/sh.
|
|
|
3,600,000
|
|
|
3,600
|
|
|
|
|
|
|
|
|
25,200
|
|
|
|
|
|
28,800
|
|
Stock
for consulting at $0.008/sh.
|
|
|
3,000,000
|
|
|
3,000
|
|
|
|
|
|
|
|
|
21,000
|
|
|
|
|
|
24,000
|
|
Stock
for consulting at $0.008/sh.
|
|
|
4,000,000
|
|
|
4,000
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
|
32,000
|
|
Balances
before reverse split
|
|
|
108,810,259
|
|
$
|
108,810
|
|
|
-
|
|
$
|
-
|
|
$
|
4,187,554
|
|
$
|
(3,745,957
|
)
|
$
|
550,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse
split 25 to 1
|
|
|
(104,457,849
|
)
|
|
(104,458
|
)
|
|
-
|
|
|
-
|
|
|
104,458
|
|
|
|
|
|
-
|
|
New
Stock issued for rounding
|
|
|
890
|
|
|
1
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
-
|
|
Balances
after reverse split
|
|
|
4,353,300
|
|
$
|
4,353
|
|
|
-
|
|
$
|
-
|
|
$
|
4,292,011
|
|
$
|
(3,745,957
|
)
|
$
|
550,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock for cash at $0.467/sh.
|
|
|
|
|
|
|
|
|
715,517
|
|
|
716
|
|
|
246,234
|
|
|
|
|
|
246,950
|
|
Common
stock for rounding$0.50/sh.
|
|
|
1
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Common
stock for services $0.20/sh
|
|
|
5,200
|
|
|
5
|
|
|
|
|
|
|
|
|
1,035
|
|
|
|
|
|
1,040
|
|
Common
stock for rounding$0.20/sh.
|
|
|
14
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Common
stock for services $0.17/sh.
|
|
|
160,000
|
|
|
160
|
|
|
|
|
|
|
|
|
27,040
|
|
|
|
|
|
27,200
|
|
Net
loss - year ended Dec. 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,745,364
|
)
|
|
(1,745,364
|
)
|
Balances
at December 31, 2006
|
|
|
4,518,515
|
|
$
|
4,518
|
|
|
715,517
|
|
$
|
716
|
|
$
|
4,566,320
|
|
$
|
(5,491,321
|
)
|
$
|
(919,767
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
NOTE 1 - BUSINESS AND CONTINUED
OPERATIONS
Victory
Energy Corporation (OTC symbol VTYE), formerly known as Victory Capital Holdings
Corporation (our “Company”) was organized under the laws of the State of Nevada
on January 7, 1982, under the name All Things, Inc. On March 21, 1985 the
Company’s name was changed to New Environmental Technologies Corporation and on
April 28, 2003 to Victory Capital Holdings Corporation. The name was changed
finally to Victory Energy Corporation on May 3, 2006.
The
Company was formed for the purpose of engaging in all lawful businesses. The
Company’s initial authorized capital consisted of 100,000,000 shares of $0.001
par value common voting stock and as of the date of this filing the authorized
capital is 200,000,000 shares of $.001 par value common stock.
The
consolidated financial statements presented are those of Victory Energy
Corporation and subsidiaries.
On
October 3, 2001, the Company formed a wholly owned subsidiary named Papadog,
Inc. Papadog has since changed its name to Global Card Services, Inc and then to
Global Card Incorporated, (“Global”). As of the date of this report, there has
been no activity for this subsidiary.
On
November 12, 2003, the Company formed a wholly owned subsidiary named On Demand
Communications, Inc., (“On Demand”). As of the date of this report, there has
been no activity for this subsidiary.
On May
27, 2005 the Company purchased 100% of the outstanding stock of L & M
Resources, Inc., a Nevada corporation. On October 3, 2005 the Company abandoned
the subsidiary, recording a loss of investment in the subsidiary of
$50,900.
On
November 27, 2006 the company incorporated a Nevada subsidiary, Victory Energy
Resources, Inc. There was no activity in this company during 2006.
Current Business of the
Company
The
Company had no material business operations from 1989 to 2003. In 2004, the
Company began the search for the acquisition of assets, property or businesses.
In 2005 management focused on projects in the oil and gas industry, intending to
drill for oil and gas
on leased
land. In 2006 the company entered into a farm-out agreement with the owner of
certain oil and gas leases for a 100% working interest in an acreage in Montana,
subject to overriding royalties.
The
Company also secured mineral rights in Montana and Texas, as well as a joint
venture in New Mexico. It is evaluating a prospect in Oklahoma, as noted in
Management Discussion. Jon Fullenkamp, the President/C.E.O., is the sole
employee and has a great deal of experience in the oil and gas industry. The
Company retains independent contractors to assist in operating and managing the
prospects and projects.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Income
Taxes
The
Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are
determined based on the difference between the tax basis of assets and
liabilities and their financial reporting amounts based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company generated deferred tax credits through net operating loss
carryforwards. However, a valuation allowance of 100% has been established, as
the realization of the deferred tax credits is not reasonably certain, based on
going concern considerations outlined below.
Going
Concern
The
Company’s financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. In addition, the Company
has a working capital deficit of $279,682 and a stockholders’ deficit of
$919,737 at December 31, 2006. The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund operating
losses until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease development of operations.
In order
to continue as a going concern, develop a reliable source of revenues, and
achieve a profitable level of operations the Company will need, among other
things, additional capital resources. Management’s plans to continue as a going
concern include raising additional capital through sales of common stock. In the
interim, shareholders of the Company are committed to meeting its minimal
operating expenses. However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
Development-Stage
Company
The
Company is considered a development-stage company, with no operating revenues
during the periods presented, as defined by Statement of Financial Accounting
Standards (“SFAS”) No. 7. SFAS No. 7 requires companies to report their
operations, shareholders deficit and cash flows since inception through the date
that revenues are generated from management’s intended operations, among other
things. Management has defined inception as January 7, 1982. Since inception,
the Company has incurred operating losses totaling $5.5 million, much of which
relates to stock-based compensation to officers, directors and consultants as a
means to preserve working capital. The Company’s working capital has been
generated through the sales of common stock, loans made by officers of the
Company and a third party loan. Management has provided financial data since
January 7, 1982 “Inception” in the financial statements, as a means to provide
readers of the Company’s financial information to make informed investment
decisions.
Use of
Estimates
The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of expenses during the reporting period. Actual results
could differ from those estimates.
Principles of
Consolidation
The
consolidated financial statements include those of Victory Energy Corporation
and its wholly owned subsidiaries, Global Card Incorporated, On Demand
Communications, Inc. and Victory Energy Resources, Inc. All material
inter-company items and transactions have been eliminated.
Loss Per
Share
Basic
earnings per share (“Basic EPS”) is computed by dividing net loss available to
common stockholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share (“Diluted EPS”) is similarly
calculated using the treasury stock method except that the denominator is
increased to reflect the potential dilution that would occur if preferred stock
at the end of the applicable period were exercised. The dilutive stock is
considered potentially converted at the beginning of the period.
The
following is a reconciliation of the numerators and denominators of the basic
and diluted earnings per share computations for the years ended December 31,
2006 and 2005.
In 2006 a
reverse stock split of Common Stock occurred on a 25 to 1 basis. Common shares
outstanding is given retroactive effect to the beginning of the year
2006.
|
|
2006
|
|
2005
|
|
Numerato
r:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per share:
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(
1,745,364
|
)
|
$
|
(1,323,775
|
)
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted weighted average
|
|
|
|
|
|
|
|
number
of shares outstanding
|
|
|
74,647,672
|
|
|
24,582,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted Net Loss Per Share
|
|
$
|
(0.02
|
)
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
Dilutive
effect of Preferred Stock
|
|
|
71,551,700
|
|
|
|
|
Equipment and
Fixtures
Equipment
and fixtures are recorded at cost. Depreciation is provided using accelerated
and straight-line methods over the estimated useful lives of the related assets
as follows.
Description
|
Years
|
|
|
Furniture
and fixtures
|
7
|
Computer
hardware and software
|
3-5
|
Equipment
and fixtures have been fully depreciated.
Recent Accounting
Pronouncements
In
December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
Payment". Statement 123(R) will provide investors and other users of financial
statements with more complete and neutral financial information by requiring
that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. Statement 123(R) covers a
wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. Statement 123(R) replaces FASB Statement No. 123,
Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees. Statement 123, as originally issued in
1995, established as preferable a fair-value-based method of accounting for
share-based payment transactions with employees. However, that Statement
permitted entities the option of continuing to apply the guidance in Opinion 25,
as long as the footnotes to financial statements disclosed what net income would
have been had the preferable fair-value-based method been used. Public entities
(other than those filing as small business issuers) will be required to apply
Statement 123(R) as of the first interim or annual reporting period that begins
after June 15, 2005. The Company adopted Statement 123(R) in December of 2005.
In March
2005, the SEC released Staff Accounting Bulletin No. 107, “Share-Based Payment”
(“SAB 107”), which provides interpretive guidance related to the interaction
between SFAS 123(R) and certain SEC rules and regulations. It also provides the
SEC staff’s views regarding valuation of share-based payment arrangements. In
April 2005, the SEC amended the compliance dates for SFAS 123(R), to allow
companies to implement the standard at the beginning of their next fiscal year,
instead of the next reporting period beginning after June 15, 2005. Management
adopted Statement 123(R) in December of 2005.
Restricted
stock is granted from time to time to company officers and consultants under
Rule
4 (2).
The fair value of restricted stock is measured by the closing stock price on the
date of issue. This stock immediately vests and the compensation expense is
recorded immediately.
NOTE 3 - RELATED PARTY
TRANSACTIONS
Five
ledger accounts in the books of the Company relating to loans, salaries and
out-of-pocket expenses payable to the President/C.E.O., Jon Fullenkamp, were
combined into one account “Loan from Officer”, which totaled $690,085 at
December 31, 2006. The retroactive effect of the combination of accounts on the
December 31, 2005 statements would be a Loan from Officer of $817,516.
During
2006 and 2005 the President/CEO incurred $121,535 and $83,367 respectively in
reimbursable expenses on behalf of the Company. $75,000 was repaid in 2006.
These amounts are included in “Loan from Officer”. Under the terms of the
employment agreement, the employee may at his election convert any and all funds
due to him into shares of the Company’s common stock at a conversion price of
$0.01 per share.
The
President/CEO was issued a total of 5,400,000 common shares of restricted stock
in payment for accrued and deferred compensation during the year.
In March
2006 the company issued a promissory note to a group of stockholders for
consideration of $141,458 in cash. The terms were to be repayable in one year at
an interest rate of 10%, payable quarterly. Interest was deferred. In December,
2006 the note was reclassified as prepaid subscriptions, reflecting an
accommodation with the stockholders.
NOTE 4 - COMMITMENTS AND
CONTINGENCIES
Share Exchange
Agreement
On March
8, 2005, the Company entered into a Share Exchange Agreement with Union Media
News (“Union”), a Nevada corporation, calling for cooperation in various joint
ventures. The agreement lapsed in 2006.
Note
Payable
Based
upon a despute involving funds raised for the company by Treetop Investments,
the company executed a demand note for $160,000 to Treetop Investments Inc. in
July, 2005 at an interest rate of 10% payable upon demand. A moratorium on
interest was negotiated with the lender. Repayments of $13,569 were made further
to demands. A three way settlement was reached on May 1, 2006, wherein:
-
|
Treetop
received 5 million shares of restricted stock for the balance of Victory’s
promissory note, plus $75,000 cash in installments, the note being secured
by 10,666,667 shares of Victory common stock. Treetop agreed to release
the security.
|
-
|
OGM
Management agreed to buy 8,666,667 shares of the security stock from
Victory in five installments, at current market price $0.06 per share,
totaling $520,000 “common stock debt”. The balance of the security,
2,000,000 shares, was allocated to legal fees.
|
The stock
price subsequently retreated and the agreement was nullified after the first
installment. Two million shares were transferred in payment. The final balance
of the security shares, 6,666,667, was subsequently issued
for
services rendered by
individuals.
NOTE 5 - CAPITAL STOCK
TRANSACTIONS
Common Stock Transactions
During the Year Ended December 31, 2004
In
February 2004, the Company issued a total of 3,600,000 shares of its common
stock to various consultants for services rendered. The shares were valued using
the closing price of the stock at the date of issuance at a total of $598,000 or
an average of $0.166 per share.
On March
16, 2004, the Company issued 150,000 shares of its common stock in payment of
amounts owed to a vendor. The shares were valued using the closing price of the
stock at the date of issuance of $67,500 or $0.45 per share. In connection with
this, a loss on extinguishment of debt of $48,363 was recorded.
On March
23, 2004, the Company issued 300,000 shares of its common stock for services
rendered in accordance with an employment agreement. The shares were valued
using the closing price of the stock at the date of issuance of $120,000 or
$0.40 per share.
In March,
2004, the Company issued a total of 1,030,000 shares of its common stock to
various consultants for services rendered. The shares were valued using the
closing price of the stock at the date of issuance of $367,450 or an average of
$0.36 per share.
In May,
2004 the Company issued a total of 900,000 shares of its common stock to various
consultants for services rendered. The shares were valued using the closing
price of the stock at the date of issuance of $213,.000 or an average of $0.24
per share.
Common Stock Transactions
During the Year Ended December 31, 2005
On
January 5, 2005, the Company authorized and issued 19,860,000 shares of the
Company’s common stock at $0.03 per share, owed under an employment agreement to
the current president and CEO.
Common Stock Transactions
During the Year Ended December 31, 2006
On March
12, 2006, the Board of Directors effected a change to the articles of the
corporation, increasing the number of shares authorized to be issued from
100,000,000 to 200,000,000.
During
the three months ended March 31, 2006 the company issued 17,583,334 shares
of common stock, of which 2,583,334 were restricted under Rule 4 (2), to company
officers and consultants for services. Under FASB SFAS No.123 (revised 2004),
the value of the services was measured by the fair value of the stock. The fair
value of the stock was established by the average trading price at closing on
the dates of issue in January 2006, $0.027 per share. The value of services
rendered was therefore recorded as $477,500.
Additional Common
Stock
As of
December 31, 2005, there were 10,666,667 shares of common stock that had been
issued in July 2, 2003 in anticipation of a proposed transaction which was never
consummated. The shares were being held in the Company’s name. Since the shares
were issued without consideration nor as a result of an economic transaction,
they had no basis in value and were not shown as issued and outstanding or
treasury shares in the financial statements of December 31, 2005.
On May 1,
2006 these shares were hypothecated in a debt restructuring with Treetop
Investments, Inc. The 10,666,667 shares were released in the restructuring and
issued for stock purchase, (2,000,000), for legal fees (2,000,000) and for
services rendered, (6,666,667). The shares were valued at the market price on
the dates of issue, $0.06, $0.06 and $0.03 respectively, totaling $440,000.
Third and Fourth Quarters,
Year Ended December 31, 2006
On May
10, 2006 5,000,000 restricted shares were issued to Treetop Investments, Inc. at
a price of $0.06 per share in a debt restructuring that combined retiring a loan
with sale of stock. The fair value of the issue was recorded as
$300,000.
On May
15, 2006 2,500,000 shares were issued for services. The fair value of the stock
was established by the market price on that day of $0.03 per share. The value of
the services was recorded as $75,000.
On June
1, 2006 500,000 shares were issued for consulting services. The fair value of
the stock was established by the market price on that day of $0.05 per share.
The value of the services was recorded as $25,000.
In
the third quarter ending September30, 2006, an additional 30,600,000 shares of
common stock, restricted under Rule 4(2), were issued as follows:
-
For
Services 10,000,000,
-
For
Consultants 20,600,000.
The fair
value of these shares was established by the trading price during the quarter,
one cent, discounted 20% to $0.008 to allow for limited trading. The issues
were:
On August
3, 2006, 10,000,000 common shares were issued for services at $0.008 per share.
The value of services was recorded as $80,000.
On August
8, 2006, 4,500,000 common shares were issued for consulting at $0.008 per share.
The value of consulting was recorded as $36,000.
On August
8, 2006, 500,000 common shares were issued for consulting at $0.008 per
share.
The value of consulting was recorded as $4,000.
On August
9, 2006, 4,000,000 common shares were issued for consulting at $0.008 per share.
The value of consulting was recorded as $32,000.
On August
18, 2006, 700,000 common shares were issued for consulting at $0.008 per share.
The value of consulting was recorded as $5,600.
On August
31, 2006, 300,000 common shares were issued for consulting at $0.008 per share.
The value of consulting was recorded as $2,400.
On
September 29, 2006, 3,600,000 common shares were issued for consulting at $0.008
per share. The value of consulting was recorded as $28,800.
On
September 29, 2006, 3,000,000 common shares were issued for consulting at $0.008
per share. The value of consulting was recorded as $24,000.
On
September 30, 2006, 4,000,000 common shares were issued for consulting at $0.008
per share. The value of consulting was recorded as $32,000.
Reverse Common Stock
Split
The
Common Stock issued and outstanding at October 26, 2006 was 108,810,259. On this
date the Board of Directors declared a reverse stock split of the Company’s
Common Stock, converting the common stock on a 25 to 1 basis. Common shares
outstanding were reduced by 104,457,849. New stock outstanding after the split
and after issuing 890 shares for rounding was 4,353,300. The effect on the
balance sheet was to increase Paid-in Capital by $104,458 and to reduce Common
Stock by $104,458, a neutral effect on stockholders’ equity.
On
October 20, 2005 one share was issued at $0.50, valued de minimus, for rounding
following the reverse split.
On
November 11, 2006 5,200 shares were issued for services valued at $1,040 at
market value of $0.20 per share.
On
December 5, 2006, 14 shares valued de minimus were issued for
rounding.
On
December 27, 2006, 160,000 shares were issued for services, valued at $27,200,
at market value of $0.17.
The total
of issued and outstanding common shares at December 31, 2006 and 2005 was
4,815,515 and 41,960,258 respectively.
Preferred
Stock
On August
22, 2006 the Board of Directors resolved to amend the Articles of Incorporation,
to authorize 10,000,000 shares of preferred stock, having a par value of $0.001.
The stock is convertible to common stock at will in a ratio of 1 preferred to
100 common. Preferred stockholders may vote as common stockholders on any matter
on which common stockholders can vote, and in accordance with the underlying
common stock held. Preferred stock dividends may be declared by the Board of
Directors.
On
October 20, 2006, 715,512.23 preferred shares were issued for cash at $0.467
each pursuant to Regulation “S”, realizing $246,950.
The total
of issued and outstanding preferred shares at December 31, 2006 and 2005 was
715,512 and zero, respectively.
NOTE 6 -
LITIGATION
On
November 19, 2004 Ring Central, Inc. filed a complaint for breach of contract
against the Company, asserting they were owed by the Company $10,000 due under
the terms of their contract. On February 15, 2005, the Company reached a
settlement with the plaintiff and agreed to pay Ring Central a total of $11,000
in several installments. This amount was initially recorded as an accrued
liability and was paid in full during 2006.
On
December 28, 2004, the Company was served with an action for breach of contract
with a former independent contractor. The complaint sought damages in excess of
$200,000 plus punitive damages in an unstated amount. On July 24, 2006 the
Company negotiated a settlement that was sealed by the court. The estimated
value of the settlement, $280,000, was retired in stock.
Neither
the Company nor any of the officers or directors is involved in any other
litigation either as plaintiffs or defendants and have no knowledge of any
threatened or pending litigation against them or any of the officers or
directors.
ITEM 8. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL
DISCLOSURE
There
have been no disagreements with accountants on accounting and financial
disclosure.
ITEM 8A. CONTROLS AND
PROCEDURES
The
Company has set up disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities Act
of 1934, as amended, is recorded, processed, summarized, and reported within the
specified time period. At the end of the period covered by this report, the
Company’s CEO and CFO have evaluated the effectiveness of the Company’s
disclosure controls and procedures. Based on the evaluation, which disclosed no
significant deficiencies or material weaknesses, the Company’s CEO and CFO
concluded that the Company’s controls and procedures are effective as of the end
of the period covered by this report.
There
were no changes in the Company’s internal controls and financial reporting that
occurred in the Company’s most recent fiscal quarter, that had materially
affected or was reasonably likely to materially affect, the Company’s internal
control over financial reporting.
ITEM 8B. OTHER
INFORMATION
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT.
Executive Officers and
Directors
The
following table sets forth the information regarding our executive officers and
directors as of the date of this filing:
Name
|
Age
|
Title
|
Jon
Fullenkamp
|
52
|
President,
CEO and Chairman of the Board of Directors
|
Rick
May
|
62
|
Director
|
Perry
Mansell
|
60
|
Director
|
Biography of Officers and
Directors
Jon Fullenkamp - CEO, President and
Chairman of the Board
Mr.
Fullenkamp is a petroleum industry executive with over 25 years of experience.
From 1990 to present, he has established a consistent track record of promotion
and leadership with a proven ability to assimilate new technology across
industry segments, and has developed new markets and new revenue streams. Mr.
Fullenkamp possesses a track record of effectively and consistently reducing
costs of doing business, reducing employee turnover, producing superior profit
margins, and personally re-negotiated numerous supplier agreements. Mr.
Fullenkamp joined Victory Energy Corporation in 2004 and became the Chairman and
CEO in January 2005. He brings with him the vision to expand the Company into
the energy market segments due to his background, focused on the petroleum
industry. He has a broad knowledge of the oil and gas industry, having completed
wells in the shallow reserves in the Appalachian Mountains to the deepest wells
in the world located in the Anadarko basin.
Rick May - Board Member
Mr. May’s
extensive professional career began following his undergraduate degree in
Finance from California Polytechnic State University, and where later he attend
the MBA program while working for Data General Corporation. Mr. May’s initial
success started when he founded Profit Systems Incorporated, a company that
created software packages for route accounting and inventory control companies.
Later he became the Chief Financial Officer and the Chief Operations Officer for
a national retail chain where he instituted on-line transactions, automation,
and centralized inventory.
Mr. May
then joined other key industry individuals to become a founding member of SCS
Corporation, a major technology supplier. SCS Corporation specialized in
automation solutions, with projects in operation at several major airports.
Following
early retirement from SCS, Mr. May became a principal in Service Industries
Systems, an integrated solutions provider, and partnered with Gemplus of France
to bring new products to the industrialized countries. Mr. May’s partners in SIS
included German, English, and French integrators.
Mr. May
was appointed to the Board of Directors of HoloTag, a technology company in
Cambridge, England. Mr. May returned to his California office to found RJI in
2001.
In 2004,
Mr. May joined SecureSTAR Corporation as a partner. SecureSTAR produces
technology products for commercial and government use. Also in 2004, Mr. May
joined TrustView Partners to provide solutions in China. In 2006, Mr. May joined
Knights Technologies as an advisor.
Today,
Mr. May operates as a partner in SecureSTAR, RJI, Knights Technologies, and
TrustView Partners.
Perry Mansell - Board
Member
Mr.
Mansell’s experience includes a professional career at North American Rockwell -
Space Division heading up the Testing Team. This involved working with NASA in
the areas of reaction control, environmental control and waste management
systems for the Apollo Command and Service Modules.
In 1970
Mansell Construction was founded focusing on commercial and industrial projects;
the company continues to flourish today. Specific projects to the petroleum
industry include the construction of fuel depots and refurbishment of refineries
and pipelines. Mr. Mansell is well known in his industry and is called upon to
present as an expert his opinion in situations where an outside expert is
required.
Mr.
Mansell’s experience in serving in and knowledge of local government is an asset
to the Company. His stand on environmentally favorable projects that affect the
local economy is positive and visionary. This will serve the Company well as it
moves forward on a national level.
Advisory Board
Charles Laser - Advisory Board
Member
Charles
Laser is an oil and gas “wildcatter” with ownership of wells in Michigan and
principal operations and discoveries in Wyoming. Mr. Laser has had operations in
Texas, Indiana, Illinois, Colorado, Montana, Wyoming, and Nevada and he has
acquired over 400,000 acres of oil and gas leases in various states. Mr. Laser
was an Executive Vice President at GeoSpectra Corporation from 1976-1984.
Geo-Spectra Corporation has been one of the leading firms in geological remote
sensing serving the major oil and mining firms worldwide. Clients included such
firms Exxon, Chevron, AMOCO, ARCO, DeBeers, Texaco, Mobil, and others. While
with GeoSpectra, although under his own company, Mr. Laser directed ten
financially successful oil and gas lease projects that were co-ventured with
industry partners. Investors typically received all of their invested funds back
within eight or so months and made anywhere from 50 to 150 percent return on
their investment. Additionally, Mr. Laser has been involved in four discoveries
plus numerous consulting positions for other companies. He negotiated a seven
million dollar oil project with a Canadian company involving fifteen oil wells,
which still provides income after twenty-five years to Laser.
The
directors hold office until the next annual meeting of the shareholders and
until their successor(s) have been duly elected or qualified.
None of
the officers or directors have been subject to bankruptcy, receivership or
convicted in any criminal proceedings subject to any criminal proceedings, have
been subject to an order, judgment or decree that would otherwise limit their
involvement in any type of business, securities or banking activities, and has
never been found by a court of competent jurisdiction, or any regulatory agency,
to have violated any securities or commodity laws.
Section 16(a) Beneficial Owner
Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires that the Company’s
directors, executive officers, and persons who own more than 10% percent of a
registered class of the Company’s equity securities, or file with the Securities
and Exchange Commission (“SEC”), initial reports of ownership and report of
changes in ownership of common stock and other equity securities of the Company.
Officers, directors, and greater than 10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file. During the fiscal year ending December 31, 2005, Forms 4 and 5 were not
timely filed by Jon Fullenkamp, the Company’s President, CEO and
Director
Code of Ethics
The
Company has adopted a code of ethics for all of the employees, directors and
officers which is attached to this Annual Report as Exhibit 14.1.
ITEM 10. EXECUTIVE
COMPENSATION
Summary of Cash and Certain Other
Compensation
Summary Compensation
Table.
The
following table reflects all forms of compensation for the fiscal year ended
December 31, 2006:
SUMMARY COMPENSATION
TABLE
|
|
Long Term
Compensation
|
|
|
Annual
Compensation
|
Awards
|
Payouts
|
|
Name and Principle
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual
Compensation
|
Restricted
Stock
Award(s)
($)(1)
|
Securities
Underlying Options/SARs
(#)
|
LTIP
Payouts
($)
|
All other
compensation
($)
|
Jon
Fullenkamp, CEO, President & Director
|
2006
|
$0
|
n/a
|
n/a
|
5,400,000(1)
|
0
|
0
|
0
|
Perry
Mansell,
Director
|
2006
|
$0
|
n/a
|
n/a
|
40,000
|
0
|
0
|
0
|
Rick
May, Director
|
2006
|
$0
|
n/a
|
n/a
|
40,000
|
0
|
0
|
0
|
|
|
|
|
|
|
|
|
|
(1)
Represents an accrued and deferred compensation through December 31, 2006 which
was taken in the form of restricted stock
.
Options granted in the last fiscal
year
At the
end of fiscal year ending December 31, 2006, no executive officer or director
was granted option to purchase shares of common stock.
Fiscal year-end option
values
During
the fiscal year ending December 31, 2006, no executive officer or director
exercised any options to purchase shares of common stock, and as of December 31,
2006, no executive officer or director possessed any options to purchase shares
of common stock.
Directors
Remuneration
As of
December 31, 2006, directors were paid in restricted stock for serving on the
board.
ITEM 11. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The
following table sets forth as of December 31, 2006, information with respect to
(a) each person, (including “group”) as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, whose known to the Company to be a
beneficial owner of more than 5% of outstanding common stock of the Company, and
(b) the number or percentage of the Company’s common stock owned by (a) each of
the directors and the executive officers named in the Summary Compensation Table
above, and (b) all of the directors and executive officers of the Company as a
group. The Company believes that unless otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares
beneficially owned. The following table sets forth certain information regarding
the beneficial ownership of the Company’s common stock as of the date of this
Report by (i) each person known to the Company of having beneficial ownership of
more than 5% of the Company’s common stock (ii) existing shareholders, (iii) and
all others as a group.
Title of
|
Name and
Address
|
Amount and
Nature
|
Percent
of
|
Class
|
of Beneficial
Owner
|
of Beneficial
Owners
|
Ownership
|
Common
|
Jon
Fullenkamp
|
6,206,476
(1)
|
42%
|
|
112
N Curry Street, Carson City, NV 89703-4934
|
|
|
Common
|
Rick
May
|
40,000
|
0%
|
|
112
N Curry Street, Carson City, NV 89703-4934
|
|
|
Common
|
Perry
Mansell
|
40,000
|
0%
|
|
112
N Curry Street, Carson City, NV 89703-4934
|
|
|
(1)
Includes shares held by Virgin Family Trust LLP of which Mr. Fullenkamp is the
trustee.
ITEM 12. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
None.
ITEM 13. EXHIBITS
a) The
exhibits included in this report are indicated below.
Exhibit No.
|
Description of
Exhibit
|
3.1
|
Articles
of incorporation and amendments (1)
|
3.2
|
Certificate
of Amendment, dated April 28, 2003
(2)
|
3.3
|
Bylaws
(2)
|
3.4
|
|
3.5
|
|
14
|
|
31
|
|
32
|
|
______________________
1.
Incorporated
by reference to Form 10-KSB filed on January 12, 2001.
2.
Incorporated
by reference to Form 10-KSB filed on April 17, 2006.
ITEM 14. PRINCIPAL ACCOUNTANT FEES
AND SERVICES
1. Audit
Fees - the aggregate fees billed for the year ended December 31, 2006 and 2005
the audit of the Company’s financial statements, review of the interim financial
statements and services provided in connection with regulatory filings totaled
$6,700 and $26,607 respectively.
3. Tax
Fees - there were no tax fees billed during the year ended December 31, 2006 and
2005.
4. All
Other Fees - there were no other fees billed during the year ended December 31,
2006 and for 2005.
There is
no audit committee at present.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
|
|
VICTORY ENERGY
CORPORATION
|
|
|
|
Date:
April 18, 2008
|
By:
|
/s/
Jon Fullenkamp
|
|
_______________________
Jon
Fullenkamp
|
|
CEO,
President and Director
|
In
accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated:
|
|
|
|
VICTORY ENERGY
CORPORATION
|
|
|
|
Date: April
18, 2008
|
By:
|
/s/
Jon Fullenkamp
|
|
_______________________
Jon
Fullenkamp
|
|
CEO,
President and Director
(Principal
Executive Officer and
Principal
Financial and Accounting Officer)
|
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