SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q/A
(Amendment No. 1)
[ X ] Quarterly Report under Section 13 or
15(d) of the Securities Exchange Act of 1934
For the quarter ended September 30, 2014
OR
[ ] Transition Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to
___________
Commission file number: 000-52227
START SCIENTIFIC, INC.
(Name of Small Business
Issuer in Its Charter)
Delaware |
|
20-4910418 |
(State
or Other Jurisdiction
of Incorporation
or Organization) |
|
(IRS Employer
Identification
No.) |
|
|
|
515 Congress Ave. Suite 2060 |
|
|
Austin, TX |
|
78701 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
|
(801) 816-2570 |
|
|
Issuer’s Telephone Number, Including Area Code |
|
|
|
|
(Former name or former address and former fiscal
year, if changed since last report.)
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company.
See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company
in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer [ ] |
Non-Accelerated Filer [ ] |
Accelerated Filer [ ] |
Smaller reporting company [X] |
Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant
has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution
of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares
outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. As of November 20, 2014,
the Company had outstanding 125,665,000 shares of common stock.
Explanation
The purpose of
this Amendment No. 1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed
with the Securities and Exchange Commission on November 21, 2014 (the “Form 10-Q”), is solely to correct the
period end date that was mistakenly created in that filing. The corrected period end date for the Quarterly Report filed on
November 21, 2014 is March 31, 2014. No other changes have been made to the Form 10-Q.
PART
I
FINANCIAL
INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REQUIRED BY FORM 10-Q
The Financial
Statements of the Company are prepared as of September 30, 2014.
START SCIENTIFIC, INC. |
(An Exploration Stage Company) |
(formerly Secure Netwerks, Inc.) |
Balance Sheets |
|
| |
| |
|
ASSETS |
| |
September 30, | |
December 31, |
| |
2014 | |
2013 |
| |
(Unaudited) | |
|
| |
| |
|
CURRENT ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Cash and cash equivalents | |
$ | 27 | | |
$ | 8,799 | |
| |
| | | |
| | |
Total Current Assets | |
| 27 | | |
| 8,799 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 27 | | |
$ | 8,799 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT |
| |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
| |
| | | |
| | |
Accounts payable | |
$ | 20,659 | | |
$ | 10,940 | |
Accrued expenses | |
| 642,545 | | |
| 626,656 | |
Accounts payable and accrued liabilities - related parties | |
| 562,890 | | |
| 382,600 | |
Notes payable | |
| 547,860 | | |
| 547,860 | |
Notes payable - related parties | |
| 105,159 | | |
| 98,486 | |
| |
| | | |
| | |
Total Current Liabilities | |
| 1,879,113 | | |
| 1,666,542 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
| 1,879,113 | | |
| 1,666,542 | |
| |
| | | |
| | |
STOCKHOLDERS' DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
Preferred stock, $0.0001 par value; 100 shares authorized, | |
| | | |
| | |
100 and -0- issued and outstanding, respectively | |
| — | | |
| — | |
Common stock, $0.0001 par value; 500,000,000 shares authorized, | |
| | | |
| | |
125,665,000 and 109,165,000 shares issued and outstanding, respectively | |
| 12,567 | | |
| 10,917 | |
Additional paid-in-capital | |
| 12,619,897 | | |
| 6,106,547 | |
Deficit accumulated during exploration stage | |
| (13,933,640 | ) | |
| (7,197,297 | ) |
Accumulated deficit | |
| (577,910 | ) | |
| (577,910 | ) |
| |
| | | |
| | |
Total Stockholders' Deficit | |
| (1,879,086 | ) | |
| (1,657,743 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | |
$ | 27 | | |
$ | 8,799 | |
| |
| | | |
| | |
The accompanying notes are an integral part of these financial statements |
START SCIENTIFIC, INC. |
(An Exploration Stage Company) |
(formerly Secure Netwerks, Inc.) |
Statements of Operations |
(Unaudited) |
| |
| |
| |
| |
| |
|
| |
| |
| |
| |
| |
From Exploration |
| |
| |
| |
| |
| |
Stage (April 2, |
| |
For the Three Months Ended | |
For the Nine Months Ended |
|
2012) through |
| |
September 30, | |
September 30, | |
September 30, |
| |
2014 | |
2013 | |
2014 | |
2013 | |
2014 |
| |
| |
| |
| |
| |
|
| |
| |
| |
| |
| |
|
NET REVENUES | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
OPERATING EXPENSES | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Salaries and consulting | |
| 5,550,000 | | |
| 68,750 | | |
| 6,531,667 | | |
| 243,750 | | |
| 12,937,594 | |
Professional fees | |
| 45,927 | | |
| 48,271 | | |
| 149,312 | | |
| 153,213 | | |
| 512,644 | |
Development costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| 205,000 | |
Selling, general and administrative | |
| 210 | | |
| 195 | | |
| 359 | | |
| 440 | | |
| 43,228 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total Operating Expenses | |
| 5,596,137 | | |
| 117,216 | | |
| 6,681,338 | | |
| 397,403 | | |
| 13,698,466 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
LOSS FROM OPERATIONS | |
| (5,596,137 | ) | |
| (117,216 | ) | |
| (6,681,338 | ) | |
| (397,403 | ) | |
| (13,698,466 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
OTHER INCOME (EXPENSES) | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| (18,428 | ) | |
| (18,636 | ) | |
| (55,005 | ) | |
| (55,179 | ) | |
| (235,174 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total Other Income (Expenses) | |
| (18,428 | ) | |
| (18,636 | ) | |
| (55,005 | ) | |
| (55,179 | ) | |
| (235,174 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
LOSS BEFORE INCOME TAXES | |
| (5,614,565 | ) | |
| (135,852 | ) | |
| (6,736,343 | ) | |
| (452,582 | ) | |
| (13,933,640 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
INCOME TAX EXPENSE | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
NET LOSS | |
$ | (5,614,565 | ) | |
$ | (135,852 | ) | |
$ | (6,736,343 | ) | |
$ | (452,582 | ) | |
$ | (13,933,640 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
BASIC AND DILUTED: | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss per common share | |
$ | (0.05 | ) | |
$ | (0.00 | ) | |
$ | (0.06 | ) | |
$ | (0.00 | ) | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding | |
| 114,346,319 | | |
| 109,165,000 | | |
| 114,086,245 | | |
| 109,165,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
The accompanying notes are an integral part of these financial statements |
START SCIENTIFIC, INC. |
(An Exploration Stage Company) |
(formerly Secure Netwerks, Inc.) |
Statements of Cash Flows |
(Unaudited) |
| |
| |
| |
|
| |
| |
| |
From Exploration |
| |
| |
| |
Stage (April 2, |
| |
For the Nine Months Ended | |
2012) through |
| |
September 30, |
|
September 30, |
| |
2014 | |
2013 | |
2014 |
| |
| |
| |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Net loss | |
$ | (6,736,343 | ) | |
$ | (452,582 | ) | |
$ | (13,933,640 | ) |
Adjustments to reconcile net loss to net | |
| | | |
| | | |
| | |
cash used by operating activities: | |
| | | |
| | | |
| | |
Stock based compensation | |
| 6,515,000 | | |
| — | | |
| 12,257,464 | |
Expenses paid by related party | |
| 4,694 | | |
| — | | |
| 4,694 | |
Debt issue costs | |
| — | | |
| — | | |
| 57,540 | |
Amortization of debt discount | |
| — | | |
| — | | |
| 4,960 | |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
Accounts receivable | |
| — | | |
| — | | |
| 1,800 | |
Prepaid expenses | |
| — | | |
| — | | |
| 50,000 | |
Accounts payable and accrued liabilities - related parties | |
| 180,290 | | |
| 451,481 | | |
| 562,890 | |
Accounts payable and accrued expenses | |
| 25,608 | | |
| — | | |
| 572,756 | |
| |
| | | |
| | | |
| | |
Net Cash Used by Operating Activities | |
| (10,751 | ) | |
| (1,101 | ) | |
| (421,536 | ) |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Proceeds from notes payable | |
| — | | |
| — | | |
| 400,000 | |
Proceeds from notes payable - related parties | |
| 2,529 | | |
| 1,200 | | |
| 15,942 | |
Payments on notes payable - related parties | |
| (550 | ) | |
| — | | |
| (2,550 | ) |
| |
| | | |
| | | |
| | |
Net Cash Provided by Financing Activities | |
| 1,979 | | |
| 1,200 | | |
| 413,392 | |
| |
| | | |
| | | |
| | |
NET INCREASE (DECREASE) IN CASH | |
| | | |
| | | |
| | |
AND CASH EQUIVALENTS | |
$ | (8,772 | ) | |
$ | 99 | | |
$ | (8,144 | ) |
| |
| | | |
| | | |
| | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | |
| 8,799 | | |
| 90 | | |
| 8,171 | |
| |
| | | |
| | | |
| | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | |
$ | 27 | | |
$ | 189 | | |
$ | 27 | |
| |
| | | |
| | | |
| | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Cash Payments For: | |
| | | |
| | | |
| | |
Interest | |
$ | 1,840 | | |
$ | 15,647 | | |
$ | 220,118 | |
Income taxes | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | |
Non-cash financing activity: | |
| | | |
| | | |
| | |
Common stock issued for services | |
$ | 6,515,000 | | |
$ | — | | |
$ | 12,257,464 | |
| |
| | | |
| | | |
| | |
The accompanying notes are an integral part of these financial statements |
START SCIENTIFIC, INC.
Notes to the Financial Statements
September 30, 2014
(Unaudited)
NOTE 1 BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited financial
statements have been prepared by Start Scientific, Inc. (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared
in accordance with U.S. generally accepted accounting principles have been condensed or omitted in accordance with such rules and
regulations. The information furnished in the interim financial statements includes normal recurring adjustments and reflects all
adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although
management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested
that these interim financial statements be read in conjunction with the Company’s audited financial statements and notes
thereto included in its Form 10-K for the year ended December 31, 2013. Operating results for the nine months ended September 30,
2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.
NOTE 2 GOING CONCERN CONSIDERATIONS
The accompanying condensed financial
statements have been prepared using generally accepted accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of business. As reported in its Annual Report on Form
10-K for the year ended December 31, 2013, the Company has incurred operating losses of $7,775,207 from inception of the Company
through December 31, 2013. The Company’s accumulated deficit at September 30, 2014 was $14,511,550 and had a working capital
deficit, continued losses, and negative cash flows from operations. These factors combined, raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans to address and alleviate these concerns are as follows:
The Company’s management continues
to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient
funds, therefore, as to be able to operate over the next twelve months. The Company is attempting to improve these conditions by
way of financial assistance through issuances of additional equity and by generating revenues through sales of products and services.
No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to management.
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 attain profitable operations. The accompanying condensed financial statements do not
include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification
of liabilities that might result from the outcome of these uncertainties.
NOTE 3 STOCK BASED COMPENSATION
During the nine months ended September
30, 2014, the Company issued a total of 16,500,000 shares of common stock for consulting services rendered to the Company. The
stock was valued at the market price on the date of issuance which totaled $6,515,000. This amount is included in salaries and
consulting expenses on the statement of operations.
START SCIENTIFIC, INC.
Notes to the Financial Statements
September 30, 2014
(Unaudited)
NOTE 4 RELATED PARTY TRANSACTIONS
During the nine months ended September
30, 2014, the Company received loans from related parties in the amount of $2,529. Related parties also paid $4,694 in expenses
on behalf of the Company. Also, accounts payable and accrued liabilities to related parties increased by $180,290.
NOTE 5 STOCK OPTIONS
On July 25, 2014, the board of directors
cancelled all of the vested and unvested options that it had granted pursuant to the Company's 2012 Equity Incentive Plan.
10,500,000 options were granted on May 4, 2012 to certain directors, and cancelled on July 25, 2014. Each grantee of active
options consented to this cancellation. As of the date of this report, the Company has no outstanding options. In addition,
no options have ever been exercised by any option holder of the Company. Shares vested prior to cancellation remain expensed amounting
to $1,054,038 and $1,702,676 during the years ended December 31, 2013 and 2012, respectively.
NOTE 6 SUBSEQUENT EVENTS
The Company has evaluated subsequent
events for the period of September 30, 2014 through the date the financial statements were issued, and concluded there were no
events or transactions occurring during this period that required recognition or disclosure in its financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
You should read the following
discussion of the company's financial condition and results of operations in conjunction with the audited financial statements
and related notes included in the filing of the company’s latest annual 10-K. This discussion may contain forward-looking
statements, including, without limitation, statements regarding our expectations, beliefs, intentions, or future strategies that
are signified by the words "expects," "anticipates," "intends," "believes," or similar
language. Actual results could differ materially from those projected in the forward looking statements. We caution you that Start
Scientific’ business and financial performance is subject to substantial risks and uncertainties.
Overview
Prior to April 2012, we
were a reseller of technology-related hardware and software, including laptops, desktops, networking devices, telecommunication
systems and networks, servers and software. In April, 2012 in connection with the acquisition of two separate one-fourth (1/4)
working interests in certain oil and gas leases located in Yazoo County, Mississippi, our principal business became the exploration,
development, and production of oil and gas interests.
On May 16, 2012, the Company
entered into an agreement to acquire all of the outstanding shares of Carpathian Energy SRL (“Carpathian”), in exchange
for 90,000,000 shares of restricted common stock of the Company. Carpathian is a Romanian limited liability company engaged in
oil and gas exploration and development. Pursuant to the terms of agreement, the current owners of Carpathian may rescind the Acquisition
and reclaim the shares of Carpathian in the event that the Company does not invest at least $5 million toward development of Carpathian’s
oil and gas assets within 60 days from the date of the agreement. In addition, since the acquisition is being acquired with shares
issued to an entity under common control, the assets were recorded at a nominal historical cost in accordance with ASC Topic 805-50-05-4.
As of March 31, 2014, the Company has issued 90,000,000 shares to the current owners of Carpathian but the acquisition has not
closed and the ownership of Carpathian has not yet been transferred to the Company. Thus the issued shares are considered to be
a prepaid deposit with a zero value.
Results of Operations
Following is our discussion
of the relevant items affecting results of operations for the periods ended September 30, 2014 and 2013.
Revenues.
The Company generated net revenues of $-0- for the three and nine month periods ended September 30, 2014 and 2013. The lack of
revenues is mainly the result of the change in our business model from a reseller of computer hardware and software to an oil and
gas exploration and development company.
Salaries and Consulting
Expenses. Salaries and consulting expenses consist of salaries and benefits, company paid payroll taxes and outside consulting
expenses. Salaries and consulting expenses for the three months ended September 30, 2014 were $5,550,000 compared to $68,750 during
the three months ended September 30, 2013. $5,550,000 is the market value of 15,000,000 shares of common stock that were issued
for services during the three months ended September 30, 2014. For the nine months ended September 30, 2014, salaries and consulting
expenses were $6,531,667 compared to $243,750 during the nine months ended September 30, 2013. The increase is mainly the result
of the issuance of stock during 2014 to directors and consultants to assist us in securing oil and gas interests for potential
investment. The stock was valued at the market price on the date of issuance which totaled $6,515,000. We anticipate salaries expenses
to increase in the future as our activity increases.
Professional Fees. Professional
fees consist of legal and accounting fees associated with the preparation, audits and reviews of the Company’s financial
statements. Professional fees for the three months ended September 30, 2014 were $45,927 compared to $48,271 during the three months
ended September 30, 2013. Professional fees for the nine month period ended September 30, 2014 were $149,312 compared to $153,213
during the nine months ended September 30, 2013. We anticipate that professional fees will increase in the future as we more fully
develop our oil and gas business.
Selling, General and
Administrative Expenses. Selling, general and administrative expenses have been comprised of advertising; occupancy and office
expenses; travel and other miscellaneous administrative expenses. Selling, general and administrative expenses for the three months
ended September 30, 2014 were $210 compared to $195 during the three months ended September 30, 2013. Selling, general and administrative
expenses for the nine months ended September 30, 2014 were $359 compared to $440 during the nine months ended September 30, 2013.
We expect selling, general and administrative expenses to increase in the future.
Other Income (Expense).
Other income and expenses for the three months ended September 30, 2014 resulted in net other expense of $18,428 compared to $18,636
during the three months ended September 30, 2013. We incurred net other expense of $55,005 for the nine months ended September
30, 2014 compared to $55,179 during the nine months ended September 30, 2013. Other expenses incurred were comprised primarily
of interest expenses related to the promissory notes and other liabilities of the Company. We do not anticipate any major changes
in other income and expenses in the near future.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Personnel
Start Scientific has two
full-time employees, and other project-based contract personnel that we utilize to carry out our business. We utilize contract
personnel on a continuous basis, primarily in connection with service contracts which require a high level of specialization for
one or more of the service components offered. We expect to hire full-time employees in the future.
Liquidity and Capital Resources
Since inception, the Company
has financed its operations through a series of loans, credit accounts with hardware vendors, and the use of Company credit to
procure goods and services. As of September 30, 2014, our primary source of liquidity consisted of $27 in cash and cash equivalents.
We may seek to secure additional debt or equity capital to finance substantial business development initiatives or acquire additional
oil and gas resources.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
As a smaller reporting company we are not required
to provide this information.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Report on Disclosure Controls and Procedures
The Securities and Exchange
Commission defines the term “disclosure controls and procedures” to mean a Company's controls and other procedures
of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under
the Securities Exchange
Act of 1934 is recorded, processed, summarized
and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated
to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls
and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and
forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial
officers to allow timely decisions regarding disclosure.
As of the end of the period
covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the chief executive
officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
Based on this evaluation, the chief executive officer and chief financial officer concluded that the disclosure controls and procedures
are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required
to be included in the Company’s periodic SEC reports and of ensuring that such information is recorded, processed, summarized
and reported within the time periods specified. The Company’s chief executive officer and chief financial officer also concluded
that the disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable
assurance of the achievement of these objectives.
Changes in Internal Control over Financial Reporting
There have been no significant
changes in our internal controls over financial reporting that occurred during the third quarter ended September 30, 2014 that
have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
As a smaller reporting company, we
are not required to provide the information required by this item.
ITEM 2. UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS
On February 29, 2012, in exchange
for $100,000, the Company issued 200,000 shares of restricted common stock and a promissory note in the original principal amount
of $100,000 (“Note”) to an investor. The Note matures on August 27, 2012 and carries a fixed interest payment at maturity
of $25,000.
On March 1, 2012, the Company accepted
the subscription of an investor for $300,000 in exchange for 1,200,000 shares of restricted common stock.
On April 2, 2012, the Company entered
into an agreement to acquire two separate one-fourth (1/4) working interests (collectively, the “Working Interests”)
in certain oil and gas leases covering the Board of Education No. 6 Well located in Yazoo County, Mississippi. The consideration
granted by the Company in exchange for the Working Interests consisted of 10,000,000 shares of restricted common stock.
On May 4, 2012, pursuant to the Company’s
2012 Equity Incentive Plan (the "Plan") which Plan is attached as an exhibit to the Company’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on May 9, 2012, the Board approved the grant of 10,500,000 common stock
purchase options to five individuals at a weighted average exercise price of $0.65 per share.
On May 16, 2012, the Company entered
into an agreement to acquire all of the outstanding shares of Carpathian Energy SRL in exchange for 90,000,000 shares of restricted
common stock of the Company. Carpathian is a Romanian limited liability company engaged in oil & gas exploration and development.
Pursuant to the terms of the agreement, the former owners of Carpathian may rescind the Acquisition and reclaim the shares of Carpathian
in the event that the Company does not invest at least $5 million toward development of Carpathian’s oil and gas assets.
As of March 31, 2013, the conditions of the agreement had not been met; therefore, due to the potential rescinding of the agreement,
the acquisition has not been recorded on the financial statements herein.
On June 12, 2012, the Company entered
into a consulting agreement. Pursuant to the terms of the Agreement the Company issued 500,000 restricted shares of its common
stock.
On June 27, 2012, the Company entered
into a consulting agreement. Pursuant to the terms of the Agreement the Company issued 65,000 restricted shares of its common stock.
On July 13, 2012, in exchange for
$100,000, the Company issued a promissory note in the original principal amount of $100,000 (“Note”) to a lender. The
Note matures and is due and payable in full on July 13, 2013 and carries an interest rate of 6% per annum.
On August 1, 2012, pursuant to the
Company’s 2012 Equity Incentive Plan, the Company issued 5,000,000 shares of common stock of the Company to an officer of
the Company for services pertaining to business development.
On August 15, 2012, the Company amended
that certain consulting agreement. Pursuant to the terms of the Addendum Agreement the Company issued an additional 500,000 restricted
shares of its common stock.
On August 31, 2012, in exchange for
$100,000, the Company issued a promissory note in the original principal amount of $100,000 (“Note”) to a lender. The
Note matures on August 30, 2013 and carries an interest rate of 8% per annum payable on a quarterly basis. The Note shall
at the maturity date, be due and payable in full unless converted partially or in its entirety upon the election of the lender
into fully paid and non-assessable shares of Common Stock of the Company at a conversion price equal to $0.25 per share of Common
Stock.
On September 7, 2012, in exchange
for $200,000, the Company issued a promissory note in the original principal amount of $200,000 (“Note”) to a lender.
The Note matures on September 6, 2013 and carries an interest rate of 8% per annum payable on a quarterly basis. The Note
shall at the maturity date, be due and payable in full unless converted partially or in its entirety upon the election of the lender
into fully paid and non-assessable shares of Common Stock of the Company at a conversion price equal to $0.25 per share of Common
Stock.
On September 25, 2012, the Company
entered into a consulting agreement. Pursuant to the terms of the Agreement the Company issued 1,200,000 restricted shares of its
common stock.
On January 29, 2014, pursuant to
a consulting agreement entered into on July 23, 2013, the Company issued 1,000,000 restricted shares of its common stock.
On April 7, 2014, pursuant to a consulting
agreement entered into on July 23, 2013, the Company issued 500,000 restricted shares of its common stock.
On July 28, 2014, pursuant to the
Company’s 2012 Equity Incentive Plan, the Board approved the issuance of an aggregate of 15,000,000 shares of the Company’s
common stock to certain directors and consultants of the Company.
With respect to the securities issuances
described above, No solicitations were made and no underwriting discounts were given or paid in connection with these transactions.
The Company believes that the issuance of these securities as described above were exempt from registration with the Securities
and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR
SECURITIES
None.
ITEM 4. OTHER INFORMATION
Not applicable.
ITEM 5. EXHIBITS:
The following documents are filed as exhibits
to this Form 10-Q:
INDEX TO EXHIBITS
Exhibit
Number |
|
Title of Document |
3.1 |
|
Certificate of Incorporation of Start Scientific, Inc., a Delaware
corporation.(1)
|
3.2 |
|
Bylaws of Start Scientific, Inc., a Delaware corporation.(2)
|
31.1 |
|
Certification by Chief Financial Officer, Norris R. Harris, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 |
|
Certification by Chief Executive Officer, Norris R. Harris, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 |
|
Certification by Chief Financial Officer, Norris R. Harris, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 |
|
Certification by Chief Executive Officer, Norris R. Harris, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| (1) | Filed as an Exhibit to the Company’s Current Report on Form 8-K filed on November 23, 2011. |
| (2) | Filed as an Exhibit to the Company’s Registration Statement on Form 10-SB 12G, deemed effective by the Commission
on January 17, 2007. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
|
START SCIENTIFIC, INC. |
|
|
|
Date: November , 2014 |
|
BY: /s/ Norris R. Harris |
|
|
Norris R. Harris |
|
|
Chief Executive Officer |
Exhibit 31.1
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Norris R. Harris of Start Scientific, Inc. (the “Company”),
certify that:
1. I have reviewed this 10-Q of the Company;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the Company as of, and for, the periods presented in this report;
4. Together with the Company’s principal executive officer,
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
Company and have:
a. Designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Designed such internal control over financial
reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the Company's
disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in
the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting; and
5. The Company’s other certifying officers and I have disclosed,
based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee
of the Company's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the Company's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company's internal control over financial reporting.
Date: November , 2014
/s/ Norris R. Harris
Norris R. Harris
Chief Financial Officer
Exhibit 31.2
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Norris R. Harris of Start Scientific, Inc. (the “Company”),
certify that:
1. I have reviewed this 10-Q of the Company;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the Company as of, and for, the periods presented in this report;
4. Together with the Company’s principal accounting and
financial officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Company and have:
a. Designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Designed such internal control over financial
reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the Company's
disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in
the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting; and
5. The Company’s other certifying officers and I have disclosed,
based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee
of the Company's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the Company's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company's internal control over financial reporting.
Date: November , 2014
/s/ Norris R. Harris
Norris R. Harris
Chief Executive Officer
Exhibit 32.1
CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
I, Norris R. Harris, Chief Financial Officer
of Start Scientific, Inc. (the “Company”) certify that:
1. I have reviewed the quarterly report on Form
10-Q of the Company;
2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report; and
3. Based on my knowledge, the financial statements,
and other financial information included in this annual report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and for, the period presented in this report.
Date: November , 2014
/s/ Norris R. Harris
Norris R. Harris
Chief Financial Officer
Exhibit 32.2
CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
I, Norris R. Harris, Chief Executive Officer
of Start Scientific, Inc. (the “Company”) certify that:
1. I have reviewed the quarterly report on Form
10-Q of the Company;
2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report; and
3. Based on my knowledge, the financial statements,
and other financial information included in this annual report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and for, the period presented in this report.
Date: November , 2014
/s/ Norris R. Harris
Norris R. Harris
Chief Executive Officer
Start Scientific (CE) (USOTC:STSC)
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