XOTC:ERCX Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 10-Q

 

    

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

  

For the quarterly period ended March 31, 2012

  

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15 ( d ) OF THE EXCHANGE ACT

  

For the transition period from ____________ to____________

  

Commission File No. 000-53116

  


E. R. C. ENERGY RECOVERY CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware

22-2301634

(State or Other Jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

 


10018 Falcon View Drive

Sandy, Utah  84092

(Address of Principal Executive Offices)


(801) 580-4555

(Registrant’s telephone number, including area code)


N/A

(Former name, former address and former fiscal year,

if changed since last report)


Indicate by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 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 [  ].  The Company does not have a corporate Website.


Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a 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 [  ]      Accelerated filer [  ]       Non-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 [X] No [  ]



1





APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS


Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court.


Not applicable.


APPLICABLE ONLY TO CORPORATE ISSUERS


Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:  May 1, 2012 - 368,200 shares of common stock.


PART I


Item 1.  Financial Statements


The Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant.













E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


UNAUDITED CONDENSED FINANCIAL STATEMENTS


March 31, 2012



















2




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]





CONTENTS


PAGE


Condensed Balance Sheets, March 31, 2012 (unaudited)

and December 31, 2011

4



Unaudited Condensed Statements of Operations,

for the three months ended March 31, 2012

and 2011 and from inception on October 24,

1979 through March 31, 2012

5



Unaudited Condensed Statements of Cash Flows,

for the three months ended March 31, 2012

and 2011 and from inception on October 24,

1979 through March 31, 2012

6



Notes to Unaudited Condensed Financial Statements

7 - 9



3




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


CONDENSED BALANCE SHEETS



ASSETS

 

March 31, 2012

 

December 31, 2011

CURRENT ASSETS:

 

(Unaudited)

 

 

 

     Cash

$

-

 

$

-

 

 

 

 

 

 

          Total Current Assets

 

-

 

 

-

 

 

 

 

 

 

Total Assets

$

-

 

$

-

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

     Accounts payable

$

119,951

 

$

113,503

     Advances from related party

 

93,373

 

 

90,015

     Accrued interest - related party

 

28,334

 

 

26,026

 

 

 

 

 

 

           Total Current Liabilities

 

241,658

 

 

229,544

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT):

 

 

 

 

 

     Preferred stock, $.001 par value 10,000,000 shares authorized, no shares

        issued and outstanding

 

-

 

 

-

     Common Stock, $.001 par value, 100,000,000 shares authorized, 368,200

       shares issued and outstanding

 

368

 

 

368

     Capital in excess of par value

 

324,850

 

 

318,250

     Deficit accumulated during the development stage

 

(566,876)

 

 

(548,162)

 

 

 

 

 

 

           Total Stockholders’ Equity (Deficit)

 

(241,658)

 

 

(229,544)

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity (Deficit)

$

-

 

$

-






Note:  The balance sheet at December 31, 2011 was taken from the audited financial statements at that date and condensed.


The accompanying notes are an integral part of these unaudited condensed financial statements.



4





E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


 

 

 

 

 

 

 

 

 

 

 

 

 

From inception

 

 

 

 

 

 

 on October 24,

 

 

For the Three Months Ended

 

1979, through

 

 

March 31,

 

March 31,

 

 

2012

 

2011

 

2012

 

 

 

 

 

 

 

REVENUES

 

 $                 -   

 

 $              -   

 

 $                  -   

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

General & administrative

 

9,806

 

11,911

 

470,217

Non-cash contributed services

`

6,600

 

5,075

 

68,325

      Total Expenses

 

16,406

 

16,986

 

538,542


LOSS BEFORE OTHER INCOME (EXPENSE)

 

(16,406)

 

(16,986)

 

(538,542)


OTHER INCOME (EXPENSE):

 

 

 

 

 

 

Interest  Expense – Related Party

 

(2,308)

 

(1,743)

 

(28,334)


LOSS BEFORE INCOME TAXES

 

(18,714)

 

(18,729)

 

(566,876)

 

 

 

 

 

 

 

TAX EXPENSE

 

                   -   

 

                   -   

 

                   -   

 

 

 

 

 

 

 

NET LOSS

 

$     (18,714)

 

$  (18,729)

 

$    (566,876)

 

 

 

 

 

 

 

LOSS PER COMMON SHARE

 

$         (0.05)

 

$      (0.05)

 

 

 

 

 

 

 

 

 
















The accompanying notes are an integral part of these unaudited condensed financial statements.



5





E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS


 



For the Three Months Ended March 31,

 

From Inception on October 24, 1979 through March 31,

 

2012

2011

 

2012

Cash Flows From Operating Activities:

 

 

 

 

 

 

   NET LOSS

$

(18,714)

$

(18,729)

  $

(566,876)

   Adjustments to reconcile net loss to net cash

     Used by operating activities:

 

 

 

 

 

 

         Non-cash contributed services

 

6,600

 

5,075

 

68,325

        Changes in assets and liabilities:

 

 

 

 

 

 

            Increase in accounts payable

 

6,448

 

11,859

 

119,051

            Increase in advances from related party

 

3,358

 

52

 

93,373

            Increase in accrued interest - related party

 

2,308

 

1,743

 

28,334

            Contributed capital for expenses

 

-

 

-

 

1,138

            Stock issued for services

 

-

 

-

 

1,450

                Net Cash (Used) by Operating Activities

 

-

 

-

 

(255,205)

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

                Net Cash (Used) by Investing Activities

 

-

 

-

 

-

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

   Issuance of common stock for cash

 

-

 

-

 

255,205

                Net Cash Provided by Financing Activities

 

-

 

-

 

255,205

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

-

 

-

 

-

 

 

 

 

 

 

 

Cash at Beginning of Period

 

-

 

-

 

-

Cash at End of Period

$

-

$

-

  $

-

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

   Cash paid during the period for:

 

 

 

 

 

 

      Interest

$

-

$

-

  $

-

      Income taxes

$

-

$

-

  $

-

 

 

 

 

 

 

 


Supplemental Schedule of Non-cash Investing and Financing Activities:

For the three months ended March 31, 2012:

Officers and Directors contributed services totaling $6,600, which have been accounted for as a capital contribution.


For the three months ended March 31, 2011:

Officers and Directors contributed services totaling $5,075, which have been accounted for as a capital contribution.



The accompanying notes are an integral part of these unaudited condensed financial statements.



6




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization – E.R.C. Energy Recovery Corporation (“the Company”) was incorporated on October 24, 1979 in the State of Delaware for the purpose of providing accounting, personnel recruiting and general business consulting.  Currently, the Company has no on-going operations.  The Company is considered to be a development stage Company.


Condensed Financial Statements - The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2012 and 2011 and for the periods then ended have been made.


Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted.  It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2011 audited financial statements.  The results of operations for the three months ended March 31, 2012 and 2011 are not necessarily indicative of the operating results for the full year.


Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimated by management.


Reclassification - The financial statements for periods prior to March 31, 2012 have been reclassified to conform to the headings and classifications used in the March 31, 2012 financial statements.


NOTE 2 - GOING CONCERN


The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since inception and currently has no on-going operations.  Further, the Company has current liabilities in excess of current assets.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.




7




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


NOTE 3 - RELATED PARTY TRANSACTIONS


Management Compensation – During the periods ended March 31, 2012 and 2011, the Company did not pay any compensation to its officers and directors.  During the three month period ended March 31, 2012 and 2011, Officers and Directors contributed services totaling $6,600 and $5,075, respectively, which have been accounted for as contributions to capital.


Office Space The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his office as a mailing address, as needed, at no expense to the Company.


Advances from Related Party – A shareholder of the Company or entities related to the shareholder have paid expenses on behalf of the Company. For the three month periods ended March 31, 2012 and 2011 these payments amounted to $3,358 and $52, respectively.  The Company has accounted for any such payments as advances payable to the related party.  At March 31, 2012 and December 31, 2011 a balance of $93,373 and $90,015, respectively, is owing the related party.


Accrued Interest – The Company has imputed interest at 10% per annum on balances owing to related parties.  At March 31, 2012 and December 31, 2011 the accrued interest balance payable to related parties was $28,334 and $26,026, respectively.  Interest expense to related parties amounted to $2,308 and $1,743 for the three months ended March 31, 2012 and 2011, respectively.


NOTE 4 - LOSS PER SHARE


The following data show the amounts used in computing loss per share for the periods presented:

 

 

 

 For the Three Months Ended

 

 

              March 31,

 

 

2012

 

2011

 

 

 

 

 

Loss available to common shareholders

 

 

 

 

(numerator)

 

 $    (18,714)

 

$       (18,729)

 

 

 

 

 

Weighted average number of common

 

 

 

 

shares outstanding used in loss per

 

 

 

 

share for the period (denominator)

 

368,200

 

368,200

Loss Per Common Share

 

 $        (0.05)

 

$             (0.05)


Dilutive loss per share was not presented; as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share.




8




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


NOTE 5 - COMMITMENTS AND CONTINGENCIES


Contingencies -The Company has not been active for several years. Management believes that there are no unrecorded valid outstanding liabilities from prior operations. If a creditor were to come forward and claim a liability, the Company has committed to contest the claim to the fullest extent of the law. Due to various statutes of limitations and because of the likelihood that such an old liability would not still be valid, no amount has been accrued in these financial statements for any such contingencies.


NOTE 6 – SUBSEQUENT EVENTS


The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued, and determined there are no events to disclose.




9




Item 2.  Management’s Discussions and Analysis of Financial Condition and Results of Operations.


Forward-looking Statements


Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance of our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.


Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.


Accordingly, results actually achieved may differ materially from expected results in these statements.  Forward-looking statements speak only as of the date they are made.  We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.


Plan of Operation


Our plan of operation for the next 12 months is to: (i) consider guidelines of industries in which we may have an interest; (ii) adopt a business plan regarding engaging in the business of any selected industry; and (iii) commence such operations through funding and/or the acquisition of a going concern engaged in any industry selected.


During the next 12 months, our only foreseeable cash requirements will relate to maintaining our good standing; the payment of our Securities and Exchange Commission and Exchange Act reporting filing expenses, including associated legal and accounting fees; costs incident to reviewing or investigating any potential business venture; and maintaining our good standing as a corporation in our state of organization.  We anticipate that these funds will be provided to us in the form of loans from David C. Merrell, our current President.  There are no written agreements requiring Mr. Merrell to provide these cash resources; and to the extent funds are provided, such funds will bear no interest (though an interest expense of 10% has been imputed on funds advanced) and will be due on demand.  As of the date of this Quarterly Report, we have not actively begun to seek any business or acquisition candidate.  


Results of Operations


Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011


During the three months ended March 31, 2012, and 2011, we had no revenues.  General and Administrative expenses were $9,806 and $11,911 for the three months ended March 31, 2012, and 2011, respectively.  We had non-cash contributed services of $6,600 and $5,075 with an interest expense of $2,308 and $1,743 for the three months ended March 31, 2012, and 2011, for losses of $18,714 and $18,729, respectively.  All of our losses are attributable to keeping our Company current in the State of Delaware and with the Securities and Exchange Commission.


Liquidity


We have no current cash resources.


During the next 12 months, our only foreseeable cash requirements will relate to maintaining our good standing in the State of Delaware, the legal and accounting costs of preparing and filing our Exchange Act reports with the Securities and Exchange Commission and any costs we may incur in evaluating a reorganization, merger or acquisition candidate.  We do not have any cash reserves to pay for our administrative expenses for the next 12 months.  In the event that additional funding is required in order to keep us in good standing, we may attempt to raise such funding through loans or through additional sales of our common stock.




10




Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


Not required.


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q.  In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.


Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2012, our disclosure controls and procedures were, subject to the limitations noted above, effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.


Changes in Internal Control over Financial Reporting


Our management, with the participation of the chief executive officer and chief financial officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II - OTHER INFORMATION


Item 1. Legal Proceedings.


None; not applicable.


Item 1A.  Risk Factors.


Not required.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


None; not applicable.


Item 3. Defaults Upon Senior Securities.


None; not applicable.


Item 4. Mine Safety Disclosures.


None; not applicable.




11




Item 5. Other Information.


None; not applicable.


Item 6. Exhibits.


Exhibit No.                         Identification of Exhibit


31.1


31.2


32

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by David C. Merrell, President and Director.

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Michael C. Brown, Secretary, Treasurer, CFO and Director

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by David C. Merrell President and Michael C. Brown, Secretary/Treasurer, CFO and Director.

101.INS

XBRL Instance Document*

101.PRE.

XBRL Taxonomy Extension Presentation Linkbase*

101.LAB

XBRL Taxonomy Extension Label Linkbase*

101.DEF

XBRL Taxonomy Extension Definition Linkbase*

101.CAL

XBRL Taxonomy Extension Calculation Linkbase*

101.SCH

XBRL Taxonomy Extension Schema*


*Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.


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


E. R. C. Energy Recovery Corporation


Date:

May 11, 2012

  

By:

/s/David C. Merrell

  

  

  

  

David C. Merrell, President and Director


Date:

May 11, 2012

  

By:

/s/Michael C. Brown

  

  

  

  

Michael C. Brown ,Secretary,  Treasurer, CFO, and Director




12




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