UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] Quarterly Report Under Section 13 OR 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2007
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
For the transition period from _______________to________________
Commission file number 001-16653
EMPIRE PETROLEUM CORPORATION
(Exact name of small business issuer as specified in its charter)
DELAWARE 73-1238709
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8801 S. Yale, Suite 120, Tulsa, Oklahoma 74137-3575
(Address of principal executive offices)
(918) 488-8068
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
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.
[X] Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $.001 Par Value 50,080,190 shares outstanding as of
March 31, 2007.
Transitional Small Business Disclosure Format: [ ] Yes [X] No
EMPIRE PETROLEUM CORPORATION
INDEX TO FORM 10-QSB
Part I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Balance Sheet at March 31, 2007 (Unaudited) 1
Statements of Operations for the three months
ended March 31, 2007 and 2006 (Unaudited) 2
Statements of Cash Flows for the three months ended
March 31, 2007 and 2006 (Unaudited) 3
Notes to Financial Statements 4-7
Item 2. Management's Discussion and Analysis 7-9
Item 3. Controls and Procedures 9
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 9
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
EMPIRE PETROLEUM CORPORATION
BALANCE SHEET
March 31,
2007
ASSETS (Unaudited)
___________
Current assets:
Cash $ 95,431
Accounts receivable (net of allowance of $3,750) 19,065
___________
Total current assets 114,496
Property & equipment, net of accumulated
depreciation and depletion 1,013,602
___________
Total Assets $ 1,128,098
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 133,402
Accounts payable to related party 274,682
Note payable 107,846
___________
Total current liabilities 515,930
Long term liabilities:
Asset retirement obligation 18,000
___________
Total liabilities 533,930
___________
Stockholders' equity:
Common stock - $.001 par value, authorized
100,000,000 shares, issued 50,080,190 shares 50,080
Additional paid in capital 10,499,676
Accumulated deficit (9,955,588)
___________
Total stockholders' equity 594,168
___________
Total liabilities and stockholders' equity $ 1,128,098
___________
See accompanying notes to financial statements.
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EMPIRE PETROLEUM CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
________________________
2007 2006
____________ __________
Revenue:
Petroleum sales $ 649 $ 1,646
Costs and expenses:
Production & operating 4,071 59,416
General & administrative 43,783 65,892
Well abandonment 809,750
____________ ___________
857,604 125,308
____________ ___________
Operating income (loss) (856,955) (123,662)
____________ ___________
Other (income) and expense:
Interest income ( 71) 0
Interest expense 1,725 1,725
____________ __________
Total other (income) expense 1,654 1,725
____________ __________
Net income (loss) $ (858,609) $(125,387)
____________ __________
Net income (loss) per common share $ (.02) $ .00
____________ __________
Weighted average number of common shares
outstanding 50,080,190 42,830,190
____________ __________
See accompanying notes to financial statements.
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EMPIRE PETROLEUM CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31, March 31,
2006 2005
_________ _________
Cash flows from operating activities:
Net income (loss) $(858,609) $(125,387)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Value of services contributed by employees 12,500 12,500
Well abandonment 809,750 0
(Increase) decrease in assets:
Accounts receivable 71,080 (26,122)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 3,604 2,760
________ ________
Net cash used in operating activities 38,325 (136,249)
________ ________
Cash flows from financing activities:
Advances from related party 0 0
Proceeds from private equity placement 0 0
________ ________
Net cash provided by financing activities 0 0
________ ________
Cash flows from investing activities:
Lease interest acquisition-Gabbs Valley 0 0
Well equipment and drilling costs ( 3,680) 0
_________ ________
Net cash used by investing activities ( 3,680) 0
________ ________
Net increase (decrease) in cash 34,645 (136,249)
Cash - Beginning 60,786 369,292
________ ________
Cash -Ending $ 95,431 $233,043
________ ________
See accompanying notes to financial statements.
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EMPIRE PETROLEUM CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007
(UNAUDITED)
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:
The accompanying unaudited financial statements of Empire Petroleum
Corporation (Empire, or the Company) have been prepared in accordance
with United States generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by
United States generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation of the Company's financial
position, the results of operations, and the cash flows for the interim
period are included. Operating results for the interim period are not
necessarily indicative of the results that may be expected for the year
ending December 31, 2007.
The information contained in this Form 10-QSB should be read in
conjunction with the audited financial statements and related notes for
the year ended December 31, 2006 which are contained in the Company's
Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission (the SEC) on April 3, 2007.
The Company has been incurring significant losses in recent years.
The continuation of the Company as a going concern is dependent upon the
ability of the Company to attain future profitable operations. These
financial statements have been prepared on the basis of United States
generally accepted accounting principles applicable to a company with
continuing operations, which assume that the Company will continue in
operation for the foreseeable future and will be able to realize its assets
and discharge its obligations in the normal course of operations. Management
believes the going concern assumption to be appropriate for these financial
statements. If the going concern assumption were not appropriate for these
financial statements, then adjustments might be necessary to adjust the
carrying value of assets and liabilities and reported expenses.
The Company continues to explore and develop its oil and gas interests.
The ultimate recoverability of the Company's investment in its oil and gas
interests is dependent upon the existence and discovery of economically
recoverable oil and gas reserves, confirmation of the Company's interest in
the oil and gas interests, the ability of the Company to obtain necessary
financing to further develop the interests, and upon the ability to attain
future profitable production.
In 2003, the Company engaged a partner to explore its Cheyenne River Prospect,
and signed an agreement to acquire a 10% interest in a block of acreage in the
Gabbs Valley Prospect of western Nevada. In June 2005, the Company completed
a private placement of 5,000,000 shares of its common stock along with
warrants to purchase 1,250,000 shares of its Common Stock for an aggregate
purchase price of $500,000. Subject to certain restrictions, the warrants may
be exercised until August 2007 (extended from the previous date of June 2006)
at an exercise price of $0.25 per share. Proceeds of the private placement
were allocated $67,875 to common stock warrants and $432,125 to common stock
and paid-in capital. These funds were used for general corporate purposes and
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to pay the Company's share of the costs associated with its 10% interest in the
Gabbs Valley Oil Prospect in Nevada. By subsequent agreement with Cortez
Exploration, LLC (formerly O. F. Duffield) dated May 8, 2006, Empire acquired
an additional 30% interest by agreeing to pay $675,000 in land and related
costs to Cortez and 45% of the drilling and completion costs on a test well to
be known as the Empire Cobble Cuesta 1-12-12-34E, Nye County, Nevada. When
combined with the original 10% working interest in the well and lease block
which was expanded to 75,721 gross acres by the acquisition of an additional
30,917 acres from the U. S. Department of the Interior on June 14, 2006, the
Company's working interest increased to 40%, after paying 55% of the drilling
and completion costs of the Empire Cobble Cuesta 1-12-12N-34E test well. To
fund this increased interest, the Company initiated a private placement of
common stock along with warrants to purchase common stock in June 2006. In
connection with this private placement, the Company issued 7,250,000 shares of
common stock and warrants to purchase 1,812,500 shares of its common stock for
an aggregate purchase price of $1,450,000 (See Note 4). The Company believes
that its available cash as of March 31, 2007 will be sufficient to finance its
operations and its oil and gas investing plans through the next nine months
depending on the Company's decision based on the results of the Cobble Cuesta
1-12 test well and further exploration in the Gabbs Valley Prospect (See Note
4). In order to sustain the Company's operations on a long term basis, the
Company intends to continue to look for merger opportunities and consider
public or private financings. The Company anticipates that its Chief Executive
Officer will advance the Company the funds necessary to continue its operations
through the next nine months, if necessary. However, there is no assurance
that he will do so.
Compensation of Officers and Employees
The Company's only executive officer serves without pay or other compensation.
The fair value of these services is estimated by management and is recognized
as a capital contribution. For the three months ended March 31, 2007, the
Company recorded $12,500 as a capital contribution by its executive officer.
2. NOTES PAYABLE:
In December 2001, the Company executed a note with Weatherford
U.S., L.P. to satisfy an outstanding indebtedness for service in
the drilling of the Timber Draw #1-AH well. The principal amount
of this note was $108,334 with interest payments at 10% per annum
commencing on May 27, 2001, until all interest and principal amounts
are paid in full. Timely payments were made in accordance with
the terms of this note through March 2002. In April 2002, the "payee"
of this note agreed to a revised payment schedule extending final payment
of $66,997 from April 10, 2002, until June 10, 2002. In connection
with this payment schedule, an initial payment of $10,000 was made in
April 2002, however, since that time, no further payments have been made.
At March 31, 2007, the Company has accrued a liability of $107,846
in connection with this note.
3. PROPERTY AND EQUIPMENT:
The Company owns a working interest in approximately 33,485 acres of oil and
gas leases located in Niobrara County, Wyoming (the "Cheyenne River Prospect")
and an overriding royalty interest of between 1.5% and 2% in 40,758 acres of
oil and gas leases located in or near the Cheyenne River Prospect. On March
31, 2004, a third party paid approximately $52,128 of the Company's lease
rentals on 32,643 acres in the Cheyenne River Prospect in exchange for an
option to drill a test well in order to earn an interest in the farmout block,
which option was subject to the third party first completing a seismic survey
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covering 16 square miles in the Cheyenne River Prospect. This survey was
completed in September of 2003. The processing and interpreting of the data
from such survey was completed September 30, 2003, and earned the third party
a 25% interest in the Timber Draw #1-AH well and prospect acreage. This third
party commenced a test well in the NW/4NE/4 Section 15, Twp 39N, Rge 66W,
Niobrara County, Wyoming, known as the Empire Hooligan Draw Unit #1-AH, on
August 6, 2004. The well was drilled horizontally to a measured drilling
depth of 9,332 feet. As a result of this earning well being drilled the
Company's working interest in the Hooligan Draw #1-AH well and prospect
acreage was reduced to 26.785% and to 17.5% of the Timber Draw #1-AH well.
The Company and the operator are currently considering alternative means
of developing this prospect, including entering into a farmout pursuant to
which a third party could earn an interest in this prospect for a drilling
commitment. Additionally, the Company has also continued to explore
opportunities to sell its interest in the Cheyenne River Prospect. As a
result of the reduction in the Company's working interest as described above,
the Company recorded an impairment charge of $188,507 in 2005.
On May 8, 2003, the Company entered into an agreement with O.F. Duffield
(now Cortez Exploration, LLC)(Duffield Agreement) to acquire a ten percent
(10%) working interest in a block of acreage in the Gabbs Valley Prospect by
agreeing to issue 2,000,000 shares of the Company's Common Stock to Mr.
Duffield for such 10% interest. The shares were issued in July 2003. This
block of acreage in the Gabbs Valley Prospect consists of federal leases
covering 44,604 acres in Nye and Mineral Counties, Nevada in which Mr.
Duffield had a 100% working interest. The shares were valued at $.10 per
share based on the closing price of the Company's common stock on the date of
issuance.
During September 2005, surveyors laid out a 19.5 mile seismic program on the
Gabbs Valley Prospect, and a seismic survey was commenced in October 2005.
Field work was carried out and final interpretation of the data was completed
in November 2005. Based on the results of the seismic survey, the Company
increased its working interest in the prospect to 40% (See Note 1) and
contracted a drilling rig which commenced drilling the Empire Cobble Cuesta
1-12-12N-34E, Nye County, Nevada on September 14, 2006. Drilling operations
were suspended October 23, 2006 in order to give the Company time to evaluate
the drilling results. The total gross acres of this prospect was increased to
75,721 acres by the acquisition of 30,917 acres from the U. S. Department of
the Interior on June 14, 2006.
Coastal Energy Company Nevada (CECN)(formerly PetroWorld Nevada Corp.)was a
participant in the Gabbs Valley Prospect with a seismic option under which it
elected to drill a well and earn a 30% interest from Cortez Exploration, Inc.
The Company's Chief Executive Officer is a member of the Board of Directors of
both CECN and its parent company Coastal Energy Company (formerly PetroWorld
Corporation) and owns approximately 1.63 (%) percent of the parent Company
which is traded on the AIM Exchange in London and the Toronto Venture Exchange
in Toronto. Accounts receivable from Coastal totaled $4,449 at March 31, 2007.
On May 1, 2007, after further testing the Cobble Cuesta 1-12-12N-34E, the
Company decided to plug and abandon the well since no hydrocarbons were
present. The Company has recognized impairment expenses of $809,750 for the
three month period ending March 31, 2007 which represents its share of
capitalized drilling costs and estimated costs to plug and abandon the well
(See Note 4).
4. SUBSEQUENT EVENTS
On May 1, 2007 the Company announced it had re-entered and completed testing
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on the Empire Cobble Cuesta 1-12-12N-34E, Nye County, Nevada well. As no
hydrocarbons were found, the Company has taken steps to plug and abandon the
well. The Company plans to analyze data obtained from the Cobble Cuesta test
well to determine if further drilling is warranted. As of March 31, 2007 the
Company has capitalized $789,750 of well equipment and intangible drilling
costs related to the Cobble Cuesta test well which have been expensed in the
three month period ending March 31, 2007.
In April, 2007 the Company completed a privte placement of it common stock
with total shares issued of 5,000,000 with an aggregate purchase price of
$1,000,000. The private placement also included issuance of 1,250,000
warrants which have an exercise price of $.50 per share. Approximately
$275,000 of the funds were used to pay for the Company's costs associated
with the re-entry and testing of the Cobble Cuesta 1-12 well in the Gabbs
Valley Prospect in Nevada and the remaining funds will be used for general
Corporate purposes.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
GENERAL TO ALL PERIODS
The Company's primary business is the exploration and development of oil and
gas interests. The Company has incurred significant losses from operations,
and there is no assurance that it will achieve profitability or obtain funds
necessary to finance its operations. Sales revenue for all periods presented
is attributable to the production of oil from the Company's Timber Draw #1-AH
and the Hooligan Draw #1-AH wells located in the Eastern Powder River Basin
in the State of Wyoming, otherwise known as the Cheyenne River Prospect.
For all periods presented, the Company's effective tax rate is 0%. The
Company has generated net operating losses since inception, which would
normally reflect a tax benefit in the statement of operations and a deferred
asset on the balance sheet. However, because of the current uncertainty as
to the Company's ability to achieve profitability, a valuation reserve has
been established that offsets the amount of any tax benefit available
for each period presented in the statements of operations.
THREE MONTH PERIOD ENDED MARCH 31, 2007, COMPARED TO THREE MONTH PERIOD
ENDED MARCH 31, 2006.
For the three months ended March 31, 2007, sales revenue decreased $997
to $649, compared to $1,646 for the same period during 2006. The decrease
in sales revenue was the result of lower production from the Timber Draw #1-AH
and the Hooligan Draw #1-AH wells.
Production and operating expenses decreased $55,345 to $4,071 for the
three months ended March 31, 2007, from $59,416 for the same period in
2006. The decrease was primarily due to site preparation costs incurred in
2006, which were adjusted from expense to property and equipment in a
subsequent quarter in 2006.
Well abandonment expenses increased $809,750 to $809,750 for the three
months ended March 31, 2007 from $0 in 2006. The increase is due to the
determination to plug and abandon the Cobble Cuesta test well in Nevada.
General and administrative expenses decreased by $22,109 to $43,783 for the
three months ended March 31, 2007, from $65,892 for the same period in
2006. The decrease was primarily due to lower professional fees in 2007.
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There was no depreciation or depletion expense attributable to the three
months ended March 31, 2007 and 2006, because the depreciable assets were
fully depreciated.
For the three months ended March 31, 2007 and 2006, interest expense remained
at $1,725. The Company accrued interest on the Weatherford note in both
periods.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
As of March 31, 2007, the Company had $95,431 of cash on hand. In April,
2007 the Company raised $1,000,000 through a private placement of common
stock along with warrants to purchase common stock. The Company believes
that its cash on hand along with the proceeds of the private placement
will allow it to finance its operations for the next nine months, and
evaluate the future of the Gabbs Valley Prospect. The Company would likely
continue to finance its cost through either a public or private financing. In
order to sustain the Company's operations on a long term basis, the Company
intends to continue to look for merger opportunities and consider public or
private financings. The Company anticipates that its Chief Executive Officer
will advance the Company the funds necessary to continue its operations through
the next twelve months, if necessary. However, there is no assurance that he
will do so.
ADVANCES FROM RELATED PARTY
Through March 31, 2005, the Company financed its operations primarily through
advances made to the Company by the Albert E. Whitehead Living Trust, of which
the Company's Chairman of the Board and Chief Executive Officer, Mr. Whitehead,
is the trustee. At March 31, 2007 the Company is indebted to the Albert E.
Whitehead Living Trust in the amount of $274,682.
MATERIAL RISKS
The Company has incurred significant losses from operations and there is no
assurance that it will achieve profitability or obtain funds necessary to
finance continued operations. For other material risks, see the Company's
form 10-KSB for the period ended December 31, 2006, which was filed April 3,
2007.
FORWARD-LOOKING INFORMATION
This quarterly report on Form 10-QSB, including this section, includes certain
statements that may be deemed "forward-looking statements" within the meaning
of federal securities laws. All statements, other than statements of historical
facts, that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future,
including future sources of financing and other possible business
developments, are forward-looking statements. Such statements are subject
to a number of assumptions, risks and uncertainties and could be affected by
a number of different factors, including the Company's failure to secure short
and long term financing necessary to sustain and grow its operations, increased
competition, changes in the markets in which the Company participates and the
technology utilized by the Company and new legislation regarding environmental
matters. These risks and other risks that could affect the Company's business
are more fully described in reports it files with the Securities and Exchange
Commission, including its Form 10-KSB for the fiscal year ended December 31,
2005. Actual results may vary materially from the forward-looking statements.
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The Company undertakes no duty to update any of the forward-looking statements
in this Form 10-QSB.
Item 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Company carried out an
evaluation under the supervision of the Company's Chief Executive Officer (and
principal financial officer) of the effectiveness of the design and operation
of the Company's disclosure controls and procedures pursuant to Securities
Exchange Act Rules 13a- 15(e) and 15d-15(e). Based on this evaluation, the
Company's Chief Executive Officer (and principal financial officer) has
concluded that the disclosure controls and procedures as of the end of the
period covered by this report are effective. During the period covered by this
report, there was no change in the Company's internal controls over financial
reporting that has materially affected or that is reasonably likely to
materially affect the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 6. Exhibits
a) Exhibits
31 Certification of Chief Executive Officer (and principal
financial officer) pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 1934, as
amended, and Item 601(b)(31) of Regulation S-B, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(submitted herewith).
32 Certification of Chief Executive Officer (and principal
financial officer) pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (submitted herewith).
EMPIRE PETROLEUM CORPORATION
SIGNATURES
In accordance with the requirements of the Exchange Act, the small
business issuer caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EMPIRE PETROLEUM CORPORATION
Date: May 15, 2007 By: /s/ Albert E. Whitehead
___________________
Albert E. Whitehead
Chairman/CEO
EXHIBIT INDEX
NO. DESCRIPTION
31 Certification of Chief Executive Officer (and principal
financial officer) pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 1934, as
amended, and Item 601(b)(31) of Regulation S-B, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(submitted herewith).
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32 Certification of Chief Executive Officer (and principal
financial officer) pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (submitted herewith).
EXHIBIT 31
CERTIFICATION
I, Albert E. Whitehead, Chief Executive Officer (and principal financial
Officer) of Empire Petroleum Corporation, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Empire
Petroleum Corporation;
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 small
business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s) and
I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the small business issuer 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
small business issuer, 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) Evaluated the effectiveness of the small business
issuer's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the controls
and procedures, as of the end of the period covered by this report
based on such evaluation; and
(c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that
occurred during the small business issuer's most recent
fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the small business issuer's
internal control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of small business issuer'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 small business
issuer's ability to record, process, summarize and report financial
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information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
small business issuer's internal control over financial
reporting.
May 15, 2007 /s/ Albert E. Whitehead
Albert E. Whitehead,
Chief Executive Officer and
Principal Financial Officer
EXHIBIT 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Empire Petroleum Corporation
(the "Company") on Form 10-QSB for the period ending March 31, 2007 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Albert E. Whitehead, Chief Executive Officer (and principal
financial officer) of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
May 15, 2007 /s/ Albert E. Whitehead
Albert E. Whitehead
Chief Executive Officer and
Principal Financial Officer
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