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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO FORM 10-K ON
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2004 Commission file number: 000-30841
UNITED ENERGY CORP.
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(Exact name of registrant as specified
in its charter)
NEVADA 22-3342379
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 MEADOWLANDS PARKWAY, #20
SECAUCUS, NEW JERSEY 07094
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(Address of principal (Zip Code)
executive offices)
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Registrant's telephone number, including area code: (201) 842-0288
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UNITED ENERGY CORP.
TABLE OF CONTENTS
PAGE
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...................................................1
ITEM 11. EXECUTIVE COMPENSATION...............................................................................3
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.......5
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................................7
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES...............................................................7
SECTION 302 CERTIFICATION OF CEO
SECTION 302 CERTIFICATION OF PFO
SECTION 906 CERTIFICATION OF CEO & PFO
EXPLANATORY NOTE
This amendment to our Annual Report on Form 10-K for the fiscal year
ended March 31, 2004 is being filed to add Items 10 through 14 of Part III of
the Annual Report on Form 10-K, which were omitted in reliance on General
Instruction G(3) thereto.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table shows the positions held by our board of directors
and executive officers and their ages as of May 15, 2004.
NAME AGE POSITION
---- --- --------
Ronald Wilen 64 Chairman of the Board, Chief
Executive Officer and Director
James McKeever, CPA 38 Interim Chief Financial Officer
Louis Bernstein 54 Director
Andrea Pampanini 63 Director
Martin Rappaport 67 Director
The principal occupations for the past five years (and, in some
instances, for prior years) of each of our executive officers and directors are
as follows:
RONALD WILEN. Mr. Wilen has served as our Chief Executive Officer and a
member of our board since October 1995. Mr. Wilen served as our President from
October 1995 to August 2001, and has been our Chairman of the Board since August
2001.
JAMES MCKEEVER, CPA. Mr. McKeever has been our Interim Chief Financial
Officer since January 2004. He also continues to be a partner in the accounting
firm of Abrams & McKeever CPA's, which he joined in January 2000. Mr. McKeever
has more than 14 years' experience in public accounting and financial reporting,
and is a member of the American Institute of Certified Public Accountants.
LOUIS BERNSTEIN. Mr. Bernstein has served as a member of our board
since September 2003. Mr. Bernstein is currently the Assistant General Counsel
of Pfizer Inc., one of the world's largest pharmaceutical companies, where he
has served as Pfizer's corporate counsel since December 1975.
ANDREA PAMPANINI. Mr. Pampanini has served as a member of our board
since December 2001. Mr. Pampanini is an organizational advisor with extensive
restructuring, marketing and strategic planning experience serving, among other
industries, the chemical, petroleum, pharmaceutical, basic metals, electrical
equipment, power generation and heavy industrial goods sectors. In 1989, Mr.
Pampanini founded Turnaround Associates Inc., a consulting firm specializing in
the financial and operational organization of medium to large-sized companies.
Since 1998, Mr. Pampanini has been a member of Leadership Strategies LLC, a
group of professionals specializing in strategic planning and personal
leadership coaching. Mr. Pampanini has devoted a major portion of his career to
the Middle East, including serving as Executive Vice President of Development
Resources Corporation from 1971 to 1977, during which time he supervised the
final phases of the Dez hydroelectric power and irrigation project in Iran.
MARTIN RAPPAPORT. Mr. Rappaport has served as a member of our board
since June 2001. Mr. Rappaport is self-employed. For more than 30 years, he has
developed and managed commercial and residential real estate (including owning
the building where our office is located). Mr. Rappaport is an active supporter
and contributor to Blythedale Children's Hospital in Valhalla, New York.
Directors are elected annually and serve until the next annual meeting
of the Company's stockholders, and until their successors have been elected and
have qualified. Officers are appointed to their positions, and continue in such
positions, at the discretion of the directors.
COMMITTEES OF THE BOARD
We do not currently have any formal board committees.
DIRECTOR COMPENSATION
Each non-employee director receives options for 10,000 shares of our
common stock in lieu of an annual retainer and meeting fees. Other than the
10,000 options granted, there are no special fees, contracts entered into, or
payments made in consideration of any director's service as a director.
INDEBTEDNESS OF EXECUTIVE OFFICERS AND DIRECTORS
No executive officer, director or any member of these individuals'
immediate families or any corporation or organization with whom any of these
individuals is an affiliate is or has been indebted to us since the beginning of
our last fiscal year.
FAMILY RELATIONSHIPS
There are no family relationships among our executive officers and
directors.
LEGAL PROCEEDINGS
During the past five years, none of our executive officers, directors,
promoters or control persons has been involved in a legal proceeding material to
an evaluation of the ability or integrity of such person.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Act of 1934, as amended, requires our
directors and executive officers, and persons who own more than 10% our
outstanding common stock, to file with the SEC, initial reports of ownership and
reports of changes in ownership of our equity securities. These persons are
required by SEC regulations to furnish us with copies of all the reports they
file.
To our knowledge, based solely on a review of the copies of the reports
furnished to us and written or oral representations that no other reports were
required for those persons during the fiscal year ended March 31, 2004, we
believe that all of our officers, directors and greater than 10% beneficial
owners complied with the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended.
CODE OF ETHICS
We are in the process of adopting a code of ethics that will apply to
all of our directors, officers, employees and independent contractors. The code
of ethics will also have specific provisions applicable to all employees with
access to, and responsibility for, matters of finance and financial management,
including our chief executive officer and interim chief financial officer. Once
adopted by our board of directors, the full text of the code of ethics will be
available at, and we intend to disclose any amendments to, or waivers from, any
provision of the code of ethics that applies to any of our executive officers or
directors by posting such information on our website at
www.unitedenergycorp.net, or provide a copy of the code of ethics, free of
charge, to those persons that make a request in writing (Attn: Robert M. Guinta)
or by e-mail (rguinta@unitedenergycorp.net).
2
ITEM 11. EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth, for the years
indicated, all cash compensation paid, distributed or accrued for services,
including salary and bonus amounts, rendered in all capacities by our chief
executive officer and all other executive officers who received or are entitled
to receive remuneration in excess of $100,000 during the stated periods.
SUMMARY COMPENSATION TABLE
Annual Long-term
Compensation Compensation
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Other Restricted Securities
Name and Fiscal Annual Stock Underlying LTIP All other
Principal Position year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
------------------ ------ ------ ----- ------------ -------- ------------ ------- ------------
($) ($) (1) (#) ($)
Ronald Wilen 2004 196,931 - 22,266(2) - - - -
Chairman and CEO 2003 206,923 - 22,308(2) 100,000 100,000 - -
2002 79,500 - 18,642(2) - 400,000 - -
Rodney I. Woods (3) 2004 9,617 - 1,385 - - - -
President 2003 192,308 75,000 3,492 - 500,000 - -
2002 - - - - - - -
Sanford M. Kimmel (4) 2004 88,467 3,014 12,485
Chief Financial Officer 2003 110,584 21,986 13,439 - 62,500 - -
2002 - - - - - - -
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(1) We pay for medical insurance for all employees. Included in the table is
the amount of the premiums paid by us dependent on the coverage provided.
(2) During the fiscal years ended March 31, 2004, 2003 and 2002, we paid for
the leases on two automobiles used by Mr. Wilen under monthly lease
payments. We also paid for medical insurance for Mr. Wilen at a rate of
$925.68 per month. The financial statements reflect imputed salaries for
Mr. Wilen totaling $93,750 for the fiscal year ended March 31, 2002.
(3) Mr. Woods resigned as our President and a member of our board in April
2003.
(4) Mr. Kimmel resigned as our Chief Financial Officer in December 2003.
OPTIONS/SAR GRANTS IN FISCAL YEAR ENDED MARCH 31, 2004
Percent of Total
Options/SARs Granted
Number of Securities to Employees
Underlying Options/ in Fiscal Exercise
Name SARs Granted Year or Base Price Expiration
---- ------------ ---- ------------- ----------
(#) ($/Sh)
Ronald Wilen -- -- -- --
Chairman and CEO
Rodney I. Woods (1) -- -- -- --
President
Sanford M. Kimmel (2) -- -- -- --
Chief Financial Officer
------------------------------
(1) Mr. Woods resigned as our President and a Director in April 2003.
(2) Mr. Kimmel resigned as our Chief Financial Officer in December 2003.
3
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR ENDED MARCH 31, 2004 AND FISCAL
YEAR END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Fiscal Options/SARs at Fiscal
Shares Acquired Value Year End Year End
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- ------------------ ------------------------- -------------------------
(#) ($) (#) ($)
Ronald Wilen -- -- 500,000 0
Chairman and CEO
Rodney I. Woods (1) -- -- -- --
President
Sanford M. Kimmel (2) -- -- -- --
Chief Financial Officer
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(1) Mr. Woods resigned as President and a Director in April 2003.
(2) Mr. Kimmel resigned as our Chief Financial Officer in December 2003.
STOCK OPTION PLAN
In August 2001, our stockholders approved the 2001 Equity Incentive
Plan which provides for the grant of stock options to purchase up to 2,000,000
shares of common stock to any employee, non-employee director or consultant at
our board's discretion. Under the 2001 Equity Incentive Plan, options may be
exercised for a period up to ten years from the date of grant. Options issued to
employees are exercisable upon vesting, which can range between the date of the
grant to up to five years.
An amendment and restatement of the 2001 Equity Incentive Plan
increasing the number of shares issuable under the plan to a total of 4,000,000
was approved by our board of directors in May 2002 and was approved by our
shareholders at our 2003 annual meeting.
Under the plan, options are granted to non-employee directors upon
election at the annual meeting of stockholders at a purchase price equal to the
fair market value on the date of grant. In addition, non-employee director stock
options shall be exercisable in full twelve months after the date of grant
unless determined otherwise by the compensation committee.
There were stock options to purchase 1,795,000 shares of our common
stock available for future grant as of March 31, 2004 under the 2001 Equity
Incentive Plan.
4
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
BENEFICIAL OWNERSHIP INFORMATION
The following table sets forth information regarding the number of
shares of our common stock beneficially owned on July 15, 2004, by each of our
directors, each of our executive officers named in the Summary Compensation
Table above, all of our executive officers and directors as a group, and by any
person or "group," as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, known to us to own beneficially more than 5% of the
outstanding shares of our common stock. Except as otherwise set forth below, the
address of each of the persons listed below is c/o United Energy Corp., 600
Meadowlands Parkway, #20, Secaucus, New Jersey 07094.
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP(1) CLASS (1)
------------------- ------------ ---------
Ronald Wilen 4,087,000(2) 18.0%
James McKeever, CPA 3,000 *
Louis Bernstein -- *
Andrea Pampanini 42,500(3) *
Martin Rappaport 3,020,100(4) 13.0%
Rodney I. Woods(5) 100,000(6) *
Sanford M. Kimmel(5) -- *
All current executive officers
and directors as a group
(5 persons) 7,152,600 30.4%
5% or Greater Stockholders:
John Holmgren 1,500,000(7) 6.7%
301 Merritt 7
Norwalk, CT 06851
UNRG Investments LLC 1,500,000(7) 6.7%
3960 Howard Hughes Parkway,
5th Floor
Las Vegas, NV 89109
LSR Capital UNRG, LLC 1,500,000(7) 6.7%
50 Charles Lindbergh Blvd.,
Suite 500
Uniondale, NY 11553
Robert L. Seaman 2,361,627(8) 10.6%
515 Madison Ave.
New York, NY 10022
Laurus Master Fund, Ltd. 2,050,000(9) 8.5%
c/o Ironshore Corporate
Services Ltd.
P.O. Box 1234 G.T.
Queensgate House, South Church Street
Grand Cayman, Cayman Islands
5
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* Less than 1% of outstanding shares.
(1) Unless otherwise indicated in these footnotes, each stockholder has sole
voting and investment power with respect to the shares beneficially owned.
All share amounts reflect beneficial ownership determined pursuant to Rule
13d-3 under the Exchange Act. All information with respect to beneficial
ownership has been furnished by the respective director, executive officer
or stockholder, as the case may be.
(2) Includes (i) stock options to purchase 400,000 shares at an exercise price
of $1.11 per share, and (ii) stock options to purchase 100,000 shares at an
exercise price of $1.80 per share, which are currently exercisable.
(3) Includes stock options to purchase 10,000 shares at an exercise price of
$.70 per share and 10,000 shares at an exercise price of $1.80 per share,
which are currently exercisable, but are subject to reduction, on a
proportional basis, if Mr. Pampanini voluntarily resigns as a director
prior to November 2004.
(4) Includes (i) stock options to purchase 10,000 shares at an exercise price
of $.70 per share and 10,000 shares at an exercise price of $1.80 per
share, which are currently exercisable, but are subject to reduction, on a
proportional basis, if Mr. Rappaport voluntarily resigns as a director
prior to November 2004; and (ii) stock options to purchase 50,000 shares at
an exercise price of $1.11 per share and warrants to purchase 750,000
shares of common stock at an exercise price of $2.00 per share, which are
currently exercisable.
(5) Mr. Woods resigned as our President and a member of our board in April 2003
and Mr. Kimmel resigned as our Chief Financial Officer in December 2003.
(6) Represents a warrant to purchase shares of common stock at an exercise
price of $1.00 per share, which are currently exercisable.
(7) Includes 1,000,000 shares of common stock and warrants to purchase 500,000
shares of common stock.
(8) Includes (i) 1,861,627 shares held by Mr. Seaman; (ii) 100,000 shares held
by the law firm Seaman & Wehle, of which Mr. Seaman is a member; and (iii)
options to purchase 400,000 shares at an exercise price of $1.11 per share,
all of which are currently exercisable.
(9) Represents 1,750,000 shares which may be acquired immediately upon
conversion of an outstanding secured convertible term note at a conversion
price of $1.00 per share and 300,000 shares which may be purchased
immediately upon exercise of an outstanding common stock purchase warrant
at an average exercise price of $1.50 per share. The convertible note and
warrant contain provisions which restrict Laurus from beneficially owning
in excess of 4.9% of our outstanding shares of common stock. Laurus Capital
Management, LLC, a Delaware limited liability company, may be deemed a
control person of the shares owned by Laurus Master Fund, Ltd. David Grin
and Eugene Grin are the principals of Laurus Capital Management, LLC. The
address for Messrs. Grin is 825 Third Avenue, 14th Floor, New York, New
York 10022.
6
Equity Compensation Plan Information
The following table provides information regarding the status of our
existing equity compensation plans at March 31, 2004.
NUMBER OF SECURITIES
REMAINING AVAILABLE
NUMBER OF SECURITIES FOR FUTURE ISSUANCE
TO BE ISSUED UPON WEIGHTED-AVERAGE UNDER EQUITY COMPENSATION
EXERCISE OF OUTSTANDING EXERCISE PRICE OF PLANS (EXCLUDING SECURITIES
OPTIONS, WARRNTS AND OUTSTANDING OPTION, REFLECTED IN THE SECOND
PLAN CATEGORY RIGHTS WARRANTS AND RIGHTS COLUMN)
--------------------------- ------------------------ ------------------- --------------------------
Equity compensation plans approved by 2,205,000 $1.32 1,795,000
security holders
Equity compensation plans not approved by 4,225,000 $1.70 --
security holders
Total 6,430,000 -- 1,795,000
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Martin Rappaport, one of our directors, owns the building in which we
lease our principal executive offices in Secaucus, New Jersey. We pay
approximately $100,000 per year under the lease, excluding real estate taxes. We
believe that this transaction was advantageous to us and was on terms no less
favorable to us than could have been obtained from unaffiliated third parties.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
The aggregate fees billed by Imowitz, Koenig & Co., LLP ("Imowitz") for
professional services rendered for the audit of our annual financial statements
for the fiscal year ended March 31, 2004 and for the reviews of the interim
financial statements included in our Quarterly Reports on Form 10-Q for that
fiscal year were approximately $47,400. The aggregate fees billed by Grant
Thornton for professional services rendered for the audit of our annual
financial statements for the fiscal year ended March 31, 2003 and for the
reviews of the interim financial statements included in our Quarterly Reports on
Form 10-Q for that fiscal year were approximately $82,500.
AUDIT-RELATED FEES
No fees were billed by Imowitz for audit-related services for the
fiscal year ended March 31, 2004. No fees were billed by Grant Thornton for
audit-related services for the fiscal year ended March 31, 2003.
TAX FEES
No fees were billed by Imowitz for tax services for the fiscal
year ended March 31, 2004. No fees were billed by Grant Thornton for tax
services for the fiscal year ended March 31, 2003.
7
ALL OTHER FEES
Neither Imowitz nor Grant Thornton rendered any other services, other
than the services described above under "Audit Fees," for the fiscal year ended
March 31, 2004 or the fiscal year ended March 31, 2003, respectively.
Our board of directors has established a policy requiring its
pre-approval of all audit services and permissible non-audit services provided
by the independent auditors, along with the associated fees for those services.
The policy requires the specific pre-approval of all permitted services. When
considering the pre-approval of non-audit services, our board considers whether
the provision of such non-audit service is consistent with the auditor's
independence and the Securities and Exchange Commission rules regarding auditor
independence. Additionally, our board considers whether the independent auditors
are best positioned and qualified to provide the most effective and efficient
service, based on factors such as the independent auditors' familiarity with our
business, personnel, systems or risk profile and whether provision of the
service by the independent auditors would enhance our ability to manage or
control risk or improve audit quality or would otherwise be beneficial to us.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
In addition to the Exhibits and Current Reports on Form 8-K listed
in our Annual Report on Form 10-K for the fiscal year ended March 31, 2004, the
following exhibits are filed herewith:
(A) Exhibits:
31.1 Certification of Chief Executive Officer pursuant to Rule
13a-14(a) under the Exchange Act.
31.2 Certification of Interim Chief Financial Officer (principal
financial and accounting officer) pursuant to Rule 13a-14(a)
under the Exchange Act.
32.1 Certification of Chief Executive Officer and Interim Chief
Financial Officer (principal financial and accounting
officer) pursuant to Rule 13a-14(b) under the Exchange Act
and 18 U.S.C. Section 1350.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
UNITED ENERGY CORP.
Date: July 29, 2004 By: /s/ Ronald Wilen
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Ronald Wilen
Chief Executive Officer
(principal executive officer)
By: /s/ James McKeever
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James McKeever
Interim Chief Financial Officer
(principal financial and
accounting officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Ronald Wilen Chief Executive Officer and Director July 29, 2004
------------------- (principal executive officer)
Ronald Wilen
/s/ James McKeever Interim Chief Financial Officer July 29, 2004
------------------- (principal financial and accounting
James McKeever officer)
Director
--------------------
Louis Bernstein
/s/ Andrea Pampanini Director July 29, 2004
--------------------
Andrea Pampanini
/s/ Martin Rappaport Director July 29, 2004
--------------------
Martin Rappaport