0001391609-12-000264.txt : 20120814 0001391609-12-000264.hdr.sgml : 20120814 20120814130541 ACCESSION NUMBER: 0001391609-12-000264 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20120630 FILED AS OF DATE: 20120814 DATE AS OF CHANGE: 20120814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Start Scientific, Inc. CENTRAL INDEX KEY: 0001368761 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 204910418 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-52227 FILM NUMBER: 121031250 BUSINESS ADDRESS: STREET 1: 11650 SOUTH STATE STREET STREET 2: SUITE 240 CITY: DRAPER STATE: UT ZIP: 84020 BUSINESS PHONE: 801-816-2560 MAIL ADDRESS: STREET 1: 11650 SOUTH STATE STREET STREET 2: SUITE 240 CITY: DRAPER STATE: UT ZIP: 84020 FORMER COMPANY: FORMER CONFORMED NAME: Secure Netwerks, Inc. DATE OF NAME CHANGE: 20060712 10-Q 1 f10q_start.htm FORM 10-Q START SCIENTIFIC, INC.

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 quarter ended June 30, 2012

 

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.)

     
6 Champion Trail    
San Antonio, TX   78258
(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 [ ] No [X]

 

1
 

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 August 1, 2012, the Company had outstanding 1,900,000 shares of common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2
 

PART I

 

FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q

 

The Financial Statements of the Company are prepared as of June 30, 2012.

 

 

 

CONTENTS

 

Balance Sheets

 

4

Statements of Operations

 

5

Statements of Cash Flows

 

6

Notes to the Financial Statements

 

7

 

 

 

 

 

 

 

 

 

3
 

START SCIENTIFIC, INC.
(formerly Secure Netwerks, Inc.)
Balance Sheets
 
       
ASSETS
   June 30,  December 31,
   2012  2011
   (Unaudited)   
       
CURRENT ASSETS          
           
Cash and cash equivalents  $65   $721 
Accounts receivable, net   1,800    2,114 
Prepaid expenses   1,742    —   
           
Total Current Assets   3,607    2,835 
           
TOTAL ASSETS  $3,607   $2,835 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
CURRENT LIABILITIES          
           
Accounts payable  $60,983   $64,646 
Accrued expenses   126,153    268,535 
Notes payable, current portion   139,722    61,850 
Notes payable - related parties, current portion   79,424    93,577 
           
Total Current Liabilities   406,282    488,608 
           
TOTAL LIABILITIES   406,282    488,608 
           
STOCKHOLDERS' DEFICIT          
           
Preferred stock, $0.0001 par value; 100 shares authorized, 100 and -0- issued and outstanding, respectively   0    —   
Common stock, $0.0001 par value; 500,000,000 shares authorized, 1,900,000 and 500,000 shares issued and outstanding, respectively   190    50 
Additional paid-in-capital   601,833    24,950 
Accumulated deficit   (1,004,698)   (510,773)
           
Total Stockholders' Deficit   (402,675)   (485,773)
           
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $3,607   $2,835 
           
The accompanying notes are an integral part of these financial statements

 

4
 

START SCIENTIFIC, INC.
(formerly Secure Netwerks, Inc.)
Statements of Operations
(Unaudited)
             
   For the Three Months Ended  For the Six Months Ended
   June 30,  June 30,
   2012  2011  2012  2011
             
NET REVENUES                    
                     
Product revenue  $—     $7,541   $—     $27,105 
                     
Total Net Revenues   —      7,541    —      27,105 
                     
OPERATING EXPENSES                    
                     
Cost of sales - product   —      5,544    —      22,345 
Salaries and consulting   304,336    946    346,336    2,298 
Professional fees   47,445    4,679    51,707    17,837 
Selling, general and administrative   29,293    412    29,403    7,286 
                     
Total Operating Expenses   381,074    11,581    427,446    49,766 
                     
LOSS FROM OPERATIONS   (381,074)   (4,040)   (427,446)   (22,661)
                     
OTHER INCOME (EXPENSES)                    
                     
Interest expense   (45,714)   (9,216)   (66,479)   (18,432)
                     
Total Other Income (Expenses)   (45,714)   (9,216)   (66,479)   (18,432)
                     
LOSS BEFORE INCOME TAXES   (426,788)   (13,256)   (493,925)   (41,093)
                     
INCOME TAX EXPENSE   —      —      —      —   
                     
NET LOSS  $(426,788)  $(13,256)  $(493,925)  $(41,093)
                     
BASIC AND DILUTED:                    
Net loss per common share  $(0.22)  $(0.03)  $(0.35)  $(0.08)
                     
Weighted average shares outstanding   1,900,000    500,000    1,425,275    500,000 
                     
The accompanying notes are an integral part of these financial statements

 

5
 

START SCIENTIFIC, INC.
(formerly Secure Netwerks, Inc.)
Statements of Cash Flows
(Unaudited)
       
   For the Six Months Ended
   June 30,
   2012  2011
       
CASH FLOWS FROM OPERATING ACTIVITIES:          
           
Net loss  $(493,925)  $(41,093)
Adjustments to reconcile net loss to net          
 cash used by operating activities:          
Stock based compensation   227,023      
Debt issue costs   96,032    —   
Amortization of debt discount   (46,032)   —   
Changes in operating assets and liabilities:          
Accounts receivable   314    1,254 
Prepaid expenses   (1,742)   —   
Loans receivable   —      3,608 
Accounts payable and accrued expenses   (146,045)   25,021 
           
Net Cash Used by Operating Activities   (364,375)   (11,210)
           
CASH FLOWS FROM INVESTING ACTIVITIES:   —      —   
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
           
Proceeds from sales of common stock   300,000    —   
Proceeds from notes payable   100,000    6,000 
Proceeds from notes payable - related parties   11,213    —   
Payments on notes payable   (22,128)   —   
Payments on notes payable - related parties   (25,366)   —   
           
Net Cash Provided by Financing Activities   363,719    6,000 
           
NET DECREASE IN CASH AND CASH EQUIVALENTS  $(656)  $(5,210)
           
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   721    6,019 
           
CASH AND CASH EQUIVALENTS, END OF PERIOD  $65   $809 
           
SUPPLEMENTAL CASH FLOW INFORMATION          
           
Cash Payments For:          
Interest  $1,369   $1,613 
Income taxes  $—     $—   
           
The accompanying notes are an integral part of these financial statements

 

 

6
 

 

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2012

(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 filed on April 16, 2012. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012.

 

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, 2011, the Company has incurred operating losses of approximately $511,000 from inception of the Company through December 31, 2011. The Company’s stockholders’ deficit at June 30, 2012 was approximately $403,000 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 PREFERRED STOCK AND COMMON STOCK

 

On February 29, 2012, 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 in exchange for $100,000. The Note matures on August 27, 2012 and carries a fixed interest payment at maturity of $25,000. As part of the note issuance, the Company recorded debt issue costs of $50,000 and a discount on the note of $19,048. These amounts are being amortized over the 6 month term of the note.

7
 

 

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2012

(Unaudited)

 

NOTE 3 PREFERRED STOCK AND COMMON STOCK (Continued)

 

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. As of June 30, 2012, the conditions of the agreement had not been met and the stock had not been issued, therefore the transaction has not been recorded on the financial statements herein.

 

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 June 30, 2012, the conditions of the agreement had not been met and the stock had not been issued. Therefore, due to the potential rescinding of the agreement, the transaction has not been recorded on the financial statements herein.

 

NOTE 4 SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events for the period of June 30, 2012 through the date the financial statements were issued, and concluded there were no other events or transactions occurring during this period that required recognition or disclosure in its financial statements.

 

 

 

 

8
 

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. You should carefully consider the information under the caption "Risk Factors" in this filing, in addition to the other information set forth in this report. 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.

 

Results of Operations

 

Following is our discussion of the relevant items affecting results of operations for the periods ended June 30, 2012 and 2011.

 

Revenues. Our products and services are broken down into two categories for revenue recognition purposes – (i) off-the-shelf hardware/software product sales, and (ii) outsourced information technology services. Our revenue recognition policy for these categories is as follows:

 

Revenue is recognized upon completion of services or delivery of goods where the sales price is fixed or determinable and collectibility is reasonably assured. Advance customer payments are recorded as deferred revenue until such time as they are recognized.

 

Product sales are derived from the resale of off-the-shelf hardware and software packages. Product sales are not warranted by Start Scientific and may be subject only to warranties that may be provided by the product manufacturer. Therefore, product warranties have no effect on the financial statements. We have no sales arrangements encompassing multiple deliverables.

 

Start Scientific generated net revenues of $-0- for the three month period ended June 30, 2012 compared to $7,541 in net revenues for the first quarter of 2012. During the six months ended June 30, 2012 and 2011, we received $-0- and $27,105, respectively, in gross revenues from software and hardware product resales and equipment leasing. The decrease in revenues is mainly the result of the change in our business model in which we no longer sell computer hardware and software.

 

Cost of Sales. Expenses which comprise cost of sales are the wholesale cost of hardware, software, any accompanying licenses, product sales commissions, and commissions paid in connection with information technology consulting contracts.

 

Cost of sales for the three month period ended June 30, 2012 was $-0-, compared to $5,544 during the second quarter of 2011. For the six months ended June 30, 2012, cost of sales was $-0- compared to $22,345 during the six months ended June 30, 2011. The decrease is mainly the result of decreased sales and the change in our business model as discussed above.

9
 

 

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 month period ended June 30, 2012 were $304,336 compared to $946 during the second quarter of 2011. During the six months ended June 30, 2012, salaries and consulting expenses were $346,336 compared to $2,298 during the six months ended June 30, 2011. The increase is mainly the result of the issuance of 10,500,000 stock options to officers and directors of the Company. This issuance resulted in compensation expense of $227,023 during the six months ended June 30, 2012. Also, based on the change in our business model we are accruing for officers’ compensation and outside consultants to assist us in locating oil and gas interests for potential investment. 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 month period ended June 30, 2012 were $47,445 compared to $4,679 during the second quarter of 2011. For the six months ended June 30, 2012, professional fees were $51,707 compared to $17,837 during the six months ended June 30, 2011. We anticipate that professional fees will increase in the future as we enter into the oil and gas business.

 

Selling, General and Administrative Expenses. Selling, general and administrative expenses have been comprised of advertising; bad debts; occupancy and office expenses; equipment leases; travel and other miscellaneous administrative expenses. Selling, general and administrative expenses for the three month period ended June 30, 2012 were $29,293 compared to $412 during the second quarter of 2011. During the six months ended June 30, 2012, selling, general and administrative expenses were $29,403 compared to $7,286 during the six months ended June 30, 2011. We expect selling, general and administrative expenses to increase in the future.

 

Other Income (Expense). Other income and expenses for the three month period ended June 30, 2012 were $45,714 compared to $9,216 during the second quarter of 2011. We incurred net other expense of $66,479 for the six month period ended June 30, 2012 compared to $18,432 during the first six months of 2011. Other expenses incurred were comprised primarily of the amortization of the debt issue costs and 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.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements.

 

Personnel

 

Start Scientific has no full-time employees, two part-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 June 30, 2012, our primary source of liquidity consisted of $65 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. At present, however, we have no plans to seek any such additional capital or to engage in any business development or acquisition activity.

10
 

 

FORWARD LOOKING STATEMENTS AND RISK FACTORS

 

Forward Looking Statements

 

When used in this report, the words, “believes,” “plans,” “expects,” and similar expressions are intended by us to identify forward-looking statements within the meaning of and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to certain risks and uncertainties, including those discussed below, that could cause actual results to differ materially from those we have projected. These forward-looking statements speak only as of the date hereof. All of these forward-looking statements are based on our estimates and assumptions, which although we believe them to be reasonable, are inherently uncertain and difficult to predict. We cannot assure you that the benefits anticipated in these forward-looking statements will be achieved.

 

We undertake no obligation to update any forward-looking statements, but you are advised to consult any further disclosures by Start Scientific on this subject in its subsequent filings pursuant to the Securities Exchange Act of 1934. Furthermore, we are providing these cautionary statements identifying risk factors, listed below, that could cause our actual results to differ materially from expected and historical results. It is not possible for our management to foresee or identify all such factors. Consequently, this list should not be considered an exhaustive statement of all potential risks, uncertainties and inaccurate assumptions.

 

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

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, to allow for timely decisions regarding required disclosure.

 

As of June 30, 2012, the end of our second quarter covered by this report, we carried out an evaluation, under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report. Our board of directors has only one member. We do not have a formal audit committee.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended). In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2012. In making this

11
 

assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of June 30, 2012, our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles.

 

This quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this quarterly report.

 

Inherent limitations on effectiveness of controls

 

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Changes in Internal Control over Financial Reporting

 

There have been no significant changes in our internal controls over financial reporting that occurred during the second quarter ended June 30, 2012 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

12
 

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 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 ten million (10,000,000) shares of restricted common stock. The holder of the Working Interests is an “accredited investor” as such term is defined under Rule 501 of Regulation D. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. The Company believes that this transaction was 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:

 

13
 

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, George Edwards, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification by Chief Executive Officer, S. Arne D. Greaves, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification by Chief Financial Officer, George Edwards, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2   Certification by Chief Executive Officer, S. Arne D. Greaves, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

(1)Filed as an Exhibit to the Company’s Form 8-k filed on November 23, 2011.
(2)Filed as an Exhibit to the Company’s Registration Statement on Form 10 SB12G, deemed effective by the Commission on January 17, 2007.

 

 

14
 

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: August 14, 2012 BY: /S/ S. Arne D. Greaves________________

Arne D. Greaves

Chief Executive Officer

 

 

15
 

EX-31.1 2 ex31_1sarbanes302edwards.htm EXHIBIT 31.1 SARBANES OXLEY 302 - GEORGE EDWARDS

Exhibit 31.1

 

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, George Edwards 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: August 14, 2012

 

/s/ George Edwards

George Edwards

Chief Financial Officer

 

EX-31.2 3 ex31_2sarbanes302greaves.htm EXHIBIT 31.2 SARBANES OXLEY 302 - ARNE GREAVES

Exhibit 31.2

 

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Arne D. Greaves 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: August 14, 2012

 

/s/ Arne D. Greaves

Arne D. Greaves

Chief Executive Officer

 

EX-31.2 4 ex32_1sarbanes906edwards.htm EXHIBIT 32.1 SARBANES OXLEY 906 - GEORGE EDWARDS

Exhibit 32.1

 

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, George Edwards, Chief Financial Officer of Start Scienrific, 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 annual 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 annual report.

 

Date: August 14, 2012

 

/s/ George Edwards

George Edwards

Chief Financial Officer

 

EX-32.2 5 ex32_2sarbanes906greaves.htm EXHIBIT 32.2 SARBANES OXLEY 906 - ARNE GREAVES

Exhibit 32.2

 

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Arne D. Greaves, 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 annual 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 annual report.

 

Date: August 14, 2012

 

/s/ Arne D. Greaves

Arne D. Greaves

Chief Executive Officer

 

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NOTE 4 SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2012
Subsequent Events [Abstract]  
NOTE 4 SUBSEQUENT EVENTS

 

NOTE 4 SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events for the period of June 30, 2012 through the date the financial statements were issued, and concluded there were no other events or transactions occurring during this period that required recognition or disclosure in its financial statements.

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NOTE 3 PREFERRED STOCK AND COMMON STOCK
6 Months Ended
Jun. 30, 2012
Note 3 Preferred Stock And Common Stock  
NOTE 3 PREFERRED STOCK AND COMMON STOCK

 

NOTE 3 PREFERRED STOCK AND COMMON STOCK

 

On February 29, 2012, 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 in exchange for $100,000. The Note matures on August 27, 2012 and carries a fixed interest payment at maturity of $25,000. As part of the note issuance, the Company recorded debt issue costs of $50,000 and a discount on the note of $19,048. These amounts are being amortized over the 6 month term of the note.

 

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. As of June 30, 2012, the conditions of the agreement had not been met and the stock had not been issued, therefore the transaction has not been recorded on the financial statements herein.

 

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 June 30, 2012, the conditions of the agreement had not been met and the stock had not been issued. Therefore, due to the potential rescinding of the agreement, the transaction has not been recorded on the financial statements herein.

XML 16 R2.htm IDEA: XBRL DOCUMENT v2.4.0.6
Balance Sheets (USD $)
Jun. 30, 2012
Dec. 31, 2011
CURRENT ASSETS    
Cash and cash equivalents $ 65 $ 721
Accounts receivable, net 1,800 2,114
Prepaid expenses 1,742   
Total Current Assets 3,607 2,835
TOTAL ASSETS 3,607 2,835
CURRENT LIABILITIES    
Accounts payable 60,983 64,646
Accrued expenses 126,153 268,535
Notes payable, current portion 139,722 61,850
Notes payable - related parties, current portion 79,424 93,577
Total Current Liabilities 406,282 488,608
TOTAL LIABILITIES 406,282 488,608
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, 1,900,000 and 500,000 shares issued and outstanding, respectively 190 50
Additional paid-in-capital 601,833 24,950
Accumulated deficit (1,004,698) (510,773)
Total Stockholders' Deficit (402,675) (485,773)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 3,607 $ 2,835
XML 17 R6.htm IDEA: XBRL DOCUMENT v2.4.0.6
NOTE 1 BASIS OF FINANCIAL STATEMENT PRESENTATION
6 Months Ended
Jun. 30, 2012
Note 1 Basis Of Financial Statement Presentation  
NOTE 1 BASIS OF FINANCIAL STATEMENT PRESENTATION

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 filed on April 16, 2012. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012.

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XML 20 R7.htm IDEA: XBRL DOCUMENT v2.4.0.6
NOTE 2 GOING CONCERN CONSIDERATIONS
6 Months Ended
Jun. 30, 2012
Note 2 Going Concern Considerations  
NOTE 2 GOING CONCERN CONSIDERATIONS

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, 2011, the Company has incurred operating losses of approximately $511,000 from inception of the Company through December 31, 2011. The Company’s stockholders’ deficit at June 30, 2012 was approximately $403,000 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.

XML 21 R3.htm IDEA: XBRL DOCUMENT v2.4.0.6
Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2012
Dec. 31, 2011
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 100 100
Preferred stock, shares issued 100 0
Preferred stock, shares outstanding 100 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 1,900,000 500,000
Common stock, shares outstanding 1,900,000 500,000
XML 22 R1.htm IDEA: XBRL DOCUMENT v2.4.0.6
Document and Entity Information
6 Months Ended
Jun. 30, 2012
Aug. 01, 2012
Document And Entity Information    
Entity Registrant Name Start Scientific, Inc.  
Entity Central Index Key 0001368761  
Document Type 10-Q  
Document Period End Date Jun. 30, 2012  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   1,900,000
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2012  
XML 23 R4.htm IDEA: XBRL DOCUMENT v2.4.0.6
Statements of Operations (Unaudited) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Income Statement [Abstract]        
Product revenue    $ 7,541    $ 27,105
Total Net Revenues    7,541    27,105
OPERATING EXPENSES        
Cost of sales - product    5,544    22,345
Salaries and consulting 304,336 946 346,336 2,298
Professional fees 47,445 4,679 51,707 17,837
Selling, general and administrative 29,293 412 29,403 7,286
Total Operating Expenses 381,074 11,581 427,446 49,766
LOSS FROM OPERATIONS (381,074) (4,040) (427,446) (22,661)
OTHER INCOME (EXPENSES)        
Interest expense (45,714) (9,216) (66,479) (18,432)
Total Other Income (Expenses) (45,714) (9,216) (66,479) (18,432)
LOSS BEFORE INCOME TAXES (426,788) (13,256) (493,925) (41,093)
INCOME TAX EXPENSE            
NET LOSS $ (426,788) $ (13,256) $ (493,925) $ (41,093)
BASIC AND DILUTED:        
Net loss per common share $ (0.22) $ (0.03) $ (0.35) $ (0.08)
Weighted average shares outstanding 1,900,000 500,000 1,425,275 500,000
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NOTE 3 PREFERRED STOCK AND COMMON STOCK (Details Narrative) (USD $)
3 Months Ended 7 Months Ended
Jun. 30, 2012
Aug. 31, 2012
May 16, 2012
Apr. 02, 2012
Mar. 01, 2012
Feb. 29, 2012
Dec. 31, 2011
Note 3 Preferred Stock And Common Stock              
Common stock shares issued 1,900,000         200,000 500,000
Principal amount of promissory note           $ 100,000  
Proceeds from issuance of debt & equity           100,000  
Fixed interest payment at maturity           25,000  
Debt issue costs   50,000          
Note discount           19,048  
Term of the note   6 months          
Common stock subscribed, shares         1,200,000    
Common stock consideration, not issued       10,000,000      
Subscription of investor         300,000    
Investment in development, required under terms of acquisition agreement     $ 5,000,000        
Shares issuable in a business combination agreement 90,000,000            
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NOTE 2 GOING CONCERN CONSIDERATIONS (Details Narrative) (USD $)
3 Months Ended 6 Months Ended 71 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Note 2 Going Concern Considerations Policies          
Operating loss $ (381,074) $ (4,040) $ (427,446) $ (22,661) $ 511,000
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Statements of Cash Flows (Unaudited) (USD $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (493,925) $ (41,093)
Adjustments to reconcile net loss to net cash used by operating activities:    
Stock based compensation 227,023  
Debt issue costs 96,032   
Amortization of debt discount (46,032)   
Changes in operating assets and liabilities:    
Accounts receivable 314 1,254
Prepaid expenses (1,742)   
Loans receivable    3,608
Accounts payable and accrued expenses (146,045) 25,021
Net Cash Used by Operating Activities (364,375) (11,210)
CASH FLOWS FROM INVESTING ACTIVITIES:      
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from sales of common stock 300,000   
Proceeds from notes payable 100,000 6,000
Proceeds from notes payable - related parties 11,213   
Payments on notes payable (22,128)   
Payments on notes payable - related parties (25,366)   
Net Cash Provided by Financing Activities 363,719 6,000
NET DECREASE IN CASH AND CASH EQUIVALENTS (656) (5,210)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 721 6,019
CASH AND CASH EQUIVALENTS, END OF PERIOD 65 809
Cash Payments For:    
Interest 1,369 1,613
Income taxes      
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NOTE 2 GOING CONCERN CONSIDERATIONS (Policies)
6 Months Ended
Jun. 30, 2012
Note 2 Going Concern Considerations Policies  
NOTE 2 GOING CONCERN CONSIDERATIONS

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, 2011, the Company has incurred operating losses of approximately $511,000 from inception of the Company through December 31, 2011. The Company’s stockholders’ deficit at June 30, 2012 was approximately $403,000 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.

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