-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MxYEl6JlYeT1/vXmcHM8vftUqOd0ETeu0/lmoC6KQFuvLPRdBvjhhGNMv/UQ2d3u ZSe1RZbe15nyfxz/WojsJQ== 0001004878-08-000002.txt : 20080103 0001004878-08-000002.hdr.sgml : 20080103 20080103131954 ACCESSION NUMBER: 0001004878-08-000002 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20080102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Gas Salvage Corp. CENTRAL INDEX KEY: 0001422295 IRS NUMBER: 364613360 STATE OF INCORPORATION: NV FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-148447 FILM NUMBER: 08505128 BUSINESS ADDRESS: STREET 1: 333 RIVERFRONT AVE., S.E. STREET 2: SUITE 153 CITY: CALGARY STATE: A0 ZIP: T2G 5R1 BUSINESS PHONE: 866-822-0325 MAIL ADDRESS: STREET 1: 333 RIVERFRONT AVE., S.E. STREET 2: SUITE 153 CITY: CALGARY STATE: A0 ZIP: T2G 5R1 SB-2 1 formsb2dec07.txt As filed with the Securities and Exchange Commission on ______, 2007 Commission File No. 333-______ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-2 Registration Statement Under THE SECURITIES ACT OF 1933 GAS SALVAGE CORP. - ----------------- (Exact name of registrant as specified in charter) Nevada 1311 36-4613360 --------------------------- ---------------------- ---------------------- (State or other jurisdiction (Primary Standard Classi- (IRS Employer of incorporation) fication Code Number) I.D. Number) Suite 153, 333 River Front Ave., S.E. Calgary, Alberta Canada T2G 5R1 (866) 822 - 0325 ---------------------------------------- (Address and telephone number of principal executive offices) Suite 153, 333 River Front Ave., S.E. Calgary, Alberta Canada T2G 5R1 (866) 822 - 0325 ------------------------------------------ (Address of principal place of business or intended principal place of business) Nolan Weir Suite 153, 333 River Front Ave., S.E. Calgary, Alberta Canada T2G 5R1 (866) 822 - 0325 ----------------------------------------------- (Name, address and telephone number of agent for service) Copies of all communications, including all communications sent to the agent for service, should be sent to: William T. Hart, Esq. Hart & Trinen, LLP 1624 Washington Street Denver, Colorado 80203 303-839-0061 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box [X]. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE Title of each Proposed Proposed Class of Maximum Maximum Securities Securities Offering Aggregate Amount of to be to be Price Per Offering Registration Registered Registered Share (1) Price Fee - ---------- ---------- ----------- --------- ------------ Common Stock (2) 2,680,000 $0.20 $536,000 $21 - ---------------------------------------------------------------------------- (1) Offering price computed in accordance with Rule 457. (2) Shares of common stock offered by selling shareholders The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of l933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 2 PROSPECTUS GAS SALVAGE CORP. Common Stock By means of this prospectus a number of Gas Salvage's shareholders are offering to sell up to 2,680,000 shares of Gas Salvage's common stock at a price of $0.20 per share. If and when Gas Salvage's common stock becomes quoted on the OTC Bulletin Board, the shares owned by the selling shareholders may be sold in the over-the-counter market, or otherwise, at prices and terms then prevailing or at prices related to the then-current market price, or in negotiated transactions. Gas Salvage will not receive any proceeds from the sale of the common stock by the selling stockholders. Gas Salvage will pay for the expenses of this offering which are estimated to be $35,000, of which approximately $16,000 has been paid as of the date of this prospectus. As of the date of this prospectus there was no public market for Gas Salvage's common stock. Although Gas Salvage plans to have its shares listed on the OTC Bulletin Board, Gas Salvage may not be successful in establishing any public market for its common stock. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE __ OF THIS PROSPECTUS. The date of this prospectus is January __, 2008. PROSPECTUS SUMMARY Gas Salvage was incorporated in Nevada on June 5, 2007. Gas Salvage plans to be involved in the exploration and development of oil and gas. Gas Salvage's activities will be primarily be dependent upon available financing. As of December 31, 2007 Gas Salvage had an interest in one oil and gas property. As of December 31, 2007 Gas Salvage had 5,280,000 outstanding shares of common stock. Gas Salvage does not have a website. Gas Salvage is not a blank check company required to comply with Rule 419 of the Securities and Exchange Commission. Gas Salvage's offices are located at Suite 153, 333 River Front Ave., S.E., Calgary, Alberta, Canada T2G 5R1. Gas Salvage's telephone number is (866) 822-0325 and its facsimile number is (866) 822-0325. See the "Glossary" section of this prospectus for the definition of terms pertaining to the oil and gas industry which are used in this prospectus. Forward Looking Statements This Prospectus contains various forward-looking statements that are based on Gas Salvage's beliefs as assumptions made by and information currently available to Gas Salvage. When used in this Prospectus, the words "believe", "expect", "anticipate", "estimate" "intend", "project", "predict" and similar expressions are intended to identify forward-looking statements. These statements may involve projections, capital requirements, operating expenses, and the like, and are subject to certain risks, uncertainties and assumptions which could cause actual results to differ materially from projections or estimates. Factors which could cause actual results to differ materially are discussed at length under the heading "Risk Factors". Should one or more of the enumerated risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Investors should not place undue reliance on forward-looking statements, all of which speak only as of the date made. The Offering By means of this prospectus a number of Gas Salvage's shareholders are offering to sell up to 2,680,000 shares of its common stock at a price of $.20 per share. If and when Gas Salvage's common stock becomes quoted on the OTC Bulletin Board or listed on a securities exchange, the shares owned by the selling shareholders may be sold in the over-the-counter market, or otherwise, at prices and terms then prevailing or at prices related to the then-current market price, or in negotiated transactions. 1 The purchase of the securities offered by this prospectus involves a high degree of risk. Risk factors include the lack of any relevant operating history, losses since Gas Salvage was incorporated, and the possible need for Gas Salvage to sell shares of its common stock to raise additional capital. See "Risk Factors" beginning on page 2 of this prospectus for additional Risk Factors. RISK FACTORS The securities being offered involve a high degree of risk. Prospective investors should consider the following risk factors which affect Gas Salvage's business and this offering. These risk factors discuss all material risks which pertain to an investment in Gas Salvage's common stock. If any of the risks discussed below materialize, Gas Salvage's common stock could decline in value or become worthless. Risk Factors Related to Gas Salvage's Business. Gas Salvage has a history of losses and may never be profitable. Gas Salvage has never earned a profit. Gas Salvage expects to incur losses during the foreseeable future and may never be profitable. The failure of Gas Salvage to obtain capital may significantly restrict Gas Salvage's proposed operations. Gas Salvage needs additional capital to fund its operating losses and to explore for oil and gas. Gas Salvage's issuance of equity or equity-related securities to raise capital will dilute the ownership interest of existing shareholders. Gas Salvage does not know what the terms of any future capital raising may be but any future sale of Gas Salvage's equity securities would dilute the ownership of existing stockholders and could be at prices substantially below the price of the shares of common stock sold in this offering. The failure of Gas Salvage to obtain the capital which it requires will result in the slower implementation of Gas Salvage's business plan or its inability of Gas Salvage to implement its business plan. There can be no assurance that Gas Salvage will be able to obtain any capital which it will need. To enable Gas Salvage to continue in business Gas Salvage will eventually need to earn a profit or obtain additional financing until Gas Salvage is able to earn a profit. As a result of Gas Salvage's short operating history it is difficult for potential investors to evaluate its business. There can be no assurance that Gas Salvage can implement its business plan, that it will be profitable, or that the shares which may be sold in this offering will have any value. Gas Salvage will not receive any proceeds from the sale of the shares offered by the selling shareholders. Oil and gas exploration is not an exact science, and involves a high degree of risk. The primary risk lies in the drilling of dry holes or drilling and completing wells which, though productive, do not produce gas and/or oil in sufficient amounts to return the amounts expended and produce a profit. Hazards, such as unusual or unexpected formation pressures, downhole fires, blowouts, loss of circulation of drilling fluids and other conditions are involved in drilling and completing oil and gas wells and, if such hazards are encountered, 2 completion of any well may be substantially delayed or prevented. In addition, adverse weather conditions can hinder or delay operations, as can shortages of equipment and materials or unavailability of drilling, completion, and/or work-over rigs. Even though a well is completed and is found to be productive, water and/or other substances may be encountered in the well, which may impair or prevent production or marketing of oil or gas from the well. Exploratory drilling involves substantially greater economic risks than development drilling because the percentage of wells completed as producing wells is usually less than in development drilling. Exploratory drilling itself can be of varying degrees of risk and can generally be divided into higher risk attempts to discover a reservoir in a completely unproven area or relatively lower risk efforts in areas not too distant from existing reservoirs. While exploration adjacent to or near existing reservoirs may be more likely to result in the discovery of oil and gas than in completely unproven areas, exploratory efforts are nevertheless high risk activities. Although the completion of oil and gas wells is, to a certain extent, less risky than drilling for oil and gas, the process of completing an oil or gas well is nevertheless associated with considerable risk. In addition, even if a well is completed as a producer, the well for a variety of reasons may not produce sufficient oil or gas in order to repay Gas Salvage's investment in the well. The acquisition, exploration and development of oil and gas properties, and the production and sale of oil and gas are subject to many factors which are outside Gas Salvage's control. These factors include, among others, general economic conditions, proximity to pipelines, oil import quotas, supply, demand, and price of other fuels and the regulation of production, refining, transportation, pricing, marketing and taxation by Federal, state, and local governmental authorities. Buyers of Gas Salvage's gas, if any, may refuse to purchase gas from Gas Salvage in the event of oversupply. If wells which may be drilled by Gas Salvage are productive of natural gas, the quantities of gas that Gas Salvage may be able to sell may be too small to pay for the expenses of operating the wells. In such a case, the wells would be "shut-in" until such time, if ever, that economic conditions permit the sale of gas in quantities which would be profitable. Interests that Gas Salvage may acquire in oil and gas properties may be subject to royalty and overriding royalty interests, liens incident to operating agreements, liens for current taxes and other burdens and encumbrances, easements and other restrictions, any of which may subject Gas Salvage to future undetermined expenses. Gas Salvage does not intend to purchase title insurance, title memos, or title certificates for any leasehold interests it will acquire. It is possible that at some point Gas Salvage will have to undertake title work involving substantial costs. In addition, it is possible that Gas Salvage may suffer title failures resulting in significant losses to Gas Salvage. The drilling of oil and gas wells involves hazards such as blowouts, unusual or unexpected formations, pressures or other conditions which could result in substantial losses or liabilities to third parties. Although Gas Salvage intends to acquire adequate insurance, or to be named as an insured under coverage acquired by others (e.g., the driller or operator), Gas Salvage may not be 3 insured against all such losses because such insurance may not be available, premium costs may be deemed unduly high, or for other reasons. Accordingly, uninsured liabilities to third parties could result in the loss of Gas Salvage's funds or property. Gas Salvage's operations are dependent upon the continued services of its officers. The loss of any of these officers, whether as a result of death, disability or otherwise, may have a material adverse effect upon the business of Gas Salvage. Gas Salvage's operations will be affected from time to time and in varying degrees by political developments and Federal and state laws and regulations regarding the development, production and sale of crude oil and natural gas. These regulations require permits for drilling of wells and also cover the spacing of wells, the prevention of waste, and other matters. Rates of production of oil and gas have for many years been subject to Federal and state conservation laws and regulations and the petroleum industry is subject to Federal tax laws. In addition, the production of oil or gas may be interrupted or terminated by governmental authorities due to ecological and other considerations. Compliance with these regulations may require a significant capital commitment by and expense to Gas Salvage and may delay or otherwise adversely affect Gas Salvage's proposed operations. From time to time legislation has been proposed relating to various conservation and other measures designed to decrease dependence on foreign oil. No prediction can be made as to what additional legislation may be proposed or enacted. Oil and gas producers may face increasingly stringent regulation in the years ahead and a general hostility towards the oil and gas industry on the part of a portion of the public and of some public officials. Future regulation will probably be determined by a number of economic and political factors beyond the control of Gas Salvage or the oil and gas industry. Gas Salvage's activities will be subject to existing federal and state laws and regulations governing environmental quality and pollution control. Compliance with environmental requirements and reclamation laws imposed by Federal, state, and local governmental authorities may necessitate significant capital outlays and may materially affect the earnings of Gas Salvage. It is impossible to predict the impact of environmental legislation and regulations (including regulations restricting access and surface use) on Gas Salvage's operations in the future although compliance may necessitate significant capital outlays, materially affect Gas Salvage's earning power or cause material changes in its intended business. In addition, Gas Salvage may be exposed to potential liability for pollution and other damages. Since Gas Salvage's officers plan to devote only a portion of their time to Gas Salvage's business, its chances of being profitable will be less than if it had full time management. As of the date of this prospectus Gas Salvage had two officers. With the exception of Philip Grey, the officers of Gas Salvage are employed full-time at other companies and the officers' other responsibilities could take precedence over the officer's duties to Gas Salvage. Risk Factors Related to this Offering As of the date of this prospectus there was no public market for Gas Salvage's common stock and if no public market develops, purchasers of the shares offered 4 by this prospectus may be unable to sell their shares. If purchasers are unable to sell their shares, purchasers may never be able to recover any amounts which they paid for Gas Salvage's shares. Because there is no public market for Gas Salvage's common stock, the price for its shares was arbitrarily established, does not bear any relationship to Gas Salvage's assets, book value or net worth, and may be greater than the price which investors in this offering may receive when they resell their shares. Accordingly, the offering price of Gas Salvage's common stock should not be considered to be any indication of the value of its shares. The factors considered in determining the offering price included Gas Salvage's future prospects and the likely trading price for its common stock if a public market ever develops. Should a market for Gas Salvage's common stock ever develop, disclosure requirements pertaining to penny stocks may reduce the level of trading activity in the market for Gas Salvage's common stock and investors may find it difficult to sell their shares. If a market ever develops for the common stock of Gas Salvage, trades of Gas Salvage's common stock will be subject to Rule 15g-9 of the Securities and Exchange Commission, which rule imposes certain requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, brokers/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser's written agreement to the transaction prior to sale. The Securities and Exchange Commission also has rules that regulate broker/dealer practices in connection with transactions in "penny stocks". Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system). The penny stock rules require a broker/ dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. DILUTION AND COMPARATIVE SHARE DATA As of December 31, 2007 Gas Salvage had 5,280,000 outstanding shares of common stock, which had a net tangible book value of $0.06 per share. These shares were issued for cash of $266,301 and as payment for Gas Salvage's working interest in an oil and gas lease. The following table illustrates per share dilution and the comparative stock ownership of Gas Salvage's stockholders as compared to the investors in this offering, assuming all shares offered by this prospectus are sold. 5 Shares outstanding as of December 31, 2007 5,280,000 Shares offered by selling shareholders 2,680,000 Net tangible book value per share at as of December 31, 2007 $0.06 Offering price, per share $0.20 Dilution to purchasers of shares offered by this prospectus $0.14 Equity ownership by purchasers of shares offered by this prospectus 51% The following table shows the cash amount paid by the present shareholders of Gas Salvage for their shares of Gas Salvage's common stock: Name Price Paid Per Share ---- -------------------- Officer and Director $0.01 Futures Investment Corp. (1) Investors in private offering $0.10 CDN$ (1) In consideration for its interest in its oil and gas property, Gas Salvage paid Futures Investment Corp. $100,000 in cash plus 900,000 shares of its restricted common stock. MARKET FOR GAS SALVAGE'S COMMON STOCK. Gas Salvage's common stock is not quoted on any exchange and there is no public trading market. As of December 31, 2007, Gas Salvage had 5,280,000 outstanding shares of common stock and 63 shareholders. Gas Salvage does not have any outstanding options, warrants or other arrangements providing for the issuance of additional shares of its capital stock. All of the outstanding shares of Gas Salvage are restricted securities and if not sold by means of this prospectus may be sold in accordance with Rule 144 of the Securities and Exchange Commission beginning in March 2008. Holders of common stock are entitled to receive dividends as may be declared by the Board of Directors. Gas Salvage's Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No dividends have ever been declared and it is not anticipated that dividends will ever be paid. Gas Salvage's Articles of Incorporation authorize its Board of Directors to issue up to 5,000,000 shares of preferred stock. The provisions in the Articles of Incorporation relating to the preferred stock allow Gas Salvage's directors to issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the 6 holders of Gas Salvage's common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by Gas Salvage's management. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION The following discussion of financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements, which are included elsewhere in this prospectus. Gas Salvage was incorporated on June 5, 2007. In September 2007 Gas Salvage acquired a 44.5% working interest (35.6% net revenue interest) in a gas well located in Lincoln County, Oklahoma. The gas well was put into production in November 2007. As of December 31, 2007 the well was producing, net to Gas Salvage's net revenue interest, 30 MCF of gas per day. RESULTS OF OPERATIONS The factors that most significantly affect Gas Salvage's results of operations will be (i) the sale prices of crude oil and natural gas, (ii) the amount of production from oil or gas wells in which Gas Salvage has an interest, and (iii) and lease operating expenses. Gas Salvage's revenues will also be significantly impacted by its ability to maintain or increase oil or gas production through exploration and development activities. Prices received by Gas Salvage for sales of crude oil and natural gas may fluctuate significantly from period to period. The fluctuations in oil prices during these periods reflect market uncertainty regarding the inability of the Organization of Petroleum Exporting Countries ("OPEC") to control the production of its member countries, as well as concerns related to the global supply and demand for crude oil. Gas prices received by Gas Salvage will fluctuate with changes in the spot market price for gas. Changes in natural gas and crude oil prices will significantly affect the revenues and cash flow of the wells and the value of the oil and gas properties. Declines in the prices of crude oil and natural gas could have a material adverse effect on the success of Gas Salvage's operations and activities, recoupment of the costs of acquiring, developing and producing its wells and profitability. Gas Salvage is unable to predict whether the prices of crude oil and natural gas will rise, stabilize or decline in the future. Other than the foregoing, Gas Salvage does not know of any trends, events or uncertainties that have had or are reasonably expected to have a material impact on Gas Salvage's net sales, revenues or expenses. 7 LIQUIDITY AND CAPITAL RESOURCES It is expected that Gas Salvage's principal source of cash flow will be from the production and sale of crude oil and natural gas reserves which are depleting assets. Cash flow from the sale of oil and gas production depends upon the quantity of production and the price obtained for the production. An increase in prices will permit Gas Salvage to finance its operations to a greater extent with internally generated funds, may allow Gas Salvage to obtain equity financing more easily or on better terms, and lessens the difficulty of obtaining financing. However, price increases heighten the competition for oil and gas prospects, increase the costs of exploration and development, and, because of potential price declines, increase the risks associated with the purchase of producing properties during times that prices are at higher levels. A decline in oil and gas prices (i) will reduce the cash flow internally generated by Gas Salvage which in turn will reduce the funds available for exploring for and replacing oil and gas reserves, (ii) will increase the difficulty of obtaining equity and debt financing and worsen the terms on which such financing may be obtained, (iii) will reduce the number of oil and gas prospects which have reasonable economic terms, (iv) may cause Gas Salvage to permit leases to expire based upon the value of potential oil and gas reserves in relation to the costs of exploration, (v) may result in marginally productive oil and gas wells being abandoned as non-commercial, and (vi) may increase the difficulty of obtaining financing. However, price declines reduce the competition for oil and gas properties and correspondingly reduce the prices paid for leases and prospects. Between June and September 2007 Gas Salvage sold 2,580,000 shares of its common stock at a price of $0.10 CDN per share to a group of private investors. In September 2007 Gas Salvage acquired a 44.5% working interest (35.6% net revenue interest) in a gas well for $100,000 in cash and 900,000 shares of its restricted common stock. At the time it acquired its interest in the gas well, Gas Salvage also acquired, for $100,000, a 50% interest in a portable unit which reduces the amount of nitrogen and oxygen from the gas produced by the well. Gas Salvage's material sources and (uses) of cash during the period from its inception (June 5, 2007) to December 31, 2007: Sale of common stock $ 276,000 Purchase of oil and gas property 100,000 Purchase of equipment 100,000 Legal and accounting expenses 15,800 Other 5,000 As of December 31, 2007 Gas Salvage had cash on hand of approximately $50,000. Gas Salvage's plan of operation is described in more detail in the "Business" section of this prospectus. Gas Salvage does not anticipate that it will need to hire any employees during the twelve month period following the date of this prospectus. 8 Gas Salvage's future plans will be dependent upon the amount of capital Gas Salvage is able to raise. Gas Salvage may attempt to raise additional capital through the private sale of its equity securities or borrowings from third party lenders. Gas Salvage does not have any commitments or arrangements from any person to provide Gas Salvage with any additional capital. If additional financing is not available when needed, Gas Salvage may continue to operate in its present mode or Gas Salvage may need to cease operations. Gas Salvage does not have any plans, arrangements or agreements to sell its assets or to merge with another entity. Gas Salvage plans to generate profits by drilling productive oil or gas wells. However, Gas Salvage will need to raise the funds required to drill new wells from third parties willing to pay Gas Salvage's share of drilling and completing the wells. Gas Salvage may also attempt to raise needed capital through the private sale of its securities or by borrowing from third parties. Gas Salvage may not be successful in raising the capital needed to drill oil or gas wells. In addition, any future wells which may be drilled by Gas Salvage may not be productive of oil or gas. The inability of Gas Salvage to generate profits may force Gas Salvage to curtail or cease operations. Contractual Obligations - ----------------------- As of December 31, 2007 Gas Salvage did not have any material capital commitments, other than funding its operating losses. It is anticipated that any capital commitments that may occur will be financed principally through the sale of shares of Gas Salvage's common stock or other equity securities. However, there can be no assurance that additional capital resources and financings will be available to Gas Salvage on a timely basis, or if available, on acceptable terms. BUSINESS Gas Salvage was incorporated in Nevada on June 5, 2007 and plans to be involved in the exploration and development of oil and gas. Gas Salvage plans to evaluate undeveloped oil and gas prospects and participate in drilling activities on those prospects which in the opinion of management are favorable for the production of oil or gas. If, through its review, a geographical area indicates geological and economic potential, Gas Salvage will attempt to acquire leases or other interests in the area. Gas Salvage will then attempt to sell portions of its leasehold interests in a prospect to unrelated third parties, thus sharing risks and rewards of the exploration and development of the prospect with the joint owners pursuant to an operating agreement. One or more exploratory wells may be drilled on a prospect, and if the results indicate the presence of sufficient oil and gas reserves, additional wells may be drilled on the prospect. Gas Salvage may also: o acquire a working interest in one or more prospects from others and participate with the other working interest owners in drilling, and if warranted, completing oil or gas wells on a prospect, and o purchase producing oil or gas properties. 9 Gas Salvage's activities will primarily be dependent upon available financing. In September 2006 Gas Salvage acquired a 44.5% working interest (35.6% net revenue interest) in an oil and gas lease covering 40 acres in Lincoln County, Oklahoma. In November 2007 the gas well drilled on the lease was placed into production. As of December 31, 2007 the well was producing approximately 30 MCF of gas per day, net to Gas Salvage's net revenue interest. At the time it acquired its interest in the oil and gas lease, Gas Salvage also acquired, for $100,000, a 50% interest in a portable nitrogen rejection unit. The unit removes excessive nitrogen and oxygen from the gas produced from the well and allows the gas to be sold to buyers who will not always purchase gas with a high level of contaminants. The following table shows, as of December 31, 2007, by state or region, Gas Salvage's producing wells, Developed Acreage and Undeveloped Acreage, excluding service (injection and disposal) wells: State Productive Wells (1) Developed Acreage Undeveloped Acreage (1) - ----- -------------------- ----------------- ----------------------- Gross Net Gross Net Gross Net ----- --- ----- --- ----- --- Oklahoma 1 35.6 40 17.8 -- -- (1) "Undeveloped Acreage" includes leasehold interests on which wells have not been drilled or completed to the point that would permit the production of commercial quantities of natural gas and oil regardless of whether the leasehold interest is classified as containing proved undeveloped reserves. The following table shows, as of December 15, 2007 the status of Gas Salvage's gross developed and undeveloped acreage. State Gross Acreage Held by Production Not Held by Production - ----- ------------- ------------------ ---------------------- Oklahoma 40 40 -- Acres Held By Production remain in force so long as oil or gas is produced from the well on the particular lease. Leased acres which are not Held By Production require annual rental payments to maintain the lease until the first to occur of the following: the expiration of the lease or the time oil or gas is produced from one or more wells drilled on the lease acreage. At the time oil or gas is produced from wells drilled on the leased acreage the lease is considered to be Held By Production. Gas Salvage does not own any Overriding Royalty Interests. Title to properties is subject to royalty, overriding royalty, carried, net profits, working and other similar interests and contractual arrangements customary in the oil and gas industry, to liens for current taxes not yet due and to other encumbrances. As is customary in the industry in the case of undeveloped properties, little investigation of record title is made at the time 10 of acquisition (other than a preliminary review of local records). Drilling title opinions are always prepared before commencement of drilling operations; however, as is customary in the industry. Gas Salvage is not obligated to provide a fixed and determined quantity of oil or gas in the future. During the last three fiscal years, Gas Salvage has not had, nor does it now have, any long-term supply or similar agreement with any government or governmental authority. GOVERNMENT REGULATION Various state and federal agencies regulate the production and sale of oil and natural gas. All states in which Gas Salvage plans to operate impose restrictions on the drilling, production, transportation and sale of oil and natural gas. The Federal Energy Regulatory Commission (the "FERC") regulates the interstate transportation and the sale in interstate commerce for resale of natural gas. The FERC's jurisdiction over interstate natural gas sales has been substantially modified by the Natural Gas Policy Act under which the FERC continued to regulate the maximum selling prices of certain categories of gas sold in "first sales" in interstate and intrastate commerce. FERC has pursued policy initiatives that have affected natural gas marketing. Most notable are (1) the large-scale divestiture of interstate pipeline-owned gas gathering facilities to affiliated or non-affiliated companies; (2) further development of rules governing the relationship of the pipelines with their marketing affiliates; (3) the publication of standards relating to the use of electronic bulletin boards and electronic data exchange by the pipelines to make available transportation information on a timely basis and to enable transactions to occur on a purely electronic basis; (4) further review of the role of the secondary market for released pipeline capacity and its relationship to open access service in the primary market; and (5) development of policy and promulgation of orders pertaining to its authorization of market-based rates (rather than traditional cost-of-service based rates) for transportation or transportation-related services upon the pipeline's demonstration of lack of market control in the relevant service market. Gas Salvage does not know what effect the FERC's other activities will have on the access to markets, the fostering of competition and the cost of doing business. Gas Salvage's sales of oil and natural gas liquids will not be regulated and will be at market prices. The price received from the sale of these products will be affected by the cost of transporting the products to market. Much of that transportation is through interstate common carrier pipelines. Federal, state, and local agencies have promulgated extensive rules and regulations applicable to Gas Salvage's oil and natural gas exploration, production and related operations. Most states require permits for drilling operations, drilling bonds and the filing of reports concerning operations and impose other requirements relating to the exploration of oil and natural gas. Many states also have statutes or regulations addressing conservation matters including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum rates of production from oil and natural gas wells and the regulation of spacing, plugging and abandonment of such wells. The statutes and regulations of some states limit the rate at which oil and natural gas is produced from Gas Salvage's properties. The federal and state regulatory burden on the oil and natural gas industry increases Gas Salvage's cost of doing business and affects its profitability. Because these 11 rules and regulations are amended or reinterpreted frequently, Gas Salvage is unable to predict the future cost or impact of complying with those laws. COMPETITION AND MARKETING Gas Salvage will be faced with strong competition from many other companies and individuals engaged in the oil and gas business, many are very large, well established energy companies with substantial capabilities and established earnings records. Gas Salvage may be at a competitive disadvantage in acquiring oil and gas prospects since it must compete with these individuals and companies, many of which have greater financial resources and larger technical staffs. It is nearly impossible to estimate the number of competitors; however, it is known that there are a large number of companies and individuals in the oil and gas business. Exploration for and production of oil and gas are affected by the availability of pipe, casing and other tubular goods and certain other oil field equipment including drilling rigs and tools. Gas Salvage depends upon independent drilling contractors to furnish rigs, equipment and tools to drill its wells. Higher prices for oil and gas may result in competition among operators for drilling equipment, tubular goods and drilling crews which may affect Gas Salvage's ability expeditiously to drill, complete, recomplete and work-over its wells. However, Gas Salvage has not experienced and does not anticipate difficulty in obtaining supplies, materials, drilling rigs, equipment or tools. Gas Salvage does not refine or otherwise process crude oil and condensate production. Substantially all of the crude oil and condensate production from Gas Salvage's well is sold at posted prices under short-term contracts, which is customary in the industry. The market for oil and gas is dependent upon a number of factors beyond Gas Salvage's control, which at times cannot be accurately predicted. These factors include the proximity of wells to, and the capacity of, natural gas pipelines, the extent of competitive domestic production and imports of oil and gas, the availability of other sources of energy, fluctuations in seasonal supply and demand, and governmental regulation. In addition, there is always the possibility that new legislation may be enacted which would impose price controls or additional excise taxes upon crude oil or natural gas, or both. Oversupplies of natural gas can be expected to recur from time to time and may result in the gas producing wells being shut-in. Increased imports of natural gas, primarily from Canada, have occurred and are expected to continue. Such imports may adversely affect the market for domestic natural gas. The market price for crude oil is significantly affected by policies adopted by the member nations of Organization of Petroleum Exporting Countries ("OPEC"). Members of OPEC establish prices and production quotas among themselves for petroleum products from time to time with the intent of controlling the current global supply and consequently price levels. Gas Salvage is unable to predict the effect, if any, that OPEC or other countries will have on the amount of, or the prices received for, crude oil and natural gas produced and sold from Gas Salvage's wells. Gas prices, which were once effectively determined by government regulations, are now largely influenced by competition. Competitors in this market include producers, gas pipelines and their affiliated marketing 12 companies, independent marketers, and providers of alternate energy supplies, such as residual fuel oil. Changes in government regulations relating to the production, transportation and marketing of natural gas have also resulted in significant changes in the historical marketing patterns of the industry. Generally, these changes have resulted in the abandonment by many pipelines of long-term contracts for the purchase of natural gas, the development by gas producers of their own marketing programs to take advantage of new regulations requiring pipelines to transport gas for regulated fees, and an increasing tendency to rely on short-term contracts priced at spot market prices. GENERAL Gas Salvage has never been a party to any bankruptcy, receivership, reorganization, readjustment or similar proceedings. Since Gas Salvage is engaged in the oil and gas business, it does not allocate funds to product research and development in the conventional sense. Gas Salvage does not have any patents, trade-marks, or labor contracts. With the exception of Gas Salvage's oil and gas leases, Gas Salvage does not have any licenses, franchises, concessions or royalty agreements. Backlog is not material to an understanding of Gas Salvage's business. Gas Salvage's business is not subject to renegotiation of profits or termination of contracts or subcontracts at the election of federal government. Gas Salvage's offices are located at Suite 153, 333 River Front Ave., S.E., Calgary, Alberta, Canada T2G 5R1. The 500 square feet of office space is occupied under a lease requiring rental payments of $500 per month until July 1, 2008. As of December 31, 2007 Gas Salvage did not have any full time employees. MANAGEMENT Gas Salvage's officers and directors are listed below. Gas Salvage's directors are generally elected at the annual shareholders' meeting and hold office until the next annual shareholders' meeting or until their successors are elected and qualified. Gas Salvage's executive officers are elected by its board of directors and serve at its discretion. Name Age Position - ---- --- -------- Nolan Weir 34 President, Chief Executive Officer, Secretary and a Director The following is a brief description of Mr. Weir's business background: Nolan Weir. Mr. Weir has been an officer and director of Gas Salvage since June 2007. Since December 2002 Mr. Weir has been the President of Makin Rain Irrigation Corp., a Company involved with residential landscaping and irrigation in the Alberta area. 13 Gas Salvage does not have a compensation committee. Gas Salvage's Directors serve as its Audit Committee. Gas Salvage does not have a financial expert. Mr. Weir is not independent as that term is defined Section 121(A) of the Listing Standards of the American Stock Exchange. Executive Compensation. - ----------------------- The following table shows the compensation paid or accrued to Gas Salvage's officer during the period from Gas Salvage's inception (June 5, 2007) to October 31, 2007: All Other Annual Stock Option Compen- Name and Principal Fiscal Salary Bonus Awards Awards sation Position Year (1) (2) (3) (4) (5) Total - ------------------ ------ ------ ----- ------ ------ ------- --------- Nolan Weir, 2007 -- -- -- -- -- -- President, Chief Executive Officer and Secretary (1) The dollar value of base salary (cash and non-cash) earned. (2) The dollar value of bonus (cash and non-cash) earned. (3) During the periods covered by the table, the value of Gas Salvage's shares issued as compensation for services to the persons listed in the table. (4) The value of all stock options granted during the periods covered by the table. (5) All other compensation received that Gas Salvage could not properly report in any other column of the table. Stock Options. Gas Salvage has not granted any stock options and does not have any stock option plans in effect as of the date of this prospectus. In the future, Gas Salvage may grant stock options to its officers, directors, employees or consultants. Long-Term Incentive Plans. Gas Salvage does not provide its officers or employees with pension, stock appreciation rights, long-term incentive or other plans and has no intention of implementing any of these plans for the foreseeable future. Employee Pension, Profit Sharing or other Retirement Plans. Gas Salvage does not have a defined benefit, pension plan, profit sharing or other retirement plan, although it may adopt one or more of such plans in the future. Compensation of Directors. Gas Salvage's directors do not receive any compensation pursuant to any standard arrangement for their services as directors. 14 Mr. Weir plans to spend approximately 50% of his time on the business of Gas Salvage. Gas Salvage does not have any employment agreements with its officers or employees. Gas Salvage does not maintain any keyman insurance on the life or in the event of disability of any of its officers. Transactions with Related Parties and Recent Sales of Securities The following lists all shares of Gas Salvage's common stock since its incorporation: Consideration Shareholder Date of Sale Shares Issued Paid for Shares ----------- ------------ ------------- --------------- Nolan Weir 6-06-07 1,800,000 $18,000 Futures Investment Corp. 9-01-07 900,000 Assignment of interest in oil and gas prospect Private Investors 6/07 - 9/07 2,580,000 CDN$0.10 per share ---------- 5,280,000 ========== PRINCIPAL SHAREHOLDERS The following table shows the ownership of Gas Salvage's common stock as of the date of this prospectus by each shareholder known by Gas Salvage to be the beneficial owner of more than 5% of Gas Salvage's outstanding shares, each director and executive officer and all directors and executive officers as a group. Except as otherwise indicated, each shareholder has sole voting and investment power with respect to the shares they beneficially own. Name and Address Number of Shares Percent of Class - ---------------- ---------------- ---------------- Nolan Weir 1,800,000 34% Suite 153 333 River Front Ave., S.E. Calgary, Alberta Canada T2G 5R1 Futures Investment Corp. 900,000 17% 31 Tusslewood View, N.W. Calgary, Alberta Canada T3L 2Y3 All officers and directors 1,800,000 34% as a group (one person) 15 SELLING SHAREHOLDERS The persons listed in the following table plan to offer the shares shown opposite their respective names by means of this prospectus. The owners of the shares to be sold by means of this prospectus are referred to as the "selling shareholders". The selling shareholders acquired their shares from Gas Salvage in private transactions for cash at a price of $0.10 CDN per share and, in the case of Futures Investment Corp., for an interest in an oil and gas property. Gas Salvage will not receive any proceeds from the sale of the shares by the selling shareholders. Gas Salvage will pay all costs of registering the shares offered by the selling shareholders. These costs, based upon the time related to preparing this section of the prospectus, are estimated to be $2,000. The selling shareholders will pay all sales commissions and other costs of the sale of the shares offered by them. Shares to Share Be Sold Ownership Shares in this After Percentage Name Owned Offering Offering Ownership Nolan Weir 1,800,000 50,000 1,750,000 33.1% Futures Investment Corp. 900,000 50,000 850,000 16.1% James Rutter 50,000 50,000 -- -- Jeanette Rutter 50,000 50,000 -- -- Charles Chebry 50,000 50,000 -- -- Aaron Cain Professional Corp 50,000 50,000 -- -- Don Campbell 50,000 50,000 -- -- Jay Funk 50,000 50,000 -- -- Glen Hubick 50,000 50,000 -- -- Jean Mark Boucher 50,000 50,000 -- -- Shawn Mccord 20,000 20,000 -- -- Trent Gahan 20,000 20,000 -- -- Don Rasmussen 50,000 50,000 -- -- Will Wagner 98,000 98,000 -- -- Brian Mattis 50,000 50,000 -- -- Lisa Maclellan 50,000 50,000 -- -- Kenn Amman 50,000 50,000 -- -- Terry Ammann 50,000 50,000 -- -- Jed Dreifke 50,000 50,000 -- -- Colleen Dreifke 50,000 50,000 -- -- Warren Killen 40,000 40,000 -- -- Corinne Killeen 40,000 40,000 -- -- Derek Chernicki 20,000 20,000 -- -- Peter Richards 20,000 20,000 -- -- Trimour Capital Group 100,000 100,000 -- -- Robbi Ann Black 30,000 30,000 -- -- Curtis Beswick 50,000 50,000 -- -- Chris MAcClellan 30,000 30,000 -- -- Olga Mcclennan 50,000 50,000 -- -- 16 Shares to Share Be Sold Ownership Shares in this After Percentage Name Owned Offering Offering Ownership Alfred Himmelspeck 50,000 50,000 -- -- Krista Mainprise 50,000 50,000 -- -- Deborah Mainprise 50,000 50,000 -- -- Joesphine Berscheid 50,000 50,000 -- -- Ryan Beamin 50,000 50,000 -- -- Ross Black 35,000 35,000 -- -- Kimberly Black 65,000 65,000 -- -- Grand Lion Investment 100,000 100,000 -- -- Jeff Sands 100,000 100,000 -- -- Maureen Sands 100,000 100,000 -- -- Shelley Rainforth 20,000 20,000 -- -- Kerry Wilde 10,000 10,000 -- -- Ken Prusky 20,000 20,000 -- -- Troy Prusky 20,000 20,000 -- -- Daryl Ries 10,000 10,000 -- -- James MacLellan 40,000 40,000 -- -- Randy Steinley 50,000 50,000 -- -- Berscheid Ventures Inc 50,000 50,000 -- -- Don Homer 20,000 20,000 -- -- Rob Turner 50,000 50,000 -- -- 1098701 Alberta Ltd 50,000 50,000 -- -- Jamie McNaughton 50,000 50,000 -- -- Sandra Dosdall 50,000 50,000 -- -- John Laqourgue 20,000 20,000 -- -- Reynoudt Jalink 10,000 10,000 -- -- Mary Wagner 10,000 10,000 -- -- Chris Jones 20,000 20,000 -- -- James Bijl 12,000 12,000 -- -- Rudolf Wagner 10,000 10,000 -- -- Gary Soost 30,000 30,000 -- -- Craig Beamin 10,000 10,000 -- -- Charlotte Soost 50,000 50,000 -- -- William Lawson 30,000 30,000 -- -- Betty Ann Horbay 20,000 20,000 -- -- Except as noted above, no selling shareholder has, or had, any material relationship with Gas Salvage, or Gas Salvage's officers or directors. To Gas Salvage's knowledge, no selling shareholder is affiliated with a broker dealer. Manner of Sale. The shares of common stock owned by the selling shareholders may be offered and sold by means of this prospectus from time to time as market conditions 17 permit. Since as of the date of this prospectus no market exists for Gas Salvage's common stock, sales by the selling shareholders, until Gas Salvage's common stock becomes quoted on the OTC Bulletin Board or listed on a securities exchange, will be made at a price of $.20 per share. If and when Gas Salvage's common stock becomes quoted on the OTC Bulletin Board or listed on a securities exchange, the shares owned by the selling shareholders may be sold in the over-the-counter market, or otherwise, at prices and terms then prevailing or at prices related to the then-current market price, or in negotiated transactions. These shares may be sold by one or more of the following methods, without limitation: o a block trade in which a broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this prospectus; o ordinary brokerage transactions and transactions in which the broker solicits purchasers; and o face-to-face transactions between sellers and purchasers without a broker/dealer. In competing sales, brokers or dealers engaged by the selling shareholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from selling shareholders in amounts to be negotiated. As to any particular broker-dealer, this compensation might be in excess of customary commissions. Neither Gas Salvage nor the selling stockholders can presently estimate the amount of such compensation. Notwithstanding the above, no NASD member will charge commissions that exceed 8% of the total proceeds from the sale. The selling shareholders and any broker/dealers who act in connection with the sale of the shares may be deemed to be "underwriters" within the meaning of ss.2(11) of the Securities Acts of 1933, and any commissions received by them and any profit on any resale of the shares as principal might be deemed to be underwriting discounts and commissions under the Securities Act. If any selling shareholder enters into an agreement to sell his or her shares to a broker-dealer as principal, and the broker-dealer is acting as an underwriter, Gas Salvage will file a post-effective amendment to the registration statement, of which this prospectus is a part, identifying the broker-dealer, providing required information concerning the plan of distribution, and otherwise revising the disclosures in this prospectus as needed. Gas Salvage will also file the agreement between the selling shareholder and the broker-dealer as an exhibit to the post-effective amendment to the registration statement. The selling stockholders may also sell their shares pursuant to Rule 144 under the Securities Act of 1933. 18 Gas Salvage has advised the selling shareholders that they and any securities broker/dealers or others who may be deemed to be statutory underwriters will be subject to the prospectus delivery requirements under the Securities Act of 1933. Gas Salvage has also advised each selling shareholder that in the event of a "distribution" of the shares owned by the selling shareholder, such selling shareholder, any "affiliated purchasers", and any broker/dealer or other person who participates in the distribution may be subject to Rule 102 of Regulation M under the Securities Exchange Act of 1934 ("1934 Act") until their participation in that distribution is completed. Rule 102 makes it unlawful for any person who is participating in a distribution to bid for or purchase stock of the same class as is the subject of the distribution. A "distribution" is defined in Rule 102 as an offering of securities "that is distinguished from ordinary trading transactions by the magnitude of the offering and the presence of special selling efforts and selling methods". Gas Salvage has also advised the selling shareholders that Rule 101 of Regulation M under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing or stabilizing the price of the common stock in connection with this offering. DESCRIPTION OF SECURITIES Common Stock Gas Salvage is authorized to issue 50,000,000 shares of common stock. As of the date of this prospectus Gas Salvage had 5,280,000 outstanding shares of common stock. Holders of common stock are each entitled to cast one vote for each share held of record on all matters presented to shareholders. Cumulative voting is not allowed; hence, the holders of a majority of the outstanding common stock can elect all directors. Holders of common stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available for dividends and, in the event of liquidation, to share pro rata in any distribution of Gas Salvage's assets after payment of liabilities. The Board of Directors is not obligated to declare a dividend and it is not anticipated that dividends will ever be paid. Holders of common stock do not have preemptive rights to subscribe to additional shares if issued by Gas Salvage. There are no conversion, redemption, sinking fund or similar provisions regarding the common stock. All of the outstanding shares of common stock are fully paid and non-assessable and all of the shares of common stock offered by this prospectus will be, upon issuance, fully paid and non-assessable. Preferred Stock Gas Salvage is authorized to issue 5,000,000 shares of preferred stock. Shares of preferred stock may be issued from time to time in one or more series as may be determined by Gas Salvage's Board of Directors. The voting powers and preferences, the relative rights of each such series and the qualifications, limitations and restrictions of each series will be established by the Board of Directors. Gas Salvage's directors may issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of Gas Salvage's common stock. The issuance of preferred stock with these rights may make the removal of management difficult 19 even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in transactions such as mergers or tender offers if these transactions are not favored by Gas Salvage's management. As of the date of this prospectus Gas Salvage had not issued any shares of preferred stock. Transfer Agent As of the date of this prospectus Gas Salvage had not appointed a transfer agent for its common stock. LEGAL PROCEEDINGS Gas Salvage is not involved in any legal proceedings and Gas Salvage does not know of any legal proceedings which are threatened or contemplated. INDEMNIFICATION The Nevada Revised Statutes authorize indemnification of a director, officer, employee or agent of Gas Salvage against expenses incurred in connection with any action, suit, or proceeding to which he is named a party by reason of his having acted or served in such capacity, except for liabilities arising from his own misconduct or negligence in performance of his duty. In addition, even a director, officer, employee, or agent of Gas Salvage who was found liable for misconduct or negligence in the performance of his duty may obtain such indemnification if, in view of all the circumstances in the case, a court of competent jurisdiction determines such person is fairly and reasonably entitled to indemnification. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling Gas Salvage pursuant to the foregoing provisions, Gas Salvage has been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is therefore unenforceable. AVAILABLE INFORMATION Gas Salvage has filed with the Securities and Exchange Commission a Registration Statement on Form SB-2 (together with all amendments and exhibits) under the Securities Act of 1933, as amended, with respect to the Securities offered by this prospectus. This prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Securities and Exchange Commission. For further information, reference is made to the Registration Statement which may be read and copied at the Commission's Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The registration statement is also available at www.sec.gov, the website of the Securities and Exchange Commission. 20 GLOSSARY BBL. One stock tank barrel, or 42 U.S. gallons liquid volume, usually used herein in reference to crude oil or other liquid hydrocarbons. BOE. Equivalent barrels of oil, using the ratio of six MCF of natural gas to one Bbl of crude oil, condensate or natural gas liquids. BTU. A British thermal unit which is the amount of heat required to raise the temperature of one avoirdupois pound of pure water form 58.5 degrees to 59.5 degrees Fahrenheit under standard conditions. CDN$. Canadian Dollars. DEVELOPED ACREAGE. The number of acres which are allocated or assignable to producing wells or wells capable of production. DEVELOPMENT WELL. A well drilled as an additional well to the same reservoir as other producing wells on a Lease, or drilled on an offset Lease not more than one location away from a well producing from the same reservoir. EXPLORATORY WELL. A well drilled in search of a new undiscovered pool of oil or gas, or to extend the known limits of a field under development. GROSS ACRES OR WELLS. A well or acre in which a working interest is owned. The number of gross wells is the total number of wells in which a working interest is owned. LEASE. Full or partial interests in an oil and gas lease, authorizing the owner thereof to drill for, reduce to possession and produce oil and gas upon payment of rentals, bonuses and/or royalties. Oil and gas leases are generally acquired from private landowners and federal and state governments. The term of an oil and gas lease typically ranges from three to ten years and requires annual lease rental payments of $1.00 to $2.00 per acre. If a producing oil or gas well is drilled on the lease prior to the expiration of the lease, the lease will generally remain in effect until the oil or gas production from the well ends. The Company is required to pay the owner of the leased property a royalty which is usually between 12.5% and 16.6% of the gross amount received from the sale of the oil or gas produced from the well. MCF. One thousand cubic feet. NET ACRES OR WELLS. A net well or acre is deemed to exist when the sum of fractional ownership working interests in gross wells or acres equals one. The number of net wells or acres is the sum of the fractional working interests owned in gross wells or acres expressed as whole numbers and fractions. OPERATING COSTS. The expenses of producing oil or gas from a formation, consisting of the costs incurred to operate and maintain wells and related equipment and facilities, including labor costs, repair and maintenance, supplies, insurance, production, severance and other production excise taxes. 21 PRODUCING PROPERTY. A property (or interest therein) producing oil or gas in commercial quantities or that is shut-in but capable of producing oil or gas in commercial quantities, to which Producing Reserves have been assigned. Interests in a property may include Working Interests, production payments, Royalty Interests and other non-working interests. PRODUCING RESERVES. Proved Developed Reserves expected to be produced from existing completion intervals open for production in existing wells. PROSPECT. An area in which a party owns or intends to acquire one or more oil and gas interests, which is geographically defined on the basis of geological data and which is reasonably anticipated to contain at least one reservoir of oil, gas or other hydrocarbons. PROVED DEVELOPED RESERVES. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Additional oil and gas expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of primary recovery may be included as "proved developed reserves" only after testing by a pilot project or after the operation of an installed program has confirmed through production response that increased recovery will be achieved. PROVED RESERVES. Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions. (i) Reservoirs are considered proved if economic producibility is supported by either actual production or conclusive formation testing. The area of a reservoir considered proved includes (a) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (b) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir. (ii) Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based. (iii) Estimates of proved reserves do not include the following: (a) oil that may become available from known reservoirs but is classified separately as "indicated additional reserves", (b) crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; (c) crude oil, natural gas, and natural gas liquids, that may occur in undrilled prospects; and (d) crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal, gilsonite and other such sources. 22 PROVED UNDEVELOPED RESERVES. Proved undeveloped oil and gas reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units can be claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Proved undeveloped reserves are not attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir. ROYALTY INTEREST. An interest in an oil and gas property entitling the owner to a share of oil and gas production free of Operating Costs. UNDEVELOPED ACREAGE. Lease acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas regardless of whether or not such acreage contains proved reserves. Undeveloped acreage should not be confused with undrilled acreage which is "Held by Production" under the terms of a lease. WORKING INTEREST. The operating interest under a Lease which gives the owner the right to drill, produce and conduct operating activities on the property and a share of production, subject to all Royalty Interests and other burdens and to all costs of exploration, development and operations and all risks in connection therewith. 23 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To: The Board of Directors and Shareholders Gas Salvage Corporation 333 Riverfront Avenue S.E., Suite 153 Calgary, Alberta CANADA I have audited the accompanying balance sheet of Gas Salvage Corporation as of October 31, 2007 and the related statements of operations and cash flows for the period then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion the financial statements referred to above present fairly, in all material respects, the financial position of Gas Salvage Corporation as of October 31, 2007, and the results of its operations and its cash flows for the period then ended, in conformity with United States generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered a loss of $13,363 since inception June 5, 2007 and has not yet commenced operations. This raises substantive doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has determined that it is not required to have, nor was I engaged to perform, an audit of the effectiveness of its documented internal controls over financial reporting. John Kinross-Kennedy Certified Public Accountant Irvine, California December 19, 2007 Gas Salvage Auditor Opinion 12-18-07 GAS SALVAGE CORPORATION (A Development Stage Company) BALANCE SHEET October 31, 2007 ASSETS Current Assets Cash at bank $ 36,169 Subscriptions Receivable 18,000 -------------- Total Current Assets 54,169 -------------- Property and Equipment Equipment 100,000 ------------- Other Assets Oil & Gas Leasehold Interest 190,000 ------------ TOTAL ASSETS $ 344,169 ============== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Current Liabilities Accounts Payable 1,231 ---------------- TOTAL LIABILITIES 1,231 ---------------- Shareholders' Equity (Deficit) Common Stock, par value $0.001, authorized 50,000,000 shares; issued and outstanding 5,280,000 shares 5,280 Additional Paid-In Capital 351,021 Deficit accumulated during the development stage (13,363) -------------- TOTAL SHAREHOLDERS' EQUITY 342,938 ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 344,169 ============ The accompanying Notes are an integral part of these financial statements F-1 GAS SALVAGE CORPORATION (A Development Stage Company) STATEMENT OF OPERATIONS For the Period of Inception from June 5, 2007, through October 31, 2007 Revenue $ - -------------------- Cost of Sales - --------------------- Operating Income - --------------------- General and Administrative Expenses: Professional Fees 11,500 Repairs & Maintenance 1,231 Other General and Administrative Expenses 632 -------------------- Total General and Administrative Expenses 13,363 ------------------ Net Loss $ (13,363) ================= Loss Per Common Share: Basic and Diluted $ (0.005) ================== Weighted Average Shares Outstanding, Basic and Diluted: 2,551,216 ================= The accompanying Notes are an integral part of these financial statements F-2 GAS SALVAGE CORPORATION (A Development Stage Company) STATEMENT OF CASH FLOWS For the Period of Inception from June 5, 2007, through October 31, 2007 Cash flows from operating activities: Net (Loss) $ (13,363) Adjustments to reconcile net loss to net cash used by operating activities: Non-cash depreciation Change in operating assets and liabilities: Increase (Decrease) in Accounts Payable 1,231 ----------------- Net cash (used by) operating activities (12,132) ----------------- Cash flows from investing activities Acquisition of equipment (100,000) Acquistion of oil & gas working interest (190,000) -------------- Net cash (used by) investing activities (290,000) -------------- Cash flows from financing activities: (Increase) in Subscriptions Receivable (18,000) Non cash issue of stock for assets 90,000 Common stock issued for cash 266,301 -------------- Net cash (used) provided by financing activitiies 338,301 -------------- Net increase (decrease) in cash 36,169 Cash, beginning of the period -- ------------- Cash, end of the period $ 36,169 ============= Supplemental cash flow disclosure: Interest paid $ -- ============= Taxes paid $ -- ============= The accompanying Notes are an integral part of these financial statements F-3 GAS SALVAGE CORPORATION (A Development Stage Company) STATEMENT OF SHARHEOLDERS' EQUITY (Unaudited) Deficit Accumulated Total Common Stock Additional during the Shareholders' Number of Paid-In Development Equity Shares Amount Capital Stage (Deficit) ----------- ------ -------------- ----------- ------------- Inception, June 5, 2007 - $ - $ - $ - $ - Common stock issued for 1,800,000 1,800 16,200 18,000 cash at $0.01 per share June 6, 2007 Common stock issued for 2,580,000 2,580 245,721 248,301 cash at $0.096 per share September 5, 2007 Common stock issued for oil 900,000 900 89,100 90,000 and gas working interest at $0.10 per share September 5, 2007 Net loss for the period ended (13,363) (13,363) ----------- -------- --------- --------- --------- Oct. 31, 2007 Balances, October 31, 2007 5,280,000 $ 5,280 $ 351,021 $(13,363) $342,938 ========== ========= ========= ======== ========
F-4 GAS SALVAGE, INC. (A Developmental Stage Company) Notes to Financial Statements October 31, 2007 1. Organization Gas Salvage Inc. (the "Company") was incorporated under the laws of the State of Nevada June 5, 2007. The Company was organized for the purpose of engaging in any activity or business not in conflict with the laws of the State of Nevada or of the United States of America. The company became engaged in the oil and gas industry. 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation. The financial statements have, in management's opinion, been properly prepared within the reasonable limits of materiality and within the framework of the significant accounting. Income Taxes The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce F-5 2. Summary of Significant Accounting Policies (Continued) Income Taxes (cont'd) deferred tax assets to the amount expected to be realized. The Company generated a deferred tax credit through net operating loss carryforward. However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined as follows. Going Concern The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plans to generate revenue form well head machinery and oil and gas leases. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern. Development-Stage Company The Company is considered a development-stage company, with limited operating revenues during the periods presented, as defined by Statement of Financial Accounting Standards ("SFAS") No. 7. SFAS. No. 7 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management's intended operations, among other things. Management has defined inception as June 5, 2007. Since inception, the Company has incurred an operating loss of $13,363. The Company's working capital has been generated through the sales of common stock. Management has provided financial data since June 5, 2007, "Inception", in the financial statements, as a means to provide readers of the Company's financial information to make informed investment decisions. Basic and Diluted Net Loss Per Share Net loss per share is calculated in accordance with SFAS 128, Earnings Per Share for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilative convertible shares and F-6 2. Summary of Significant Accounting Policies (Continued) Basic and Diluted Net Loss Per Share (cont'd) ------------------------------------ stock options were converted or exercised. Dilution iscomputed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby we used to purchase common stock at the average market price during the period. The Company has no potentially dilutive securities outstanding as of August 31, 2007. The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the period since Inception, June 5, 2007 ending October 31, 2007 Numerator: Basic and diluted net loss per share: Net Loss $ (13,363) Denominator Basic and diluted weighted average number of shares outstanding 2,551,216 Basic and Diluted Net Loss Per Share $ (0.005) ------------------------------------- 3. Property and Equipment Equipment $ 100,000 The Company purchased a 50% interest in a skid mounted Nitrogen Rejection unit. The unit strips out excessive nitrogen and oxygen from a gas well to an acceptable level of contaminants in the gas stream. The unit is intended for use on the Company's gas wells. 4. Oil & Gas Leasehold Interest The Company purchased a 44.5% leasehold interest in a producing gas well on 40 acres in Lincoln County, Oklahoma, known as Holmes #1. The well was shut-in awaiting repairs to the Nitrogen Rejection Unit. The well was subsequently put into production in November, 2007. Volumetric calculations of the Holmes Lease reservoir have not yet been performed. F-7 4. Oil & Gas Leasehold Interest (Continued) Property Acquisition Costs: Unproved Homes Lease $190,000 5. Capital Structure During the period from inception through August 31, 2007, the Company entered into the following equity transactions: June 6, 2007: Sold 1,800,000 shares of common stock at $.01 per share realizing $18,000. September 5, 2007: Sold 2,580,000 shares of common stock at $.096 per share realizing $248,301. September 5, 2007: Issued 900,000 shares of common stock at $.10 per share in payment of $90,000 toward 44.5% working interest in an oil and gas lease. As at October 31, 2007, the Company was authorized to issue 50,000,000 shares of $0.001 par common stock, of which 5,280,000 shares were issued and outstanding. The Company was also authorized to issue 5,000,000 shares of preferred stock, of which nil shares were issued and outstanding. 6. Legal Proceedings There are no significant legal proceedings against the Company with respect to matters arising in the ordinary course of business. 7. Subsequent Event The gas well, Holmes No. 1, in which the Company holds an interest, was put into production in November 2007 with the use of the Nitrogen Rejection unit under the control of the Operator, Southside Oil and Gas, Inc. F-8 TABLE OF CONTENTS Page PROSPECTUS SUMMARY .................................................. RISK FACTORS ........................................................ DILUTION AND COMPARATIVE SHARE DATA.................................. MARKET FOR GAS SALVAGE'S COMMON STOCK ............................... MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION .......................................... BUSINESS............................................................. MANAGEMENT .......................................................... PRINCIPAL SHAREHOLDERS............................................... SELLING SHAREHOLDERS................................................. DESCRIPTION OF SECURITIES............................................ LEGAL PROCEEDINGS.................................................... INDEMNIFICATION ..................................................... AVAILABLE INFORMATION................................................ GLOSSARY ............................................................ FINANCIAL STATEMENTS................................................. No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this prospectus, and if given or made, such information or representations must not be relied upon as having been authorized by Gas Salvage. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any of the securities offered in any jurisdiction to any person to whom it is unlawful to make an offer by means of this prospectus. Until _______, 2008 all dealers effecting transactions in the registered securities, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. PART II Information Not Required in Prospectus Item 24. Indemnification of Officers and Directors The Nevada Revised Statutes provide that the Company may indemnify any and all of its officers, directors, employees or agents or former officers, directors, employees or agents, against expenses actually and necessarily incurred by them, in connection with the defense of any legal proceeding or threatened legal proceeding, except as to matters in which such persons shall be determined to not have acted in good faith and in the Company's best interest. Item 25. Other Expenses of Issuance and Distribution. The following table show the costs and expenses payable by the Company in connection with this registration statement. SEC Filing Fee $ 21 Blue Sky Fees and Expenses 500 Printing Expenses 500 Legal Fees and Expenses 30,000 Accounting Fees and Expenses 800 Miscellaneous Expenses 3,179 --------- TOTAL $35,000 ========= All expenses other than the SEC filing fee are estimated. Item 26. Recent Sales of Unregistered Securities. The following lists all shares issued by the Company since its inception. Name Date Shares Consideration (1) - ---- ---- ------ ----------------- Nolan Weir 6-6-07 1,800,000 $18,000 Futures Investment Corp. 9-5-07 900,000 Interest in oil and gas property James Rutter 9-5-07 50000 $5,000 Jeanette Rutter 9-5-07 50000 $5,000 Charles Chebry 9-5-07 50000 $5,000 Aaron Cain Professional Corp 9-5-07 50000 $5,000 Don Campbell 9-5-07 50000 $5,000 Jay Funk 9-5-07 50000 $5,000 Glen Hubick 9-5-07 50000 $5,000. Jean Mark Boucher 9-5-07 50000 $5,000 Shawn Mccord 9-5-07 20000 $2,000 Trent Gahan 9-5-07 20000 $2,000 Don Rasmussen 9-5-07 50000 $5,000 Will Wagner 9-5-07 98000 $9,800 Brian Mattis 9-5-07 50000 $5,000 1 Name Date Shares Consideration (1) - ---- ---- ------ ----------------- Lisa Maclellan 9-5-07 50000 $5,000 Kenn Amman 9-5-07 50000 $5,000 Terry Ammann 9-5-07 50000 $5,000 Jed Dreifke 9-5-07 50000 $5,000 Colleen Dreifke 9-5-07 50000 $5,000 Warren Killen 9-5-07 40000 $4,000 Corinne Killeen 9-5-07 40000 $4,000 Derek Chernicki 9-5-07 20000 $2,000 Peter Richards 9-5-07 20000 $2,000 Trimour Capital Group 9-5-07 100000 $10,000 Robbi Ann Black 9-5-07 30000 $3,000 Curtis Beswick 9-5-07 50000 $5,000 Chris MAcClellan 9-5-07 30000 $3,000 Olga Mcclennan 9-5-07 50000 $5,000 Alfred Himmelspeck 9-5-07 50000 $5,000 Krista Mainprise 9-5-07 50000 $5,000 Deborah Mainprise 9-5-07 50000 $5,000 Joesphine Berscheid 9-5-07 50000 $5,000 Ryan Beamin 9-5-07 50000 $5,000 Ross Black 9-5-07 35000 $3,500 Kimberly Black 9-5-07 65000 $6,500 Grand Lion Investment 9-5-07 100000 $10,000 Jeff Sands 9-5-07 100000 $10,000 Maureen Sands 9-5-07 100000 $10,000 Shelley Rainforth 9-5-07 20000 $2,000 Kerry Wilde 9-5-07 10000 $1,000 Ken Prusky 9-5-07 20000 $2,000 Troy Prusky 9-5-07 20000 $2,000 Daryl Ries 9-5-07 10000 $1,000 James MacLellan 9-5-07 40000 $4,000 Randy Steinley 9-5-07 50000 $5,000 Berscheid Ventures Inc 9-5-07 50000 $5,000 Don Homer 9-5-07 20000 $2,000 Rob Turner 9-5-07 50000 $5,000 1098701 Alberta Ltd 9-5-07 50000 $5,000 Jamie McNaughton 9-5-07 50000 $5,000 Sandra Dosdall 9-5-07 50000 $5,000 John Laqourgue 9-5-07 20000 $2,000 Reynoudt Jalink 9-5-07 10000 $1,000 Mary Wagner 9-5-07 10000 $1,000 Chris Jones 9-5-07 20000 $2,000 James Bijl 9-5-07 12000 $1,200 Rudolf Wagner 9-5-07 10000 $1,000 Gary Soost 9-5-07 30000 $3,000 Craig Beamin 9-5-07 10000 $1,000 Charlotte Soost 9-5-07 50000 $5,000 2 Name Date Shares Consideration (1) - ---- ---- ------ ----------------- William Lawson 9-5-07 30000 $3,000 Betty Ann Horbay 9-5-07 20000 $2,000 (1) The consideration received from Nolan Weir is expressed in U.S. $. The amounts received from all other shareholders is expressed in Canadian $. The shares listed above were all issued to non-U.S. persons who reside outside of the United States. The negotiations and agreements relating to the issuance of these shares were made by the Company's officers (who were non-U.S. persons) from Canada. The shares are restricted from resale in the public markets for a period of one year from the date of their issuance. There is no market for the Company's securities in the United States and none of the securities have been transferred since their issuance. The Company relied upon the exemption provided by Rule 901 of the Securities and Exchange Commission with respect to the sale of these shares. Item 27. Exhibits The following exhibits are filed with this Registration Statement: Exhibit Number Exhibit Name 3.1 Articles of Incorporation, as amended 3.2 Bylaws 5 Opinion of Counsel 10.1 Agreement pertaining to acquisition of interest in oil and gas lease in Oklahoma. 23.1 Consent of Attorneys 23.2 Consent of Accountants Item 28. Undertakings (a) The small business issuer will: (1) File, during any period in which it offers or sells securities, a post-effective amendment to this Registration Statement to. (i) Include any Prospectus required by Section l0 (a)(3) of the Securities Act: (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of 3 securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) Include any additional or changed material information on the plan of distribution. (2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. (4) For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and (iv) Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser. (b) Insofar as indemnification for liabilities arising under the Securities Act of l933 (the "Act") may be permitted to directors, officers and controlling persons of the Small Business Issuer pursuant to the foregoing provisions or otherwise, the Small Business Issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Small Business Issuer of expenses incurred or paid by a director, officer or controlling person of the Small Business Issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling 4 person in connection with the securities being registered, the Small Business Issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (c) That, for the purpose of determining liability under the Securities Act to any purchaser: (1) If the small business issuer is relying on Rule 430B: (i) Each prospectus filed by the undersigned small business issuer pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and (ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or (2) If the small business issuer is subject to Rule 430C, include the following: Each prospectus filed pursuant to Rue 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. 5 SIGNATURES In accordance with the requirements of the Securities Act of l933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned in Calgary, Alberta, Canada on the 31st day of December 2007. GAS SALVAGE CORP. By: /s/ Nolan Weir ------------------------------------------ Nolan Weir, President, Principal Financial Officer and Principal Accounting Officer In accordance with the requirements of the Securities Act of l933, this registration statement has been signed by the following persons in the capacities and on the dates indicated: Signature Title Date /s/ Nolan Weir Director December 31, 2007 - ------------------------- Nolan Weir EXHIBITS GAS SALVAGE CORP. REGISTRATION STATEMENT ON FORM SB-2 EX-3.(I) 2 formsb2dec07ex31.txt EXHIBIT 3.1 DEAN HELLER Entity # Secretary of State E0414912007-0 206 North Carson St. Document Number: Carson City, Nevada 89701-4299 20070393603-63 (775) 884-5706 Website: secretaryofstate.biz Date Filed: 06/05/2007 7:13 AM Articles of Incorporation In the office of Dean Heller Secretary of State 1. Name of Corporation: Gas Salvage Corp. 2. Resident Agent Name and Street Address: Business Filings Incorporated 6100 Neil Road, Suite 500 Reno, NV 89511 3. Shares: Number of shares Number of shares with par value 2,000 Par value: $ 0.01 without par value ------ ------- ------ 4. Names and Addresses of Board of Directors/Trustees: Nolan Weir 41890 Enterprise Circle South Suite 280 Temecula, CA 92590 5. Purpose: All lawful purposes. 6. Names, Address and Signature of incorporator: The Nevada Company Terese Coulthard, Asst. Sec. 8025 Excelsior Drive, Suite 200 Madison, WI 53717 7. Certificate of Acceptance of Appointment of Resident Agent: I hereby accept appointment as Resident Agent for the above named corporation. /s/ Terese Coulthard 06/04/2007 -------------------------------- ---------- Authorized Signature of R.A. or On Behalf of R.A. Company Date DEAN HELLER Secretary of State 206 North Carson St. Carson City, Nevada 89701-4299 (775) 884-5706 Website: secretaryofstate.biz Filed in the Office of Document Number Ross Miller 20070677071-47 Secretary of State Filing Date and Time State of Nevada 10/03/2007 12:30 P.M. Entity Number E0414912007-0 CERTIFICATE OF AMENDMENT Certificate of Amendment to the Articles of Incorporation For Nevada Profit Corporations (Pursuant to NRS 78.380 - Before Issuance of Stock) 1. Name of Corporation: GAS SALVAGE CORP. 2. The articles have been amended as follows (provide article numbers, if available): Article 3 is amended to read as follows: The authorized capital stock of the Corporation shall be divided into 50,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value. The text of other amendments are attached. 3. The undersigned declare that they constitute at least two-thirds of the incorporators [ ], or of the board of directors [X] (check one box only) 4. Effective date of filing (optional): 5. The undersigned affirmatively declare that to the date of this certificate, no stock of the corporation has been issued. 6. Signatures*: /s/ Nolan Weir ------------------------ Signature CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF GAS SALVAGE CORP. A. The period of duration of the Corporation shall be perpetual. B. The authorized capital stock of the Corporation shall be divided into 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. Subject to the laws of the state of Nevada, the directors of the Corporation have the authority to issue the preferred shares in one or more series and to designate the rights, preferences and limitations of each series. C. No share of common stock shall have any preference over or limitation in respect to any other share of common stock. All shares of the common stock shall have equal rights and privileges. D. Each outstanding share of common stock shall be entitled to one vote at stockholders' meetings, either in person or by proxy. E. Cumulative voting shall not be allowed in elections of directors or for any other purpose. F. No holders of shares of the common stock of the Corporation shall be entitled, as such, to any preemptive or preferential right to subscribe to any unissued stock or any other securities which the Corporation may now or hereafter be authorized to issue. The Board of Directors of the Corporation, however, in its discretion by resolution, may determine that any unissued securities of the Corporation shall be offered for subscription solely to the holders of the common stock of the Corporation, or solely to the holders of any class or classes of such stock, which the Corporation may now or hereafter be authorized to issue, in such proportions based on stock ownership as said board in its discretion may determine. G. The Board of Directors may restrict the transfer of any of the Corporation's stock issued by giving the Corporation or any stockholder "first right of refusal to purchase" the stock, by making the stock redeemable, or by restricting the transfer of the stock under such terms and in such manner as the directors may deem necessary and as are not inconsistent with the laws of Nevada. Any stock so restricted must carry a conspicuous legend noting the restriction and the place where such restriction may be found in the records of the Corporation. H. The judgment of the Board of Directors as to the adequacy of any consideration received or to be received for any shares, options, or any other securities which the Corporation at any time may be authorized to issue or sell or otherwise dispose of shall be conclusive in the absence of fraud and any applicable law. I. The number of directors shall be fixed by or in the manner provided in the By-laws of the Corporation, as may be amended from time to time, except as to the number constituting the initial board which number shall be one. J. No contract or other transaction between the Corporation and any other corporation, whether or not a majority of the shares of the capital stock of such other corporation is owned by the Corporation, and no act of the Corporation shall in any way be affected or invalidated by the fact that any of the directors of the Corporation are pecuniarily or otherwise interested in, or are directors or officers of, such other corporation. Any director of the corporation, individually, or any firm with which such director is affiliated may be a party to or may be pecuniarily or otherwise interested in any contract or transaction of the Corporation; provided, however, that the fact that he or such firm is so interested shall be disclosed or shall have been known to the Board of Directors of the Corporation, or a majority thereof, at or before the entering into such contract or transaction; and any director of the Corporation who is also a director or officer of such other corporation, or who is so interested, may be counted in determining the existence of a quorum at any meeting of the Board of Directors of the Corporation which shall authorize such contract or transaction, with like force and effect as if he were not such director or officer of such other corporation or not so interested. K. No director of the Corporation shall have liability to the Corporation or to its stockholders or to other security holders for monetary damages for breach of fiduciary duty as a director; provided, however, that such provisions shall not eliminate or limit the liability of a director to the Corporation or to its shareholders or other security holders for monetary damages for: (i) any breach of the director's duty of loyalty to the Corporation or to its shareholders or other security holders; (ii) acts or omissions of the director not in good faith or which involve intentional misconduct or a knowing violation of the law by such director; (iii) acts by such director as specified by Nevada law; or (iv) any transaction from which such director derived an improper personal benefit. No officer or director shall be personally liable for any injury to person or property arising out of a tort committed by an employee of the Corporation unless such officer or director was personally involved in the situation giving rise to the injury or unless such officer or director committed a criminal offense. The protection afforded in the preceding sentence shall not restrict other common law protections and rights that an officer or director may have. The word "director" shall include at least the following, unless limited by Nevada law: an individual who is or was a director of the Corporation and an individual who, while a director of a Corporation is or was serving at the Corporation's request as a director, officer, partner, trustee, employee or agent of any other foreign or domestic corporation or of any partnership, joint venture, trust, other enterprise or employee benefit plan. A director shall be considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on or otherwise involve services by him to the plan or to participants in or beneficiaries of the plan. To the extent allowed by Nevada law, the word "director" shall also include the heirs and personal representatives of all directors. This Corporation shall be empowered to indemnify its officers and directors to the fullest extent provided by law. 2 EX-3.(II) 3 formsb2dec07ex32.txt EXHIBIT 3.2 BYLAWS OF GAS SALVAGE CORP ARTICLE I OFFICES Section l. Offices: - ------------------- The principal office of the Corporation shall be determined by the Board of Directors, and the Corporation shall have other offices at such places as the Board of Directors may from time to time determine. ARTICLE II STOCKHOLDER'S MEETINGS Section l. Place: - ----------------- The place of stockholders' meetings shall be the principal office of the Corporation unless another location shall be determined and designated from time to time by the Board of Directors. Section 2. Annual Meeting: - -------------------------- The annual meeting of the stockholders of the Corporation for the election of directors to succeed those whose terms expire, and for the transaction of such other business as may properly come before the meeting, shall be held each year on a date to be determined by the Board of Directors. Section 3. Special Meetings: - ---------------------------- Special meetings of the stockholders for any purpose or purposes may be called by the President, the Board of Directors, or the holders of ten percent (l0%) or more of all the shares entitled to vote at such meeting, by the giving of notice in writing as hereinafter described. Section 4. Voting: - ------------------ At all meetings of stockholders, voting may be viva voce; but any qualified voter may demand a stock vote, whereupon such vote shall be taken by ballot and the Secretary shall record the name of the stockholder voting, the number of shares voted, and, if such vote shall be by proxy, the name of the proxy holder. Voting may be in person or by proxy appointed in writing, manually signed by the stockholder or his duly authorized attorney-in-fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided therein. One third of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. Each stockholder shall have such rights to vote as the Articles of Incorporation provide for each share of stock registered in his name on the books of the Corporation, except where the transfer books of the Corporation shall have been closed or a date shall have been fixed as a record date, not to exceed, in any case, fifty (50) days preceding the meeting, for the determination of stockholders entitled to vote. The Secretary of the Corporation shall make, at least ten (10) days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the principal office of the Corporation and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. Section 5. Order of Business: - ----------------------------- The order of business at any meeting of stockholders shall be as follows: l. Calling the meeting to order. 2. Calling of roll. 3. Proof of notice of meeting. 4. Report of the Secretary of the stock represented at the meeting and the existence or lack of a quorum. 5. Reading of minutes of last previous meeting and disposal of any unapproved minutes. 6. Reports of officers. 7. Reports of committees. 8. Election of directors, if appropriate. 9. Unfinished business. 10 New business. 11. Adjournment. 12. To the extent that these Bylaws do not apply, Roberts' Rules of Order shall prevail. 2 Section 6. Notices: Written or printed notice stating the place, day, and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than fifty (50) days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid. Section 7. Quorum: A quorum at any annual or special meeting shall consist of the representation in person or by proxy of one-third in number of shares of the outstanding capital stock of the Corporation entitled to vote at such meeting. In the event a quorum not be present, the meeting may be adjourned by those present for a period not to exceed sixty (60) days at any one adjournment; and no further notice of the meeting or its adjournment shall be required. The stockholders entitled to vote, present either in person or by proxy at such adjourned meeting, shall, if equal to a majority of the shares entitled to vote at the meeting, constitute a quorum, and the votes of a majority of those present in numbers of shares entitled to vote shall be deemed the act of the shareholders at such adjourned meeting. ARTICLE III BOARD OF DIRECTORS Section l. Organization and Powers: - ----------------------------------- The Board of Directors shall constitute the policy-making or legislative authority of the Corporation. Management of the affairs, property, and business of the Corporation shall be vested in the Board of Directors, which shall consist of not less than one nor more than ten members, who shall be elected at the annual meeting of stockholders by a plurality vote for a term of one (l) year, and shall hold office until their successors are elected and qualify. The number of directors shall be established from time-to-time by a resolution of the directors. Directors need not be stockholders. Directors shall have all powers with respect to the management, control, and determination of policies of the Corporation that are not limited by these Bylaws, the Articles of Incorporation, or by statute, and the enumeration of any power shall not be considered a limitation thereof. 3 Section 2. Vacancies: - --------------------- Any vacancy in the Board of Directors, however caused or created, shall be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board, or at a special meeting of the stockholders called for that purpose. The directors elected to fill vacancies shall hold office for the unexpired term and until their successors are elected and qualify. Section 3. Regular Meetings: - ---------------------------- A regular meeting of the Board of Directors shall be held, without other notice than this Bylaw, immediately after and at the same place as the annual meeting of stockholders or any special meeting of stockholders at which a director or directors shall have been elected. The Board of Directors may provide by resolution the time and place, either within or without the State of Colorado, for the holding of additional regular meetings without other notice than such resolution. Section 4. Special Meetings: - ---------------------------- Special meetings of the Board of Directors may be held at the principal office of the Corporation, or such other place as may be fixed by resolution of the Board of Directors for such purpose, at any time on call of the President or of any member of the Board, or may be held at any time and place without notice, by unanimous written consent of all the members, or with the presence and participation of all members at such meeting. A resolution in writing signed by all the directors shall be as valid and effectual as if it had been passed at a meeting of the directors duly called, constituted, and held. Section 5. Notices: - ------------------- Notices of both regular and special meetings, save when held by unanimous consent or participation, shall be mailed by the Secretary to each member of the Board not less than three days before any such meeting and notices of special meetings may state the purposes thereof. No failure or irregularity of notice of any regular meeting shall invalidate such meeting or any proceeding thereat. Section 6. Quorum and Manner of Acting: - --------------------------------------- A quorum for any meeting of the Board of Directors shall be a majority of the Board of Directors as then constituted. Any act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Any action of such majority, although not at a regularly called meeting, and the record thereof, if assented to in writing by all of the other members of the Board, shall always be as valid and effective in all respects as if otherwise duly taken by the Board of Directors. 4 Section 7. Executive Committee: - ------------------------------- The Board of Directors may by resolution of a majority of the Board designate two (2) or more directors to constitute an executive committee, which committee, to the extent provided in such resolution, shall have and may exercise all of the authority of the Board of Directors in the management of the Corporation; but the designation of such committee and the delegation of authority thereto shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed on it or him by law. Section 8. Order of Business: - ----------------------------- The order of business at any regular or special meeting of the Board of Directors, unless otherwise prescribed for any meeting by the Board, shall be as follows: l. Reading and disposal of any unapproved minutes. 2. Reports of officers and committees. 3. Unfinished business. 4. New business. 5. Adjournment. 6. To the extent that these Bylaws do not apply, Roberts' Rules of Order shall prevail. ARTICLE IV OFFICERS Section l. Titles: - ------------------ The officers of the Corporation shall consist of a President, one or more Vice Presidents, a Secretary, and a Treasurer, who shall be elected by the directors at their first meeting following the annual meeting of stockholders. Such officers shall hold office until removed by the Board of Directors or until their successors are elected and qualify. The Board of Directors may appoint from time to time such other officers as it deems desirable who shall serve during such terms as may be fixed by the Board at a duly held meeting. The Board, by resolution, shall specify the titles, duties and responsibilities of such officers. Section 2. President: - --------------------- The President shall preside at all meetings of stockholders and, in the absence of a, or the, Chairman of the Board of Directors, at all meetings of the directors. He shall be generally vested with the power of the chief executive officer of the Corporation and shall countersign all certificates, contracts, and other instruments of the Corporation as authorized by the Board of Directors or required by law. He shall make reports to the Board of Directors and stockholders and shall perform such other duties and services as may be required of him from time to time by the Board of Directors. 5 Section 3. Vice President: - -------------------------- The Vice President shall perform all the duties of the President if the President is absent or for any other reason is unable to perform his duties and shall have such other duties as the Board of Directors shall authorize or direct. Section 4. Secretary: - --------------------- The Secretary shall issue notices of all meetings of stockholders and directors, shall keep minutes of all such meetings, and shall record all proceedings. He shall have custody and control of the corporate records and books, excluding the books of account, together with the corporate seal. He shall make such reports and perform such other duties as may be consistent with his office or as may be required of him from time to time by the Board of Directors. Section 5. Treasurer: - --------------------- The Treasurer shall have custody of all moneys and securities of the Corporation and shall have supervision over the regular books of account. He shall deposit all moneys, securities, and other valuable effects of the Corporation in such banks and depositories as the Board of Directors may designate and shall disburse the funds of the Corporation in payment of just debts and demands against the Corporation, or as they may be ordered by the Board of Directors, shall render such account of his transactions as may be required of him by the President or the Board of Directors from time to time and shall otherwise perform such duties as may be required of him by the Board of Directors. The Board of Directors may require the Treasurer to give a bond indemnifying the Corporation against larceny, theft, embezzlement, forgery, misappropriation, or any other act of fraud or dishonesty resulting from his duties as Treasurer of the Corporation, which bond shall be in such amount as appropriate resolution or resolutions of the Board of Directors may require. Section 6. Vacancies or Absences: - --------------------------------- If a vacancy in any office arises in any manner, the directors then in office may choose, by a majority vote, a successor to hold office for the unexpired term of the officer. If any officer shall be absent or unable for any reason to perform his duties, the Board of Directors, to the extent not otherwise inconsistent with these Bylaws, may direct that the duties of such officer during such absence or inability shall be performed by such other officer or subordinate officer as seems advisable to the Board. 6 ARTICLE V STOCK Section 1. Regulations: - ----------------------- The Board of Directors shall have power and authority to take all such rules and regulations as they deem expedient concerning the issue, transfer, and registration of certificates for shares of the capital stock of the Corporation. The Board of Directors may appoint a Transfer Agent and/or a Registrar and may require all stock certificates to bear the signature of such Transfer Agent and/or Registrar. Section 2. Restrictions on Stock: - --------------------------------- The Board of Directors may restrict any stock issued by giving the Corporation or any stockholder "first right of refusal to purchase" the stock, by making the stock redeemable or by restricting the transfer of the stock, under such terms and in such manner as the directors may deem necessary and as are not inconsistent with the Articles of Incorporation or by statute. Any stock so restricted must carry a stamped legend setting out the restriction or conspicuously noting the restriction and stating where it may be found in the records of the Corporation. ARTICLE VI DIVIDENDS AND FINANCES Section l. Dividends: - --------------------- Dividends may be declared by the directors and paid out of any funds legally available therefore, as may be deemed advisable from time to time by the Board of Directors of the Corporation. Before declaring any dividends, the Board of Directors may set aside out of net profits or earned or other surplus such sums as the Board may think proper as a reserve fund to meet contingencies or for other purposes deemed proper and to the best interests of the Corporation. Section 2. Monies: - ------------------ The monies, securities, and other valuable effects of the Corporation shall be deposited in the name of the Corporation in such banks or trust companies as the Board of Directors shall designate and shall be drawn out or removed only as may be authorized by the Board of Directors from time to time. Section 3. Fiscal Year: - ----------------------- The Board of Directors by resolution shall determine the fiscal year of the Corporation. 7 ARTICLE VII AMENDMENTS These Bylaws may be altered, amended, or repealed by the Board of Directors by resolution of a majority of the Board. ARTICLE VIII INDEMNIFICATION The Corporation shall indemnify any and all of its directors or officers, or former directors or officers, or any person who may have served at its request as a director or officer of another corporation in which this Corporation owns shares of capital stock or of which it is a creditor and the personal representatives of all such persons, against expenses actually and necessarily incurred in connection with the defense of any action, suit, or proceeding in which they, or any of them, were made parties, or a party, by reason of being or having been directors or officers or a director or officer of the Corporation, or of such other corporation, except in relation to matters as to which any such director or officer or person shall have been adjudged in such action, suit, or proceeding to be liable for negligence or misconduct in the performance of any duty owed to the Corporation. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled, independently of this Article, by law, under any Bylaw agreement, vote of stockholders, or otherwise. ARTICLE IX CONFLICTS OF INTEREST No contract or other transaction of the Corporation with any other persons, firms or corporations, or in which the Corporation is interested, shall be affected or invalidated by the fact that any one or more of the directors or officers of the Corporation is interested in or is a director or officer of such other firm or corporation; or by the fact that any director or officer of the Corporation, individually or jointly with others, may be a party to or may be interested in any such contract or transaction. 8 EX-5 4 formsb2dec07ex5.txt EXHIBIT 5 HART & TRINEN 1624 Washington St Denver, CO 80203 (303) 839-0061 (303) 839-5414 - Fax harttrinen@aol.com - email December 31, 2007 Gas Salvage Corp. Suite 153, 333 River Front Ave., S.E. Calgary, Alberta Canada T2G 5R1 This letter will constitute an opinion upon the legality of the sale by certain selling shareholders of Gas Salvage Corp., a Nevada corporation (the "Company"), of up to 2,680,000 shares of common stock, all as referred to in the Registration Statement on Form SB-2 filed by the Company with the Securities and Exchange Commission. We have examined the Articles of Incorporation and the minutes of the Board of Directors of the Company and the applicable laws of Nevada. In our opinion, the Company has duly authorized the issuance of the shares of stock mentioned above and such shares of common stock are legally issued, fully paid and non-assessable. Very Truly Yours, HART & TRINEN, L.L.P. /s/ William T. Hart William T. Hart EX-10 5 formsb2dec07ex101.txt EX 10.1 - PURCHASE AND SALE AGREEMENT EXHIBIT 10.1 PURCHASE AND SALE AGREEMENT THIS AGREEMENT made and entered into this 10th day of August, 2007, between Gas Salvage Corp ("GSC") and Futures Investment Corp. ("Futures"). W I T N E S S E T H: - - - - - - - - - 1. PURCHASE AND SALE. On the Closing Date (as hereinafter defined), but effective for all purposes as of 12:01 a.m. Mountain Time September 1, 2007 (the "Effective Date") subject to the terms and conditions of this Agreement, Futures hereby agrees to sell, convey, and deliver to GSC, and GSC hereby agrees to purchase and accept delivery from Futures, the following: (a) The oil, gas, and leasehold interests described in Exhibit A, which are attached hereto and incorporated by reference; (b) all of Futures's rights under the operating agreements, unitization agreements, pooling agreements, declarations of pooling or unitization, farmout agreements, assignments, gas sale contracts, gas processing contracts, and other instruments and agreements described or referred to in Exhibit A (all of which are hereinafter collectively referred to as the "Existing Contracts"); (c) All right, title and interest of Futures in all equipment, pipelines, accounts, wells, tanks, pipeline easements, surface easements, production in tanks, and appurtenances used or held for use or related to the aforesaid interests described in Exhibit A or operations conducted in connection therewith; (d) All right, title, and interest of Futures in or derived from all unitization and pooling agreements concerning the properties covered and the units created thereby which accrue or are attributable to the interests described in Exhibit A, and including not less than those percentages of interests in the units set forth in Exhibit A; (e) Without limitation by the foregoing, all of Futures's right, title, and interest in and to oil, gas, and mineral interests and oil, gas, and mineral leasehold interests and overriding royalty interests in the lands described or referred to in Exhibit A or to which the interests in Exhibit A relate; (f) without limitation all of Futures's interest in and to the wells described in Exhibit A (the "Wells"); all of which interests, are hereinafter collectively referred to as the "Subject Interests". 2. PURCHASE PRICE. The total purchase price (the "Purchase Price") to be paid by GSC to Futures for the Subject Interests is $200,000 in cash, plus 900,000 shares of GSC's common stock. The Purchase Price shall be paid on the Closing Date pending the adjustments for title matters described in Article 7 and the adjustments for taxes, production, and operating costs described in Article 8. The shares of GSC to be delivered on Closing Date will be restricted securities, as that term is defined in Rule 144 of the Securities and Exchange Commission. 3. DISTRIBUTION OF BENEFITS AND ASSUMPTION OF CERTAIN OBLIGATIONS. GSC shall be entitled to any amount realized from and accruing to the Subject Interests subsequent to the Effective Date and shall be responsible for all expenses for the development and operation of the Subject Interests subsequent to that date. Futures shall be entitled to all the amounts realized from and accruing to the Subject Interests prior to the Effective Date and shall be responsible for and hold GSC harmless from any liability arising out of all expenses for the development and operation of the Subject Interests incurred prior to the Effective Date and also, any litigation expenses incurred by Futures prior to the Closing Date. 4. REPRESENTATIONS AND WARRANTIES OF SELLER. Futures represents and warrants to GSC that: 4.1 Due Organization. Futures is a duly organized and validly existing corporation under the laws of the State of Nevada and has the corporate power to carry on its business as it is now being conducted and is duly qualified to do business in Oklahoma. 4.2 Power and Authority; No Conflict. Futures has full legal power and authority to enter into and perform this Agreement, and the consummation of the transactions contemplated herein will not result in the breach of any provision of, or constitute a default under, Futures's articles of incorporation or bylaws or, as of the Closing Date, any indenture, mortgage, deed of trust, credit agreement or any other agreement or instrument by which Futures is bound or to which the Subject Interests are subject, except for agreements or instruments with respect to which Futures will have obtained by the Closing Date the consents set forth in Exhibit A. This Agreement has been duly authorized by all necessary corporate action of Futures and its shareholders and this Agreement constitutes a legal, valid and binding agreement of Futures enforceable against Futures in accordance with its terms. 4.3 No Defaults. Futures has not received any notice of default and is not in default under any lease or extension thereof, operating agreement or other agreement or obligation to which it is a party or by which it is bound or to which it may be subject affecting the Subject Interests or Futures' right to enter into this Agreement and carry out the transactions contemplated hereby, and Futures is not subject to any order, writ, injunction, or decree of any court or commission or other administrative agency affecting the Subject Interests or its right to enter into this Agreement and carry out the transactions contemplated hereby. 2 4.4 No Finders Fee. Futures has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fee in respect to the matters provided for in this Agreement. 4.5 No Encumbrances. Futures has good and marketable title to the Subject Interests and, except for the obligations, encumbrances, depth limitations, and burdens set forth on Exhibit A the Subject Interests are free and clear of all liens, claims, clouds, burdens, depth limitations, or encumbrances. In addition, Exhibit A reflects the names, addresses, and phone numbers of all contractors, service companies, materialmen, and vendors that have provided services or material on the Subject Interests within the last six months or who could claim a lien for services or materials provided to the Subject Interests under applicable law in a cumulative amount of $500.00 or more. The oil, gas, and leasehold interests described in Exhibit A, are not subject to being reduced by virtue of any reversionary or back-in interests or reassignments or payments required of Futures. The oil, gas, and leasehold interests described in Exhibit A, are not subject to any joint venture agreements, farmout agreements, operating agreements, oil and or gas sales or processing contracts, preferential rights of purchase, consents to assignment, drilling and or development obligations or other burden, restriction or limitation with respect to the ownership interest of Futures, the operation thereof, or the disposition and processing of production attributable thereto which are not ordinary and customary in the oil and gas industry, or which contain any terms, provisions, conditions or agreements which are not ordinary and customary in the oil and gas industry. 4.6 No Litigation. There is no action at law or equity and no proceeding before any governmental agency, pending or threatened, that in any way relates to or affects the Subject Interests or Futures's ability to enter into, and perform its obligations under, this Agreement. 4.7 Subject Interests. Exhibit A contains a correct and complete description of the Subject Interests owned by Futures and to be conveyed to GSC hereunder, and the Subject Interests are correctly described in Exhibit A. The only operating agreements or other agreements affecting the Subject Interests are those set forth and described in Exhibit A. The Subject Interests entitle Futures to receive not less than the undivided interests set forth in Exhibit A as "Net Revenue Interests" of all indicated hydrocarbons produced, saved, and marketed from the lands covered thereby and all wells located thereon through the plugging, abandonment, and salvage of such wells. Futures's proportionate obligation to bear costs and expenses relating to the development of and operations on the leases, land, and wells thereon is not, and, through the plugging, abandonment, and salvage of such wells, will not be, greater than the "Working Interests" set forth in Exhibit A. Exhibit A contains a correct and complete list of each person or entity who owns a working interest in any of the property covered by the Subject Interests, the extent of such working interest, the net revenue interest of such person or entity, each person who holds a royalty interest in such property, and the extent of such royalty interest. 3 4.8 Environmental Matters. As used in this Section 4.8: "CERCLA" means the Comprehensive Environmental Response, Compensation a Liability Act of 1980, as amended. "CERCUS" means the Comprehensive Environmental Response, Compensation an Liability Information System List. "Environmental Laws" means any federal, state, local, or foreign statute, code, ordinance, rule, regulation, policy, guidelines, permit, consent, approval, license, judgment, order, writ, decree, injunction, or other authorization, including the requirement to register underground storage tanks, relating to (a) emissions, discharges, releases, or threatened releases of Hazardous Materials into the natural environment, including into ambient air, soil, sediments, land surface or subsurface, buildings or facilities, surface water, groundwater, pub1icly~~wned treatment works, septic systems, or land, (b) the generation, treatment, storage, disposal, use, handling, manufacturing, transportation, or shipment of Hazardous Materials, or (c) otherwise relating to the pollution of the environment, solid waste handling treatment, or disposal, or operation or reclamation of mines or oil and gas wells. "Hazardous Material" means (a) any "hazardous substance", as defined by CERCLA, (b) any "hazardous waste," as defined by the Resource Conservation and Recovery Act, as amended, (c) any hazardous, dangerous, or toxic chemical, material, waste, or substance within the meaning of and regulated by any Environmental Law, (d) any radioactive material, including any naturally occurring radioactive material, and any source, special, or byproduct material as defined in 42 U.S.C. ss.2011 et seq. and any amendments or authorizations thereof, (e) any asbestos-containing materials in any form or condition, or (f) any polychlorinated biphenyls in any form or condition. (a) Futures has conducted its business and operated the Subject Interests, and is conducting its business and operating the Subject Interests, in material compliance with all Environmental Laws; (b) Neither Futures nor the Subject Interests are the subject of any investigation or inquiry by any governmental authority evaluating whether any material remedial action is needed to respond to a release of any Hazardous Material or to the improper storage or disposal (including storage or disposal at offsite locations) of any Hazardous Material; (c) Futures (and to the best knowledge, information, and belief of Futures, no other person) has filed any notice under any federal, state, or local law indicating that it is responsible for the improper release into the environment, or the improper storage or disposal, of any Hazardous Material or that any Hazardous Material is improperly stored or disposed of upon any of the Subject Interests; 4 (d) Futures does not have any material contingent liability in connection with the release into the environment or at or on any property now or previously owned or leased by Futures or the storage or disposal of any Hazardous Material; (e) Futures has not received any claim, complaint, notice, inquiry, or request for information, which remains unresolved as of the date hereof, with respect to any alleged violation of any Environmental Law or regarding potential liability under any Environmental Law or under any common law theories relating to operations or conditions of any facilities or property owned, leased, or operated by Futures; (f) No property now or previously owned, leased, or operated by Futures is listed on the National Priorities List pursuant to CERCLA or on the CERCUS or on any other federal or state list as sites requiring investigation or cleanup; (g) Futures is not directly transporting, has directly transported or, is directly arranging for the transportation of any Hazardous Material to any location which is listed on the National Priorities List pursuant to CERCLA, on the CERCUS, or on any similar federal or state list or which is the subject of federal, state, or local enforcement actions or other investigations that may lead to material claims against Futures for remedial work, damage to natural resources, or personal injury, including claims under CERCLA; (h) There are no sites, locations, or operations at which Futures is currently undertaking, or has completed, any remedial or response action relating to any such disposal or release, as required by Environmental Laws; and (i) All underground storage tanks and solid waste disposal facilities owned or operated by Futures are used and operated in material compliance with Environmental Laws. 4.9 Consents and Approvals. Except as set forth in Exhibit A, no governmental, regulatory, or other third party approvals, waivers, consents, or waivers of preferential or similar rights of third parties to purchase any part of the Subject Interests are required to consummate the transactions contemplated by this Agreement and to fully vest in GSC all rights, title, and interests of Futures in and to the Subject Interests, and none of the leases, contracts or other agreements listed in Exhibit A and being assigned to GSC hereunder require the consent of another party to such assignment. Consummation of the transaction contemplated hereby by Futures will not violate any statute, ordinance, or regulation of any governmental or regulatory body. 4.10 Validity of Leases and Contracts. Each of the leases, operating agreements, and other agreements described in Exhibit A hereto relating to the Subject Interests is valid and subsisting; such leases will be maintained in effect as to the lands covered thereby by production from the Wells located on such leases or by timely meeting the drilling obligations thereunder; there is not under any such leases or contracts any existing breach or default or event that with notice or lapse of time, or both, would constitute a breach or default. Futures has fulfilled all requirements for filings, certificates, disclosures of parties in interest, and other similar matters contained in (or otherwise applicable thereto by law, rule or regulation) the leases or other 5 documents applicable to Futures and is fully qualified to own and hold all such leases or other interests relating to the Subject Interests. There are no obligations (excluding implied covenants, if any) to engage in continuous development operations in order to maintain any such lease relating to the Subject Interests or other interest in force and effect for the areas and depths covered thereby; there are no provisions applicable to such leases or other documents which increase the royalty share of the lessor thereunder. Upon the establishment of production in commercial quantities, the leases and other interests will be in full force and effect over the economic life of the property involved and do not have terms fixed by a certain number of years. With respect to tangible personal property held by Futures under lease, all such agreements are valid, binding and in full force and effect and Futures is not in default under any such lease. The copies of the leases and agreements described in Exhibit A to this Agreement which have been heretofore delivered to GSC are true and complete copies thereof, with all amendments to date. 4.11 Compliance with Laws. To the best of Futures' knowledge, all of the Wells have been drilled, completed, and operated in compliance with all applicable laws and regulations. Futures holds (and is in compliance with the terns of) all permits, licenses, variances, exemptions, orders, franchises, approvals, and authorizations of all governmental agencies necessary for the lawful conduct of its business or the lawful ownership, use, and operation of its assets. As of the date of this Agreement, no investigation or review by any governmental agency with respect to Futures or its Subject Interests is pending or, to the best knowledge, information, and belief of Futures, is threatened. Futures is not subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, the Investment Company Act of 1940, or any state public utilities code. 4.12 Obligation Wells. A complete and accurate description of all drilling obligations and other material development obligations (and the penalties for the breach thereof) affecting the Subject Interests is set forth in Exhibit A. 4.13 Taxes. All ad valorem, property, production, severance, and similar taxes and assessments based on or measured by the ownership of property or the production of hydrocarbons or the receipt of proceeds therefrom with respect to the Subject Interests for all years prior to the year in which this Agreement is executed have been properly paid, and all such taxes and assessments which become due and payable prior to the Closing Date shall be paid in full by Futures, subject, however, to proration pursuant to Section 8.2. 4.14 Oil and Gas Reserve Information. All information in the reserve report dated February 10, 2007 relating to the Subject Interests was (as of the date of the reserve report) true and correct in all material respects. Except for changes in classification or values of oil and gas reserve or property interests that occurred in the ordinary course of business since the date of such report and except for changes (including changes in commodity prices) generally affecting the oil and gas industry, there has been no material adverse change with respect to the matters addressed in the Reserve Report. 6 4.15 Oil and Gas Operations. Except as otherwise set forth in Exhibit A: ---------------------- (a) None of the Wells has been overproduced such that it is subject or liable to being shut-in or to any other overproduction penalty; (b) There have been no changes proposed in the production allowables for any Wells; (c) All Wells have been drilled and (if completed) completed, operated,and produced in accordance with good oil and gas field practices and in compliance in all material respects with applicable oil and gas leases and applicable laws, rules, and regulations; (d) Futures has not agreed to, and is not obligated to, abandon any Well; (e) Proceeds from the sale of oil or gas produced from the Wells are being received by Futures in a timely manner and are not being held in suspense for any reason (except for amounts, individually or in the aggregate, not in excess of $100.00 and held in suspense in the ordinary course of business); and (f) No person has any call on, option to purchase, or similar rights with respect any of the Subject Interests or any or to the production attributable thereto, and upon consummation of the transactions contemplated by this Agreement, GSC will have the right to market production from the Subject Interests on terms no less favorable than the terms upon which Futures is currently marketing such production. (g) Except as disclosed on Exhibit A no agreements relating to the Subject Interests will require as of or after the Closing Date, GSC to sell or deliver, oil or gas for a price materially less than the market value price that would have been, or would be, received pursuant to any arm's-length contract for a term of one month with an unaffiliated third party purchaser. (h) Each agreement relating to the Subject Interests is valid, binding, and in full force and effect, and no party is in material breach or default of any such agreement, and to the best knowledge, information, and belief of Futures, no event has occurred that with notice or lapse of time (or both) would constitute a material breach or default or permit termination, modification, or acceleration under any such agreement; (i) There have been no claims from any third party for any price reduction or increase or volume reduction or increase under any agreement relating to the Subject Interests and Futures has not made any claims for any price reduction or increase or volume reduction or increase under any such agreements; (j) Payments for oil or gas produced from the Wells have been made materially in accordance with prices or price setting mechanisms set forth in the agreement pertaining to the Wells; 7 (k) No purchaser under any agreement has notified Futures (or, to the best knowledge, information, and belief of Futures, the operator of any property) of its intent to cancel, terminate, or renegotiate any agreement or otherwise to fail and refuse to take and pay for oil or gas in the quantities and at the price set out in any agreement, whether such failure or refusal was pursuant to any force majeure, market out, or similar provisions contained in the agreement or otherwise; (l) Futures is not obligated by any prepayment arrangement, "take-or-pay" or similar provision, production payment, or any other arrangements to deliver oil or gas produced from a Well at some future time without then or thereafter receiving payment therefor; (m) There are no gas balancing agreements or arrangements or similar situations by which Futures is required to allow another party or parties to produce quantities of gas with an aggregate market value of more than $1.00 which, in the absence of such balancing agreements, arrangements or similar situations, would have been produced by Futures, and (n) The agreements pertaining to the Subject Interests are of the type generally found in the oil and gas industry, do not (individually or in the aggregate) contain unusual or unduly burdensome provisions that may have a material adverse effect on Futures, and are in form and substance considered normal within the oil and gas industry. 5. CERTAIN AGREEMENTS OF SELLER. 5.1 Access to Information. From and after the date of this Agreement until the Closing Date, Futures shall give to GSC and to its representatives full access at any time at a place reasonably convenient to GSC to all records, contracts, leases, documents, seismic, geological and geophysical data, and other information in Futures's possession or subject to its control pertaining to the Subject Interests and shall permit GSC and its representatives to examine all abstracts of title, title opinions, title files, ownership maps, division orders, records, surveys, reports filed with any federal or state agency as well as any Windfall Profit Tax returns which Futures may have relating to the Subject Interests. Until the Closing Date GSC shall hold confidential all such information not otherwise available to it and will return all such information to Futures in the event that the transaction contemplated hereby is not consummated. 5.2 Affirmative Covenants. From and after the date of this Agreement until Closing Date, Futures shall, except as otherwise agreed to in writing by GSC: (a) Use its best efforts to maintain and keep, or cause to be maintained and kept, the personal property which is a part of the Subject Interests in good condition and working order; (b) Preserve in full force and effect all of the oil and gas leases and other agreements which relate to the Subject Interests and perform all covenants and conditions imposed upon Futures thereunder; (c) Use its best efforts to operate or cause to be operated the Wells in a good and workmanlike manner and in compliance with all applicable laws and regulations; 8 (d) Pay its share of all valid operating charges applicable to the Subject Interests and receive its share of all proceeds from the sale of production related thereto; and (e) Use its best efforts to assure that the conditions to closing set forth in Section 10 will be satisfied at the Closing Date. 5.3 Negative Covenants. From and after the date of this Agreement until Closing Date, Futures shall not, without the prior written consent of GSC: (a) Enter into any agreement or arrangement granting any preferential or other right to purchase any of the Subject Interests or any interest therein requiring the consent of any party to the transfer and assignment of same to GSC; (b) Enter into any sales or supply contract affecting the Subject Interests; (c) Waive any right or claim having material value affecting the Subject Interests; (d) Enter into any new agreements or commitments with respect to the Subject Interests which extend beyond the Closing Date make or authorize the operators to make any expenditures with respect to any of the Subject Interest in excess of $5,000, abandon any well located on the Subject Interests nor release or abandon all or any portion of any of the leases covering the Lands, modify or terminate any of the agreements relating to the Subject Interests, apply for or otherwise seek any modification to the spacing requirements applicable to the Lands or encumber, sell, or otherwise dispose of any of the Subject Interests other than personal property which is replaced by equivalent property or consumed in the operation of the Subject Interests; or (e) Except as provided for herein, amend any oil and gas leases, operating agreements, gas purchase agreements, or other agreements which affect the Subject Interests. 5.4 Consents and Approvals. From and after the date of this Agreement until Closing Date, Futures shall use its best efforts to obtain all such permissions, approvals, waivers, and consents by governmental authorities and others as, in the opinion of GSC, may be required of Futures in connection with the sale and transfer of the Subject Interests, and the acquisition, use, and operation thereof by GSC. 5.5 Notice of Default. Futures shall give prompt notice to GSC of any notice of default received by Futures subsequent to the date of this Agreement under any instrument or agreement to which Futures is a party and relating to the Subject Interests or by which the Subject Interests may be affected. 9 6. REPRESENTATIONS AND WARRANTIES OF GSC GSC represents and warrants to Futures that; 6.1 Due Incorporation and Qualification. GSC is a corporation duly organized and validly existing under the laws of the State of Nevada, has corporate power to carry on its business as it is now being conducted, and is duly qualified to do business in Oklahoma. 6.2 Power and Authority. GSC has the full legal power and authority to enter into and perform this Agreement. The consummation of the transactions contemplated hereby will not result in the breach of, or constitute a default under, GSC's articles of incorporation or bylaws or any indenture, mortgage, deed of trust or other agreement or instrument to which GSC is a party or by which it or its properties may be bound. This Agreement has been duly authorized by all necessary corporate action of GSC and this Agreement constitutes a legal, valid, and binding agreement of GSC, enforceable against GSC in accordance with its terms. 6.3 Finders Fee. GSC has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fee in respect to the matters provided for in this Agreement. 7. TITLES. 7.1 Title Opinion. Futures shall deliver to GSC, within five days of execution of this Agreement, such copies of oil and gas leases, rental receipts, agreements, contracts, assignments, attorneys' title opinions, current division order, abstracts, and all such other title information as Futures may have in its possession or subject to its control pertaining to the Subject Interests. There have been no changes to the Title Opinion dated January 31, 2007 which would adversely affect the Subject Interests. 8. ACCOUNTING FOR PRODUCTION AND OPERATING COSTS AND TAXES. 8.1 Production, Costs, and Expenses. As soon as practicable, and in any event not later than 10 days from the Closing Date, the parties agree to account for proceeds of production, costs, and expenses relating to the Subject Interests for the period from and after the Effective Date so that the benefit of production from and after the Effective Date and the obligation for all costs and expenses from and after the Effective Date with respect to the Subject Interests shall inure to GSC. To effect the foregoing: (i) Futures shall pay to GSC all proceeds of production which are received by Futures and attributable to production collected from the Subject Interests on or after the Effective Date, net of ad valorem, production, and excise taxes actually withheld (including, but not limited to, the Crude Oil Windfall Profits Tax) and all other taxes withheld against production, and (ii) GSC shall reimburse Futures for all costs and expenses paid by Futures on or after the Effective Date which are attributable to the Subject Interests for the period from and after the Effective Date. As used herein, costs and expenses (including capital expenditures) shall be limited to those billed by the Operators under the operating agreements set forth in Exhibit A and attributable to the Subject Interests for the period from and after the Effective Date in accordance with the terms of such operating agreements. 10 8.2 Proration of Taxes. To the extent not accounted for by the procedure set forth in Section 8.1, all ad valorem, property, production, severance, and similar taxes and assessments based upon or measured by the ownership of property or the production of hydrocarbons or the receipt of proceeds therefrom on the Subject Interests shall be prorated between Futures and GSC as of the Effective Date as soon as practicable after the necessary tax bills and other information become available so that Futures shall be responsible for all such taxes for the period prior to the Effective Date, and GSC shall be responsible for all such taxes for the period beginning on the Effective Date. If such taxes are not specifically identified as to one period or another, they shall be prorated on the basis of a year of 365 days. The proration shall be adjusted from time to time to rectify any errors and to reflect any modifications that are hereafter discovered or determined. 8.3 Expenses Prior to the Effective Date. Futures shall be responsible for the payment of all operating and development costs and expenses attributable to the Subject Interests for the period prior to the Effective Date. 8.4 Final Accounting Statement. Subsequent to the Closing Date, a final accounting statement will be prepared by GSC, subject to verification by Futures, based upon the actual income and expenses between the Effective Date and the Closing Date. GSC or Futures, as the case may be, shall pay to the other such sums as may be found to be due in said final account (the "Final Account Adjustment"). 9. CLOSING. 9.1 Closing Date. The closing of the transaction provided for herein shall take place at the offices of Futures Investment Corp., at 10:00 a.m., local time, on August 24, 2007, or on such earlier or later date or at such other place as shall be fixed by mutual written agreement of the parties hereto (such time being referred to in this Agreement as the "Closing Date"). 9.2 Assignments. On the Closing Date, Futures shall execute, acknowledge, and deliver to GSC appropriate conveyances, assignments, transfers, bills of sale, and other instruments conveying marketable title to the Subject Interests and the contracts set forth in Exhibit A to GSC, free and clear of all liens, encumbrances, and burdens except as specifically set forth in Exhibit A, or waived by GSC hereunder, which instruments shall be in proper and recordable form satisfactory to GSC, shall be effective as of the Effective Date, shall contain special warranties of title, by, through and under Futures, and shall include Futures's assignment to GSC of all rights held by Futures by virtue of warranties with respect to the Subject Interests given by Futures's predecessors in title. In addition, the parties shall execute and deliver good and sufficient transfer orders and division orders, and other documents and further assurances of title as may be reasonably required by GSC so as to fully effectuate the transfer and conveyance of the Subject Interests and the payment of the proceeds of production attributable thereto for the period from and after the Effective Date to GSC. 9.3 Geological Information. To the extent not heretofore delivered to GSC, Futures shall on the Closing Date deliver to GSC any and all files, geological and geophysical information and data, survey maps, drill hole logs, lease and production records, and all other reports or information in its possession or to which it has access pertaining to the Subject Interests. 11 10. CONDITIONS TO GSC'S CLOSING. The obligations of GSC under this Agreement are subject, at GSC's option, to the satisfaction on or prior to Closing Date of the following conditions: 10.1 Representations and Warranties True. All representations and warranties of Futures contained in this Agreement shall be true in all material respects at and as of the Closing Date as though such representations and warranties were made at and as of the Closing Date, and Futures shall have performed and satisfied all agreements, covenants, and conditions required by this Agreement to be performed and satisfied by it prior to or at the Closing Date; and GSC shall have received a certificate signed by the President or the Vice President of Futures dated as of the Closing Date to the foregoing effect. 10.2 No Restraint. At the Closing Date, no suit, action, or other proceeding shall be pending or threatened before any court or governmental agency seeking to restrain or prohibit the consummation of the transactions contemplated by this Agreement or to obtain damages in connection with this Agreement or the consummation of the transactions contemplated hereby. 10.3 Evidence of Authority. GSC shall have received a copy of resolutions of the Board of Directors of Futures and such other necessary documents which, in the opinion of GSC's counsel, indicate the authority of Futures to enter into and perform this Agreement and that the person executing this Agreement and the assignments and conveyances herein contemplated are fully authorized and directed to execute and deliver same unto GSC. 10.4 Consents. Futures shall have furnished to GSC copies of all consents, approvals, and waivers by third parties necessary to consummate the transactions contemplated hereby including, but not limited to, consents, waivers, and approvals described in Exhibit A. 10.5 Title Opinion. . There will have been no changes to the Title Opinion dated January 31, 2007 which would adversely affect the Subject Interests. 10.6 No Casualty Loss. There shall not have occurred any casualty loss with respect to the Subject Interests for which GSC has not received proceeds of insurance in the amount of full replacement value of the property affected by such casualty loss, or with respect to which an appropriate deduction has not been made from the Purchase Price. 10.7 Operating Agreements and Tax Partnerships. Futures shall have caused the termination of any tax partnership associated with any agreement affecting the Subject Interests. Futures shall have obtained written approval from all of the working interest owners owning an interest in the leases described in Exhibit A of Futures's resignation as operator and GSC's appointment as successor operator. 12 10.8 Inspection and Wells Tests. GSC shall have completed an inspection of the Producing Wells and shall have performed such well tests as it may determine necessary or appropriate and such test results shah be acceptable to GSC; provided, however, that GSC shall have completed such inspection and tests within three business days prior to the Closing Date hereof by GSC and Futures and, unless GSC shall have notified Futures on or before such date that such tests are not acceptable to GSC, this condition shall be deemed waived by GSC. All such tests shall be performed at GSC's sole risk and expense. 10.9 Contracts and Leases. The leases, contracts, and agreements listed on Exhibit A to this Agreement shall be in form and substance satisfactory to GSC. 10.10 Releases. GSC shall have received duly executed releases of the liens of all lien claimants holding liens, encumbrances, and burdens upon the Subject Interests. 10.11 Marketing of Hydrocarbons. At and as of the Closing Date, GSC shall be legally entitled to market all hydrocarbons produced from the Subject Interests upon price and other sale conditions no less favorable than those upon which Futures could market such production on the last sale day immediately preceding the Effective Date. No governmental order or regulation (whether final or proposed) shall have been published which GSC reasonably deems to materially and adversely affect the price at which production from the Subject Interests can be legally marketed at or after the Closing Date as compared to the price that Futures could receive for production on said last sale day. 10.12 Windfall Profits Tax. With respect to each producing oil and gas reservoir which constitutes part of the Subject Interests to be transferred to GSC pursuant to this Agreement, Futures shall have furnished to GSC a written statement, that Soveriegn has complied with all provisions relating to the Windfall Profits tax. 11. CONDITIONS TO FUTURES'S CLOSING. The obligations of Futures under this Agreement are subject, at Futures's option, to the satisfaction at or prior to the Closing Date of the following conditions: 11.1 Representations and Warranties True. All representations and warranties of GSC contained in this Agreement shall be true in all material respects at and as of the Closing Date as though such representations and warranties were made at and as of the Closing Date, and GSC shall have performed and satisfied all agreements, covenants, and conditions required by this Agreement to be performed and satisfied by it prior to or at the Closing Date; and Futures shall have received a certificate signed by the President or a vice president of GSC dated as of the Closing Date to the foregoing effect. 11.2 No Restraint. At the Closing Date, no suit, action, or other proceeding shall be pending or threatened before any court or governmental agency seeking to restrain or prohibit the consummation of the transactions contemplated by this Agreement or to obtain damages in connection with this Agreement or the consummation of the transactions contemplated hereby. 13 11.3 Evidence of Authority. Futures shall have received a certified copy of the resolutions of the Board of Directors of GSC and such other necessary documents which, in the opinion of Futures's counsel, indicate the authority of GSC to enter into this Agreement and that the officers executing any of the documents herein contemplated are fully authorized and directed to execute and deliver same unto Futures. 12. TERMINATION OF AGREEMENT. In addition to the rights of termination by GSC as provided in Article 7 the parties hereto shall have further rights of termination of this Agreement as follows: 12.1 Termination by GSC. If all conditions set forth in Article 11 hereof are satisfied and Futures refuses to close this transaction, or if Futures fails to fully perform and satisfy all those conditions to GSC's closing set forth in Article 10 hereof, then, in either of such events, GSC shall have the right to terminate this Agreement without limitation upon or prejudice to the enforcement of any other legal remedy it may have against Futures for breach of this Agreement; or at GSC's option it may seek the remedy of specific performance of this Agreement, which remedy Futures agrees shall be available to GSC in such event. 12.2 Termination by Futures. If all conditions set forth in Article 10 hereof are satisfied and GSC refuses to close this transaction or if GSC fails to perform and satisfy all those conditions to Futures's closing as set forth in Article 11 hereof, then, in either of such events, Futures shall have the right to terminate this Agreement without limitation upon or prejudice to the enforcement of any other legal remedy it may have against GSC for breach of this Agreement; or at Futures's option, it may seek the remedy of specific performance of this Agreement, which remedy GSC agrees shall be available to Futures in such event. 12.3 Effectiveness. Termination of this Agreement by either party hereto pursuant to Article 7 or pursuant to Section 12.1 or 12.2 shall be effective upon the giving of written notice thereof to the other party hereto. 13. POST CLOSING COVENANTS. 13.1 Further Assurances. After the Closing Date Futures shall at any time upon request of GSC execute, acknowledge, and deliver to GSC such further instruments of conveyance, assignment, and transfer and take such other action as the other party may reasonably request in order more effectively to perfect and cure, convey, assign, transfer, and deliver title to the Subject Interests, the proceeds of production attributable thereto, and personal property and well equipment in connection therewith, all as contemplated by this Agreement. Futures shall furnish to GSC (or cooperate in securing from any prior owners) all support information and documents required for GSC to compute and to make necessary returns pursuant to the Crude Oil Windfall Profit Tax Act and shall cooperate with GSC in furnishing such additional information as may be required to enable GSC to use Futures's base price in computing GSC's liability for Windfall Profit Tax on crude oil produced from the producing oil and gas reservoirs transferred to GSC pursuant to this Agreement. 14 14. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS; INDEMNIFICATION. 14.1 Survival of Representations, Warranties, and Agreements. The representations, warranties, covenants, and agreements made by Futures and GSC hereunder shall survive the execution and delivery of the transfers, conveyances, and assignments to be executed and delivered hereunder upon closing. 14.2 Indemnification. Futures hereby agrees to indemnify and hold GSC harmless from and against any and all losses, costs, expenses, damages, or liabilities (including, among other things, court costs and attorney's fees) incurred or suffered from time to time by GSC, arising out of, resulting from, or attributable to any breach of any covenant, representation, or warranty by Futures contained in or given pursuant to this Agreement, irrespective of the nature of claims or liabilities respecting any of the foregoing, or the manner in which any such claims or liabilities arise, whether the same are meritorious or not, and whether any such losses, costs, expenses, damages, or liabilities are incurred or suffered by GSC as a result of any investigation, proceeding, settlement, or otherwise. In case any claim is made, or any suit or action is commenced, against GSC in respect of which indemnity may be sought by GSC pursuant to this Section 14.2, Futures shall be given notice thereof promptly by GSC and shall be entitled to participate in (or if GSC does not desire to defend, to conduct) the defense thereof at its own expense. GSC may (but need not) defend or participate in the defense of any such claim, suit, or action, but GSC shall promptly notify Futures if GSC shall not desire to defend or participate in the defense of any of such claims, suits, or actions. GSC may settle or compromise any claim, suit, or action against GSC in respect of which payments may be sought by GSC pursuant to this Section 14.2, provided that Futures does not notify GSC in writing (within (15) days after GSC has given Futures written notice that it does not desire to defend or participate in the defense of any such claim, suit, or action) that Futures intends to conduct the defense of such claim, suit, or action. Any settlement or compromise made by GSC in accordance with this Section 14.2 or any final judgment or decree entered in any claim, suit, or action defended only by GSC (or with respect of which GSC participated in the defense), in accordance with this Section 14.2 shall be deemed to have been consented to by, and shall be obligatory and binding upon, Futures as fully as if Futures alone had assumed the defense thereof and a final judgment or decree had been entered in such suit or action, or with regard to such claim, by a court of competent jurisdiction of the amount of such settlement or compromise, satisfaction, judgment, or decree. The provisions of this Section 14.2 shall be effective only with respect to those losses, costs, expenses, damages, and liabilities set forth in the first sentence of this Section 14.2 of which GSC has notified Futures prior to the expiration of three years from the Closing Date; provided, however, that such limitation shall not apply to Futures's indemnity with respect to the special warranty of title set forth in Section 4.5 or in any instrument of transfer delivered pursuant to Section 9.2 or to the indemnities provided for in Sections 7.1(c) and 7.2(d). 15. NOTICES. All notices that are required or authorized to be given herein, except as otherwise specifically provided, shall be given in writing by hand delivery, United States Certified Mail, postage and charges prepaid, and addressed to the party to whom such notice is to be given as follows: 15 If to GSC: Gas Salvage Corp President: Nolan Weir Suite 153, 333 Riverfront Ave, SE Calgary, Alberta Canada T2G 5R1 (403) 874-7442 (403) 248-6328 (fax) If to Futures: Futures Investment Corp. President: Cory Dosdall 31 Tusslewood View, NW Calgary, Alberta Canada T3L 2Y3 (403) 831-4565 (866) 280-6136 (fax) (or at such other address or in care of such other person as hereafter shall be designated in writing by either party to the other). Notices to be given under any provision hereof will be deemed given (i) 4 days after the date deposited with the United States post office postage prepaid, or (ii) on the date delivered and confirmed by an executed receipt. 16. MISCELLANEOUS. 16.1 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. Prior to closing, neither party hereto shall assign its rights and obligations under this Agreement without the prior written consent of the other party hereto. 16.2 Entire Agreement. This Agreement contains the entire agreement of the parties hereto and there are no additional oral representations or conditions relating to this Agreement. Further, this Agreement supercedes and replaces all prior written contracts and memoranda relating to the transaction which is the subject of this Agreement. 16.3 Recordation. The parties hereto agree that memorandum of this Agreement in the form set forth on Exhibit B shall be filed in the real property records of the counties where the Subject Interests are located. Such memorandum shall not contain a recitation of the consideration paid by GSC to Futures without the mutual agreement of the parties, except where such recitation is required by law or regulation of the United States or that of the States of Oklahoma. 16 16.4 Expenses of Transaction. The expenses (including, without limitation, fees and expenses of attorneys and consultants) incurred by the parties in connection with this Agreement or the consummation of the transactions contemplated herein shall be borne by the parties incurring the same. 16.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. GAS SALVAGE CORP By: /s/ Nolan Weir ------------------------------------ Nolan Weir, President FUTURES INVESTMENT CORP. By: /s/ Cory Dosdall ------------------------------------ Cory Dosdall, President 17 "Exhibit A" Description of Futures Investment Corp.' Interest in the Holmes # 1 Well, Lincoln County, Oklahoma The Northwest Quarter of the Southwest Quarter of Section Two, Township Thirteen North, Range Six East (NW/4 SW/4, Section 2-T13N-R6E), containing 40 acres more or less, located in Lincoln County, Oklahoma: Forty Four and a Half percent (44.5%) Working Interest/ Thirty Five and Six tenths percent (35.6%) Net Revenue Interest in the Holmes # 1 well which is located on the above described lands. Operating Agreement pertaining to Holmes # 1. 18 EX-23 6 formsb2dec07ex231.txt 23.1 EXHIBIT 23.1 CONSENT OF ATTORNEYS Reference is made to the Registration Statement of Gas Salvage Corp. on Form SB-2 whereby certain shareholders of Gas Salvage Corp. propose to sell up to 2,680,000 shares of Gas Salvage Corp.'s common stock. Reference is also made to Exhibit 5 included in the Registration Statement relating to the validity of the securities proposed to be sold. We hereby consent to the use of our opinion concerning the validity of the securities to be sold. Very truly yours, HART & TRINEN, L.L.P. /s/ William T. Hart William T. Hart Denver, Colorado December 31, 2007 EX-23 7 formsb2dec07ex232.txt 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the use in this registration statement on Form SB-2 of our report dated December 19, 2007 relating to the financial statements of Gas Salvage Corp. for the period ended October 31, 2007. JOHN KINROSS-KENNEDY, CPA Irvine, California January 2, 2008 -----END PRIVACY-ENHANCED MESSAGE-----