ITEM 1. DESCRIPTION OF BUSINESS.
Our Background . Friendly Energy Corporation was formed under the laws of the State of Nevada on January 7, 1993 under the name Eco-Systems Marketing. Eco-Systems subsequently changed its name to Rama Financial Corporation. An amendment to the Articles of Incorporation was filed changing the corporate name to Friendly Energy Corporation.
Friendly Energy Corporation was originally incorporated to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Nevada. Friendly Energy Corporation, from its inception in 1993 to now, was engaged primarily in establishing itself as an electric service provider to California customers.
Our Business. The company was in the business of selling electric power and related services to small and medium sized businesses in the newly deregulated California market. The Company qualified as an electric service provider with San Diego Gas & Electric on January 10, 2000, Southern California Edison on May 15, 2000 and Pacific Gas & Electric on May 18, 2000. Because of the problems with electricity supply in California, we were never able to begin delivering electricity to the customers we had marketed. So the Company ceased operations as an Electric Service Provider in early 2001. It then entered the business of marketing cogeneration equipment. In early 2002, the Company temporarily ceased operations. The Company operations have been limited to general administrative operations. It is considered a development stage company in accordance with Statement of Financial Accounting Standards No. 7.
ITEM 1A.
ITEM 1A. RISK FACTORS
In evaluating the Company, careful consideration should be given to the following risk factors, in addition to the other information included or incorporated by reference in this annual report. In addition, the "Forward-Looking Statements" located in this Form 10-KSB describe additional uncertainties associated with our business and the forward-looking statements included or incorporated by reference. Each of these risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common stock.
Accumulated Losses
To date the Company's operations have not generated operating cash flows to provide working capital for the Company's ongoing overhead and the funding of marketing activities. Without adequate financing, the Company may not be able to successfully market cogeneration equipment or achieve profitability from its operations in the near future or at all.
During the year ended December 31, 2004, Friendly incurred a net loss of $11,795 and as of December 31, 2004 has an accumulated deficit of $2,202,562.
Financing Risks
The Company has relied in the past primarily on the sale of equity capital, shareholder loans and other similar types of transactions to fund working capital. Failure to generate operating cash flow or to obtain additional financing for the development of the Company's could adversely affect operations.
Conflicts of Interest
Certain of the officers and directors of the Company Energy will also serve as directors of other companies or have significant shareholdings in other companies. To the extent that such other companies participate in ventures in which Friendly Energy may participate, or compete for prospects or financial resources with Friendly Energy, these officers and directors of Friendly Energy will have a conflict of interest in negotiating and concluding terms relating to the extent of such participation. In the event that such a conflict of interest arises at a meeting of the board of directors, a director who has such a conflict must disclose the nature and extent of his interest to the board of directors and abstain from voting for or against the approval of such participation or such terms.
In accordance with the laws of the State of Nevada, the directors of Friendly Energy are required to act honestly and in good faith with a view to the best interests of the Company. In determining whether or not the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY.
As of the dates specified in the following table, Friendly Energy Corporation held the following property in the following amounts:
Property
December 31, 2004
December 31, 2003
----------------------------------------------------------------------------------------------------
Cash and equivalents
$-0-
$-0-
Equipment
$6,431
$12,726
Friendly Energy Corporation defines cash equivalents as all highly liquid investments with a maturity of 3 months or less when purchased. Friendly Energy Corporation does not presently own any interests in real estate.
Facilities. Friendly Energy Corporation does not own any real or personal property nor does the Company currently lease any office space.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
A former employee filed a complaint regarding compensation in September 2001. The Company is not currently a party to or the subject of any other pending legal proceeding.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE
ITEM 5.
ITEM 5. MARKET PRICE FOR THE FRIENDLY ENERGY CORPORATION'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
As at December 31, 2004 there were approximately 665 holders of the outstanding shares of the Friendly Energy Corporation's $0.001 par value common stock. Friendly Energy Corporation participates in the PinkSheets Electronic Quotation System maintained by the National Association of Securities Dealers, Inc., under the trading symbol "FDEG". There is only a limited history of public trading of the Registrant's common stock; the sponsoring broker-dealer began trading on July 10, 2000. The Friendly Energy Corporation's common stock has closed at:
Quarter
High
Low
2000 Third Quarter
$2.250
$0.500
2000 Fourth Quarter
$0.750
$0.700
2001 First Quarter
$0.700
$0.080
2001 Second Quarter
$0.090
$0.030
2001 Third Quarter
$0.090
$0.010
2001 Fourth Quarter
$0.012
$0.005
2002 First Quarter
$0.005
$0.005
2002 Second Quarter
$0.005
$0.005
2002 Third Quarter
$0.020
$0.005
2002 Fourth Quarter
$0.002
$0.001
2003 First Quarter
$0.002
$0.002
2003 Second Quarter
$0.002
$0.002
2003 Third Quarter
$0.002
$0.002
2003 Fourth Quarter
$0.002
$0.002
2004 First Quarter
$0.002
$0.002
2004 Second Quarter
$0.010
$0.002
2004 Third Quarter
$0.010
$0.001
2004 Fourth Quarter
$0.005
$0.001
Such quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street NW, Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov.
Common Stock . Friendly Energy Corporation is authorized to issue 100,000,000 shares of common stock, $.001 par value, each share of common stock having equal rights and preferences, including voting privileges. The shares of $.001 par value common stock of Friendly Energy Corporation constitute equity interests in Friendly Energy Corporation entitling each shareholder to a pro rata share of cash distributions made to shareholders, including dividend payments. As of December 31, 2004, 12,684,973 shares of the Friendly Energy Corporation's common stock were issued and outstanding.
The holders of Friendly Energy Corporation's common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of directors of Friendly Energy Corporation or any other matter, with the result that the holders of more than 50% of the shares voted for the election of those directors can elect all of the Directors.
The holders of Friendly Energy Corporation's common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to Friendly Energy Corporation's common stock. All of the outstanding shares of Friendly Energy Corporation's common stock are duly authorized, validly issued, fully paid and non-assessable.
Dividends . The holders of the Friendly Energy Corporation's common stock are entitled to receive dividends when, as and if declared by Friendly Energy Corporation's Board of Directors from funds legally available therefore; provided, however, that cash dividends are at the sole discretion of Friendly Energy Corporation's Board of Directors. In the event of liquidation, dissolution or winding up of Friendly Energy Corporation, the shareholders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities of Friendly Energy Corporation and after provision has been made for each class of stock, if any, having preference in relation to Friendly Energy Corporation's common stock.
Friendly Energy Corporation has never declared or paid any dividends on its common stock. Friendly Energy Corporation does not intend to declare or pay any dividends in the foreseeable future.
Sales of Securities
2004 Stock Transactions
During the year ended December 31, 2004, the Company sold no common shares.
2004 Stock Options
During the year ended December 31, 2004, the Company issued no stock options.
ITEM 6.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS.
This following information specifies certain forward-looking statements of management of the company. Forward-looking statements are statements that estimate the happening of future events are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may", "shall", "will", "could", "expect", "estimate", "anticipate", "predict", "probable", "possible", "should", "continue", or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.
Liquidity and Capital Resources.
For the year ended December 31, 2004, we had total assets of $6,431, compared to total assets in 2003 of $12,726. The decrease in assets was due to depreciation. At December 31, 2004, we had current liabilities of $154,204 which was represented by accounts payable, payroll liabilities, judgment payable, deferred salaries, interest payable and loans payable. At December 31, 2003 we had current liabilities of $148,704. The increase in liabilities was due primarily to an increase in interest payable. At December 31, 2004, we had a stockholder’s deficit of $147,773 (2003 - stockholder’s deficit of $135,978).
We do not believe that our current cash resources will be able to maintain our current operations for an extended period of time. We will be required to raise additional funds or arrange for additional financing over the next 12 months to adhere to our development schedule. No assurance can be given, however, that we will have access to additional cash in the future, or that funds will be available on acceptable terms to satisfy our working capital requirements. If we are not able to arrange for additional funding or if our officers, directors and shareholders stop advancing funds to us, we may be forced to make other arrangements for financing such as loans or entering into strategic alliances. We have not identified any alternative sources of financing.
Results of Operations
We have realized only $13,372 in revenue from operations to date. During the year ended December 31, 2004 the loss from operations is $11,795 (2003 - $24,215). This decrease in loss was due primarily to a reduction in interest. From inception to December 31, 2004 Friendly Energy Corporation has incurred cumulative net losses of $2,202,562.
The cash and equivalents constitute our present internal sources of liquidity.
Because we are not generating any significant revenues, our only external source of liquidity is the sale of our capital stock and any advances from officers, directors or shareholders.
Our Plan of Operation for the Next Twelve Months
We anticipate that we will need to raise additional capital within the next 12 months in order to continue as a going concern. To the extent that additional capital is raised through the sale of equity or equity- related securities, the issuance of such securities could result in dilution of stockholders. There can be no assurance that additional funding will be available on favorable terms, if at all. If adequate funds are not available within the next 12 months, we may be required to curtail our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain of our assets that we would not otherwise relinquish.
ITEM 7.
ITEM 7. FINANCIALS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Friendly Energy Corp.
(A Development Stage Company)
Orlando, Florida
We have audited the accompanying balance sheets of Friendly Energy Corp. (A Developmental Stage Company) as of December 31, 2005 and 2004, and the related statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2005 and 2004 and for the period from January 7, 1993 (Date of Inception) through December 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we 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. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2005 and 2004 and the results of its operations and its cash flows for the years ended December 31, 2005 and 2004, and for the period from January 7, 1993 (Date of Inception) through December 31, 2005, in conformity with U.S. 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 1 to the financial statements, the Company has suffered losses from operations, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ De Joya Griffith & Company, LLC
De Joya Griffith & Company, LLC
September 12, 2006
Henderson, Nevada
NOTE: THIS AUDIT COVERED THE PERIOD FROM JANUARY 1, 2000 TO DECEMBER 31, 2005.
NOTES TO FINANCIAL STATEMENTS - 2004
1.
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
Description of business and history - Friendly Energy Corp., Nevada corporation, (hereinafter referred to as the “Company” or “Friendly Energy”) was incorporated in the State of Nevada on January 7, 1993. The company was in the business of selling electric power and related services to small and medium sized businesses in the newly deregulated California market. Because of the problems with electricity supply in California, we were never able to begin delivering electricity to the customers we had marketed. So the Company ceased operations as an Electric Service Provider in early 2001. It then entered the business of marketing cogeneration equipment. In early 2002, the Company temporarily ceased operations. The Company operations have been limited to general administrative operations. It is considered a development stage company in accordance with Statement of Financial Accounting Standards No. 7.
Management of Company - The company filed its articles of incorporation with the California Secretary of State on January 7, 1993, indicating G. Alfred Roensch as the incorporator.
The company filed its annual list of officers and directors with the California Secretary of State on January 7, 1993, indicating its President is G. Alfred Roensch and its Secretary and Treasurer is Owen Stephenson and were both listed as directors on this filing. The current President is Douglas Tallant and the current Secretary and Treasurer is Douglas Tallant.
Going concern - The Company incurred net losses of approximately $2,202,562 from the period of January 7, 1993 (Date of Inception) through December 31, 2004 and has commenced its operations on a limited basis. However, it is still in the development stages, raising substantial doubt about the Company’s ability to continue as a going concern. The Company may seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Year end - The Company’s year end is December 31.
Principles of consolidation - The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated.
Use of estimates - The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Property and equipment - Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 27 years. The amounts of depreciation provided are sufficient to charge the cost of the related assets to operations over their estimated useful lives.
The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.
Income taxes - The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.
Management feels the Company will have a net operating loss carryover to be used for future years. Such losses may not be fully deductible due to the significant amounts of non-cash service costs. The Company has not established a valuation allowance for the full tax benefit of the operating loss carryovers due to the uncertainty regarding realization.
Net loss per common share - The Company computes net loss per share in accordance with SFAS No. 128, Earnings per Share (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is antidilutive.
Concentration of risk - A significant amount of the Company’s assets and resources are currently dependent on the financial support of Douglas Tallant. Should he determine to no longer finance the operations of the company before new capital is raised, it may be unlikely for the company to continue.
Revenue recognition - The Company has no revenues to date from its operations. Once the revenue is generated, the company will recognize revenues as it is received.
Inventory valuation - At this time the Company is not expected to hold inventory.
Legal Proceedings - A former employee filed a complaint regarding compensation in September 2001. The Company is not currently a party to or the subject of any other pending legal proceeding.
2.
FIXED ASSETS
Fixed assets consist of the following as of December 31, 2004 and 2003:
Furniture & Fixtures
$ 20,102
$ 20,102
Computers & Equipment
$ 21,616
$ 21,616
$ 41,718
$ 41,718
less Accumulated Depreciation
$ (35,287)
$ (28,992)
Net Furniture, Fixtures, Computers & Equip.
$ 6,431
$ 12,726
3.
RELATED PARTY TRANSACTIONS
As of December 31, 2002 and 2001, loans payable from related parties consists of the following:
Notes payable from officers of
the Company bearing no interest
unsecured and due on demand
$ 0
$ 0
Notes payable from officers of
the Company bearing interest at 8%
unsecured and due on demand
$ 20,000
$ 20,000
$ 20,000
$ 20,000
4.
OTHER CURRENT LIABILITIES
The company has accrued for unpaid federal payroll taxes in the amounts of $37,268 and $37,268 for the years ended December 31, 2004 and 2003, respectively. The Company has filed the payroll taxes with the Internal Revenue Service.
5.
STOCKHOLDERS’ DEFICIT
Common Shares: As of December 31, 2003 and 2002 there were 12,684,973 and 12,684,973 shares of common stock outstanding.
a)
In 1993, the company issued 63,750 shares of common stock for cash at $0.016 per share to officers and directors.
b)
On June 2, 1996, in connection with the acquisition of the Company by Granite Development Corporation("Granite"), the Company cancelled all outstanding shares of common stock and issued a total of 2,500,000 shares to Granite for consideration of $10.
c)
In 1996, 500,000 common shares were converted to 50,000 shares of preferred stock.
d)
In 1997, the Company issued 15,223 shares of common stock relating to the spin out from Granite Development Corporation.
e)
On April 21, 1997, the company issued 21,875 shares of common stock for cash at $0.685 per share to officers and directors.
f)
On July 31, 1997, the company issued 37,500 shares of common stock for cash at $0.80 per share.
g)
On August 14, 1997, the company issued 21,875 shares of common stock for cash at $0.685 per share to officers and directors.
h)
From February 18, 1998, through March 16, 1998, a total of 9,750 shares of common stock were sold for cash pursuant to Regulation D, Rule 504 offering at $1.74 per share.
i)
On October 29, 1998, 625,000 shares of common stock were issued for cash at $0.004.
j)
On October 30, 1998, 8,000,000 shares of common stock were issued as a result of the conversion of 800,000 preferred shares.
k)
On November 11, 1998, the company issued 2,000,000 shares of common stock for cash at $0.004 per share.
l)
During 1999, the company cancelled 46,250 shares of common stock.
.
Preferred Shares:Each share of preferred stock is convertible into ten shares of common stock and has voting rights equal to ten shares of common stock. The board of directors has not specified any other rights or privileges with respect to the preferred stock.
As of December 31, 2003 and 2002 there were 3,457,261 and 3,457,261 shares of preferred stock outstanding.
a)
During 1996, 500,000 common shares were converted to 50,000 shares of preferred stock.
b)
During 1997 the company issued 750,000 shares of preferred stock to officers and directors for services valued at $0.04 per share.
c)
On October 30, 1998, 800,000 shares of preferred stock were converted to 8,000,000 shares of common stock.
d)
On February 26, 1999, the company issued 24,390 shares of preferred stock in satisfaction of debt valued at $3.69 per share.
e)
On April 30, 1999, the company issued 16,290 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
f)
On April 30, 1999, the company issued 21,680 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
g)
On September 30, 1999, the company issued 33,062 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
h)
On December 30, 1999, the company issued 51,491 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
i)
On December 22, 1999, the company issued 5,000 shares of preferred stock for a year end bonus valued at $3.69 per share.
j)
On January 30, 2000, the company issued 2,500 shares of preferred stock for a sign up bonus valued at $3.69 per share.
k)
On March 31, 2000, the company issued 56,911 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
l)
On April 21, 2000, the company issued 10,000 shares of preferred stock for services of an officer valued at $3.69 per share.
m)
On May 1, 2000, the company issued 2,500 shares of preferred stock for a sign up bonus valued at $3.69 per share.
n)
On May 1, 2000, the company issued 10,000 shares of preferred stock for a sign up bonus valued at $3.69 per share.
o)
On June 30, 2000, the company issued 58,266 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
p)
On June 30, 2000, the company issued 2,500 shares of preferred stock for a sign up bonus valued at $3.69 per share.
q)
On September 19, 2000, the company issued 100,000 shares in exchange for 100,000 shares of Friendly Energy Services Inc valued at $3.69 per share.
r)
On September 19, 2000, the company issued 20,000 shares to employees of Friendly Energy Services Inc. relating to an assumed obligation from the merger with Friendly Energy Services Inc. valued at $3.69 per share.
s)
October 4, 2000, the company issued 59,621 shares of preferred stock in stock in satisfaction of debt valued at $3.69 per share.
t)
On October 16, 2000, the company issued 10,000 shares of preferred stock for a sign up bonus valued at $3.69 per share.
u)
On January 8, 2002, the company issued 120,000 shares of preferred stock in stock in satisfaction of debt valued at $0.05 per share.
v)
On March 5, 2002, the company issued 701,200 shares of preferred stock in stock in satisfaction of debt valued at $0.05 per share.
w)
On March 5, 2002, the company issued 551,880 shares of preferred stock in stock in satisfaction of debt owed to an officer of the company valued at $0.05 per share.
x)
On June 6, 2002, the company issued 1,600,000shares of preferred stock in stock in satisfaction of debt valued at $0.05 per share.
During 2000, 11,000 shares of preferred stock were cancelled. As of December 31, 2002 the issue was not completely resolved and the stock agent had not received the returned share certificates. Therefore the 11,000 shares are still reflected in the preferred stock balance.
6.
STOCK OPTIONS
In 2002, the Company granted no stock options.
The following table summarizes the Company’s stock option activity.
Number
Weighted
of
Average
Shares
Exercise Price
Balance, December 31, 1998
--
$
--
Options granted and assumed
1,000,000
.37
Options expired
--
--
Options canceled
--
--
Options exercised
--
--
Balance, December 31, 1999
1,000,000
$
.37
Options granted and assumed
200,000
.37
Options expired
--
--
Options canceled
--
--
Options exercised
--
--
Balance, December 31, 2000
1,200,000
$
.37
7.
COMMITMENTS AND CONTINGENCIES
Employment contracts -
The Company entered into an employment agreement with Thomas Bowers effective October 25, 1999. Pursuant to the terms of the agreement, Mr. Bowers is to be paid an annual salary of $90,000 in consideration of which Mr. Bowers agreed to act as the Company’s Chief Operating Officer. On October 11, 2000, Mr. Bowers was terminated for cause. His termination is the subject of a complaint filed in September 2001.
8.
LITIGATION
A former employee filed a complaint regarding compensation in September 2001. The Company is not currently a party to or the subject of any other pending legal proceeding.
9.
SUBSEQUENT EVENTS
This is a delayed filing and subsequent events are discussed in the Form 10-KSBs filed for 2006 and 2007; in the Form10-K filed for 2008; and in the Form 10-Qs filed for the first three quarters of 2008 and first quarter of 2009. Additional delayed filings will be filed shortly for the period between this report and the just mentioned reports.
ITEM 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been no disagreements with Friendly Energy Corporation's auditors since formation of the company that require disclosure pursuant to Item 304 of Regulation S-B.
ITEM 8A. CONTROLS AND PROCEDURES
Evaluation Of Disclosure Controls And Procedures
Our Chief Executive Officer, and our Chief Financial Officer, have performed an evaluation of the Company's disclosure controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2004 and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms.
Management's Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an assessment of the effectiveness of its internal control over financial reporting as of December 31, 2004. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2004. Management's assessment of the effectiveness of the Company's internal control over the financial reporting period ended December 31, 2004 has been audited by our auditors, an independent registered public accounting firm, as stated in their report included herein.
Changes In Internal Controls
No changes in the Company's internal controls over financial reporting occurred during the period ending December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Code of Ethics
We intend to adopt a code of ethics in 2007 that applies to our principle executive officer, principal financial officer, principle accounting officer or controller, other persons performing similar functions. We intend to post the text of our code of ethics on our website in connection with our "Investor Relations" materials. In addition, we intend to promptly disclose (1) the nature of any amendment to our code of ethics that applies to our principle executive officer principal financial officer, principle accounting officer or controller, other persons performing similar functions (2) the nature of any wavier, including an implicit wavier, from a provision of our code of ethics that is granted to one of these specific officers, the name of such person who is granted the waiver and the date of the waiver on our web site in the future.
We do not currently have a code of ethics as this is a new regulatory requirement and we are examining the various form and contents of other companies written code of ethics, discussing the merits and meaning of a code of ethics to determine the best form for our Company.
ITEM 9.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
1. Officers and Directors of the Company
DATE OF APPOINTMENT
NAME
AGE
POSITION
TO BOARD OF DIRECTORS
----------------------------------------------------------------------------------------------------------------------------------------
Douglast Tallant
President, Secretary & Director
March 2002
The chart above specifies Friendly Energy Corporation's officers and directors as of December 31, 2004.
Douglas Tallant, President. Douglas Tallant was born and raised in Oklahoma. He has owned several businesses including the largest automobile dealership in Denver and physical therapy clinics in Denver and Oklahoma City. He has formed and managed several public companies including Entec, the developer of the original breathalyzer. Mr. Tallant has a Bachelor of Science degree in Mechanical Engineering from the University of Oklahoma.
All directors of the Company hold office until the next annual meeting or until their successors have been elected and qualified. All officers serve at the discretion of the Board of Directors.
There are no familial relationships between our officers and directors.
Section 16(a) Beneficial Ownership Reporting Compliance . We believe that our officers, directors, and principal shareholders have not filed all reports required to be filed on, respectively, a Form 3 (Initial Statement of Beneficial Ownership of Securities), a Form 4 (Statement of Changes of Beneficial Ownership of Securities), or a Form 5 (Annual Statement of Beneficial Ownership of Securities).
ITEM 10.
ITEM 10. EXECUTIVE COMPENSATION - REMUMERATION OF DIRECTORS AND OFFICERS.
No remuneration was paid to directors or officers in 2004, 2003 or 2002.
Stock Based Compensation. During the year ended December 31, 2004, no stock based compensation was recorded in our financial statements. Stock based compensation is an estimate of the market value of stock granted to officers, directors, employees.
Transactions with Promoters
NONE
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as of December 31, 2004, with respect to the ownership of the Friendly Energy Corporation's common stock by each person known by Friendly Energy Corporation to be the beneficial owner of more than five percent (5%) of Friendly Energy Corporation's common stock, by each director and officer and by all officers and directors as a group.
Name of
Address of
Amount of Shares
% of Outstanding
Beneficial Holder
Beneficial Holder
Beneficially Owned
Common Stock
- ------------------------------------------------------------------------------------------------------------------------------
L. Craig Morton, CEO & Director
(1)
401,645
3.2%
Donald Trapp, CFO & Director
(1)
448,283
3.5%
Heather Janz, Treasurer & Director
(1)
20,000
0.2%
Douglas Financial Corporation
(1)
1,131,380
8.9%
Douglas Trust
(1)
881,472
6.9%
Jetco Trust
(1)
336,220
2.7%
All Directors and Officers as a group
869,928
6.9%
(1) 502 North Division Street, Carson City, NV 89703
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. In accordance with Securities and Exchange Commission rules,
shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees. Subject to community property laws, where applicable, the persons or entities named in the table above have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them. Currently there are only the stock options listed above issued or outstanding.
Changes in Control. Our management is not aware of any arrangements which may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.
ITEM 12.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
NONE
All related party transactions are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
ITEM 13.
ITEM 13. PRINCIPAL ACCOUNTANT FEES AND SERVICES
1. Audit Fees: Aggregate fees billed for each of the last two (2) fiscal years for professional services rendered by the principal accountant for the audit of the annual financial statements and review of financial statements included on Form 10-KSB:
2003: $0
2004: $0
2. Audit-Related Fees: Aggregate fees billed in each of the last two (2) fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements and are not reported previously.
2003: $0
2004: $0
3. Tax Fees: Aggregate fees billed in each of the last two (2) fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
2003: $0
2004: $0
4. All Other Fees: Aggregate fees billed in each of the last two (2) fiscal years for products and services provided by the principal accountant, other than the services previously reported.
2003: $0
2004: $0
5. Audit Committee Pre-Approval Procedures. The Board of Directors has not, to date, appointed an Audit Committee.
ITEM 14.
ITEM 14. EXHIBITS
Exhibit 31.1 - Amended Section 906 Certification of Periodic Report of the Chief Executive Officer.
Exhibit 31.2 - Amended Section 906 Certification of Periodic Report of the Chief Financial Officer.
Exhibit 32.1 - Amended Section 302 Certification of Periodic Report of the Chief Executive Officer.
Exhibit 32.2 - Amended Section 302 Certification of Periodic Report of the Chief Financial Officer.
The following documents are incorporated by reference in this Form 10-KSB/A:
NONE
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Company has duly caused to be signed on its behalf by the undersigned, whereunto duly authorized.
FRIENDLY ENERGY CORPORATION
Date: June 11, 2009
By: /s/ Douglas Tallant
---------------------------
Douglas Tallant, Director and President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this amended report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates included.
Date: June 11, 2009
By: /s/ Donald Trapp
-----------------------------
Donald Trapp, Director
Exhibit 31.1
I, Douglas Tallant, certify that:
(1) I have reviewed this Annual Report on Form 10-KSB of Friendly Energy Corp.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
(5) The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Date: June 11, 2009
/s/ Douglas Tallant
-----------------------
Douglas Tallant, Director and President
Exhibit 31.2
I, Donald Trapp, certify that:
(1) I have reviewed this Annual Report on Form 10-KSB of Friendly Energy Corp.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
(5) The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Date: June 11, 2009
/s/ Donald Trapp
-----------------------
Donald Trapp, Director
Exhibit 32.1
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002
In connection with the Annual Report of Friendly Energy Corporation(the "Company") on Form 10-KSB for the period ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Douglass Tallant, Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
IN WITNESS WHEREOF, the undersigned has executed this certification as of the 11th day of June 2009.
/s/ Douglas Tallant
------------------------
Douglas Tallant, President/Director
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002
In connection with the Annual Report of Friendly Energy Corporation(the "Company") on Form 10-KSB for the period ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Donald Trapp, Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
IN WITNESS WHEREOF, the undersigned has executed this certification as of the 11th day of June 2009.
/s/ Donald Trapp
------------------------
Donald Trapp, Director