Attached files

file filename
EX-31 - 302 CERTIFICATION OF DAVID C. MERRELL - GO EZ Corpex311.htm
EX-31 - 302 CERTIFICATION OF MICHAEL C. BROWN - GO EZ Corpex312.htm
EX-32 - 906 CERTIFICATION - GO EZ Corpex3210ka2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K/A-2


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934


For the fiscal year ended:  December 31, 2010

or


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934


For the transition period from                  to


Commission File Number:  000-53116


E.R.C. ENERGY RECOVERY CORPORATION

(Exact Name of registrant as specified in its Charter)


Delaware

22-2301634

(State or other Jurisdiction of Incorporation or organization)

(I.R.S. Employer Identification No.)


3884 East North Little Cottonwood Rd

Salt Lake City, Utah  84092

(Address of Principal Executive Offices)


(801) 580-4555

(Registrant’s Telephone Number, including area code)


Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001


Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes [  ] No [X]


Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [  ]   No [  ]


Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

(1) Yes [X] No [  ]     (2) Yes [X] No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)  Yes [  ]  No [  ]


Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part IV of this Form 10-K or any amendment to this Form 10-K. [  ]




1




Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:


 

 

Large accelerated filer       [   ]

Accelerated filed                     [  ]

Non-accelerated filer         [   ]

Smaller reporting company    [X]


Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [X] No [  ]


Aggregate Market Value of Non-Voting Common Stock Held by Non-Affiliates


State the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the Registrant’s most recently completed second quarter.


The market value of the voting and non-voting common stock was $112.50 on the evaluation date, based on 112,500 shares held by non-affiliates.  Due to the extremely limited trading market for the Registrant’s common stock, these shares were arbitrarily valued at par value of one mill ($0.001) per share.


Outstanding Shares


As of March 14, 2011, the Registrant had 368,200 shares of common stock outstanding.


Documents Incorporated by Reference


See Part IV, Item 15.


EXPLANATORY NOTE:


We are amending our Form 10-K Annual Report for the year ended December 31, 2010, to include the attached updated Audit Report that expresses our auditor’s opinion on our cumulative financial statements from inception that was inadvertently left out and had been included in our auditor’s reports since the filing of our Form 10 Registration Statement, which was filed with the Securities and Exchange Commission on December 14, 2007.



2




ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA














E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


FINANCIAL STATEMENTS


DECEMBER 31, 2010







3




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]





CONTENTS


PAGE


Report of Independent Registered Public Accounting Firm

5



Balance Sheets

6



Statements of Operations

7



Statements of Stockholders’ Equity (Deficit)

8 - 10



Statements of Cash Flows

11



Notes to Financial Statements

12 - 15



4




Report of Independent Registered Public Accounting Firm


To the Board of Directors

E.R.C. Energy Recovery Corporation

(A Development Stage Company)

Salt Lake City, Utah


We have audited the accompanying balance sheets of E.R.C. Energy Recovery Corporation (A Development Stage Company) as of December 31, 2010 and 2009, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended and for the period from inception of the development stage on October 24, 1979, through December 31, 2010. 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. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, the financial statements referred to above present fairly, in all material respects, the financial position of E.R.C. Energy Recovery Corporation as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended and for the period from inception of the development stage on October 24, 1979, through December 31, 2010, 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 2 to the financial statements, the Company has suffered losses from operations since inception and its current liabilities exceed its current assets.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to this matter are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/HJ & Associates, LLC


HJ & Associates, LLC

Salt Lake City, Utah

March 31, 2011



5




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


BALANCE SHEETS



ASSETS


 

December 31,

 2010

S

December 31, 2009

CURRENT ASSETS:

 

 

 

 

 

     Cash

$

-

 

$

-

 

 

 

 

 

 

          Total Current Assets

 

-

 

 

-

 

 

 

 

 

 

Total Assets

$

-

 

$

-

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

     Accounts payable

$

101,262

 

$

88,372

     Advances - related party

 

70,679

 

 

56,864

     Accrued interest

 

17,955

 

 

11,324

 

 

 

 

 

 

           Total Current Liabilities

 

189,896

 

 

156,560

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT):

 

 

 

 

 

     Preferred stock, $.001 par value 10,000,000 shares authorized, no shares

        issued and outstanding

 


-

 

 


-

     Common stock, $.001 par value, 100,000,000 shares authorized, 368,200

       shares issued and outstanding

 


368

 

 


368

     Capital in excess of par value

 

283,300

 

 

270,725

     Deficit accumulated during the development stage

 

(473,564)

 

 

(427,653)

 

 

 

 

 

 

           Total Stockholders’ Equity (Deficit)

 

(189,896)

 

 

(156,560)

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity (Deficit)

$

-

 

$

-






The accompanying notes are an integral part of these financial statements.



6




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


STATEMENTS OF OPERATIONS


 



For the Years Ended

December 31,

 

From Inception on October 24, 1979 through December 31,

 

2010

2009

 

2010

REVENUE

$

-

  $

-

  $

-

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

   General and administrative

 

26,705

 

26,622

 

428,834

   Non-cash contributed services

 

12,575

 

5,425

 

26,775

          Total Operating Expenses

 

39,820

 

32,047

 

455,609

 

 

 

 

 

 

 

LOSS FROM OPERATIONS BEFORE OTHER EXPENSES

 

(39,820)

 

(32,047)

 

(455,609)

 

 

 

 

 

 

 

OTHER EXPENSES:

 

 

 

 

 

 

   Interest expense

 

(6,631)

 

(4,960)

 

(17,955)

          Total Other Expenses

 

(6,631)

 

(4,960)

 

(17,955)

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

(45,911)

 

(37,007)

 

(473,564)

 

 

 

 

 

 

 

TAX EXPENSE

 

-

 

-

 

-

 

 

 

 

 

 

 

NET LOSS

$

(45,911)

  $

(37,007)

  $

(473,564)

 

 

 

 

 

 

 

LOSS PER COMMON SHARE

$

(0.12)

  $

(0.10)

 

 























The accompanying notes are an integral part of these financial statements.



7



E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]

UNAUDITED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FROM THE DATE OF INCEPTION ON OCTOBER 24, 1979

THROUGH DECEMBER 31, 2010

 




Common Stock

 



Capital in Excess of Par

 

Deficit Accumulated During the Development

 

Shares

 

Amount

 

Value

 

Stage

BALANCE, December 31, 1994

15,049

 

$

15

 

$

254,290

 

$

(265,105)

 

 

 

 

 

 

 

 

 

 

 

Expenses paid by shareholder

-

 

 

-

 

 

79

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 1995

-

 

 

-

 

 

-

 

 

(79)

BALANCE, December 31, 1995

15,049

 

 

15

 

 

254,369

 

 

(265,184)

 

 

 

 

 

 

 

 

 

 

 

Expenses paid by shareholder

-

 

 

-

 

 

769

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 1996

-

 

 

-

 

 

-

 

 

(2,306)

BALANCE, December 31, 1996

15,049

 

 

15

 

 

255,138

 

 

(267,490)

 

 

 

 

 

 

 

 

 

 

 

Expenses paid by shareholder

-

 

 

-

 

 

291

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services

For $0.40 per share

1,667

 

 

2

 

 

997

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services

For $0.001 per share

300,000

 

 

300

 

 

150

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 1997

-

 

 

-

 

 

-

 

 

(4,148)

BALANCE, December 31, 1997

316,716

 

 

317

 

 

256,576

 

 

(271,638)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 1998

-

 

 

-

 

 

-

 

 

(4,423)

BALANCE, December 31,1998

316,716

 

 

317

 

 

256,576

 

 

(276,061)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 1999

-

 

 

-

 

 

-

 

 

(1,961)

BALANCE, December 31, 1999

316,716

 

 

317

 

 

256,576

 

 

(278,022)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 2000

-

 

 

-

 

 

-

 

 

(2,105)

BALANCE, December 31, 2000

316,716

 

 

317

 

 

256,576

 

 

(280,127)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 2001

-

 

 

-

 

 

-

 

 

(2,569)

BALANCE, December 31, 2001

316,716

 

$

317

 

$

256,576

 

$

(282,696)

 [Continued]

The accompanying notes are an integral part of these financial statements.



8



E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FROM THE DATE OF INCEPTION ON OCTOBER 24, 1979

THROUGH DECEMBER 31, 2010

[Continued]

 




Common Stock

 



Capital in Excess of Par

 

Deficit Accumulated During the Development

 

Shares

 

Amount

 

Value

 

Stage

BALANCE, December 31, 2001

316,716

 

$

317

 

$

256,576

 

$

(282,696)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 2002

-

 

 

-

 

 

-

 

 

(2,618)

BALANCE, December 31, 2002

316,716

 

 

317

 

 

256,576

 

 

(285,314)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 2003

-

 

 

-

 

 

-

 

 

(2,666)

BALANCE, December 31, 2003

316,716

 

 

317

 

 

256,576

 

 

(287,980)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 2004

-

 

 

-

 

 

-

 

 

(2,454)

BALANCE, December 31, 2004

316,716

 

 

317

 

 

256,576

 

 

(290,434)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

   December 31, 2005

-

 

 

-

 

 

-

 

 

(2,454)

BALANCE, December 31, 2005

316,716

 

 

317

 

 

256,576

 

 

(292,888)

 

 

 

 

 

 

 

 

 

 

 

Rounding shares issued in connection

   with subsequent stock split and

   dividend

51,484

 

 

51

 

 

(51)

 

 

-

Net loss for the year ended

   December 31, 2006

-

 

 

-

 

 

-

 

 

(2,758)

BALANCE, December 31, 2006

368,200

 

 

368

 

 

256,525

 

 

(295,646)

 

 

 

 

 

 

 

 

 

 

 

Non-cash contributed services

-

 

 

-

 

 

2,575

 

 

-

Net loss for the year ended December 31, 2007


-

 

 


-

 

 


-

 

 


(45,017)

BALANCE, December 31, 2007

368,200

 

 

368

 

 

259,100

 

 

(340,663)

 

 

 

 

 

 

 

 

 

 

 

Non-cash contributed services

-

 

 

-

 

 

6,200

 

 

-

Net loss for the year ended December 31, 2008


-

 

 


-

 

 


-

 

 


(49,983)

BALANCE, December 31, 2008

368,200

 

 

368

 

 

265,300

 

 

(390,646)

 

 

 

 

 

 

 

 

 

 

 

Non-cash contributed services

-

 

 

-

 

 

5,425

 

 

-

Net loss for the year ended December 31, 2009


-

 

 


-

 

 


-

 

 


(37,007)

BALANCE, December 31, 2009

368,200

 

$

368

 

$

270,725

 

$

(427,653)

[Continued]

The accompanying notes are an integral part of these financial statements.



9



E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FROM THE DATE OF INCEPTION ON OCTOBER 24, 1979

THROUGH DECEMBER 31, 2010

[Continued]

 




Common Stock

 



Capital in Excess of Par

 

Deficit Accumulated During the Development

 

Shares

 

Amount

 

Value

 

Stage

BALANCE, December 31, 2009

368,200

 

$

368

 

$

270,725

 

$

(427,653)

 

 

 

 

 

 

 

 

 

 

 

Non-cash contributed services

-

 

 

-

 

 

12,575

 

 

-

Net loss for the year ended

   December 31, 2010

-

 

 

-

 

 

-

 

 

(45,911)

BALANCE, December 31, 2010

368,200

 

$

368

 

$

283,300

 

$

(473,564)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.



10




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


STATEMENTS OF CASH FLOWS


 



For the Years Ended

December 31,

 

From Inception on October 24, 1979 through December 31,

 

2010

2009

 

2010

Cash Flows From Operating Activities:

 

 

 

 

 

 

   Net loss

$

(45,911)

  $

(37,007)

  $

(473,564)

   Adjustments to reconcile net loss to net cash

     Used by operating activities:

 

 

 

 

 

 

         Non-cash contributed services

 

12,575

 

5,425

 

26,775

        Changes in assets and liabilities:

 

 

 

 

 

 

            Increase in accounts payable

 

26,705

 

26,622

 

171,041

            Increase in accrued interest

 

6,631

 

4,960

 

17,955

            Contributed capital for expenses

 

-

 

-

 

1,138

            Stock issued for services

 

-

 

-

 

1,450

                Net Cash (Used) by Operating Activities

 

-

 

-

 

(255,205)

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

                Net Cash (Used) by Investing Activities

 

-

 

-

 

-

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

   Issuance of common stock for cash

 

-

 

-

 

255,205

                Net Cash Provided by Financing Activities

 

-

 

-

 

255,205

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

-

 

-

 

-

 

 

 

 

 

 

 

Cash at Beginning of Period

 

-

 

-

 

-

Cash at End of Period

$

-

  $

-

  $

-

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

   Cash paid during the period for:

 

 

 

 

 

 

      Interest

$

-

  $

-

  $

-

      Income taxes

$

-

  $

-

  $

-


Supplemental Schedule of Non-cash Investing and Financing Activities:

For the year ended December 31, 2010:

During 2010 Officer and Directors contributed services totaling $12,575 which have been accounted for as a

     capital contribution.


For the year ended December 31, 2009:

During 2009 Officers and Directors contributed services totaling $5,425 which have been accounted for as a

     capital contribution.










The accompanying notes are an integral part of these financial statements.



11




E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization – E.R.C. Energy Recovery Corporation (“the Company”) was incorporated on October 24, 1979 in the State of Delaware for the purpose of providing accounting, personnel recruiting and general business consulting.  Currently, the Company has no on-going operations.  


Development Stage - The Company discontinued its operations in 1989 and is considered to be a Development Stage Company.  


Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.


Income Taxes - The Company accounts for income taxes in accordance with ASC Topic No. 740, “Income Taxes.”  This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards.


Loss Per Share - The Company computes loss per share in accordance with Accounting Standards Codification (“ASC”) Topic No. 260, Earnings Per Share, which requires the Company to present basic and dilutive loss per share when the effect is dilutive.


Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimated by management.


NOTE 2 - GOING CONCERN


The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since inception and currently has no on-going operations.  Further, the Company has current liabilities in excess of current assets.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.




12



E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO FINANCIAL STATEMENTS


NOTE 3 - CAPITAL STOCK


Preferred Stock – The Company has authorized 10,000,000 shares of preferred stock with a par value of $.001.  There are no preferred shares issued and outstanding at December 31, 2010 and 2009.


Common Stock – The Company has authorized 100,000,000 shares of common stock with a par value of $.001 par value. At December 31, 2010 and 2009, the Company had 368,200 shares of common stock issued and outstanding.


Stock Splits – On July 31, 1997, the Company affected a 1-for-400 reverse stock split. During November 2007 the Company affected a 1-for-150 reverse stock split followed by a simultaneous 100-for-1 stock dividend.  The company issued approximately 51,484 rounding shares as a result of these transactions.  The financial statements have been restated for all periods presented to reflect the stock splits and dividend.


NOTE 4 - INCOME TAXES


The Company has no tax positions at December 31, 2010 and 2009 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.


The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  During the years ended December 31, 2010 and 2009, the Company recognized no interest and penalties.  The Company had no accruals for interest and penalties at December 31, 2010, and 2009.


Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


Net deferred tax assets consist of the following components as of December 31, 2010 and 2009:


 

2010

 

2009

Deferred tax assets:

 

 

 

 

 

     NOL Carryover

$

64,850

 

 

52,509

     Related Party Accruals

 

7,002

 

 

4,416

Valuation allowance

 

(71,852)

 

 

(56,925)

Net deferred tax asset

$

-

 

$

-





13



E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO FINANCIAL STATEMENTS


NOTE 4 - INCOME TAXES [Continued]


The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended December 31, 2010 and 2009 due to the following:


 

2010

 

2009

Book Income

$

(17,905)

 

$

(14,433)

Contributed Services

 

4,904

 

 

2,116

Valuation allowance

 

13,001

 

 

12,317

Tax at Statutory rate

$

-

 

$

-


At December 31, 2010, the Company had net operating loss carryforwards of approximately $161,000 that may be offset against future taxable income from the year 2010 through 2030.  No tax benefit has been reported in the December 31, 2010 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.


Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations.  Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.


NOTE 5 - RELATED PARTY TRANSACTIONS


Management Compensation – During the years ended December 31, 2010 and 2009, the Company did not pay any compensation to its officers and directors.  During 2010 and 2009, Officers and Directors contributed services totaling $12,575 and $5,425 which have been accounted for as a contribution to capital.


Office Space The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his office as a mailing address, as needed, at no expense to the Company.


Advances from Related Party – A shareholder of the Company or entities related to the shareholder have paid expenses on behalf of the Company. For the years ended December 31, 2010 and 2009 these payments amounted to $13,815 and $17,870.  The Company has accounted for any such payments as advances payable to the related party.  At December 31, 2010 and 2009 a balance of $70,679 and $56,864 is owed the related party.


Accrued Interest – The Company has imputed interest at 10% per annum on balances owing to related parties. At December 31, 2010 and 2009 the balance payable was $17,955 and $11,324 respectively.  Interest expense to related parties amounted to $6,631 and $4,960 for the years ended December 31, 2010 and 2009, respectively.





14



E.R.C. ENERGY RECOVERY CORPORATION

[A Development Stage Company]


NOTES TO FINANCIAL STATEMENTS


NOTE 6 - LOSS PER SHARE


The following data show the amounts used in computing loss per share for the periods presented:


 

For the Year Ended December 31,

 

2010

 

2009

Loss available to common shareholders (numerator)

$

(45,911)

 

$

(37,007)

Weighted average number of common shares

outstanding during the period used in loss per share

 

 

 

 

 

(denominator)

 

368,200

 

 

368,200


Dilutive loss per share was not presented; as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share.


NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

         Contingencies - The Company has not been active for several years. Management believes that there are no

         unrecorded valid outstanding liabilities from prior operations. If a creditor were to come forward and claim a

         liability, the Company has committed to contest the claim to the fullest extent of the law. Due to various statutes

         of limitations and because of the likelihood that such an old liability would not still be valid no amount has        

         been accrued in these financial statements for any such contingencies.


NOTE 8 – SUBSEQUENT EVENTS


The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued, and concluded there were no other events or transactions during this period that required recognition or disclosure in its financial statements.




15




SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


E.R.C. ENERGY RECOVERY CORPORATION


Date:

August 25, 2011

 

By:

/s/David C. Merrell

 

 

 

 

David C. Merrell

 

 

 

 

President and Director


Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


E. R. C. ENERGY RECOVERY CORPORATION


Date:

August 25, 2011

 

By:

/s/David C. Merrell

 

 

 

 

David C. Merrell

 

 

 

 

President and Director


Date:

August 25, 2011

 

By:

/s/Michael C. Brown

 

 

 

 

Michael C. Brown

 

 

 

 

Secretary, Treasurer, CFO and Director




16