What changed in this filing

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Item 5. Other Information

2008-08-19 compared with 2008-05-20 · 24 added, 292 removed, 6 unchanged (98% of the section changed)

Other Information

to the rules of the SEC, the Company's consolidated financial statements

included in this filing have not been reviewed by an independent public

accountant in accordance with professional standards for conducting such

TO FINANCIAL STATEMENTS

Balance Sheets as of March 31, 2008 and December 31, 2007

Statements of Operations for the three months ended March 31, 2008 and

2007 (unaudited)

Statement of Stockholders’ Equity for the three months ended March 31,

2008 (unaudited)

Statements of Cash Flows for three months ended March 31, 2008 and 2007

to the Consolidated Financial Statements – March 31, 2008

SUPERIOR ENERGY HOLDINGS, INC.

BALANCE SHEETS

of March 31, 2008 and December 31, 2007

and cash equivalents

current assets

and gas properties, including $348,086 of unproved properties, net of

accumulated depletion, depreciation and amortization of $52,257 and

$36,991, respectively – using full cost method of

equipment, net of depreciation of $14,839 and $9,391,

AND STOCKHOLDERS’ EQUITY

payable and accrued liabilities

demand note, net of unamortized discount of $ 242,207 and $244,154,

portion of notes payable

payable – related party

current liabilities

debenture, net of unamortized discount of $248,084 and $257,316,

retirement obligations

STOCKHOLDERS’

shares, $0.001 par value, 150,000,000 shares authorized, 56,160,000 and

55,760,000 shares issued and outstanding, respectively

paid-in capital

subscription receivable

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes are an integral part of these consolidated financial

SUPERIOR ENERGY HOLDINGS, INC.

STATEMENTS OF OPERATIONS

the three months ended March 31, 2008 and 2007

operating expenses

and administrative, including stock based compensation of $217,501 and

$3,020,000, respectively

Depreciation,

depletion and amortization

operating expenses

income (expense)

other expense

loss per share:

average shares outstanding:

accompanying notes are an integral part of these consolidated financial

SUPERIOR ENERGY HOLDINGS, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

the years three months ended March 31, 2008

Subscription Receivable

December 31, 2007

issued in exchange for subscription receivable

issued for services

transferred by CEO for services

March 31, 2008

accompanying notes are an integral part of these consolidated financial

SUPERIOR ENERGY HOLDINGS, INC.

STATEMENTS OF CASH FLOWS

the three months ended March 31, 2008 and 2007

FLOWS FROM OPERATING ACTIVITIES

to reconcile net loss to cash used by operating

Depreciation,

depletion and amortization

of debt discount

based compensation

change in operating assets and liabilities

CASH USED BY OPERATING ACTIVITIES

FLOWS FROM INVESTING ACTIVITIES

of property and equipment

in oil and gas properties

FLOWS USED IN INVESTING ACTIVITIES

FLOWS FROM FINANCING ACTIVITIES

from issuance of short-term debt

from sale of units

contributions from shareholder

of notes payable

FLOWS USED BY FINANCING ACTIVITIES

INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS

and cash equivalents, beginning of period

and cash equivalents, end of period

Schedule of Non-cash Investing and Financing Activities:

oil and gas properties through issuance of notes payable

Recapitalization

retirement obligation incurred

accompanying notes are an integral part of these consolidated financial

SUPERIOR ENERGY HOLDINGS, INC.

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1 – ORGANIZATION AND BUSINESS OPERATIONS

to the rules of the SEC, the Company's consolidated financial statements

included in this filing have not been reviewed by an independent public

accountant in accordance with professional standards for conducting such

Superior Energy Holdings, Inc.

(the “Company” or “USA Superior”), a Nevada

corporation, was originally formed on November 12, 2003 as Comlink

Communications Company (“Comlink”).

In fiscal the fiscal year ended

2006, Comlink was essentially dormant with no operating business, having

discontinued all prior operations in the first quarter of 2006.

Prior operations

consisted of an attempt to market two-way radio communication equipment over the

The Company had no capital and no prospects to raise capital to carry

out the prior business plan.

current business of the Company is to develop, own and operate prospects and

energy projects in East and Southwest Texas.

The Company primarily

focuses on properties with a potential for enhanced secondary or tertiary

recovery using modern state-of-the-art workover and stimulation

January 16, 2007, USA Superior and Comlink Communications Company (“Comlink”)

consummated a merger that was effected through a reverse merger in which the

shareholders of USA Superior agreed to receive 34,000,000 shares of common stock

of Comlink in exchange for 100% of the issued and outstanding shares of USA

Concurrent with the merger, USA Superior’s executive

management and directors assumed control and responsibility for Comlink’s

activities and its strategic direction.

The merger effected a

change in control of Comlink and immediately following the merger, USA

Superior’s former stockholders held approximately 59% of Comlink’s issued and

outstanding common shares.

After the merger, Comlink’s name was

changed to USA Superior Energy Holdings, Inc., and the stock symbol was changed

Securities and Exchange Commission (“SEC”) reporting purposes, the merger

between USA Superior and Comlink was treated as a reverse merger with USA

Superior being the “accounting acquirer” and, accordingly, it assumed Comlink’s

reporting obligations with the SEC.

In accordance with SEC

requirements, the historical financial statements and related disclosures

presented herein for the period prior to the date of merger

(i.e., January 16, 2007) are those of USA

The assets and liabilities of Comlink were recorded, as of

completion of the merger, at fair value, which is considered to approximate

historical cost, and added to those of USA Superior.

accordance with the terms of the merger agreement, each outstanding share of USA

Superior prior to the reverse merger was converted into 309.8 common shares in

USA Superior (post reverse merger) with a total of 30,980,000 common shares

issued to the former USA Superior stockholders.

Of the 63,360,000 shares of

Comlink outstanding at the time of the merger, 45,000,000 shares were

cancelled concurrent with the closing of the merger.

conjunction with the merger, USA Superior issued 3,020,000 shares of common

In accordance with EITF 95-8, USA Superior determined

that these were shares issued for services and not additional transaction costs

due to the fact that Comlink’s cash balance was minimal prior to the

These shares had a market value of $3,020,000 on the date of

the reverse merger.

Of the total shares issued for services,

2,720,000 shares were issued to employees of USA Superior.

following the merger, a total of 52,360,000 shares of common stock were issued

and outstanding.

inception, USA Superior has funded its oil and gas activities through a

combination of equity and debt securities and the contribution of funds and

services by its principal shareholders and

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statements

accompanying interim financial statements have been prepared based on accounting

principles generally accepted in the United States of America.

opinion of management, all adjustments, consisting of normal recurring

adjustments, necessary for a fair presentation of financial position and the

results of operations for the interim periods presented have been reflected

The results of operations for interim periods are not necessarily

indicative of the results to be expected for the full year.

financial statements which would substantially duplicate disclosure contained in

the audit consolidated financial statements for the most recent fiscal year,

found in the Company’s Form 10-K, have been omitted.

of presentation

Superior’s unaudited consolidated balance sheets as of March 31, 2008 and

December 31, 2008 and related consolidated statements of operations,

stockholders’ equity and cash flow for the three months ended March 31, 2008 and

2007 are presented in U.S.

dollars and have been prepared in accordance with

accounting principles generally accepted in the United States of America

(“GAAP”) and the rules of the Securities and Exchange Commission.

preparation of financial statements in conformity with generally accepted

accounting principles in the United States 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 revenues and expenses during the

reporting periods.

Actual results could materially differ from those

believes that it is reasonably possible the following material estimates

affecting the financial statements could significantly change in the coming

(1) estimates of proved oil and gas reserves, and (2) forecast

forward price curves for natural gas and crude oil.

gas industry in the United States has historically experienced substantial

commodity price volatility, and such volatility is expected to continue in the

Commodity prices affect the level of reserves that are

considered commercially recoverable;

significantly influence USA Superior’s

current and future expected cash flows;

and impact the PV10 derivation of proved

reserves presented in USA Superior’s supplemental oil and gas reserve

disclosures made herein.

of consolidation

financial statements include the accounts of its 100% owned subsidiaries USA

Superior Energy, Inc.

and Superior Energy, LLC and its 80% interest in the

subsidiary Skyrider Energy, LLC.

and cost recognition

Superior uses the sales method to account for sales of crude oil and natural

Under this method, revenues are recognized based on actual volumes of oil

and gas sold to purchasers.

The volumes sold may differ from the volumes to

which USA Superior is entitled based on our interest in the

These differences create imbalances which are recognized

as a liability only when the imbalance exceeds the estimate of remaining

USA Superior had no imbalances as of March 31, 2008 and

December 31, 2007.

Costs associated with production are expensed in

the period incurred.

Accounting Pronouncements

Superior does not expect the adoption of recently issued accounting

pronouncements to have a significant impact on their results of operations,

financial position or cash flows

3 – GOING CONCERN

Superior has raised limited financing and has incurred operating losses since

its inception in October 2005.

These factors raise substantial doubt

about USA Superior’s ability to continue as a going

USA Superior’s ability to achieve and maintain

profitability and positive cash flow is dependent on its ability to secure

sufficient financing to fund the acquisition, drilling and development of

profitable oil and gas properties.

Management is seeking financing

that it believes would allow USA Superior to establish and sustain commercial

There are no assurances that USA Superior will be

able to obtain additional financing from investors or private lenders and, if

available, such financing may not be on commercial terms acceptable to USA

Superior or its stockholders.

The financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

4 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES

Payable – Bastrop and Caldwell County, Texas Leases

portion of the consideration for the purchase of the Bastrop and Caldwell

County, Texas leases, USA Superior issued a $350,000 note payable to the

The note bears interest at 5% and requires monthly payments

of $15,000 plus interest.

As of December 31, 2007, USA Superior was

in default on the payments of the note.

On April 11, 2008, USA

Superior paid the lender $50,000 for attorney fees and a partial payment on the

note and entered into a Renewal and Extension Promissory Note which settled the

Under the terms of the new note, USA Superior must make

monthly payments of $15,000 plus 8% interest beginning May 15,

All unpaid principal and interest is due October 15,

This note is secured by 500,000 shares of USA Superior’s common

stock which were pledged by the Company’s CEO and USA Superior’s interest in the

Bastrop County leases.

additional consideration for the purchase of the Bastrop County, Texas leases,

USA Superior agreed to assume the seller’s noninterest bearing liability to a

third party in the total amount of $440,000.

This note requires

payments of 25 percent of the net revenue from the production of the leases,

with minimum payments of $7,500 per month and $120,000 per year.

note was recorded at the present value of the future cash payments of

Management used an interest rate of 5% to discount this

rate, because it was the same as the rate on the note payable to the seller

described above.

USA Superior is currently in default on the note due

to the fact that all required payments have not been made on the

5 – STOCKHOLDERS’ EQUITY

of Common Shares and Warrants

1, 2008, as amended April 22, 2008, USA Superior entered into an agreement with

a third party for financial advisory services for the period from March 1, 2008

through February 28, 2010.

Under the terms of the contract USA

Superior will make monthly payments of $5,000 for a total of 23

In addition, USA Superior has issued a warrant to purchase

1,000,000 shares of common stock for a period of five years at an exercise price

of $0.17 and USA Superior’s CEO will pay the third-party 1,250,000 shares of the

common stock owned by him.

The warrants were valued at $550,020 using

the Black-Scholes model with the following assumptions:

price on the issuance date

free interest rate

transferred by the CEO of USA Superior was valued at $590,000 based on its

trading price on the issuance date.

These amounts have been recorded

as a prepaid asset and are being amortized over the two year term of the

of Common Stock for Subscription Agreement

January 2008, USA Superior issued 400,000 shares of stock to an employee of the

company in exchange for a stock subscription receivable in the amount of

The shares were valued at $300,000 on the date of

USA Superior recognized $170,000 of compensation expense

related to the difference in the market value of the shares and the cash to be

received from the employee.

discussion under Part 1 – FINANCIAL INFORMATION, Item 2.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations regarding

information required to be disclosed on Form 8-K during the period covered by

this Form 10-Q, but not reported.

holders of the Company may recommend nominees to the Company’s board of

directors by directing such nominations to the board of directors at the

Company’s principal office.

Certification

of Chief Executive Officer of the Company pursuant to 15 U.S.C.

7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of

Certification

of Chief Financial Officer of the Company pursuant to 15 U.S.C.

7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of

Certification

of Chief Executive Officer of the Company pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

Certification

of Chief Financial Officer of the Company pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

to the requirements of the Securities Exchange Act of 1934, the registrant has

1 unchanged sentence

duly authorized.

USA Superior Energy Holdings,

(the “Registrant”)

Superior Energy Holdings, Inc.

“Registrant”)

Rowland Carey

President, Chief Executive

& Chief Financial

Chief Executive Officer,

Chief Financial Officer

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information