Universal Bioenergy Inc., (otcmarkets:UBRG), a publicly traded independent diversified energy company, that markets natural gas, propane, and produces petroleum and coal, announced that it has filed its Annual Report on Form 10-K/A for the fiscal year ended December 31, 2011 with the Securities and Exchange Commission. The annual report contains the Company’s audited financial statements, management’s discussion and analysis (MD&A), its plans and future outlook and other disclosures.
Results of Operations
Our primary revenues from this period are from the sale of natural gas and propane. Our revenues for the twelve months ended December 31, 2011 were $71,747,840 as compared to $41,320,647 for the same period in 2010. This resulted in an increase of $30,427,193 in revenues or 73.64% over the previous year. Our Cost of Sales for this period was $71,604,210. This has resulted in a gross profit margin for this period of $143,630.
We incurred losses of $2,164,948 for the twelve months ended December 31, 2011 and $1,947,963 for the same period in 2010. Our accumulated deficit since our inception through December 31, 2011 amounts to $18,890,370. We issued 3,000,000 of common shares for services with an aggregate fair value of approximately $133,500 that was included in the $1,187,624 in general and administrative expenses for the twelve month period ended December 31, 2011. Excluding the value of the common shares of $133,500 from the general and administrative expenses of $1,187,624 would reduce the actual net G&A expenses to $1,054,124. We also incurred interest (expenses) including amortization of beneficial conversion feature of $1,051,549. Excluding the value of the common stock that was issued for services, and interest expenses which together totaled $1,185,049 would correspondingly reduce our net loss of $2,164,948 to an adjusted net loss of $979,899 for the period ending December 31, 2011. Based on an adjusted net loss of $979,899 this loss equals only 1.37% of our total revenues of $71,747,840 for the period ended December 31, 2011, as compared to 2.48% for the same period ended 2010.
Operating Costs and Expenses
Our Cost of Sales for the twelve months ended December 31, 2011 were $71,604,210 as compared to $41,273,543 for the same period in 2010. Our primary business operations consists of the marketing and distribution of natural gas and propane to our major customers nationwide. Our general and administrative expenses for the twelve months ended December 31, 2011 were $1,187,624 as compared to $1,251,674 for 2010 a decrease of $ 64,050. We pay our employees and consultants largely in common shares as our cash availability is currently limited.
Our total operating expenses decreased from $1,333,818 for the period ending 2010, by a total of $116,958, or by 8.77%, to $1,216,860 for the period ending December 31, 2011. Based on our plans for growth and expansion, and increasing revenues through sales of natural and other products, we believe we will soon reduce our net losses down to zero, and then move our company toward solid profitability. Since we are a high growth company, growing by mergers and acquisitions, we expect to have corresponding increases in costs reflected in our operating expenses. However, although our total revenues increased by 73.64%, our total operating expenses decreased by 8.77%.
Our “total assets” have decreased by $2,047,886, or 15.44% to $11,212,845 for the period ending December 31, 2011, compared to $13,260,731 for the same period in 2010. A total of $2,850,371 of that resulted from a reduction in the amount of our Accounts Receivables from the sales of natural gas due to the unseasonably warm winter on the east coast, a reduced demand in natural gas for heating, a decline in natural gas prices, and an increase in natural gas working inventories.
Our cash used in operating activities for the twelve months ended December 31, 2011 was ($1,141,272) as compared to ($322,979) for the twelve months ended December 31, 2010. The increase was primarily attributable to the costs associated with the growth and expansion of NDR Energy Group and our other operations.
Cash used in investing activities for the year ended December 31, 2011 was $889,500 as compared to cash provided by investing activities of $24,906 for the twelve months ended December 31, 2010. This was an increase of $864,594 or an increase of 3471.43% due to our cash needs to grow by means of acquisitions. The use of cash in the year ended December 31, 2011 was related to the investment in participation agreements for Progas Energy Services, the acquisition of the member interests in Whitesburg Friday Branch Mine LLC, and cash provided by investing activities that is attributable to the purchase of fixed assets of $13,094 and the sale of property and equipment for $38,000.
Our cash provided by financing activities for the year ended December 31, 2011 was $2,034,477 as compared to $295,254 for the year ended December 30, 2010. The net cash provided by financing activities is primarily attributable to our Notes Payables issued and the investment in the Whitesburg Friday Branch Mine.
Current liabilities decreased to $10,422,309 for the twelve months ended December 31, 2011, compared to $13,071,803 for the same period in 2010. This 18.31% decrease was primarily due to a $2,741,102 decrease in accounts payable from the purchasing costs and supplies of natural gas. Our long term liabilities are $494,646 for the period ending December 31, 2011, compared to $238,355 for the year ending December 31, 2010. This increase was primarily due to the conversion of the accrued compensation and expenses of certain officers and employees into long term notes payable, to reduce our current liabilities, improve our cash flow, and improve the Balance Sheet.
Universal’s President Vince M. Guest says, “We are very proud of our results this past year, and believe our business model and strategy is working very successfully. We believe this Annual Report fully confirms and establishes the tremendous progress we made in 2011, and demonstrates our ability to accomplish our goals and objectives. Universal Bioenergy is a high growth company that grew over 74% this past year. Very few companies in any industry in the U.S. are growing at that kind of accelerated rate. A major goal for the fiscal 2012 year and beyond is to begin to generate earnings for the Company. We intend to deliver greater value to our shareholders and investors by generating increasing revenues, producing solid earnings, and improving returns on invested capital, for the long-term growth of our Company.”
The full Form 10-K Annual Report is available for viewing on the SEC’s website and it is also available at our website at http://www.universalbioenergy.com Investor Relations, SEC Filings section.
About Universal Bioenergy Inc.
Founded in 2004, Universal Bioenergy Inc., is a publicly traded independent diversified energy company that produces and markets natural gas, petroleum, coal and propane. We market energy resources to the largest public utilities, electric power producers and local gas distribution companies in the U.S., that serve millions of commercial, industrial and residential customers. We are also engaged in the acquisition and development of existing or recently discovered oil and gas fields, leases and surface coal mines. For more information visit www.universalbioenergy.com