Universal Energy Corp (UVSE)

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eak435s -

Page 10 of 3rd quarter 10Q

Balance at September 30, 2008 $ 3,203,065

Bottom of page 22

During October and November 2008, the Company converted approximately $480,000 in debt into 664,364,542 shares of our Common Stock.

(The balance as of the 10Q date would be $3,203,065-$480,000=$2,723,065).

On page 33 a different debenture total is listed;

We have outstanding, as of September 30, 2008, $4,801,760 aggregate original principal amount of our Debentures.

(These debentures are to be paid under the following terms)


Unless deferred by the holders of the Senior Debentures, we are required to redeem the Senior Debentures on a monthly basis commencing on September 1, 2008, by payment, at our option, in cash or in shares of our common stock, one-twelfth of the aggregate original principal amount of the Senior Debentures or approximately $425,900 plus interest on the outstanding balance. Similarly, we are required to redeem the Junior Debentures on a monthly basis commencing on November 1, 2008, by payment, at our option, in cash or in shares of our common stock, one-twelfth of the aggregate original principal amount of the Junior Debentures or approximately $145,200 plus interest on the outstanding balance.


The Senior Debentures and the Junior Debentures are due and payable on September 1, 2009 and October 31, 2009, respectively, unless sooner converted into shares of our common stock.

...We anticipate that the full amount of the Debentures will be converted into shares of our common stock...

On page 24 it states the expected cost for operating the next 12 months are $ 1,775,000. The revenue on page 4 was $330,226 for 2 months of production. There was no production in the 3rd month due to hurricane damage. Multiply $330,226 times 6 to get 12 months revenue and you get $1,981,356 for the next 12 months before any new wells are brought on line.

Based on the info above the debentures remaining as of the 10Q date are between $2,723,065 and $4,321,760 and is due and payable by September 1, 2009 and October 31, 2009. What the company plan states is ...We anticipate that the full amount of the Debentures will be converted into shares of our common stock... which indicates that no revenue will be used to reduce the debentures. With 4.5 billion shares still available to be issued it would generate less than $1 million at the current price of .0001 to .0002 .

Other sources will be required to pay off the debentures either additional wells or other debentures besides the one that is due in 2010. All in my opinion of course.