GSVI GSV Inc (CE)

 

GSV, INC.

 

(Exact name of registrant as specified in its charter)

Delaware		13-3979226
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

191 Post Road West, Westport, CT	06880
(Address of principal executive offices)	(Zip Code)

(203) 221-2690

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	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  o No x

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of May 5, 2008, there were 7,502,703 shares of common stock outstanding, excluding 168,592 shares held in treasury.

 

 

 

1. Description of the Business

GSV Inc. (the “Company”) manages investments in oil and gas wells. The Company currently is seeking additional related opportunities. The Company also has limited internet related investments.

2. Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, certain information and notes required by accounting principles generally accepted in the United States of America for complete financial statements are not included. These financial statements should be read in conjunction with the financial statements and accompanying notes for the year ended December 31, 2007, included in the Company’s Annual Report on Form 10-KSB as filed with the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments (consisting primarily of normal recurring accruals) that the Company considers necessary for a fair presentation of its financial position, results of operations and cash flows. Results for interim periods are not necessarily indicative of the results that may be achieved for the full year.

The Company has incurred substantial operating losses, resulting in an accumulated deficit of $38,364,526 as of March 31, 2008. Its current investments are limited to certain oil and gas producing properties in Louisiana and an interest in Century Royalty. Century Royalty’s primary asset consists of geologic studies to exploit oil and gas properties. One prospect, “Friendswood No. 2 RE,” has been successfully completed and in June 2007 was successfully tied into a pipeline. On or about September 14, 2007, efforts to increase the pressure of the flow of gas from the well were successful and the sale of gas through the pipeline commenced. On February 4, 2008, fracturing of the well was completed successfully. All 1150 bbls of frac water have been recovered, and the well has been tested at various pressures. On February 21, 2008, the well was put back on line full-time. Although the Company has not yet completed a study to evaluate the underlying reserves, it believes that the reserves are at least adequate to recover the costs of the geologic studies . Century Royalty and its partners are preparing to commence drilling a second well near “Friendswood No. 2 RE” in the near future. Timing of work on the second well is dependent on securing sufficient financing and the completion of the engineering report.

In recent periods cash flows from the Company’s oil and gas investments have been sufficient to enable the Company to fund its operating, investing and financing needs. However, the Company will be required to obtain additional financing to fund drilling and development to recover its investment in geologic studies and to pay certain indebtedness as it becomes due. There is no assurance that the Company will be able to obtain additional adequate financing nor is there any assurance that proved reserves will be discovered. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that may result from the outcome of this uncertainty.

Net cash provided by operations increased by 35%, or $31,887, from $90,214 for the three months ended March 31, 2007, to $122,100 for the three months ended March 31, 2008. The increase was due primarily to the increase in production of the Lousiana wells.

  

Net cash used by investing activities during the three months ended March 31, 2008, was $34,654, as compared to $6,139 in the corresponding period of the prior year. The increase relates to additional investments in Texas wells.

 

Net cash used by financing activities during the three months ended March 31, 2008, was $61,548, as compared to $0 used by financing activities in the prior year. The cash used in 2008 was attributable to a repayment of principal on notes payable.

 

In 2003, we issued to Polystick 4,500,000 shares of common stock and 1,500,000 shares of Series B convertible preferred stock valued at $2,625,000 to acquire assets in a non-cash transaction.