Start Scientific, Inc. - FORM 10-K

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - Start Scientific, Inc.	Financial_Report.xls
EX-32.1 - 906 CERTIFICATION - Start Scientific, Inc.	ex32_1906certification.htm
EX-31.1 - 302 CERTIFICATION - Start Scientific, Inc.	ex31_1302certification.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

FORM 10-K

[X] Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2014

[ ] 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: 000-52227

START SCIENTIFIC, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-4910418
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

2003 My Anns Hill
San Antonio, TX		78258
(Address of Principal Executive Offices)		(Zip Code)

	(210) 758-5898
	Issuer’s Telephone Number, Including Area Code

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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. ☐

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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 III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The aggregate market value of the Company’s voting stock held by non-affiliates computed by reference to the closing price as quoted on the Pink Sheets quotation system on June 30, 2013, was approximately $275,000. For purposes of this calculation, voting stock held by officers, directors, and affiliates has been excluded.

As of March 4, 2015, the Company had 130,665,000 outstanding shares of common stock, par value $0.0001 per share.

DOCUMENTS INCORPORATED BY REFERENCE

None.

PART I.

ITEM 1: BUSINESS

Cautionary Factors That May Affect Future Results (Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

The disclosure and analysis set forth herein concerning Start Scientific, Inc. (hereafter, “we”, “our”, “us”, or the “Company”)contains certain forward looking statements, particularly statements relating to future actions, performance or results of current and anticipated products and services, sales efforts, expenditures, and financial results. From time to time, we also provide forward-looking statements in other publicly-released materials, both written and oral. Forward-looking statements provide current expectations or forecasts of future events such as new products or services, product approvals, revenues, and financial performance. These statements are identified as any statement that does not relate strictly to historical or current facts. We use words such as “anticipates,” “intends,” “plans,” “expects,” “will,” and other words and phrases of similar meaning. In all cases, a broad variety of assumptions can affect the realization of the expectations or forecasts in those statements. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially.

We undertake no obligation to update any forward-looking statements, but investors are advised to consult any further disclosures by the Company on this subject in our subsequent filings pursuant to the Securities Exchange Act of 1934. Furthermore, as permitted by the Private Securities Litigation Reform Act of 1995, we provide these cautionary statements identifying risk factors, listed below, that could cause our actual results to differ materially from expected and historical results. It is not possible to foresee or identify all such factors. Consequently, this list should not be considered an exhaustive statement of all potential risks, uncertainties and inaccurate assumptions.

Corporate Organization

The Company was formed in the State of Utah under the name of “Secure Networks, Inc.” on February 4, 2004, and was subsequently reincorporated in Delaware on February 14, 2007 under the name “Secure Netwerks, Inc.” At the time of its formation, the Company was a wholly-owned subsidiary of SportsNuts, Inc., a Delaware corporation traded on the OTC Electronic Bulletin Board that files reports with the Securities and Exchange Commission under Sections 13(a) and 15(d) of the Securities Exchange Act of 1934. On March 1, 2007, the shares of the Company were spun-off to the shareholders of SportsNuts, Inc. On November 11, 2011, the Company changed its name to Start Scientific, Inc. As of March 4, 2015, we had 281 shareholders of record.

The Business of the Company

Overview

development of oil and gas interests in North America or overseas, we expect to align with industry partners in respect of the drilling and operation of these wells. Our long-term focus is to grow and develop existing oil and gas leasehold interests and acquire new interests within and without the continental United States. In addition, we intend to acquire interests in older wells that, with the application of newer technologies, may increase production and reserves.

Our Oil & Gas Interests

Carpathian Energy. On May 16, 2012, we entered into an agreement with Standard Energy Holdings LLC, an entity under common control with the Company, to acquire all of the shares of Carpathian Energy – Companie Petroliera SRL, a Romanian limited liability company that holds various oil and gas interests in Romania (hereafter, "Carpathian"). All of the conditions of purchase have not been satisfied as described herein. The first recorded oil and gas production in history was established in Romania in 1854. In 1857, the giant Moreni-Gura-Ocnitei Field was discovered which has produced approximately 750 million barrels of oil. Oil production increased dramatically from the late 19^th century until World War I, which resulted in massive destruction of oil production infrastructure throughout the country. Following a rebuilding phase, Romanian oil exports were among the highest in the world just prior to the outbreak of World War II. After that war, the oil industry was nationalized under communist rule and production continued to increase until 1976, but, while under communist control, the lack of investment in oil and gas exploration resulted in fewer discoveries and new producing fields. The very low depletion rate of recoverable oil and gas reserves under the communist regime (3.5% annually), the lack of a profit motive (and concomitant rewards for risk assumption), and the poor investment climate is indicative of the inefficiency of oil and gas operations during this era. Since the fall of the communist dictatorship of Ceaucescu in 1989 and the establishment of a democracy one year later, it appears that the political climate now exists to safely accommodate investment in most economic and business sectors of Romania. Romania became a member of the European Union (EU) in 2007. We believe there is an opportunity for investment in the Romanian oil and gas industry.

To date, approximately 6.7 billion barrels of recoverable oil reserves has been discovered in Romania, of which 5.8 billion have been produced. We have therefore estimated that approximately 1 billion barrels of recoverable oil reserves remain in place. Also, some 55 trillion cubic feet (Tcf) of recoverable gas has been discovered, of which 43 Tcf has been produced. Romania has current average daily production of approximately 200,000 barrels of oil and oil equivalents from 250 to 300 oil and gas fields.

Established in 2001, Carpathian has analyzed and studied over 40 existing fields in Romania. After the initial studies identified certain oil and gas fields that met the parameters of Carpathian’s objectives, efforts commenced to acquire those fields. Carpathian has been successful in acquiring exploration and production licenses for six fields which have met its criteria. The fields included are: Calinesti Field/Alexandria Block and Cozieni Field, Nadlac Field, and the Bordei Verde Vest Field. The Catrunesti Field is a small, simple structure, upon which it is planned to drill one or two wells. The East Ciumeghiu Field produced about 14 BCF and is expected to have significant remaining reserves that could be economically produced by drilling one new well.

Using American and Romanian geologists and engineers, Carpathian has analyzed the shut-in fields available for concession and has concluded that a number of the oil fields have produced only 10% of recoverable reserves as result of inefficient drilling and production techniques. In addition, some of the individual wells in the fields reviewed were producing significant amounts of oil and/or gas when they developed mechanical problems and were either shut down or, in some instances, simply plugged and abandoned. It also appears that the official government calculations of the original reserves in many of the oil fields were significantly underestimated.

Upon completion of its review of the available fields, Carpathian acquired the concession rights to Bordei Verde Vest, Nadlac, Catrunesti, Cozieni, and East Ciumeghiu fields, as well as the South Bucharest Block I-II concession (also called the Alexandria Block which encompasses 114,000 acres and includes the Calinesti field). A tabular summary of each of these concession rights are included below and encompass a total of approximately 120,000 acres. Extensive geological and engineering research was performed on these fields, including the re-evaluation of all well logs, core analyses, mud logs, production history, and any other information available. All six fields have data indicating significant remaining reserves in multiple zones. It is believed that these reserves can be recovered at a relatively low cost by drilling new wells in the known reserves. Once these projects are profitable, additional wells may be drilled to explore deeper substrata. These fields are not considered proven reserves because we do not have a current 2014 Reserve Report. Furthermore, the Carpathian assets have not been acquired because we have not paid $5 million dollars as required by the agreement.

Our policy in respect of the operation and production of these fields will be to produce them at conservative rates so as to recover a higher percentage of hydrocarbons from the reservoir. We plan to rework and/or drill and develop these properties in an orderly and economically efficient manner.

Risk of Unwinding. We intend to raise capital to enable us to use the proceeds to invest in the development of our oil and gas properties. Importantly, our agreement to acquire Carpathian contains an obligation to invest, no later than July 15, 2012, a minimum of Five Million Dollars ($5,000,000) into the development of Carpathian’s oil and gas assets. The previous owners of Carpathian, who are related parties, have the right to unwind the acquisition of Carpathian and reclaim the Carpathian interest from the Company. (See RISK FACTORS)

On April 2, 2012, the Company entered into an agreement to acquire two separate one-fourth (1/4) working interests (collectively, the “Working Interests”) in certain oil and gas leases covering the Board of Education No. 6 Well located in Yazoo County, Mississippi ("Pickens")from Standard Energy Holdings LLC, an entity under common control. The consideration granted by the Company in exchange for the Working Interests consisted of ten million (10,000,000) shares of restricted common stock. The Company has properly recorded its Working Interest with the County Recorder in Yazoo County, Mississippi.

About the Pickens Field

The first oil field discovered in Mississippi, the Tinsley field, is located 27 miles to the southwest of the Pickens Field. The Pickens Field was discovered six months later.

The Pickens Field is located about 35 miles north of Jackson, Mississippi, in Madison and Yazoo Counties. The field was discovered by Kingwood Oil Company in March of 1940 with the drilling of the R. E. Wilburn No.1, which is located in Section 31 of T12N-R3E, Yazoo County. The R.E. Wilburn was completed open hole in the Eutaw Wilburn sand at a depth of 4878-4889 feet, and initially tested 1013 barrels per day of 40 gravity oil and eventually produced 356,489 barrels of oil over its life time.

Pickens Field was discovered six months after the discovery of the Tinsley Field in western Yazoo County, and was the fourth field discovered in Mississippi. Pickens Field has produced 20,441,487 barrels of oil from the Eutaw Wilburn sand, approximately 2,000,000 barrels of oil from the Selma Chalk, and approximately 100,000 barrels of oil from the Tuscaloosa and Lower Cretaceous.

The Pickens Field is a ten-mile long northwest-southeast trending fault line trap with up-thrown fault blocks and structural closer. The Selma Chalk and the Tuscaloosa reservoirs are also associated with the same type of trapping mechanisms. Pickens is located near the western end of the Pickens-Gilbertown fault system, which begins west of the Pickens Field, and extends to the southeast through the producing oil regions of Scott, Jasper, and Clarke counties Mississippi, and ending at the Gilbertown Field in Choctaw County, Alabama. This fault system is also located at the northern end of the Mississippi Interior Salt Basin, and has had many oil fields discovered along its trend.

The first oil field discovered in Mississippi, the Tinsley field, is located 27 miles to the southwest of the Pickens Field. Other producing oil fields in the region are the Bentonia and Flora oil fields, which are 21 miles to the southwest. It is believed that an upward movement in the Louann Salt caused a northwest-southeast trending salt ridge, creating an overlying high relief Smackover structure and severe faulting in the shallow reservoirs of the Eutaw and other Cretaceous reservoirs. The high-grade crude oil that has charged the shallower horizons, most likely migrated up the faults from the Smackover structure below.

The Selma Chalk Formation. The Texas Oil Company discovered oil in the Selma Chalk formation in March of 1963 with the completion of the Eliza Thomas No.1. This well is located in the SE quarter of Section 29 of T12N-R3E, Yazoo County. The Chalk is a light gray carbonate rock, which is approximately 900 feet thick in the Pickens area. The Chalk is more sandy and permeable in the northwest portion of the field and less permeable in the southeast portion of the field. Up until 1963 the oil produced at the Pickens Field came from the Eutaw. Over the years as Eutaw wells were being drilled, it became common knowledge in the local oil industry as well as drilling contractors that a loss of circulation would sometimes occur when drilling through the Chalk. Also, oil would occasionally appear on the mud pits as drilling mud was circulated back to the surface after drilling through the Chalk section.

The Eliza Thomas No.1 was north of the Pickens Field on a separate fault. The Thomas well was originally drilled to 5,415 feet, and then completed in the Selma Chalk in the interval from 4434 to 4454. After acidizing, the well flowed 309 BOPD and no water, with 175 pounds of flowing tubing pressure. The Chalk oil was 37 gravity, similar to the Eutaw. Sidewall cores taken in the Chalk had a slight oil show, which probably led Texaco to complete in the interval.

The John McGowan Company and Clement & Stover subsequently drilled other Chalk wells after the successful completion of the Thomas well. These operators would typically run a Drill Stem Test to see if the Chalk would show oil. This was a fairly successful technique, but was not always an indication of whether a well would be productive or not. McGowan and Clement & Stover, however, completed the more successful wells in the field such as the Varnado, the Livingston and the Bridgforth. Out of the 27 Chalk wells completed at the Pickens Field, the average cumulative production was 65,734 BO. However, the better producers in the field were the H. R. Varnado No. 1, the No. 2 Board of Supervisors, the Stewart Bridgforth No. 2, and the Livingston No. 1. These four wells averaged 263,000 BO per well. Drilling in the more permeable part of the field along with cutting the fault at the optimum depth most likely led to the higher recovery.

The No. 2 Board of Supervisors was drilled by Clement & Stover and is located in Section 16 of T12N-2E of Yazoo County. This well was completed in the Chalk open-hole and no log was run. The initial test was 64 BO and 8 BW per day, and produced 287,482 BO cumulatively. This well steadily produced an average of 4472 barrels of oil per month (149 per day) for the first four years before it began to decline. The Clement-Stover/Stewart Bridgforth No. 2 flowed 168 BO and 48 BW per day on the initial test, and produced a total of 213,500 BO. The McGowan/H. R. Varnado No.1 tested 156 BO per day, and produced a total of 440,000 BO cumulatively. The Clement-Stover/Livingston No.1 tested 112 BO and 128 BW per day, and produced a total of 110,000 BO.

In March of 1996, G&S Oil Company re-entered the Palmer Petroleum/Bridgforth No.1, and completed in the Selma Chalk from 4180 to 4230. The well flowed 380 BOPD with no water and 225 pounds of tubing pressure. Cumulative oil production is 49,496 barrels. A fault cut the Chalk in the top 150 feet of the section. The pay section shows no SP response and resistivity of 7 ohms. This well did not flow oil until it was acidized with Hydrochloric acid. After reviewing various Selma Chalk completions in the Pickens Field, it seems that the wells that cut a fault in the top 100 feet of the Chalk section performed better than the ones that did not. Acidizing (HCL) after perforating is also important for a successful completion.

We believe that there is potential remaining in the Selma Chalk at the Pickens Field. New locations should be drilled directly on the down-thrown side of the main faults allowing a fault cut in the top 100 feet of the Chalk section. In the Northwest portion of the Pickens Field, the chalk is more permeable and should have a higher than average recovery of oil.

These fields are not yet considered proven reserves because we do not have a current 2014 Reserve Report.

City of Palacios, Matagorda County, Texas Oil and Gas Leases

On August 7, 2013, the Company entered into an agreement to acquire two separate working interests (collectively, the “Working Interests”) in certain oil and gas leases in Matagorda County, Texas. The consideration granted by the Company in exchange for the Working Interests consisted of one hundred and fifty thousand ($150,000) dollars. The Company failed to provide the appropriate consideration for these Working Interests so this initial agreement is null and void. On January 13, 2015, the Company purchased an option to acquire 1,500 acres of leases northwest of the town of Palacios, Matagorda County, Texas (the "Airport Lease"). The Company had until February 5, 2015 to tender $150,000 for the Airport Lease from the city of Palacios. The Company is required to pay gross revenue royalties of 18.75% to the city of Palacios and 1.25% royalty to XXI Oil & Gas, LLC upon production in accordance with the Airport Lease. Upon tendering $150,000 for the Airport Lease, the Company will have three (3) years to get the Airport Lease into production. The deadline for this Airport Lease option to purchase has been extended to April of 2015. The Company is working with the city of Palacios for an extension to be able to perform on the $150,000 obligation. These fields are not yet considered proven reserves because we do not have a current 2014 Reserve Report. The following is a property description:

Tract 1

Fifteen hundred (1531.4569) acres of land, more or less, out of Sections 11, 12, 16, 17, of the Texas Rice Development Company Subdivision of lands in the J. Smith Survey (A-379), the Lewis Goodwin Survey (A-162), and the Thomas Dasher Survey (A-146), the D.O. Collinsworth Survey (A-129); being the same lands described in conveyances from the United States of America to the City of Palacios, Texas, recorded in Volune 179, Pages 523 to 530, and in Volume 197, Pages 55 to 62, of the Deed of Records of Matagorda County, Texas, to which instruments reference is hereby had and made for all purposes, and also being known as the Municipal Airport of the City of Palacios all in Matagroda County, Texas.

Tract 2

Being 241.8 acres of land, more or less, out of Fractional Section 1, Section 2, and Fractional Section 3 of the Texas Rice Development Subdivision of Thomas Dasher Survey, Abstract 146, and the Lewis Goodwin Survey Abstract 162, both being in Matagorda County, Texas.

The acreage comprising Tract 2 is divided as follows:

City Streets			201 acres
Alleys			26 acres

Dump Grounds			10 acres
Sewer Plant			5.8 acres

No drilling, reworking or other operations may be conducted on the surface of Tract 2 without the City of Palacios’ express written permission. The Company may utilize the subsurface of Tract 2 without the City of Palacios’ express written permission. The Company may utilize the subsurface of land comprising Tract 2 for horizontal or directional drilling, so long as the well bore is not less than 1,500 feet below the surface of any lands comprising Tract 2.

Flora Field, Madison County, Mississippi

On January 2, 2015, the Company entered into a Farmout Agreement with BPS Operating Services LLC, located in Jackson, Mississippi. The Company has until April 1, 2015 to tender $500,000 for the first well to be drilled. The production interest includes 40 acres around the new well and the Company will earn a 75% working interest before payout, and a 60% working interest after payout. All of the production facilities, salt water disposal systems, and 33 well bores are in place. The Company may drill additional wells for $400,000 per well within 60 days of completion of each previously drilled well completion. No payments towards this Farmout Agreement have been made by yet by the Company as of the date of this annual report. These fields are not yet considered proven reserves because we do not have a current 2014 Reserve Report

The Flora Field in the Madison County of Mississippi was discovered in 1943 and has since then produced more than 7,650,000 barrels of oil from the Selma Rock Gas Formation in the Anderson Sand. Known for its very high permeability, the Anderson Sand has porosity ranging from 20% to 26%. Recent wells drilled by Jordan Exploration, Inc. in 1997 demonstrate that there is still oil to be recovered in the Anderson Sand as well as significant potential in the Chalk formation.

Fayette Field, Jefferson County, Mississippi

On January 21, 2015, the Company entered into a Farmout Agreement with Durban Energy, Inc., located in Jackson, Mississippi. The Company has until July 10, 2015 to commence drilling a new well on the farmout acreage. The Company will receive 100% of the net revenue until payout of all costs, at which time the Company will assign a 25% working interest to Durban and partners. There is a 30% royalty burden on the leases, which means that before payout the Company will have 70% of net revenue and after payout the Company will have 52.5% of net revenue and Durban will have 17.5% of net revenue. Each well will be treated separately for payout calculation. No payments towards this Farmout Agreement have been made by yet by the Company as of the date of this annual report. These fields are not yet considered proven reserves because we do not have a current 2014 Reserve Report

The Fayette Field is located in Jefferson County, Mississippi, 6 miles northwest of the town of Fayette and 21 miles northeast of the city of Natchez. Humble Oil Company made the discovery in August of 1945 with the completion of the No. 1 M. R. Smith. This well was completed in the Lower Tuscaloosa Massive sand, and tested 229 BOPD of 40-degree gravity oil with 2,000 pounds of flowing tubing pressure. The well produced a total of 630,288 BO and 2.3 BCF of gas. The Massive sand is fine grained, ashy and micaceous. Permeability in this sand is as much as 460 millidarcies and porosity averages 28%. The Fayette structure is a simple anticline and covers about 2,500 acres.

Market

Generally. The oil and gas industry is highly susceptible to extreme fluctuations in energy-related commodity prices, which in turn has a corresponding effect on the level of drilling and exploration activity and the costs associated therewith. Such volatility is also represented in the trends, however disparate, of supplies, demand, and price movements of crude oil and natural gas.

Regulation

Federal and state regulations control various aspects of drilling and operating oil and gas wells, including care of the environment, the safety of workers and the public, and the relations with the owners and occupiers of surface lands within or near the leasehold acreage. The effect of these regulations is, invariably, to increase the cost of operations. The costs of compliance with state regulations include a permit for drilling a well before beginning a project. Other compliance matters have to do with keeping the property free of oil spills and the plugging of non-productive wells.

Oil and gas exploration, drilling, and production activities are also subject to private property rights. Owners of real property also own the rights to the minerals underneath the surface, unless such mineral rights have been retained, sold or transferred by a previous landowner. Oil and gas rights held by the United States government are managed by the Bureau of Land Management in conjunction with the U.S. Forest Service pursuant to a variety of federal statutes.

Environmental impacts of oil and gas production include produced water and drilling waste. Wastes that cannot be reused or recycled must be stored or disposed of in some manner, increasing the land area affected by oil and gas extraction and raising concerns over potential leaking of drilling fluids and other wastes from storage sites. Some petroleum industry operations have been responsible for water pollution through by-products of refining and oil spills. The combustion of fossil fuels produces greenhouse gases and other air pollutants as byproducts. Pollutants include nitrogen oxides, sulphur dioxide, volatile organic compounds and heavy metals.

Employees

As of December 31, 2014, we had 2 employees and 4 part-time contractors, although we intend to hire additional personnel to pursue our new business as an oil and gas exploration and development company. Although national unemployment rates remain high relative to historical averages, there exists a significant amount of competition for skilled personnel in the oil and gas services industry. Nevertheless, we expect to be able to attract and retain such additional employees as are necessary, commensurate with the anticipated future expansion of our business. Further, we expect to continue to use consultants, contract labor, attorneys and accountants as necessary.

ITEM 1A RISK FACTORS

Since we are a smaller reporting company, we are not required to supply the information required by this Item 1A.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

Our current corporate offices located at 2003 My Anns Hill, San Antonio, Texas 78258.

We do not own any real property.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

PART II

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a)

Market for Common Equity and Related Stockholder Matters.

(1) Market Information

The Company’s Common Stock is listed on the Pink Sheets quotation system (“Pink Sheets”) under the symbol “STSC.” The Company’s stock has been publicly traded since March, 2007. The following table sets forth, for the periods indicated, the high and low closing sales prices as quoted on the Pink Sheets, of shares of the Company’s Common Stock during the calendar year ended December 31, 2014:

	High		Low
Fourth Quarter 2014	$	0.35	$	0.15
Third Quarter 2014	$	0.50	$	0.29
Second Quarter 2014	$	0.58	$	0.42
First Quarter 2014	$	0.68	$	0.40

The following table sets forth, for the periods indicated, the high and low closing sales prices as quoted on the Pink Sheets, of shares of the Company’s common stock during the calendar year ended December 31, 2013:

	High		Low
Fourth Quarter 2013	$	0.68	$	0.20
Third Quarter 2013	$	2.00	$	0.10
Second Quarter 2013	$	0.55	$	0.09
First Quarter 2013	$	0.30	$	0.25

(2) Holders.

As of December 31, 2014, the Company had approximately 297 holders of record of its common stock.

(3) Dividends.

The Company has not paid any cash dividends on its common stock since inception and does not anticipate paying cash dividends in the foreseeable future. The Company anticipates that any future earnings will be retained for use in developing and/or expanding the business.

(4) Securities Authorized for Issuance Under Equity Compensation Plans.

None

(b) Recent Sales of Unregistered Securities.

On February 25, 2015, the Company issued a promissory note in the original principal amount of $52,500 (“Note”) to a lender. The Note matures on February 25, 2016 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at 60% of the lowest trading price for the fifteen prior days trading, including the date of conversion.

On February 11, 2015, the Company issued 5,000,000 shares of its common stock to a consultant of the Company for services rendered.

On February 10, 2015, the Company issued a promissory note in the original principal amount of $33,000 (“Note”) to a lender. The Note matures on November 12, 2015 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest trading days in the ten trading days previous to the conversion.

On July 28, 2014, pursuant to the Company’s 2012 Equity Incentive Plan, the Company issued an aggregate of 15,000,000 shares of common stock of the Company to an employee and a director of the Company for services rendered.

On April 7, 2014, the Company issued an aggregate of 500,000 shares of common stock of the Company to two consultants for services rendered.

On January 29, 2014, the Company issued 500,000 shares of its common stock to J.R. Munoz, and 500,000 shares of its common stock to Mr. Munoz's transferee Paul Ferendell for consulting services.

On September 25, 2012, the Company entered into a consulting agreement with TEGA, LLC, a Kentucky-based consulting company. The Company issued 600,000 shares of its common stock to TEGA, LLC, 500,000 shares of its common stock to TEGA's transferee Frances Crew, and 100,000 shares of its common stock to TEGA's transferee Teddy Colley.

On August 31, 2012, in exchange for $100,000, the Company issued a promissory note in the original principal amount of $100,000 (“Note”) to a lender. The Note matured on August 30, 2013 and carries an interest rate of 8% per annum payable on a quarterly basis. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a conversion price equal to $0.25 per share of Common Stock. This Note has not been converted and it is in default.

On August 15, 2012, the Company amended that certain consulting agreement with JT Arco, LLC a New Jersey-based Corporation. Pursuant to the terms of the Addendum Agreement the Company issued an additional 500,000 restricted shares of its common stock.

On August 1, 2012, the Company issued 5,000,000 shares of common stock of the Company to an officer of the Company for services pertaining to business development.

On June 27, 2012, the Company entered into a consulting agreement with Morris Carlo White IV a Texas-based consultant. Pursuant to the terms of the Agreement the Company issued 65,000 restricted shares of its common stock.

On June 12, 2012, the Company entered into a consulting agreement with JT Arco, LLC a New Jersey-based Corporation. Pursuant to the terms of the Agreement the Company issued 500,000 restricted shares of its common stock.

On May 4, 2012, pursuant to the Company’s 2012 Equity Incentive Plan (the "Plan") which Plan is attached as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 9, 2012, the Board approved the grant of 10,500,000 common stock purchase options to five individuals at a weighted average exercise price of $0.65 per share.

On March 1, 2012, the Company accepted the subscription of an investor for $300,000 in exchange for 1,200,000 shares of restricted common stock.

Exemption From Registration Claimed

All of the sales by the Company of its unregistered securities were made by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”). All of the individuals and/or entities listed above that purchased the unregistered securities were all known to the Company and its management, through pre-existing business relationships. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

Penny Stock Rules

Due to the price of our common stock, as well as the fact that we are not listed on a national securities exchange, our stock is characterized as “penny stocks” under applicable securities regulations. Our stock will therefore be subject to rules adopted by the SEC regulating broker-dealer practices in connection with transactions in penny stocks. The broker or dealer proposing to effect a transaction in a penny stock must furnish his customer a document containing information prescribed by the SEC and obtain from the customer an executed acknowledgment of receipt of that document. The broker or dealer must also provide the customer with pricing information regarding the security prior to the transaction and with the written confirmation of the transaction. The broker or dealer must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction prior to consummating the transaction and with the written confirmation of the trade. The broker or dealer must also send an account statement to each customer for which he has executed a transaction in a penny stock each month in which such security is held for the customer's account. The existence of these rules may have an effect on the price of our stock, and the willingness of certain brokers to effect transactions in our stock.

Dividend Policy

We have never declared or paid dividends on our common stock. Payment of future dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including the terms of any credit arrangements, our financial condition, operating results, current and anticipated cash needs and plans for expansion. At the present time, we are not party to any agreement that would limit our ability to pay dividends.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company we are not required to provide this information

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of the Company’s financial condition and results of operations in conjunction with the audited financial statements and related notes included in this registration statement. This discussion may contain forward-looking statements, including, without limitation, statements regarding our expectations, beliefs, intentions, or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes,” or similar language. Actual results could differ materially from those projected in the forward looking statements. You should carefully consider the information set forth above under Item 1 of this Part I under the caption “Risk Factors” in addition to the other information set forth in this registration statement. We caution you that the Company’s business and financial performance is subject to substantial risks and uncertainties.

Overview

Prior to April 2012, we were a reseller of technology-related hardware and software, including laptops, desktops, networking devices, telecommunication systems and networks, servers and software. In April, 2012 in connection with the acquisition of two separate one-fourth (1/4) working interests in certain oil and gas leases located in Yazoo County, Mississippi, our principal business became the exploration, development, and production of oil and gas interests.

On May 16, 2012, the Company entered into an agreement to acquire all of the outstanding shares of Carpathian Energy SRL (hereafter, “Carpathian”), in exchange for 90,000,000 shares of restricted common stock of the Company (such transaction is hereafter referred to as the “Acquisition”). Carpathian is a Romanian limited liability company engaged in oil & gas exploration and development. Pursuant to the terms of agreement entered into in connection with the Acquisition, the former owners of Carpathian may rescind the Acquisition and reclaim the shares of Carpathian in the event that the Company does not invest at least $5 million toward development of Carpathian’s oil and gas assets.

On August 7, 2013, the Company entered into an agreement to acquire two separate working interests (collectively, the “Working Interests”) in certain oil and gas leases in Matagorda County, Texas. The consideration granted by the Company in exchange for the Working Interests consisted of one hundred and fifty thousand ($150,000) dollars. The Company failed to provide the appropriate consideration for these Working Interests so this initial agreement is null and void. On January 13, 2015, the Company purchased an option to acquire 1,500 acres of leases northwest of the town of Palacios, Matagorda County, Texas (the "Airport Lease"). The Company had until February 5, 2015 to tender $150,000 for the Airport Lease from the city of Palacios. The Company is required to pay gross revenue royalties of 18.75% to the city of Palacios and 1.25% royalty to XXI Oil & Gas, LLC upon production in accordance with the Airport Lease. Upon tendering $150,000 for the Airport Lease, the Company will have three (3) years to get the Airport Lease into production. The deadline for this Airport Lease option to purchase has passed without payment. The Company is working with the city of Palacios for an extension to be able to perform on the $150,000 obligation.

Results of Operations

Following is our discussion of the relevant items affecting results of operations for the years ended December 31, 2014 and 2013.

Revenues. The Company generated net revenues of $-0- for both the years ended December 31, 2014 and 2013. The lack of revenues is mainly the result of the change in our business model from a reseller of computer hardware and software to an oil and gas exploration and development company.

Cost of Sales. Cost of sales for both the years ended December 31, 2014 and 2013 was $-0-. This is a result of zero sales and the change in our business model as discussed above.

Salaries and Consulting Expenses. For the years ended December 31, 2014 and 2013, salaries and consulting expenses consisted of salaries and benefits and outside consulting expenses. Salaries and consulting expenses for the year ended December 31, 2014 were $6,531,667 compared to $1,365,188 during the year ended December 31, 2013. The increase is mainly the result of the issuance of stock during 2014 to directors and consultants to assist us in securing oil and gas interests for potential investment. The stock was valued at the market price on the date of issuance which totaled $6,515,000. We expect that salaries and consulting expenses will increase commensurate with the expansion of the Company’s business as an oil and gas exploration, development, and production firm.

Professional Fees. Professional fees for the year ended December 31, 2014 were $200,953, compared to $201,478 during the year ended December 31, 2013. The change of our business to an oil and gas exploration, development, and production company will result in an increase in professional fees.

Other Selling, General and Administrative Expenses. For the years ended December 31, 2014 and 2013, selling, general and administrative expenses were comprised of advertising; occupancy and office expenses; equipment leases; travel and other miscellaneous administrative expenses. Selling, general and administrative expenses for the year ended December 31, 2014 were $379 compared to $8,107 during the year ended December 31, 2013. We expect that selling, general, and administrative expenses will continue to increase in the future in connection with the expansion of the Company’s business.

Other Income (Expense). We incurred net other expenses of $73,431 for the year ended December 31, 2014 compared to net other expense of $73,553 during the year ended December 31, 2013. Other expenses incurred during 2014 and 2013 were comprised primarily of interest expenses related to credit cards as well as promissory notes issued by the Company.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Personnel

We presently have four employees and four other project-based contract personnel that we utilize to carry out our business. We utilize contract personnel on a continuous basis, primarily in connection with our reporting obligations under the Securities Exchange Act of 1934. We expect to hire more full-time employees in the future. Although competition for personnel in the oil and gas industry is intense, we don’t believe we will have significant difficulty retaining additional employees or contract personnel in the future.

Liquidity and Capital Resources

Since inception, the Company has financed its operations through a series of loans, credit accounts with hardware vendors, and the use of Company credit to procure goods and services. As of

December 31, 2014, our primary source of liquidity consisted of $452 in cash and cash equivalents. We expect to secure additional debt or equity capital to finance substantial business development initiatives or acquire additional oil and gas interests.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company we are not required to provide this information.

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONTENTS

Report of Independent Registered Public Accounting Firm	19
Balance Sheets	20
Statements of Operations	21
Statements of Stockholders’ Deficit	22
Statements of Cash Flows	23
Notes to the Financial Statements	24

PRITCHETT, SILER & HARDY, P.C.

CERTIFIED PUBLIC ACCOUNTANTS

A PROFESSIONAL CORPORATION

1466 N. HIGHWAY 89 STE. 230

FARMINGTON, UTAH 84025

_______________

(801) 447-9572 FAX (801) 447-9578

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Start Scientific, Inc.

San Antonio, TX

We have audited the accompanying balance sheets of Start Scientific, Inc. as of December 31, 2014 and 2013 and the related statements of operations, stockholders’ deficit and cash flows for the years then ended. 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 Start Scientific, Inc. as of December 31, 2014 and 2013 and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the financial statements the Company has negative working capital, negative cash flows from operations, and recurring operating losses which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 10 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Pritchett, Siler & Hardy, P.C.

Pritchett, Siler & Hardy, P.C.

Farmington, Utah

March 25, 2015

START SCIENTIFIC, INC.
(An Exploration Stage Company)
Balance Sheets


ASSETS
	December 31,			December 31,
	2014			2013


CURRENT ASSETS

Cash and cash equivalents	$	452		$	8,799

Total Current Assets		452			8,799

TOTAL ASSETS	$	452		$	8,799

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable	$	12,120		$	10,940
Accrued expenses		652,986			626,656
Accounts payable and accrued liabilites - related parties		604,829			382,600
Notes payable		547,860			547,860
Notes payable - related parties		131,830			98,486

Total Current Liabilities		1,949,625			1,666,542

TOTAL LIABILITIES		1,949,625			1,666,542

STOCKHOLDERS' DEFICIT

Preferred stock, $0.0001 par value; 100 shares authorized,
100 and -0- issued and outstanding, respectively		—			—
Common stock, $0.0001 par value; 500,000,000 shares authorized,
125,665,000 and 109,165,000 shares issued and outstanding, respectively		12,567			10,917
Additional paid-in-capital		12,619,897			6,106,547
Deficit accumulated during exploration stage		(14,003,727	)		(7,197,297	)
Accumulated deficit		(577,910	)		(577,910	)

Total Stockholders' Deficit		(1,949,173	)		(1,657,743	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	452		$	8,799

The accompanying notes are an integral part of these financial statements

START SCIENTIFIC, INC.
(An Exploration Stage Company)
Statements of Operations

							From Exploration
							Stage (April 2,
	For the Years Ended						2012) through
	December 31,						December 31,
	2014			2013			2014
							(Restated - Note 12)


NET REVENUES	$	—		$	—		$	—

OPERATING EXPENSES

Salaries and consulting		6,531,667			1,365,188			12,937,594
Professional fees		200,953			201,478			564,285
Development costs		—			—			205,000
Other selling, general and administrative		379			8,107			43,248

Total Operating Expenses		6,732,999			1,574,773			13,750,127

LOSS FROM OPERATIONS		(6,732,999	)		(1,574,773	)		(13,750,127	)

OTHER INCOME (EXPENSES)

Interest expense		(73,431	)		(73,553	)		(253,600	)

Total Other Income (Expenses)		(73,431	)		(73,553	)		(253,600	)

LOSS BEFORE INCOME TAXES		(6,806,430	)		(1,648,326	)		(14,003,727	)

INCOME TAX EXPENSE		—			—			—

NET LOSS	$	(6,806,430	)	$	(1,648,326	)	$	(14,003,727	)

BASIC AND DILUTED:
Net loss per common share	$	(0.06	)	$	(0.02	)

Weighted average shares outstanding		117,004,726			109,165,000

The accompanying notes are an integral part of these financial statements

START SCIENTIFIC, INC.
(An Exploration Stage Company)
Statements of Stockholders' Deficit
For the Period April 2, 2012 through December 31, 2014

												Deficit
												Accumulated						Total
	Preferred Stock				Common Stock				Additional			During Exploration			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Paid-in Capital			Stage			Deficit			Deficit

Balance, April 2, 2012 (commencement of development stage)		100	$	—		500,000	$	50	$	24,950		$	—		$	(510,773	)	$	(485,773	)

Common stock issued for cash		—		—		1,200,000		120		299,880			—			—			300,000

Common stock issued for note payable		—		—		200,000		20		49,980			—			—			50,000

Common stock issued for services		—		—		7,265,000		727		2,985,023			—			—			2,985,750

Common stock issued for assets		—		—		100,000,000		10,000		(10,000	)		—			—			—

Stock options issued		—		—		—		—		1,702,676			—			—			1,702,676

Net loss for the year ended
December 31, 2012		—		—		—		—		—			(5,548,971	)		(67,137	)		(5,616,108	)

Balance, December 31, 2012 (Restated - Note 12)		100		—		109,165,000		10,917		5,052,509			(5,548,971	)		(577,910	)		(1,063,455	)

Stock options issued		—		—		—		—		1,054,038			—			—			1,054,038

Net loss for the year ended
December 31, 2013		—		—		—		—		—			(1,648,326	)		—			(1,648,326	)

Balance, December 31, 2013		100		—		109,165,000		10,917		6,106,547			(7,197,297	)		(577,910	)		(1,657,743	)

Common stock issued for services		—		—		16,500,000		1,650		6,513,350			—			—			6,515,000

Net loss for the year ended
December 31, 2014		—		—		—		—		—			(6,806,430	)		—			(6,806,430	)

Balance, December 31, 2014		100	$	—		125,665,000	$	12,567	$	12,619,897		$	(14,003,727	)	$	(577,910	)	$	(1,949,173	)

The accompanying notes are an integral part of these financial statements

START SCIENTIFIC, INC.
(An Exploration Stage Company)
Statements of Cash Flows

							From Exploration
							Stage (April 2,
	For the Years Ended						2012) through
	December 31,						December 31,
	2014			2013			2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss	$	(6,806,430	)	$	(1,648,326	)	$	(14,003,727	)
Adjustments to reconcile net loss to net
cash used by operating activities:
Stock based compensation		6,515,000			1,054,038			12,257,464
Expenses paid by related party		6,090			—			6,090
Debt issue costs		—			—			57,540
Amortization of debt discount		—			—			4,960
Changes in operating assets and liabilities:
Accounts receivable		—			—			1,800
Prepaid expenses		—			—			50,000
Accounts payable and accrued liabilities - related parties		222,229			236,962			604,829
Accounts payable and accrued expenses		27,510			364,635			574,658

Net Cash Provided (Used) by Operating Activities		(35,601	)		7,309			(446,386	)

CASH FLOWS FROM INVESTING ACTIVITIES:		—			—			—

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from notes payable		—			—			400,000
Proceeds from notes payable - related parties		27,804			1,400			41,217
Payments on notes payable - related parties		(550	)		—			(2,550	)

Net Cash Provided by Financing Activities		27,254			1,400			438,667

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS	$	(8,347	)	$	8,709		$	(7,719	)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		8,799			90			8,171

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	452		$	8,799		$	452

SUPPLEMENTAL CASH FLOW INFORMATION

Cash Payments For:
Interest	$	2,421		$	2,390		$	220,118
Income taxes	$	—		$	—		$	—

Non-cash financing activity:
Common stock issued for services	$	6,515,000		$	1,054,038		$	12,257,464

The accompanying notes are an integral part of these financial statements

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Start Scientific, Inc. (the Company) was formed in the state of Utah on February 4, 2004, with authorized common stock of 10,000,000 shares. The Company was subsequently reincorporated in the State of Delaware on February 14, 2006 with authorized common stock of 500,000,000 shares and authorized preferred stock of 100 shares. Both classes of stock have a par value of $0.0001 per share.

Prior to March 2012, we were a computer and technology hardware reseller to businesses and other organizations. Most of our clients were small and medium sized organizations, although we attempted to market our products and services to larger organizations. We also outsourced technology-related services to provide a full solution basket of technology products and services including hardware, software, network development and services. Our clients consisted of some retail purchasers and small to medium-sized organizations, operating mostly in North America, but we did have occasional clients in Europe. Due to our recent acquisition of oil and gas interests, our future business is expected to be based on the exploration, development, drilling, and production of various oil and gas properties. In particular, we intend to look for oil and gas opportunities in international markets. Whether in respect to the development of oil and gas interests in North America or overseas, we expect to align with industry partners in respect of the drilling and operation of these wells. Our long-term focus is to grow and develop existing oil and gas leasehold interests and acquire new interests within and without the continental United States. In addition, we intend to acquire interests in older wells that, with the application of newer technologies, may increase production and reserves.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The following policies are considered to be significant:

Accounting Method

The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a calendar year-end.

Cash and Cash Equivalents

Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basic and Fully Diluted Net Loss per Share of Common Stock

In accordance with Financial Accounting Standards No. ASC 260, “Earnings per Share,” basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. There are no common stock equivalents as of December 31, 2014 and 2013.

	December 31,
	2014			2013
Net loss (numerator)	$	(6,806,430	)	$	(1,648,326	)
Weighted average shares outstanding (denominator)		117,004,726			109,165,000
Basic and fully diluted net loss per share amount	$	(0.06	)	$	(0.02	)

Accounts Receivable

Accounts receivable are recorded net of the allowance for doubtful accounts. The Company generally offers 15-day credit terms on sales to its customers and requires no collateral. The Company maintains an allowance for doubtful accounts which is determined based on a number of factors, including each customer’s financial condition, general economic trends and management judgment. The Company had $-0- in accounts receivable at December 31, 2014 and 2013.

Inventories

Inventories are stated at the lower of average cost or market value. When there is evidence that the inventories value is less than original cost, the inventory is reduced to market value. The Company had $-0- in inventory at December 31, 2014 and 2013.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. When assets are disposed of, the cost and accumulated depreciation (net book value of the assets) are eliminated and any resultant gain or loss reflected accordingly. Betterments and improvements are capitalized over their estimated useful lives whereas repairs and maintenance expenditures on the assets are charged to expense as incurred.

Revenue Recognition

Revenue is recognized upon completion of services or delivery of goods where the sales price is fixed or determinable and collectibility is reasonably assured. Advance customer payments

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

are recorded as deferred revenue until such time as they are recognized. The Company does not offer any cash rebates. Returns or discounts, if any, are netted against gross revenues.

Recent Accounting Pronouncements

We have reviewed accounting pronouncements issued during the past two years and have adopted any that are applicable to the Company. We have determined that none had a material impact on our financial position, results of operations, or cash flows for the years ended December 31, 2014 and 2013.

Income Taxes

The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10.

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 basis. 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.

At December 31, 2014, the Company had net operating loss carryforwards of approximately $5,310,000 which may be offset against future taxable income through 2034. No tax benefit has been reported in the financial statements because the potential tax benefits of the net operating loss carryforwards are 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 future use.

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Net deferred tax assets consist of the following components as of December 31, 2014 and 2013:

	2014			2013
Deferred tax assets:
NOL Carryover	$	2,070,000		$	1,957,000
Valuation allowance		(2,070,000	)		(1,957,000	)
Net deferred tax asset	$	—		$	—

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 34% to pretax income from continuing operations for the years ended December 31, 2014 and 2013 due to the following:

	2014			2013
Federal tax benefit at 34%	$	(2,314,000	)	$	(561,000	)
Non-deductible stock-based compensation		2,541,000			411,000
State tax benefit		(340,000	)		(82,000	)
Change in Valuation allowance		113,000			232,000
	$	—		$	—

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

		Year ended December 31,
		2014		2013
Beginning balance	$	—	$	—
Additions based on tax positions related to current year		—		—
Additions for tax positions of prior years		—		—
Reductions for tax positions of prior years		—		—
Reductions in benefit due to income tax expense		—		—
Ending balance	$	—	$	—

At December 31, 2014, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate.

The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of December 31, 2014 and 2013, the Company had no accrued interest or penalties related to uncertain tax positions.

The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2014, 2013 and 2012, and since inception.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places cash and cash equivalents at well known quality financial institutions. Cash and cash equivalents at banks are insured by the Federal Deposit Insurance Corporation for up to $250,000. The Company did not have any cash or cash equivalents in excess of this amount at December 31, 2014 and 2013.

NOTE 3. WORKING INTEREST IN OIL LEASES

On August 7, 2013, the Company entered into an agreement to acquire two separate working interests in certain oil and gas leases in Matagorda County, Texas. The consideration granted by the Company in exchange for the Working Interests consisted of one hundred and fifty thousand ($150,000) dollars which had not been paid by the Company as of December 31, 2014. Subject to the Primary Terms of the Working Interest leases, the leases shall be for a term of five (5) years (“Primary Term”), and so long thereafter as oil or gas is produced in paying quantities from said land, or as long as continuous drilling or reworking operations are being conducted on said land. Since consideration has not been given, no significant rework has commenced and, accordingly, no working interest has been recorded.

NOTE 4. RELATED PARTY TRANSACTIONS

The Company issued certain promissory notes to related individuals and/or their companies as disclosed in Note 6. The individuals consist of an officer of the Company and a director of the Company. The Company received advances of $27,804 and $1,400, respectively; and made payments on these advances of $550 and $-0-, respectively, during the years ended December 31, 2014 and 2013.

Accounts payable and accrued liabilities – related parties consisted of the following as of December 31, 2014 and 2013:

	2014		2013
Accounts payable	$	416,757	$	246,757
Accrued interest		72,732		45,003
Misc. loans and advances		115,340		90,840
Total	$	604,829	$	382,600

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 5. NOTES PAYABLE

Notes payable consisted of the following:	December 31, 2014			December 31, 2013
Note payable to a company, interest at 24% per annum, due on demand, unsecured	$	7,100		$	7,100
Notes payable to individuals, interest at 10% per annum, due on demand, unsecured		40,760			40,760
Note payable to an individual, interest at 10% per annum, due on August 27, 2012, unsecured, in default		100,000			100,000
Notes payable to an individual, interest at 6% per annum, due on July 13, 2013, unsecured, in default		100,000			100,000
Notes payable to individuals, interest at 8% per annum, due on August 30, 2013 and September 9, 2013, unsecured, in default		300,000			300,000
Total Notes Payable		547,860			547,860
Less: Current Portion		(547,860	)		(547,860	)
Long-Term Notes Payable	$	—		$	—

Accrued interest at December 31, 2014 and 2013 was $95,546 and $52,267, respectively. These amounts are included in accrued expenses on the balance sheet.

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 6. NOTES PAYABLE – RELATED PARTIES

Notes payable – related parties consisted of the following:	December 31, 2014			December 31, 2013
Note payable to a related individual, interest at 24% per annum, due on demand, unsecured	$	60,901		$	60,901
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured		16,578			16,578
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured		4,145			4,145
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured		16,578			16,578
Notes payable to a company, due on demand, unsecured		33,628			284
Total Notes Payable – Related Parties		131,830			98,486
Less: Current Portion		(131,830	)		(98,486	)
Long-Term Notes Payable – Related Parties	$	—		$	—

Accrued interest at December 31, 2014 and 2013 was $72,732 and $45,003, respectively.

NOTE 7. EQUITY TRANSACTIONS

On February 14, 2006, the Board of Directors approved the Company’s amended and restated Articles of Incorporation (Amendment). The Amendment increases the authorized shares of common stock from 10,000,000 to 100,000,000 shares. The Amendment also provides for a new class of preferred stock with 10,000,000 shares authorized. The rights and preferences of the preferred stock have yet to be determined. Both common and preferred stock have a par value of $0.001.

On July 6, 2011, the Company issued 100 shares of Series “A” Preferred Stock in exchange for the forgiveness of $25,000 in debt. The Series A Preferred Stock carries no dividend, distribution, liquidation, or rights of conversion into common stock, but holds 10,000,000 votes per share.

On February 29, 2012, in exchange for $100,000, the Company issued 200,000 shares of restricted common stock and a promissory note in the original principal amount of $100,000 (“Note”) to an investor. The Note matures on August 27, 2012 and carries a fixed interest payment at maturity of $25,000. As part of the note issuance, the Company recorded debt issue costs of $50,000 and a discount on the note of $19,048. These amounts are being amortized over the 6 month term of the note.

On March 1, 2012, the Company accepted the subscription of an investor for $300,000 in exchange for 1,200,000 shares of restricted common stock.

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 7. EQUITY TRANSACTIONS (Continued)

On April 2, 2012, the Company entered into an agreement to acquire two separate one-fourth (1/4) working interests (collectively, the “Working Interests”) in certain oil and gas leases covering the Board of Education No. 6 Well located in Yazoo County, Mississippi. The consideration granted by the Company in exchange for the Working Interests consisted of 10,000,000 shares of restricted common stock. Until the working interests could be developed and reserve estimates and feasibility studies have been undertaken, the Company’s management has determined that the value of the working interests is nominal. In addition, since the working interests were acquired with shares issued to an entity under common control, the assets have been recorded at a nominal historical cost in accordance with ASC Topic 805-50-05-4.

On May 16, 2012, the Company entered into an agreement to acquire all of the outstanding shares of Carpathian Energy SRL in exchange for 90,000,000 shares of restricted common stock of the Company. Carpathian is a Romanian limited liability company engaged in oil and gas exploration and development. Pursuant to the terms of the agreement, the current owners of Carpathian may rescind the Acquisition and reclaim the shares of Carpathian in the event that the Company does not invest at least $5 million toward development of Carpathian’s oil and gas assets within 60 days from the date of the agreement. In addition, since the acquisition is being acquired with shares issued to an entity under common control, the assets will be recorded at a nominal historical cost in accordance with ASC Topic 805-50-05-4. As of December 31, 2014 the Company has issued 90,000,000 shares to the current owners of Carpathian but the acquisition has not closed and the ownership of Carpathian has not yet been transferred to the Company. Thus the issued shares are considered to be a prepaid deposit with a zero value.

On June 12, 2012, the Company entered into a consulting agreement with JT Arco, LLC. a New Jersey-based Corporation. Pursuant to the terms of the Agreement the Company issued 500,000 restricted shares of its common stock.

On August 1, 2012, the Company issued 5,000,000 shares of common stock of the Company to an officer of the Company for services pertaining to business development.

On August 15, 2012, the Company amended that certain consulting agreement with JT Arco, LLC, a New Jersey-based Corporation. Pursuant to the terms of the Addendum Agreement the Company issued an additional 500,000 restricted shares of its common stock.

During the year ended December 31, 2014, the Company issued 16,500,000 shares of its common stock for consulting and legal services rendered to the Company. The stock was

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 7. EQUITY TRANSACTIONS (Continued)

valued at the market price on the date of issuance which totaled $6,515,000. This amount is included in salaries and consulting expenses on the statement of operations.

NOTE 8. OPTIONS AND WARRANTS

The Company has adopted FASB ASC 718, “Share-Based Payments” (“ASC 718”) to account for its stock options. The Company estimates the fair value of each stock award at the grant date by using the Black-Scholes option pricing model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized only for those options expect to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations.

The following table summarizes the changes in options outstanding issued to employees of the Company:

	Number of Shares		Weighted Average Exercise Price
Outstanding as of January 1, 2013		10,500,000	$	—
Granted		—		—
Exercised		—		—
Cancelled		10,500,000		0.65
Outstanding at December 31, 2013		—	$	0.65
Granted		—		—
Exercised		—		—
Cancelled		—		—
Outstanding at December 31, 2014		—	$	—

On July 25, 2014, the board of directors cancelled all of the vested and unvested options that it had granted pursuant to the Company's 2012 Equity Incentive Plan. 10,500,000 options were granted on May 4, 2012 to certain directors, and cancelled on July 25, 2014. Each grantee of active options consented to this cancellation. As of the date of this report, the company has no outstanding options. In addition, no options have ever been exercised by any option holder of the company. The cancellation also revoked any shares that would have vested in 2014 under the same plan. However, shares vested prior to cancellation remain expensed amounting to $-0- and $1,054,038 in 2014 and 2013, respectively.

NOTE 9. FINANCIAL INSTRUMENTS

On January 1, 2008, the Company adopted FASB ASC 820-10-50, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 9. FINANCIAL INSTRUMENTS (Continued)

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

NOTE 10. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has a working capital deficit, negative cash flows from operations and has sustained net losses from inception which have resulted in an accumulated deficit at December 31, 2014 of $14,581,637 and has experienced periodic cash flow difficulties, all of which raise substantial doubt regarding the Company’s ability to continue as a going concern.

To date the Company has funded its operations through a combination of loans. The Company anticipates another net loss for the year ended December 31, 2015 and with the expected cash requirements for the coming year, there is substantial doubt as to the Company’s ability to continue operations.

The Company is attempting to improve these conditions by way of financial assistance through issuances of additional equity and by generating revenues through sales of products and services.

NOTE 11. SUBSEQUENT EVENTS

On February 11, 2015, the Company issued 5,000,000 shares of its common stock to a consultant of the Company for services rendered.

On February 10, 2015, the Company issued a promissory note in the original principal amount of $33,000 (“Note”) to a lender. The Note matures on November 12, 2015 and carries

START SCIENTIFIC, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2014 and 2013

NOTE 11. SUBSEQUENT EVENTS (Continued)

an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest trading days in the ten trading days previous to the conversion.

On March 6, 2015, the Company entered into a Note Purchase Agreement (the “Note Purchase”) in respect of a credit line and associated convertible debenture (“Debenture”) in the original principal amount up to $220,000. As of March 6, 2015, the Company recorded a $50,000 draw down and consideration in respect of the credit line. The Debenture matures on March 6, 2016 (the “Maturity Date”), and bears interest at the rate of 10% per annum. The Debenture, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to the lower of $.10 or 58% of the lowest trading price of the Company’s common stock during the 20 previous consecutive trading days. The Note Purchase and the Debenture contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no other events that would have a material impact on the financial statements.

NOTE 12. RESTATEMENT

Subsequent to the issuance of its December 31, 2012 10-K and financial statements, the Company discovered errors in its accounting for prepaid assets and working interests in oil and gas leases, which were acquired with the Company’s common stock. Namely, the assets

acquired were valued at the applicable per share value of the Company’s common stock on the day of issuance rather than using historical cost as the valuation method for the underlying assets acquired from an entity under common control. Accordingly, Prepaid Assets, Working Interests In Oil Leases, and Additional Paid-In Capital were restated to reflect these changes as follows:

	As Originally Stated			As Restated			Change

Prepaid Assets	$	22,645,000		$	—		$	(22,645,000	)
Working Interests in Oil Leases	$	2,560,000		$	—		$	(2,560,000	)
Total Assets	$	25,205,090		$	90		$	25,205,000
Development Expenses	$	205,000		$	—		$	(205,000	)
Net Loss	$	(5,821,108	)	$	(5,616,108	)	$	205,000
Additional Paid-In Capital	$	30,052,509		$	5,052,509		$	(25,000,000	)
Deficit Accumulated During the Exploration Stage	$	(5,753,971	)	$	(5,547,971	)	$	205,000
Total Stockholders. Deficit	$	(26,268,455	)	$	(1,063,455	)	$	25,205,000

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A: CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, to allow for timely decisions regarding required disclosure.

As of December 31, 2014, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report. Our board of directors has five members. We do not have a formal audit committee.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended). In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of December 31, 2014, our internal control over financial reporting is ineffective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and

is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal controls over financial reporting that occurred during the year ended December 31, 2014 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 9B: OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officers

Name	Age	Position
Norris R. Harris (1)	81	Chief Executive Officer, Secretary, and Chairman of the Board
S. Arne D. Greaves (2)	51	Director
Ruben Flores	37	Director

(1)

Appointed August 16, 2013.

(2)

On August 16, 2013, Mr. Greaves resigned as Chief Executive Officer but remains on as a director of the Company.

Norris R. Harris. Mr. Harris, age 81, is the Chief Executive Officer and the Chairman of the Board. Mr. Harris is also a Founder of King Resources, Inc. Mr. Harris has been the Chairman and Chief Executive Officer of Royalite Petroleum Company, Inc. since March 31, 2008 and its President since February 2009. He has been owner and operator of May Petroleum, Inc. since January 1, 2007, Range Resources since January 1, 2006 and Gulfport Oil And Gas, Inc. since January 1, 2003. He served as the Chief Executive Officer and President of Gulfport Oil & Gas Inc. since January 1999. Mr. Harris has over 50 years of considerable experience in oil and gas exploration, founding and restructuring of oil and gas companies and in oil and gas drilling and operations. Mr. Harris has an extensive base of contacts in the oil and gas industry. He served as an independent oil and gas operator and Consultant for various independent oil and gas companies from 1993 to January 1999. Mr. Harris was the Founder of Centex Oil and Gas Inc., (Name changed to Cenergy) and served as its President. He was the Founder of Basin Exploration Corporation, a subsidiary of Basin Petroleum Corp., and served as its President. Mr. Harris has considerable international oil and gas exploration experience as a geophysicist with Mobil Oil Corporation, where he worked in Turkey, Austria, Holland, England (North Sea) and Nigeria. Mr. Harris served as an Officer or Director of Texas Arkansas Petroleum Company. Since 1988, he drilled wells for his own account in Alabama and Texas. He has been the Chairman of King Resources, Inc. and its

holding company Gulfport Oil & Gas Inc. since January 28, 2008 and May 5, 1999 respectively. He has been a Director of Gulfport Oil & Gas Inc. since January 1999. Mr. Harris has been a member of the AAPG (American Association of Petroleum Geologists) since October 20, 1980 and is an Emeritus Member of the Society Exploration Geophysicists. On April 27, 2011 Mr. Harris was permanently barred from transacting business as a dealer, agent, investment advisor or investment advisor representative in the state of Alabama by the Alabama Securities Commission stemming from a finding that Mr. Harris sold an oil lease without proper licensing. On March 27, 2006 Mr. Harris entered into a consent order with the state of Tennessee Department of Commerce and Insurance to be permanently barred from seeking registration as a broker-dealer, agent of a broker-dealer, investment adviser, or investment advisor representative and agreed to pay $111,663 in restitution and rescind investments from Tennessee residents

S. Arne D. Greaves. Mr. Greaves, age 52, is the Former Chief Executive Officer and Former Chairman of the Board of Directors of the Company and currently serves as Board member. Since 1983, he has been working in the oil and gas industry. In May 2001, Mr. Greaves co-founded Carpathian Energy Companie Petroliera S.R.L., a Romanian oil and gas production company, and has actively been involved the acquisition of concessions and development plans for reentries and development of new wells. Since November 2007, he has been the President of Livingston Operating Company, LLC, a family-owned oil and gas production company, based in Jackson, Mississippi.

Ruben Flores. Mr. Flores, age 38. Mr. Flores is a non-executive director of the Company. He specializes in corporate finance with commercial lenders, hedge funds, private equity groups, and other forms of structured finance. Mr. Flores is the founder and has been the President of Definitive Commercial Capital, a Texas-based strategic finance company, since July 2005. Prior to July 2005, he was involved in the real estate mortgage industry. During March 2008, Mr. Flores filed a chapter 13 bankruptcy, and on October 2009 he voluntarily dismissed the bankruptcy. He has a Bachelor of Business Administration from the University of Incarnate Word in San Antonio, Texas.

Compensation of Directors

Board of Directors Meetings and Committees

Although various items were reviewed and approved by the Board of Directors during 2014, the Board of Directors held no formal meetings during the fiscal year ended December 31, 2014. The remaining actions of the Board were approved by unanimous written consent.

The Company does not have Audit or Compensation Committees of the Board of Directors.

Code of Ethics

The Company expects that its Officers and Directors will maintain appropriate standards of honesty and ethical conduct in connection with the performance of their duties on behalf of the Company. In recognition of this expectation, the Company has adopted a Code of Ethics. The purpose of this Code of Ethics is to codify standards the Company believes are reasonably necessary to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships and full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”), or other regulatory bodies and in other public communications made by the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

We are required to identify each person who was an officer, director or beneficial owner of more than 10% of our registered equity securities during our most recent fiscal year and who failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934.

For the 2014 fiscal year we are unaware of any officer, director or beneficial owner of more that 10% of our registered equity securities who failed to file reports on a timely basis in accordance with Section 16(a) of the Securities Exchange Act of 1934.

ITEM 11. EXECUTIVE COMPENSATION

The following table summarizes the total compensation, for the two fiscal years ended December 31, 2014 and 2013, of our executive officers. Our company did not award cash bonuses, stock awards, stock options or non-equity incentive plan compensation to any Named Executive Officer during the past two fiscal years, thus these items are omitted from the table below:

Summary Compensation Table

Name and Principal Position	Year		Salary		Stock Awards		All Other Compensation		Total

Norris R. Harris		2014	$	—	$	—	$	—	$	—
Chief Executive		2013	$	—	$	—	$	—	$	—
Officer (1)

S. Arne D. Greaves		2014	$	—	$	—	$	—	$	—
former Chief Executive		2012	$	—	$	—	$	—	$	—
Officer (1)

George Edwards		2014	$	—	$	—	$	—	$	—
former Chief Financial		2013	$	—	$	—	$	—	$	—
Officer (2)

John D. Thomas		2014	$	—	$	2,590,000	$	—	$	—
VP of Business		2013	$	—	$	—	$	—	$	—
Development (3)
Kenneth I. Denos		2014	$	—	$	2,800,000	$	—	$	—
Former director (4)		2013	$	—	$	—	$	—	$	—

(1) Appointed May 3, 2012.

(2) Appointed May 3, 2012.

(3) Appointed August 15, 2012.

(4) Appointed

Employment Agreements

Currently Norris R. Harris serves at the discretion of the Board of Directors, however, the Board of Directors intend to formalize Mr. Harris’ relationship with the Company through an employment agreement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding the beneficial ownership of our common stock (par value $0.001 per share) as of March 4, 2015 by (i) each person (or group of affiliated persons) who is known by us to beneficially own more than 5% of the outstanding shares of our common stock, (ii) each person serving as a director or executive officer of the Company, and (iii) all directors and executive officers of the Company as a group. As of such date, we had 125,665,000 shares of common stock outstanding.

Name of Beneficial Owner⁽¹⁾	Number of Shares Beneficially Owned ⁽²⁾	Percent of Class⁽³⁾
Norris R. Harris⁽⁴⁾	100,000,000	79.58%
S. Arne D. Greaves⁽⁵⁾	0	*
Kenneth Denos⁽⁶⁾	8,012,657	6.38%
Ruben Flores⁽⁷⁾	0	*
Standard Energy Holdings, LLC⁽⁸⁾	100,000,000	79.58%
All officers and directors as a group (3 persons)⁽¹⁰⁾	100,000,000	79.58%

* Indicates ownership of less than 1%.

(1) The address of each officer, director, and beneficial owner is c/o the Company, 2003 My Anns Hill, San Antonio, TX 78258.

(2) The number of shares of common stock beneficially owned by any shareholder is determined by the sum of (i) all shares of common stock held directly or indirectly by such shareholder, and (ii) shares of common stock subject to options, warrants and/or conversion rights deemed beneficially owned by the shareholder that are currently exercisable or exercisable within 60 days. Excludes shares of Series A Preferred Stock beneficially held by Kenneth Denos that are not convertible into common stock but collectively hold 1,000,000,000 voting rights and are entitled to vote together with holders of common stock on all such matters upon which common stockholders may vote.

(3) The calculation of percentage of beneficial ownership is based upon: (i) 125,665,000 shares of common stock outstanding as of March 4, 2015, and (ii) shares of common stock subject to options, warrants and/or conversion rights deemed beneficially held by the shareholder that are currently exercisable or exercisable within 60 days. The percentage ownership of any shareholder is determined by assuming that the shareholder has exercised all options, warrants, and conversion rights to obtain additional securities, and that no other shareholder has exercised such rights. Except as otherwise indicated below, the persons and entity named in the table have sole voting and investment power with respect to all shares of common stock and voting rights shown as beneficially owned by them, subject to applicable community property laws.

(4) Chief Executive Officer, Secretary, and Chairman of the Board of Directors. Includes 100,000,000 shares of Standard Energy Holdings LLC. Mr. Harris is the beneficial owner of Standard Energy Holdings LLC.

(5) Former Chief Executive Officer and member of the Board of Directors.

(6) Former Director and a controlling shareholder of the Company. Includes 8,012,657 shares held directly. Excludes 100 shares of Series A Preferred Stock held by Acadia Group, Inc., a corporation owned and controlled by Mr. Denos. The Series A Preferred Stock carries no dividend, distribution, or liquidation, or common stock conversion rights, but holds 10,000,000 votes per share, enabling Mr. Denos to unilaterally control the election of the Board of Directors. If the Series A Preferred Stock is taken into account in determining percentage of beneficial ownership, Mr. Denos would beneficially hold 89.55% of the voting shares of the Company.

(7) Member of the Board of Directors.

(8) Principal shareholder of the Company. Includes 100,000,000 shares of common stock held directly.

Changes in Control

On July 6, 2011, in exchange for the forgiveness of $25,000 in amounts owed, the Company issued 100 shares of Series “A” Preferred Stock to Acadia Group, Inc., a corporation owned and controlled by Kenneth Denos, then a member of the Board of Directors of the Company. The Series A Preferred Stock carries no dividend, distribution, liquidation, or rights of conversion into common stock, but holds 10,000,000 votes per share, enabling Mr. Denos to unilaterally control the election of the Board of Directors.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

On January 2, 2015, the Company entered into a Farmout Agreement with BPS Operating Services LLC, located in Jackson, Mississippi. The Company has until April 1, 2015 to tender $500,000 for the first well to be drilled. The production interest includes 40 acres around the new well and the Company will earn a 75% working interest before payout, and a 60% working interest after payout. All of the production facilities, salt water disposal systems, and 33 well bores are in place. The Company may drill additional wells for $400,000 per well within 60 days of completion of each previously drilled well completion. No payments towards this Farmout Agreement have been made by yet by the Company as of the date of this annual report. Arne Greaves, a director of the Company is also a principal of BPS Operating Services LLC.

On January 21, 2015, the Company entered into a Farmout Agreement with Durban Energy, Inc., located in Jackson, Mississippi. The Company has until July 10, 2015 to commence drilling a new well on the farmout acreage. The Company will receive 100% of the net revenue until payout of all costs, at which time the Company will assign a 25% working interest to Durban and partners. There is a 30% royalty burden on the leases, which means that before payout the Company will have 70% of net revenue and after payout the Company will have 52.5% of net revenue and Durban will have 17.5% of net revenue. Each well will be treated separately for payout calculation. No payments towards this Farmout Agreement have been made by yet by the Company as of the date of this annual report. Arne Greaves, a director of the Company is also a principal of Durban Energy, Inc.

On July 6, 2011, in exchange for the forgiveness of $25,000 in amounts owed, the Company issued 100 shares of Series “A” Preferred Stock to Kenneth I. Denos, P.C., a corporation owned and controlled by Kenneth Denos, then a member of the Board of Directors of the Company. The Series A Preferred Stock carries no dividend, distribution, liquidation, or rights of conversion into common stock, but holds 10,000,000 votes per share, enabling Mr. Denos to unilaterally control the election of the Board of Directors.

On June 10, 2004, $80,000 was loaned to the Company in the form of the payment of outstanding liabilities on behalf of the Company, and on January 1, 2005, the Company issued 3 promissory notes to the following individuals to formalize these non-cash payments in the prior year:

		Chene Gardner ($6,250), a former member of the Board of Directors and the Company’s former CEO;
		Kenneth Denos ($25,000), a former member of the Board of Directors; and
		Travis Pera ($23,750), son of Walter Pera, former Chairman of the Board of Directors.

The notes each mature upon demand, are unsecured, and bear interest at the rate of ten percent per annum.

Director Independence

Ruben Flores is the only Director considered to be independent, inasmuch as he does not beneficially hold greater than a 10% ownership interest in our common stock and is unrelated to any of our shareholders who hold any such interest. We have not established any board committees. We hope in the future to add at least one more independent director and establish one or more board committees including, in particular, an audit committee.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Change in Auditors

On or about January 1, 2014, Morrill and Associates, LLC (“Morrill”) combined with Pritchett, Siler and Hardy, LLC (“PSH”), an independent registered auditing firm. Due to the combination, the Company announced the dismissal of its prior independent registered accounting firm and the engagement of PSH as the successor form on Form 8-K filed on April 1, 2014.

During the period from the engagement of the former auditors through the change of auditors, including the registrant’s most recent fiscal year and the subsequent interim period, there were no disagreements with the former auditors, whether or not resolved, on any matter of accounting principles or practices, financial statements disclosure, or auditing scope or procedure, which, if not resolved to the former auditor’s satisfaction, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report.

The reports of Morrill and PSH did not contain any adverse opinions or disclaimer of opinions and were not qualified or modified as to uncertainty, audit scope or accounting principles.

Fees Billed For Audit and Non-Audit Services

The following table represents the aggregate fees billed for professional audit services rendered to the Company by Morrill and PSH for the audits of the Company’s annual financial statements for the years ended December 31, 2014 and 2013, respectively, and all fees billed for other services rendered by PSH and Morrill during those periods.

Year Ended December 31	2014		2013

Audit Fees⁽¹⁾	$	15,800	$	15,380
Audit-Related Fees⁽²⁾		0		0
Tax Fees⁽³⁾		0		0
All Other Fees⁽⁴⁾		0		0

Total Accounting Fees and Services	$	15,800	$	15,380

(1) Audit Fees. These are fees for professional services for the audit of the Company’s annual financial statements, and for the review of the financial statements included in the Company’s filings on Form 10-Q, and for services that are normally provided in connection with statutory and regulatory filings or engagements.

(2) Audit-Related Fees. These are fees for the assurance and related services reasonably related to the performance of the audit or the review of the Company’s financial statements.

(3) Tax Fees. These are fees for professional services with respect to tax compliance, tax advice, and tax planning.

(4) All Other Fees. These are fees for permissible work that does not fall within any of the other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax Fees.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following exhibits are filed with or incorporated by referenced in this report:

Item No.	Description

14.1	Code of Ethics for the Registrant.
21.1	Subsidiaries of the Registrant.
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Norris R. Harris.
31.1*	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for S. Norris R. Harris.

* filed herewith.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		START SCIENTIFIC, INC.

Date:	March 26, 2015	By:	/s/ Norris R. Harris
			Norris R. Harris
			Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Norris R. Harris

Chairman, Chief Executive Officer and principal financial officer

March 26, 2015

Start Scientific, Inc. - FORM 10-K - March 26, 2015

Attached files

Start Scientific, Inc. Reports