UNITED
STATES
  SECURITIES
AND EXCHANGE COMMISSION
  Washington,
D.C. 20549
  
  FORM
10-Q
  þ
              QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For the quarterly period ended June 30,
2009
  or
   ̈
              TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the transition period from ________ to __________
  Commission
File No. 000-30841
  
 UNITED
ENERGY CORP.
 (Exact
name of registrant as specified in its charter)
  Nevada
                  (State
      or other jurisdiction of
                  incorporation
      or organization)
                
                22-3342379
                  (I.R.S.
      Employer Identification No.)
 
  600
Meadowlands Parkway #20, Secaucus, N.J.  07094
 (Address
of principal executive offices)
 
 (800)
327-3456
 (Registrant's
telephone number, including area code)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding
12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.  þYes  ̈
No
  Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈  No þ
  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  ̈ (Do
      not check if a smaller reporting company)
                  
                  Smaller
      reporting company þ
  Indicate
by check mark whether the registrant is a shell company (as defined in rule
12b-2 of the Exchange Act.  Yes  ̈ No þ
  As of
August 14, 2009, 31,328,587 shares of common stock, par value $.01 per share,
were outstanding.
  
  INDEX
  PART
      I.  FINANCIAL INFORMATIONItem
      1.
                    Financial
      StatementsConsolidated
      balance sheets June 30, 2009 (Unaudited) andMarch
      31, 2009
                    
                    3-4Consolidated
      statements of operations for the three months ended June 30, 2009
      (Unaudited) and 2008 (Unaudited)
                    
                    5Consolidated
      statement of stockholders' equity for the three months ended June 30, 2009
      (Unaudited)
                    
                    6Consolidated
      statements of cash flows for the three months ended June 30, 2009
      (Unaudited) and 2008 (Unaudited)
                    
                    7-8Notes
      to consolidated financial statements
                    
                    9-16Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    
                    17-19Item
      3.
                    Quantitative
      and Qualitative Disclosures About Market Risk
                    
                    19Item
      4.
                    Controls
      and Procedures
                    
                    20PART
      II.  OTHER INFORMATIONItem
      1.
                    Legal
      Proceedings
                    
                    21Item
      1A.
                    Risk
      Factors
                    
                    21Item
      2.
                    Unregistered
      Sales of Equity Securities and Use of Proceeds
                    
                    21Item
      3.
                    Defaults
      Upon Senior Securities
                    
                    21Item
      4.
                    Submission
      of Matters to a Vote of Security Holders
                    
                    21Item
      5.
                    Other
      Information
                    
                    21Item
      6.
                    Exhibits
                    
                    21Signatures
                    
                    
                    22
  2
  Item
1. Financial
Statements
 
 UNITED
ENERGY CORP.  AND SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
  June
      30,
                  
                  
                  March
      31,2009
                  
                  
                  2009(Unaudited)ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
                  
                  $
                  110,616
                  
                  
                  $
                  56,372Accounts
      receivable, net of allowance for doubtful accounts of $10,040 and $7,032,
      respectively
                  
                  
                  165,142
                  
                  
                  
                  140,531Inventory
                  
                  
                  118,839
                  
                  
                  
                  155,427Prepaid
      expenses and other current assets
                  
                  
                  63,057
                  
                  
                  
                  79,237Loan
      receivable, net of reserve of $25,000
                  
                  
                  25,000
                  
                  
                  
                  25,000Total
      current assets
                  
                  
                  482,654
                  
                  
                  
                  456,567PROPERTY
      AND EQUIPMENT, net of accumulated depreciation and amortization of
      $469,856 and $462,091 respectively
                  
                  
                  100,329
                  
                  
                  
                  108,094OTHER
      ASSETS:Goodwill,
      net
                  
                  
                  15,499
                  
                  
                  
                  15,499Patents,
      net of accumulated amortization of $251,257 and $242,000,
      respectively
                  
                  
                  338,134
                  
                  
                  
                  347,661Loans
      receivable
                  
                  
                  3,993
                  
                  
                  
                  3,843Deposits
                  
                  
                  1,385
                  
                  
                  
                  1,385Total
      assets
                  
                  $
                  941,994
                  
                  
                  $
                  933,049
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  3
  UNITED
ENERGY CORP.  AND SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
  June
      30,
                              
                              
                              March
      31,2009
                              
                              
                              2009(Unaudited)LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Accounts
      payable
                              
                              $
                              201,352
                              
                              
                              $
                              189,609Accrued
      expenses
                              
                              
                              93,098
                              
                              
                              
                              107,622Convertible
      term note payable
                              
                              
                              -
                              
                              
                              
                              35,000Due
      to related parties
                              
                              
                              303,781
                              
                              
                              
                              150,000Total
      current liabilities
                              
                              
                              598,231
                              
                              
                              
                              482,231STOCKHOLDERS'
      EQUITY:Series
      A Convertible Preferred Stock:$8,000
      stated value; 100,000 sharesauthorized;
      3 shares issued and outstandingas
      of June 30, 2009 and March 31, 2009
                              
                              
                              24,000
                              
                              
                              
                              24,000Common
      stock: $0.01 par value 100,000,000 sharesauthorized;
      31,328,587 shares issued andoutstanding
      as of  June 30, 2009and
      March 31, 2009
                              
                              
                              313,286
                              
                              
                              
                              310,301Additional
      paid-in capital
                              
                              
                              22,268,430
                              
                              
                              
                              22,196,257Accumulated
      deficit
                              
                              
                              (22,261,953
                              )
                              
                              
                              (22,079,740
                              )Total
      stockholders' equity
                              
                              
                              343,763
                              
                              
                              
                              450,818Total
      liabilities and stockholders' equity
                              
                              $
                              941,994
                              
                              
                              $
                              933,049
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  4
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 
 For
      the Three MonthsEnded
      June 30,2009
                                                  
                                                  
                                                  2008(Unaudited)REVENUES,
      net
                                                  
                                                  $
                                                  394,004
                                                  
                                                  
                                                  $
                                                  213,638COST
      OF GOODS SOLD
                                                  
                                                  
                                                  153,714
                                                  
                                                  
                                                  
                                                  108,534Gross
      profit
                                                  
                                                  
                                                  240,290
                                                  
                                                  
                                                  
                                                  105,104OPERATING
      EXPENSES:Selling,
      general and administrative
                                                  
                                                  
                                                  351,032
                                                  
                                                  
                                                  
                                                  342,633Research
      and developement
                                                  
                                                  
                                                  51,496
                                                  
                                                  
                                                  
                                                  74,076Depreciation
      and amortization
                                                  
                                                  
                                                  12,077
                                                  
                                                  
                                                  
                                                  12,271Total
      operating expenses
                                                  
                                                  
                                                  414,605
                                                  
                                                  
                                                  
                                                  428,980Loss
      from operations
                                                  
                                                  
                                                  (174,315
                                                  )
                                                  
                                                  
                                                  (323,876
                                                  )OTHER
      INCOME (EXPENSE), net:Interest
      income
                                                  
                                                  
                                                  7
                                                  
                                                  
                                                  
                                                  802Interest
      expense
                                                  
                                                  
                                                  (7,545
                                                  )
                                                  
                                                  
                                                  (601
                                                  )Total
      other expense, net
                                                  
                                                  
                                                  (7,538
                                                  )
                                                  
                                                  
                                                  201Net
      loss
                                                  
                                                  
                                                  (181,853
                                                  )
                                                  
                                                  
                                                  (323,675
                                                  )PREFERRED
      DIVIDENDS
                                                  
                                                  
                                                  (360
                                                  )
                                                  
                                                  
                                                  (360
                                                  )Net
      loss applicable to common shareholders
                                                  
                                                  $
                                                  (182,213
                                                  )
                                                  
                                                  $
                                                  (324,035
                                                  )BASIC
      AND DILUTED LOSS PER SHARE,
                                                  
                                                  $
                                                  (0.01
                                                  )
                                                  
                                                  $
                                                  (0.01
                                                  )BASIC
      AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
                                                  
                                                  
                                                  31,180,991
                                                  
                                                  
                                                  
                                                  31,030,115
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  5
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
 FOR
THE THREE MONTHS ENDED JUNE 30, 2009 (UNAUDITED)
  AdditionalCommon
      Stock
                            
                            
                            Preferred
                            
                            
                            Paid-In
                            
                            
                            AccumulatedShares
                            
                            
                            Amount
                            
                            
                            Stock
                            
                            
                            Capital
                            
                            
                            Deficit
                            
                            
                            TotalBALANCE,
      April 1, 2009
                            
                            
                            31,030,115
                            
                            
                            $
                            310,301
                            
                            
                            $
                            24,000
                            
                            
                            $
                            22,196,257
                            
                            
                            $
                            (22,079,740
                            )
                            
                            $
                            450,818Compensation
      expense associated with options
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            356
                            
                            
                            
                            -
                            
                            
                            
                            356Compensation
      expense associated with warrants
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            39,802
                            
                            
                            
                            -
                            
                            
                            
                            39,802Conversion
      of convertible noteinto common
      stock
                            
                            
                            298,472
                            
                            
                            
                            2,985
                            
                            
                            
                            -
                            
                            
                            
                            32,015
                            
                            
                            
                            -
                            
                            
                            
                            35,000Dividends
      accrued onpreferred shares
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (360
                            )
                            
                            
                            (360
                            )Net
      loss
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (181,853
                            )
                            
                            
                            (181,853
                            )BALANCE,
      June 30, 2009
                            
                            
                            31,328,587
                            
                            
                            $
                            313,286
                            
                            
                            $
                            24,000
                            
                            
                            $
                            22,268,430
                            
                            
                            $
                            (22,261,953
                            )
                            
                            $
                            343,763
  6
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008
  2009
                                    
                                    
                                    2008(Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss from continuing operations
                                    
                                    $
                                    (181,853
                                    )
                                    
                                    $
                                    (323,675
                                    )Adjustments
      to reconcile net loss to net cash used in operating
      activitiesDepreciation
      and amortization
                                    
                                    
                                    17,292
                                    
                                    
                                    
                                    13,880Allowance
      for doubtful accounts
                                    
                                    
                                    3,008
                                    
                                    
                                    
                                    427Compensation
      expense associated with warrants
                                    
                                    
                                    39,802
                                    
                                    
                                    
                                    -Compensation
      expense associated with warrants
                                    
                                    
                                    356
                                    
                                    
                                    
                                    6,442Changes
      in operating assets and liabilitiesAccounts
      receivable
                                    
                                    
                                    (27,619
                                    )
                                    
                                    
                                    (94,376
                                    )Inventory
                                    
                                    
                                    36,588
                                    
                                    
                                    
                                    (19,249
                                    )Prepaid
      expenses and other current assets
                                    
                                    
                                    16,180
                                    
                                    
                                    
                                    23,160Accounts
      payable and accrued expenses
                                    
                                    
                                    (2,781
                                    )
                                    
                                    
                                    15,597Net
      cash used in operating activities
                                    
                                    
                                    (99,027
                                    )
                                    
                                    
                                    (377,794
                                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Employee
      loans
                                    
                                    
                                    (150
                                    )
                                    
                                    
                                    (713
                                    )Payments
      for acquisition of property and equipment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (1,054
                                    )Payments
      for patents
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (5,786
                                    )Cash
      used in investing activities
                                    
                                    
                                    (150
                                    )
                                    
                                    
                                    (7,553
                                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from related party loans
                                    
                                    
                                    153,781
                                    
                                    
                                    
                                    -Preferred
      stock dividend
                                    
                                    
                                    (360
                                    )
                                    
                                    
                                    (360
                                    )Net
      cash provided by (used in) financing activities
                                    
                                    
                                    153,421
                                    
                                    
                                    
                                    (360
                                    )Net
      increase (decrease) in cash and cash equivalents
                                    
                                    
                                    54,244
                                    
                                    
                                    
                                    (385,707
                                    )CASH
      AND CASH EQUIVALENTS, beginning of period
                                    
                                    
                                    56,372
                                    
                                    
                                    
                                    858,575CASH
      AND CASH EQUIVALENTS, end of period
                                    
                                    $
                                    110,616
                                    
                                    
                                    $
                                    472,868
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  7
  UNITED
ENERGY CORP. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008
  2009
                        
                        
                        2008(Unaudited)SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Cash
      paid during the periodInterest
                        
                        $
                        580
                        
                        
                        $
                        601Income
      taxes
                        
                        $
                        1,040
                        
                        
                        $
                        1,560SUPPLEMENTAL
      DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:Conversion
      of note into common stock
                        
                        $
                        35,000
                        
                        
                        $
                        -
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  8
  UNITED
ENERGY CORP.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
30, 2009 (Unaudited)
  1.
              BASIS
      OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES
  Basis
of presentation
  Interim
Financial Statements
  The
accompanying unaudited consolidated financial statements of United Energy Corp.
(“we”, “United Energy” or the “Company”) have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, the unaudited interim financial statements furnished herein
include all adjustments necessary for a fair presentation of the Company's
financial position at June 30, 2009 (unaudited) and the results of its
operations for the three months ended June 30, 2009 and 2008 (unaudited) and
cash flows for the three months ended June 30, 2009 and 2008 (unaudited). All
such adjustments are of a normal and recurring nature. Interim financial
statements are prepared on a basis consistent with the Company's annual
financial statements. Results of operations for the three months ended June 30,
2009 are not necessarily indicative of the operating results that may be
expected for the year ending March 31, 2010.
  The
consolidated balance sheet as of March 31, 2009 has been derived from the
audited financial statements at that date but does not include all of the
information and notes required by accounting principles generally accepted in
the United States for complete financial statements.
  For
further information, refer to the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2009.
  Going
Concern– The accompanying
consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America which
contemplate continuation of the Company as a going concern. However, the Company
has year end losses from operations and has an accumulated deficit of
$22,261,953 as of June 30, 2009.During the three months ended June 30,
2009 the Company experienced a net loss from operations of $181,853 and a
negative cash flow from operations of $99,027.  These matters raise
substantial doubt about the Company’s ability to continue as a going concern.
Our consolidated financial statements do not include any adjustment that might
result from the outcome of this uncertainty.
  Our
continued existence is dependent upon several factors, including raising
additional funds through loans, additional sales of its equity securities,
increased sales volumes and the ability to achieve profitability from the sales
of our product lines.  In order to increase our cash flow, we are
continuing our efforts to stimulate sales and cut back expenses not directly
supporting our sales and marketing efforts.
 
 There can
be no assurance that we will be successful in stimulating sales or reducing
expenses to levels sufficient to generate cash flow sufficient to fund our
anticipated liquidity requirements. There also can be no assurance that
available financing will be available, or if available, that such financing will
be on terms acceptable to us.
 
 2
              NET
      LOSS PER SHARE
  Basic net
loss per share is computed based upon the weighted average number of common
shares outstanding during the periods and is computed by dividing net loss by
the adjusted weighted average number of shares during the
periods.
  9
  3
                RECENTLY
      ISSUED ACCOUNTING STANDARDS
  Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting
Principles
 
 In June
2009, the Financial Accounting Standards Board issued Statement “FASB” issued
Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles” (“SFAS No. 168”).  SFAS
No. 168 will become the single source of authoritative nongovernmental U.S.
generally accepted accounting principles (“GAAP”), superseding existing FASB,
American Institute of Certified Public Accountants (“AICPA”), Emerging Issues
Task Force (“EITF”), and related accounting literature.  SFAS No. 168
reorganizes the thousands of GAAP pronouncements into roughly 90 accounting
topics and displays them using a consistent structure.  Also included
is relevant Securities and Exchange Commission guidance organized using the same
topical structure in separate sections.  SFAS No. 168 will be
effective for financial statements issued for reporting periods that end after
September 15, 2009.  This statement will have an impact on the
Company’s financial statements since all future references to authoritative
accounting literature will be references in accordance with SFAS No.
168.
  Subsequent
Events
 
 In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”.(“SFAS No. 165”)
This Statement establishes general standards of accounting for and disclosures
of events that occur after the balance sheet date but before financial
statements are issued or are available to be issued.  It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date and is effective for interim and annual periods
ending after June 15, 2009.  The adoption of SFAS No. 165 is not
expected to have a material impact on the Company’s financial
statements.
 
 Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not
Orderly
  In April
2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly". This FSP provides additional
guidance for estimating fair value in accordance with FASB Statement No. 157,
Fair Value Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. FSP FAS
No. 157-4 is effective for interim and annual reporting periods ending after
June 15, 2009, and shall be applied prospectively.The
implementation of FSP FAS No. 157-4 did not have a material on the Company’s
financial position and results of operations.
  Recognition
and Presentation of Other-Than-Temporary Impairments
  In April
2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairments ". The objective of an
other-than-temporary impairment analysis under existing U.S. generally accepted
accounting principles (GAAP) is to determine whether the holder of an investment
in a debt or equity security for which changes in fair value are not regularly
recognized in earnings (such as securities classified as held-to-maturity or
available-for-sale) should recognize a loss in earnings when the investment is
impaired. An investment is impaired if the fair value of the investment is less
than its amortized cost basis. FSP FAS No. 115-2 and FAS No. 124-2 is effective
for interim and annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. Earlier adoption for
periods ending before March 15, 2009, is not permitted.  The
implementation of FSP FAS No. 115-2 and FAS No. 124-2 did not have a material
impact on the Company’s financial position and results of
operations.
  10
  Interim
Disclosures about Fair Value of Financial Instruments
  In April
2009, the FASB issued FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures
about Fair Value of Financial Instruments". This FSP amends SFAS No. 107, Disclosures about Fair Value of
Financial Instruments,to require disclosures about fair value of
financialinstruments for interim
reporting periods of publicly traded companies as well as in annualfinancial statements.
This FSP also amends APB Opinion No. 28, Interim Financial Reporting,to require those disclosures in summarized financial information at
interim reporting periods. FSP FAS No. 107-1 is effective for interim reporting
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009.  The implementation of FSP FAS No. 107-1
did not have a material impact on the Company’s financial position and results
of operations
  Interim
Disclosure about Fair Value of Financial Instruments
 
 In April
2009, the FASB issued FASB Staff Position “FSP” No. SFAS 107-1 and APB 28-1,
“Interim Disclosures about Fair Value of Financial Instruments”.  This
FSP amends SFAS No. 107 to require disclosures about fair values of financial
instruments for interim reporting periods as well as in annual financial
statements.  The FSP also amends Accounting Principles Board Opinions
“APB Opinion” No. 28 to require those disclosures in summarized financial
information at interim reporting periods.  This FSP becomes effective
for interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009.  The adoption of
this FSP is not expected to have a material impact on our consolidated financial
statements.
 
 Amendments
to the Impairment Guidance of EITF Issue No. 99-20
 
 In
January 2009, the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No.
99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20". This
FSP amends the impairment guidance in EITF Issue No. 99-20, “Recognition of
Interest Income and Impairment on Purchased Beneficial Interests and Beneficial
Interests That Continue to Be Held by a Transferor in Securitized Financial
Assets,” to achieve more consistent determination of whether an
other-than-temporary impairment has occurred. The FSP also retains and
emphasizes the objective of an other than temporary impairment assessment and
the related disclosure requirements in FASB Statement No. 115, Accounting for Certain Investments
in Debt and Equity Securities,and other related guidance. This Issue is
effective for interim and annual reporting periods ending after December 15,
2008, and shall be applied prospectively. Retrospective application to a prior
interim or annual reporting period is not permitted. The adoption of FSP EITF
99-20-1 did not have a material effect on the Company’s consolidated financial
statements
  Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance
or Other Financing
  In
June 2009, the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No.
09-1, “Accounting for Own-Share Lending Arrangements in Contemplation of
Convertible Debt Issuance or Other Financing”. This Issue is effective for
fiscal years beginning on or after December 15, 2009, and interim periods within
those fiscal years for arrangements outstanding as of the beginning of those
fiscal years. Share lending arrangements that have been terminated as a result
of counterparty default prior to the effective date of this Issue but for which
the entity has not reached a final settlement as of the effective date are
within the scope of this Issue. This Issue requires retrospective application
for all arrangements outstanding as of the beginning of fiscal years beginning
on or after December 15, 2009. This Issue is effective for arrangements entered
into on or after the beginning of the first reporting period that begins on or
after June 15, 2009. Early adoption is not permitted. The Company is currently
assessing the impact of FSP EITF 09-1 on its financial position and results of
operations.
  Determining
the Fair Value of a Financial Asset When the Market for That Asset is Not
Active
  In
October 2008, the FASB issued FSP FAS No. 157-3, “Determining the Fair Value of
a Financial Asset When the Market for That Asset is Not Active.”  This
FSP clarifies the application of SFAS No. 157, “Fair Value Measurements,” in a
market that is not active.  The FSP also provides examples for
determining the fair value of a financial asset when the market for that
financial asset is not active.  FSP FAS No. 157-3 was effective upon
issuance, including prior periods for which financial statements have not been
issued.  The impact of adoption was not material to the Company’s
consolidated financial condition or results of operations.
  11
  The
Hierarchy of Generally Accepted Accounting Principles
 
 In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles.”  SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements.  SFAS No. 162 is effective 60
days following the SEC's approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity
with Generally Accepted Accounting Principles".  The implementation of
this standard will not have a material impact on the Company's consolidated
financial position and results of operations.
 
 Determination
of the Useful Life of Intangible Assets
 
 In April
2008, the FASB issued FSP FAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under SFAS No. 142 “Goodwill and Other Intangible
Assets”.  The intent of this FSP is to improve the consistency between the
useful life of a recognized intangible asset under SFAS No. 142 and the period
of the expected cash flows used to measure the fair value of the asset under
SFAS No. 141 (revised 2007) “Business Combinations” and other U.S. generally
accepted accounting principles.    The implementation of FSP FAS
No. 142-3 is not expected to have a material impact on its consolidated
financial statements.
 
 Disclosure
about Derivative Instruments and Hedging Activities
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosure about Derivative
Instruments and Hedging Activities, an amendment of SFAS No.
133.” This statement requires that objectives for using derivative instruments
be disclosed in terms of underlying risk and accounting designation. The Company
was required to adopt SFAS No. 161 on January 1, 2009. The adoption of SFAS
No.161 on January 1, 2009 did not have a material effect on the Company’s
consolidated financial statements
  Fair
Value Option for Financial Assets and Financial Liabilities
  In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities – Including an amendment of SFAS No.
115,” which becomes effective on February 1, 2008, permits companies to choose
to measure many financial instruments and certain other items at fair value and
report unrealized gains and losses in earnings. Such accounting is optional and
is generally to be applied instrument by instrument. The election of this
fair-value option did not have a material effect on its consolidated financial
condition, results of operations, cash flows or disclosures.
  Fair
Value Measurements
  In
September 2006, the FASB No. 157, “Fair Value Measurements” (“SFAS No. 157”).
SFAS No. 157 defines fair value, establishes a framework for measuring fair
value in accordance with generally accepted accounting principles and expands
disclosures about fair value investments. SFAS No. 157 was effective for
financial assets and liabilities on January 1, 2008. The statement deferred the
implementation of the provisions of SFAS No. 157 relating to certain
non-financial assets and liabilities until January 1, 2009. The adoption of SFAS
No.157 on January 1, 2009 for financial assets and liabilities did not have a
material effect on the Company’s consolidated financial
statements.
  12
  4.
              CONVERTIBLE
      DEBT
  On
January 28, 2009, the Company issued a convertible term note (the “Term Note”)
in the amount of $35,000, which accrues interest at 7% per year. Principal and
interest is payable on the maturity date of June 30, 2009. The holder of the
Term Note has the option to convert all or a portion of the note (including
principal and interest) into shares of common stock at any time at a conversion
price of $0.12 per share. The conversion price is subject to adjustment for
stock splits, stock dividends and similar events.
  On June
2, 2009, the conversion was exercised. In consideration for the conversion, the
Company issued to the holder of the note, warrants to acquire 140,000 shares of
Common Stock at an exercise price of $0.12.
  5.
              USE
      OF ESTIMATES
  The preparation of consolidated
financial statements in accordance with accounting principles generally accepted
in the United States of America requires the Company to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities.
  On an on-going basis, the Company
evaluates its estimates, including those related to option and warrant values,
bad debts, inventories, intangible assets, contingencies and litigation. The
Company bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other
sources.  Actual results may differ from these estimates under
different assumptions or conditions.
  6.
              RECLASSIFICATIONS
  Certain amounts in the June 30, 2008
consolidated financial statements have been reclassified to conform to the June
30, 2009 presentation.
  7.
              PROPERTY
      AND EQUIPMENT
  Property and equipment are stated at
cost.  Depreciation has been calculated over the estimated useful
lives of the assets ranging from 3 to 15 years.  Leasehold
improvements are amortized over the lives of the respective leases, which are
shorter than the useful life.  The cost of maintenance and repairs is
expensed as incurred.  Depreciation and amortization expense for the
period ended June 30, 2009 and the year ended March 31, 2009 were $7,765 and
$26,714, respectively.
  Property
and equipment consists of the following::
  June 30,
                        
                        
                        March 31,2009
                        
                        
                        2009Furniture
      and fixtures
                        
                        $
                        83,355
                        
                        
                        $
                        83,355Machinery
      and equipment
                        
                        
                        418,626
                        
                        
                        
                        418,626Vehicles
                        
                        
                        42,001
                        
                        
                        
                        42,001Leasehold
      improvements
                        
                        
                        26,203
                        
                        
                        
                        26,203570,185
                        
                        
                        
                        570,185Less:
      Accumulated depreciation and amortization
                        
                        
                        (469,856
                        )
                        
                        
                        (462,091
                        )Property
      and equipment, net
                        
                        $
                        100,329
                        
                        
                        $
                        108,094
  13
 
 8.
              INVENTORY
 
 Inventory consists of the
following:
 
 June 30,
                    
                    
                    March 31,2009
                    
                    
                    2009Blended
      chemicals
                    
                    $
                    53,445
                    
                    
                    $
                    92,944Raw
      materials
                    
                    
                    65,394
                    
                    
                    
                    62,483Total
      inventory
                    
                    $
                    118,839
                    
                    
                    $
                    155,427
 
 9.
              RELATED-PARTY
      TRANSACTIONS
  In March
2009, Ronald Wilen, a director, the President and the Chief Executive Officer,
Martin Rappaport, a director, and Sherleigh Associates Profit Sharing Plan
(“Sherleigh”), a trust of which Jack Silver, a director, is the trustee,
provided the Company with short term loans in the amount of $50,000 each, and
each received warrants to purchase up to 200,000 shares of common stock at an
exercise price of $.125 per share which warrants are exercisable for a period of
five (5) years.  Subsequently, in May 2009, the loan by Sherleigh was
repaid, and Messrs Wilen and Rappaport loaned the Company an additional $50,000
each, and Mr. Silver loaned the Company $101,017.  Thereafter, in June
2009, the Company amended the Messrs Wilen’s and Rappaport’s March 2009 notes
into secured convertible notes and issued to Messrs Wilen, Rappaport and Silver
secured convertible notes for their May 2009 loans to the
Company.  All of the convertible notes bear interest at 12% per annum,
are due August 13, 2009 and are secured by substantially all the assets of the
Company.  In consideration for agreeing to extend the maturity date of
the March 2009 loans and for making the May 2009 loans, Messrs Wilen, Rappaport
and Silver each received warrants to purchase up to 400,000 shares of common
stock at an exercise price of $.12 per share, which warrants are exercisable for
a period of five (5) years.
  10.
              EMPLOYEE
      BENEFITS PLAN
  Stock
Option Plans
  In August 2001, the Company’s
stockholders approved the 2001 Equity Incentive Plan (the “2001 Plan”), which
provides for the grant of stock options to purchase up to 2,000,000 shares of
common stock to any employee, non-employee director, or consultant at the
Board’s discretion.  Under the 2001 Plan, these options may be
exercised for a period up to ten years from the date of
grant.  Options issued to employees are exercisable upon vesting,
which can range between the dates of the grant to up to 5
years.
  An
amendment and restatement of the 2001 Equity Incentive Plan increasing the
number of shares for a total of 4,000,000 was approved by the Board of Directors
on May 29, 2002 and was approved by the shareholders at the annual
meeting.
  Under the 2001 Plan, options are
granted to non-employee directors upon election at the annual meeting of
stockholders at a purchase price equal to the fair market value on the date of
grant.  In addition, the non-employee director stock options shall be
exercisable in full twelve months after the date of grant unless determined
otherwise by the compensation committee.
  14
  Fair
Value of Stock Options
  For disclosure purposes under SFAS No.
123 and SFAS No. 123(R), the fair value of each option grant is estimated on the
date of grant using the Black-Scholes option valuation model with the following
weighted-average assumptions:
  2009
                        
                        
                        2008Expectedlife (in
      years)
                        
                        
                        10
                        
                        
                        
                        10Risk-free
      interest rate
                        
                        
                        4.54
                        %
                        
                        
                        4.54
                        %Volatility
                        
                        
                        147.3
                        
                        
                        
                        78.0Dividend
      yield
                        
                        
                        0
                        %
                        
                        
                        0
                        %
  Utilizing
these assumptions, the weighted average fair value of options granted with an
exercise price equal to their fair market value at the date of the grant is
$1.05 for the three months ended June 30, 2009.
  Summary
Stock Option Activity
  The following table summarizes stock
option information with respect to all stock options for the quarter ended June
30, 2009:
  Number of
                      Shares
                  
                  
                  Weighted
                      Average
                      Exercise
                      Price
                  
                  
                  Weighted
                      Average
                      Remaining
                      Contractual
                      Life (Years)
                  
                  
                  Aggregate
                      Intrinsic
                      ValueOptions
      outstanding April 1, 2009
                  
                  
                  3,287,500
                  
                  
                  $
                  1.24
                  
                  
                  
                  6.16Granted
                  
                  
                  —Expired
                  
                  
                  —Options
      outstanding June 30, 2009
                  
                  
                  3,287,500
                  
                  
                  $
                  1.05
                  
                  
                  
                  5.45Vested
      and expected to vest–end of quarter
                  
                  
                  3,287,500
                  
                  
                  $
                  1.05
                  
                  
                  
                  5.45
                  
                  
                  $
                  —Exercisable–end
      of quarter
                  
                  
                  3,150,000
                  
                  
                  $
                  1.09
                  
                  
                  
                  5.35
                  
                  
                  $
                  —
  Pursuant to the terms of an
employment agreement with Ronald Wilen, Chief Executive Officer, President,
Secretary and Director of the Company dated April 17, 2007, for each of the next
five (5) years of the term of the agreement (commencing with April 17, 2008),
Mr. Wilen will receive an option to purchase fifty thousand (50,000) shares of
common stock of the Company. The exercise price with respect to any option
granted pursuant to the employment agreement shall be the fair market value of
the common stock underlying such option on the date such option was
granted.
 
 Options
outstanding at June 30, 2009 have an exercise price ranging between $0.12 to
$2.05.
  The aggregate intrinsic
value in the table above represents the total intrinsic value (the difference
between United Energy’s closing stock price on June 30, 2009 and the exercise
price, multiplied by the number of in–the–money options) that would have been
received by the option holders had vested option holders exercised their options
on June 30, 2009. This amount changes based upon changes in the fair market
value of United Energy’s stock. As of June 30, 2009, $3,913 of the total
unrecognized compensation costs related to stock options is expected to be
recognized over a period of three years and six months.
  15
  11.
              COMMITMENTS
      AND CONTINGENCIES
  Litigation
  Sales Commission
Claim
  In July 2002, an action was commenced
against us in the Court of Common Pleas of South Carolina, Pickens County,
brought by Quantum International Technology, LLC and Richard J.
Barrett.  Plaintiffs allege that they were retained as a sales
representative of ours and in that capacity made sales of our products to the
United States government and to commercial entities.  Plaintiffs
further allege that we failed to pay to plaintiffs agreed commissions at the
rate of 20% of gross sales of our products made by plaintiffs.  The
complaint seeks an accounting, compensatory damages in the amount of all unpaid
commissions plus interest thereon, and punitive damages in an amount triple the
compensatory damages, plus legal fees and costs.  Plaintiffs maintain
that they are entitled to receive an aggregate of approximately $350,000 in
compensatory and punitive damages, interest and costs.  In June 2003,
the action was transferred from the court in Pickens County to a Master in
Equity sitting in Greenville, South Carolina and was removed from the trial
docket.  The action, if tried, will be tried without a
jury.  No trial date has been scheduled.   We believe,
based on the advice of counsel, we have meritorious defenses to the claims
asserted in the action and intend to vigorously defend the case. The outcome of
this matter cannot be determined at this time.
  12.
              SUBSEQUENT
      EVENT
  Subsequent
to quarter-end, in August 2009, the due date on the loans by Messrs Silver,
Wilen and Rappaport have been extended to August 31, 2009. All of the
convertible notes bear interest at 12% per annum, and are secured by
substantially all the assets of the Company.
  16
  Item
      2
              Management's Discussion and
      Analysis of Financial Condition and Results of
      Operations
  CAUTIONARY
STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS
 
 The matters discussed in this Form
10-Q contain certain forward-looking statements and involve risks and
uncertainties (including changing market conditions, competitive and regulatory
matters, etc.) detailed in the disclosure contained in this Form 10-Q and the
other filings with the Securities and Exchange Commission made by us from time
to time. The discussion of our liquidity, capital resources and results of
operations, including forward-looking statements pertaining to such matters,
does not take into account the effects of any changes to our operations.
Accordingly, actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein and those discussed under the heading “Risk Factors” in the
Company’s 10-K for the fiscal year ended March 31, 2009. This item should be
read in conjunction with the financial statements and other items contained
elsewhere in the report. Unless the context otherwise requires, “we”, “our”,
“us”, the “Company” and similar phrases refer to United Energy
Corp.
  Overview
  We
develop and distribute environmentally friendly specialty chemical products with
applications in several industries and markets.  Our current line of
products includes our K-Line of Chemical Products for the oil industry and
related products.
  Through
our wholly owned subsidiary, Green Globe Industries, Inc., we provide the U.S.
military with a variety of solvents, paint strippers and cleaners under our
trade name “Qualchem.” Green Globe is a qualified supplier for the U.S. military
and has sales contracts currently in place with no minimum purchase
requirements, which are renewable at the option of the U.S.
Military.
  A key
component of our business strategy is to pursue collaborative joint working and
marketing arrangements with established international oil and oil service
companies.  We intend to enter into these relationships to more
rapidly and economically introduce our K-Line of Chemical Products to the
worldwide marketplace for refinery, tank and pipeline cleaning
services.
  We
provide our K-Line of Chemical Products and our Green Globe Products to our
customers and generated revenues of $394,004 for the quarterly period ended June
30, 2009 and $213,638 for the quarterly period ended June 30,
2008.
  17
  RESULTS
OF OPERATIONS
  Three
Months Ended June 30, 2009 Compared to the Three Months Ended June 30,
2008
  Revenues.  Revenues
for the three months ended June 30, 2009 were $394,004, a $180,366, or 84%
increase from revenues of $213,638 in the comparable three months of
2008.  Revenues from our K-Line of Chemical Products increased by
$109,704 to $315,678 or 53% compared to $205,974 in the comparable three months
ended June 30, 2008, and revenues from our Green Globe/Qualchem military sales
increased by $70,662 to $78,326 or 922% compared to $7,664 in the comparable
three months ended June 30, 2008.
  Cost of Goods
Sold.  Cost of goods sold increased $45,180, or 42%, to
$153,714, or 39% of revenue, for the three months ended June 30, 2009 from
$108,534, or 51% of revenues for the three months ended June 30, 2008. Cost of
goods sold from our K-Line of Chemical Products sales increased by $12,793 to
$119,108 or 12% compared to $106,315 in the comparable three months ended June
30, 2008 and by an increase of $32,387 to $34,606 or 146% compared to $2,219 in
the comparable three months ended June 30, 2008 in cost of goods sold of our
Green Globe/Qualchem military sales.
  Gross
Profit.  Gross profit for the three months ended June 30, 2009,
increased by $135,186, or 129% to $240,290 or 61% of revenues compared with
$105,104 or 49% of revenues in the prior period. The increase in gross profit
and gross profit percentage reflects the higher levels of sales of our K-Line of
Chemical Products and our Green Globe/Qualchem military sales.
  Operating
Costs and Expenses
  Selling, General and Administrative
Expenses. Selling, general and administrative expenses increased $8,399
to $351,032 or 89% of sales for the three months ended June 30, 2009 compared
with $342,633 or 160% of sales for the three months ended June 30,
2008.  The slight increase in selling, general and administrative
expenses is primarily related to an increase in marketing expense partially
offset by a decrease in salaries and travel and entertainment
expenses.
  Research and Development.
Research and development expenses decreased $22,580 to $51,496 or 13% of sales
for the three months ended June 30, 2009 compared with $74,076 or 35% of sales
for the three months ended June 30, 2008. The decrease in research and
development expenses was related to a decrease in lab supplies and
salaries.
  Depreciation and
Amortization.  Depreciation and amortization remained
relatively constant for the three months ended June 30, 2009 as compared with
June 30, 2008.
  Interest
Income.  The Company had interest income of $7 for the three
months ended June 30, 2009 compared with $802 in the corresponding period in
2008. The decrease was due to the use of cash received in connection with the
private placement in March 2007.
  Interest
Expense.  The Company had interest expense of $7,545 for the
three months ended June 30, 2009 compared with $601 in the corresponding period
in 2008. The increase was due to the indebtedness outstanding on the director
loans.
  Net Loss.  The
three months ended June 30, 2009 resulted in a net loss of $181,853 or $0.01 per
share as compared to a net loss of $323,675 or $0.01 per share for the three
months ended June 30, 2008. The average number of shares of common stock used in
calculating earnings per share increased 150,876 shares to 31,180,991 as a
result of 298,472 shares issued in connection with the conversion of the
convertible note.
  18
  Liquidity
and Capital Resources
  As of
June 30, 2009, the Company had $110,616 in cash and cash equivalents, as
compared to $56,372 at March 31, 2009.
  The
$54,244 increase in cash and cash equivalents was due to net cash used in
operations of $99,027, net cash used in investing activities of $150 and net
cash provided by financing activities of $153,421. Cash used in investing
activities consisted of employee loans of $150.  Cash provided by
financing activities consisted of related party loans of $153,781, offset by
preferred stock dividends of $360.
  As of
June 30, 2009 the Company’s backlog included $246,450 of chemical
sales.  Backlog represents products that the Company’s customers have
committed to purchase. The Company’s backlog is subject to fluctuations and is
not necessarily indicative of future sales.
  The accompanying consolidated financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States of America which contemplate continuation of the
Company as a going concern. However, the Company has year end losses from
operations and has an accumulated deficit of $22,261,953 as of June 30,
2009.During
the three months ended June 30, 2009 the Company experienced a net loss from
operations of $181,853 and a negative cash flow from operations of
$99,027.  These matters raise substantial doubt about the Company’s
ability to continue as a going concern. Our consolidated financial statements do
not include any adjustment that might result from the outcome of this
uncertainty.
  Our
continued existence is dependent upon several factors, including raising
additional funds through loans, additional sales of its equity securities,
increased sales volumes and the ability to achieve profitability from the sales
of our product lines.  In order to increase our cash flow, we are
continuing our efforts to stimulate sales and cut back expenses not directly
supporting our sales and marketing efforts.
 
 There can
be no assurance that we will be successful in stimulating sales or reducing
expenses to levels sufficient to generate cash flow sufficient to fund our
anticipated liquidity requirements. There also can be no assurance that
available financing will be available, or if available, that such financing will
be on terms acceptable to us.
  Concentration
of Risk
  Sales to our top three customers, Ainex
Corporation, Solarium Solutions and the US Military, accounted for approximately
81% of revenue, or $320,326, for the three-month period ending June 30, 2009 and
sales to our top two customers, Nalco Company and Dennis J. Pfeifer, accounted
for approximately 57% of our revenue, or $120,780, for the three-month period
ending June 30, 2008.
  Sales to our top customer, Ainex
Corporation, for the three-month period ending June 30, 2009 were $198,000.
  Off-Balance
Sheet Arrangements
  We do not currently have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to our
stockholders.
  Item
      3.
              Quantitative and Qualitative
      Disclosures About Market
Risks.
  Not
applicable
  19
  Item
      4.
              Controls and
      Procedures.
  Evaluation
of the Company's Disclosure Controls and Procedures
  We carried out an evaluation, under
the supervision and with the participation of the Company's management,
including our Chief Executive Officer and our Principal Accounting Officer
(Interim Chief Financial Officer), of the effectiveness of our “disclosure
controls and procedures” (as defined in Rules 13a-15(e) or 15d-15(e) of the
Securities Exchange Act of 1934, as amended) as of June 30,
2009.  Based upon that evaluation, the Chief Executive Officer and the
Principal Accounting Officer (Interim Chief Financial Officer) concluded that
our disclosure controls and procedures are effective, in all material respects,
with respect to the recording, processing, summarizing, and reporting, within
the time periods specified in the Securities and Exchange Commission's rules and
forms, of information required to be disclosed by us in the reports that we file
or submit under the Exchange Act. In designing and evaluating our “disclosure
controls and procedures” (as defined in Rules 13a-15(e) or 15d-15(e) of the
Securities Exchange Act of 1934, as amended), management recognized that any
controls and procedures, no matter how well designed and operated, can provide
only reasonable assurances of achieving the desired control objectives, as ours
are designed to do, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures.
 
 Changes
in Control Over Financial Reporting
  Management
has not identified any change in our internal control over financial reporting
that occurred during the fiscal quarter ended June 30, 2009 that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial
reporting.
  20
  PART
II
  OTHER
INFORMATION
  Item
      1.
              Legal
      Proceedings
  None.
  Item
      1A.
              Risk
      Factors
  Not applicable.
  Item
      2.
              Unregistered Sales of Equity
      Securities and Use of
Proceeds
  In June
2009, the Company issued 298,472 shares of Common Stock upon conversion of a
$35,000 note, plus accrued interest.  In consideration for the
agreement to convert such note, the Company issued to the holder of the note
warrants to acquire 140,000 shares of Common Stock at an exercise price of
$0.12.
  In June
2009, the Company issued Secured Convertible Promissory Notes in the aggregate
principal amount of $201,107, convertible at an exercise price of $0.12 per
share, and warrants to acquire in the aggregate 800,000 shares of Common Stock
at an exercise price of $0.12 a share.  In June 2009, the Company also
issued warrants to acquire 400,000 shares of Common Stock at an exercise price
of $0.12 per share in consideration for, among other things, extending the
maturity date of previously outstanding notes.
  In June
2009, the Company issued warrants to acquire 900,000 shares of Common Stock in
the aggregate to members of its Board of Directors as compensation for their
services.
  All of
the foregoing transactions were conducted pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act of
1933.
  Item
      3.
              Defaults Upon Senior
      Securities
  None
  Item
      4.
              Submission of Matters to a
      Vote of Security Holders
  None
  Item
      5.
              Other
      Information
  None
 
 Item
      6.
              Exhibits
  31.1
              Chief
      Executive Officer’s Certificate, pursuant to Rule 13a-14(a)/ 15d-14(a) of
      the Exchange Act.
  31.2
              Chief
      Financial Officer’s Certificate, pursuant to Rule 13a-14(a)/ 15d-14(a) of
      the Exchange Act
  32.1
              Chief
      Executive Officer’s Certificate, pursuant to Section 1350 of Chapter 63 of
      Title 18 of the United States Code (18 U.S.C.
  1350).
  32.2
              Chief
      Financial Officer’s Certificate, pursuant to Section 1350 of Chapter 63 of
      Title 18 of the United States Code (18 U.S.C.
  1350).
  21
  SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this Report to be signed on its behalf by the undersigned thereunto
duly authorized.
  Dated:      
      August 14, 2009
                UNITED
      ENERGY CORP.By:
                /s/ Ronald WilenRonald
      Wilen,Chief
      Executive Officer(as
      principal executive officer)By:
                /s/ James McKeeverJames
      McKeever,Interim
      Chief Financial Officer(as
      principal financial and accounting
officer)
  22